U.S. Is Still Studying Ideal Way to Release Treasuries Trading Data

(Bloomberg) -- The U.S. government continues to study the best way to publicly release data on Treasuries trading, according to Craig Phillips, counselor to Treasury Secretary Steven Mnuchin.

The idea has been under consideration for more than a year to unveil statistics that are currently being collected for regulators. But a decision has not yet been reached, in part because of the complexity of the data and gaps in the collection, Phillips said Monday at a Federal Reserve Bank of New York conference on the structure of the U.S. debt market.

Regulators and industry members met at the New York Fed for the fourth straight year to discuss the structure of the world’s biggest bond market. The meetings have been part of a push by authorities for more transparency in the market following an unusual bout of volatility in October 2014.

Phillips said at the same conference last year that the government was considering the public release of trading data collected through the Trade Reporting and Compliance Engine, a bond-price reporting system known as Trace.

“In short, we continue to examine the appropriate level of public dissemination for the Trace Treasury data at this time,” Phillips said on Monday.

Trace Developer

The Financial Industry Regulatory Authority, which developed Trace, has been using it to gather Treasury trading statistics from its members since July 2017. A group of regulators engineered the start of the data gathering for their purposes in the wake of the 2014 episode, which underscored for officials the need for more robust statistics on government-debt trading.

Treasury is working on ways to better break down and detail the large volume of transactions, to make any release to the public clear regarding what the statistics are signaling about actual trading, Phillips said in prepared remarks. He also said the government is working on filling data loopholes that include transactions from non-Finra members that are currently not being gathered.

The data that regulators have observed amount to more than 230,000 reported transactions a day, and daily volume in Treasuries averages about $600 billion daily, he said.

“As the deepest and most liquid market in the world, prices for Treasury securities are remarkably transparent around the clock,” Phillips said.

There has been debate among industry members about the merits of releasing information such as the size, price and time of transactions. On one side, big banks say public reporting would make their dealing business more difficult, while on the other, high-speed traders and hedge funds see greater transparency improving execution.

“At the outset of this process we stated that our guiding principle was to ‘do no harm’ to the market, and our deliberate approach in determining a path forward on TRACE data is a product of that principle,” Phillips said.

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