One change will be that FICC members -- typically big banks and broker-dealers -- must settle their clients' treasuries trades through the clearing house. This is critical to the SEC's most significant restructuring of the world's largest bond market in three decades.
Expanded clearing volumes may make clearing capacity a scarce resource for which market participants may need to compete, raising costs.
New capacity providers and alternatives to clearing may emerge; however, central clearing is capital-intensive and costly to set up.
Cash and repo transactions involving local, state or sovereign governments and central banks are exempt from the new rules.
The SEC sees speeding up settlement and centrally clearing more US Treasuries trading as financial stability models for the EU to follow.
