DTCC and CME Group have received approval from the SEC and CFTC to extend their U.S. Treasury cross-margining arrangement to end-user clients of dually registered broker/dealers and futures commission merchants that are common members of DTCC’s Fixed Income Clearing Corporation (FICC) and CME.
The expanded service is due to go live on April 30 and broadens a long-standing house-account arrangement into client accounts. In practice, it will allow eligible end users clearing U.S. Treasury securities through FICC and interest rate futures through CME to offset positions with opposing risk exposures across the two clearing venues. The aim is to reduce margin requirements, release capital and improve liquidity for firms active in cash Treasuries and rates futures.
The extension comes as the US Treasury market adjusts to the practical effects of expanded central clearing requirements, with market participants under pressure to manage collateral, balance sheet usage and operational complexity more efficiently. Against that backdrop, cross-margining is being positioned as a way to soften the funding and margin impact of clearing related Treasury and futures positions through separate infrastructures.
DTCC pointed to the scale of the existing arrangement in proprietary accounts. Frank La Salla, President & CEO at DTCC, said the current model has “a proven track record of creating an average of $1 billion across both clearing houses in risk offsets every day,” and added that “we expect the end-user cross margin effort will lead to additional offsets for the industry.”
CME framed the move in the context of regulatory change in the Treasury market. Terry Duffy, CME Group Chairman and Chief Executive Officer, said: “With the SEC’s central clearing mandates now taking effect, cross-margining is essential — not only for operational efficiency, but to help end users manage the real costs of compliance.”
Cross-margining between CME and FICC has been available for proprietary, or house, accounts since 2004, and the firms announced significant enhancements to the arrangement in 2024. This latest step extends comparable treatment to client business, giving clearing members a way to pass margin efficiencies on to end users where positions meet the eligibility criteria.
Under the model, FICC will designate cross-margin accounts so eligible positions can offset against CME interest rate futures. CME Clearing will allow participants to direct futures into end-user cross-margin accounts during the trading day, making those positions available for inclusion in the offset calculation.
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