North American securities firms are confident that they will be ready for new central clearing requirements in the U.S. Treasury market, while preparations among firms in Europe and Asia are lagging, according to a new survey from the U.S. Securities Industry and Financial Markets Association (SIFMA).
The U.S. industry trade group released the results of the survey, which was carried out in August by The ValueExchange, to examine preparations for mandatory clearing of U.S. Treasuries ahead of the reform deadlines, which is the end of 2026 for cash transactions and mid-2027 for repo transactions.
The survey, which included buy-side firms, sell-side firms, custodians and clearing agencies, found that 71% of North American firms said that they are “very familiar” with the reforms, and another 25% are “somewhat” familiar, it noted.
Meanwhile, only 27% of European firms said that they are very familiar with the reforms, and 55% are somewhat familiar. In Asia, all respondents reported being somewhat familiar with the changes.
The survey also found that, despite the looming deadlines, firms have undertaken limited work to get ready for mandatory clearing requirements.
“Buy-side firms remain behind the curve, with 77% of organizations still in the research stage,” it said. It added that European and Asian firms remain behind the North American firms in their preparations for central clearing.
Nevertheless, just over half (54%) of firms said that they are “very confident” they will be ready by the deadline for cash transactions, and 40% are “very confident” that they will be ready by the repo deadline, it noted.
“We are encouraged by the findings of this survey as it relates to U.S. firm readiness,” said Steve Byron, managing director and head of technology, operations, and business continuity at SIFMA, in a release.
“The move to centralized Treasury clearing is a complex and significant lift for our member firms. Given the key role that U.S. Treasuries play within the global markets, ensuring global awareness of the implementation process is critically important,” he added.
The survey also found that the industry wants greater clarity from regulators in certain areas — such as dealing with flows between affiliated firms — to help prepare for the transition, which is expected to boost industry operating costs.
“The implementation timeline remains a central challenge,” SIFMA said, noting that “Most firms expect that operational and technology workloads will be the last to complete, indicating a heavy lift is still ahead across systems and integration layers.”