DTCC today announced the launch of FICC’s interactive, public computer Capped Contingency Liquidity Facility (CCLF).
DTCC explains that CCLF is a critical risk management tool used to manage DTCC’s fixed income clearing company (FICC) liquidity risk arising from settlement activity. Market participants can enter their current unique settlement activity into the calculator to estimate and understand the CCLF-related liquidity obligations that could arise from participation.
The CCLF is a rules-based liquidity resource facility that will provide FICC with additional liquid financial resources to meet its cash settlement obligations in the event of a default by the larger family of affiliated GSD clearing members. To anticipate this potential funding need, GSD clearing members incorporate their individually determined CCLF liability amounts into their own liquidity plans.
While the CCLF liability is a committed liability for Clearing Members, FICC does not require pre-funding or deposits of the liability amount. Rather, as a continuing requirement of FICC participation, clearing members provide prior assurances of their ability to provide such CCLF amounts.
The new CCLF calculator, accessible at dtcc.com, requires a number of data points to be provided by users. Once entered on the screen, the calculator processes the data points using the existing GSD CCLF engine logic, providing an estimated individual CCLF liability.