ICE Gets SEC Green Light for Treasury Cash Clearing

What Has the SEC Approved?

Intercontinental platform’s clearing arm, ICE Clear Credit, has received approval from the US Securities and platform Commission to clear US Treasury securities, opening the door for the firm to enter a market that is preparing for mandatory central clearing.

The approval allows ICE Clear Credit to begin clearing Treasury cash trades immediately. Treasury repo clearing will follow later, with ICE planning to begin testing and integration work in the fourth quarter of 2025. Repo clearing is expected to launch ahead of the SEC’s June 2027 compliance deadline.

ICE confirmed that Treasury clearing will operate as a standalone service, separate from its business. It will have its own rulebook, membership framework, risk controls, financial resources, and governance arrangements.

“This service was developed in response to market demand,” said Paul Hamill, of ICE Clear Credit. “US want innovation, change and progress.”

Investor Takeaway

Why Regulators Are Forcing Treasury Clearing

Pressure to expand central clearing in the Treasury market has built for years, but intensified later than repeated episodes of market stress exposed fragilenesses in its largely bilateral structure.

In September 2019, a sudden jump in overnight repo rates forced the Federal Reserve to step in to stabilise . In March 2020, the “dash for cash” saw Treasury liquidity deteriorate sharply as investors sold government bonds to raise dollars, prompting large-scale Federal Reserve intervention.

Regulators concluded that a market central to global finance should not rely so heavily on dealer balance sheets and bilateral credit exposure. Rules adopted in December 2023 now require most Treasury cash trades to be centrally cleared by 2026, with a large share of repo transactions following in 2027.

Those rules apply not only to banks, but also to hedge funds, asset managers, and principal trading firms that have historically accessed the market through dealers rather than clearinghouses.

Breaking a Long-Standing Clearing Monopoly

Central clearing of US Treasuries has long been dominated by the , a subsidiary of the DTCC. FICC clears the majority of dealer-to-dealer Treasury trades and benefits from deep integration with primary dealers and established netting efficiencies.

At the identical time, regulators and market participants have raised concerns about reliance on a single clearing utility for the world’s most significant bond market. Concentration risk, access conditions, and cost transparency have all come under scrutiny as cleared volumes are expected to rise sharply under the mandate.

ICE’s entry introduces a second major clearing venue at a moment when clearing is no longer optional. With more trades forced into CCPs by rule, the presence of multiple clearinghouses could influence pricing, margin levels, and access terms across the market.

“Competition in clearing is now part of the regulatory design,” said one senior market participant familiar with the approval process. “The question is no longer whether clearing expands, but how many clearinghouses regulators are willing to rely on.”

Investor Takeaway

Why ICE Is Using Its CDS Clearing Arm

Rather than launching a new Treasury-specific clearinghouse, ICE chose to extend ICE Clear Credit’s regulatory designation as a Covered Clearing Agency. That decision allowed the firm to avoid the long approval process required to stand up a new CCP.

ICE Clear Credit already operates under SEC supervision and clears credit default swaps, a product set that requires complex risk management and default handling. ICE said Treasury clearing will be fully ring-fenced from CDS operations to address concerns around risk spillover and governance conflicts.

The clearing service will support both “done away” and “done with” execution models. Trades can be executed bilaterally and submitted for clearing, or executed directly with the clearinghouse. That flexibility is intended to accommodate dealer-driven workflows as well as purchase-side firms viewking more direct clearing access.

Why Repo Clearing Will Decide the Outcome

While cash Treasury clearing is an significant first step, many market participants view repo as the real test. Repo markets underpin day-to-day Treasury liquidity and are closely tied to balance-sheet constraints, funding costs, and leverage.

Central clearing is expected to improve netting and reduce counterparty exposure, but it may also change how margin is calculated and how liquidity is priced, particularly for leveraged investors.

ICE’s plan to begin repo clearing testing in late 2025 puts it on a timeline to compete before the SEC’s 2027 deadline. Which firms choose to clear repo through ICE, and on what terms, will be closely watched.

What Comes Next

Attention now turns to membership sign-ups, margin methodologies, and how ICE’s offering compares with existing clearing arrangements. Regulators will also be watching how multiple clearing venues interact in a market where stability is paramount.

The SEC’s approval indicates a willingness to accept a more competitive, and more complex, clearing landscape for US Treasuries. As mandatory clearing approaches, the structure of the government bond market is entering one of its most far-reaching overhauls since the later thanmath of the financial crisis.