SEC eases Treasury clearing rules for some inter-affiliate and non-U.S. repo trades

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SEC eases Treasury clearing rules

Highlights

SEC grants exemptive relief excluding certain repo transactions with non-U.S. counterparties and some inter-affiliate trades from new Treasury clearing rules.
Exclusions apply to repo trades involving non-U.S. counterparties and between direct clearing agency participants and eligible affiliated entities, with specific limits and conditions.
Agency extends compliance dates for Treasury clearing rules first adopted in December 2023 and enhances ongoing support via a new webpage launched September 2025.

Treasury clearing rollout and exemptive relief

As reported by Securities and Exchange Commission, the agency is issuing exemptive relief for certain repo transactions involving non-U.S. counterparties and for some inter-affiliate repo transactions tied to direct participants of U.S. Treasury securities clearing agencies.

The SEC says the step is intended to help broker-dealers and other market participants move toward central clearing of U.S. Treasury securities while addressing interpretive, compliance and operational issues raised during implementation. The Commission adopted the Treasury clearing rules in December 2023 and later extended the original compliance dates to allow more time for engagement with the industry.

Under the relief, certain repo transactions with non-U.S. counterparties are excluded from the definition of eligible secondary market transactions, subject to specified limits and conditions. The same exclusion applies to certain repo trades between a direct participant of a U.S. Treasury securities clearing agency and an affiliated entity that is not an investment company under Section 3 of the Investment Company Act of 1940, provided the affiliate otherwise meets the definition of an affiliated counterparty in Rule 17ad-22(a).

Implementation impact for market participants

Commissioner Mark T. Uyeda, who Chairman Paul S. Atkins has designated to lead the agency's transition initiative, says the SEC has heard concerns about the practical difficulty of implementing the Treasury clearing framework, particularly for cross-border transactions. He says the targeted relief is designed to preserve the benefits of central clearing while responding to market structure realities.

The agency says it continues to support implementation through a dedicated webpage launched in September 2025 that brings together updates, frequently asked questions, Commission and staff statements, and other guidance. During the compliance period, firms can also contact staff in the Division of Trading and Markets directly with questions.

In our earlier coverage of rising long-term Treasury yields and the widening U.S. deficit, we explained how borrowing costs above 5% are feeding through to mortgages, federal interest expenses, and broader financing conditions. The article highlighted how persistent heavy issuance and a tight capital backdrop can intensify fiscal strain, especially when political gridlock limits the scope for deficit-reduction measures.

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