The U.S. Treasury Market is the largest and most liquid sovereign debt market in the world. Currently, trading activity is split between two clearing processes: bilaterally-cleared and centrally-cleared transactions. The U.S. Treasury clearing rule amendments adopted in December 2023 by the Securities and Exchange Commission (SEC) require a significantly larger portion of the U.S. Treasury and cash repo markets to be centrally cleared.
These amendments, to be implemented in phases over 2025 (cash) and 2026 (repo), will affect several segments of the Treasury and associated financing markets. A significant migration of Treasury repo and reverse repo into central clearing is expected.
To assist our clients in understanding the technology- and solution-related impacts of the upcoming U.S. Treasury Clearing Rule, we have prepared this Flash Report. Information has been drawn from relevant industry publications and events, including those from regulatory authorities and market infrastructures, such as the U.S. Securities Exchange Commission (SEC) and the Depository Trust & Clearing Corporation (DTCC), and from industry trade associations, including the International Swaps and Derivatives Association (ISDA) and the Securities Industry and Financial Markets Association (SIFMA). This information has been analyzed to identify areas related to technology systems and solutions supporting post-trade processes in this space.
This report highlights technology considerations and impacts for market participants and for the solution providers serving them.
UPDATE ON REGULATORY TIMELINE: As noted above and in the report, the SEC’s initial deadline for mandatory clearing of cash Treasury transactions was the end of this year, while repo was set to be cleared by the end of June 2026. Following industry calls, the SEC extended mandate deadlines by 12 months for cash and by 18 months for repo. Current implementation dates therefore are Dec. 31, 2026 for eligible cash market transactions and June 30, 2027 for eligible repo market transactions. Also, there is a temporary exemption for U.S. Treasury securities covered clearing agencies regarding their written policies and procedures – the requirement has moved to Sept. 30 2025 form March 30 2025. More detailed information can be found in the SEC’s Press Release here.
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