DTCC Can Offer New SFT Clearing Client Access Model

Access model introduces new account structure designed to enhance capital efficiency for stock loan market participants acting in an agent capacity, supporting broader central clearing participation for securities financing transactions

The Depository Trust & Clearing Corporation (DTCC), the premier post-trade market infrastructure for the global financial services industry, announced that the U.S. Securities and Exchange Commission (SEC) has approved DTCC subsidiary, National Securities Clearing Corporation (NSCC) to offer a new client access model for the Securities Financing Transaction (SFT) Clearing Service.

The new client access model introduces a dedicated account structure, called the Agent Clearing Member Customer Net Margin Account, that allows stock loan market participants acting in an agent capacity to net margin and clearing fund requirements across their clients' activity. Rather than calculating margin on a gross, client-by-client basis, offsetting positions across underlying customers are taken into account, improving capital efficiency while maintaining NSCC's robust risk management standards.

This model also more closely aligns margin treatment with proprietary SFT activity and comparable agency models in other cleared markets, while supporting the benefits of central clearing, including reduced counterparty credit risk, enhanced operational efficiency and greater market stability, particularly during periods of stress.

"This launch changes the economics of central clearing for securities financing transactions in a meaningful way," said John Vinci, Managing Director and Head of Secured Funding, DTCC. "By enabling margin netting across client positions, we're better aligning the SFT Clearing Service with how market participants operate today, with real impact to balance sheets and capital. At the same time, we're delivering the risk reduction, transparency and resilience that central clearing provides."

The new access model leverages NSCC's existing risk management framework and aligns with practices already in use at DTCC's Fixed Income Clearing Corporation (FICC), where Agency Clearing Models have supported increased participation in centrally cleared U.S. Treasury repo markets.

Effective immediately and aligned with regulatory approval, the new access model is available to market participants.

Source: DTCC