Deposits to the Clearing Fund may be made in the form of cash or eligible Clearing Fund securities. Securities eligible for the Clearing Fund are direct obligations of the U.S. government, U.S. agencies or government sponsored enterprises, or a mortgage-backed pass-through obligation issued by those U.S. agencies or government sponsored enterprises, which satisfy the criteria set forth in notices issued by FICC from time to time. FICC requires that a member maintain the following:
- At a minimum, the lesser of $5,000,000 or 10% of a required cash deposit in cash, with a minimum cash requirement of $100,000.
- A minimum of 40% of the required deposit in cash and Treasuries.
- The remaining required deposit in cash, U.S. Treasury securities, government agency securities, and mortgage-backed securities issued by government agencies or entities sponsored by the federal government, subject to applicable concentration limits and haircuts.
FICC applies haircuts to collateral in order to appropriately reflect the potential for declines in asset values between the last revaluation and liquidation. The schedule of haircuts and concentration limits is reflected in the MBSD Clearing Rules.