FIA and ISDA sent a letter to U.S. Rep. Emmanuel Cleaver (D-Mo.) and other Congressional leaders in support of legislative efforts to grant derivatives clearinghouses access to deposit accounts offered by the U.S. Federal Reserve.
In the letter, FIA and ISDA request that Derivatives Clearing Organizations (DCOs) registered with the U.S. Commodity Futures Trading Commission and clearing agencies registered with the U.S. Securities and Exchange Commission should be allowed access to deposit accounts offered by the Fed because it is the safest and most liquid place to hold U.S. dollar client margin that is collected and paid on a daily basis.
The letter notes that during times of stress and increased market volatility, access to deposit accounts for all central counterparty clearinghouses (CCPs) will improve liquidity across the cleared derivatives ecosystem and reduce the interconnectedness of the CCPs and banks. This access would also protect customers and end-users who use the derivatives markets to hedge risk.