FICC Requires Clearing for All U.S. Treasury Trades
Published Date: 7/9/2026
Notice
Summary
The Fixed Income Clearing Corporation (FICC) wants all members to send their U.S. Treasury trades to them for clearing and settlement. This new rule helps keep things smooth and safe in the market by making sure every eligible trade is tracked and processed properly. The change starts soon and affects anyone trading these government securities, aiming to boost transparency without extra costs.
Analyzed Economic Effects
8 provisions identified: 1 benefits, 4 costs, 3 mixed.
Mandatory Clearing of Eligible Treasury Trades
FICC would require each Netting Member to submit for central clearing and settlement all "Eligible Secondary Market Transactions" to which it is a counterparty. "Eligible Secondary Market Transactions" includes repurchase transactions in U.S. Treasury securities, certain cash transactions entered into by Inter-Dealer Brokers, and cash transactions with broker-dealers or government securities dealers or brokers, as defined by Rule 17ad-22(a).
Possible New Clearing and Risk Charges
FICC states Netting Members subject to the trade submission requirement may incur additional costs, such as clearing fees and risk management charges, when they submit transactions to FICC for central clearing. These additional costs could affect members with lower operating margins or higher capital costs.
FICC Can Inspect Books and Request Info
FICC would clarify and use its existing authority to request reports or other information, inspect Netting Members' books and records, and request information from a member's regulatory authority to monitor compliance with the trade submission requirement. FICC may request trading activity reports, trade data, and related policies or controls.
Member Self-Reporting: 30-Day Notice Rule
Each Netting Member must notify FICC in writing within 30 calendar days after it learns it is no longer in compliance with the trade submission requirement. The notification must include relevant facts known at the time, such as duration of non-compliance, remediation steps and timing, and contact information for the member of Controlling Management overseeing the matter.
Fine and Cure Period for Non-Compliance
FICC would adopt a $10,000 fine for failure to comply with the trade submission requirement. A Netting Member that notifies FICC of non-compliance before FICC independently discovers it would receive a cure period of 30 Business Days before disciplinary measures are taken; the fine may be waived if the member self-reports and remediates within the specified timeframe. FICC will also notify the member's regulatory authority and the Commission of failures.
No Pre‑Netting — Submit Trades Unaltered
FICC would consolidate and retain a prohibition on pre-netting practices: trades required to be submitted must be submitted on a trade-by-trade basis with the original terms unaltered. This supports FICC's market risk management and monitoring closer to execution time.
Banks and Branches: One Membership Rule
FICC would clarify that a bank and its branches must apply under the same membership as one Bank Netting Member, treating a branch and its parent bank as the same legal entity under the GSD Rules. The rule removes prior references allowing a non-U.S. bank to participate via a U.S. branch as an alternative.
Implementation Timing and Commission Compliance Dates
FICC expects to implement most rule changes by no later than December 31, 2026, but Netting Members will not be obligated to comply with the trade submission requirement until the Commission sets the compliance dates for Eligible Buy/Sell Transactions and Eligible Treasury Repo Transactions. FICC will announce effective dates by an Important Notice on its website.
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