Central clearing panel
14 April 2026
Industry experts discuss how firms are preparing for the US Treasury clearing mandate, exploring evolving access models, operational readiness, and the remaining regulatory and infrastructure challenges facing market participants
Image: stock.adobe.com/ill Chizek
Panellists
Nate Wuerffel, Head of Product for the Global Collateral Platform and Head of Market Structure, BNY
Andrew Lazar, Managing Director, Head of Sales, BUCKLER Securities
Brooke Reis, Secured Financing Product Development, State Street
The US Treasury Clearing Mandate is expected to come into force for cash trades on 31 December, with rules around repo set for June 2027. What actionable steps is your firm taking to meet the compliance deadlines?
Nate Wuerffel: BNY has played a central role in building the safety and liquidity of the US Treasury market since its inception, having first financed the US government over 235 years ago. Today, BNY continues to hold a unique position in the world’s most important bond market and provides a solution for every stage of the Treasury market investment lifecycle. We act as the primary settlement provider for US Treasury securities and operate the leading triparty liquidity venue for US Treasury securities. We recognise the important role we play and are working to provide our clients with enhanced solutions that allow them to comply with the mandate.
This has taken a variety of forms. In our Global Collateral business, we have been working with US Treasury market central counterparties (CCPs) to develop margin and capital efficient clearing models, as seen in the launch of the Fixed Income Clearing Corporation’s (FICC’s) Collateral in Lieu (CiL) and Agent Clearing Triparty Service. This is complemented by the work we are doing in Global Clearing and Securities Financing businesses, where we are providing clients with access to clearing via the Sponsored and Agent Clearing models. Additionally, we are working to develop a done-away clearing solution that would leverage our sponsored member programme and allow clients to comply with the mandate in a more scalable manner.
In some cases, we are a CCP member and have an obligation to comply with the clearing mandate, and in other cases we have business lines that engage in Treasury cash and repo transactions with other CCP members. To accomplish this, we are assessing the eligibility of our transactions, reviewing access models to determine the right approach to supporting in scope activity, reviewing our risk management practices, and implementing these changes via a rigorous change management programme.
Andrew Lazar: It is well beyond concept and is in the implementation stage where we have tested the pipes and wiring in advance of compliance. So, it is in the ‘tech-ops’ phase.
Brooke Reis: State Street is actively preparing to support an influx of new clearing volumes in the US Treasury market, with a focus on expanding our suite of clearing access models for the buy side. From Regulated Investment Companies (RICs) to hedge funds, we’re taking a client-centric approach by designing solutions tailored to distinct trading, operational, and regulatory profiles.
As part of this effort, we recently adopted FICC Agent Clearing Service (ACS) and are in the process of expanding our capabilities to include CiL, both as a Sponsoring Member and as a FICC Clearing Agent Bank. In parallel, we have assessed our firm’s internal capital and liquidity usage across our trading products and have taken targeted steps to optimise resources to prevent constraining new clearing volumes.
Another key step has been adopting the Securities Industry and Financial Markets Association’s (SIFMA’s) industry standard clearing documentation, the Master Treasury Securities Clearing Agreement (MTSCA). Our MTSCA schedule is structured to streamline client onboarding and support interoperability between clearing access models.
Lastly, we have scaled our global trading and operations coverage to deliver seamless follow-the-sun support, particularly for our non-US clients preparing for upcoming compliance deadlines.
CME Group, ICE, and DTCC are gearing up for the regulation by offering clients a clearing service, while a number of clearing models, such as sponsored and agent clearing, are also available to users. How should firms navigate this landscape of choice?
Lazar: We suspect that clients will take a portfolio approach to solving for the most efficient funding ecosystem for themselves. No model is one ‘one-size-fits-all’ but for those who can leverage cross-margining it can make sense.
Wuerffel: Clearing a Treasury transaction involves costs, including those for margin, liquidity commitments, and CCP membership. There is a good reason for this, because it is like paying for insurance, making the system more resilient in times of stress. As we approach the mandate, the challenge is how to make the system safer but also create clearing infrastructure that is efficient and scalable and gives market participants options for clearing that are tailored to their needs and constraints.
Two of the biggest costs are related to margin and the capital. FICC, CME, and ICE are all evaluating how they can create safe and efficient clearing models that help address these costs. For example, FICC has developed CiL and ACS, with CiL lowering margin and capital costs, and ACS providing the ability to net margin across your repo book. As market participants evaluate these options, it is important they consider which of these savings is most valuable to them and work to utilise the model that best addresses it.
Reis: While FICC’s Sponsored Member Repo remains the most prominent cleared repo model, the introduction of new models and covered clearing agencies has materially expanded the set of choices available to firms seeking clearing. This broader landscape allows firms to tailor their clearing strategy based on their size, trading activity, and operational sophistication.
Smaller firms may find that their optimal clearing solution involves a combination of indirect access models, making it important to work with providers that offer multiple clearing models or maintain direct clearing memberships across several CCPs.
Reviewing the requirements for this clearing mandate, such as margin, capital allocation, and liquidity management, are there aspects of this regulation where questions remain? What can regulators do to further support participants?
Lazar: Platforms are taking different views on pricing stressed volatility, so which is more effective remains to be determined. Operating efficiency under the different models with one versus multiple CCPs is also a consideration. This will inform clearing fees as well as the ability for broker-dealers to scale given these constraints.
Reis: While not a direct regulatory matter, uncertainty persists around the finalisation of SIFMA’s done-away MTSCA schedule and modules, which remain a work-in-progress, along with the development of industry-sourced enforceability opinions on the MTSCA for non-US jurisdictions.
While this is an efficient, industry-led approach, market participant firms will need to dedicate time and resources to adopt done-away documentation and review enforceability opinions once finalised. Given the expected concentration of onboarding activity, ample time should be allotted for negotiations and implementations, as many firms are likely to seek clearing access at the same time.
Additionally, there are open questions around the scope of certain clearing mandate requirements applicable to non-US institutions. Greater regulatory clarity on extraterritorial aspects of the mandate, particularly for foreign branches of US banks, will help participants finalise their clearing strategies and implementation plans with greater confidence.
Wuerffel: The US Securities and Exchange Commission (SEC) has been working through some of the outstanding issues and has made real progress. They also extended the implementation deadline by a year, which was very helpful. Several questions remain though, specifically around the treatment of inter-affiliate transactions, and how banks and their branches are treated under the rule. While some parties have focused on the extraterritoriality of the rule, the Treasury market is a truly global market, and it should have fair and consistent rules for those that choose to participate in the market. We know it can be harder to clear trades in some international jurisdictions and for some types of firms, and we think it is possible to solve for those concerns in a way that preserves a level playing field.
Technology is a key aspect to preparing for this mandate. How has your firm had to upgrade systems to fulfil upcoming requirements?
Wuerffel: We view the mandate as a real opportunity to invest in our systems to ensure they are able to support the Treasury market into the future. We made a number of changes to our systems to support the clearing of activity today that is uncleared, including a scalable and resilient infrastructure, support for new access models, the introduction of new information like novation status, and streamlined onboarding and legal documentations processes.
Lazar: We have upgraded our systems prospectively to train towards clearing mandate implementation, so no retro fitting of legacy systems is required.
Reis: State Street made strategic investments in re-platforming its repo IT stack ahead of the clearing mandate. Building on this, we are implementing targeted system updates to support new clearing access models and our expanded role as a FICC Clearing Agent Bank for the forthcoming CiL offering.
We have also made several enhancements to our trading system to support trade submission workflows and robust connectivity with FICC for our ACS and CiL clearing accounts. Together, these upgrades are designed to support higher volumes, operational resilience, and seamless client onboarding as clearing activity increases.
Striving for connectivity, resiliency, and surety is core for US Treasury clearing. How should the industry approach these regulatory requirements, from now to implementation?
Reis: As options in the clearing market evolve over the next few years, new participants may consider a phased approach, initially seeking clearing access through established models that have proven to be reliable. The industry has steadily enhanced clearing practices to meet regulatory requirements and strengthen connectivity and resiliency in the done-with marketplace.
With market interest increasing in forthcoming done-away models, the industry should keep these themes in mind to establish robust, resilient trading flows and connectivity. Margin management and pre-trade credit checks, in particular, will be critical to enabling scalable, resilient clearing as participation expands.
Wuerffel: Market participants can choose to view the change in one of two ways. For many market participants, they are likely to view this change as strictly a compliance exercise, ensuring that they secure access to clearing and establish the proper collateral and risk management practices for a cleared market. While all of this is necessary, the firms that are really going to come out ahead are the ones who view this change as an opportunity and decide to invest in their capabilities. That will take an investment in making changes that are strategic, scalable, and resilient — all the attributes that are needed to operate successfully in the US Treasury market.
Lazar: The day-to-day client experience will largely remain unchanged. The question is does the operational complexity created by mandated central clearing introduce new costs and collateral/cash movement issues? Does it improve the securities financing ecosystem or introduce lurking issues like key institution risk? In normal market conditions the experience is likely business as usual, but in stressed conditions does this create concentrated risk? Stay tuned.
Nate Wuerffel, Head of Product for the Global Collateral Platform and Head of Market Structure, BNY
Andrew Lazar, Managing Director, Head of Sales, BUCKLER Securities
Brooke Reis, Secured Financing Product Development, State Street
The US Treasury Clearing Mandate is expected to come into force for cash trades on 31 December, with rules around repo set for June 2027. What actionable steps is your firm taking to meet the compliance deadlines?
Nate Wuerffel: BNY has played a central role in building the safety and liquidity of the US Treasury market since its inception, having first financed the US government over 235 years ago. Today, BNY continues to hold a unique position in the world’s most important bond market and provides a solution for every stage of the Treasury market investment lifecycle. We act as the primary settlement provider for US Treasury securities and operate the leading triparty liquidity venue for US Treasury securities. We recognise the important role we play and are working to provide our clients with enhanced solutions that allow them to comply with the mandate.
This has taken a variety of forms. In our Global Collateral business, we have been working with US Treasury market central counterparties (CCPs) to develop margin and capital efficient clearing models, as seen in the launch of the Fixed Income Clearing Corporation’s (FICC’s) Collateral in Lieu (CiL) and Agent Clearing Triparty Service. This is complemented by the work we are doing in Global Clearing and Securities Financing businesses, where we are providing clients with access to clearing via the Sponsored and Agent Clearing models. Additionally, we are working to develop a done-away clearing solution that would leverage our sponsored member programme and allow clients to comply with the mandate in a more scalable manner.
In some cases, we are a CCP member and have an obligation to comply with the clearing mandate, and in other cases we have business lines that engage in Treasury cash and repo transactions with other CCP members. To accomplish this, we are assessing the eligibility of our transactions, reviewing access models to determine the right approach to supporting in scope activity, reviewing our risk management practices, and implementing these changes via a rigorous change management programme.
Andrew Lazar: It is well beyond concept and is in the implementation stage where we have tested the pipes and wiring in advance of compliance. So, it is in the ‘tech-ops’ phase.
Brooke Reis: State Street is actively preparing to support an influx of new clearing volumes in the US Treasury market, with a focus on expanding our suite of clearing access models for the buy side. From Regulated Investment Companies (RICs) to hedge funds, we’re taking a client-centric approach by designing solutions tailored to distinct trading, operational, and regulatory profiles.
As part of this effort, we recently adopted FICC Agent Clearing Service (ACS) and are in the process of expanding our capabilities to include CiL, both as a Sponsoring Member and as a FICC Clearing Agent Bank. In parallel, we have assessed our firm’s internal capital and liquidity usage across our trading products and have taken targeted steps to optimise resources to prevent constraining new clearing volumes.
Another key step has been adopting the Securities Industry and Financial Markets Association’s (SIFMA’s) industry standard clearing documentation, the Master Treasury Securities Clearing Agreement (MTSCA). Our MTSCA schedule is structured to streamline client onboarding and support interoperability between clearing access models.
Lastly, we have scaled our global trading and operations coverage to deliver seamless follow-the-sun support, particularly for our non-US clients preparing for upcoming compliance deadlines.
CME Group, ICE, and DTCC are gearing up for the regulation by offering clients a clearing service, while a number of clearing models, such as sponsored and agent clearing, are also available to users. How should firms navigate this landscape of choice?
Lazar: We suspect that clients will take a portfolio approach to solving for the most efficient funding ecosystem for themselves. No model is one ‘one-size-fits-all’ but for those who can leverage cross-margining it can make sense.
Wuerffel: Clearing a Treasury transaction involves costs, including those for margin, liquidity commitments, and CCP membership. There is a good reason for this, because it is like paying for insurance, making the system more resilient in times of stress. As we approach the mandate, the challenge is how to make the system safer but also create clearing infrastructure that is efficient and scalable and gives market participants options for clearing that are tailored to their needs and constraints.
Two of the biggest costs are related to margin and the capital. FICC, CME, and ICE are all evaluating how they can create safe and efficient clearing models that help address these costs. For example, FICC has developed CiL and ACS, with CiL lowering margin and capital costs, and ACS providing the ability to net margin across your repo book. As market participants evaluate these options, it is important they consider which of these savings is most valuable to them and work to utilise the model that best addresses it.
Reis: While FICC’s Sponsored Member Repo remains the most prominent cleared repo model, the introduction of new models and covered clearing agencies has materially expanded the set of choices available to firms seeking clearing. This broader landscape allows firms to tailor their clearing strategy based on their size, trading activity, and operational sophistication.
Smaller firms may find that their optimal clearing solution involves a combination of indirect access models, making it important to work with providers that offer multiple clearing models or maintain direct clearing memberships across several CCPs.
Reviewing the requirements for this clearing mandate, such as margin, capital allocation, and liquidity management, are there aspects of this regulation where questions remain? What can regulators do to further support participants?
Lazar: Platforms are taking different views on pricing stressed volatility, so which is more effective remains to be determined. Operating efficiency under the different models with one versus multiple CCPs is also a consideration. This will inform clearing fees as well as the ability for broker-dealers to scale given these constraints.
Reis: While not a direct regulatory matter, uncertainty persists around the finalisation of SIFMA’s done-away MTSCA schedule and modules, which remain a work-in-progress, along with the development of industry-sourced enforceability opinions on the MTSCA for non-US jurisdictions.
While this is an efficient, industry-led approach, market participant firms will need to dedicate time and resources to adopt done-away documentation and review enforceability opinions once finalised. Given the expected concentration of onboarding activity, ample time should be allotted for negotiations and implementations, as many firms are likely to seek clearing access at the same time.
Additionally, there are open questions around the scope of certain clearing mandate requirements applicable to non-US institutions. Greater regulatory clarity on extraterritorial aspects of the mandate, particularly for foreign branches of US banks, will help participants finalise their clearing strategies and implementation plans with greater confidence.
Wuerffel: The US Securities and Exchange Commission (SEC) has been working through some of the outstanding issues and has made real progress. They also extended the implementation deadline by a year, which was very helpful. Several questions remain though, specifically around the treatment of inter-affiliate transactions, and how banks and their branches are treated under the rule. While some parties have focused on the extraterritoriality of the rule, the Treasury market is a truly global market, and it should have fair and consistent rules for those that choose to participate in the market. We know it can be harder to clear trades in some international jurisdictions and for some types of firms, and we think it is possible to solve for those concerns in a way that preserves a level playing field.
Technology is a key aspect to preparing for this mandate. How has your firm had to upgrade systems to fulfil upcoming requirements?
Wuerffel: We view the mandate as a real opportunity to invest in our systems to ensure they are able to support the Treasury market into the future. We made a number of changes to our systems to support the clearing of activity today that is uncleared, including a scalable and resilient infrastructure, support for new access models, the introduction of new information like novation status, and streamlined onboarding and legal documentations processes.
Lazar: We have upgraded our systems prospectively to train towards clearing mandate implementation, so no retro fitting of legacy systems is required.
Reis: State Street made strategic investments in re-platforming its repo IT stack ahead of the clearing mandate. Building on this, we are implementing targeted system updates to support new clearing access models and our expanded role as a FICC Clearing Agent Bank for the forthcoming CiL offering.
We have also made several enhancements to our trading system to support trade submission workflows and robust connectivity with FICC for our ACS and CiL clearing accounts. Together, these upgrades are designed to support higher volumes, operational resilience, and seamless client onboarding as clearing activity increases.
Striving for connectivity, resiliency, and surety is core for US Treasury clearing. How should the industry approach these regulatory requirements, from now to implementation?
Reis: As options in the clearing market evolve over the next few years, new participants may consider a phased approach, initially seeking clearing access through established models that have proven to be reliable. The industry has steadily enhanced clearing practices to meet regulatory requirements and strengthen connectivity and resiliency in the done-with marketplace.
With market interest increasing in forthcoming done-away models, the industry should keep these themes in mind to establish robust, resilient trading flows and connectivity. Margin management and pre-trade credit checks, in particular, will be critical to enabling scalable, resilient clearing as participation expands.
Wuerffel: Market participants can choose to view the change in one of two ways. For many market participants, they are likely to view this change as strictly a compliance exercise, ensuring that they secure access to clearing and establish the proper collateral and risk management practices for a cleared market. While all of this is necessary, the firms that are really going to come out ahead are the ones who view this change as an opportunity and decide to invest in their capabilities. That will take an investment in making changes that are strategic, scalable, and resilient — all the attributes that are needed to operate successfully in the US Treasury market.
Lazar: The day-to-day client experience will largely remain unchanged. The question is does the operational complexity created by mandated central clearing introduce new costs and collateral/cash movement issues? Does it improve the securities financing ecosystem or introduce lurking issues like key institution risk? In normal market conditions the experience is likely business as usual, but in stressed conditions does this create concentrated risk? Stay tuned.
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