The recent approval of additional clearing models by the U.S. Securities and Exchange Commission Securities and Exchange Commission (SEC), as reported by Risk.net‘s Paulina Pielichata, marks another critical step toward the 2025 mandate for clearing US Treasuries cash and repo transactions. However, the journey is far from smooth.

While the SEC’s green light for Fixed Income Clearing Corporation (FICC) models aims to facilitate broader market access, concerns about bundled clearing and execution services (“done-away” trades) and the lack of competition in the CCP space persist. Critics argue that these issues could hinder market efficiency and increase costs for participants, particularly non-bank firms.

This debate gains urgency with Gary Gensler’s upcoming departure as SEC Chair, as leadership changes could reshape priorities. Will the implementation timeline remain intact, or will new leadership push for delays to address unresolved access and competition challenges?

The question of competition is also heating up. CME Group has filed for clearing services in Treasuries and repo, but market participants warn that fragmentation could create inefficiencies if borrowers and lenders align with different CCPs. Additionally, the accounting treatment of FICC’s agent model raises concerns for clearing members, further complicating the transition.

While FICC’s sponsored access model offers operational certainty, broader reforms are still needed. The stakes are high: ensuring that mandatory clearing strengthens the market rather than fragmenting it requires collaboration, innovation, and, perhaps, a willingness to challenge the status quo.

As deadlines loom, what are your thoughts on the road ahead? Will the market adapt in time, or are delays inevitable?

Please get in touch to discuss. We have decades of experience trading cleared repo products in all major markets and managing netting under IFRS9.

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