Treasury Clearing
The U.S. Securities and Exchange Commission (SEC) adopted rules requiring most additional classes of Treasury transactions, including repo and cast, to be centrally cleared. This represents one of the most significant structural changes to the Treasury market in decades — with major implications for market participants, infrastructure providers, and regulators alike.
Key Rule Requirements
Under the SEC’s December 2023 rule, secondary trading in in-scope U.S. Treasury securities and repos must be cleared through a Covered Clearing Agency (CCA) if one of the parties is a member of the CCA.
Today, Treasury and repo transactions are either settled bilaterally or centrally cleared through the Fixed Income Clearing Corporation (FICC). Other entities have announced plans to become CCAs for Treasury securities transactions.
This new mandate expands the range of transactions subject to clearing and establishes phased compliance dates:
- December 31, 2026: Clearing required for in-scope Treasury cash transactions.
- June 30, 2027: Clearing required for in-scope Treasury repo transactions.
The rule will significantly reshape U.S. Treasury market structure, impacting broker-dealers, institutional investors, interdealer brokers, principal trading firms, and clearing agencies.
Key Focus Areas
Supporting Implementation and Industry Readiness
On behalf of our members, SIFMA is leading coordinated workstreams to prepare the industry for implementation. These efforts include developing operational timelines, enhancing market structure, and ensuring readiness across both the buy- and sell-side.
Developing Market Standard Documentation
To promote consistency and efficiency as new participants enter the clearing ecosystem, SIFMA has convened cross-industry working groups to establish market standard documentation for key access models:
- “Done-With” Model: Available here.
- “Done-Away” Model: Available here.
Advancing Regulatory Reforms and Clarifications
This rulemaking is extraordinarily complex, and several open questions remain. SIFMA continues to engage with regulators to:
- Clarify inter-affiliate exemptions that are currently impractical to implement.
- Address implications for registered funds and offshore entities that may be within the scope of the rule.
SIFMA has completed a review of FICC’s Agent Clearing Service and engaged with the SEC’s Office of the Chief Accountant to resolve accounting issues, with the working group’s conclusions and correspondence made publicly available.
The Bottom Line
Central clearing of U.S. Treasuries represents a historic transformation in the world’s most important securities market. SIFMA is committed to supporting a smooth, coordinated transition-one that enhances market resiliency, promotes efficiency, and preserves the liquidity and depth that define the U.S. Treasury market.
