📅 30 October 2026 • SEC
SEC GRANTS EXEMPTIVE RELIEF FROM TREASURY CLEARING FOR CERTAIN INTER-AFFILIATE AND NON-US REPO
The Securities and Exchange Commission has issued exemptive relief from the US Treasury central clearing requirements. Press release 2026-111, dated 30 October 2026, accompanies exemptive order Release No. 34-106789, granted under Sections 17A and 36(a) of the Securities Exchange Act of 1934. The order excludes certain repurchase agreement transactions from the definition of eligible secondary market transactions that direct participants of US Treasury securities covered clearing agencies must submit for central clearance and settlement.
Two exclusions
The relief defines two categories of excluded repo. First, certain repo transactions with non-US counterparties are excluded, subject to specified limits and conditions. Second, certain repo transactions between a US Treasury clearing agency direct participant and a non-investment-company affiliate are excluded, provided the affiliate meets the affiliated counterparty standard in Rule 17ad-22(a). For repo in these categories, covered clearing agencies need not enforce the trade submission obligation against their direct participants.
The order follows exemptive relief requests from SIFMA, published for comment in April 2026 under Release 34-105262, and from the Institute of International Bankers, published for comment in March 2026 under Release 34-104944. The requests concerned inter-affiliate repo used for internal liquidity and treasury management and repo with non-US counterparties. The Commission granted targeted relief addressing the operational and cross-border considerations raised in those requests while keeping the clearing framework in place.
Scope of the mandate unchanged
The central clearing mandate for US Treasuries remains in force for all other eligible transactions. The relief narrows the scope of the mandate, it does not pause the mandate. Covered clearing agencies continue to require submission of all eligible secondary market transactions outside the two excluded categories, and direct participants retain their clearance and settlement obligations for those trades.
IMPACT
Dealers running internal liquidity and treasury management repo through affiliates gain a defined exclusion where the affiliate is not an investment company and meets the Rule 17ad-22(a) standard. Non-US counterparty desks can route qualifying repo outside central clearing within the specified limits and conditions. Clearing agencies must adjust scope mapping and monitoring of eligible secondary market transactions. Compliance teams should update clearing policies, affiliate classification checks and booking documentation, and evidence that each excluded repo meets the conditions of the order.
Sources: sec.gov, securities.io, tradersunion.com, sifma.org
Sources:
- https://www.sec.gov/newsroom/press-releases/2026-111-sec-issues-exemptive-relief-treasury-clearing-requirements-certain-inter-affiliate-non-us-repo
- https://www.sec.gov/files/rules/exorders/2026/34-106789.pdf
- https://securities.io/sec-exempts-certain-repo-transactions-from-treasury-clearing-rule
- https://tradersunion.com/news/regulators/show/4042175-sec-treasury-clearing-rule-relief
- https://sifma.org/wp-content/uploads/2026/07/SIFMA-Final-Cross-Border-letter-7.1.26.pdf
Continue the conversation: https://t.me/ComplianceExplained · Bluesky
Top comments (0)