SEC Grants Exemptions to Non-U.S. Repo Transactions Under Rule 17ad-22

On Oct. 30, 2026 the Securities and Exchange Commission issued Order Granting Exemptive Relief, Release No. 34-106789, File Nos. S7-2026-07 and S7-2026-11. The order removes specified transactions from the definition of an "eligible secondary market transaction" in Rule 17ad-22(a) of the Exchange Act.

The Institute of International Bankers had asked that the Trade Submission Requirement not apply to repo transactions involving foreign financial institutions that are direct participants of a U.S. Treasury securities covered clearing agency when dealing with non-U.S. clients. The SEC's order grants that exemption, allowing those foreign-origin repo trades to be excluded from the mandatory clearance and settlement mandate.

The Securities Industry and Financial Markets Association sought two related changes. First, it requested that any counterparty meeting the ownership and reporting criteria in Rule 17ad-22(a) be treated as an affiliated counterparty, except for entities classified as "investment companies" under the Investment Company Act of 1940. Second, it asked that the outward-facing condition not apply to repo transactions between non-U.S. affiliates and non-U.S. counterparties when the direct participant's activity level remains below a specified percentage threshold. Both requests were approved in the order.

The Commission reopened comment periods on Aug. 7, 2026 and Aug. 31, 2026 to gather additional input on a unified approach that combined the IIB and SIFMA proposals. After reviewing the comments, the SEC finalized the exemptions in the Oct. 30 order.

Effective immediately, covered clearing agencies and their direct participants must apply the newly granted exemptions when evaluating eligible secondary market transactions involving foreign affiliates and the expanded affiliate definition. The order therefore alters the scope of the Trade Submission Requirement for a subset of repo transactions under the Exchange Act.