Welcome to the Delivery versus Payment (DVP) Service section of the Learning Center!
The DVP Service offered by FICC’s Government Securities Division (GSD) supports and facilitates the submission, comparison, risk management, netting and settlement of trades executed by its Members in the U.S. Government securities market. The service supports the clearance and settlement of buy/sell transactions on U.S. Government securities, repo transactions and Treasury auction takedown purchases and secondary market trades.
All eligible Netting Members of GSD may use the Netting and Settlement service. In addition to Netting Member services, GSD services another category of members known as Comparison-only members. GSD’s comparison services for Comparison-only members, does not include risk management, netting or settlement services for their trades.
Members are required to submit all their netting-eligible trades to GSD. This includes cash buy/sell transactions with a next day settlement or and extended settlement up to 365 days, repo/reverse repo transactions that are overnight, forward-starting or term repos with a settlement date of up to 735 days (2 years) and U.S. Treasury auction purchases. Trades are received, validated and compared through FICC's Real-Time Trade Matching (RTTM®) service. This results in the evidence of a valid, binding and enforceable contract between counterparties whose trades have been compared, and it is at time of comparison that FICC provides a guaranty of settlement for all Netting Members. Then through netting on the night before settlement, GSD establishes a single net long or short position for each participant’s daily trading activity in a given security. The netting output is communicated to GSD's Netting Members. The resulting obligations generated represent receive and deliver obligations that are settled on a delivery versus payment (DVP) basis over the Fedwire or through GSD's clearing banks BNY Mellon and JP Morgan*.
*JP Morgan has recently announced its plans to exit the government bond clearance business.
To learn more, please select the DVP Service topic that you would like to learn about from the dropdown menu located to the left of this article.