JP Morgan clears first repo under new DTCC sponsor programme

Transaction follows recent regulatory approval to expand DTCC’s Fixed Income Clearing Corporation sponsored programme.

JP Morgan has become the first member under the DTCC’s new fixed income sponsor member programme to clear a repo transaction.

The transaction immediately follows the recent approval to expand the DTCC’s Fixed Income Clearing Corporation (FICC) sponsored service programme by the US Securities and Exchange Commission (SEC).

The expansion has allowed a broader category of market participants in the cleared repo service, including dealers, non-US banks and prime brokers.

“We were excited to participate in the original sponsored repo programme and we believe the expansion of the programme will continue to streamline dealer balance sheets and further enhance repo market liquidity,” said Drian Connell, managing director, fixed income financing, JP Morgan.

In addition to JP Morgan, there are now over a dozen category 2 sponsored 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,” added Murray Pozmanter, head of clearing agency services, DTCC. “The increased participation, particularly from the buy-side, will yield significant benefits in reducing systemic risk and creating market capacity.”