SIFMA Offers Compliance Frameworks for "Done-Away" Treasury Clearing

SIFMA provided design considerations and operational frameworks to support "done-away" clearing in the U.S. Treasury and Repo markets ahead of the upcoming compliance dates. 

SIFMA said the guidance is intended "to support CCAs, technology vendors, and broader market participants to build, refine, and implement a consistent and functional done-away model." In the report, SIFMA explained that the ability to separate trade execution from clearing is fundamental to maintaining liquidity and competitive pricing under the SEC’s new central clearing mandate. SIFMA emphasized that without a standardized "done-away" model—where clients can execute with one broker but settle through a different clearing member—market participants risk being locked into restrictive "done-with" arrangements that could concentrate risk and reduce choice. The association cautioned that successful implementation requires a coordinated industry effort to overhaul current workflows, ensuring that the operational friction of moving trades between parties does not introduce new settlement risks.

To ensure clearing certainty and operational efficiency, SIFMA detailed four foundational design elements and specific execution workflows:

• Establish a "Limit Hub" for Pre-Trade Risk Control. SIFMA called for the implementation of a "Limit Hub" to facilitate pre-trade checks and manage credit risk at the fund level. SIFMA stated that a standardized "Limit Check Token" should be used as proof that a trade has passed these checks, providing the necessary clearing certainty before execution. Further, SIFMA highlighted the need for CCAs and venues to systematically provide account and product eligibility data via APIs to support these automated controls.
• Standardize Workflows Across CLOB, RFQ, and Voice. SIFMA defined distinct requirements for primary execution paths. For Central Limit Order Books ("CLOB"), SIFMA recommended that limit checks occur on-platform prior to matching, with venues submitting trades on a "locked-in" basis. For Request for Quote ("RFQ") models, SIFMA described a workflow where platforms ping the Limit Hub for a token to make an order executable. For Voice Trading, SIFMA proposed a shift from current post-trade checks to a pre-trade model, requiring middleware to validate the trade details and token before submission to the CCA.
• Address Bunched Order Novation Risks. SIFMA identified specific challenges in allocating large block trades, particularly regarding settlement delays and margin calculations. SIFMA presented two proposals for industry discussion: "Bunched Order Level Novation," where a stand-in broker submits the block trade with subsequent allocations (carrying potential replacement risk), and "Allocation Level Novation," where only fully allocated trades are submitted to the CCA after an initial check against a firm-level suspense account.
• Minimize Bifurcation in Trade Submission. SIFMA urged the industry to align "done-away" flows as closely as possible with "done-with" models. SIFMA recommended that venues submit trades to CCAs on a locked-in basis on behalf of both parties to streamline the lifecycle. SIFMA also noted that platforms adopting this model must support full lifecycle event management, including amendments, cancellations, and substitutions.