On May 13th, the SEC granted accelerated approval to the National Securities Clearing Corporation and the Fixed Income Clearing Corporation for individually submitted proposed modifications to certain haircuts currently applied to their Eligible Clearing Fund Securities. The NSCC's and FICC's respective rules require members to make deposits to the appropriate Clearing Fund with the amount of each Member's required deposit being fixed in accordance with one or more formulas. A member may satisfy its Required Deposit with a cash deposit, and NSCC and FICC rules permit a portion of the Member's deposit (with limited exception) to be evidenced by an open account indebtedness secured by Eligible Clearing Fund Securities (certain Treasury, agency, and mortgage-backed securities). NSCC and FICC permit members to fund settlement by pledging Clearing Fund deposits as collateral for loans, and NSCC and FICC maintain committed borrowing facilities for this purpose. Haircuts imposed on collateral pledged by NSCC and FICC under the borrowing facility are being increased by the lending syndicate, and therefore, NSCC and FICC must make corresponding increases in its Clearing Fund collateral haircuts in order to maintain alignment with the haircuts under the borrowing facility.