DTCC’s Fixed Income Clearing Corporation (FICC) subsidiary has launched its Collateral-in-Lieu (CIL) service on BNY’s Global Collateral Platform. BNY Securities Finance and Federated Hermes successfully executed the first repo trade on the new solution.
The service maintains the haircut typically posted by dealers to money market funds and other cash investors in triparty while implementing a CCP lien that is applied “in lieu” of both a sponsor guaranty and margin posting to the CCP (in most circumstances). This approach eliminates double-margining for some Sponsored members and streamlines operational processes for market participants, leveraging the benefits of triparty.
The service, designed to help industry transition to central clearing in 2026 and 2027, leverages BNY’s triparty infrastructure for collateral management and settlement, supporting both “done-away” and “done-with” trade execution styles.
Susan Hill, senior portfolio manager and head of the Government Liquidity Group at Federated Hermes., said: “This solution expands our access to cleared repo, helping us to deliver value to clients while meeting evolving regulatory requirements. Collateral-in-Lieu reflects our commitment to ongoing innovation and the advancement of resilient market structure.”
