SEC Implements New Clearing Rules, Overhauling US Treasury Market

The U.S. Securities and Exchange Commission (SEC) has adopted new rules aimed at reducing systemic risk in the $26 trillion U.S. Treasury market by requiring more trades to go through clearing houses. The reforms, which will be implemented in phases by June 2026, target hedge funds and proprietary trading firms that have become a larger part of the Treasury market but are relatively lightly regulated. The new rules broaden the scope of transactions that must be cleared and require clearing houses to ensure that their members clear cash Treasury trades. While advocates argue that clearing makes markets safer, critics say it adds costs that could reduce liquidity.