The Securities and Exchange Commission (SEC) is considering a proposed rule change by the Fixed Income Clearing Corporation (FICC) to introduce a "Volatility Event Charge." This charge is designed to help FICC manage and reduce its risk during periods of significant market upheaval, like major elections or economic announcements, that could cause large market movements. The proposed change is aimed at ensuring FICC has enough financial resources to protect against potential losses if a clearing member defaults during such volatile times. The SEC invites public comments on this proposal, which would add more stability to financial markets by proactively managing associated risks.
Simple Explanation
The SEC is looking at a new rule where the FICC would add a special fee to help keep things safe when the market gets really bumpy, like during big events. This way, if any of their members get into trouble, they have enough money to cover it.