The latest adjustment of the time limit arrangement by regulatory agencies has created conditions for market participants to optimize the clearing mechanism. In January 2025, a number of financial industry groups, including the Securities Industry and Financial Market Association, jointly sent a letter to the regulatory authorities, proposing to extend the implementation period of treasury bond centralized clearing for at least 12 months.

In the original regulatory timetable, clearing institutions were required to implement a risk management framework by the end of March 2025, initiate mandatory clearing of the spot bond market by the end of December of the same year, and complete the coverage of repurchase transactions clearing by June of the following year. Industry organizations believe that additional time is needed to address several operational difficulties, including clarifying the scope of application for mixed pledge tripartite transactions, resolving dual margin requirements for mutual funds, coordinating mature market operation mechanisms, and improving technical details such as the banking capital regulatory framework.

The latest announcement in February 2025 shows that the regulatory authorities have moved the overall implementation period of treasury bond clearing back 12 months, including the mandatory clearing of cash bond transactions to the end of 2026, and the repurchase transactions to the middle of 2027. It is worth noting that regulatory authorities have simultaneously introduced transitional arrangements, allowing central counterparties to manage their proprietary and customer margin accounts separately. This exemption requires approval from fixed income clearing companies and may extend the compliance buffer period for some institutions until the third quarter of 2025.

This policy adjustment has brought a strategic adjustment window period for financial institutions. For entities with strong liquidity management needs, they can continue to promote models such as direct liquidation or customer agency to improve operational efficiency and gain room for balance sheet optimization. For small and medium-sized institutions with limited business scale, it is recommended to reassess the implementation path and focus on long-term solutions that can adapt to structural changes in the treasury bond market.

Practical operation suggestions:

1. Continuously track the evolution of the clearing industry landscape and pay attention to the entry dynamics of new clearing service providers

2. Maintain regular communication with fixed income clearing companies and keep abreast of the revision trends of the rule manual in a timely manner

3. Open the impact assessment of the existing clearing scheme, and focus on the allocation of key resources to improve the clearing efficiency of treasury bond

4. Systematically examine the selection of clearing modes, taking into account the economic viability of independent clearing and third-party services

5. Explore the establishment of a strategic cooperation clearing network to reduce the risk of cross time zone agency dependence

6. Develop differentiation strategies based on business types: Seller institutions can promote customer clearing membership certification, while buyer institutions should choose opportunities to obtain direct membership based on market maturity

The buffer period provided by regulatory authorities is essentially a window of opportunity for improving quality and efficiency. It is suggested that market participants focus on three dimensions: building a flexible clearing framework to meet the dynamic regulatory requirements, optimizing business processes to improve operational energy efficiency, and forward-looking layout to adapt to the treasury bond market infrastructure upgrading solutions. Professional service agencies will continue to monitor policy evolution and assist market entities in seizing transformation opportunities.

（Writer：Galli）