SEC Finalizes Two New Standards For A Changed U.S. Treasury Market

The Securities and Exchange Commission (SEC) has taken two important steps recently as part of a long-running U.S. government-wide push to reform the U.S. Treasury market. On December 13, 2023, the SEC published a final rule (the Treasury Clearing Requirement) under the Securities Exchange Act of 1934 (the '34 Act) that significantly expands the types of transactions in U.S. Treasuries that must be cleared through a covered clearing agency. This important overhaul of the U.S. Treasury market is expected to dramatically increase the amount of daily U.S. Treasury clearing activity that will be processed through the Fixed Income Clearing Corporation (FICC).¹ Then, on February 6, 2024, the SEC published a final rule (the Dealer Redefinition) establishing new standards for when a dealer is required to register under the '34 Act. Under the final rule, entities will be required to register as dealers, under certain conditions, if such entities (1) regularly express trading