DTCC is committed to guiding and informing the industry as it prepares for expanded central clearing of U.S. Treasuries activity, which is scheduled to come into effect in December 2025 for cash transactions and June 2026 for repo transactions.
Given FICC’s role at the center of this major market transformation, we’ve released the findings of a new survey that serves as a pulse check for how the industry is progressing in its preparations. The survey gives a better understanding of how clients plan to use FICC’s access models, and how margin and liquidity risk management resources may be impacted by the rule.
Survey respondents included 83 sell-side institutions, which are all full Netting Members of the Government Securities Division (GSD) of FICC – inclusive of all the major primary dealers. These insights provide further confidence across the wider community on the directional impacts of the Treasury Clearing Mandate on the Treasury market.
Here are some of the takeaways from our survey:
1. Treasury Clearing Volume
FICC’s daily Treasury Clearing activity is expected to increase by more than $4TN.
2. Access Models
The Sponsored Service continues to be the preferred approach at this time; however survey
respondents showed an increased interest in usage of the Agent Clearing Member (ACM) Service. Account setup and indirect participant onboarding has started in advance of the Treasury Clearing Mandate go-live dates. FICC will continue to facilitate a smooth transition.
3. Done-Away Clearing
There is growing evidence for the adoption of a done-away clearing model for indirect participants.
4. Margin
Treasury Repo and Buy/Sell activity estimates indicate an increase in aggregate margin (VaR) for
the respondents’ portfolios of approximately $58.4BN, with approximately $27BN (or 46%) of the aggregate incremental VaR representing segregated indirect participant margin.
5. Liquidity
Responses to the survey indicate a potential maximum daily liquidity need of $84.5BN, which would
point to a total CCLF size of $109.9BN under current parameters and the outlined assumptions. Since 2021, the CCLF facility has ranged between $71.0BN and $128.4BN.
6. Affiliate Clearing
Majority of respondents are planning to choose indirect access for their affiliates.