Fixed Income Clearing Corporation (FICC): A Brief History


The Fixed Income Clearing Corporation (FICC) is a financial institution that plays a crucial role in the fixed income trading market. Established in 2003, the FICC provides clearing, settlement, and risk management services for fixed income transactions.


Prior to the establishment of the FICC, the fixed income market lacked a centralized clearinghouse. This resulted in inefficiencies and increased risks for market participants. The need for a dedicated clearing corporation became evident, leading to the creation of the FICC.

Creation of the FICC

The FICC was formed through the merger of two existing clearing corporations: the Government Securities Clearing Corporation (GSCC) and the Mortgage-Backed Securities Clearing Corporation (MBSCC). By combining these two entities, the FICC was able to provide comprehensive clearing services for a wide range of fixed income products.

Functions of the FICC

The FICC serves as a central counterparty for fixed income transactions, acting as an intermediary between buyers and sellers. It ensures the timely and efficient settlement of trades, reducing counterparty risk and promoting market stability. Additionally, the FICC provides risk management services, including collateral management and margin calculations.

Membership and Governance

Membership and Governance

The FICC is a membership-based organization, with its members consisting of financial institutions, broker-dealers, and other market participants. These members have a say in the governance of the FICC through their participation in the organization’s committees and working groups.

Significance of the FICC

The establishment of the FICC has had a significant impact on the fixed income market. It has improved market transparency, reduced operational risks, and enhanced overall market efficiency. The FICC’s role as a central counterparty has also helped to mitigate systemic risks and promote financial stability.


The Fixed Income Clearing Corporation (FICC) has played a vital role in the development and growth of the fixed income trading market. Through its clearing, settlement, and risk management services, the FICC has helped to create a more secure and efficient marketplace for fixed income transactions.

History of FICC

Formation of GSCC

The Government Securities Clearing Corporation (GSCC) was formed in response to the increasing volume and complexity of the U.S. government securities market. Prior to its establishment, the market lacked a centralized clearinghouse, which resulted in inefficiencies and increased risk for market participants. The GSCC was created to address these issues and provide a more efficient and secure clearing and settlement process for government securities.

The GSCC introduced several innovations to the market, including the use of automated book-entry systems for securities transfers and the development of standardized confirmation and settlement processes. These initiatives helped streamline operations and reduce risk, making the government securities market more attractive to investors.

Expansion and Transformation

Expansion and Transformation

In the 1990s, the GSCC underwent a significant transformation. It expanded its services beyond government securities to include mortgage-backed securities (MBS) and other fixed income instruments. This expansion was driven by market demand and the need for a centralized clearinghouse for these securities.

In 1996, the GSCC merged with the Mortgage-Backed Securities Clearing Corporation (MBSCC) to form the Government Securities Division of the Depository Trust & Clearing Corporation (DTCC). This merger further strengthened the organization’s position as a leading provider of post-trade services for fixed income markets.

Introduction of FICC

Today, FICC continues to play a vital role in the fixed income markets, providing efficient and reliable post-trade services to market participants. Its services include trade comparison, netting, risk management, and settlement. The organization’s innovative technology and robust infrastructure help facilitate the smooth functioning of the fixed income markets and reduce risk for market participants.