U.S. SEC may expand oversight to key Treasury market platforms -chair

By Kitco News / November 02, 2021 / www.kitco.com / Article Link

WASHINGTON (Reuters) - The chair of the U.S. Securities and Exchange Commission (SEC)said on Tuesday it will consider new oversight rules for some platforms for trading U.S. Treasuries, in a move aimed at boosting transparency and competition.

Gary Gensler said he asked staff to revisit a 2020 proposal issued here under the Trump administration intended to treat electronic trading platforms for corporate debt and municipal securities more like stock exchanges.

"I've asked staff to reconsider (bringing)... certain Treasury trading platforms into the SEC's regulatory regime and to make recommendations," said Gensler. Staff would also consider if "other key platforms" could be brought in, he said.

Analysts say potential crypto trading platforms could be captured by the new rules.

In its 2020 proposal, the SEC said it wanted to better enable regulators to hold firms accountable for technology glitches that affect trading and assess a platform's preparedness for cyber attacks by mandating data backups in case of disaster or emergency scenarios.

Gensler's comments come amid illiquidity concerns in the $14.8 trillion U.S. Treasuries market. Players anticipate inflation gains could push the Federal Reserve to accelerate interest rates hikes, after ultra-low rates helped flatten the yield curve at its swiftest pace since 2011.

The Federal Open Market Committee is widely expected to announce Wednesday that it will begin tapering its $120 billion-per-month bond buying program.

Gensler added that the SEC will also consider rule changes in equity trading that may shrink the increments at which smaller companies' stocks are priced, as well as reevaluate best bid and offer components.

He said the agency will soon address potential conflicts of interest in how online brokers use digital engagement practices when marketing to investors after it reviews public comments it sought here in October.

Reporting by Katanga Johnson in Washington and John McCrank in New York; Editing by Chizu Nomiyama and John Stonestreet

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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