On April 15th, the SEC announced a conditional exemptive order that would permit customer cross‑margining between cash market positions in US Treasury securities cleared by a registered clearing agency and futures positions in US Treasury securities cleared by a registered derivatives clearing organization. The exemption applies to broker‑dealers that are also registered as futures commission merchants with the Commodity Futures Trading Commission (CFTC) and that serve as joint clearing members of both clearing entities. In accordance with the order, these organizations now may offer cross‑margining to eligible customers in a futures account as long as all conditions of the exemption are met.
Additionally, the SEC approved a rule change submitted by the Fixed Income Clearing Corporation (FICC) to enter into a Third Amended and Restated Cross‑Margining Agreement with the Chicago Mercantile Exchange. The agreement will be included in the FICC Government Securities Division rules, and it will extend cross‑margining to customer positions cleared and carried by dually registered broker‑dealers that are common members of both FICC and CME. Prior to this rulemaking, only clearing members were able to cross‑margin Treasury futures positions cleared at CME with cash Treasury positions cleared at FICC.
The exemptive order and the FICC rule‑approval order are posted on sec.gov, and a related CFTC exemptive order will be available on CFTC.gov before publication in the Federal Register.
Source:
SEC Approves Exemptive Order and Proposed Rule Change to Permit Customer Cross-Margining in the U.S. Treasury Market (sec.gov)
