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Screenshot of a breaking news alert e-mail from Q2 2017
Another news from FIA Tech today, the company announced the expansion of its Owner & Controller Repository (OCR) service to securely and confidentially store data for firms offering indirect clearing services under MIFID II. The new Indirect Clearing Lockbox capability allows indirect clearers to store their client account data securely to be accessed by their clearing member only in a default scenario, ensuring clients have the full protection of new segregated clearing models provided for under MIFID II.
To bolster client protections, MiFID II established a new category of omnibus clearing; the Gross Omnibus Segregated Account (GOSA). GOSA accounts may be used by market participants in an indirect clearing arrangement where they clear through an Indirect Clearer (Direct Client of Clearing Member) which accesses the clearinghouse via a third-party Clearing Member which services the Indirect Clearer and, by extension, all their Indirect Clients.
In this new clearing model, Indirect Client positions and collateral are held separately at the Clearing Member to insulate those assets from financial instability with the Indirect Clearer. In addition to these financial protections, Indirect Clients are given an assurance of anonymity, which has created the need for a trusted third party to store Indirect Client information to be accessed by the Clearing Member only in the event of a default of the Indirect Clearer.
To facilitate compliance with these new requirements, FIA Tech’s Indirect Clearing Lockbox allows for the secure, confidential storage of indirect client information including contact information, account ownership information and other data needed to aid indirect clients in the event of a default between the Clearing Member and Indirect Clearer. Once the Lockbox is opened in a default, the Clearing Member may then work with the Indirect Client to make or receive margin payments, liquidate positions or port positions to another clearing firm.
FIA Tech’s Owner & Controller Repository is used for secure client data storage for regulatory reporting, client gross margin compliance and indirect clearing lockbox, securely storing account data on over 470,000 accounts across 45 clearing members globally.