SEC Trading and Markets FAQ: Treasury Clearing

Sept. 30, 2025

(Updated: September 2, 2026)

The Division of Trading and Markets (“Division”), U.S. Securities and Exchange Commission (“Commission”), has prepared the following responses to questions about certain aspects of Commission Rule 17ad-22, including the definition of an eligible secondary market transaction, related to the central clearing of U.S. Treasury securities. These responses represent the views of the staff of the Division. They are not a rule, regulation, or statement of the Commission. The Commission has neither approved nor disapproved this content. These responses, like all staff statements, have no legal force or effect: they do not alter or amend applicable law, and they create no new or additional obligations for any person. The staff adds or updates questions and answers periodically.

General Collateral Triparty Repo Transactions in Which U.S. Treasury Securities Are Allocated Based on a “Collateral Eligibility Schedule” (i.e., Mixed CUSIP Triparty Repo)

Question 1: Does the definition of an “eligible secondary market transaction” in Rule 17ad-22(a) necessarily include general collateral triparty repos in which U.S. Treasury securities are included in the collateral eligibility schedule and are allocated as collateral as part of the settlement process?

Answer: No. When the Commission adopted Rule 17ad-22(e)(18)(iv), it stated that it understood that market participants may use U.S. Treasury securities as “permissible substitutions for other types of collateral” and stated that market participants generally should not consider mixed CUSIP triparty repos resulting from such a permissible substitution as an eligible secondary market transaction.[1] The Commission further stated that, to the extent that a mixed CUSIP triparty repo contains U.S. Treasury CUSIPs from the outset of the transaction, such a transaction would be included in the scope of the definition of an eligible secondary market transaction, and that an exclusion for such transactions is not necessary because the counterparties “specifically structured” the transaction to include U.S. Treasury securities.[2]

Similarly, the staff understands that, typically, entities who wish to transact with each other in general collateral triparty repo pre-select, in advance of any specific transaction, which types of eligible securities the triparty agent may allocate to fill any shortfall in the event that a counterparty does not have sufficient securities of the collateral types chosen at trade execution to settle that particular transaction. This list of pre-selected collateral types that may be allocated when there is a shortfall is often referred to as a “collateral eligibility schedule.” The staff understands that the parties will specify at trade execution (i.e., the outset) of a particular transaction the type of general collateral that would be used for matching purposes, and that the transaction is associated with a specific pre-selected collateral eligibility schedule.[3]

The staff further understands that most triparty repo collateral eligibility schedules allow allocation of U.S. Treasury securities as the most creditworthy collateral type that can be used in place of any other collateral to complete settlement. For example, counterparties to a general collateral repo trade may select a matching CUSIP corresponding to U.S. government agency securities as the collateral type at trade execution. However, U.S. Treasury securities may be allocated as collateral at settlement if there is a shortfall of the U.S. government agency securities collateral, and U.S. Treasury securities are included on the parties’ collateral eligibility schedule.[4]

Inclusion of U.S. Treasury securities as eligible collateral on a collateral eligibility schedule should not be considered as specifically structuring a particular triparty repo transaction to include U.S. Treasury securities. If the parties intend to use non-U.S. Treasury securities as indicated by the collateral type selected at trade execution, then the transaction does not become an eligible secondary market transaction merely because U.S. Treasury securities are later allocated to complete settlement for that particular transaction. Instead, determining whether a particular triparty repo transaction is specifically structured to include U.S. Treasury securities should be based upon objective indicators at trade execution, e.g., the collateral type the parties select, as identified via a collateral matching mechanism, such as a matching CUSIP.

Therefore, consistent with the Commission’s discussion in the Adopting Release described above, the staff does not believe that a mixed CUSIP triparty repo, in which U.S. Treasury securities are allocated as collateral based on a “collateral eligibility schedule” is an “eligible secondary market transaction” when the parties have selected a matching CUSIP (or similar collateral matching mechanism) at trade execution corresponding to securities other than U.S. Treasury securities.

Transactions in U.S. Treasury Securities Involving a Federal Reserve Bank

Question 2: Are transactions in U.S. Treasury securities in which the Board of Governors of the Federal Reserve System or any of the Federal Reserve Banks are a counterparty subject to the requirement in Rule 17ad-22(e)(18)(iv)(A) that any direct participant of a U.S. Treasury securities covered clearing agency submit for clearance and settlement all of the eligible secondary market transactions to which it is a counterparty? (NEW 3/30/26)

Answer: No. Transactions in U.S. Treasury securities conducted by the Board of Governors of the Federal Reserve System or any of the Federal Reserve Banks are not “eligible secondary market transactions” as defined in Rule 17ad-22(a). Specifically, Rule 17ad-22(a) defines an “eligible secondary market transaction” to include certain specified transactions.

However, the definition of an “eligible secondary market transaction” specifically excepts any purchase or sale transaction in U.S. Treasury securities or repurchase or reverse repurchase agreement collateralized by U.S. Treasury securities in which one counterparty is a “central bank.”[5] “Central bank” is then defined in Rule 17ad-22(a) as a reserve bank or monetary authority of a central government (including the Board of Governors of the Federal Reserve System or any of the Federal Reserve Banks) and the Bank for International Settlements.[6]

As the Commission stated in the Adopting Release, the exclusion of central banks from the definition of “eligible secondary market transaction” is appropriate because central bank transactions promote important policy goals and present limited to no risk of contagion to U.S. Treasury securities covered clearing agencies.[7]

Unavailability of a U.S. Treasury Securities CCA

Question 3 (added July 20, 2026): Under Rule 17ad-22(e)(18)(iv)(A), a covered clearing agency must have written policies and procedures reasonably designed to require each direct participant to submit for clearance and settlement all eligible secondary market transactions to which such direct participant is a counterparty. Would it be consistent with Rule 17ad-22(e)(18)(iv)(A) for a U.S. Treasury securities CCA to allow a direct participant to settle bilaterally when the U.S. Treasury securities CCA is not available (because of, e.g., a cyber or other technological outage), such that the direct participant is unable to submit transactions for clearing? (NEW 7/20/26)

Answer: Yes. In the staff’s view, it would be consistent with Rule 17ad-22(e)(18)(iv)(A) for a U.S. Treasury securities CCA to permit its direct participants to settle bilaterally when the U.S. Treasury securities CCA is not available to accept an eligible secondary market transaction for central clearing.[8] In such scenarios, market participants may wish to continue to execute trades and settle such trades bilaterally while the CCA remains unavailable, because they rely on such trades for funding, which may be of particular importance if a CCA outage is causing stress to the market. If a CCA’s direct participants were not permitted to settle bilaterally in such circumstances, it could become necessary to terminate the trades, which could trigger complicated operational and legal processes. Further, it could also negatively impact the counterparties and potentially have broader implications for the U.S. Treasury market.

Trades That Fail to Clear for Reasons Outside the Direct Participant’s Control

Question 4 (added Sept. 2, 2026):Under Rule 17ad-22(e)(18)(iv)(A), a covered clearing agency must have written policies and procedures reasonably designed to require each direct participant to submit for clearance and settlement all eligible secondary market transactions to which such direct participant is a counterparty. Would it be consistent with Rule 17ad-22(e)(18)(iv)(A) for a U.S. Treasury securities CCA to allow a direct participant to settle bilaterally if the participant submits, in good faith, an eligible secondary market transaction for clearing, but the transaction is rejected or not novated to the U.S. Treasury securities CCA for operational reasons outside the control of the direct participant (i.e., a technological or communication disruption or a system malfunction) and the direct participant determines that the transaction cannot be resubmitted for clearance and settlement using reasonable efforts?

Answer: Yes. Rule 17ad-22(e)(18)(iv)(A) establishes a requirement for a U.S. Treasury securities CCA to have written policies and procedures reasonably designed to require that each direct participant submit all eligible secondary market transactions to which such direct participant is a counterparty. Therefore, in the staff’s view, it would be consistent with Rule 17ad-22(e)(18)(iv)(A) for a U.S. Treasury securities CCA to permit its direct participants to settle bilaterally when the direct participant submits a transaction in good faith, but it fails to centrally clear because it is rejected or not novated to the U.S. Treasury securities CCA for operational reasons outside the direct participant’s control and the direct participant determines that the transaction cannot be resubmitted for clearance and settlement using reasonable efforts.

Staff understands that such rejections or failures to novate happen in very limited instances. In such scenarios, market participants may wish to continue to execute trades and settle such trades bilaterally while the CCA remains unavailable, because they rely on such trades for funding, which may be of particular importance if a CCA outage is causing stress to the market. If a CCA’s direct participants were not permitted to settle bilaterally in such circumstances, it could become necessary to terminate the trades, which could trigger complicated operational and legal processes. Further, it could also negatively impact the counterparties and potentially have broader implications for the U.S. Treasury market.

Determining When a Market Participant Is a “Government Securities Broker” or “Government Securities Dealer”

Question 5 (added Sept. 2, 2026): Rule 17ad-22(a) defines an eligible secondary market transaction as a secondary market transaction in U.S. Treasury securities of a type accepted for clearing by a registered covered clearing agency that is, among other things, a purchase or sale between a direct participant and a registered broker-dealer, government securities broker, or government securities dealer. How should market participants determine when a market participant is a government securities broker or government securities dealer?

Answer: The following are examples of ways in which market participants can determine when a market participant is a (i) government securities broker or government securities dealer (“government securities broker or dealer”), and (ii) government securities broker or dealer that is a financial institution (“FI government securities broker or dealer”).

Government securities brokers or dealers: A government securities broker or dealer, other than a registered broker or dealer or a financial institution, must register with the Commission.[9] Market participants may look to BrokerCheck to determine whether a market participant is a government securities broker or dealer.[10] BrokerCheck allows a user to review the “types of business” conducted by a particular firm in its “detailed report” feature.

FI government securities brokers or dealers: An FI government securities broker or dealer[11] is required to file with its appropriate regulatory agency written notice that it is a government securities broker or dealer.[12] Financial institutions must notify the appropriate regulatory agency by using the Notice by Financial Institutions of Government Securities Broker or Government Securities Dealer Activities (Form G-FIN).[13]

After the Commission receives a Form G-FIN notice, it will reflect the receipt of such a notice on its Electronic Data Gathering, Analysis, and Retrieval (“EDGAR”) system. EDGAR allows a user to conduct a “full text search” in which users can search by Company name and filing category. With the “browse filing types” feature, users can narrow the types of forms, including Form G-FIN, to search.[14]

Therefore, market participants may look to EDGAR to help determine whether a market participant that is a financial institution has provided written notice on Form G-FIN of government securities broker or dealer activities.

For illustrative purposes, as of Sept. 2, 2026, EDGAR shows that the following firms have provided such written notice since Jan. 1, 2020:

• FHN Financial Capital Markets
• Goldman Sachs Bank USA
• Credit Agricole Corporate & Investment Bank
• JP Morgan Chase Bank, National Association
• Deutsche Bank AG, New York Branch
• Bank of America, NA
• Bank of New York /N Y/
• Bank of Nova Scotia, New York Agency
• State Street Bank & Trust Co
• Societe Generale New York Branch
• Wells Fargo Bank NA
• Commerce Bank
• First National Bankers Bank
• SouthState Bank, National Association
• Bank of Montreal/IL/
• CITIBANK NA
• HSBC Bank USA
• Royal Bank of Canada – 3 WFC Branch
• U.S. Bank National Association
• UMB Bank NA
• Barclays Bank PLC

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[1] See Standards for Covered Clearing Agencies for U.S. Treasury Securities and Application of the Broker-Dealer Customer Protection Rule With Respect to U.S. Treasury Securities, Exchange Act Release No. 99149 (Dec. 13, 2023), 89 FR 2714, 2726 (Jan. 16, 2024) (“Adopting Release”), available at https://www.sec.gov/rules-regulations/2025/02/s7-23-22#34-102487final. In the Adopting Release, the Commission used the term “mixed CUSIP triparty repo” to describe “triparty repos involving purchased securities that include both Treasury CUSIPS and securities with other CUSIPS or where permitted substitution may be made in CUSIPs other than Treasury CUSIPs.” Id.

[2] See Adopting Release, 89 FR at 2726.

[3] For example, the staff understands that for triparty repo for which BNY serves as the triparty agent, the parties are required to select a “collateral type ID” aligned with a particular generic CUSIP at the outset of a repo transaction for matching purposes, which is also referred to as a matching CUSIP.

[4] The staff understands that allocation of repo collateral within the triparty platform takes place at some time after the counterparties entered the trade and the trade has been matched.

[5] 17 CFR 240.17ad-22(a) (definition of “eligible secondary market transaction” at (iii)).

[6] Id. (definition of “central bank”).

[7] See Adopting Release, 89 FR at 2807 (referencing Proposing Release, Standards for Covered Clearing Agencies for U.S. Treasury Securities and Application of the Broker-Dealer Customer Protection Rule With Respect to U.S. Treasury Securities, Exchange Act Release No. 95763 (Sept. 14, 2022), 87 FR 64610, 64625 (Oct. 25, 2022)).

[8] This FAQ does not address the obligations of a U.S. Treasury securities CCA if it is not available (e.g., its obligations under Regulation SCI).

[9] 15 U.S.C. 78o-5(a)(1)(A).

[10] See Financial Industry Regulatory Authority (“FINRA”) Rule 8312, available at https://www.finra.org/rules-guidance/rulebooks/finra-rules/8312; and BrokerCheck by FINRA, available at https://brokercheck.finra.org/.

[11] Exchange Act section 3(a)(46) defines the term “financial institution” to mean: (i) a bank (as that term is defined in Exchange Act section 3(a)(6) (15 U.S.C. 78c(a)(6)); (ii) a foreign bank (as that term is used in the International Banking Act of 1978); and (iii) a savings association (as defined in section 3(b) of the Federal Deposit Insurance Act), the deposits of which are insured by the Federal Deposit Insurance Corporation. See 15 U.S.C. 78c(a)(46)(A) through (C).

[12] 15 U.S.C. 78o-5(a)(1)(B)(i). Absent an exemption, for a registration as a government securities broker or dealer to become effective, a firm must become a member of a national securities exchange registered under section 6 of the Exchange Act, or a securities association registered under section 15A of the Exchange Act. 15 U.S.C. 78o-5(a)(2)(B). FINRA currently is the only such registered securities association and is required to establish and maintain a system for collecting and retaining registration information on its member firms as well as the non-FINRA member firms that are members of any registered national securities exchange that uses the Central Registration Depository for registration purposes. 15 U.S.C. 78o-3(i).

[13] See 17 CFR 400.1(d) and 449.1; and Form G-FIN, available at https://www.federalreserve.gov/apps/reportingforms/Download/DownloadAttachment?guid=afd9c2cb-2e04-4f37-b381-d6b2eddd88b1

[14] See https://www.sec.gov/edgar/search/. The “browse filing types” feature can be found as part of the “filing category” search field.

Last Reviewed or Updated: Sept. 2, 2026