CME Group has announced Treasury Link, a service enabling spread trading between CBOT Treasury futures and BrokerTec cash Treasuries on CME Globex. The functionality allows participants to transact the differential between the two markets through a single submission, removing legging risk and enabling exposure to be managed via a single spread. It is expected to launch in Q4 2026, pending regulatory review, and is built on the technology already running FX Link.
“Treasury Link will connect the cash and futures markets in a way that wasn’t possible before – delivering faster, more efficient execution to market participants and unlocking new spread trading opportunities across fixed income,” says Mike Dennis, Global Head of Fixed Income at CME Group. “This functionality offers improved execution performance, pairing with CME Group Capital efficiencies which total $27 billion across cash, futures and swaps.”Regarding the timing, under SEC rules adopted in December 2023 and subsequently extended, eligible cash Treasury transactions must be centrally cleared from 31 December 2026, with eligible repo transactions following on 30 June 2027. Commissioner Mark Uyeda, who leads the SEC’s implementation work, said in September 2025 that the Commission does not at present intend to consider further extensions.
Matt Gierke, Global Head of BrokerTec, tells TradingTech Insight: “Treasury Link will bring execution cost efficiencies by removing legging risk via a transparent orderbook and simplify workflows for firms spreading cash-futures markets today. The timing of the launch of Treasury Link coincides nicely with the upcoming clearing mandate for cash U.S. Treasuries, where this offering will support new execution efficiencies alongside the potential for capital efficiencies via our partnership with CME/FICC and upcoming launch of CME Securities Clearing.”
The pieces already in place
The two components are at different stages. The CME-FICC cross-margining arrangement, which allows clients of dually registered broker-dealers and FCMs that are common members of both FICC and CME to offset cash Treasury positions against interest rate futures positions, was extended to customer positions on 30 April 2026. DTCC reports that the existing member-level arrangement generates an average of $1 billion in risk offsets across both clearing houses each day. As for CME Securities Clearing, the SEC approved its registration as a clearing agency on 1 December 2025, with CME stating at the time that launch was expected in Q2 2026 and that the entity would clear both ‘done-with’ and ‘done-away’ execution.
Treasury Link also follows BrokerTec Chicago, a second BrokerTec central limit order book aimed at relative value traders, co-located in CME Group’s Aurora data centre alongside the Treasury futures and options market. That platform went live in October 2025 and reached a single-day volume record of $1.22 billion on 8 April 2026, according to the company.Together, the four elements describe an execution and clearing stack for cash-futures Treasury activity assembled inside a single group: a cash order book co-located with the futures engine, a spread instrument linking the two, a cross-margining arrangement to net the resulting positions, and a clearing house of CME’s own to compete for the flow the mandate will force into central clearing.
What the spread serves
The cash-futures basis trade is among the largest relative value positions in fixed income. Federal Reserve estimates put outstanding basis trade exposure at roughly $830 billion as of September last year, around double the previous peak recorded in 2020. The strategy has drawn sustained attention from the Fed, the SEC and the Financial Stability Oversight Council, on the grounds that concentrated leveraged positions can amplify stress, as evidenced by the March 2020 dislocation, when rapid unwinding of basis positions contributed to disorderly conditions in the Treasury market.
CME’s position is that consolidating both legs into one instrument reduces operational and execution risk and should support price discovery, and that electronifying more of the activity improves transparency in a cash market that remains less transparent than futures. Treasury Link “offers improved execution performance, pairing with CME Group Capital efficiencies which total $27 billion across cash, futures and swaps,” states Dennis.
The open question
Gierke describes demand in general terms. “We have seen broad based interest from our existing common customers of Treasury futures and BrokerTec, given the efficiencies Treasury Link can provide,” he says. “We have also seen growing interest from participants who would be new to one or both markets. While all new offerings take time to develop, we expect that the breadth of interest and range of potential trading and hedging uses for the offering will support the development of robust liquidity and participation.”
As yet, no dedicated liquidity provision arrangements or market-maker incentives have been disclosed, and no participant numbers have been put on the record. Sell-side firms describe the service in prospective terms: Citi welcomes initiatives bringing greater execution efficiency and transparency, while Morgan Stanley characterises the removal of legging risk as a leap forward in market structure efficiency.
Treasury Link builds on the recently launched BrokerTec Chicago, an electronic trading platform housed at the Aurora data centre specifically aimed at relative value traders, which hit a record single-day volume of $1.22 billion on 8th April 2026.
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