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
Pilot repo survey reveals Japan as regional activity centre
26 September 2017 | London | Reporter: Jenna Lomax
The survey, which was the first of its kind carried out by ICMA and ASIFMA, found the majority of repo collateral was made up of Japanese government bonds
Shadow banking will not be banned, confirms IMF
26 September 2017 | Helsinki | Reporter: Jenna Lomax
The IMF, along with the FSB and other regulatory bodies, have no desire to shut down the alternative financing industry but that some aspects of the market’s risk features must be managed
Hedge funds see record-breaking returns, says eVestment
26 September 2017 | Atlanta | Reporter: Jenna Lomax
Investors added an estimated $13.4 billion to hedge funds in August, bringing in more money than was spent, which lead total AUM to $3.2 trillion
Broadridge expands sec finance project team
25 September 2017 | London | Reporter: Drew Nicol
Broadridge has recruited Martin Walker as head of product management for securities finance and collateral management
US Volcker Rule not fit for purpose, says SIFMA
22 September 2017 | New York | Reporter: Drew Nicol
The US Volcker Rule is too broad, excessively complex, and uniquely prescriptive, according to the Securities Industry and Financial Markets Association
Pension fund mandate for BNP Paribas
22 September 2017 | London | Reporter: Drew Nicol
BNP Paribas has been appointed to provide global custody for £3 billion in pension fund assets for the West Sussex Pension Fund
Pirum joins South African securities lending association
21 September 2017 | Johannesburg | Reporter: Drew Nicol
Pirum Systems has joined the South African Securities Lending Association