New Financial Instruments Clearing Membership (FICM) Provides Margin Benefits of up to 65 Percent
CME Group, the world’s leading and most diverse derivatives marketplace, announced the creation of a new clearing membership class for interest rate futures allowing for significant margin offsets between CME Group Interest Rate futures and U.S. Treasury securities. The Financial Instruments Clearing Membership (FICM), which is expected to be offered by the end of the first quarter, will provide margin offsets of up to 65 percent to qualified firms that trade both U.S. Treasury securities and CME Group Interest Rate futures products.
“We are establishing this new clearing membership category to provide customers who trade both U.S. Treasury securities and CME Group’s Interest Rate futures with greater capital efficiencies, enabling firms to trade cash/futures strategies in a highly cost-effective manner,” said Bryan Durkin, CME Group’s Chief Operating Officer and Managing Director of Products and Services. “With our interest rate complex open interest at 37 million contracts or $30 trillion in notional value, the new FICM membership provides a strong value proposition for our global customers who trade these products.”
The FICM membership category leverages existing infrastructure of firms that are active in both the U.S. Treasury securities and CME Group Interest Rate futures markets. The new membership class combines the benefits of CME Group’s deep, liquid Interest Rates futures markets with our industry leading risk management financial safeguards and proven track record of CME Clearing.
A number of trading firms, including Breakwater Trading, Endeavor Trading, Henning-Carey Proprietary Trading, and HTG Capital Partners, have tested and validated the FICM membership and are working with CME Group to become FICM members. A full CME clearing member must sponsor the FICM and act as the firm’s facilities manager to transact in the U.S. Treasury securities market.
