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The report outlines 10 proposals to enhance central clearing resilience ranging from CCP disclosures to initial margin responsiveness measurement
Despite its strong push to mandate central clearing for US Treasury trades, the SEC is unlikely to move forward without the authorities’ green light
SEC proposals to centrally clear US Treasury securities transactions would create concentration risk
Recent economic events have affected liquidity in the US Treasury market, bringing the debate around the SEC’s proposed reform back to the fore
Any clearing mandate should start with cash transactions only, and bring in repos at a later stage
Lack of standardised documentation, inadequate infrastructure, and concentration risk are among key issues pointed out by the industry
A thorough cost-benefit assessment of proposed changes for Treasury securities clearing will be needed to justify their necessity
A proposal to require that more US Treasury trades be centrally cleared could concentrate too much risk and create another ‘too big to fail’