Treasury Clearing Rule: Compliance Date Extensions, Temporary Relief and FICC Implementation

This OnPoint is intended to provide buy-side participants in the Treasury repo markets:

• An overview of the recent SEC action to extend the compliance dates for rules requiring submission for central clearing of certain Treasury repo transactions.
• An overview of the temporary exemption providing relief to FICC (and potentially other covered clearing agencies) from enforcing policies and procedures implementing a requirement on their members to separately and independently calculate, collect and hold margin posted by an indirect participant.
• A high-level summary of the Treasury Repo Transaction clearing and related requirements and implementation thereof to date by FICC, including the trade submission requirement and its implications for market participants.
• A detailed description of the FICC margin separation and margin calculation methodologies and other related provisions of FICC’s rulebook, which buy-side participants can use to assess alternative arrangements for margining their cleared Treasury repo transactions.

The Appendix to this OnPoint provides further explanation of the scope of the transactions covered by the SEC Treasury Repo Transaction clearing and related requirements, a description of relevant FICC indirect participant access models and the conditions of the SEC’s no-action relief granted to registered funds in connection with posting margin to FICC.