The FT recently ran an article calling Repo markets the “Dark Matter” of finance. It is an entertaining read:

The article taught me a lot about the history of the repo market and its development. But there is another reason why repo is particularly interesting right now: the upcoming US Treasury clearing mandate.

We have seen mandatory clearing completely reshape derivatives markets before. This time, however, the product being brought into clearing sits at the heart of how the markets are financed.

Repo is not just any traded product – it is a funding product. Applying a clearing mandate to a funding market makes this transition fundamentally different to those we have seen in derivatives.

That distinction is important when thinking about how quickly market structure might change. Our ISDA-Actrix Repo Market Indicators give us a way of tracking that transition through the data.

But first, it is worth explaining why I think about repo differently to most traded products.

Two Types of Financial Products

Having spent a large part of my trading career in cross-currency swaps, I tend to make a fairly fundamental distinction between price-first products and funding products. It is not a perfect classification, but I find it a useful way of thinking about how markets behave:

• Spot FX, cash equities and futures are largely price-first products.
• Repo, FX swaps and cross-currency swaps are funding products.

Clearly, price matters in both and positioning matters in both. You can get squeezes in either market and, in extreme conditions, prices can move a long way.

The difference is really in the motivation for doing the trade. In a price-first product, I may decide that the price is unattractive and simply not transact. I can wait for a better entry point, reduce the position or decide that the opportunity has gone. Funding does not always give you that luxury, because the underlying requirement often remains regardless of where the market is trading.

If I need to borrow dollars against euros, the fact that the cross-currency basis has moved against me does not make the dollar requirement disappear. Equally, if I own a portfolio of Treasuries that needs financing, an unattractive repo rate does not necessarily mean that I can simply decide not to fund the position.

This is something that anyone who has traded cross-currency swaps will recognise. At times the market can move to levels that look completely irrational from a relative-value perspective, but there is still a trade because somebody, somewhere, needs the funding.

In that sense liquidity in a funding product is not only represented by bid-offer. Sometimes the important question is much more basic:

Can I actually do the trade?

Funding Positions are Structural

There is a second important difference. Funding positions also tend to be structural.

A trading book can move from long to short, or from risk-on to risk-off, very quickly. Funding requirements are generally driven by the underlying assets and liabilities of a business and therefore tend to move more slowly.

Nor are they necessarily fungible. If I am short JPY liquidity, borrowing some extra EUR does not magically solve the problem. If I need to finance a particular pool of securities, liquidity elsewhere on the balance sheet may not be an effective substitute.

This is why I have always thought about cross-currency swaps slightly differently to most other derivatives. Yes, they are swaps, and yes, they have a market price, but economically they are funding positions.

Repo is similar, which is why I think market structure matters differently here.

A Clearing Mandate for Funding

I think the upcoming clearing mandate for repo is super interesting because we are changing the market structure of a product whose principal purpose is funding. I don’t think that has happened before.

Moving a repo transaction from uncleared to cleared is not necessarily comparable to clearing a swap, and certainly different to measuring futures contract market share between exchanges.

For some participants it can mean fundamentally changing the infrastructure through which they fund themselves.

The transition in repo might therefore look quite different to the market-structure changes we’ve seen in derivatives.

What Does the Data Say?

Which brings us to the latest installment of the ISDA-Actrix Repo Indicators.

First up, there has been an important methodology change. The OFR recently clarified that Sponsored GC repo was not included in the data series we had previously used. We have therefore updated the Indicators to incorporate this activity separately, which results in a larger estimate of the cleared market and reduces the estimated sponsored share to around 31-32%.

You can read the detail of the methodology changes here.

Most importantly, the underlying characteristics of the repo market continue to be remarkably stable. And in funding markets, stability is undoubtedly a good thing.

The data shows that business is carrying on as usual ahead of the clearing mandate.

Sponsored Repo

As well as total size of the repo market, we pay special attention to how much of the cleared repo volumes are conducted by a sponsored member. The theory being that the clearing mandate should cause more activity from “clients” in clearing.

In 2026, this metric has been stable, at around 31-32%:

I find that interesting precisely because repo is a funding product.

There were plenty of early adopters during the LIBOR transition, but trading nevertheless persisted in LIBOR right up towards the cessation dates. Changing long-established market behaviour takes time.

In repo there is arguably an additional complication: participants are not merely changing the benchmark used to price a transaction, they may be changing the mechanics through which existing funding relationships operate.

There can be a lot of moving parts, and a lot of structural positions, behind those numbers.

Triparty is the engine of growth

The clearest structural shift is in triparty repo. For example, within sponsored repo, triparty now makes up 38% of volumes:

No, I do not expect these numbers to suddenly move by ten percentage points in a month. Funding markets tend not to work like that.

What we should be watching for are gradual structural changes in where repo sits, how clients access the market and how funding relationships migrate towards clearing. That is why we designed the indicators the way we have.

It will be interesting to see when (and where) those gradual changes show up in the data. Stay tuned.