Countdown To The Treasury Clearing Mandate: Will The Capital Rules Keep Pace?

We're still a year and a half from the effective date of the US Treasury Clearing mandate for cash trades and two years from the effective date for US Treasury repo transactions. But participants in the largest and most liquid financial market in the world – over $900 billion in daily cash transactions and $8 trillion in daily repo – are starting to feel the pressure of those deadlines.

The punch list to get to full implementation is daunting:

• There is currently one covered clearing agency authorized under Section 17ad-22 of the Securities Exchange Act of 1934 to clear eligible secondary market transactions in US Treasury securities: the Fixed Income Clearing Corporation(FICC). Two more – CME Securities Clearing and ICE Clear Credit – have applied for authorization or are in the process of applying. There are material differences among the models proposed for mandatory clearing at FICC, CME and ICE, and each of the CCPs – including FICC – still has significant