Treasury Proposes to Amend Large Position Reporting Rules (Fed. Reg.) (with Lofchie Comment)
The U.S. Treasury Department ("Treasury") issued a notice of proposed rulemaking to solicit public comment on proposed amendments to Treasury's rules for reporting large positions in certain Treasury securities.
According to Treasury, the proposed amendments are designed to improve the information available to Treasury and simplify the reporting process for many entities subject to the large position reporting rules.
Specifically, the proposed amendments Treasury's Large Position Report include: (i) revising the reporting format; (ii) requiring gross reporting; (iii) requiring reporting of futures and option contracts; (iv) amending the reported components of a total reportable position; and (v) reducing the exemptions from reporting, particularly for non-U.S. governmental entities.
Comments on the proposed rulemaking must be submitted by August 9, 2014.
Lofchie Comment: Buy-side and sell-side firms, both private and government, that are engaged in a significant volume of transactions in U.S. government securities should review the changes carefully, particularly from an operational standpoint. In a number of respects, the reporting requirements under the new rules will be more complicated to administer. For example, the former $2 billion minimum reporting threshold is being replaced with a variable threshold that will require investors to monitor the size of the threshold that applies to every separate issue of Treasury securities.