After years of reviewing a hotly debated issue, the U.S. government has decided to recommend publicly releasing data on Treasuries trading volume.
Treasury Secretary Steven Mnuchin’s debt managers on Monday detailed the results of their years-long examination of transparency in the world’s biggest bond market.
Speaking at an event at the Federal Reserve Bank of New York, Deputy Treasury Secretary Justin Muzinich said the department was advising that the Financial Industry Regulatory Authority, which has been collecting transactions data since 2017, release weekly aggregate volume statistics.
The decision fell short of what some market participants, including high-frequency traders, were hoping for: the release of pricing data. But Treasury’s analysis indicates there’s already transparency on that, according to Muzinich.
The Treasury is working out the details with FINRA, which owns the data. The department recommended the statistics become available to the public early next year. Treasury advised releasing weekly aggregate volume details, broken down by market segments on all government securities.
In the U.S. stock market, the price, size and time of transactions are usually reported within a second. For corporate bonds, it’s 15 minutes or less. Reflecting the private-club feel that’s long dominated the business, there’s no comparable disclosure in Treasuries, which set rates for trillions of dollars worth of assets, like mortgages.
A raucous public debate stretching back to 2016, if not earlier, has pitted bond dealers against high-speed trading firms over what data should be public.
Wall Street banks argue greater transparency will make it harder for them to trade. Automated market makers, which play an increasingly key role in modern trading, think more information will help them buy and sell more as well as reduce costs.