30 June 2017
New York
Reporter: Drew Nicol

DTCC completes first trade on CCIT platform

The Depository Trust & Clearing Corporation (DTCC) has executed the first trade through its Centrally Cleared Institutional Triparty (CCIT), between Citadel and Morgan Stanley.

The new CCIT membership expands the availability of central clearing in the repo market and extends central counterparty (CCP) services and the guaranty of the completion of eligible triparty repo transactions between dealer members and eligible institutional cash lenders.

The first trade comes a month after the US Securities and Exchange Commission (SEC) approved rule changes that allow institutional investors to participate directly in the clearinghouse through CCIT membership.

According to DTCC, expanding the CCP guaranty to a broader number of participants would lower the risk of diminished liquidity in the triparty repo market caused by a large scale exit of participants in a market stress situation.

It would also mean that a failed counterparty can be centrally liquidated ‘in an orderly manner’ by FICC, thereby reducing the risk of fire sales that drive down asset prices and spread stress across the financial system.

CCIT comes under the umbrella of DTCC’s Fixed Income Clearing Corporation (FICC) subsidiary.

FICC works with asset managers, pension funds, insurance companies, state treasuries, along with other dealers and cash lenders.

Murray Pozmanter, DTCC managing director and head of clearing agency services, said: “We are very pleased to have been able to work with Citadel and Morgan Stanley to take this next step to make CCIT a reality.”

“With a greater number of market participants leveraging the clearinghouse through the CCIT Service, we are able to strengthen both the safety and efficiency of the tri-party repo marketplace.”

Tom Wipf, vice chairman of institutional securities at Morgan Stanley, added: “We congratulate FICC on this important enhancement to the structure of the repo market. The combination of expanded market access for our clients and the overall reduction in counterparty credit risk is a major step forward for all participants in the repo market.”

“FICC has worked diligently over the past several years to bring this strategic product to market and we at Morgan Stanley are proud to partner with Citadel on this inaugural cleared repo trade.”

More news
The latest news from Securities Lending Times
Join Our Newsletter

Sign up today and never
miss the latest news or an issue again

Subscribe now
Hedge funds continue to attract inflows, says J.P. Morgan survey
23 February 2018 | London | Reporter: Brian Bollen
Hedge funds continue to attract inflows, according to a J.P. Morgan 2018 Institutional Investor Survey
SEC votes to extend compliance date for liquidity classification
23 February 2018 | Washington DC | Reporter: Jenna Lomax
The deadline, which will be extended by six months, will provide funds additional time to complete implementation of the final rule's classification requirement
ISDA releases best practice for margin call issuance and response
23 February 2018 | London | Reporter: Jenna Lomax
The ISDA CIC examined the minimum set of fields which is required to communicate the issuance of a margin call, as well as the expected response of a margin call
ESMA gives SSR technical advice
23 February 2018 | Brussels | Reporter: Brian Bollen
Verena Ross, executive director at the ESMA, addressed the Economic and Monetary Affairs Committee of the European Parliament to discuss elements of the short selling regulation
Saxo Bank sees positive growth in 2017
23 February 2018 | Copenhagen | Reporter: Jenna Lomax
Saxo Bank’s reported 33 percent increase in net profit follows the sale of its subsidiary Saxo Privatbank earlier this month
ROBO appoints BNY Mellon as custodian and sec lending agent
22 February 2018 | New York | Reporter: Brian Bollen
ROBO Global, creator of the world’s first ETF to track the global RAAI sector, has selected BNY Mellon to provide the firm with custody and transfer agency services
FCA launches call for input on use of technology for regulation
22 February 2018 | London | Reporter: Jenna Lomax
The Financial Conduct Authority is seeking views on how technology can make it easier for firms to meet their regulatory reporting requirements and improve the quality of the information they provide