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DTCC’s FICC Proposes ’Collateral-in-Lieu’ Service to Streamline Treasury Clearing
DTCC’s FICC Proposes ’Collateral-in-Lieu’ Service to Streamline Treasury Clearing
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BTCCSquare news:
The Depository Trust & Clearing Corporation (DTCC) has filed a rule with the SEC to introduce a Sponsored General Collateral 'Collateral-in-Lieu' service through its Fixed Income Clearing Corporation (FICC) subsidiary. The initiative aims to address margin and capital efficiency challenges tied to the U.S. Treasury Clearing mandate.
The new offering eliminates the 'double-margining' issue by allowing dealers to apply a CCP lien instead of posting haircuts to money market funds and margin to the clearinghouse. FICC's Sponsored Service already processes over $2 trillion daily, underscoring its significance in buyside clearing.
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