June 9, 2025 — Although the industry breathed a sigh of relief in February when the SEC announced a one-year extension of its new clearing mandate for U.S. Treasuries and repo, capital markets professionals interviewed in a new study by Crisil Coalition Greenwich continue to grapple with a host of challenges that must be addressed ahead of the clearing rule implementation.

U.S. Treasury market participants regularly employed what is known as the “done-with” model, in which a single broker or dealer executed and, if desired, clears a trade. One of the key benefits of this model is that the dealer’s exposures can be netted with other exposures—an attribute of clearing that 70% of study respondents believe is most important.

In the new world, many market participants will likely turn to the “done-away” model in which trades execute with one dealer and clear with another. This practice ensures best execution while minimizing the number of clearing counterparty agreements to gain efficiencies and reduce cost.

While done-away trading for U.S. Treasury trading is possible with current models, done-away repo is completely new and requires different technology and workflows that industry professionals are still sorting out. 
Other advocacy points are still lingering. For instance, market participants are concerned about mixed CUSIP baskets that may pull other types of securities into clearing that aren’t expressly mentioned in the mandate, such as mortgages.

“Effectively, baskets containing even a single U.S. Treasury bond could pull all other transactions into clearing—something industry experts aren’t ready to contend with,” says Audrey Costabile, Senior Analyst for Crisil Coalition Greenwich Market Structure & Technology and author of a new report titled U.S. Treasury clearing: A new timeline and uncertain trajectory.

Other gray areas come up as talking points as well, including the scope of the rules concerning foreign branches of U.S. firms transacting U.S. Treasuries and repo. Technical issues like credit checks and responsibility of the trade’s performance over the course of its life cycle is another open agenda item. Finally, unpopular pieces of the mandate, like the inclusion of inter-affiliate trades, demand more conversation.

U.S. Treasury clearing: A new timeline and uncertain trajectory presents the results of a new study and identifies the industry’s biggest concerns, potential impacts on the U.S. Treasury market and its participants, and the likely path forward as the implementation deadline approaches.