And large buy-side firms, in particular, pension funds, do not currently meet all the requirements for direct membership.4 Pension fund participation is especially important because these institutions are on one side of a large proportion of repo transactions. CDCC and its members are already working to find a way for both of these groups to participate.
CDCC is considering how to set up a mechanism that would allow smaller firms to clear indirectly – that is, through a direct member that provides clearing services. This is a triedand-true approach, one that is well understood by financial institutions.