SEC Grants Targeted Exemptions for Certain Repo Transactions Amid Treasury Clearing Rollout

Background on the Treasury Clearing Mandate

The Securities and Exchange Commission adopted rules in December 2023 that require U.S. Treasury securities to be cleared through a central clearing agency. The agency has extended original compliance dates to give market participants more time to address operational and interpretive issues.

New Exemptive Relief

The SEC issued exemptive relief that excludes from the definition of eligible secondary market transactions certain repo trades involving non‑U.S. counterparties, provided they meet specified limits and conditions. The relief also covers repo trades between a direct participant of a U.S. Treasury securities clearing agency and an affiliated entity that is not classified as an investment company under the Investment Company Act, as long as the affiliate otherwise satisfies the definition of an affiliated counterparty in Rule 17ad‑22(a).

The agency said the relief follows extensive public engagement on how the Treasury clearing rules apply to these transaction types, including requests for relief that the SEC published for comment.

Purpose and Impact

SEC Commissioner Mark T. Uyeda explained that the commission has listened to market participants about implementation challenges and that the targeted relief addresses practical concerns while preserving the benefits of central clearing. The agency noted that successful implementation requires a thoughtful approach that accounts for the realities of cross‑border transactions.

The exemption is intended to help broker‑dealers and other market participants continue preparing for compliance during the implementation period. By carving out these specific repo transactions, the SEC aims to reduce operational burdens and promote an orderly transition to central clearing of U.S. Treasury securities.

Next Steps for Market Participants

While preparing for compliance, the SEC invited market participants to contact staff in the Division of Trading and Markets with questions via email or phone. The agency also highlighted a one‑stop webpage launched in September 2025 that consolidates implementation updates, FAQs, and other resources.