CHICAGO, Aug. 2, 2022
/PRNewswire/ -- CME Group, the world's leading derivatives
marketplace, today announced that CME Clearing has further expanded
the collateral it accepts and now will permit clearing members to
deposit Short-Term U.S. Treasury Exchange Traded Funds (ETFs) to
meet initial margin requirements.
CME Clearing accepts the widest range of collateral of any major
clearing house. The addition of short-term ETFs gives clearing
members and their clients greater flexibility and increased
efficiency in managing their collateral costs. In particular, the
ETFs pay a dividend, which is more operationally efficient and
mitigates the need for clients to re-invest maturity proceeds for
individual U.S. Treasury securities.
"We are very pleased to provide our market participants with
additional capital efficiencies by continuing to expand the types
of collateral we accept," said Suzanne
Sprague, Senior Managing Director and Global Head of
Clearing & Post-Trade Services. "We've worked closely with ETF
sponsors to ensure that this new collateral both meets our rigorous
risk management standards and offers a broader range of collateral
choices for clearing members."
"iShares launched the first four-bond ETFs 20 years ago
believing they would modernize fixed income markets by increasing
transparency and liquidity while unlocking sophisticated portfolio
and trading capabilities for our clients," said Carolyn Weinberg, Global Head of Product for ETF
and Index Investments, BlackRock. "Margin and collateral are a new
use case for bond ETFs like SGOV and SHV, which further
demonstrates how they are useful, resilient investment tools that
can improve outcomes for individuals and large institutions alike."
"Treasury ETFs such as the Goldman Sachs Access Treasury 0-1
Year ETF (GBIL) are a useful form of collateral that may benefit
clients who have challenges managing the roll of a U.S. Treasury
Bill portfolio, or who simply wish to outsource treasury
management," said Mike Crinieri,
Global Head of ETFs at Goldman Sachs Asset Management. "We are
excited to work with CME Clearing to deliver the operational
efficiency of the ETF wrapper for collateral purposes."
"We appreciate that CME Clearing has developed an initiative to
create a flexible and efficient funding solution for market
participants with initial margin requirements," says Emily McKinley, Head of Institutional
Specialists for Invesco ETFs and Indexed Strategies. "CME
Clearing's addition of the Invesco Treasury Collateral ETF (CLTL)
and other short-duration U.S. Treasury ETFs as eligible collateral
expands the available toolset for collateral providers and
receivers."
"This initiative aims to bring flexible and efficient funding
solutions for market participants with initial margin requirements
and highlights an additional use case for short term treasury
ETFs," said Kimberly Russell, Vice
President and Market Structure Specialist at State Street Global
Advisors.
The short-term ETFs invest in U.S. Treasury securities with less
than one-year to maturity and are portable instruments held at the
Depository Trust Company. More information about this new
acceptable collateral is available here.
About CME Group
As the world's leading derivatives
marketplace, CME Group (www.cmegroup.com) enables clients to trade
futures, options, cash and OTC markets, optimize portfolios, and
analyze data – empowering market participants worldwide to
efficiently manage risk and capture opportunities. CME Group
exchanges offer the widest range of global benchmark products
across all major asset classes based on interest
rates, equity indexes, foreign
exchange, energy, agricultural
products and metals. The company offers futures and
options on futures trading through the CME Globex® platform, fixed
income trading via BrokerTec and foreign exchange trading on the
EBS platform. In addition, it operates one of the world's
leading central counterparty clearing providers, CME
Clearing.
CME Group, the Globe logo, CME, Chicago Mercantile Exchange,
Globex, and, E-mini are trademarks of Chicago Mercantile
Exchange Inc. CBOT and Chicago Board of Trade are trademarks of Board
of Trade of the City of Chicago,
Inc. NYMEX, New York Mercantile Exchange and ClearPort are
trademarks of New York Mercantile Exchange, Inc. COMEX is a
trademark of Commodity Exchange, Inc. BrokerTec and EBS are
trademarks of BrokerTec Europe LTD and EBS Group LTD,
respectively. Dow Jones, Dow Jones Industrial Average, S&P
500 and S&P are service and/or trademarks of Dow Jones
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other trademarks are the property of their respective
owners.
CME-G
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SOURCE CME Group