DTCC’s subsidiary Fixed Income Clearing Corporation (FICC) has achieved a milestone in the transformation of the US treasury market toward central clearing as Citadel executed and cleared both cash and repo trades via FICC’s recently expanded Sponsored Service model.
The Sponsored Service was recently extended to cover a wider scope of market players who can act as sponsors.
The expansion also allowed sponsor member clients to facilitate clearing transactions with market participants other than their sponsors, labelled a “done away” activity.
This enabled Palafox, a subsidiary of Citadel, to be the first sponsor to carry out centrally cleared “done away” cash and repo trades on behalf of Citadel’s Global Fixed Income Master Fund.
Murray Pozmanter, managing director and head of clearing agency services at DTCC, commented: “The greatest benefit of allowing different types of firms to be sponsors is that FICC has now made it possible to bring a much larger percentage of the market into clearing, while maintaining our robust risk management standards.”
Dan Dufresne, managing director and global treasurer at Citadel, added: “We continue to support FICC’s efforts to expand the accessibility of central clearing for cash and repo trading, and are excited to be a part of this important milestone in the evolution of the US treasury markets.”
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