CME Group and DTCC Receive Regulatory Approval for Enhanced Treasury Cross-Margining Arrangement Launching January 2024

Rhea-AI Summary

CME Group and DTCC receive regulatory approvals for enhanced cross-margining arrangement, expected to launch in January 2024.

Positive

• The enhanced cross-margining arrangement will enable capital efficiencies for clearing members that trade and clear both U.S. Treasury securities and CME Group Interest Rate futures.
• The arrangement allows eligible clearing members to cross-margin an expanded suite of products, including CME Group SOFR futures, Ultra 10-Year U.S. Treasury Note futures, and Ultra U.S. Treasury Bond futures.
• Repo transactions with Treasury collateral over one year to maturity will also be eligible for the enhanced cross-margining arrangement.

Negative

• None.

CHICAGO and NEW YORK and LONDON and HONG KONG and SINGAPORE and SYDNEY, Sept. 12, 2023 /PRNewswire/ -- CME Group, the world's leading derivatives marketplace, and The Depository Trust & Clearing Corporation (DTCC), the premier post-trade market infrastructure for the global financial services industry, today announced their enhanced cross-margining arrangement has received Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) approvals. The arrangement will enable capital efficiencies for clearing members that trade and clear both U.S. Treasury securities and CME Group Interest Rate futures and is expected to launch in January 2024.

The new cross-margining arrangement will permit eligible clearing members of CME and the Government Securities Division (GSD) of DTCC's Fixed Income Clearing Corporation (FICC) to cross-margin an expanded suite of products, including CME Group SOFR futures, Ultra 10-Year U.S. Treasury Note futures and Ultra U.S. Treasury Bond futures, and FICC-cleared U.S. Treasury notes and bonds. Repo transactions that have Treasury collateral with a remaining time to maturity greater than one year will also be eligible for the enhanced cross-margining arrangement.

"In line with our longstanding commitment to provide capital efficiencies to market users, we are very pleased to bring this enhanced cross-margining arrangement to the Treasury marketplace in January," said Suzanne Sprague, CME Group Global Head of Clearing and Post-Trade Services. "We appreciate the opportunity to further our collaboration with DTCC for the benefit of market participants who trade across cash and futures markets."

"We are pleased to have received regulatory approval of our enhanced cross-margining arrangement," said Laura Klimpel, General Manager of Fixed Income Clearing Corporation (FICC) & Head of SIFMU Business Development at DTCC. "The approval of the arrangement paves the way for increased efficiency and resiliency of the overall U.S. Treasury Market, and we look forward to working with CME Group to deliver upon these important enhancements."

Notes to Editor
To view the CME Group rule filing, click here. To view the FICC rule filing, click here.

About CME Group
As the world's leading derivatives marketplace, CME Group (www.cmegroup.com) enables clients to trade futures, options, cash and OTC markets, optimize portfolios, and analyze data – empowering market participants worldwide to efficiently manage risk and capture opportunities. CME Group exchanges offer the widest range of global benchmark products across all major asset classes based on interest rates, equity indexes, foreign exchange, energy, agricultural products and metals.  The company offers futures and options on futures trading through the CME Globex platform, fixed income trading via BrokerTec and foreign exchange trading on the EBS platform. In addition, it operates one of the world's leading central counterparty clearing providers, CME Clearing.

CME Group, the Globe logo, CME, Chicago Mercantile Exchange, Globex, and, E-mini are trademarks of Chicago Mercantile Exchange Inc. CBOT and Chicago Board of Trade are trademarks of Board of Trade of the City of Chicago, Inc. NYMEX, New York Mercantile Exchange and ClearPort are trademarks of New York Mercantile Exchange, Inc. COMEX is a trademark of Commodity Exchange, Inc. BrokerTec and EBS are trademarks of BrokerTec Europe LTD and EBS Group LTD, respectively. The S&P 500 Index is a product of S&P Dow Jones Indices LLC ("S&P DJI"). "S&P®", "S&P 500®", "SPY®", "SPX®", US 500 and The 500 are trademarks of Standard & Poor's Financial Services LLC; Dow Jones®, DJIA® and Dow Jones Industrial Average are service and/or trademarks of Dow Jones Trademark Holdings LLC. These trademarks have been licensed for use by Chicago Mercantile Exchange Inc. Futures contracts based on the S&P 500 Index are not sponsored, endorsed, marketed, or promoted by S&P DJI, and S&P DJI makes no representation regarding the advisability of investing in such products. All other trademarks are the property of their respective owners.

About DTCC
With 50 years of experience, DTCC is the premier post-trade market infrastructure for the global financial services industry. From 20 locations around the world, DTCC, through its subsidiaries, automates, centralizes, and standardizes the processing of financial transactions, mitigating risk, increasing transparency, enhancing performance and driving efficiency for thousands of broker/dealers, custodian banks and asset managers. Industry owned and governed, the firm innovates purposefully, simplifying the complexities of clearing, settlement, asset servicing, transaction processing, trade reporting and data services across asset classes and bringing increased security, enhanced resilience and soundness to financial markets. In 2022, DTCC's subsidiaries processed securities transactions valued at U.S. $2.5 quadrillion and its depository subsidiary provided custody and asset servicing for securities issues from over 150 countries and territories valued at U.S. $72 trillion. DTCC's Global Trade Repository service, through locally registered, licensed, or approved trade repositories, processes more than 17.5 billion messages annually. To learn more, please visit us at www.dtcc.com or connect with us on LinkedIn, X, YouTube, Facebook, and Instagram. 

CME-G

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SOURCE CME Group