SEC Amends Standards for Covered Clearing Agencies

The SEC has released a final rule “to amend the standards applicable to covered clearing agencies for U.S. Treasury securities to require that such covered clearing agencies have written policies and procedures reasonably designed to require that every direct participant of the covered clearing agency submit for clearance and settlement all eligible secondary market transactions in U.S. Treasury securities to which it is a counterparty.” The final rule also:

• Makes additional “risk management” amendments to the covered clearing agency standards that “are designed to protect investors, reduce risk, and increase operational efficiency.”
• Revises “the broker-dealer customer protection rule to permit margin required and on deposit with covered clearing agencies for U.S. Treasury securities to be included as a debit in the reserve formulas for accounts of customers and proprietary accounts of broker-dealers . . . , subject to certain conditions.”

The final rule will become effective 60 days after the date of its publication in the Federal Register. For more information, see the press release and fact sheet— as well as the statements by SEC Chair Gary Gensler and Commissioners Hester Peirce, Caroline Crenshaw, Mark Uyeda, and Jaime Lizárraga — on the SEC’s Web site.