Preparing for U.S. Treasury Clearing: Outreach, Documentation, and Client Readiness

The U.S Treasury Clearing mandate represents a significant structural shift in the mechanics of an estimated $30tn U.S Treasury market with mandatory clearing for eligible cash trades required by December 31^st, 2026, and eligible repo transactions by June 30^th, 2027. This change applies to direct participants of the Fixed Income Clearing Corporation (FICC), including major banks, broker-dealers, and interdealer brokers, whilst also affecting “indirect participants”, including buy-side firms such as hedge funds, asset managers, and pension funds who trade with these entities.

While the systemic benefits of central clearing are well understood, the extended SEC timeline does not eliminate the scale of change required. Market participants must still address clearing model selection, margin implications, technology and operational readiness, and significant legal documentation changes all at the same time.

Counterparty Outreach and Documentation Execution

Amidst all of these challenges, one component which could easily be overlooked is counterparty outreach - imperative to ensure client readiness.

S&P Global Market Intelligence’s experience supporting clients through prior regulatory changes (including SFTR, IBOR Reform and SBSD) has taught us that an optimal outreach function can play a pivotal role in avoiding the “rush to the finishing line” to prevent impacts to the “ready to trade” status of client relationships.

The added legal challenges of the U.S Treasury Clearing mandate on counterparty documentation places even greater emphasis on institutions’ client engagement strategies. Managing this level of regulatory change at scale requires more than ad-hoc communication. It demands structured, auditable outreach that is embedded within wider client lifecycle processes.

Through CLM Pro, S&P Global Market Intelligence’s client lifecycle management platform, institutions can coordinate documentation execution and regulatory workflows across onboarding, remediation, and ongoing change. Capabilities such as Outreach360 enable firms to engage counterparties digitally, track responses, and monitor outreach progress centrally, providing transparency and control across large and diverse counterparty populations.

What can Buy Side institutions do to prepare?

• Engage with counterparties early in the process to understand their legal documentation and operational obligations.
• Leverage market standard documentation where available to streamline documentation execution across all trading relationships.
• Future proof client lifecycle management processes by updating legal and operational processes to meet new requirement standards.

Embedding these activities within a connected client lifecycle platform helps ensure readiness is maintained not only for remediation efforts, but also for future onboarding and ongoing change.

What can Sell Side institutions do to prepare?

• Adopt a technology-led approach to counterparty outreach leveraging outreach tools to provide greater transparency into outreach success.
• Formulate comprehensive outreach success and documentation execution reporting.
• Leverage an operational orchestration function to ensure high-cost BAU resource is only called upon for exception management.
• Utilize industry standard documentation and contract management solutions to streamline re-papering exercises.
• Embed new processes into your client lifecycle management processes for new client onboards to ensure regulatory compliance.

A lifecycle-centric approach, supported by CLM Pro, allows sell side firms to standardize outreach, documentation, and compliance workflows while retaining flexibility as regulatory requirements evolve.

Looking forward

The timing of the U.S Treasury Clearing mandate intersects with other market changes (e.g., T+1 settlement cycles) and broad regulatory reform, stretching change-management capacity across technology, legal, risk, and operations functions.

It is imperative that all market participants affected by this change continue to prepare across all functions and assess the cumulative impact on the end-to-end client lifecycle.

Further Reading

To explore how upstream data readiness and lifecycle control are becoming critical in a T+1 environment, read our recent blog by Dougie Mcclumpha:

SSI Automation in a T+1 Settlement Age

If you’d like to understand how these changes will impact your organisation, and how to strengthen client readiness as part of a broader lifecycle strategy, our experts can help.

Speak to an expert to discuss how S&P Global Market Intelligence supports U.S. Treasury Clearing readiness, counterparty outreach, and client lifecycle transformation.

Contact us to speak to an expert.