CME Group and DTCC to Increase Cross-Margining Opportunities for the Treasury Markets

Rhea-AI Summary

CME Group and DTCC announce enhancements to their cross-margining agreement, pending regulatory approval. The changes will increase capital efficiencies for clearing members trading U.S. Treasury securities and CME Group Interest Rate futures. The enhanced agreement will allow cross-margining of additional products, including CME Group SOFR futures and Ultra Treasury futures, starting from January 2024.

• Enhancements to long-standing cross-margining agreement will launch in January 2024, pending regulatory approval
• Clearing members will be eligible to gain greater margin efficiencies between U.S. Treasury securities and CME Group Interest Rate futures

CHICAGO, NEW YORK, LONDON, HONG KONG, SINGAPORE, SYDNEY, July 18, 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 enhancements to their existing cross-margining arrangement that will increase capital efficiencies for clearing members that trade and clear both U.S. Treasury securities and CME Group Interest Rate futures.

The proposed changes, subject to regulatory approval, are expected to launch in January 2024. Through the enhanced agreement, clearing members of CME and the Government Securities Division of DTCC's Fixed Income Clearing Corporation (FICC) who are eligible to benefit from the program today will be able 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. FICC-cleared U.S. Treasury notes and bonds and Repo transactions that have a time to maturity greater than one year will also be eligible. 

"Today's announcement builds on 20 years of our organizations working together to create efficiencies for Treasury market participants," said Suzanne Sprague, CME Group Global Head of Clearing and Post-Trade Services. "As evidenced in the G30 report, cross-margining has been identified as both a market benefit and a regulatory priority going forward. CME Group is extremely pleased to expand on our collaboration with DTCC to deliver greater opportunities for capital efficiencies for participants who trade across cash and futures markets."

"FICC recognizes the importance of this joint effort, and we are pleased to be working with CME Group to improve the efficiency and resiliency of the overall Treasury market," said Laura Klimpel, General Manager of Fixed Income Clearing Corporation (FICC) & Head of SIFMU Business Development at DTCC.

Notes to Editor

To view the CME Group rule filing, click here. To view the DTCC 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 and driving efficiency for thousands of broker/dealers, custodian banks and asset managers. Industry owned and governed, the firm simplifies the complexities of clearing, settlement, asset servicing, data management, data reporting and information services across asset classes, bringing increased security and soundness to financial markets. In 2022, DTCC's subsidiaries processed securities transactions valued at U.S. $2.5 quadrillion. Its depository provides 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, Twitter, YouTube, Facebook, and Instagram. 

CME-G

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SOURCE CME Group

FAQ

What is the news about CME Group and DTCC?

CME Group and DTCC have announced enhancements to their cross-margining agreement.

What is cross-margining?

Cross-margining is a process that allows clearing members to offset margin requirements by combining positions in different products.

What are the benefits of the enhanced cross-margining agreement?

The enhanced agreement will increase capital efficiencies for clearing members trading U.S. Treasury securities and CME Group Interest Rate futures.

Which products will be eligible for cross-margining?

Under the enhanced agreement, clearing members will be able to cross-margin an expanded suite of products, including CME Group SOFR futures and Ultra Treasury futures.

When will the enhancements be available?

The enhancements are expected to launch in January 2024, pending regulatory approval.