SEC weighs one order for cross-border and affiliate relief from Treasury clearing mandate and reopens comment

SEC Commissioner Mark Uyeda, who oversees the Commission’s implementation of the Treasury Clearing Rule, published a progress update on 7 August. It shows the Commission considering a single order to settle two of the mandate’s most contested scope questions, and reopening comment to test that approach.

The rule requires direct participants in covered clearing agencies to clear certain eligible secondary market transactions in US Treasury securities. The Commission has already pushed the compliance dates back by one year, to 31 December 2026 for eligible cash transactions and 30 June 2027 for eligible repo.

Two requests, possibly one answer

Earlier in 2026 the Commission published two exemptive relief requests for comment:

• Institute of International Bankers (IIB): relief from applying the rule to certain non-US transactions.
• SIFMA: targeted changes to the inter-affiliate exclusion, including relief from the “outward-facing condition” for certain repo between non-US affiliates and non-US parties below a threshold. SIFMA also asked for the definition of “affiliated counterparty” to cover all affiliates except investment company entities.

Uyeda wrote that the Commission is evaluating “an approach that would address—in a single Commission order—the relief requested in the IIB Notice and the relief requested in the SIFMA Notice concerning the outward facing condition”. Commenters had noted that the two areas overlap, particularly for global institutions operating across several jurisdictions and legal entities. The Commission reopened the comment periods for both notices and asked specific questions about a combined approach. Comments were expected by 31 August.

Reserve computations

A separate notice, published in July, asks for comment on a possible exemption under Rule 15c3-3. It would let broker-dealers include a debit in their reserve computations for margin on deposit with a qualified clearing agency for cleared Treasury transactions, even when the margin is calculated and delivered on a net, omnibus basis rather than customer by customer. Comments on that notice were also due by 31 August.

Done so far, and still open

The update lists relief already granted. A June order exempts transactions that private funds clear through “captive” clearing subsidiaries, as long as the subsidiary meets set requirements. A staff FAQ on clearing agency outages says bilateral trading remains an option in some cases when a clearing agency is not available to accept Treasury transactions from its participants.

Work continues on other implementation questions, Uyeda wrote, “including the treatment of failed trades, which market participants have identified as critical to their preparations”. He also acknowledged concerns some market participants have raised about the bank regulators’ recent Basel III proposal and its possible effect on transactions subject to the rule. SEC staff have discussed those concerns with other federal agencies, he said.

Why it matters

Analysis. For market practitioners at dealers and foreign banking groups, the open items decide which trades are in scope. A combined IIB and SIFMA order would tell non-US affiliates whether their Treasury and repo activity with non-US parties must be cleared. Until it arrives, firms must prepare for more than one possible outcome, with cash clearing due at the end of the year.

The Rule 15c3-3 notice matters for broker-dealers that clear customer Treasury trades. In its application, SIFMA said a strict customer-by-customer approach needs highly granular systems, and that firms without them could face “duplicative capital and liquidity requirements that are misaligned with actual risk exposure”. The exemption would decide whether net omnibus margin can count in the reserve formula. Failed-trade treatment is the other gap. Without it, desks cannot finalise how a cleared trade that fails to settle is handled between the clearing agency, the direct participant and the customer.

What we are watching

• Whether the Commission issues the combined cross-border and inter-affiliate order before 31 December.
• Guidance on failed trades and a decision on the Rule 15c3-3 net omnibus margin exemption.

Added 1 Nov 2026 to the Regulation section; dated to the event, not published at the time.

Sources

• Update on the SEC’s Work Toward Treasury Clearing Implementation [August 2026], Commissioner Mark T. Uyeda, U.S. Securities and Exchange Commission, 7 Aug 2026
• Release No. 34-105262: Notice of SIFMA request for exemptive relief from aspects of Rule 17ad-22(e)(18)(iv), U.S. Securities and Exchange Commission, 17 Apr 2026
• Release No. 34-105980: Notice of SIFMA application for exemption from conditions of Note H to Rule 15c3-3a, U.S. Securities and Exchange Commission, 24 Jul 2026
• Release No. 34-105736: Order granting conditional exemptive relief for transactions cleared through captive clearing subsidiaries, U.S. Securities and Exchange Commission, 18 Jun 2026