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The Rise of Sponsored Service for Clearing Repo

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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.

Suggested Citation

  • Adam Copeland & R. Jay Kahn, 2025. "The Rise of Sponsored Service for Clearing Repo," Liberty Street Economics 20251008, Federal Reserve Bank of New York.
    • Handle: RePEc:fip:fednls:101926
    DOI: 10.59576/lse.20251008
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    JEL classification:

    • G1 - Financial Economics - - General Financial Markets
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt

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