CFTC Eases Rules for Cross-Margining at CME and FICC Clearinghouses
Published Date: 12/17/2025
Proposed Rule
Summary
The CFTC wants to make it easier for certain broker-dealers who work with both the Chicago Mercantile Exchange and the Fixed Income Clearing Corporation to combine customer funds in one account. This change helps these firms manage money more smoothly and could save time and costs. If you’re involved, get ready to share your thoughts by January 16, 2026!
Analyzed Economic Effects
5 provisions identified: 4 benefits, 1 costs, 0 mixed.
Allow FICC to Hold BD-FCM Customer Funds
The CFTC proposes an exemption that would let broker-dealers that are also futures commission merchants (BD-FCMs) deposit customer funds and margin at the Fixed Income Clearing Corporation (FICC) even though FICC is not currently a permitted depository under CEA section 4d and Commission Regulations 1.20 and 1.49(d). This change would permit FICC to hold cross-margining customer margin in a designated FICC account (either a Federal Reserve Bank of New York account or a segregated commercial bank account).
Cross-Margining Can Lower Margin Costs
The Proposed Order would let eligible customers cross-margin U.S. Treasury securities positions cleared at FICC with futures positions cleared at CME so the two portfolios are margin-calculated together. Cross-margining accounts for risk offsets between positions and can reduce initial margin requirements and lower the cost of central clearing for customers who elect to participate.
Customers Must Sign Subordination Agreement
Customers who elect cross-margining would have to agree to have their FICC-cleared securities carried in a BD-FCM futures account and sign a subordination agreement stating their claim for return of those securities will not receive customer treatment under the Exchange Act or the Securities Investor Protection Act (SIPA) and will not be treated as certain types of 'customer property' in a BD-FCM liquidation.
Part 190 Treatment for BD-FCM Bankruptcies
The Commission preliminarily concludes that, under the Proposed Order, customers whose positions and margin are cross‑margining would be treated as futures customers under Commission Regulation Part 190 and would have allowable net equity claims in the BD-FCM bankruptcy, giving them the same priority to distribution as other futures customers.
FICC-Held Collateral Protected Under NYUCC Article 8
The Proposed Order would require FICC to amend its rules so that cross-margining customer margin credited to FICC XM Customer Margin Accounts is treated as 'financial assets' in a securities account under New York UCC Article 8. The Commission preliminarily concludes this structure would keep cross-margining customer collateral from becoming part of FICC's estate in the event of a FICC bankruptcy.
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Key Dates
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