CME Group to Launch Treasury Clearing House on 7 December | LeapRate
CME Group said Thursday that it will launch CME Securities Clearing on 7 December.
The move is said to offer market participants a new option to clear US Treasury cash and repo transactions and comply with the SEC’s central clearing mandate, pending regulatory approvals.
The derivatives exchange operator noted that the SEC-registered clearing house will operate alongside its longstanding cross-margining partnership with the Fixed Income Clearing Corporation.
It will support both “done-with” and “done-away” execution and clearing, allowing clearing members and independent users to optimise capital efficiencies across cash Treasuries, repo and CME Group interest rate futures.
Eligible firms will be able to offset margin associated with eligible positions across both clearing houses, reducing margin requirements, freeing up capital and improving liquidity.
“With U.S. debt reaching a record $40 trillion and the clearing mandate months away, the U.S. Treasury market is undergoing the biggest transformation in a generation,” commented Terry Duffy, CME Group chairman and chief executive.
He added that the new clearing house, together with the existing FICC arrangement that already produces over $2 billion in daily margin savings, would provide another capital-efficient option “precisely when the market needs it most.”
Suzanne Sprague, chief operating officer and global head of clearing and post-trade services, described the launch as the culmination of years of preparation and a natural extension of the firm’s expertise in clearing interest rate risk.
The SEC’s Treasury clearing rule requires central clearing of eligible cash transactions by 31 December 2026 and eligible repo transactions by 30 June 2027.
