Basis traders mull UST self-clearing as response to SEC mandate
Inter-affiliate exemption requested by hedge funds could ease shortage of clearing capacity
Hedge funds with large US Treasury (UST) trades are looking to obtain an exemption from the US Securities and Exchange Commission that would let them use their own clearing entities to handle repo trades. The move is designed to make them better prepared for the SEC’s Treasuries clearing mandate.
The mandate includes an inter-affiliate exemption, to allow firms to execute trades at one entity, and then transfer them internally to another entity to be cleared at a central counterparty (CCP). The
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