The $26 trillion U.S. Treasury market is on the cusp of a major transformation. From 2025, sweeping regulatory changes will require mandatory central clearing of both cash and repo transactions through a central counterparty (CCP). This shift, driven by the U.S. Securities and Exchange Commission (SEC), aims to enhance market transparency, reduce systemic risk, and standardise post-trade processes.
However, the industry is far from prepared. According to a comprehensive survey conducted in July 2024, 43% of firms remain unfamiliar with the new rules, and fewer than one in ten feel fully ready. The implications are significant: increased margin requirements, operational overhauls, technology upgrades, and complex contract renegotiations. Smaller firms, in particular, may face liquidity pressures and rising costs, while even larger institutions are grappling with the scale of change.
This factsheet outlines the key milestones, exemptions, and practical challenges of mandatory treasury clearing. It also highlights the importance of choosing the right CCP partner, with operational efficiency and risk management emerging as top priorities. With only one approved CCP currently in place and others entering the market, strategic decisions must be made soon.
Davies offers expert guidance to help firms assess their readiness, develop tailored playbooks, and implement the necessary changes. Whether you’re just beginning your analysis or already planning your transition, now is the time to act.
Download the full factsheet to gain deeper insights and understand how Davies can support your journey. Get in touch today to ensure your firm is ready for the future of U.S. Treasury clearing.