Financing & Liquidity

U.S. TREASURY CENTRAL CLEARING

The United States Securities and Exchange Commission (SEC) adopted a final rule in December 2023 to enhance risk management practices for central counterparties (CCP) in the U.S. Treasury market and facilitate additional clearing of U.S. Treasury (UST) securities transactions.

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Solutions to Lead You on the Path to Central Clearing

The SEC central clearing rule is set to transform the U.S. Treasury market, requiring market participants to reorganize their trading and infrastructure. BNY can help clients navigate these changes with new ways to access the market, clear and finance their transactions, and manage their collateral and margin.

Clear and finance your cash trades with a leading global clearing solution.

Conduct cleared repo trades by tapping into the single-largest triparty repo platform¹ for U.S. government securities.

Source liquidity or invest cash with one of the largest providers of centrally cleared repo financing.²

Maintain and grow counterparty relationships by clearing repo trades through a single "Done-Away" clearing agent.

¹ 2024 Finadium triparty market survey.

² S&P Global Market Intelligence as of 3Q 2024.

EXPLORE CENTRAL CLEARING SOLUTIONS

BNY has played a central role in building the safety and liquidity of the U.S. Treasury market since its inception, having first financed the U.S. government in 1789.
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 central clearing lifecycle.

FINANCING SOLUTIONS

CLEARING SOLUTIONS

COLLATERAL MANAGEMENT

Sponsored Cleared Repo (“Done With”) Model

BNY’s sponsored cleared repo service enables clients to face Fixed Income Clearing Corporation (FICC) as a repo counterparty, without assuming the financial obligations of direct membership. BNY is a market leader in facilitating CCP access, providing the risk mitigation and capacity benefits of repo clearing to qualifying cash investors and borrowers through a mechanism called “sponsored membership.”

Self Clearing

For market participants who want to centrally clear their transactions directly, our U.S. Government securities clearing platform provides direct access to the Federal Reserve to clear and settle primary and secondary trading activity for U.S. government securities. While BNY provides settlement services to its clients for cleared and uncleared activity, they will need to ensure that their eligible U.S. Treasury transactions are submitted for central clearing to a Covered Clearing Agency.

Agent Clearing

Our Outsourced Clearing solution helps clients power their business by offering scale across multiple markets, a flexible cost structure and staying ahead of new regulations. We provide access to the FICC today through BNY Pershing and for U.S. Treasury Cash and Agency Securities through the FICC’s Correspondent Clearing Model, that is currently evolving to become the Agent Clearing Service (ACS).

Done Away Model
(Currently in development)
Through the anticipated FICC-Sponsored “Done Away” model, FICC Netting Members are anticipated to be able to centrally clear U.S. Treasury repo transactions without sponsoring their counterparties and utilizing BNY as acting sponsor and clearing agent.Currently clearing a trade is “done with” the dealer that executes the trade. With BNY’s “Done Away” clearing model, clearing a trade is “done away” from the dealer that executed the trade, keeping the clearing and execution of the trade separate.

Centrally Cleared Triparty Repo

As the world’s largest collateral manager,³ BNY’s Global Collateral platform allows clients to efficiently centralize how collateral is managed, opening up a world of possibilities for utilizing your assets to meet investment objectives. BNY triparty repo is the single-largest venue for financing Treasury securities in the world.⁴

3 BNY 2024 Annual Report

4 2024 Finadium triparty market survey.

INSIGHTS

Views | Clearing & Settlement

Reassembly Revisited: The path to central clearing

Explore how the U.S. Treasury central clearing rule affects global market participants. BNY provides expert guidance on complying with the SEC mandate.

SPOTLIGHT ON
CENTRAL CLEARING

BNY experts explore the global impact of the SEC’s central clearing mandate on U.S. Treasury transactions and how market participants can navigate and prepare to ensure a successful transition.

*As of July 8, 2025

Download video transcript

Central Clearing: Frequently Asked Questions

CCPs were originally required to make risk management and access related changes by March 31, 2025. Following the extension of the compliance date, the SEC issued a temporary exemption regarding the enforcement, postponing it until September 30, 2025.

Direct participants are required to clear eligible cash transactions by December 31, 2026, and clear eligible repo and reverse repo transactions by June 30, 2027.

Direct members of an SEC-registered clearing agency that clears US Treasury security trades (a “Treasury CCA”) must submit eligible secondary market US Treasury trades for clearing. Eligible transactions include:

All repurchase and reverse repurchase agreements collateralized by US Treasury securities to which a direct participant is a counterparty.
All purchase and sale transactions of U.S. Treasury securities entered into by direct participants who are acting as interdealer brokers (i.e., entered into by a direct participant that brings together multiple buyers and sellers using a trading facility and that is a counterparty to both the buyer and seller in two separate transactions).
All purchases and sales of US Treasury securities between a direct participant and a registered broker-dealer, government securities dealer, or government securities broker.

Eligible secondary market transactions do not include purchase or sale transactions or repurchase or reverse repurchase agreements in which one counterparty is a central bank, a sovereign entity, an international financial institution (i.e., a multilateral development bank or similar entity) or a natural person.
Eligible secondary market transactions that are repos do not include those between a direct participant and either a state or local government or another clearing organization or those that are the direct participants’ inter-affiliate transactions, provided that the affiliate (i) is a bank, broker-dealer, FCM, or foreign equivalent; and (ii) submits for clearing all other Treasury repos to which it is a party.

Mixed collateral triparty repo trades play an important role in the funding activity of many market participants. Under General Collateral Financing, market participants will agree to a trade without specifying the exact collateral they will accept from a broader bucket of high quality, liquid assets, which include US Treasurys, TIPS, and Agency MBS. Under these trades, it is not unusual for agency general collateral repo trades to be topped off with Treasury securities if the dealer does not have sufficient Agency MBS to complete the deal.

The SEC understands that market participants may use US Treasury securities as permissible substitutions for other types of collateral and generally should not consider mixed CUSIP triparty repos resulting from such a permissible substitution as within the scope of the definition of an eligible secondary market transaction. However, if a mixed CUSIP triparty repo is eligible to be cleared and contains US Treasury CUSIPS from the outset of a transaction, such a transaction would be included in the scope of the definition of an eligible secondary market transaction.

Inter-affiliate trades are an important tool used by market participants to centralize risk management and distribute liquidity amongst their various entities.

The SEC has conditionally excluded any repurchase or reverse repurchase agreement collateralized by US Treasury securities entered into between a direct participant and an affiliated counterparty that is a bank, broker-dealer, FCM, or foreign equivalent, provided that the affiliated counterparty submits for clearance and settlement all other repurchase or reverse repurchase agreements collateralized by US Treasury securities to which the affiliated counterparty is a party.

The rule only applies to transactions that are of a type currently accepted for clearing at a Treasury CCA; it does not impose a requirement on a Treasury CCA to offer additional products for clearing.

FICC does not currently clear these trade tenors today. FICC may choose to clear this trade in the future.

FICC does not currently clear this type of trade today. FICC may choose to clear this trade in the future.

No, as per the SEC final rule, securities lending transactions do not fall within the scope of the definition of an eligible secondary market transaction.

Clients are encouraged to check with their legal and FICC.

FICC provides a variety of access models that market participants can choose from. For more information, please consult FICC’s website.

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Markets products are offered through BNY or Capital Markets, LLC in the U.S. and select countries in NA, EMEA and APAC where permitted by local law. Not all products and services are offered in all countries. Please confirm with a BNY representative.

BNY Markets Global Disclaimer

BNY Clearance & Collateral Management Disclaimer

U.S. TREASURY CENTRAL CLEARING

Ready to grow your business?

Solutions to Lead You on the Path to Central Clearing

1 2024 Finadium triparty market survey.

2 S&P Global Market Intelligence as of 3Q 2024.

EXPLORE CENTRAL CLEARING SOLUTIONS

Self Clearing

Agent Clearing

3 BNY 2024 Annual Report

4 2024 Finadium triparty market survey.

INSIGHTS

SPOTLIGHT ONCENTRAL CLEARING

Central Clearing: Frequently Asked Questions

Ready to grow your business?

Ready to grow your business?

¹ 2024 Finadium triparty market survey.

² S&P Global Market Intelligence as of 3Q 2024.

SPOTLIGHT ON
CENTRAL CLEARING