Standard & Poor’s has awarded Fixed Income Clearing Corporation (FICC), subsidiary of The Depository Trust & Clearing Corporation (DTCC), an “AAA/A-1+” credit rating. The rating is the highest issued by S&P.
In announcing its rating, S&P said that FICC’s comprehensive financial safeguards provide “substantial protection against counterparty credit risk even during extreme market conditions, as well as strong support from the membership and the broader securities market.” On an average day, FICC processes close to $3 trillion in trades in U.S. Government securities and mortgage-backed securities.
“This AAA rating acknowledges the integral role FICC plays in the fixed income marketplace,” said Jeff Ingber, FICC managing director and general manager.
Ingber said that FICC sought the new credit rating as part of a plan to expand FICC services to the institutional or “buy side” of the fixed income marketplace. To facilitate this expansion, FICC is working on an initiative to create membership models that will bring many U.S. Government securities transactions executed by the institutional side into FICC’s settling process. As a first step in this process, FICC has recently filed a proposal with the Securities and Exchange Commission to create a “sponsoring/sponsored” membership category that would allow member banks to sponsor their mutual funds clients into FICC membership.