US Treasury clearing: The race to be first
05 August 2025
Following the SEC鈥檚 decision to extend the US Treasury clearing mandate deadline, Broadridge鈥檚 Ami Vora and Uday Singh uncover the key issues firms must address, and how those who move early can capture strategic advantages
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The financial industry is adjusting following the US 网爆吃瓜 and Exchange Commission鈥檚 (SEC鈥檚) February announcement of an extension to the compliance dates for the US Treasury clearing mandate. However, urgency remains as achieving compliance with the mandate demands a multi-phase transformation 鈥� spanning months of analysis, design, procurement, development, and testing.
鈥淓xtending the deadline was crucial to address several outstanding industry issues, enabling more effective implementation and better outcomes for this vast market,鈥� explains Ami Vora, vice president of fixed income capital markets at Broadridge. 鈥淚mplementing significant changes to clearing flows that have remained largely the same for decades is never an easy task. Managing large-scale change in a market of this magnitude demands a redesign of processes, procedures and trading workflows, which introduces a significant level of implementation risk. This risk can only be effectively mitigated through meticulous planning and comprehensive testing.鈥�
A recent Depository Trust & Clearing Corporation (DTCC) press release notes that the Fixed Income Clearing Corporation鈥檚 (FICC) daily clearing volumes have surged from US$4.5 trillion since the SEC鈥檚 Treasury clearing rule was finalised to reach an all-time high of over US$11 trillion on 9 April 鈥� a significant milestone in the FICC鈥檚 history of processing government securities transactions.
No time to relax
Treasury clearing fundamentally changes a firm鈥檚 trade processing workflows and business operations. Market participants must adapt quickly and optimise their systems.
鈥淔irms need to take a look in the mirror right now and assess where they are in the process,鈥� says Uday Singh, managing director, head of professional services at Broadridge. 鈥淭he complexity and breadth of changes demand a huge amount of work and resources. Meeting compliance standards by December 2026 requires urgent and sustained effort.鈥�
Broadridge experts estimate that the remaining time will go quickly. The analysis and planning phase alone may take at least three months, as firms decide on their target operating models. This will be followed by design, procurement, and development phases 鈥� each requiring time and technical resources. A thorough end-to-end test must also be completed.
鈥淭his is far more complex than the recently shortened T+1 settlement initiative in the US, which firms devoted up to nine months to for industry testing alone,鈥� Singh adds.
Key issues still to address
There are still critical issues to resolve 鈥� from trade models to technology integration 鈥� while maintaining market stability.
The industry is looking for regulatory guidance on several open questions, in particular:
鈥� Clarifying the triparty 鈥渕ixed CUSIP鈥� issue and resolving how trades with identical CUSIPs but different settlement paths are processed and cleared.
鈥� Providing an inter-affiliate exemption to allow trades between a firm鈥檚 own legal entities to be excluded from mandatory central clearing requirements.
鈥淭here are also concerns within the investment advisory community around potential double margining. These issues must be clarified, as they directly impact FICC rules and affect what falls within scope,鈥� says Singh.
In addition, there are several open questions the market participants must address, including:
鈥� A mechanism for credit checks for done away activity
鈥⒙燗 mechanism for voice trade pre-matching
Adding to the complexity is the entry of new clearing entities. CME 网爆吃瓜 Clearing filed their application to the SEC to clear US Treasuries on 15 January, and the Intercontinental Exchange (ICE) has announced its offering in this space. Market participants need to fully understand the differences and nuances of the processing and margining models of the three central clearing firms. 鈥淲e need to understand what the market structure will look like and who the key participants are,鈥� says Vora.
There is also growing concern that entities outside the US, which may be affected, are not fully aware or prepared. It is unclear how the rule will work in practice for international firms operating in varied regulatory environments.
Revamping workflow
Firms are either revamping their existing workflows or introducing new processes to comply with the mandate.
鈥淥ur clients are looking for technology solutions that integrate smoothly into their systems without requiring a complete overhaul,鈥� explains Vora. 鈥淲e鈥檝e meticulously designed our product offerings to not only address today鈥檚 compliance needs but also to be adaptable for what鈥檚 ahead.鈥�
She notes that adoption varies across market participants. Sell side firms often already have clearing access and are providing it to indirect participants, but buy side participants have to make decisions around becoming direct participants or opting for indirect access.
Regardless of the approach, firms are emphasising operational efficiency and regulatory compliance through technology innovation. But this takes time. Firms must map current workflows, identify necessary modifications, and implement platform changes.
Why race to be first?
There are hurdles, but forward-looking firms can see a strategic opening. Early movers will not just meet compliance 鈥� they will reshape how they manage liquidity, streamline operations, and drive long-term efficiency. While many firms are focused on short-term fixes, the deadline extension creates space to pursue bigger, more innovative solutions.
A key part of that solution may be a shift toward the Agent Clearing Service (ACS) access model status. As the market evolves, firms that take on direct clearing responsibilities can reduce their reliance on intermediaries, lower costs, and increase transparency across their trade lifecycle. Preparing now positions firms to implement ACS when accounting and regulatory clarity is finalised 鈥� giving them a head start operationally and strategically.
鈥淎CS isn鈥檛 just a compliance move,鈥� says Singh. 鈥淚t is a structural transformation. We see early adopters building a more scalable infrastructure, offering better pricing to clients, and positioning themselves as leaders in a market that increasingly rewards agility and control.鈥�
With front offices pushing for simplicity and speed, firms that act now will be best positioned to lead when readiness becomes reality.
The pressure stays on
Even with the deadline extended, firms cannot afford to slow down. The smartest players keep up momentum to ensure they are ready when the rule takes effect.
鈥淭his is a chance to take a fresh look under the hood, ensure all the wiring is right, and get ahead of the game with better liquidity management and long-term efficiencies,鈥� Singh says. 鈥淭he race is on.鈥�
鈥淓xtending the deadline was crucial to address several outstanding industry issues, enabling more effective implementation and better outcomes for this vast market,鈥� explains Ami Vora, vice president of fixed income capital markets at Broadridge. 鈥淚mplementing significant changes to clearing flows that have remained largely the same for decades is never an easy task. Managing large-scale change in a market of this magnitude demands a redesign of processes, procedures and trading workflows, which introduces a significant level of implementation risk. This risk can only be effectively mitigated through meticulous planning and comprehensive testing.鈥�
A recent Depository Trust & Clearing Corporation (DTCC) press release notes that the Fixed Income Clearing Corporation鈥檚 (FICC) daily clearing volumes have surged from US$4.5 trillion since the SEC鈥檚 Treasury clearing rule was finalised to reach an all-time high of over US$11 trillion on 9 April 鈥� a significant milestone in the FICC鈥檚 history of processing government securities transactions.
No time to relax
Treasury clearing fundamentally changes a firm鈥檚 trade processing workflows and business operations. Market participants must adapt quickly and optimise their systems.
鈥淔irms need to take a look in the mirror right now and assess where they are in the process,鈥� says Uday Singh, managing director, head of professional services at Broadridge. 鈥淭he complexity and breadth of changes demand a huge amount of work and resources. Meeting compliance standards by December 2026 requires urgent and sustained effort.鈥�
Broadridge experts estimate that the remaining time will go quickly. The analysis and planning phase alone may take at least three months, as firms decide on their target operating models. This will be followed by design, procurement, and development phases 鈥� each requiring time and technical resources. A thorough end-to-end test must also be completed.
鈥淭his is far more complex than the recently shortened T+1 settlement initiative in the US, which firms devoted up to nine months to for industry testing alone,鈥� Singh adds.
Key issues still to address
There are still critical issues to resolve 鈥� from trade models to technology integration 鈥� while maintaining market stability.
The industry is looking for regulatory guidance on several open questions, in particular:
鈥� Clarifying the triparty 鈥渕ixed CUSIP鈥� issue and resolving how trades with identical CUSIPs but different settlement paths are processed and cleared.
鈥� Providing an inter-affiliate exemption to allow trades between a firm鈥檚 own legal entities to be excluded from mandatory central clearing requirements.
鈥淭here are also concerns within the investment advisory community around potential double margining. These issues must be clarified, as they directly impact FICC rules and affect what falls within scope,鈥� says Singh.
In addition, there are several open questions the market participants must address, including:
鈥� A mechanism for credit checks for done away activity
鈥⒙燗 mechanism for voice trade pre-matching
Adding to the complexity is the entry of new clearing entities. CME 网爆吃瓜 Clearing filed their application to the SEC to clear US Treasuries on 15 January, and the Intercontinental Exchange (ICE) has announced its offering in this space. Market participants need to fully understand the differences and nuances of the processing and margining models of the three central clearing firms. 鈥淲e need to understand what the market structure will look like and who the key participants are,鈥� says Vora.
There is also growing concern that entities outside the US, which may be affected, are not fully aware or prepared. It is unclear how the rule will work in practice for international firms operating in varied regulatory environments.
Revamping workflow
Firms are either revamping their existing workflows or introducing new processes to comply with the mandate.
鈥淥ur clients are looking for technology solutions that integrate smoothly into their systems without requiring a complete overhaul,鈥� explains Vora. 鈥淲e鈥檝e meticulously designed our product offerings to not only address today鈥檚 compliance needs but also to be adaptable for what鈥檚 ahead.鈥�
She notes that adoption varies across market participants. Sell side firms often already have clearing access and are providing it to indirect participants, but buy side participants have to make decisions around becoming direct participants or opting for indirect access.
Regardless of the approach, firms are emphasising operational efficiency and regulatory compliance through technology innovation. But this takes time. Firms must map current workflows, identify necessary modifications, and implement platform changes.
Why race to be first?
There are hurdles, but forward-looking firms can see a strategic opening. Early movers will not just meet compliance 鈥� they will reshape how they manage liquidity, streamline operations, and drive long-term efficiency. While many firms are focused on short-term fixes, the deadline extension creates space to pursue bigger, more innovative solutions.
A key part of that solution may be a shift toward the Agent Clearing Service (ACS) access model status. As the market evolves, firms that take on direct clearing responsibilities can reduce their reliance on intermediaries, lower costs, and increase transparency across their trade lifecycle. Preparing now positions firms to implement ACS when accounting and regulatory clarity is finalised 鈥� giving them a head start operationally and strategically.
鈥淎CS isn鈥檛 just a compliance move,鈥� says Singh. 鈥淚t is a structural transformation. We see early adopters building a more scalable infrastructure, offering better pricing to clients, and positioning themselves as leaders in a market that increasingly rewards agility and control.鈥�
With front offices pushing for simplicity and speed, firms that act now will be best positioned to lead when readiness becomes reality.
The pressure stays on
Even with the deadline extended, firms cannot afford to slow down. The smartest players keep up momentum to ensure they are ready when the rule takes effect.
鈥淭his is a chance to take a fresh look under the hood, ensure all the wiring is right, and get ahead of the game with better liquidity management and long-term efficiencies,鈥� Singh says. 鈥淭he race is on.鈥�
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