CMESC files rule change to adopt cross-margin standards with CME
The proposal, filed August 18, 2026, would bind CMESC members and independent users once approved, establishing a cross-margining arrangement with CME.
On August 18, 2026, CME Securities Clearing Inc. (CMESC) filed with the Securities and Exchange Commission a proposed rule change, Release No. 34-106193; File No. SR-CMESC-2026-007, to adopt standards for establishing cross-margining arrangements and to enter into an initial cross-margining agreement with its affiliate, Chicago Mercantile Exchange Inc. (CME). The filing is made pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 and Rule 19b-4.
The rulebook modifications introduce a new Rule 514 (Cross-Margining) and add defined terms to Rule 101, including "Cross-Margining Agreement," "Cross-Margining Clearing Organization," "Proprietary X-M Account," and "X-M Account." Related revisions affect Rules 405, 1507, 406, 412, 502, 506, 508, 509, 515 (renumbered from the current Rule 514), 602, 709, and 902. These changes create a framework that permits CMESC to establish cross-margining arrangements with clearing organizations registered with the CFTC as derivatives clearing organizations.
The proposal also revises eight clearing risk-management policies: the CMESC Risk Management Framework, Credit Policy, Credit Risk Management Assessment Methodology, Liquidity Risk Management Policy, Stress Testing & Guaranty Fund Sizing Policy, the proposed Margin Policy (filed July 22, 2026 under SR-CMESC-2026-005), Backtesting Policy, and Model Risk Management Policy. Together, the rule and policy updates would allow eligible Members or Independent Users to offset margin requirements for U.S. Treasury securities cleared at CMESC against positions in interest-rate futures cleared at CME.
CMESC, which became a registered clearing agency on December 1, 2025, states that the cross-margining arrangement is intended to provide capital efficiencies, encourage greater use of its clearing services, and reduce systemic risk in the Treasury securities market. The SEC is publishing this notice to solicit comments from interested persons; comments must be submitted in accordance with the procedures outlined in the filing.
Further reading