Wall Street's top regulator on Wednesday adopted new rules aimed at reducing systemic risk in the $26 trillion U.S. Treasury market by forcing more trades through clearing houses, while offering some concessions following industry pushback, Reuters reported. The five-member U.S. Securities and Exchange Commission voted 4-1 yesterday to finalize the new rules, proposed over a year ago, marking the most significant overhaul in decades of the world's largest bond market, a global benchmark for assets. The reforms, which require some cash Treasury and repurchase or "repo" agreements to be centrally cleared, are part of a broader government effort to fix structural issues regulators believe are causing market volatility and liquidity problems. They will become effective in phases by June 2026. "Today is the most significant day for U.S. Treasury market structure in decades. The SEC's final rule will reassemble the way that the Treasury market functions," said Nathaniel Wuerffel, head of market structure at BNY Mellon, a major Treasury market participant.
