Accounting fix needed for done-away Treasury clearing – DTCC

Splitting UST execution and clearing “not viable” for clearing brokers under current regime

Unbundling of US Treasury execution and clearing is “not viable” under current accounting rules, a senior executive at the Depository Trust & Clearing Corporation (DTCC) has warned, as higher capital treatment would make the service uneconomic for banks to offer.

Banks which submit clients’ US Treasuries and repos for clearing typically do so for ‘done with’ trades, which they have also executed. US regulators are pushing for clients to choose who they clear with after execution, in so-called