- Chief Compliance Officer and VP of Legal Affairs, Arrow Electronics
By 
Kyle Brasseur2023-12-14T19:11:00
The Securities and Exchange Commission (SEC) adopted a rule change Wednesday aimed at reducing the threat of systemic risk to U.S. Treasury securities by facilitating additional central clearing in the market.
The rule, approved by a 4-1 vote, “require(s) that covered clearing agencies in the U.S. Treasury market adopt policies and procedures designed to require their members to submit for clearing certain specified secondary market transactions,” the SEC said in a press release. Its aim is to increase the proportion of transactions that are centrally cleared, a figure that currently comprises about 20 percent of the market.
“Having such a significant portion of the Treasury markets uncleared … increases system-wide risk,” said SEC Chair Gary Gensler in a statement. The rule changes will “reduce risk across a vital part of our capital markets in normal times and stress times,” he said, benefitting investors, issuers, and the markets.
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