NEW YORK A U.S. Treasury official said on Monday there are benefits for limited public sharing of trade data on U.S. government securities for traders and investors to gain an understanding of the changing structure of the $13.6 trillion market.
Last week, the Securities and Exchange Commission approved the Financial Industry Regulatory Authority’s proposal to require its members to report their trades of U.S. Treasuries.
“Treasury remains committed to close and careful review of the data before making any determinations. But we believe the debate should shift from whether to seek increased transparency to how, when, and on what basis,” Counsellor to the U.S. Treasury Secretary Antonio Weiss said in prepared remarks at the second annual on Treasury market structure at the New York Federal Reserve.
The SEC, Treasury Department, Federal Reserve, the New York Fed and other U.S. regulators’ push for disclosure on Treasury trades came after a “flash rally” of Treasuries in Oct. 15, 2014 when bond prices swung wildly within minutes in the absence of fundamental reasons.
Some critics of public disclosure argued more transparency could harm market liquidity.
“Transparency is not all or nothing; and one size may not fit all segments of the Treasury market,” Weiss said.
He outlined three strategies on public disclosure on trades: time delays, size limits, and phase-in.
(Reporting by Richard Leong; Editing by Chizu Nomiyama)