Securities Regulation Daily Wrap Up, CLEARANCE AND SETTLEMENT—SEC prepares for treasury clearing rule, (Aug 13, 2026)

By Jay Fishman, J.D.

The rule takes effect December 31, 2026 for eligible cash market transactions and June 30, 2027 for eligible repo market transactions.

SEC Commissioner Mark Uyeda, on August 7, 2026, spoke about the Commission’s work to prepare for implementing the long-awaited treasury clearing rule. The rule mandates the clearing of certain eligible secondary market transactions in U.S. Treasury securities by direct participants in covered clearing agencies. The rule specifically takes effect December 31, 2026 for U.S. Treasury cash transactions and on June 30, 2027 for U.S. Treasury repo transactions. U.S. Treasury cash transactions are outright purchases and sales of government debt where ownership transfers permanently for immediate payment. U.S. Treasury repo transactions (repurchase agreements) are short-term, collateralized borrowing and lending arrangements where one party sells securities with a formal agreement to buy them back later at a slightly higher, predetermined price.

Uyeda told attendees to periodically check the SEC’s dedicated Treasury Clearing Implementation webpage at https://www.sec.gov/securities-topics/treasury-clearing-implementation for updates.

Two separate requests for exemptive relief. Uyeda first mentioned the two 2026 exemption requests for public comment, one sent by the Institute of International Bankers (IIB) and the other submitted by the Securities Industry and Financial Markets Association (SIFMA). IIB requested that certain non-U.S. transactions be exempt from the rule. SIFMA sought modifications to the rule’s inter-affiliate exclusion, particularly requesting relief from the “outward-facing condition” for certain repo transactions between non-U.S. affiliates and non-U.S. parties below a certain threshold.

Based on the overwhelming response to the requests from dealers, asset managers, foreign banks and similarly situated others, Uyeda declared the Commission’s intent to reopen the comment period for both requests (notices) until August 31, 2026.

And, because the above financial institutions raised thoughtful questions common to both requests about, for example, operation and legal risks and consistent treatment of the rule across different businesses geographically, Uyeda requested that their August 31st comments ask and answer questions for the Commission to consider creating a combined approach that addresses both requests in a single SEC order.

The Commission’s already completed work. The Commission, anticipating the rule’s beginning implementation at the end of 2026, has already begun a few initiatives (mentioned below), Uyeda remarked.

1. In July 2026, the SEC published a notice seeking comment on potential exemption under Exchange Act Rule 15c3-3 for U.S. treasury securities pertaining to margin calculated on a net omnibus basis instead of on a gross customer-by-customer basis. The relief would allow broker-dealers to include a debit in their reserve computations for margin on deposit with a qualified clearing agency, even if the margin collateral was delivered on a net omnibus basis. These comments, like those above, are due August 31;

2. The SEC published an order granting a conditional exemption from the treasury rule’s application for transactions cleared through “captive” clearing private fund subsidiaries, so long as the subsidiaries meet certain prescribe requirements. Transactions cleared through "captive" clearing private fund subsidiaries refer mostly to repurchase and reverse repurchase (repo) transactions involving U.S. Treasury securities. More specifically, a private fund uses a wholly owned subsidiary—acting as a direct participant in a central clearing agency—to execute and centrally clear trades with third parties on the fund's behalf;

3. Commission staff released a FAQ on clearing agency outages: a temporary technical, operational, or system failure that prevents a central clearinghouse, e.g., a fixed income clearing corporation from accepting, processing, or settling financial trades. The outages freeze central counterparty workflows and force markets to manage counterparty risk through alternative protocols like bilateral trading. The Commission would consider permitting bilateral trading when outages occur; and

4. Lastly, Uyeda said, the Commission is considering how to: (a) treat failed trades following market participant’s having identified the fixing of this issue as critical for their work; and (b) address the recent Basel III notice of proposed rulemaking, particularly its potential effect on transactions subject to the treasury clearing rule.

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