The US Securities and Exchange Commission (SEC) has extended the deadline for a rule under the US treasury clearing mandate. Following the extension, the deadline is now 31 December 2026 for eligible cash market transactions, and 30 June 2027 for repo market transactions.
The rule dictates that covered clearing agencies providing CCP services for US treasury securities must establish and enforce policies that mandate every one of their direct participants to “submit for clearance and settlement all eligible secondary market transactions in US treasury securities to which they are a counterparty”. The covered clearing agency should also “identify and monitor its direct participants’ submissions of transactions for clearing and decide how it would address a failure to submit transactions.
That’s not all
In addition to the extension, the SEC has also issued a temporary exemption for a second rule pertaining to margin amounts. The rule requires that covered clearing agencies calculate and hold margin amounts from direct participants for its proprietary positions in US treasury securities independently. These margin amounts must be kept separate from those calculated and held in connection with transactions by indirect participants that are relying on services provided by the direct participant to access US treasury securities.
Prep time
SEC acting chairman Mark T. Uyeda says, “This one-year extension provides additional time to implement and validate operational changes. Direct participants will also have more time to implement important risk management changes to comply with US treasury covered clearing agency rules.”
The Fixed Income Clearing Corporation (FICC), under the Depository Trust and Clearing Corporation (DTCC) has released a comment on the extension: “FICC appreciates the regulatory clarity around the US treasury clearing mandate deadlines. Even with these changes to the various deadlines, we are ready to launch our enhanced access models and segregated customer margin capabilities in March, and will proceed with offering those services to our clients as and when they are ready to use them.”
How might expanded treasury clearing cross the pond to affect Europe? Find out more at the PostTrade 360° 2025 conference coming up in September in the session titled “Navigating the expanding requirements for treasury clearing – from the US to Europe”. Visit the event page to sign up.
