In recent remarks, Commissioner Uyeda provided an update on the Securities and Exchange Commission’s progress toward implementation of the Treasury clearing rule. The Commissioner emphasized the benefits associated with central clearing, which include enhancing transparency and reducing bilateral exposures. In his remarks, he cites research from the Office of Financial Research on the benefits of central clearing in the Treasury repo market. Based on a back testing analysis of repo and reverse repo positions of six G-SIBs during the first eight months of 2025, the OFR found that had the Treasury clearing rule been in effect, each bank would have freed up an average of approximately $34.5 billion in balance sheet capacity.
The Commissioner noted that CME’s and ICE’s registrations as clearing agencies for Treasury securities transactions have been approved. The SEC Staff also has been reviewing and considering proposals from FICC to support the rule—related to expanded cross-margining for customers. The Commissioner explained that in December 2025 the SEC had acted on two proposals from FICC to establish a “collateral-in-lieu” service as part of its existing sponsored general collateral service. This would allow FICC to take a lien on the collateral underlying a repo instead of charging margin, addressing the double margining issue. The SEC also issued an order approving expansion of FICC’s agent clearing service to include triparty transactions.
The Commissioner acknowledged market participants are seeking additional regulatory clarity relating to the application of the rule to inter-affiliate transactions. The final rule included an exemption for inter-affiliate transactions. The inter-affiliate exemption provides that a direct participant of a central counterparty would not have to clear its inter-affiliate transactions if (i) the affiliate was under common control and was either a bank, broker-dealer or a futures commission merchant, and (ii) the direct participant also submitted for clearing the outward-facing transactions of that affiliate. However, this final inter-affiliate exemption was not exposed to public review, and market participants have raised a number of concerns, including with respect to the types of entities that can be affiliates for purposes of the exemption and the requirement to clear the outward-facing transactions of the affiliate. SEC staff has been working with market participants to better understand these concerns and how they can be addressed. The Commissioner noted that “productive feedback” had been received from market participants and it was his hope that potential modifications could be rolled out in the near future.
The Commissioner also touched on the rule’s extraterritorial scope—a topic he has commented on in various prior speeches. He noted that the SEC is working with non-U.S. firms and understands that these firms may have a more significant compliance burden. Finally, he said that the Staff was working to understand the jurisdictional issues, and hoped to address these matters. Read Commissioner Uyeda’s full remarks.