BNY and CME Partner to Facilitate Corporate Bonds for Margins Posting

clearing and settlement

Investment services provider BNY Mellon announced it will allow futures commission merchants (FCMs) to post corporate bonds and a range of other non-traditional collateral for futures and cleared swaps margins at CME Clearing, using BNY's MarginEdge derivatives margin management service.

MarginEdge, BNY says, will allow market participants posting margins to reduce risk and increase efficiencies in the other complex process of margin management, particularly with potential mandated clearing of certain swaps forthcoming from regulators.

CME Clearing accepts a variety of collateral types for futures and over-the-counter (OTC) derivatives transactions, ranging from cash and government bonds to money market funds and physical gold. Corporate bonds will represent the newest addition.

"As demand for non-traditional collateral grows at clearinghouses in the wake of regulatory reforms, it is critical that market participants have access to superior operational solutions and support to post and track their collateral. BNY Mellon has for many years provided tri-party collateral management services for traditional repo transactions and has expanded the model to meet the requirements of the centralized clearing environment," says James Malgieri, head of global collateral management and securities clearance services at BNY Mellon broker-dealer services.

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