How US Regulators Are Overhauling the Treasuries Market

US securities regulators are rolling out big changes to the market plumbing for US Treasuries. They aim to aid transparency and resiliency to a more than $26 trillion market that helps guide the price of all kinds of securities and loans but whose trading activity is opaque and has suffered from big disruptions. Rules being phased in over the next couple of years will alter the trading infrastructure, operating rules and disclosure requirements for the large private funds operating in the market.

Under the rules, many of these high-frequency trading firms and hedge funds that are responsible for a large chunk of trading volume in Treasuries would have to register as dealers, requiring them to hold more capital as a cushion against losses and subjecting them to greater regulatory scrutiny. Industry groups have had a mixed reaction to the proposals, with some groups considering court challenges and others showing a willingness to adapt to the evolving rules of Treasuries trading.