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The head of the main futures trade body has indicated that the US Treasury clearing mandate will foster increased competition in the US government debt market, creating new opportunities for futures brokers.
This mandate, introduced by the Securities and Exchange Commission (SEC) in December 2023, requires most U.S. Treasury market transactions to be centrally cleared. While Treasury clearing is currently available voluntarily through the Fixed Income Clearing Corporation (FICC), the mandate is expected to significantly expand the cleared market.
A key aspect of this opportunity for futures brokers lies in the shift towards a “done-away” clearing model. Traditionally, US Treasury clearing has often relied on a “done-with” model where one firm handles both trading and clearing. The new regulation will allow for a “done-away” model, where one firm trades and another clears. This is standard practice in futures markets and is expected to open up new avenues for futures commission merchants (FCMs) to offer clearing services in the Treasury market, fostering competition and providing participants with more options.
Major exchange groups like CME Group and Intercontinental Exchange (ICE) are already developing and testing services to capitalize on these changes, with plans to go live later in 2025. This move towards central clearing is also expected to enhance market stability, reduce counterparty risk, and increase transparency in the vast U.S. Treasury market.

Video courtesy of CSOB

Video courtesy of CSOB