SEC Issues No-Objection to FICC-CME Cross-Margining Expansion for Customer Positions

The Securities and Exchange Commission issued a notice of no objection on April 10, 2026, to an advance notice from the Fixed Income Clearing Corporation seeking to expand its cross-margining arrangement with the Chicago Mercantile Exchange. The Federal Register published the formal notice on April 14. The move extends margin offsets to customer positions for the first time.

Until now, the FICC-CME cross-margining setup only covered proprietary positions of clearing members and their eligible affiliates. The proposed Third Amended and Restated Cross-Margining Agreement changes that. Under the new framework, customers of dually registered broker-dealers and futures commission merchants — firms that are common members of both FICC and CME — can benefit from reduced margin requirements by offsetting Treasury cash positions against futures positions.

Less collateral tied up means more capital available for trading. That’s the pitch, and for firms running large Treasury books alongside interest rate futures, the math could be meaningful.

What the Filing Actually Does

FICC filed advance notice SR-FICC-2025-801 in December 2025, seeking SEC no-objection under Section 806(e)(1) of the Dodd-Frank Act. The SEC extended its review period by 60 days, pushing the deadline to April 11, 2026. The no-objection came through on April 10.

Separately, FICC filed a proposed rule change (SR-FICC-2025-025) to amend its Government Securities Division rules and incorporate the new agreement. That rule change is still under SEC review. On March 23, 2026, the SEC instituted proceedings to determine whether to approve or disapprove the proposed rule change. No decision has been published yet.

Two filings, two tracks. The advance notice cleared. The rule change has not.

Implementation Remains Open

The no-objection to the advance notice does not mean cross-margining for customers starts immediately. FICC and CME still need the proposed rule change approved before the operational framework takes effect. Clearing members will need to update risk management systems, margin calculation models, and compliance procedures to handle customer cross-margining once both approvals are in place.

The DTCC, which is FICC’s parent organization, has been working on the cross-margining expansion for months. The arrangement originally dates back years and has been amended multiple times. This latest version represents the most significant structural change since the agreement was first restated.

For the broader Treasury clearing landscape, the timing matters. The SEC has been pushing toward mandatory central clearing for Treasury securities, with compliance dates already extended once in 2025. Cross-margining is one of the capital efficiency tools that firms have been requesting as the clearing mandate approaches. Getting it right for customer positions is a piece of that puzzle.

The mechanics here are straightforward in concept but complex in execution. When a firm holds a long Treasury cash position cleared through FICC and a short interest rate futures position cleared through CME, those positions naturally offset each other’s risk. Cross-margining recognizes that offset and reduces the total collateral the firm needs to post. For proprietary positions, this has worked for years. Extending it to customer accounts introduces new layers — customer segregation rules, default management procedures, and the question of how margin offsets get allocated when a clearing member carries thousands of individual customer accounts.

FICC filed Partial Amendment No. 2 to the advance notice on March 4, 2026, addressing some of these operational details. The amendment modified how margin calculations would work under the expanded arrangement. The SEC reviewed the amended filing before issuing its no-objection on April 10.

The SEC has not published a timeline for its decision on the proposed rule change SR-FICC-2025-025. Comments from market participants were solicited as part of the review process, but the SEC has not disclosed the next procedural step.