FICC submits proposal to offer new 鈥楥ollateral-in-Lieu鈥� service
03 September 2025 US
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The Fixed Income Clearing Corporation (FICC) has submitted a rule filing with the US 网爆吃瓜 and Exchange Commission (SEC) to approve a new collateral service.
The move aims to enhance FICC鈥檚 Sponsored Service with a new cleared triparty offering known as the Sponsored General Collateral (GC) 鈥淐ollateral-in-Lieu鈥� service.
The new enhancement is designed to solve industry concerns regarding the need for enhanced margin and capital efficiency, to ensure a smooth implementation of the US Treasury clearing mandate, says the Depository Trust & Clearing Corporation (DTCC) subsidiary.
The proposed service is to use the haircut typically posted by dealers to money market funds, and other cash investors in triparty, via a CCP lien that is applied 鈥渋n lieu鈥� of both a sponsor guaranty of client performance and the posting of margin to the CCP (in most circumstances), thereby solving for the so-called double-margining challenge.
While the firm anticipates a December 2025 release date, the filing will be published in the Federal Register with a public comment period to follow.
Laura Klimpel, managing director, head of DTCC鈥檚 Fixed Income and Financing Solutions, says: 鈥淭he Sponsored Service has been an incredibly popular buy side clearing solution, with over US$2 trillion in volume flowing through the service on a typical day.
鈥淭he proposed Collateral-in-Lieu service has been intentionally designed to build upon that success and allow sponsors and their clients to leverage many of their existing legal agreements and operational processes for sponsored repo, but take the margin and capital efficiencies of the product to the next level.鈥�
The Collateral-in-Lieu service would be offered by FICC, using BNY鈥檚 triparty infrastructure to support the collateral management and settlement of the Collateral-in-Lieu repo trades, with both done-away and done-with styles of trade execution to be supported in the service.
Nate Wuerffel, BNY鈥檚 global head of market structure and product leader for the Global Collateral Platform, adds: 鈥淭he FICC鈥檚 Sponsored GC Collateral-in-Lieu service is precisely the type of solution the industry needs to meet the SEC鈥檚 central clearing rule in a capital- and margin-efficient way.
鈥淏uilt using BNY鈥檚 global collateral platform 鈥� the largest Treasury triparty repo settlement venue 鈥� Collateral-in-Lieu offers Treasury market participants streamlined, efficient access to central clearing.鈥�
The move aims to enhance FICC鈥檚 Sponsored Service with a new cleared triparty offering known as the Sponsored General Collateral (GC) 鈥淐ollateral-in-Lieu鈥� service.
The new enhancement is designed to solve industry concerns regarding the need for enhanced margin and capital efficiency, to ensure a smooth implementation of the US Treasury clearing mandate, says the Depository Trust & Clearing Corporation (DTCC) subsidiary.
The proposed service is to use the haircut typically posted by dealers to money market funds, and other cash investors in triparty, via a CCP lien that is applied 鈥渋n lieu鈥� of both a sponsor guaranty of client performance and the posting of margin to the CCP (in most circumstances), thereby solving for the so-called double-margining challenge.
While the firm anticipates a December 2025 release date, the filing will be published in the Federal Register with a public comment period to follow.
Laura Klimpel, managing director, head of DTCC鈥檚 Fixed Income and Financing Solutions, says: 鈥淭he Sponsored Service has been an incredibly popular buy side clearing solution, with over US$2 trillion in volume flowing through the service on a typical day.
鈥淭he proposed Collateral-in-Lieu service has been intentionally designed to build upon that success and allow sponsors and their clients to leverage many of their existing legal agreements and operational processes for sponsored repo, but take the margin and capital efficiencies of the product to the next level.鈥�
The Collateral-in-Lieu service would be offered by FICC, using BNY鈥檚 triparty infrastructure to support the collateral management and settlement of the Collateral-in-Lieu repo trades, with both done-away and done-with styles of trade execution to be supported in the service.
Nate Wuerffel, BNY鈥檚 global head of market structure and product leader for the Global Collateral Platform, adds: 鈥淭he FICC鈥檚 Sponsored GC Collateral-in-Lieu service is precisely the type of solution the industry needs to meet the SEC鈥檚 central clearing rule in a capital- and margin-efficient way.
鈥淏uilt using BNY鈥檚 global collateral platform 鈥� the largest Treasury triparty repo settlement venue 鈥� Collateral-in-Lieu offers Treasury market participants streamlined, efficient access to central clearing.鈥�
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