The long road to U.S. Treasury clearing: An industry mid-journey report

DEEP LOOK | With cash clearing due by December 2026 and repo by June 2027, the U.S. Treasury clearing mandate is no longer a distant deadline, but a live project. Survey data reveals an industry confident in principle but wrestling with margin economics, onboarding complexity, extraterritorial scope and technology gaps. We take stock of where things stand, who is building what, and why it’s going to be a long journey.

Pulse check: where the industry stands

The ValueExchange Pulse Survey, conducted with BNY, Broadridge, DTCC and SIFMA across 330 global respondents in August 2025, gives the clearest cross-market picture of readiness. While 47% feel very confident of meeting the deadlines and 85% are familiar with FICC’s Sponsored DVP model, the detail is sobering: 77% of buy-side firms have not moved beyond researching the mandate; 88% cannot finalise preparation without clarity on CCP operating models; and 38% expect margin to rise by more than 25%. Awareness drops sharply outside North America – just 27% in Europe and 18% in APAC – underscoring that this is not yet a global readiness story.

At the November 2025 webinar, BNY’s Nate Wuerffel put the capital stakes plainly: margin costs of two to three basis points for a dealer, rising to eight to ten when RWA constraints are factored in. The panel was clear on extensions: “We should be expecting that we need to be ready.” SIFMA’s Stephen Byron noted that the credit check framework for done-away cash trades has been resolved; the treatment of inter-affiliate repo remains open with the SEC.

What’s on the table: FICC’s access models

Market infrastructures have been in building mode since the rule was finalised. FICC has expanded its offering significantly, introducing new services in Q4 2025 to address the structural barriers that previously made client clearing uneconomic. In done-with clearing, the same firm executes and clears the trade; in done-away clearing, execution and clearing are handled by different intermediaries – offering more buy-side flexibility but requiring more complex credit-check and legal infrastructure. The six current FICC access models cover every major clearing pathway.

The newer models – CIL, Done Away and ACS tri-party – address the two biggest barriers to client clearing at scale: double-margining in traditional tri-party repo, the documentation and operational burden for done-away activity. Before CIL, dealers had to post margin to the CCP while guaranteeing client performance, with collateral also sitting separately at the tri-party agent – effectively supported twice economically.

“They were effectively over‑pledging – supporting margin at the CCP while also maintaining separate collateral at the tri‑party agent. It simply didn’t work out economically,” notes Kishore Ramakrishnan, partner, Wepoint Consulting.

CIL resolves this by granting FICC a legal lien over collateral held at the tri-party agent, eliminating margin on the client side. As BNY’s Nate Wuerffel put it: “Collateral-in-lieu can reduce to zero the margin for the client side – and removes both the RWA capital exposure of the guarantee and the margin posted to the CCP.” The first live CIL trade was executed in December 2025.

What the market is saying: The ICMA letter

While firms active in the U.S. work through access model choices and technology builds, the international community has a distinct and urgent set of concerns. In February 2026, ICMA wrote to the SEC on behalf of its buy side and sell side firm membership, highlighting implementation issues and calling for “further clarification and targeted adjustments” to ensure the rules “operate as intended.”  

First, extraterritorial scope: the mandate applies to transactions regardless of where they are conducted, which creates uncertainty for non-U.S. counterparties transacting in Treasuries, for offshore firms with indirect clearing obligations, and where different CCPs operate under different regulatory regimes.

Second, the inter-affiliate exemption: under current rules, a firm can only exempt internal repo transactions if its affiliate clears all its external U.S. Treasury repo – a condition ICMA argues is disproportionate given that inter-affiliate repos serve liquidity and balance sheet management purposes, not evasion. The letter argues the exemption should be made voluntary rather than conditional.

Third, mixed-CUSIP triparty baskets: repo transactions where only some securities in the basket are U.S. Treasuries remain ambiguous in scope and need regulatory clarity.

Fourth, FICC membership constraints: direct membership is not available to many international firms for legal or regulatory reasons, and reliance on sponsored or agent models raises both cost and access concerns, particularly for firms with no U.S. nexus.

The SEC has acknowledged these as live issues. Commissioner Uyeda stated in February 2026 that staff were actively working on potential modifications to the inter-affiliate exemption and expected to publicly roll out proposals “in the near future.” ICMA’s intervention is a reminder that this is not purely a domestic U.S. implementation challenge – it is a global market transition with unresolved edges.

Planning, not panic

As head of fixed income and financing solutions at DTCC, Laura Klimpel has perhaps the clearest view of where the market stands. In an interview with PostTrade 360, she was measured but pointed: the tools are available, the paths exist, but firms need their day-one plan in place now.

“People are at different levels of readiness just by nature of their business,” she explained. “There are some intermediaries who tell me they have 80% or more of their business already in clearing. And then there are others that still have significant chunks they need to bring in – it’s a big range.”

The base she is building on is strong. Since the SEC rule was finalised in December 2023, FICC has seen a 65% increase in overall volume when compared to February 2026 activity, with a 158% increase in Sponsored activity. Most recently, FICC announced that its Government Securities Division (GSD) reached a new overall peak of $13.2 trillion on 1 December 2025.

On model choice, Klimpel is explicitly non-prescriptive. DTCC launched Collateral-in-Lieu (CIL) as part of its Sponsored General Collateral (GC) Done Away offering in Q4 2025 and received approval from the SEC to offer the Agent Clearing Service (ACS) tri-party service in January 2026, but adoption is optional and can happen on each firm’s own timetable.“Firms don’t have to use the new access models, and they don’t have to use them at a particular time. They can evolve into them at their own pace.”

What firms cannot avoid is a path to compliance. “I advise them to have a day one compliance plan. Your day one doesn’t have to look like your day ten. You can evolve your offerings – and I think most people will.”

On indirect access, Klimpel is clear: not every firm needs to be a direct FICC member. “If their activity is covered by the clearing requirement, they do not have to have direct plumbing into the CCP. That’s why the indirect access models are so critical.” Her practical sequencing for asset managers: identify in-scope activity, engage direct clearing members on which models they will support and when, then prioritise technology builds, testing and legal documentation.

“Firms need time to plan, test and roll out. That’s why it was so important for us to move first – to deliver new capabilities well in advance of the mandate so that firms could evolve into them.”

On volumes, Klimpel expects steady growth. “How much firms clear will translate directly into how much balance sheet and capital relief they obtain.” She sees June 2027 as “around the corner, really, from a planning perspective.” 

New entrants: CME and ICE join the landscape

FICC’s dominant position as sole Covered Clearing Agency for U.S. Treasuries is ending. CME received SEC approval in December 2025 and ICE Clear Credit followed in early 2026. It is a dynamic that mirrors what happened in the OTC derivatives market after Dodd-Frank – where the entry of multiple CCPs, initially disruptive, eventually settled into a competitive landscape with clearer economics and better pricing for end users. CME’s immediate focus is cross-margining: netting Treasury clearing exposures against its futures and derivatives book, offering meaningful capital savings for firms already in its ecosystem. The competitive dynamic is broadly welcomed: “It’s expected to broaden the service offering, bring much-needed competition and improve the pricing structure,” said BNP Paribas’s Romain Tyrou in the bank’s recently hosted webinar. The caveat is that multi-venue clearing dilutes multilateral netting efficiency – a trade-off firms must model carefully before splitting flows.

How firms are preparing 

BNP Paribas has launched a firm-wide CIB programme spanning Global Markets, Derivatives Execution & Clearing and Securities Services. Having cleared repo since 2019 via the Sponsored Done-With model, it is now adding CIL and ACS and engaging with the new CCPs. Romain Tyrou draws a direct Dodd-Frank parallel: “Similar to how the swaps market transitioned in 2012, our business is well-positioned to support done-away clearing as this model continues to develop.”  

On the infrastructure side, fintech firm Saphyre is targeting one of the mandate’s most concrete bottlenecks – account onboarding and legal agreement management – through a collaboration with FICC. Using AI to digitise counterparty onboarding and centralise documentation, it addresses what the survey identifies as the buy-side’s primary concern. With hundreds of firms needing new clearing relationships before the mandate, automation at this layer may prove as important as the clearing models themselves.

The Long View

Kishore Ramakrishnan has spent 25 years advising sell‑side and buy‑side firms through structural market transitions. As a partner at Wepoint Consulting in London, he has been watching the U.S. Treasury clearing build‑out with the particular clarity of someone who has seen the finish line before – even if the course looks different this time. “This is a repeat of what we saw with Dodd‑Frank. The same thing is being replicated now for repo. Early movers will gain advantage – and CCPs know it,” he says.

Dealers are building connectivity to multiple CCPs to capture buy‑side flows as the economics shift: bilateral repo increasingly carries margin and capital impacts that make clearing attractive. On custodians, Ramakrishnan is blunt – those unable to plug into CIL‑style tri‑party frameworks risk being structurally disadvantaged on price and balance sheet. “In practical terms, there is no other scalable path if they want to attract clearing volumes.”

“This is going to be a long journey. The obligation is fixed — but the road to get there has a lot of on‑ramps, a lot of decisions, and a lot of plumbing that still needs to be built.”

A structural shift still being absorbed

The infrastructure is largely in place. FICC now offers six access models covering every major clearing pathway; CIL has resolved the double-margining problem that made tri-party client clearing uneconomic; CME and ICE Clear Credit have entered the market; and vendors from Broadridge to Saphyre are building the connectivity to make it all work. What the survey data and the ICMA letter together make clear is that operational and regulatory reality have not caught up. Seventy-seven per cent of buy-side firms are still in research mode, international participants are seeking urgent clarification on scope and access, and the documentation, technology and margin work ahead is substantial.

The mandate removes only one option: the choice to stay outside clearing. Everything else – which CCP, which model, which timeline – is still, for now, a strategic decision. But the window for making those decisions thoughtfully is narrowing with every month.