Preparing for Treasury Clearing: Inside the Done-Away Model

In this episode of The SIFMA Podcast, Steve Byron speaks with Charles DeSimone, Ray Agoglia, and Elaine Li about the U.S. Treasury and Repo Clearing Done-Away Model Design Considerations report, published with EY in December 2025.

Transcript

(Edited for Clarity)

Stephen Byron: Thank you for joining us for this episode of the SIFMA Podcast. I'm Steve Byron, managing director, head of technology, operations, and BCP at SIFMA, and your host for today's session. Today, we'll be discussing the US Treasury and Repo Clearing Done-Away Model Design Considerations report that SIFMA published in conjunction with EY earlier in December. I'm pleased to be joined today by Ray Agoglia, Senior Manager, FSO Business Consulting, and Elaine Li, Manager of Capital Markets, who are both with EY. I'm also joined by Charles DeSimone, Managing Director and Deputy Head of Technology, Operations and Resiliency here at SIFMA. As always, we welcome your comments and questions. Listeners can reach us at [email protected]. And with that, let's get into the discussion. So Ray, Elaine, Charles, thanks so much for joining us today. Let's start at the top. Charles, can you share with us some background on the Done-Away initiative and give us a sense of the scope of the work that needs to take place?

Charles DeSimone: Great. Thanks, Steve. First, I think it's worthwhile to level set by providing a clear understanding of what we're talking about when we talk about Done-Away Treasury Clearing. Done-Away Treasury Clearing refers to the process in which trades executed by an external broker are centrally cleared through a firm's designated clearing provider rather than by the executing broker. The Done-Away Initiative is part of CIFMA's broader commitment to helping the industry prepare for the implementation of the Done-Away Treasury clearing requirement. As part of that work, we've led extensive efforts over the last 18 months across multiple fronts, including documentation, capital, operations, and technology. Before digging into the operational work stream, which this project has been a part of, would like to note that since 2024, we've been actively engaged in working through developing standardized documentation and will in a few weeks be releasing additional documentation for the Done-Away side.

So encourage firms who are interested to look for those resources and information on that on the SIFMA website. We've also been actively engaged on the capital front, working to get relevant capital opinions required for FICC in this area. Turning now to the operations side, Duneway Initiative is for the continuation of work we've been carrying out for the last several years around understanding the operational technology and business project process context for the move to Done-Away Clearing. We started this work with a publication which was published also together with EY in 2024 around key design considerations, operational and technology considerations for Done-Away clearing broadly. Emerging out of that project was a recognition that we needed to do additional work, which is really focused as a supplement to that prior US Treasury Clearing Considerations report focused around the issues specific to done away clearing. We organized this then to really dig into these issues and develop a series of recommendations and considerations to help the industry as they begin building and developing a doneaway model.

This was based on a series of discussions among SIFMA members representing both buy and sell-side participants, as well as with a broad range of infrastructure providers who support this market, including CCAs, trading venues, and technology vendors throughout the securities lifecycle. The document was intended to really support the industry broadly across all of those entity types, CCAs, vendors, trading platforms, and market participants on both the buy and sell side as they build, refine, and implement a consistent and functional doneaway model ahead of the upcoming compliance dates. The scope of this document really focuses on transactions which don't require allocations. The flows and requirements for bunched order allocations continue to be discussed and refined, and we'll touch on that later in the discussion. The flows and requirements documented are agnostic to the products themselves, both cash and repo, as well as clearing access models and CCAs. As such, it's designed to be a guideline and a framework for baseline US treasure clearing doneaway clearing requirements.

In the document, as you'll see today, we outline the desired done away flows for a range of different execution paths, CLOB RFQ and voice as defined by market participants where they choose to be active. We describe the roles and responsibilities of market participants, CCAs, trading venues and technology platforms across the trade lifecycle, and identify the core capabilities and data requirements that will be needed to established a proposed doneaway flows. And finally, as we move forward into building and implementation, we indicate the proposed owners who will be responsible for developing and implementing defined core capabilities.

Byron: Thanks, Charles. That was a great insight. Now, EY has been a great supportive partner for the industry and SIFMA in this process, so I'd like to bring Ray in here. Ray, the report captures and organizes the proposed unaway flows and core requirements based on input and subject matter analysis from market participants on both the buy and the sell side. Can you walk us through the design foundations for the different models?

Ray Agoglia: Thank you for having us, Steve and Charles and SIFMA. Always happy to participate in such panels and efforts at the industry level alongside your members. I will share a few different points here around the key design foundations where we wanted to make sure that risk and operational efficiency is centered in each of the flows. Aligning to the documentation effort, we looked at Central Limit Orderbook CLOB, request for quotes, RFQ, voice, and bunch to order execution flows. Each having its own operational and technology considerations, which we outlined in the document itself. Across each of the flows, there are some common foundations that we try to underpin each flow. Of course, all the flows, there are some common foundations, clear data capabilities allowing for control upfront early on in the trade lifecycle, supporting downstream processing, robust limit check mechanism that balances flexibility, efficiency, and effectiveness for risk management purposes.

Standardized pre-trade and post-trade workflows that aim to minimize bifurcation between done away and done with models, allowing for a clear operational flow. Lastly, a well-defined allocation and give workflow that allows for reduced friction within the buy and sell side participants. This consistency across flows allows for scalability and implementation in a practical way and allowing firms to take a fit-for-purpose approach and meet its own business and client need.

Byron: Thanks, Ray. Now, Elaine, let's dig into each of these individually. So starting with the central limit order book, what does our audience need to know?

Elaine Li: Yeah, happy to chime in here, Steve. CLOB has some unique characteristics that we took into consideration when designing the Donaway model. Trades are essentially executed anonymously with CLOB, acting as the principle and being the counterparty of each trade. So the trades are essentially inherently done away, and therefore this market possess some of the functionalities that are critical to Donoway clearing, such as the limit check mechanism. Trades are executed at high volume and low latency on CLOB, so we believe establishing a model that does not introduce latency or time lags in the trading process is crucial to maintaining the efficiency of this market. With that in mind, the CLOB workflows essentially preserve a lot of the existing processes such as leveraging the Collab's existing risk management practice for limit check and the existing process of submitting trades to CCAs. A few specific requirements were layered in as we believe they are beneficial to bring consistency across the different execution models.

One of the specific requirements is to provide a central LimitHub ability to listen in any limit consumptions and updates once the trades are executed on CLOB, which allows the clearing brokers the visibility of their limits across the different execution venues. The other specific requirements we layered in, it's the flexibility of allowing CLOB to submit both sides of the trades to CCA's app on explicit delegation of the clearing brokers for the purpose of enhanced automation. So to close, I think a important takeaway is that the design recognizes the unique characteristics of CLOB, but also tries to preserve a lot of the existing capabilities and risk controls that firms and venues already rely on today.

Byron: That was great insight. So moving on now to the RFQ flow, the request for quote flow, could you walk the audience through that?

Li: Yeah, of course. RFQ actually introduces a bit of different dynamics because you are dealing with a more bilateral interactions at a point of execution. You will know who your content party will be at a point of execution, which is different than the CLOB. Here, we basically shift our focus to how information flows between the different counterparties before and after trade execution, particularly around limit checking and the handoff to clearing. What we heard consistently from market participants is that from the executing broker perspective, there is a real need to know before trade execution that the trade will be accepted for clearing. At the same time, the clearing brokers need the visibility that appropriate risk has been checked, and then the trade is submitted into their CCA account so they can manage exposures effectively. That is why the pre-trade limit check becomes a critical design element for RFQ.

In the proposed model, we introduce the roll of a central limit hub, which acts as a single point for limit validations. The RFQ platform will essentially ping the limit hub prior to trade execution to confirm there are sufficient clearing limits for the particular clearing relationship. A key concept that comes out of that is the limit token. Once a limit track is successfully completed, a token is generated and will be carried throughout the trade lifecycle as an indicator to CCA and downstream that the appropriate limit track has already been performed, and then the clearing broker is aware of the trade. So this approach helps balance the interactions among trade counterparties, clearing brokers, and the CCAs without fundamentally changing how RFQ trading works today.

Byron: That's great. Thank you. Now, Ri, Elene did a great job there walking through the club and the RFQ flows. Let's turn now to voice clearing. Can you give your perspectives on what makes this flow different from the others that we've discussed and key points that members should take away?

Agoglia: Elaine did a great job there, so now I have to follow that act. Voice is a little bit more operationally nuanced compared to the platform flows. Knowing how voice is executed today, typically it's between two brokers on the phone, Bloomberg Chat. However, given the desire to have a limit check prior to execution, it makes for fundamentally a challenge that we have to design for. So similar to the RFQ, we'd like to position a pre-trade check along the critical path for the voice, given that the executing brokers desire the confidence that a trade will be accepted for clearing as it's being executed. Clearing brokers, on the other hand, would also like the assurance that appropriate risk checks are in place before they become exposed to the clearing aspect of the transaction. That said, voice trading doesn't follow a single standardized workflow, so the model is intentionally designed to show flexibility in how those limit checks are initiated.

Depending on the firm's business model, either the client or the executing broker may initiate the pre-trade limit check, with the objective being clearing certainty rather than prescribing who pushes the buttons.

Another key consideration for voice trades is that they're currently executed off platform. With the need for a limit check, does this now push those voice trades traditionally off platform onto platform? Obtaining the limit check prior to execution. This design contemplates the use of a middleware to support the trade matching and affirmation, ensuring economics and key data attributes are reconciled between the parties before anything is sent downstream to the appropriate CCA. Taking all this together, this approach balances the bespoke nature of voice trading and today's market with the need for control, risk management, and clean handoffs into clearing without forcing firms into a one-size-fits-all approach.

Byron: Thanks for that summary, Ray. I know as a working group, we spend a lot of time looking at the bunched orders and post-trade allocation flows. Maybe you could spend some time just talking through some of the work that was done there and also what remains and what clarity remains to be given there.

Agoglia: Sure. And as Charles mentioned earlier, that's an open topic that remains in discussion on how best to implement across executing and clearing brokers, as well as the buy-side participant and supporting market infrastructure. We realize this is a important trade transaction for the buy-side perspective, giving a critical mechanism to manage funding needs. Bunch orders introduce an additional layer of complexity because they're essentially looking at a single execution, and later the requirement is to broken down into smaller pieces for central clearing at the fund level. In the proposed design, the initial limit check is for a bunched order to be performed against a firm level suspense account using a stand-in broker. Once a valid token is verified, the trade is then can be executed at the top level account, providing clearing certainty at the point of execution. From there, we contemplated two different approaches. In the first proposal, the bunched order is submitted via the CCA to the standard broker, and settlement obligations are suppressed by the CCA.

Allocations are submitted once the trade is fully allocated, and a secondary fund level limit check occurs with the reconciliation performed to ensure that full allocation and clearing at the fund level. In the second proposal, the bunch trade itself is not submitted to the CDCA. Instead, allocations are submitted as the trade is allocated and secondary fund level limits are validated. This includes the ability to submit partial allocations, and as allocations occur, the firm level suspense limit is returned while the fund level limits are adjusted simultaneously. Across both these approaches, there is a clear recognition that a robust fallback mechanism is critical. If allocations fail, remediation steps may include the client coordinating with their designated clearing broker to resolve limit or account issues and resubmit it for clearing. Perhaps resubmitting allocations with alternative clearing brokers as an alternative option. Lastly, adjusting allocations where there's clearing limits still available to allow for the trade to clear in a timely fashion.

Overall, the design is intended to support punched order workflows in a controlled and flexible way, allowing firms to choose the approach that best aligns to their business model while still maintaining strong risk management and clearing discipline.

Byron: Thanks, Ray. That was great. When you consider all of this information, and I know we've covered a lot of detail today, what should our audience take away as the one key step or key next step for them as they consider the US Treasury clearing rollout and the Donaway model?

Li: Happy to start there. I think the one thing I want to emphasize is that the model is intentionally not one size fits all. It provides a structural framework and clear design considerations, while still allowing firms to make choices that align with their business models, client relationships, and operating environments. So I think it's importantly that firms start engaging with clients, perform internal assessment to land on a appropriate clearing model for their business.

Agoglia: Great insights there. I think it's really about the call to action for firms to ensure that they're moving at pace to meet the regulatory obligations. So aligning firm clearing needs as well as what you want to offer for your clients being the top priority of 2026, given the mandate date of end of the year for cash and June 2027 for repo.

Byron: Thank you, Charles, Ray and Elaine for your thoughtful insights and discussion today. And thank you all for tuning in. The Done-Away Model Design Considerations Report is available on our website, and I hope you'll take the time to review it. To learn more about SIFMA and our work to promote effective and resilient markets, please visit SIFMA.org.

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