DTCC Provides Vision for Central Clearing in the U.S. Treasury Cash Market

DTCC Provides Vision for Central Clearing in the U.S. Treasury Cash Market
08.05.2019 07:44 am

DTCC Provides Vision for Central Clearing in the U.S. Treasury Cash Market

Treasury

The Depository Trust & Clearing Corporation (DTCC), the premier post-trade market infrastructure for the global financial services industry, today announced the release of a new white paper that explores the current structure of the U.S. Treasury securities market, highlighting potential risk and resiliency issues, and describing initiatives that could promote greater use of central clearing.

The white paper, Central Clearing In The U.S. Treasury Cash Market, looks at recent reports from the U.S. Department of the Treasury and the Federal Reserve Board’s Treasury Market Practice Group on the structural transformation now underway, and explores the risk and resiliency issues of bilateral clearing. DTCC is currently engaging with the industry around ways to increase central clearing in the Treasury market to reduce risks and strengthen market resiliency.

The paper looks at initiatives – both implemented and planned – from DTCC’s subsidiary Fixed Income Clearing Corporation (FICC) and how they will promote the growth of central clearing including the Sponsored Membership Program and the centrally Cleared Institutional Triparty (CCIT) Service. It also explores several proposals to support the growth of central clearing activity, including:

  • 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
  • FICC-CME Cross-Margining enhancements and updates

“The past 10 years have seen a global movement toward central clearing, across markets and asset classes,” said Murray Pozmanter, DTCC Managing Director and Head of Clearing Agency Services. “However, we need to further explore the current cause of the shift to bilateral clearing in the Treasury cash market, and deploy solutions that can broaden participation in central clearing to best manage risk in the marketplace.”

The initiatives outlined in the paper may provide options for market participants to increase their centrally cleared activity in the U.S. Treasury

cash market, thus mitigating many of the risks realized with this shift toward bilateral clearing.

Related News

Surecomp® Unveils Trade Finance-as-a-Service for Holistic Trade Finance Management

Surecomp, the market leader in global trade finance and treasury solutions for banks and corporations, today announced the launch of its Trade Finance-as-a-Service (TFaaS)... Read more »

Caixa Geral de Depósitos selects Finastra to transform treasury and capital markets business

Caixa Geral de Depósitos, the largest commercial bank in Portugal, has chosen Finastra to power its end-to-end treasury and capital markets... Read more »

PayClip Selects TreasuryXpress for Comprehensive Treasury Automation

TreasuryXpress, the global leader in on-demand treasury management software today announced that Payclip (Clip),... Read more »

Planixs Expands Global Sales and Marketing Operations

Planixs, the leading provider of real-time banking treasury software, has expanded its sales and marketing team with five new... Read more »

TreasurySpring Launches Fixed-Term Fund (FTF) Platform

TreasurySpring, the London-based financial technology company today announced the launch of its Fixed-Term Fund (FTF) platform.

A Fixed-Term Fund is a completely new... Read more »

Sumitomo Mitsui Trust Bank (Japan) selected Acumennet to be deployed across 6 Overseas Offices to support their Treasury Operations

Profile Software, an international financial services solutions provider, announced today the selection of Login’s Acumennet by ... Read more »

Magazine
ALL
Free Newsletter Sign-up
+44 (0) 208 819 32 53 +44 (0) 173 261 71 47
Download Our Mobile App
Financial It Youtube channel