Welcome to the Mortgage-Backed Securities Division membership onboarding path! If you are interested in learning more about FICC's MBSD services or have plans to apply for membership, you are in the right place! Please feel free to utilize this path to learn more about onboarding, the steps you can expect to complete, and the tools we'll be providing you with in this dedicated onboarding section Center to make sure your onboarding process is a success.
This section is divided into three parts.
Part One provides an overview of the process and will help you understand:
- the benefits of FICC's Mortgage-Backed Securities Division membership,
- the "Preliminary Qualification Wizard" (what it is/what it's used for);
- what the onboarding process entails (a high-level overview); and
- if membership is the right choice for you.
Part One is open to the public on the world wide web.
What does it mean to become an FICC member? What are the services such membership offers? What is required of you to become an FICC member? What are the steps involved in the onboarding process for FICC membership?
You will find the answers to these and other questions in this section of the FICC MBSD onboarding path!
Part One: Preliminary Onboarding Engagement answers these questions:
- What are FICC's Mortgage-Backed Securities Division Services? What are the benefits of membership?
- What steps will you have to take to complete the FICC Membership Onboarding process? What is the Prequalification Wizard and when should you complete it?
- What are the preliminary eligibility requirements for membership?
- What are some of the most commonly asked questions & answers about the FICC Membership Onboarding process?
Click the article below to learn more about FICC's Mortgage-Backed Securities Division services and benefits.
What types of memberships does DTCC offer?
DTCC itself is a holding company and does not offer memberships directly. It does, however, offer various types of memberships through its subsidiary entities and joint venture entities, which cater to various business needs. These entities include, but are not limited to The Depository Trust Company ("DTC"), National Securities Clearing Corporation ("NSCC"), The Fixed Income Clearing Corporation ("FICC") through its Government Securities(GSD) and Mortgage Backed Securities (MBSD) divisions and DTCC Solutions.
You can choose to become a member of both the Government Securities Division (GSD) and the Mortgage-Backed Securities Division (MBSD). Prospective members can apply to one of both divisions, depending on business needs.
The GSD is a central counterparty (CCP) offering a guarantee of completion on all eligible trades. The MBSD provides netting and comparison services for TBA and specified pool trades, and is in preparation to move to a guaranteed central counterparty model for netted pool trades.
In order to utilize FICC's Mortgage-Backed Securities Division Services, participants are required to be members of the Fixed Income Clearing Corporation (FICC). FICC is committed to serving the growing needs of all of its customers. Applicants are asked to satisfy reasonable requirements in order to ensure the financial integrity of the system.
After reviewing all the membership information provided for you in Part One: Preliminary Onboarding Engagement, we encourage you to contact Fixed Income Customer Service at (888) 382-2721 with any questions between 8:30 am and 5:30pm EST, Monday through Friday. An Onboarding Specialist is ready to assist you with your application process along every step of your journey to becoming an FICC Member!
FICC Netting Member Benefits
Matched trades have a settlement guarantee in the event of a member default. If your counterparty becomes insolvent prior to settlement, FICC will still settle your trades.
Trade Novation - FICC becomes Your Counterparty
Once you receive your net obligation, FICC becomes your counterparty for settlement purposes, mitigating your counterparty risk (and maximizing balance sheet offsets where applicable).
Operational Cost Reduction of Netting –Fewer Settlements
- MBSD'S TBA netting reduces the number of settlements by 95%. The introduction of Pool Netting is expected to reduce the overall number of settlements by 98%.
Centralized Posting of Collateral
By posting collateral with FICC for all your trades with member firms, you eliminate the need to manage multiple bilateral collateral arrangements. You also get the added benefit of collateral calculation on your entire portfolio, creating the potential for offsets and more efficient use of your collateral.
Next: Click the article below to learn more about prequalification and the onboarding process.
Before you can begin the official onboarding process there are some preliminary steps you must take. In addition to reviewing the information in Part One of this Learning Center, all candidates for membership must complete the "Prequalification Wizard." This is a short online form designed to reduce the time it takes to determine a candidate's membership eligibility and connect them with an Onboarding Specialist. Once you have completed reviewing the information in Part One and have determined, at least preliminarily, that beginning the membership process at this time is appropriate, complete the Prequalification Wizard located on dtcc.com (we provide a link to the 'Wizard on the next page.)
Please note: The 'Wizard' is not an application for membership. Completing it provides DTCC with information relative to your business needs. It should take approximately 5 minutes, assuming the necessary information is quickly available to you. Once the information is submitted, a DTCC Account Administration representative will contact you.
This section of the FICC MBSD membership onboarding path is designed to provide you with a good understanding of what you need to do to become a Member, and give you the supplementary information that will help you complete the onboarding process in the most efficient way possible. There are a few important steps in the Preliminary Onboarding Engagement phase. The next step involves completing the Prequalification Wizard. Read on to learn more about completing the Wizard.
Next: Click the article below to learn more about membership requirements.
There are some basic requirements that your Onboarding Specialist will need to verify with you right away. We want you to understand these requirements now to ensure you will be able to complete the process once you begin. Even if you don't meet them at the present time, armed with this knowledge you can return here once you meet the requirements and are ready to begin the membership process. When reading the requirements listed below, think carefully if it will makes sense for you to proceed further. Of course, you can always call if you have more questions!
To help the government fight the funding of terrorism and money laundering activities, procedures have been established to obtain, verify and record information that identifies each entity that opens an account. When a firm applies for membership, we request information and documents that allow us to identify the firm.
This article outlines basic requirements only. Applicants are subject to additional requirements/standards for membership pursuant to FICC Rules. FICC Rules and Procedures may be viewed online, at http://www.dtcc.com/legal/rules-and-procedures.aspx.
The Fixed Income Clearing Corporation ("FICC") is a subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). FICC is an SEC-registered clearing agency and a "self-regulatory organization" under the Securities Exchange Act of 1934, as amended.
Applicants are required to obtain regulatory approval from their primary regulator to conduct the business for which the applicant is completing this application. Before applying for membership, applicants should obtain the required approval and provide the information supporting and documenting the approval.
Each applicant must have an established business history of a minimum of six months and be able to satisfactorily communicate with FICC and to otherwise meet FICC's operational requirements. In addition, the applicant entity must be formed in the U.S. Non-U.S. applicants must apply for an FICC Non-U.S. membership, which has additional membership requirements.
Each applicant must meet the minimum net capital requirement as outlined in the FICC MBSD Rules.
Settling Bank Arrangements
A FICC Member is required to appoint a bank to act as its FICC settling bank. The settling bank must be a FICC approved settling bank and will be responsible for paying to FICC on behalf of the Member any balances owed to FICC and paying to the Member any balances owed to it by FICC. A listing of FICC approved U.S. based entities can be provided upon request.
Next: Click the article below to learn more about the Preliminary Qualification Wizard.
The Prequalification Wizard is designed to reduce the time it takes to determine your membership eligibility and connect you with an Onboarding Specialist. We've identified some of the commonly asked questions about the "Preliminary Qualification Wizard" and answered them here.
If you are already a member of one of DTCC's subsidiaries you do not have to complete the Wizard. Instead, please call Membership Services at 888.382.2721.
What is the "Preliminary Qualification Wizard?"
The DTCC Prequalification Wizard is designed for clients to provide DTCC with basic information relative to their business needs so that DTCC can determine whether our products and services fit their needs.
Where can I locate the Prequalification Wizard?
How long does it take to complete the Prequalification Wizard?
Assuming all relevant information is readily available to you, the Prequalification Wizard will take approximately 5 minutes to complete.
How many steps are there in the Prequalification Wizard?Step 1: Asks for basic information about yourself and your company (this includes full legal name of your company).
Step 2: Asks what country in which your company operates.
Step 3: Asks what memberships and services you would like for your company.
Step 4: Outlines the capital and regulatory requirements for membership.
Step 5: Reports some preliminary qualification results based on the answers you've provided.
Note: Completing the wizard begins the process of alerting DTCC that you are interested in membership and ensures an Onboarding Specialist will contact you regarding that interest. Any information you enter in the 'Wizard carries over to an application, if one is submitted. Please review our Information Privacy Policies & Procedures.
If you are already a DTCC Member you do not have to complete the 'Wizard; instead, please call Customer Service at 888-382-2721.
What happens after I complete and submit my information using the 'Wizard'?
Once you have completed the 'Wizard, an Onboarding Specialist receives and reviews the information you have provided. If they determine that your firm meets the preliminary requirements for membership, they will contact you and conduct a Needs Assessment for candidates interested in membership. (You may be contacted prior to the Needs Assessment and asked to verify or provide additional information depending on the completeness of your submission - this is not to be confused with the Needs Assessment.) The results of the Needs Assesment is what determines whether or not you are eligible to begin the "Official Onboarding Process."
Next: Click the article below to view some commonly asked questions.
Beyond the requirements for membership listed in the previous article, there are many questions candidates ask when they are interested in becoming FICC Members. We've collected and answered them here to help you. Read on to learn more!
What is the FICC MBSD Membership Needs Assessment?
The FICC MBSD Membership Needs Assessment is a verbal inquiry that expands on the questions and answers candidates provide via the Prequalification Wizard. During this one-on-one dialog (initiated by an Onboarding Specialist from the business line about which a candidate expresses interest) such things are discussed as:
- what Legal Entity suits your current business needs,
- what Connectivity and Activation protocols most closely match your needs,
- what other products and services DTCC can offer,
among other things.
How much does it cost to apply for the FICC MBSD membership?
Nothing! DTCC does not charge any membership fee. However, regular memnbership and transactional fees apply. See the MBSD Rules for details.
Must legal entities gain approval from their primary regulator?
Yes. Legal Entities must have approval from their primary regulator, like FINRA, to apply for FICC membership. However, on a case-by-case basis, DTCC can explore how far along the applicant is in the regulator's approval process and make a determination. However, applicants can begin the application process prior to getting regulator approval.
Why is the FICC MBSD membership candidate's daily trade processing volume important?
It is used to establish their Fund Deposit Requirement.
How long does the FICC MBSD membership application approval process take?
The FICC MBSD membership application process can take up to 3 to 6 months to be completed and approved - once the applicant has supplied all required membership documentation - in good form. There are additional factors involved in the membership approval process and they can vary for each candidate. Additional factors include legal entity ownership information, financial and capital requirements, and legal opinion reviews. In an applicant has a preferred target start date, FICC will work with the applicant on a best efforts basis to achieve that start date.
You've reached the end of Part One: Preliminary Onboarding Engagement of the FICC MBSD Onboarding Learning Center. If you haven't already, and you wish to begin the official onboarding process, please complete the Preliminary Qualification Wizard (explained in Part One of this Learning Center) and/or call 888.382.2721 to speak with an Onboarding Specialist.
Thank you for your interest in becoming an FICC MBSD member. We look forward to serving you!
Part Two provides:
- guidance and instruction designed to assist you in completing the necessary steps in your onboarding journey.
To access Part Two you will need a designated login that your FICC Onboarding Specialist will provide you with after you have completed a preliminary verbal questionnaire. If you are already familiar with the content in Part One but haven't yet spoken to an onboarding specialist, we recommend you do so at your earliest convenience.
The number to call is 888.382.2721.
Your onboarding specialist will ensure you know everything you need to about the process and will help ensure your onboarding experience goes as smoothly and as quickly as possible.
Congratulations on beginning your onboarding journey as an FICC MBSD Member!
Part Two of the Onboarding Learning Center is dedicated to the Official Onboarding Process.
Part Two is divided into four steps:
Step 1: Completing the General Membership Questionnaire
This step also includes completing and uploading Supporting Documentation into the Membership Online Portal.
Step 2: Completing Required Legal Documentation
If after your firm completes Steps 1 & 2 DTCC determines that you are to be granted FICC membership, there are two additional steps required to complete the Official Onboarding Process.
Step 3: Establishing Connectivity
Step 4: Activation
Where Am I Now?
By now you have received your login credentials for the Membership Online Portal. The next article of this Learning Center are devoted to assisting you with Step 1: Completing the General Membership Questionnaire. Reviewing them will provide you with answers to many of the questions commonly asked by candidates beginning the Official Onboarding Process.
Once you have completed the General Membership Questionnaire and have completed and uploaded your required Supporting Documentation, you will have completed Step 1 of the Official Onboarding Process and be ready to move on to Step 2: Completing Required Legal Documentation.
Next: Click the article below to learn more on completing the General Membership Questionnaire.
Part Three provides the new account training paths that new MBS firms should have all of their engaged staff review and execute to be ready for new account training.
Whether you're a member of a firm that has just started using the products and services of the Fixed Income Clearing Corporation's (FICC) Mortgage-Backed Securities Division (MBSD) or if you're a new employee who needs to get up to speed on how it all works, you're in the right place!
New Account Training
Your partnership with DTCC Learning begins when your firm activates a new account in a product or service of a DTCC subsidiary. DTCC Learning works with you to ensure that your firm has the required operational competencies prior to activation. This is accomplished through our New Account Validation program.
Our process begins with a comprehensive learning needs analysis that determines the business context in which your firm will utilize a DTCC subsidiary product.
A blended learning curriculum including comprehensive performance-based skills assessments is then prescribed. These assessments are what allow DTCC Learning to objectively validate your firm’s ability to perform the critical tasks associated with a particular product or service and identify any opportunities for further learning.
Throughout this process, your firm has access to a dedicated Learning Consultant who shepherds your team through the process, monitors progress and provides remediation as necessary. Following validation, you also receive live support and performance coaching on both activation day and first settlement day, minimizing risk and maximizing efficiency.
As your firm’s membership in DTCC subsidiary services matures, DTCC Learning continues to support the learning needs of your organization. Product enhancements and new product rollouts? Check. Support for employees new to your firm or an area of responsibility? Check. Custom learning programs tailored to the specific needs of your firm? Check.
We work with you to proactively identify additional learning opportunities, provide you with access to an ever-expanding inventory of learning tools, and offer personalized consultative services; all geared towards keeping you ahead of the curve, minimizing risk, and maximizing performance.