Depository Trust & Clearing Corporation and CME Group had their expanded cross-margining arrangement, designed to create additional capital efficiencies for market participants, receive regulatory approvals from the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission. Beginning April 30, Depository Trust & Clearing Corporation and CME Group will extend the benefits of cross-margining to end-user clients of dually registered broker/dealers and futures commission merchants that are common members of both the Depository Trust & Clearing Corporation's Fixed Income Clearing Corporation and CME. Clients can benefit from increased capital and margin efficiencies when clearing transactions in U.S. Treasury securities through Fixed Income Clearing Corporation and interest rate futures through CME when those transactions have offsetting risk exposures.
Clients active in trading U.S. Treasury and interest rate derivatives will be able to offset eligible positions across both clearinghouses, reducing margin requirements, freeing up capital and improving liquidity. CME-Fixed Income Clearing Corporation cross-margining arrangements have been available to common clearing members with respect to their proprietary accounts since 2004, with significant enhancements to the arrangement announced in 2024. This latest expansion will now enable clearing members to extend equivalent margining benefits to their clients.
Under the arrangement, Fixed Income Clearing Corporation will designate cross-margin accounts, allowing all eligible positions in the account to offset with eligible CME Group interest rate futures. CME Clearing allows participants to direct futures to end-user cross-margin accounts throughout the day, thereby making them available for offset in the cross-margin arrangement.
