SIFMA and SIFMA AMG Support CME Clearing Proposal for USTs

SIFMA and SIFMA AMG ("SIFMA") supported the application of CME Securities Clearing, Inc., ("CMESC") to provide central clearing services for US Treasuries. 

In comments on the application for registration under Securities Exchange Act Section 17A ("National system for clearance and settlement of securities transactions"), SIFMA said it strongly supported "the expansion of access to clearing of Treasury transactions and welcome increased variety in the clearing services available to Treasury Market participants." (If approved, CMESC would act as a competitor to the Fixed Income Clearing Corporation.

SIFMA also urged CMESC to make substantial revisions to its proposed rulebook, among them, recommendations as to: (i) ensuring appropriate bank regulatory capital treatment; (ii) interactions with the SEC's transaction submission requirement; (iii) margining practices; (iv) risk management and default management; and (v) possible future cross-margining solutions between CMESC and the Chicago Mercantile Exchange Inc. These revisions include those within the power of the SEC to impose (e.g. increases to the amount of capital that CMESC would be required to put at risk) and make rule changes that are within the discretion of the CMESC, but that would make CMESC's clearing offering more attractive as a business product to market participants.