SEC Approves Yet Another Financial Clearing Firm
Published Date: 12/4/2025
Notice
Summary
The SEC has officially approved CME Securities Clearing, Inc. to act as a clearing agency for U.S. Treasury securities, meaning they’ll help make these big money trades safer and smoother. This change affects banks, traders, and anyone dealing with U.S. Treasury transactions by adding a new trusted middleman. The approval process wrapped up in late 2025, setting the stage for CMESC to start operations soon without any immediate cost changes for users.
Analyzed Economic Effects
6 provisions identified: 3 benefits, 2 costs, 1 mixed.
New CCP Approved for U.S. Treasuries
On December 1, 2025 the SEC granted CME Securities Clearing, Inc. (CMESC) registration as a clearing agency to provide central counterparty (CCP) services for transactions in U.S. Treasury securities. The order was published in the Federal Register on December 4, 2025 and authorizes CMESC to begin the steps toward operating as a registered clearing agency for Treasury transactions.
T+0 Gross and T+1 Netting Rules
CMESC will settle repo transactions that settle on trade date (T+0) in real-time on a gross basis. For Cash Treasury Transactions and Repo Transactions settling on T+1 with identical CUSIPs, CMESC will net settlements at the CUSIP level and net settlement will occur at CMESC's end-of-day settlement price. Clear to Hold Transactions will net only against other Clear to Hold transactions in the same General Collateral Bucket.
Margin and Settlement Currency Requirements
CMESC will compute margin and settlement variation each clearing cycle and issue margin calls that must be met in U.S. Dollar cash; settlement variation requirements will also be collected in U.S. Dollar cash. Members and Users may substitute permissible non-cash collateral for initial margin prior to the applicable deadline.
Members and Users: Direct Settlement Liability
CMESC's rules classify participants as Members and Users. Users must be authorized by a Member but are contractually bound to settle directly with CMESC. Users are further classified as Independent Users (who post margin and make payments directly) or Supported Users (whose authorizing Member posts margin and makes payments). If a Member defaults, CMESC can transfer a User's open positions to a new Member.
Fail Charges and Buy-In Procedures
CMESC will allocate settlement fails to Members or Users entitled to the same securities and assess a fail charge for each day a Member or User fails to deliver. CMESC may buy in a failing Member or User; after a buy-in CMESC will pay or collect the difference between the buy-in price and the repurchase price. A Member or User allocated a fail may submit a buy-in request to CMESC no earlier than one day after allocation.
Redundant Infrastructure and Board Oversight
CMESC will use SCI-designated critical systems hosted in a virtual private cloud and physical datacenters with geographically disparate backups and disaster recovery infrastructure. CMESC will be governed by a nine-member Board and specialized committees including Audit, Risk Management, Regulatory Oversight, and Nominating Committees.
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