Merger Produces New Clearinghouse Firm

December 19, 2002 ( - Two securities clearinghouses are joining hands to form a new company now scheduled to kick off operations January 1.

According to an announcement, Fixed Income Clearing Corporation will be a subsidiary of The Depository Trust & Clearing Corporation (DTCC) and will reflect the merger of Government Securities Clearing Corporation (GSCC) and MBS Clearing Corporation (MBSCC).

The announcement said that GSCC now clears about $1.7 trillion a day in trades involving US government securities, while MBSCC clears an average of about $200 billion a day in mortgage-backed securities trades.

FICC expects to see reduced costs because the merger will eliminate duplicate facilities, services and certain operational expenses such as separate regulatory reports, audits, financial statements, and regulatory examinations, the announcement said.

FICC will operate as separate divisions, the Government Securities Division and the Mortgage-Backed Securities Division.