Trades: More securities market openness might have unfavorable effects

In a remark letter submitted Friday, the ABA Securities Association and 2 other trade groups raised issues about a Treasury Department proposition to need extra post-trade information openness in the Treasury securities market, stating that details might have “significant” prospective drawbacks if it were made openly readily available. The groups highlighted that they were broadly encouraging of extra non-public information disclosure that might support policymaking and market tracking, however stated that public disclosure might do more damage than excellent.

The Treasury Department in June started accepting public discuss the advantages and disadvantages of going public with more details about Treasury securities market deals. In their letter, the trade groups stated they saw little advantage in making more information public however numerous possible unfavorable results. “Specifically, additional inappropriately calibrated public disclosures present significant risks to the Treasury’s goal of financing the U.S. debt at the lowest cost to taxpayers over time, the ability of primary dealers to effectively serve their important underwriting and market making function, and the ability of end-users and investors to execute large transactions,” they stated.

The associations rather made numerous tips for Treasury to think about prior to making more information public. These consist of basing those choices on a market-by-market basis after weighing the prospective unfavorable results and not pursuing more disclosure till there is increased clearness on how openness would harmonize a wider series of Treasury market reforms being pursued


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