The Treasury Department has released a request for information (RFI) on the structure of the market for U.S. Government (USG) securities. Building on a report issued last year by the Treasury in conjunction with other regulators, the RFI explores the extent to which the market for obligations issued by the Treasury Department has become illiquid or has other structural flaws that warrant intervention. Much in the RFI focuses on data, laying out an extensive list of factors on which Treasury believes current data are incomplete, inadequate, and or outdated. Input is also sought on the extent to which disclosing some or all of these new data elements would benefit market transparency and new entrants. Treasury is also concerned that the growth of principal trading firms (PTIs) active in the Treasury market through high-speed electronic trading has altered market structure in problematic ways. Although not a highlighted concern, key sections in the RFI also inquire about Treasury-market liquidity, an area of strong industry concern that Treasury to date has largely argued does not require remedial policy action.
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