DTCC鈥檚 FICC and BNY launch collateral-in-lieu service
23 December 2025 US, UK, Australia
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The Depository Trust and Clearing Corporation鈥檚 (DTCC) Fixed Income Clearing Corporation (FICC) subsidiary has launched its Collateral-in-Lieu (CIL) service under its Sponsored General Collateral (GC) offering via BNY鈥檚 Global Collateral Platform, with BNY 网爆吃瓜 Finance and Federated Hermes, executing the first repo trade on the solution.
The CIL service enhances FICC鈥檚 clearing model offerings by delivering margin and capital efficiencies and will accelerate the market鈥檚 transition to central clearing under the US 网爆吃瓜 and Exchange Commission鈥檚 (SEC鈥檚) US Treasury clearing mandate.
The service maintains the haircut typically posted by dealers to money market funds and other cash investors in triparty while implementing a CCP lien that is applied 鈥渋n lieu鈥� of both a sponsor guaranty and margin posting to the CCP (in most circumstances).
This approach eliminates double-margining for some sponsored members and streamlines operational processes for market participants, leveraging the benefits of triparty.
The firm says the key benefits of FICC鈥檚 collateral-in-lieu include margin and capital efficiency, operational streamlining, and central clearing access, supporting compliance with the SEC鈥檚 US Treasury clearing rule.
The service leverages BNY鈥檚 triparty infrastructure for collateral management and settlement, supporting both 鈥榙one-away鈥� and 鈥榙one-with鈥� trade execution styles.
Laura Klimpel, managing director, head of DTCC鈥檚 Fixed Income and Financing Solutions, remarks: 鈥淭his important milestone underscores our commitment to delivering innovative solutions that enhance margin and capital efficiency for all types of firms, to addressing issues within the industry and to supporting firms as they work towards regulatory compliance.鈥�
Nate Wuerffel, BNY鈥檚 head of Market Structure and product leader for the Global Collateral Platform, notes: 鈥淐ollateral-in-Lieu represents a major step forward in the path to central clearing by introducing a margin and capital efficient means to clear repo transactions leveraging BNY鈥檚 Global Collateral Platform.
鈥淭his is the first of many trades that will help expand cleared repo activity ahead of the mandatory clearing deadline.鈥�
Susan Hill, chartered financial analyst, senior portfolio manager and head of the Government Liquidity Group at Federated Hermes, says: 鈥淔ederated Hermes is pleased to collaborate with BNY 网爆吃瓜 Finance to be the first cash provider to execute a transaction on FICC鈥檚 Collateral-in-Lieu service.
鈥淭his solution expands our access to cleared repo, helping us to deliver value to clients while meeting evolving regulatory requirements. Collateral-in-Lieu reflects our commitment to ongoing innovation and the advancement of resilient market structure.鈥�
Nehal Udeshi, BNY鈥檚 head of 网爆吃瓜 Finance, adds: 鈥淲e鈥檙e proud to work with DTCC, BNY鈥檚 Global Collateral Platform and Federated Hermes to execute the first repo trade in Collateral-in-Lieu. This solution creates greater capacity for us to support client activity and is critical as the market scales toward mandatory clearing.鈥�
The CIL service enhances FICC鈥檚 clearing model offerings by delivering margin and capital efficiencies and will accelerate the market鈥檚 transition to central clearing under the US 网爆吃瓜 and Exchange Commission鈥檚 (SEC鈥檚) US Treasury clearing mandate.
The service maintains the haircut typically posted by dealers to money market funds and other cash investors in triparty while implementing a CCP lien that is applied 鈥渋n lieu鈥� of both a sponsor guaranty and margin posting to the CCP (in most circumstances).
This approach eliminates double-margining for some sponsored members and streamlines operational processes for market participants, leveraging the benefits of triparty.
The firm says the key benefits of FICC鈥檚 collateral-in-lieu include margin and capital efficiency, operational streamlining, and central clearing access, supporting compliance with the SEC鈥檚 US Treasury clearing rule.
The service leverages BNY鈥檚 triparty infrastructure for collateral management and settlement, supporting both 鈥榙one-away鈥� and 鈥榙one-with鈥� trade execution styles.
Laura Klimpel, managing director, head of DTCC鈥檚 Fixed Income and Financing Solutions, remarks: 鈥淭his important milestone underscores our commitment to delivering innovative solutions that enhance margin and capital efficiency for all types of firms, to addressing issues within the industry and to supporting firms as they work towards regulatory compliance.鈥�
Nate Wuerffel, BNY鈥檚 head of Market Structure and product leader for the Global Collateral Platform, notes: 鈥淐ollateral-in-Lieu represents a major step forward in the path to central clearing by introducing a margin and capital efficient means to clear repo transactions leveraging BNY鈥檚 Global Collateral Platform.
鈥淭his is the first of many trades that will help expand cleared repo activity ahead of the mandatory clearing deadline.鈥�
Susan Hill, chartered financial analyst, senior portfolio manager and head of the Government Liquidity Group at Federated Hermes, says: 鈥淔ederated Hermes is pleased to collaborate with BNY 网爆吃瓜 Finance to be the first cash provider to execute a transaction on FICC鈥檚 Collateral-in-Lieu service.
鈥淭his solution expands our access to cleared repo, helping us to deliver value to clients while meeting evolving regulatory requirements. Collateral-in-Lieu reflects our commitment to ongoing innovation and the advancement of resilient market structure.鈥�
Nehal Udeshi, BNY鈥檚 head of 网爆吃瓜 Finance, adds: 鈥淲e鈥檙e proud to work with DTCC, BNY鈥檚 Global Collateral Platform and Federated Hermes to execute the first repo trade in Collateral-in-Lieu. This solution creates greater capacity for us to support client activity and is critical as the market scales toward mandatory clearing.鈥�
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