The Financial Times on the US Treasury working on a way to collect data on government bond market trading
- The Financial Industry Regulatory Authority (FINRA) collects and shares all corporate bond trades through its "Trace" system
- But the Treasury market currently has no trade reporting requirements
The article says that:
- Banks are concerned that the real time sharing of trading information ... will deter them from facilitating trades and therefore hurt liquidity
- The Investment Company Institute (a trade body for fund managers) said public transparency might bring benefits to the Treasury cash market, but the transparency must be balanced against the risk of it reducing liquidity and impairing market quality
And, on the other side, some big trading firms -- especially high-frequency traders - argue that improved transparency would be a benefit:
- Real-time public reporting for secondary market Treasury transactions will increase investor confidence
- Will level the playing field & provide the information necessary for investors to better assess execution quality
FT article is here, but may be gated
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So, now you can decide which side to support - the banks and big funds, or the HFTs.
Tee hee.
