CME Group & DTCC: Revolutionizing U.S. Treasury Markets with Enhanced Cross-Margining

In a significant move to enhance capital efficiencies and reduce systemic risk, CME Group and The Depository Trust & Clearing Corporation (DTCC) have announced plans to expand their existing cross-margining arrangement, extending benefits to end users by December 2025. This strategic enhancement, subject to regulatory approval, will enable 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 and CME Group interest rate futures with offsetting risk exposures.

The proposed arrangement will require clients to leverage the same dually registered Futures Commission Merchant (FCM) and broker/dealer (as registered with the SEC) at both CCPs to participate in end-user cross margining. This requirement creates a natural barrier to entry, potentially strengthening CME's competitive position in interest rate derivatives. By aligning enhanced cross-margining for end-user customers with the regulatory timeline for expanded U.S. Treasury Clearing requirements, the initiative encourages greater utilization of central clearing, thereby reducing systemic risk.

Under the proposed arrangement, FICC will designate cross-margin accounts, allowing all eligible positions in the account to offset with eligible CME Group interest rate futures. CME Group will allow participants to direct futures to end-user cross-marg