SEC Exempts Some Inter-Affiliate and Non-U.S. Repo Trades From Treasury Clearing Rules

What happened

The Securities and Exchange Commission on Oct. 30, 2026 granted exemptive relief that removes two kinds of repurchase agreements from its Treasury clearing requirements ^[1]. Those deals are no longer counted as eligible secondary market transactions, the category that must be centrally cleared ^[1].

The first carve-out covers certain repo trades with non-U.S. counterparties, subject to specified limits and conditions ^[1]. The second covers certain repos between a direct participant of a U.S. Treasury securities clearing agency and an affiliate that is not an investment company under the Investment Company Act of 1940, provided the affiliate meets the Rule 17ad-22(a) definition of an affiliated counterparty ^[1].

How it affects Americans

The order changes how part of the U.S. Treasury securities market must settle trades, a step the SEC describes as part of the path to central clearing ^[1]. The SEC adopted the clearing mandate in December 2023. Commissioner Mark T. Uyeda called the relief targeted and said it preserves the important benefits of central clearing ^[1]. Broker-dealers and other firms trading with affiliates or foreign counterparties face fewer clearing obligations as a result ^[1].

The Veil Press view

Regulators had already pushed back the original compliance dates to allow an orderly rollout, and this order follows requests for relief that the SEC published for comment ^[1]. Commissioner Mark T. Uyeda, whom Chairman Paul S. Atkins tapped to lead the transition, said: "Successful implementation requires a thoughtful approach that must account for the realities of cross-border transactions. Today’s targeted relief addresses practical concerns while preserving the important benefits of central clearing." ^[1]. Listening to the firms that must comply is sensible, provided the carve-outs stay as narrow as promised ^[1].

What we know

Confirmed

• The SEC issued the relief on Oct. 30, 2026 ^[1].
• Certain repo trades with non-U.S. counterparties are excluded, subject to specified limits and conditions ^[1].
• Certain inter-affiliate repos involving a direct participant of a Treasury clearing agency are excluded, unless the affiliate is an investment company ^[1].
• The Treasury clearing rules were adopted in December 2023 ^[1].

Still being reported

• The press release does not spell out the specific limits and conditions for non-U.S. repo transactions ^[1].
• How much repo volume the relief removes from central clearing has not been disclosed ^[1].