Regulators Highlight Recent Treasury Market Initiatives

At the 2023 U.S. Treasury Market Conference, Under Secretary Nellie Liang and CFTC Chair Rostin Behnam described regulatory initiatives that impact the Treasury markets. Their remarks focused on reviewing Treasury market conditions and liquidity over the past year and highlighting progress made by the Inter-Agency Working Group on Treasury Market Surveillance ("IAWG") on various workstreams led by Treasury.


Ms. Liang identified several Treasury initiatives, including: (i) providing daily reports on trade counts and volume-weighted average prices for on-the-run nominal coupon securities and (ii) working towards releasing secondary market transaction data for on-the-run nominal coupons, with end-of-day dissemination and with appropriate cap sizes.


Mr. Behnam underscored the challenges of (i) monitoring data amidst the rapid evolution of technologies, such as automated trading, artificial intelligence ("AI") and cybersecurity risks and (ii) providing comprehensive data on risks in the Treasury market. He called for robust cybersecurity measures in the wake of recent cyberattacks.

Mr. Behnam outlined the CFTC's approach, which includes enhancing its data program and pursuing enforcement actions against bad actors. He said that the CFTC is taking steps to utilize AI and machine learning, such as deploying models designed to detect data anomalies. Mr. Behnam said that the CFTC is working to coordinate international efforts to harmonize data standards, such as the adoption of the Legal Entity Identifier and the Unique Transaction Identifier.

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