Clearinghouse Tweaks Liquidity Rules in a Bid to Stay Prepared
Published Date: 10/16/2026
Notice
Summary
CME Securities Clearing Inc. is updating some important rules to make sure it has enough money ready to handle big payment demands, even in tough market times. These changes affect how they manage their liquidity tools, like the Capped Liquidity Facility, to keep everything running smoothly and safely. The new rules were approved in October 2026 and help protect everyone involved by boosting financial stability without extra costs right now.
Analyzed Economic Effects
5 provisions identified: 4 benefits, 1 costs, 0 mixed.
Clarified CLF Sizing and Allocation Rules
CMESC will assess and determine the required CLF size at least every quarter (or more frequently if CMESC deems appropriate) using the largest participant-family hypothetical cash settlement obligation over a designated lookback period (the "Cover 1 SPPO") as the starting point. The rule text also defines a Member's "Maximum SPPO," an "Obligation Ratio," and that each Member's Allocated CLF Amount is calculated pro rata (including that CMESC may apply a multiplier to a Member's Maximum SPPO).
CLF Serves as Liquidity Backstop to Protect Settlements
The CLF is designed to provide access to required liquidity when CMESC's other liquidity sources are unavailable or insufficient, sized starting from the Cover 1 SPPO over a designated lookback period, to help effect same-day, intraday, and multiday settlement under extreme but plausible market conditions. The Commission found these changes consistent with Section 17A and Rules 17ad-22(e)(1) and (e)(7) and concluded the amendments support CMESC's ability to maintain sufficient liquid resources and reduce the risk of settlement failure.
Members Bound by Rules-Based CLF MRA
Under the approved changes, each CMESC Member becomes a party to a Capped Liquidity Facility Master Repurchase Agreement (CLF MRA) automatically by operation of Rule 410(a), without separate bilateral signature steps. The CLF MRA will incorporate by reference the SIFMA Master Repurchase Agreement (September 1996 version) and the CLF MRA terms will govern if there is any inconsistency with the SIFMA MRA.
New Member Data Requirement to Begin Clearing
A Member must provide information (including projected volumes and sizes of Eligible Securities Transactions for the period deemed relevant by CMESC) as an input to CMESC's sizing and allocation calculations in order to commence clearance and settlement of Eligible Securities Transactions. CMESC will use such projected data for initial ramp-up and blend it with actual cleared activity until the lookback period is available.
Quarterly Notices and Annual Attestation for Members
CMESC will notify each Member of its individual Allocated CLF Amount on at least a quarterly basis and upon any resizing of the CLF, including the effective date of any amended Allocated CLF Amount. An authorized representative of each Member must acknowledge and affirm the Member's potential CLF obligations at least annually.
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