CME Securities Clearing proposes amendments to its default management framework

On October 9, 2026 CME Securities Clearing Inc. (CMESC) filed a proposed rule change with the Securities and Exchange Commission. The notice, published October 16, 2026 in the Federal Register (Vol. 91, No. 202, pp. 66587-66590), is identified as Release No. 34-106681, File No. SR-CMESC-2026-011. The filing amends the CMESC Risk Management Framework (RMF) and is set out in Exhibit 5.

The core amendment adds detail to Section 14.1.1 of the RMF concerning the use of a third-party liquidation agent and one or more execution brokers in a participant default. The revised language requires the liquidation agent to collaborate with CMESC to assess exposures, devise a close-out strategy, and may employ open-market transactions, hedging, or other methods. Execution brokers may receive a CMESC-maintained account to submit back-to-back trades that keep the broker's account in a net flat position.

Additional clarifying and administrative changes address both member and user defaults. Section 14 is revised to note that CMESC analyzes users' risk profiles ex ante and may transfer non-defaulting user positions to a non-defaulting member. For user defaults, the amended RMF requires an authorizing member to respond within a prescribed period and outlines pro-rata cost allocation based on margin requirements. The proposal also relocates hedging language, deletes the header "Hedging," and limits the use of acceleration rights to transactions with maturities greater than two business days, consistent with Rule 1507(f).

The amendment clarifies the role of CMESC's Risk Management Committee (CSRMC) in designing default management procedures and emphasizes transparency for CMESC staff. The Commission is soliciting comments on the proposal; no effective date has been set.