Washington, D.C.—On the anniversary of the Treasury market events of October 15, 2014, the FIA Principal Traders Group released a position paper detailing policy recommendations in response to the Joint Staff Report on the U.S. Treasury Market.
FIA PTG members support transparency, access, liquidity, and efficiency across all Treasury markets. FIA PTG’s recommendations include broad-based risk management principles; specifically the use of pre- and post-trade risk controls, as well as self-match prevention technology in Treasury markets. Additionally, FIA PTG supports greater data transparency into Treasury markets, including Dealer to Customer venues, non-multilateral platforms, multilateral platforms, and Designated Contract Markets.
The response paper also praised the regulatory staff for using a data-driven approach to evaluate the market events in question: “This Report’s methodology is, in many ways, as important to market participants as the Report’s conclusions are; because of the complex, interrelated nature of our markets, it is critical that discussions of market structure are based on this type of detailed, quantitative analysis.”
The paper concludes that, “the Report and the conversations that it has prompted are the first steps in what should be an objective and data-driven analysis of Treasury market structure and how it has evolved in the recent decade. We agree with the Report—before any changes can be made to a market as critical as the U.S. Treasury market, additional analysis is necessary. Further analysis must take into account all aspects of what is now a complex, highly interconnected Treasury ecosystem.”