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Treasury Department Requests Comment on Evolution of Treasury Market

The Treasury Department published a notice last week to solicit comments on “changes in Treasury market structure, the implications for market functioning, and risk management policies and practices.” The Treasury Department is also soliciting comment on the types of data that it should collect how it should collect it, and whether transaction level data should be made available to the public. Reuters reported that the Treasury Department plans to release data collection plans in the fourth quarter of this year.

Counselor to the Treasury Secretary Antonio Weiss said that “[t]he RFI is an important step in the most comprehensive review of the Treasury market in decades, and will further inform the ongoing interagency work to maintain the depth and resiliency of the US Treasury market."

The request is driven at least in part from next steps that came out of a joint report issued by a working group consisting of staff from several agencies (including the SEC) investigating the causes of the volatility in the Treasury market on October 15, 2014. That report identified four next steps: “1) further study of the evolution of the U.S. Treasury market and the implications for market structure and liquidity, 2) continued monitoring of trading and risk management practices across the U.S. Treasury market and a review of the current regulatory requirements applicable to the government securities market and its participants, 3) an assessment of the data available to the public and to the official sector on U.S. Treasury cash securities markets, and 4) continued efforts to strengthen monitoring and surveillance and promote inter-agency coordination related to the trading across the U.S. Treasury market.”