CME Group, a leading global derivatives marketplace, and The Depository Trust & Clearing Corporation (DTCC), a key player in post-trade market infrastructure, have confirmed plans to expand their long-standing cross-margining arrangement. The move aims to provide greater margin savings and capital efficiencies to end users, with the new arrangement expected to be in place by December 2025, subject to regulatory approval.
The enhancement will allow eligible end-user clients at CME Group and the Government Securities Division (GSD) of DTCC’s Fixed Income Clearing Corporation (FICC) to access capital efficiencies when trading U.S. Treasury securities alongside CME Group interest rate futures that have offsetting risk exposures.
To participate in the expanded cross-margining, clients will need to use the same dually registered Futures Commission Merchant (FCM) and broker/dealer, both registered with the SEC, at both Central Counterparties (CCPs).
This expanded cross-margining arrangement is aligned with the regulatory timeline for U.S. Treasury Clearing requirements, promoting the increased use of central clearing, which in turn reduces systemic risk in the market.
“We’re taking a critical step in enhancing capital efficiencies across U.S. Treasury market participants,” said Laura Klimpel, Managing Director and Head of DTCC’s Fixed Income and Financing Solutions. “This ongoing collaboration with CME Group will extend cross-margin benefits to more customer accounts and other products, enabling improved liquidity, reduced costs, and better risk management in the U.S. Treasury markets.”
Suzanne Sprague, CME Group’s Chief Operating Officer and Global Head of Clearing and Post-Trade Services, added, “This milestone in extending cross-margining to client accounts is a significant step toward making U.S. Treasury markets more efficient for all users. We look forward to working with DTCC and regulators to bring even greater benefits to cash and futures market participants.”
Under the proposed arrangement, FICC will designate cross-margin accounts where eligible positions will be offset with CME Group interest rate futures. CME Group will enable participants to direct futures into these accounts throughout the day for offset in the cross-margining setup. Ahead of regulatory approval, end-users are encouraged to set up new accounts, complete legal documentation, and test workflows.
