SEC Grants Conditional Relief to Brokers for Treasury Cross‑Margining

The US Securities and Exchange Commission (SEC) has approved
a package of measures that will allow certain users to cross‑margin
cash U.S. Treasury securities and related Treasury futures. The step marks
another stage in the rollout of the US Treasury clearing framework and aims to
support liquidity and resilience in the market.

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Conditional Relief for Dual-Registered Firms

The SEC issued a conditional exemptive order that permits
customer cross‑margining between cash Treasury positions cleared at a
registered clearing agency and Treasury futures positions cleared at a
registered derivatives clearing organization.

The relief applies to a broker‑dealer that also registers as a
futures commission merchant (FCM) with the Commodity Futures Trading Commission
(CFTC) and acts as a joint clearing member of both clearing entities. Under the
order, such firms may offer cross‑margining to eligible customers in
a futures account, provided they comply with the conditions of the exemption
from the broker‑dealer customer protection rule.

NEW: SEC Approves Exemptive Order and Proposed Rule Change to Permit Customer Cross-Margining in the U.S. Treasury MarketRead more: https://t.co/jTiN7BZgqZ

— U.S. Securities and Exchange Commission (@SECGov) April 15, 2026

The SEC’s move matters for FX and CFDs mainly through liquidity and funding channels rather than through direct rule changes: by allowing cross‑margining between cash Treasuries and Treasury futures, regulators lower collateral and funding costs for major macro and basis traders.

This can support more stable risk‑taking and liquidity in U.S. rates, a core anchor for global pricing in FX and index underlyings. It also reduces the chance of margin‑driven shocks spilling over into bank and non‑bank liquidity provision to FX and CFD markets.

It allows these firms to recognize offsetting
risk between matched cash and futures Treasury positions in defined customer
portfolios while remaining within the regulatory safeguards set out in the
exemptive order.

FICC–CME Agreement Extends Cross-Margining to Clients

Separately, the SEC approved a proposed rule change from the
Fixed Income Clearing Corporation (FICC). The change allows FICC to enter into
a Third Amended and Restated Cross‑Margining Agreement with Chicago
Mercantile Exchange Inc. (CME) and to incorporate that agreement into the rules
of FICC’s Government Securities Division,
together with related rule amendments.

The new agreement extends cross‑margining to
positions cleared and carried for customers by a dually registered broker‑dealer
and FCM that is a common member of FICC and CME. Until now, only clearing
members’ proprietary positions could be cross‑margined
between Treasury futures at CME and cash Treasuries at FICC.

“Today’s issuance of orders completes another step in the
implementation of Treasury clearing,” said SEC Commissioner Mark T. Uyeda, who
has led the SEC’s work in this area. “It advances the goal of both the SEC and
the CFTC to unlock additional liquidity and helps ensure the market for U.S.
Treasury securities remains resilient.”

The SEC said the exemptive order and the order approving the
rule change will appear on SEC.gov before publication in the Federal Register.
A related CFTC exemptive order will also be available on CFTC.gov and in the
Federal Register.

This article was written by Jared Kirui at www.financemagnates.com.

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