On Friday, March 18, the US Treasury Department extended the public comment period for the Request for Information (RFI) on the Evolution of the U.S. Treasury Market Structure. Market participants and other interested parties, including corporate treasurers, asset managers, market makers, trading venues, and sophisticated corporations, now have until April 22 to provide the Treasury Department with written responses.
The RFI, originally published on January 22, seeks public comment “on structural changes in the U.S. Treasury market and their implications for market functioning; trading and risk management practices across the U.S. Treasury market; considerations with respect to more comprehensive official sector access to Treasury market data; and benefits and risks of increased public disclosure of Treasury market activity.”
The Steptoe Financial Services team held a webinar on March 10 titled US Treasury Market Review: Prelude to a New World Order?. During the presentation, we shared why we believe the Treasury RFI signals possible future changes to US Treasury market structure, trading protocols, risk management and business conduct standards, transparency, and regulatory and public post-trade information.
The RFI could be the precursor to dramatic revisions to the Treasury market regulatory landscape that extends into the next Presidential Administration. Commenters should address the issues raised by the RFI, as well as how US Treasury market structure changes could affect the liquidity, efficiency, and stability of an important global financial benchmark. Market participants should also clearly address any repercussions to the larger financial system that may come from US Treasury market structure changes, including their impact in the US and globally on liquidity, competitive pricing, funding, risk management, and post-trade transparency.