Sponsoring Membership is a full GSD membership type where FICC permits the establishment of a sponsored membership relationship between a Netting Member that is approved to be a Sponsoring Member and one or more entities that are accepted by FICC as Sponsored Members of such Sponsoring Member.
MEMBERSHIP ELIGIBILITY REQUIREMENTS
- Must be a Bank Netting Member to be a Category 1 Sponsoring Member.
- Must be a Netting Member that is a Tier One Netting Member (with certain exceptions) to be a Category 2 Sponsoring Member.
- Financial Responsibility – Applicant must have sufficient financial ability to make anticipated required deposits to the Clearing Fund and Funds-Only Settlement Amounts.
- Operational Capability – Applicant must successfully complete network and connectivity testing at the current FICC standards.
CAPITAL REQUIREMENTS
- An applicant is applying to become a Category 1 Sponsoring Member must have a level of equity capital as of the end of the month prior to the effective date of its membership of at least $5 billion and must be “wellcapitalized” as defined by the applicable regulations of the Board of Governors of the Federal Reserve System.
If an applicant is applying to become a Category 1 Sponsoring Member has a bank holding company that is registered under the Bank Holding Company Act of 1956, as amended, the bank holding company must also be “well-capitalized” as defined by the applicable regulations of the Board of Governors of the Federal Reserve System.
The Corporation may impose financial requirements on a Netting Member applying to become a Category 2 Sponsoring Member that are greater than the financial requirements applicable to it in its capacity as aNetting Member based upon the level of anticipated positions and obligations, the anticipated risk associated with the volume and types of transactions, and the overall financial condition of such applicant.
MARGIN REQUIREMENTS
- Applicants must post an initial Clearing Fund deposit based on the anticipated volume of the Sponsoring Member’s Omnibus Account activity, prior to going live. Post go-live, a Sponsoring Member must meet a required Clearing Fund amount based on the Sponsoring Member’s Omnibus Account’s unsettled positions and the market risk associated with those positions; this amount is calculated twice daily. Note: For purposes of satisfying the Sponsoring Member’s Clearing Fund requirements, a Sponsoring Member’s activity in its proprietary Netting Member account will be treated separately from the activity in its Omnibus Account.