J.P. Morgan completes first cleared repo transaction under the newly approved Category 2 Sponsoring Member classification
New York/London/Hong Kong/Singapore/Sydney, April 4, 2019 – The Depository Trust & Clearing Corporation (DTCC), the premier post-trade market infrastructure for the global financial services industry, today announced another step has been taken in the unfolding evolution of the Treasury marketplace.
J.P. Morgan has completed the first cleared repo transaction under the new Category 2 Sponsoring Member classification. This important milestone comes immediately following the recent Securities and Exchange Commission (SEC) approval for DTCC subsidiary Fixed Income Clearing Corporation (FICC) to expand its Sponsored Service.
Through the expanded Sponsored Service, a broader category of market participants can participate in the service as sponsors, including Dealers, non-US Banks and Prime Brokers (all referred to as Category 2 Sponsoring Members). The expansion also changed how the service can be used, with sponsors now able to let their clients trade with counterparties other than themselves, providing sponsored members with the same execution flexibility they have in the bi-lateral market today.
“J.P. Morgan is a leader in providing innovative solutions to our clients.” said Brian Connell, J.P. Morgan Managing Director, Fixed Income Financing. “We were excited to participate in the original Sponsored Repo program and we believe the expansion of the program will continue to streamline dealer balance sheets and further enhance repo market liquidity.”
In addition to J.P. Morgan, there are now over a dozen Category 2 Sponsoring Members approved, or in the process of approval, to leverage the new service.
“We are pleased by the early interest we have had from market participants as it is a tremendous indication of the positive impact this expansion will have for the Treasury marketplace,” said Murray Pozmanter, DTCC Managing Director and Head of Clearing Agency Services. “The increased participation, particularly from the buyside, will yield significant benefits in reducing systemic risk and creating market capacity.”
With 45 years of experience, DTCC is the premier post-trade market infrastructure for the global financial services industry. From operating facilities, data centers and offices in 16 countries, DTCC, through its subsidiaries, automates, centralizes and standardizes the processing of financial transactions, mitigating risk, increasing transparency and driving efficiency for thousands of broker/dealers, custodian banks and asset managers. Industry owned and governed, the firm simplifies the complexities of clearing, settlement, asset servicing, data management and information services across asset classes, bringing increased security and soundness to financial markets. In 2017, DTCC’s subsidiaries processed securities transactions valued at more than U.S. $1.61 quadrillion. Its depository provides custody and asset servicing for securities issues from 131 countries and territories valued at U.S. $57.4 trillion. DTCC’s Global Trade Repository service maintains approximately 40 million open OTC positions per week and processes over one billion messages per month through its group of licensed trade repositories.