The U.S. Department of the Treasury and the Securities and Exchange Commission (SEC) have announced that they are working together to explore efficient and effective means of collecting U.S. Treasury cash market transaction information.
The announcement is an important move to boost the oversight of the Treasury market.
Both agencies are requesting that the Financial Industry Regulatory Authority (FINRA) considers a proposal calling for its member brokers and dealers to report Treasury cash market transactions to a centralised repository.
The announcement represents an important move to boost the oversight of the Treasury market, after the sudden ‘flash crash’ a year and a half ago triggered concerns about volatility.
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A response to the Treasury’s recent request for information expressed wide support for more comprehensive reporting to regulators, including almost unanimous support for reporting additional information on Treasury cash market activity.
SEC Chair Mary Jo White commented: “The Treasury cash market is vital for investors and other market participants. Regulatory reporting by FINRA members could provide important new information about day‑to‑day activity in both inter‑dealer and dealer‑to‑client markets.”
Any proposal by FINRA to require the reporting of Treasury cash market activity will be subject to review and approval by the SEC, in consultation with the Treasury. The collection of this data will better enable official authorities to fulfill their responsibilities to safeguard the U.S. Treasury market, which remains the deepest and most liquid securities market in the world.
Antonio Weiss, a senior Treasury official, further commented: “The need for more comprehensive official sector access to data, particularly with respect to Treasury cash market activity, is clear. It is important to build on this growing consensus and, we are committed to having a comprehensive plan to collect cash market data in place by year end. Today’s request to FINRA is a significant first step toward that objective.”