CME® and the  Government Securities Clearing Corporation (GSCC) announced plans to implement an arrangement that will enable certain members of both entities to cross-margin their buy-sell and repo activity in U.S. Government securities against Eurodollar futures and options on futures contracts traded at CME. The GSCC and CME are preparing rule filings for their respective regulatory agencies for the cross-margining arrangement.

The GSCC-CME cross-margining arrangement expands the cross-margining opportunities that each organization offers. The GSCC currently has a cross-margining agreement with the New York Clearing Corporation (NYCC), which clears Treasury futures for the Cantor Exchange. CME was the first to implement a cross-margining arrangement when the exchange introduced such a program with the Options Clearing Corporation (OCC) and the NYCC for equity products. CME has also been a leader in launching separate cross-margin agreements with the London Clearing House (LCH) and The Clearing Corporation for interest rate products.

To participate in the GSCC-CME cross-margining program, a firm must either be both a GSCC netting member and a CME clearing member, or be one of the two and have an affiliate that is the other. The member must also sign (together with its affiliate, if applicable) a Cross-Margining Participant Agreement. Once a member executes the Agreement, it will have no further implementation requirements, as the margining will take place automatically. That is, the use of the cross-margining facility, which can only reduce a participating member's margin requirement, will be virtually transparent to members from an operational standpoint.