SEC's Key Update on Treasury Clearing Rule Implementation

By Braeden Anderson

On September 30, 2025, SEC Commissioner Mark T. Uyeda issued an important update on the Commission’s ongoing efforts to implement the Treasury Clearing Rule, a major regulatory initiative aimed at enhancing the resilience and transparency of the U.S. Treasury market. The statement outlined recent progress, identified remaining open questions, and encouraged continued engagement from market participants.

Background on the Treasury Clearing Rule

The Treasury Clearing Rule, adopted in December 2023, mandates the central clearing of certain secondary market transactions in U.S. Treasury securities by direct participants in covered clearing agencies. The goal is to mitigate counterparty risk, increase transparency, and modernize the functioning of a market that remains foundational to both the U.S. and global financial systems.

“The U.S. Treasury securities market is one of the largest and most liquid in the world, with nearly $29 trillion outstanding in U.S. Treasury securities as of August 2025 and average daily trading volume above $1 trillion.” [1] Recognizing this, SEC Chairman Paul Atkins recently appointed Commissioner Uyeda to oversee implementation.

Extension of Compliance Deadlines

In February 2025, the SEC approved a one-year extension of the compliance deadlines in response to industry concerns over operational readiness:

The new deadline for cash transactions is December 31, 2026
The deadline for repo transactions is June 30, 2027

The extension is intended to allow market participants sufficient time to build infrastructure and develop access to clearance and settlement services for Treasury securities. It also provides a buffer to resolve interpretive and technical issues before full implementation.

Key Issues Addressed to Date

Commissioner Uyeda outlined several important developments that have clarified how the rule will apply in practice:

1. Accounting Treatment for Cleared Repos

Staff from the Office of the Chief Accountant reviewed the treatment of repo transactions cleared through the Fixed Income Clearing Corporation (FICC). Based on the facts presented, staff did not object to treating agent clearing members as agents for accounting purposes. This means they are not required to carry customer trades on their own balance sheets—a significant operational and capital relief.

2. FAQs on Rule 15c3-3a Requirements

In August 2025, the Division of Trading and Markets issued FAQs clarifying that broker-dealers may pre-fund segregated margin for customers using U.S. dollars (in addition to U.S. Treasury securities). This flexibility supports more efficient compliance with Exchange Act Rule 15c3-3a in the context of Treasury clearing.

3. Treatment of Triparty Repos

On September 30, 2025, Commission staff issued further guidance regarding “mixed CUSIP” triparty repos, collateralized transactions where U.S. Treasury securities are allocated after trade execution. Staff confirmed that such transactions do not fall within the clearing requirement, under the facts described in the FAQ.

Contact Us Today

Remaining Implementation Issues

Despite this progress, several significant questions remain under active consideration:

Expansion of the inter-affiliate exemption to include cash transactions and broader affiliate definitions
Clarification of the extraterritorial application of the Treasury Clearing Rule
Addressing “double margining” concerns for registered funds
Facilitating cross-margining between securities and futures at the customer level
Guidance on trade failures and clearing agency outages
Analysis of gross vs. net margining for customer accounts under Rule 15c3-3a

Commissioner Uyeda emphasized that feedback from market participants continues to inform the staff’s work in these areas.

Additional Clearing Agency Applications

The SEC is also reviewing two pending applications from firms seeking registration as clearing agencies for U.S. Treasury securities:

ICE Clear Credit (application filed August 2025)
CME Securities Clearing, Inc. (application filed January 2025)

These applications may significantly impact the market’s access to clearing services and the structure of Treasury settlement going forward.

Coordination and Outreach

The Commission continues to work closely with key stakeholders, including:

The U.S. Department of the Treasury
The Federal Reserve Board
The Commodity Futures Trading Commission
Other domestic and foreign regulators

Commissioner Uyeda encouraged industry participants and the public to remain engaged and to continue reaching out with data-driven insights, particularly on issues involving the definition of eligible transactions and operational implementation.

A Dedicated Treasury Clearing Webpage

To support transparency and centralize guidance, the SEC has launched a Treasury Clearing Implementation Webpage, which contains:

Staff FAQs and statements
Proposed rule changes by self-regulatory organizations
Clearing agency registration applications
Other relevant implementation materials

The site will be updated as additional issues are addressed and new materials are released.

No Further Extensions Expected

Notably, the Commission currently does not intend to extend compliance deadlines again. Firms are strongly encouraged to continue preparing for implementation in line with the current timeline.

Conclusion

The SEC’s Treasury Clearing Rule marks a watershed moment in U.S. market infrastructure reform. With the rule’s delayed deadlines now in place, the focus turns to implementation, guidance, and readiness. Commissioner Uyeda’s update underscores the Commission’s commitment to working closely with market participants to ensure a smooth, coordinated transition.

Firms impacted by the rule (particularly broker-dealers, clearing members, asset managers, and repo market participants) should remain actively engaged with the SEC’s guidance and prepare to meet the rule’s requirements well ahead of the new deadlines.

For access to the SEC’s Treasury Clearing Implementation Webpage, visit: https://www.sec.gov/treasury-clearing

[1] US Treasury Securities Statistics, Securities Industry and Financial Markets Association, available at https://www.sifma.org/resources/research/statistics/us-treasury-securities-statistics (statistics current as of September 11, 2025).