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U.S. Treasury Clearing: SEC Mandate and Market Considerations

Author: Lauren E. Semrad.; Brian J. Morris.; Wankun (Charles) Wang.; Katherine Kennedy.

Source: Volume 59, Number 04, February 15 2026 , pp.49-62(14)

Review of Securities & Commodities Regulation

Abstract:

The Securities and Exchange Commission has adopted new central clearing requirements applicable to a substantial portion of repurchase transactions on, as well as certain purchases and sales of, U.S. Treasury securities. This significant change to the U.S. Treasury market will occur over a period of phased compliance dates that will continue through June of 2027. This article provides an overview of the rule and the existing and proposed clearing models for U.S. Treasury transactions, and identifies several critical issues for market participants to consider in their implementation and compliance initiatives in the remaining time before the compliance dates.

Keywords: UST Clearing Mandate; Treasury CCP; Inter-affiliate Exemption; Mixed CUSIP Triparty Repos; Custody ’40 Act Funds; FCMs; Cross-Margining

Affiliations: 1: Cleary Gottlieb Steen & Hamilton LLP; 2: Cleary Gottlieb; 3: Cleary Gottlieb; 4: Cleary Gottlieb.