How Clearinghouses Make Money

Direct answer: Clearinghouses generate revenue primarily from clearing fees charged per transaction on securities and derivatives cleared through their systems, and from interest income earned on the margin and collateral deposited by clearing members. In the U.S., DTCC (through its subsidiaries NSCC and DTC) handles most equity clearing; CME Clearing handles futures and options.

Clearing Fees: Per-Transaction Revenue at Scale

Every trade cleared by a central counterparty clearinghouse (CCP) generates a clearing fee. The fee structures vary by clearinghouse, asset class, and member type, but the common thread is that fees are charged per transaction or per contract cleared.

For equity and fixed-income markets in the U.S., NSCC (the National Securities Clearing Corporation, a DTCC subsidiary) charges clearing members based on their transaction volumes. The fee schedule is published and tiered: members that generate higher volumes pay lower per-trade rates. Because DTCC is a user-owned utility, its fee structures are designed to cover costs and maintain adequate financial resources rather than to maximize profit in the traditional sense.

For futures and options markets, CME Clearing, the central clearing subsidiary of CME Group, charges per-contract clearing fees. These fees vary by product: interest rate futures have one rate, equity index futures another, agricultural commodities another. Options on futures carry their own fee schedule. Members often receive volume discounts and institutional customers negotiate custom arrangements for very high trading volumes.

Options market clearing in the U.S. is handled by OCC (Options Clearing Corporation), which clears options traded on all U.S. listed options exchanges. Like NSCC, OCC is a utility owned by the exchanges and member firms it serves. Its clearing fees are per-contract and tiered by volume.

Interest Income: Margin as a Profit Center

The margin pool held at a major clearinghouse represents staggering sums of money. CME Clearing, for example, holds tens of billions of dollars in cash and non-cash collateral posted by its clearing members at any given time. The cash portion of this margin is invested in safe, liquid instruments, primarily short-term U.S. Treasury securities and cash-equivalent instruments approved by the clearinghouse's investment policy.

The yield on these investments, minus the return paid back to members on their cash margin (the interest rate passed through, sometimes called the Overnight Rate or a similar benchmark), is the clearinghouse's net interest income. This spread is the fundamental mechanism: the clearinghouse earns a gross yield and pays out a net yield to members, keeping the margin.

Interest income is highly sensitive to interest rates. During periods of near-zero interest rates (2009 to 2022 in the U.S.), this income stream was compressed. When the Federal Reserve raised rates from near zero to over 5% between 2022 and 2024, CME Group's investment income rose sharply. CME Group discloses this in its financial reporting under "Investment Income" and it has at times contributed hundreds of millions of dollars per year to the company's overall results.

The Default Fund: A Shared Risk Buffer

The default fund (also called the guaranty fund, clearing fund, or mutualized default fund) is a pool of capital contributed by all clearing members. It exists to absorb losses that exceed a defaulting member's own margin. If a member defaults and its margin is wiped out by the cost of closing its positions, the default fund is the next line of defense before the clearinghouse's own equity capital.

Members contribute to the default fund proportionally to the risk they bring to the clearinghouse. The clearinghouse may invest default fund contributions in the same way as margin cash, earning interest income on this pool as well. However, the primary function of the default fund is risk management, not revenue generation.

DTCC's Structure: A User-Owned Utility

DTCC is structured differently from a typical for-profit exchange. It is owned by its members (the major broker-dealers, banks, and other financial institutions that use its services) and governed by a board that includes both industry and independent directors. Its fee structures are intended to cover operating costs, fund capital requirements mandated by regulators, and build financial resilience, rather than to maximize returns to outside shareholders.

This structure means that DTCC's fees have historically been lower in absolute terms than what a profit-maximizing company might charge for the same services. However, DTCC's role is so central to U.S. market infrastructure that its financial health and stability are closely monitored by the SEC and CFTC as systemically important financial market utilities.

CME Clearing and the Exchange-CCP Model

Unlike DTCC, CME Clearing is a subsidiary of a publicly traded corporation (CME Group). This means the clearing function is part of a profit-seeking enterprise that reports results to shareholders. CME Group bundles exchange revenue (transaction fees from trading on its exchanges) with clearing revenue (clearing fees and investment income) and data services revenue in its financial reporting.

This integration gives CME Group a powerful business model: it earns from both the trading activity on its exchanges and the clearing of that activity through its affiliated clearinghouse. It also creates a regulatory consideration, since the exchange and its clearinghouse are combined under one corporate parent, which regulators monitor to ensure the clearing function remains adequately capitalized and independent in its risk management decisions.