Time to prepare
May 2026
Elisabeth Kirby, managing director, head of market structure at Tradeweb, sits down with Hansa Tote to discuss the firm’s positioning for the Treasury clearing mandate, how they drew on previous experience, and what market participants are prioritising before the go-live
Image: Tradeweb
The US Treasury Clearing Mandate is a December 2023 US Securities and Exchange Commission (SEC) rule requiring most cash and repo transactions in US Treasury securities to be cleared through a central counterparty (CCP), specifically the Fixed Income Clearing Corporation (FICC). It aims to reduce risk and increase transparency, with phased compliance requiring cash clearing by 31 December 2026, and repo clearing by 30 June 2027.
Discussing the mandate, Elisabeth Kirby managing director, head of market structure at Tradeweb, examines how the firm can assist market participants ahead of the deadlines, and encourages participants to begin their preparations as early as possible.
Tradeweb drew heavily on its Dodd-Frank/swaps experience when positioning for the Treasury clearing mandate. With the benefit of hindsight, where does that analogy hold, and where does it break down when applied to repo?
There are some natural differences in the way the US Treasuries and repo clearing rule is being implemented compared to the swaps clearing rule, stemming in large part from how the two rules have been written.
It is a considerable undertaking to transition the Treasury market and the Treasury repo market into a centrally-cleared environment, and what we have found as we near the deadline, is that numerous participants remain keenly interested, and see value in having multiple models of clearing access such as done-with and done-away.
However, as the deadline approaches and timing becomes tighter, we are seeing a natural prioritisation of simply getting to a place where firms can be compliant with the rule. We are also seeing participants using, and becoming comfortable with the done-with model, often called Sponsored Repo.
Most market participants we have spoken to have found that leveraging the done-with, Sponsored Repo model that exists today has emerged as the default course of action to be compliant with the rule. They then have the option to explore other models that could add greater efficiency or rationality to the market over time.
FICC now has competition from CME Securities Clearing, with ICE potentially entering too. Does a multi-CCP landscape make Tradeweb’s neutral platform position more valuable, or does it fragment liquidity and create operational complexity that ultimately hurts clients?
Multiple clearing houses can introduce operational complexity, and we have seen a similar construct in the swaps market; however, Tradeweb is well versed in helping market participants address this complexity.
Tradeweb’s experience in supporting cleared workflows in the derivatives market positions us well to support a multi-clearing house model in Treasuries and Treasury repo.
From a client perspective, a platform like Tradeweb, with deep experience connecting to multiple clearing houses, is well placed to support this transition. Regarding market and liquidity fragmentation, time will tell how participants adapt to one or multiple clearing houses and to what extent, if any, fragmentation will ultimately materialise.
On the institutional side of our business, the predominant protocol is request-for-quote (RFQ), which allows participants to request bespoke quotes for individual clearing houses.
Within our Tradeweb Institutional and Wholesale platforms, it remains to be seen how fragmentation may evolve, but we are well positioned to support multiple clearing houses within a single liquidity pool if that is ultimately required.
The industry has been talking about done-away clearing for repo for some time, but dealer appetite to provide it remains limited. How close is the market to making done-away a genuine, commercially viable option, and what is the actual blocker?
There has been a general market convergence around leveraging existing model, particularly Sponsored Repo, to achieve compliance ahead of the mandate. At the same time, there is a clear understanding that exploring economic, operational, and efficiency implications of alternative clearing models will become an increasing focus over time.
Looking at the evolution of swap execution facilities with all their customisation and complexity, does the repo clearing market benefit from a more standardised approach, or is there still value in maintaining those ‘bells and whistles’?
There is clear value in providing participants with a high degree of optionality, and Tradeweb’s flexibility across clearing models, trading protocols, and instrument types is well placed to meet that need — an area we will continue to prioritise and build on.
Industry surveys suggest a significant portion of buy side firms are behind on their clearing preparations. From your conversations with clients, how wide is that gap really, and what is the single biggest operational challenge they are not talking about publicly?
In terms of the conversations we have had with clients, it seems that firms are moving in the right direction. We do continue to hear that documentation remains a hurdle and, specifically, ensuring that clients and all associated accounts are appropriately documented with clearing sponsors and, where appropriate, clearing houses. This is an area that both clients and clearing banks are actively working through.
From a client readiness perspective, what should market participants be prioritising today that many still are not doing?
From a client readiness perspective, preparations are hopefully already underway, though there is still meaningful work to be done — particularly around documentation and onboarding, both of which can be time-intensive.
Clients should be actively engaging with their counterparties and clearing banks, as well as with clearing organisations where needed. They should also be working with trading platforms like Tradeweb to ensure all account information is properly documented and onboarded, as applicable.
There is a fairly extensive operational checklist, and Tradeweb has teams in place to support clients through their onboarding requirements. Our experience in facilitating cleared workflows in other asset classes is a meaningful advantage as we help clients prepare for the mandate.
If you had to identify the one implementation risk that the market is underestimating ahead of the December 2026 deadline, whether operational, regulatory, or structural, what would it be?
For participants in scope for the December 2026 deadline, most are already well underway, and it does not appear that there is a significant risk of that deadline not being met.
The June 2027 repo clearing deadline, however, is broader in scope — both in terms of the range of participants required to clear and the complexity of their associated sub-accounts — which makes it a more substantial operational undertaking.
In our view, working through the full set of legal and operational milestones will take time, and firms will want to avoid being in a position where they are racing up against the deadline. As such, we would encourage participants to begin this process as early as possible.
Discussing the mandate, Elisabeth Kirby managing director, head of market structure at Tradeweb, examines how the firm can assist market participants ahead of the deadlines, and encourages participants to begin their preparations as early as possible.
Tradeweb drew heavily on its Dodd-Frank/swaps experience when positioning for the Treasury clearing mandate. With the benefit of hindsight, where does that analogy hold, and where does it break down when applied to repo?
There are some natural differences in the way the US Treasuries and repo clearing rule is being implemented compared to the swaps clearing rule, stemming in large part from how the two rules have been written.
It is a considerable undertaking to transition the Treasury market and the Treasury repo market into a centrally-cleared environment, and what we have found as we near the deadline, is that numerous participants remain keenly interested, and see value in having multiple models of clearing access such as done-with and done-away.
However, as the deadline approaches and timing becomes tighter, we are seeing a natural prioritisation of simply getting to a place where firms can be compliant with the rule. We are also seeing participants using, and becoming comfortable with the done-with model, often called Sponsored Repo.
Most market participants we have spoken to have found that leveraging the done-with, Sponsored Repo model that exists today has emerged as the default course of action to be compliant with the rule. They then have the option to explore other models that could add greater efficiency or rationality to the market over time.
FICC now has competition from CME Securities Clearing, with ICE potentially entering too. Does a multi-CCP landscape make Tradeweb’s neutral platform position more valuable, or does it fragment liquidity and create operational complexity that ultimately hurts clients?
Multiple clearing houses can introduce operational complexity, and we have seen a similar construct in the swaps market; however, Tradeweb is well versed in helping market participants address this complexity.
Tradeweb’s experience in supporting cleared workflows in the derivatives market positions us well to support a multi-clearing house model in Treasuries and Treasury repo.
From a client perspective, a platform like Tradeweb, with deep experience connecting to multiple clearing houses, is well placed to support this transition. Regarding market and liquidity fragmentation, time will tell how participants adapt to one or multiple clearing houses and to what extent, if any, fragmentation will ultimately materialise.
On the institutional side of our business, the predominant protocol is request-for-quote (RFQ), which allows participants to request bespoke quotes for individual clearing houses.
Within our Tradeweb Institutional and Wholesale platforms, it remains to be seen how fragmentation may evolve, but we are well positioned to support multiple clearing houses within a single liquidity pool if that is ultimately required.
The industry has been talking about done-away clearing for repo for some time, but dealer appetite to provide it remains limited. How close is the market to making done-away a genuine, commercially viable option, and what is the actual blocker?
There has been a general market convergence around leveraging existing model, particularly Sponsored Repo, to achieve compliance ahead of the mandate. At the same time, there is a clear understanding that exploring economic, operational, and efficiency implications of alternative clearing models will become an increasing focus over time.
Looking at the evolution of swap execution facilities with all their customisation and complexity, does the repo clearing market benefit from a more standardised approach, or is there still value in maintaining those ‘bells and whistles’?
There is clear value in providing participants with a high degree of optionality, and Tradeweb’s flexibility across clearing models, trading protocols, and instrument types is well placed to meet that need — an area we will continue to prioritise and build on.
Industry surveys suggest a significant portion of buy side firms are behind on their clearing preparations. From your conversations with clients, how wide is that gap really, and what is the single biggest operational challenge they are not talking about publicly?
In terms of the conversations we have had with clients, it seems that firms are moving in the right direction. We do continue to hear that documentation remains a hurdle and, specifically, ensuring that clients and all associated accounts are appropriately documented with clearing sponsors and, where appropriate, clearing houses. This is an area that both clients and clearing banks are actively working through.
From a client readiness perspective, what should market participants be prioritising today that many still are not doing?
From a client readiness perspective, preparations are hopefully already underway, though there is still meaningful work to be done — particularly around documentation and onboarding, both of which can be time-intensive.
Clients should be actively engaging with their counterparties and clearing banks, as well as with clearing organisations where needed. They should also be working with trading platforms like Tradeweb to ensure all account information is properly documented and onboarded, as applicable.
There is a fairly extensive operational checklist, and Tradeweb has teams in place to support clients through their onboarding requirements. Our experience in facilitating cleared workflows in other asset classes is a meaningful advantage as we help clients prepare for the mandate.
If you had to identify the one implementation risk that the market is underestimating ahead of the December 2026 deadline, whether operational, regulatory, or structural, what would it be?
For participants in scope for the December 2026 deadline, most are already well underway, and it does not appear that there is a significant risk of that deadline not being met.
The June 2027 repo clearing deadline, however, is broader in scope — both in terms of the range of participants required to clear and the complexity of their associated sub-accounts — which makes it a more substantial operational undertaking.
In our view, working through the full set of legal and operational milestones will take time, and firms will want to avoid being in a position where they are racing up against the deadline. As such, we would encourage participants to begin this process as early as possible.
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