SEC exempts some inter-affiliate and non-US repo trades from the Treasury clearing mandate

The Securities and Exchange Commission on 30 October 2026 granted exemptive relief from its US Treasury clearing rules for two kinds of repo trades: some trades with non-US counterparties, and trades between a clearing member and its affiliates.

The clearing mandate

The SEC adopted the rules in December 2023. They require every direct participant of a Treasury clearing house to submit its eligible secondary market Treasury trades, repo included, for central clearing. The compliance dates are 31 December 2026 for cash trades and 30 June 2027 for repo.

What the order exempts

Non-US repo. A firm can leave uncleared some repo trades between a non-US client and a non-US clearing member, a non-US affiliate or a foreign branch of a US member. The exemption applies only while those trades stay below one of two limits, each measured as a rolling daily average over the prior three quarters:

• a percentage cap, measured against the firm’s cleared repo plus the exempt trades, which starts at 25% from 30 June 2027, falls to 20% from 1 July 2028 and 15% from 1 July 2029, and ends at 10% after 30 June 2030; or
• a fixed threshold of $5 billion in market value.

Clearing members using it must attest to their clearing house that they are monitoring and complying with the limits, and must tell it at once if they breach them.

Inter-affiliate repo. The rules already excluded repo between a clearing member and an affiliated bank, broker-dealer or futures commission merchant. The order extends that to any majority-owned, consolidated affiliate, unless the affiliate is an investment company. The SEC says such funds can pose extra risk because they take market positions.

Commissioner Mark T. Uyeda, who leads the agency’s Treasury clearing work, said the relief “addresses practical concerns while preserving the important benefits of central clearing.”

What it means for traders

The relief is aimed at dealers and banks, not retail accounts. It narrows how much of the Treasury repo market must move to central clearing in 2027, a market that also funds the Treasury futures basis trade (see our background on hedge funds’ futures and repo positions).

What happens next

The cash-trade deadline of 31 December 2026 is unchanged. The SEC says it will monitor whether the $5 billion threshold remains appropriate. Firms with questions can contact the Division of Trading and Markets.