The SEC’s New Treasury Clearing Rule

Last December, the SEC adopted final rules that will require most market participants to clear repos they enter into on US Treasury securities as well as certain cash purchases and sales of Treasury securities. Despite requests from the futures industry, the SEC declined to adopt exceptions for FCMs investing customer funds. As a result, the final rule will require not only a massive implementation effort for many firms, but also the resolution of a number of interpretive issues involving both the SEC and the CFTC. Attorneys from Cleary Gottlieb will provide an overview of the final rule and what FCMs and derivatives lawyers need to know about it.