International derivatives marketplace CME Group today announced that it has filed with the CFTC to expand its existing cross-margining agreement with The Depository Trust & Clearing Corporation (DTCC), the premier post-trade market infrastructure for the global financial services industry.
DTCC plans to make a similar filing with its regulator, the Securities and Exchange Commission (SEC), in the near future. Together, the firms intend to enable the cross-margining capabilities needed to provide increased margin savings and capital efficiencies to end user clients by December 2025, subject to regulatory approval.
The proposed enhancement will enable eligible end user clients with positions at CME Group and the Government Securities Division (GSD) of DTCC’s Fixed Income Clearing Corporation (FICC) to benefit from capital efficiencies when trading U.S. Treasury securities and CME Group interest rate futures that have offsetting risk exposures.
To participate in end-user cross-margining, clients will need to use the same dually-registered Futures Commission Merchant (registered with the CFTC) and broker/dealer (registered with the SEC) at both clearinghouses. Under the new arrangement, end user clients could elect to have positions in eligible products at CME Group and positions in eligible products at FICC carried in a cross-margining account and margined based on the combined risk presented by those positions.
