DTCC gained approval from the US Securities and Exchange Commission (SEC) to expand its cleared repo services through its Fixed Income Clearing Corporation (FICC) subsidiary to allow institutional investors to participate in the new centrally cleared institutional triparty (CCIT) service.
Investors can also access the services indirectly through a sponsoring member bank. FICC will now permit additional qualified institutional buyer clients to lend cash and US treasuries via their sponsoring member banks throughout the day.
According to DTCC, CCIT is the only US central counterparty (CCP) platform that clears triparty repo and debt transactions.
As an expansion of the core GCF Repo Service, FICC will extend its CCP services and guaranty of the completion of eligible trades to triparty repo transactions between its dealer members and eligible triparty cash lenders.
Commenting on the SEC’s approval, DTCC said that centrally clearing these transactions at FICC offers members opportunities for potential balance sheet netting and capital relief, which, in turn, may afford institutional investors increased lending capacity and income.
“The repo market is a critical source of funding for broker-dealers and an important cash management tool for institutional counterparties,” said Murray Pozmanter, DTCC head of clearing agency services.
“We believe the larger group of market participants able to use central clearing through the CCIT Service and sponsored membership program strengthens the entire marketplace.”
“We applaud the SEC actions, and look forward to delivering increased central clearing capabilities to our expanded community.”