📆SEC Extends Compliance Dates for U.S. Treasury Clearing Rule
The SEC has extended the compliance dates for crucial rules related to the clearing of U.S. Treasury securities, giving market participants more time to adapt.
Key Points
- •📅 New Deadlines: Compliance for cash market transactions is now due by Dec. 31, 2026, and for repo market transactions by June 30, 2027.
- •⌛ Temporary Exemption: The SEC grants a temporary exemption until Sept. 30, 2025, for Rule 17ad-22(e)(6)(i).
- •📊 Operational Changes: The extension aims to address operational issues and validate necessary changes.
- •🔍 Monitoring: Covered clearing agencies must still monitor direct participants' transaction submissions.
- •🗣️ Expert Insight: SEC Acting Chairman Mark T. Uyeda emphasizes the importance of proper implementation and risk management.
⏳ Deadline Extensions
The SEC has decided to push back the deadlines for compliance with Rule 17ad-22(e)(18)(iv)(A) and (B). Cash market transactions now have until Dec. 31, 2026, and repo market transactions have until June 30, 2027. This rule mandates that covered clearing agencies enforce policies requiring direct participants to submit all eligible U.S. Treasury securities transactions for clearance and settlement. The extension provides more time to iron out any operational kinks.
📜 Temporary Exemption
In addition to extending deadlines, the SEC issued a temporary exemption for Rule 17ad-22(e)(6)(i). Originally set for March 31, 2025, the compliance date is now Sept. 30, 2025. This rule involves the calculation and collection of margin amounts for direct participants' proprietary positions in U.S. Treasury securities. The temporary exemption allows more time for covered clearing agencies to prepare.
📈 The Bigger Picture
"The U.S. Treasury market is a critical piece of the global financial system," stated SEC Acting Chairman Mark T. Uyeda. The extension and temporary exemption aim to ensure that new rules are implemented correctly and any operational issues are addressed. This move is designed to facilitate smoother compliance and risk management processes.
🛠️ What This Means for Market Participants
Covered clearing agencies are still required to keep an eye on their direct participants' transaction submissions. While the temporary exemption gives some breathing room, agencies must be ready to enforce policies for participants who are prepared to comply. This extension period is a chance to refine the approach and ensure robust implementation.