SEC Leadership Change Impacts Treasury Mandate – Risk Management Analysis

In a recent decision, the US Securities and Exchange Commission (SEC) has given the green light to new clearing models proposed by the Fixed Income Clearing Corporation (FICC). This move comes just before Gary Gensler steps down as chair in January. The aim of these new models is to make it easier for more market participants to access central clearing services. This step is crucial as the SEC is set to introduce a clearing mandate for US Treasuries cash and repo transactions by the end of 2025.

While this decision marks a positive development in the push towards central clearing, some critics have raised concerns about the current services offered by FICC. As the sole central counterparty in the market, there are worries about potential risks and inefficiencies in the system.

It will be interesting to see how these new clearing models will impact the market and whether they will address the concerns raised by critics. Stay tuned for more updates on this evolving story.