Update on Continuing Work Toward Treasury Clearing Implementation

As the year draws to a close, the Commission continues to move forward in its implementation of the Treasury Clearing rule, which, among other things, mandates the clearing of certain eligible secondary market transactions in U.S. Treasury securities by direct participants in covered clearing agencies.[1]

On December 12, 2025, the Commission issued an order approving a proposed new offering from the Fixed Income Clearing Corporation ("FICC") to establish a new "Collateral-in-Lieu" service as part of the existing Sponsored General Collateral (GC) Service. This new service would allow FICC to take a lien on the collateral underlying a repo transaction, in lieu of charging margin. The lien, in most instances, will obviate FICC's need to collect margin or to obtain a guarantee on the transactions. The new service would address what market participants have referred to as "double margining" that increases the costs (and thereby decreases the ability) of a FICC Sponsoring Member to provide clearance and settlement services to registered investment companies and other cash providers [2]

Additionally, on December 22, 2025, the Commission published notice of FICC's proposed rule change to amend its cross-margining agreement with the Chicago Mercantile Exchange, Inc. ("CME") to expand its existing cross-margining arrangement with CME to customers. Currently, the arrangement is limited to the proprietary positions of FICC and CME members.[3] Relatedly, the Commission is considering petitions submitted by FICC and CME for exemptive relief from certain provisions of the Securities Exchange Act of 1934 that would permit the expanded cross-margining for customers.[4]

Finally, on December 1, 2025, the SEC approved the application of CME Securities Clearing Inc. to register as a clearing agency for U.S. Treasury securities, expanding clearing capacity and competitive options for market participants.[5]

Other Steps Taken by the SEC to Date

Since adopting the Treasury Clearing rule in December 2023, the Commission and SEC staff have taken several steps to facilitate orderly implementation:

• Timeline Extension: The Commission approved a one-year extension of compliance deadlines to December 31, 2026, for cash transactions and June 30, 2027, for repo transactions, providing market participants with essential additional preparation time.[6]
• Staff Guidance: SEC staff has issued guidance on the customer protection rules, clarified the scope of eligible secondary market transactions for triparty repo arrangements.[7]
• Engage with Market Participants on Accounting: SEC staff has provided feedback to market participants on accounting requirements for agent clearing members.[8]

We continue our close collaboration with the U.S. Treasury Department, Federal Reserve Board, CFTC, and international regulatory counterparts to ensure seamless cross-border implementation.

Work that Remains Underway

Commission staff continues to actively consider several implementation issues where market participant input remains valuable. These issues relate to:

• Expanding the interaffiliate exemption to include cash transactions and to allow for internal liquidity and collateral management;
• Including additional types of affiliates and broadening the concept of affiliate within the interaffiliate exemption;
• Clarifying the extraterritorial scope of the Treasury Clearing rule;
• Providing guidance on the impact of failed trades or clearing agency outages on the Treasury Clearing rule; and
• Assessing gross vs. net margin alternatives for segregated customer accounts under Exchange Act Rule 15c3-3a.

As we move toward full implementation, we strongly encourage market participants to engage with us on any remaining challenges or unforeseen issues.

The Commission remains committed to working collaboratively with all market participants to ensure the U.S. Treasury market remains the deepest, most liquid, and most resilient government securities market in the world. Please see the SEC's dedicated Treasury Clearing implementation webpage, which will be updated regularly as we address additional issues and provide further guidance, for more information.