The use of central clearing for money market fund (MMF) repurchase agreements (repos) continues to climb, reaching new heights in December 2025. According to data from Risk.net, 43.3% of MMF repos were cleared through the Fixed Income Clearing Corporation (FICC) in December, marking a fourth consecutive month of record-breaking figures.
The volume of repos traded via FICC surged 11.6% in December to $1.3 trillion, significantly outpacing the overall 5.6% growth in MMF repo investments, which totaled $2.99 trillion. This trend, initially observed in late 2024 when FICC-cleared repos represented a then-record 33% of MMF repo activity, underscores a growing preference for sponsored access models within the money market.
The shift towards central clearing, facilitated by FICC’s sponsored repo program, offers several benefits. In this arrangement, a clearinghouse member sponsors an MMF’s access to FICC’s clearing services, fulfilling specific requirements on the MMF’s behalf. This allows MMFs to participate in cleared repos without becoming direct members of the clearinghouse themselves.
The increasing reliance on FICC for repo clearing is notable given the scale of the MMF repo market. At the end of 2024, MMF repo assets stood at $864.7 billion, a record high at the time, and continued to grow through December 2025. The December 2025 figure of $2.99 trillion represents a substantial increase from the $864.7 billion reported at the end of 2024.
While the precise drivers behind this shift are not detailed in the available information, the growth of the sponsored-access model is highlighted as a key factor. This model likely reduces counterparty risk and enhances market stability by introducing a central counterparty to the transaction. The increased use of FICC also suggests a growing emphasis on standardized processes and improved transparency within the MMF repo market.
The trend towards greater central clearing in the MMF repo market has implications for systemic risk. By channeling a larger proportion of transactions through a central counterparty like FICC, the potential for contagion in the event of a counterparty default is reduced. This is a key objective of post-financial crisis regulatory reforms aimed at enhancing the resilience of the financial system.
The data suggests a continued evolution in how money market funds manage their short-term funding and investment activities. The increasing share of FICC-cleared repos indicates a growing acceptance of central clearing infrastructure and a willingness among MMFs to adopt more sophisticated risk management practices. Further monitoring of this trend will be crucial to assess its long-term impact on market liquidity, stability, and efficiency.
The substantial increase in FICC-cleared repo volume – from $865 billion at the end of 2024 to $1.3 trillion in December 2025 – demonstrates a significant and accelerating shift in market behavior. This movement towards central clearing is likely to continue as MMFs seek to optimize their operations and navigate an increasingly complex regulatory landscape.