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NEW YORK, May 24 (Reuters) - The U.S. Treasury department has no plans now to publicly disclose trading data on the $13 trillion Treasury debt market and will wait until it has the data in hand to develop any policy proposal, a top Treasury official said on Tuesday.
The move for regulators to collect trade data on the U.S. government debt market arose from the “flash rally” on Oct. 15, 2014 when bond prices posted wild price swings in a 12-minute period.
In its ongoing review of changes in the Treasury market including faster trading technology and the increased presence of high-frequency trading firms, the Treasury asked for industry comments in four areas including official sector access to Treasury cash market data.
“To reiterate, we do not anticipate developing any policy proposal on the public availability of data until the official sector has access to cash market transaction data,” Daleep Singh, acting assistant secretary for financial markets, said in a prepared speech at an event sponsored by the Securities Industry Financial Markets Association (SIFMA).
While most financial players supported official gathering of trade data, some including SIFMA and some Wall Street bond dealers said public disclosure of the data would hurt trading activity.
“I do think there would be some damage to liquidity,” Gerald Pucci Jr., head of North American rates trading and global head of repo with BlackRock, said on a panel about Treasury market structure following Singh’s speech.
“I applaud the Treasury being patient and let us analyze it and let us decide is it harmful or hurtful to the market,” Pucci said.
High-frequency trading firms and other newer players in the Treasury market told the Treasury they favor more transparency which would promote liquidity and transparency.
“I think for the public good liquidity is critical to understanding price formation and what’s trading is really, really important,” Ryan Primmer, head of global quantitative strategies at KCG, said on the panel. (Reporting by Richard Leong; Editing by Jonathan Oatis and Meredith Mazzilli)