US derivatives market CME announces that its clearing arm is expanding its acceptance of collateral securities for initial-margin requirements, to enable the deposit also of short-term US treasury exchange-traded funds.
The CME press release emphasises the value of the ETF format for investors who are gladly relieved of the administration around re-investment of securities capital at maturity.
Managers of ETFs are apparently happy to see their products eligible as initial-margin collateral.
“Margin and collateral are a new use case for bond ETFs like SGOV and SHV, which further demonstrates how they are useful, resilient investment tools that can improve outcomes for individuals and large institutions alike,” says BlackRock’s global head of ETFs Carolyn Weinberg, in the CME press release.