ICE Secures Regulatory Nod to Operate US Treasury Clearinghouse
Intercontinental Exchange Inc. has achieved a significant regulatory milestone, obtaining approval from the US Securities and Exchange Commission to operate a clearinghouse for US Treasuries. This development positions ICE as the latest provider to enter this critical segment of the financial infrastructure under new regulations governing the world's largest debt market.
Service Launch and Expansion Plans
According to Paul Hamill, Chief Commercial Officer of ICE Clear Credit, the firm's clearing unit, the service for US Treasuries is now operational. The company is actively preparing to expand its offerings by incorporating repurchase agreements, commonly known as repos, by the end of this year. Hamill emphasized that the growing Treasury market demands increased competition, improvements, and modernization.
"There is demand for competition and improvements and modernization of the Treasury market," Hamill stated in an interview, highlighting the market's expansion in size and complexity.
Clearing Options and Market Structure
ICE Clear Credit will facilitate two primary types of trades: done-away trades, where customers utilize a different dealer as their clearing agent, and done-with trades, where a dealer acts as the clearing agent for the transaction. The firm anticipates adding repurchase agreements later in 2026, following a comprehensive testing phase.
"You need to have a viable solution to support both" in clearing Treasury and repo trades, Hamill explained, underscoring the necessity for robust infrastructure to handle diverse transaction types.
Introducing Competition to a Monopolized Market
For years, the $30 trillion Treasury market relied on a single registered central clearing house: the Fixed Income Clearing Corp., a subsidiary of Depository Trust & Clearing Corp. The entry of ICE, along with CME Group Inc., which also expressed interest and received approval in December, marks a transformative shift.
"This is the first time there will be true competition and choice for clearing in the Treasury market in its long history," Hamill remarked, signaling a new era of market dynamics.
Regulatory Drivers and Compliance Timeline
The moves by ICE and CME respond directly to an SEC rule mandating that eligible trades involving Treasury securities and repurchase agreements be centrally cleared. Market participants have until the end of 2026 to comply with the new clearing requirements for Treasuries and until June 30, 2027, for repo transactions.
This mandate, finalized under former SEC Chair Gary Gensler, represents one of the signature policy changes aimed at mitigating financial shocks in the Treasuries market. Clearinghouses serve as intermediaries between buyers and sellers, assuming ultimate responsibility for transaction completion, thereby reducing systemic risk.
ICE Clear Credit's Established Role and New Structure
ICE Clear Credit, an SEC-registered clearing agency founded in 2009, specializes in credit derivatives. It holds the designation of a systemically important financial market utility by the Financial Stability Oversight Council and is recognized as a qualified central counterparty under US bank capital rules.
Hamill clarified that the new Treasury clearing unit will operate separately from ICE's existing credit default swap clearing services, featuring its own rulebook, membership criteria, and governance structure.
"They are two different products, and need to operate with two different risk frameworks," he noted, emphasizing the tailored approach required for distinct financial instruments.
