BNY Mellon will begin allowing futures commission merchants (FCMs) to post a range of collateral, now including corporate bonds, for futures and cleared swaps margins at CME Clearing.
CME Clearing now accepts corporate bonds in addition to cash, government bonds, agency and mortgage-backed bonds, money market funds, letters-of-credit, physical gold, equities and bank deposits to collateralize transactions in the futures and the OTC derivatives market.
Clients of BNY Mellons outsourced derivatives collateral management service can post collateral at CME using MarginEdge, BNY Mellons global derivatives margin management service.
As demand for non-traditional collateral grows at clearinghouses in the wake of regulatory reforms, it is critical that market participants have access to superior operational solutions and support to post and track their collateral, said James Malgieri, head of Global Collateral Management and Securities Clearance Services at BNY Mellon Broker-Dealer Services. BNY Mellon has for many years provided tri-party collateral management services for traditional repo transactions and has expanded the model to meet the requirements of the centralized clearing environment.
BNY Mellon services more than $1.8 trillion in tri-party balances worldwide.
CME Clearings expanded collateral program will help create efficiencies for our customers who are migrating their OTC interest rate swaps into CME Clearing, said CME Clearing President Kim Taylor. By extending the range of collateral accepted, CME Clearing reduces the costs of clearing and creates further efficiencies for our customers and clearing members.
(CG)