DTCC to promote growth in US treasury clearing
08 May 2019 New York
Image: Shutterstock
DTCC has provided initiatives to promote growth in central clearing for participants in the US treasury cash market.
In a whitepaper, Central Clearing In The US Treasury Cash Market, DTCC looked at initiatives both implemented and planned.
The paper explained that over the last several years, DTCC’s Fixed Income Clearing Corporation (FICC) subsidiary has executed initiatives that have focused on broadening the accessibility of central clearing for participants in the US Treasury cash market.
It also explored several proposals to support the growth of central clearing activity, including FICC-CME Cross-Margining enhancements and updates.
One update included the advancement of the FICC Start Leg Repo Initiative to include compared same-day starting repo transactions in eligible netting securities in the risk management, novation, guarantee and settlement in the DVP Service benefit.
Expansion of capabilities to designate Locked-In Trade Sources to allow for additional trading volume to be centrally cleared through FICC was also included in the proposals to support growth.
Elsewhere in the paper, DTCC explored the current structure of the US Treasury securities market and highlighted potential risk and resiliency issues.
Murray Pozmanter, DTCC managing director and head of clearing agency services, commented: “The past 10 years have seen a global movement toward central clearing, across markets and asset classes.”
“However, we need to further explore the current cause of the shift to a bilateral clearing in the Treasury cash market, and deploy solutions that can broaden participation in a central clearing to best manage risk in the marketplace.”
In a whitepaper, Central Clearing In The US Treasury Cash Market, DTCC looked at initiatives both implemented and planned.
The paper explained that over the last several years, DTCC’s Fixed Income Clearing Corporation (FICC) subsidiary has executed initiatives that have focused on broadening the accessibility of central clearing for participants in the US Treasury cash market.
It also explored several proposals to support the growth of central clearing activity, including FICC-CME Cross-Margining enhancements and updates.
One update included the advancement of the FICC Start Leg Repo Initiative to include compared same-day starting repo transactions in eligible netting securities in the risk management, novation, guarantee and settlement in the DVP Service benefit.
Expansion of capabilities to designate Locked-In Trade Sources to allow for additional trading volume to be centrally cleared through FICC was also included in the proposals to support growth.
Elsewhere in the paper, DTCC explored the current structure of the US Treasury securities market and highlighted potential risk and resiliency issues.
Murray Pozmanter, DTCC managing director and head of clearing agency services, commented: “The past 10 years have seen a global movement toward central clearing, across markets and asset classes.”
“However, we need to further explore the current cause of the shift to a bilateral clearing in the Treasury cash market, and deploy solutions that can broaden participation in a central clearing to best manage risk in the marketplace.”
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