New York Portfolio Clearing, LLC (NYPC) has successfully executed its first physical delivery of US Treasury futures.
NYPC’s “locked-in” trade delivery system seamlessly submitted $1.275 billion notional in expiring US Treasury futures from NYPC to The Depository Trust & Clearing Corporation’s (DTCC) Fixed Income Clearing Corporation (FICC) for physical delivery. The member firms’ activity was then automatically netted with all trades the member firms cleared with FICC on that day. NYPC’s “locked-in” delivery process combined with its unprecedented “one-pot” margining across proprietary futures and cash portfolios provides market participants with significant capital and operational efficiencies across their portfolios.
“We are proud of the successful and orderly completion of our first series of physical deliveries for our US Treasury futures complex,” says Walt Lukken, chief executive officer of NYPC. “All current NYPC customers will benefit from the ease and efficiencies of our locked-in physical delivery processes. We look forward to expanding the universe of market participants who will benefit from the unique capital and operational advancements as we onboard new clearing members in the coming months.”
Tom Wipf, NYPC board member and global head of bank resource management for Morgan Stanley, adds: “NYPC’s trade delivery process is a clear improvement in operational mechanics of US Treasury physical delivery that seamlessly integrates the futures and cash fixed-income settlement systems. Market participants will substantially benefit from this transparent and efficient innovation.”
NYPC is a joint venture of DTCC and NYSE Euronext (NYX) created to deliver capital efficiencies to the market by netting and reducing risks between a clearing member’s portfolio of cash bonds and derivatives, combined with a streamlined delivery process allowing for the seamless netting of futures and cash positions. NYPC currently clears Eurodollar and US Treasury futures listed on NYSE Liffe US, the US futures exchange of NYSE Euronext.
For more on the NYPC, click here.
To view an interview with Lukken, click here.
(CM)