CME Group has filed with the U.S. Commodity Futures Trading Commission (CFTC) to expand its cross-margining arrangement with The Depository Trust & Clearing Corporation (DTCC), in a move aimed at extending margin savings and capital efficiencies to end user clients.
CME Group Seeks Approval to Expand Cross-Margining for End Users
DTCC said it plans to make a similar filing with the Securities and Exchange Commission (SEC) in the near future. Subject to regulatory approval, the firms intend to roll out the expanded service by December 2025.
The proposed changes would allow eligible end user clients with positions at CME Group and at the Government Securities Division (GSD) of DTCC’s Fixed Income Clearing Corporation (FICC) to benefit from cross-margining when trading U.S. Treasury securities and CME Group interest rate futures with offsetting risk exposures.
CME Group described the initiative as a step towards greater efficiency for institutional investors.
The firm noted that, under the arrangement, clients could elect to have eligible positions at both clearinghouses held in a cross-margining account and margined on the basis of the combined risk of those positions.
To participate, end users will be required to use the same dually registered Futures Commission Merchant (with the CFTC) and broker-dealer (with the SEC) across both clearinghouses.
CME Group and DTCC said the expansion builds on their existing collaboration, which is designed to reduce collateral demands and free up capital for market participants.
