The Board of Trade Clearing Corporation and the Government Securities Clearing Corporation (GSCC) have named 1 February, 2002 as the implementation date for their cross-margining arrangement, which was agreed to last year.
The arrangement will enable members of both entities to cross-margin their buy-sell and repo activity in US government securities against treasury and agency futures and futures options traded on the Chicago Board of Trade and cleared at the Board of Trade Clearing Corporation. Once implemented, members will be able to optimise their capital usage by viewing their positions at different clearing organisations as a combined portfolio.
Tom Hammond, executive vice president at the Board of Trade Clearing Corporation, says: "In addition to providing significant cost savings to our clearing members and a reduction in settlement risk and enhanced financial safeguards with respect to both clearing organisations, I believe that this historical initiative marks the beginning of an era of further cooperation between our organisations."