FICC & BNY Collaborate on Clearing Repos

Core Insights - The Fixed Income Clearing Corp. (FICC) has launched a new Collateral-in-Lieu (CIL) service aimed at enhancing the efficiency of repo transaction clearing while complying with SEC regulations [2][3][5] Group 1: Service Overview - The CIL service is designed to be margin and capital-efficient, facilitating repo transactions through BNY's Global Collateral Platform [2][3] - The first repo trade using the CIL service was executed by BNY Securities Finance and Federated Hermes, indicating initial market adoption [3] - The service maintains the typical haircut for dealers while implementing a CCP lien, which reduces double-margining for some sponsored members [4] Group 2: Benefits and Compliance - The CIL service reduces duplicative margin requirements for sponsors and their clients, streamlining operational processes [5] - It supports compliance with the SEC's U.S. Treasury clearing rule, enhancing market liquidity [5] - The service leverages BNY's triparty infrastructure for collateral management and settlement, accommodating various trade execution styles [5]