On May 29, 2026, The International Swaps and Derivatives Association, Inc. submitted comments on the U.S. Securities and Exchange Commission notice of request for exemptive relief related to the inter-affiliate exception under the SEC’s U.S. Treasury clearing rule.

ISDA believes that the inter-affiliate exception should exempt from mandatory clearing any Treasury repo transaction between a direct participant and an affiliate that is under common control with, and consolidated for financial reporting purposes with, that direct participant — regardless of whether the affiliate is itself a bank, broker-dealer, FCM, or foreign equivalent. Additionally, the requirement in the existing exception for affiliated counterparties to clear all of their other outward-facing repos should continue to apply generally; however, non-U.S. affiliates trading with non-U.S. counterparties should not be required to clear their outward-facing transactions up to a measured 10% threshold, calibrated against the firm’s aggregate cleared Treasury repo activity. Separately, the exception should also cover transactions between a private fund (or private fund family) and its wholly owned captive clearing subsidiary that is a direct participant of a Treasury covered clearing agency.

Taken together, the recommendations would preserve the ability of large financial institutions to use intragroup Treasury repo as a tool of treasury, liquidity, and collateral management, expand practical access to central clearing for private funds and private fund families that rely on captive clearing subsidiary structures, and accommodate the legitimate funding needs of non-U.S. affiliates and the non-U.S. counterparties that transact with them.