The federal Inter-Agency Working Group on Treasury Market Surveillance (IAWG) issued a progress report on the steps its members have made to enhance the resilience of the U.S. Treasury market.
Among the most notable achievements, the group announced plans to implement a Treasury buyback program in 2024. It also approved further enhancements to the public release of data on secondary market transactions in on-the-run Treasury securities.
In addition, the group has adopted amendments requiring certain firms that are significantly involved in the proprietary trading of Treasury securities to become members of the Financial Industry Regulatory Authority (FINRA) and report their Treasury transactions to FINRA’s Trade Reporting and Compliance Engine (TRACE).
Further, the working group adopted changes to SEC Form N-MFP that will provide, among other items, more granular information about activity of money market funds in the Treasury repurchase agreement (repo) market. Also, it adopted changes to SEC Form PF that will enable better monitoring of the activity of liquidity funds and will draw clearer distinctions between cash and derivatives activity in the Treasury markets.
Additionally, it adopted rules requiring reporting of the terms of securities lending transactions in a timely manner. Finally, it approved changes that will expand cross-margining between central counterparties that clear cash and derivatives transactions related to Treasury securities and improve the management of member defaults.
Next week. on Nov. 16, the IAWG will convene its ninth annual U.S. Treasury Market Conference to further discuss recent developments and proposals to improve Treasury market resilience.
The IAWG is composed of staff from the U.S. Department of the Treasury, the Board of Governors of the Federal Reserve System, the Federal Reserve Bank of New York, the U.S. Securities and Exchange Commission, and the U.S. Commodity Futures Trading Commission.