DTCC’s FICC and BNY Launch Collateral-in-Lieu Service

New York/London/Hong Kong/Singapore/Sydney, December 23, 2025 ‒ The Depository Trust & Clearing Corporation (DTCC), the premier market infrastructure for the global financial services industry, and BNY (NYSE: BK), a global financial services company, today announced that DTCC’s Fixed Income Clearing Corporation (FICC) subsidiary has officially launched its Collateral-in-Lieu (CIL) service under its Sponsored General Collateral (GC) offering via BNY’s Global Collateral Platform, with BNY Securities Finance and Federated Hermes, Inc. (NYSE: FHI) successfully executing the first repo trade on the new solution.

The CIL service enhances FICC’s clearing model offerings by delivering significant margin and capital efficiencies and will accelerate the market’s transition to central clearing under the Securities and Exchange Commission’s (SEC’s) U.S. Treasury clearing mandate.

The service maintains the haircut typically posted by dealers to money market funds and other cash investors in triparty while implementing a CCP lien that is applied “in lieu” of both a Sponsor guaranty and margin posting to the CCP (in most circumstances). This approach eliminates double-margining for some Sponsored members and streamlines operational processes for market participants, leveraging the benefits of triparty.

Key Benefits of FICC’s Collateral-in-Lieu:

• Margin & Capital Efficiency: Reduces duplicative margin requirements for Sponsors and their clients.
• Operational Streamlining: Builds on FICC’s existing Sponsored Service processes and legal agreements.
• Central Clearing Access: Supports compliance with the SEC’s U.S. Treasury clearing rule while enhancing market liquidity.

The service leverages BNY’s triparty infrastructure for collateral management and settlement, supporting both “done-away” and “done-with” trade execution styles.

“We are pleased to officially launch our Collateral-in-Lieu service on BNY’s Global Collateral Platform and congratulate BNY Securities Finance and Federated Hermes on completing the first repo trade,” said Laura Klimpel, Managing Director, Head of DTCC’s Fixed Income and Financing Solutions. “This important milestone underscores our commitment to delivering innovative solutions that enhance margin and capital efficiency for all types of firms, to addressing issues within the industry and to supporting firms as they work towards regulatory compliance.”

“Collateral-in-Lieu represents a major step forward in the path to central clearing by introducing a margin and capital efficient means to clear repo transactions leveraging BNY’s Global Collateral Platform, the largest single liquidity pool for Treasury securities financing,” said Nate Wuerffel, BNY’s Head of Market Structure and Product Leader for the Global Collateral Platform. “This is the first of many trades that will help expand cleared repo activity ahead of the mandatory clearing deadline.”

“Federated Hermes is pleased to collaborate with BNY Securities Finance to be the first cash provider to execute a transaction on FICC’s Collateral-in-Lieu service,” said Susan Hill, CFA, senior portfolio manager and head of the Government Liquidity Group at Federated Hermes. “This solution expands our access to cleared repo, helping us to deliver value to clients while meeting evolving regulatory requirements. Collateral-in-Lieu reflects our commitment to ongoing innovation and the advancement of resilient market structure.”

“We’re proud to work with DTCC, BNY’s Global Collateral Platform and Federated Hermes to execute the first repo trade in Collateral-in-Lieu,” said Nehal Udeshi, BNY’s Head of Securities Finance. “This solution creates greater capacity for us to support client activity and is critical as the market scales toward mandatory clearing. It also reflects our BNY approach – bringing together capabilities across the company to deliver seamless, integrated solutions for our clients. We see Collateral-in-Lieu as an important enabler of broad participation, supporting client access and a more resilient cleared repo market.”

DTCC expects increased adoption of the Collateral-in-Lieu service in the coming months as the industry prepares for full implementation of the SEC’s clearing requirements at the end of 2026 and June 2027.

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About DTCC
With over 50 years of experience, DTCC is the premier post-trade market infrastructure for the global financial services industry. From 20 locations around the world, DTCC, through its subsidiaries, automates, centralizes, and standardizes the processing of financial transactions, mitigating risk, increasing transparency, enhancing performance and driving efficiency for thousands of broker/dealers, custodian banks and asset managers. Industry owned and governed, the firm innovates purposefully, simplifying the complexities of clearing, settlement, asset servicing, transaction processing, trade reporting and data services across asset classes, bringing enhanced resilience and soundness to existing financial markets while advancing the digital asset ecosystem. In 2024, DTCC’s subsidiaries processed securities transactions valued at U.S. $3.7 quadrillion and its depository subsidiary provided custody and asset servicing for securities issues from over 150 countries and territories valued at U.S. $99 trillion. DTCC’s Global Trade Repository service, through locally registered, licensed, or approved trade repositories, processes more than 25 billion messages annually. To learn more, please visit us at www.dtcc.com or connect with us on LinkedIn, X, YouTube, Facebook and Instagram.

BNY
BNY is a global financial services company that helps make money work for the world — managing it, moving it and keeping it safe. For more than 240 years BNY has partnered alongside clients, putting its expertise and platforms to work to help them achieve their ambitions. Today BNY helps over 90% of Fortune 100 companies and nearly all the top 100 banks globally access the money they need. BNY supports governments in funding local projects and works with over 90% of the top 100 pension plans to safeguard investments for millions of individuals, and so much more. As of September 30, 2025, BNY oversees $57.8 trillion in assets under custody and/or administration and $2.1 trillion in assets under management.

BNY is the corporate brand of The Bank of New York Mellon Corporation (NYSE: BK). Headquartered in New York City, BNY has been named among Fortune’s World’s Most Admired Companies and Fast Company’s Best Workplaces for Innovators. Additional information is available on www.bny.com. Follow on LinkedIn or visit the BNY Newsroom for the latest company news.

Federated Hermes, Inc,
Federated Hermes, Inc. (NYSE: FHI) is a global leader in active investment management, with $871.2 billion in assets under management, as of Sept. 30, 2025. We deliver investment solutions that help investors target a broad range of outcomes and provide equity, fixed-income, alternative/private markets, multi-asset and liquidity management strategies to more than 10,000 institutions and intermediaries worldwide. Our clients include corporations, government entities, insurance companies, foundations and endowments, banks and broker/dealers. Headquartered in Pittsburgh, Federated Hermes has more than 2,000 employees in London, New York, Boston and offices worldwide. For more information, visit FederatedHermes.com/us.