The Rise of Sponsored Service for Clearing Repo

Adam Copeland and Robert Kahn

No 20251008, Liberty Street Economics from Federal Reserve Bank of New York

Abstract: Recently instituted rule amendments have initiated a large migration of dealer-to-client Treasury repurchase trades to central clearing. To date, the main avenue used to access central clearing is Sponsored Service, a clearing product that has, until now, received little attention. This post highlights the results from a recent Staff Report which presents a deep dive into Sponsored Service. Here, we summarize the description of the institutional details of this service and its costs and benefits. We then document some basic facts on how market participants use this service, based on confidential data.

Keywords: Treasuries; securities; Securities and Exchange Commission (SEC); Sponsored Service; Fixed Income Clearing Corporation (FICC); central clearing; sponsored repo (search for similar items in EconPapers)
JEL-codes: G1 G18 H63 (search for similar items in EconPapers)
Date: 2025-10-08
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fednls:101926

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DOI: 10.59576/lse.20251008

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