Derivatives marketplace CME Group and post-trade market infrastructure provider the Depository Trust & Clearing Corporation (DTCC), are to expand their existing cross-margining arrangement by December 2025.

According to a press statement, the proposed enhancement to the long-standing existing arrangement, which is subject to regulatory approval, will provide increased margin savings and capital efficiencies. End user clients at CME Group and the Government Securities Division (GSD) of DTCC's Fixed Income Clearing Corporation (FICC) will be able to access capital efficiencies that are available when trading US Treasury securities and CME Group interest rate futures that have offsetting risk exposures.

To participate in end-user cross margining, clients will need to leverage the same dually registered Futures Commission Merchant (FCM) and broker/dealer (as registered with the SEC) at both CCPs. Aligning enhanced cross-margining for end-user customers with the regulatory timeline for expanded US Treasury Clearing requirements encourages greater utilisation of central clearing, therefore 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-margin accounts throughout the day, thereby making them available for offset in the cross-margin arrangement. Ahead of the regulatory approvals, end-users can work to set up a new account, complete proper program legal documentation and test end-to-end workflows.