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CME Seeks to Broaden Cash Options in Clearinghouse Default Rules

CME Group Inc., concerned that a new U.S. rule undermines the use of Treasuries as collateral at clearinghouses, is proposing a workaround that would make greater use of client cash.

The owner of the world’s largest derivatives market is seeking permission to alter how funds pledged to guarantee trades are accessed when a member defaults, according to a Dec. 18 filing with the U.S. Commodity Futures Trading Commission. Under the plan, cash from other clearinghouse members would be more readily available to offset losses, particularly in cases where it might take too long to liquidate collateral such as Treasuries.