The Securities and Exchange Commission (SEC) extended the compliance dates for UST and UST repo clearing to Dec. 31, 2026 and June 30, 2027, respectively.
Under the rule, a covered clearing agency that provides central counterparty services for US Treasury securities must establish, implement, maintain, and enforce written policies and procedures reasonably designed to require that every direct participant of the covered clearing agency submit for clearance and settlement all eligible secondary market transactions in US Treasury securities to which it is a counterparty.
The rule also requires a covered clearing agency to identify and monitor its direct participants’ submissions of transactions for clearing, including how the covered clearing agency would address a failure to submit transactions.
The SEC also issued a temporary exemption for a rule requiring that covered clearing agencies have written policies and procedures reasonably designed to calculate, collect, and hold margin amounts from a direct participant for its proprietary positions in US Treasury securities separately and independently from margin calculated and collected from that direct participant in connection with US Treasury securities transactions by an indirect participant that relies on the services provided by the direct participant to access the US Treasury securities covered clearing agency’s payment, clearing, or settlement facilities.
Under this temporary exemption, a US Treasury securities covered clearing agency is not required to enforce its written policies and procedures until Sept. 30, 2025, instead of the original March 31, 2025, compliance date.
“The US Treasury market is a critical piece of the global financial system. New rules must be implemented properly, and any operational issues must be addressed,” said SEC acting chair Mark Uyeda. “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 Commission stands ready to engage with market participants on issues associated with implementation.”
In emailed commentary, DTCC wrote: “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. We will also work closely with our clients to address any challenges that drove the request for an extension.
“FICC remains committed to continually delivering our clients best-in-class central clearing solutions that enable greater efficiency and liquidity, promote transparency and competition, and improve the safety and soundness of the US Treasury market.: