This article was first published on 20 September 2024. It was last updated on 30 July 2026.
On 13 December 2023, the Securities & Exchange Commission (SEC) adopted a new rule promoting the central clearing of U.S. Treasury securities transactions. The Rule[1] is designed to improve risk management practices, protect investors and reinforce market resiliency. The eligible U.S. Treasury securities cash transactions and U.S. Treasury securities repurchase agreement transactions will be subject to mandatory clearing starting 31 December 2026 and 30 June 2027, respectively[2].
U.S. Treasury central clearing: the work continues
In June 2026, the U.S. Treasury market reached a record crossing USD 31 trillion[3] in total value of outstanding transactions which evidences a continuous growth trajectory over the past two decades. A significant portion of the U.S. Treasury transactions are executed on a bilateral basis, are not cleared and can be exposed to counterparty risk. In recent years, the resiliency of this market has been challenged, as market volatility and geopolitical risks became more prominent leading the SEC to introduce the central clearing rule to improve risk management practice and reduce settlement risk.
The U.S. Treasury central clearing rule is a major shift in the current market practice and requires significant efforts. The industry and market participants continue the preparatory work toward full implementation by adapting their technological platforms and operating models. That said, a number of critical issues require further clarification to enable the efficient transition. This includes, but is not limited to, the publication of standardized legal documentation for “done-away” transactions, SEC addressing IIB[4] (Institute of International Bankers) and SIFMA[5] (Securities Industry and Financial Markets Association) exemptive relief proposals for certain eligible transactions executed outside of the United States and inter-affiliate exemption for repo transactions respectively, and the finalization of newly approved clearing houses operating workflows etc.
U.S. Treasury central clearing: a changing landscape
Since the SEC rule was announced, the Fixed Income Clearing Corporation has observed a significant increase in clearing activity and is currently processing on average USD 12 trillion in cleared transactions (in total value)[6]. This trend is expected to grow, as earlier this year CME Securities Clearing and ICE Clear Credit were approved to clear the U.S. Treasuries securities transactions.
A multiple clearing house environment is expected to broaden service offerings, improve pricing structure and diversify risk exposure. Nevertheless, the proliferation of clearing houses may also create some drawbacks, such as limitations on multilateral netting as well as increased operating, onboarding and connectivity costs for market participants.
U.S. Treasury securities clearing: next steps
The regulatory bodies, clearing houses and industry working groups continue to collaborate on addressing critical pending points and establishing a path for best market practices.
As a result, clients are encouraged to undertake preparatory work and engage with clearing brokers and service providers as early as possible to assess their trading patterns, clearing needs and determine the optimal path to clearing access. Note that the qualifying standards for sell-side and buy-side firms may vary depending on clearing house specific rules and conditions, operating models and client requirements.
Preparatory steps (not exhaustive)
- Identify eligible transactions and their nature
- Engage with trading counterparties
- Review margin requirements
- Review different Treasury Clearinghouse offerings
- Execute legal documentation
The U.S. Treasury securities clearing regulation is a step toward market integrity and avoidance of systemic events by reduction of the counterparty and settlement risks.
BNP Paribas continues its efforts to implement this regulatory change.
Explore the SEC amendment – Click here to access the Rule 17 CFR Parts 240 (Final rule: Standards for Covered Clearing Agencies for U.S. Treasury Securities and Application of the Broker-Dealer Customer Protection Rule with Respect to U.S. Treasury Securities)
For any further questions, please reach out to your BNP Paribas representative.
[1] Final rule: Standards for Covered Clearing Agencies for U.S. Treasury Securities and Application of the Broker-Dealer Customer Protection Rule with Respect to U.S. Treasury Securities
[2] Final rule; extension of compliance date.
[3] US Treasury Securities Statistics – SIFMA – US Treasury Securities Statistics – SIFMA
[4] IIB Urges SEC to Adopt Targeted Exemption for Certain Non-U.S. Transactions – Institute of International Bankers
[5] Request for Exemptive Relief from the Clearing Rule for Certain Inter-Affiliate Transactions – SIFMA
[6] U.S. Treasury Clearing | DTCC, as of June 2026