Bond Tape is a Matter of Time – Markets Media
April 20, 2017 \
3 Comments
Full Article: Markets Media
The discussion of whether there will be consolidated tape for fixed income products is no longer a matter of if, but when. The wheels already are in motion for public disclosure of US Treasury trades. They are not moving quickly, but they are moving.
Comments
I’m curious to see what sort of reaction the focus article gets this week. We’re in an time indeed. Conventional wisdom is that all markets need transparency to operate efficiently, and the broad consensus among regulators and legislators is that we should always err on the side of too much transparency. By the way, these are many of the same people that believed there are times when there is too much liquidity. But I digress. At the core of this article it the notion that the wheels of progress are in motion and that we will have real-time reporting of… Read more »
What’s going to be the impact of post-trade reporting for US Treasuries? Well that depends on one crucial factor. Who will be managing the data? From the looks of it, the quasi-government-private institution known as FINRA will be in charge of this precious commodity. Based on FINRA’s previous track record, the full value of this post-trade data will not be realized by the market. FINRA has been notoriously poor at improving the quality and access to data. This is why they are losing control over data reporting assets in other markets like equity options: http://www.waterstechnology.com/industry-issues-initiatives/3041456/cat-constructor-why-thesys-won-finra-lost-and-what-comes-next If they are in charge… Read more »
You better believe that a public tape for treasuries is on the way. Once you start collecting data for “regulatory and compliance” purposes, you essentially create the demand for a public tape by investors and dealers. Does anyone want regulators monitoring their trading activity without understanding the benchmarks they are monitoring against? When they do get around to taking the next step, I would strongly caution against the path taken with the FINRA TRACE feed. Taking what is essentially an audit trail, and throwing it out there for public consumption is not a trade tape. Multiple reporting legs, markups and… Read more »
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