📈SEC Approves FICC's Proposed Volatility Event Charge for Risk Management
Self-Regulatory Organizations; Fixed Income Clearing Corporation; Order Approving Proposed Rule Change To Adopt a Volatility Event Charge
Summary
The Securities and Exchange Commission has approved the Fixed Income Clearing Corporation's proposal to implement a Volatility Event Charge. This new charge aims to enhance margin methodologies, managing credit risk more effectively by assessing additional fees during periods of heightened market volatility linked to scheduled economic events. The charge is expected to improve financial resilience for member firms amidst significant market fluctuations.
Agencies
- Securities and Exchange Commission
Business Impact
$$ - Med
The proposed Volatility Event Charge by FICC impacts financial regulations related to risk management and compliance for members, specifically in how margins are calculated during market volatility events. This charge requires members to maintain greater financial resources to cover potential credit exposures, thus directly affecting their operational costs and risk strategies.