SIFMA Asks SEC to Ease Liquidity Strain in Treasury Clearing Rules

SIFMA urged the SEC to revise the treatment of customer margin under SEA Rule 15c3-3 ("Customer protection-reserves and custody of securities"). The association's recommendations concerned the need to address liquidity strains created by the new Treasury clearing requirements.

In a letter to SEC Chair Paul Atkins, SIFMA said current interpretations prevent broker-dealers from recognizing a reserve formula debit when customer margin for U.S. Treasury transactions is posted to a clearing agency through an omnibus account. The association argued that this framework overstates firms’ liquidity needs and does not reflect the actual risk posed to broker-dealers or the financial system. SIFMA recommended adopting an approach modeled on the Options Clearing Corporation’s longstanding omnibus segregation regime, which would allow firms to take a debit when they collect, post, and properly segregate customer margin.

SIFMA also asked the SEC staff to revise recent guidance limiting to 24 hours the ability of a broker-dealer to recognize an Item 15 debit (i.e., the amount of margin required and on deposit at a qualified clearing agency resulting from a customer's U.S. Treasury securities positions cleared, settled, and novated at the qualified clearing agency). The association said the requirement to remove the debit after one business day—combined with the need to take a capital charge for uncollected margin—creates duplicative regulatory consequences that add operational complexity without enhancing customer protection. SIFMA maintained that removing the time constraint would more accurately reflect firms’ true exposures and support a more efficient and resilient Treasury clearing framework.