The US Securities and Exchange Commission’s push to make the Treasury and repurchase agreement markets more transparent and resilient to stress in the financial system could actually make trading even more convoluted, according to Curvature Securities as reported by Bloomberg.
While a proposed mandate for a central clearing of Treasuries and repos has since become more of a “rule to ‘promote’ central clearing,” rather than a requirement, it is likely to increase the costs of trading and create liquidity issues, Curvature said. CME Group, ICE, LCH.Clearnet are vying for market share and mulitiple clearinghouses will create issues, Curvature said.