SIFMA seeks Treasury repo relief
SIFMA asked the SEC for expanded affiliated‑counterparty relief under the Treasury clearing mandate so certain Treasury repo transactions won't inadvertently trigger parts of the rule that create operational problems (finadium.com). The request focuses on allowing direct participants and their affiliates to enter specified transactions without activating clearing provisions SIFMA says are operationally burdensome (finadium.com).
The Securities Industry and Financial Markets Association asked the Securities and Exchange Commission on April 10 to widen an exemption so more affiliated Treasury repo trades can stay outside mandatory central clearing. (sifma.org) A repo is a short-term funding trade: one side sells a Treasury security and agrees to buy it back later at a set price. The New York Federal Reserve says repos are a common secured money-market transaction used to support market functioning. (newyorkfed.org) The Securities and Exchange Commission’s December 2023 rule requires covered clearing agencies to make direct participants submit all eligible Treasury cash and repo trades for clearing. The commission said in February 2025 that the compliance dates are now December 31, 2026 for cash trades and June 30, 2027 for repo trades. (sec.gov 1) (sec.gov 2) The trade group says the current inter-affiliate exemption exists on paper but is too narrow in practice. Under the existing rule, only a limited set of affiliates can use it, and those affiliates must clear all of their outward-facing repo trades to qualify. (sifma.org) SIFMA wants the exemption opened to any affiliate of a direct participant that is consolidated under generally accepted accounting principles, except investment company affiliates. It also wants those firms to avoid triggering the clearing mandate when affiliates move cash and collateral inside a corporate group. (sifma.org) The industry argument is operational: large dealers often use different legal entities to shift liquidity and collateral across the firm, and SIFMA says forcing those internal repo trades into clearing could create friction instead of reducing risk. Its letter says the relief would “help support the resiliency and efficiency” of the Treasury market. (sifma.org) The commission has already been adjusting the rollout. In February 2025, it delayed the main deadlines by one year, and its Treasury clearing implementation page says staff are still issuing guidance, including frequently asked questions on triparty repo and broker-dealer financial responsibility issues. (sec.gov 1) (sec.gov 2) At the center of the system is the Fixed Income Clearing Corporation, which says it is the registered clearing agency and central counterparty for this market. That matters because the rule pushes more Treasury trades toward a model where the clearinghouse steps between buyers and sellers and manages margin, netting, and default procedures. (dtcc.com) (sec.gov) The Securities and Exchange Commission has not yet granted the new relief SIFMA requested. For now, the trade group is asking the agency to keep the clearing mandate from pulling in internal Treasury repo trades that firms say were never the main target of the rule. (sifma.org)
