To Whom it May Concern:
The Bank Policy Institute[1]and the Securities Industry and Financial Markets Association[2] appreciate the opportunity to comment on the Board of Governors of the Federal Reserve System’s proposal to implement the Treasury Securities and Agency Debt and Mortgage-Backed Securities Reporting Requirements (FR 2956).[3] The Associations recognize the need to collect Treasury trading data to “help identify and address potential anomalies in the market for Treasury securities” and to “understand frictions and disruptions in the market that would affect the implementation of monetary policy.”[4] However, firms have significant concerns around the potential scope of this new data collection as well as the implementation timeline, the latter of which are largely due to the nuance and complexities of implementing new Trade Reporting and Compliance Engine (TRACE) reporting, as well as proposed modifications to the TRACE system that are currently pending.[5][6]
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[1] The Bank Policy Institute is a nonpartisan public policy, research and advocacy group, representing the nation’s leading banks and their customers. Our members include universal banks, regional banks and the major foreign banks doing business in the United States. Collectively, they employ almost 2 million Americans, make nearly half of the nation’s small business loans, and are an engine for financial innovation and economic growth.
[2] SIFMA is the leading trade association for broker-dealers, investment banks and asset managers operating in the U.S. and global capital markets. On behalf of our industry’s nearly 1 million employees, we advocate for legislation, regulation and business policy, affecting retail and institutional investors, equity and fixed income markets and related products and services. We serve as an industry coordinating body to promote fair and orderly markets, informed regulatory compliance, and efficient market operations and resiliency. We also provide a forum for industry policy and professional development. SIFMA, with offices in New York and Washington, D.C., is the U.S. regional member of the Global Financial Markets Association (GFMA).
[3] 86 Fed. Reg. 6329 (January 21, 2021).
[4] Board of Governors of the Federal Reserve System, Supporting Statement for the Treasury Securities and Agency Debt and Mortgage-Backed Securities Reporting Requirements (FR 2956; OMB No. 7100-NEW) at page 2, available at https://www.federalreserve.gov/reportforms/formsreview/FR 2956 OMB SS.pdf.
[5] Financial Industry Regulatory Authority Regulatory Notice 20-43, FINRA Requests Comment on Enhancements to TRACE Reporting for U.S. Treasury Securities, available at https://www.finra.org/sites/default/files/2020-12/Regulatory-Notice-20-43.pdf.
[6] The comments provided herein are based on the current disclosure standards pertaining to TRACE reporting. Modifications related to the disclosure of TRACE data could impact certain recommendations made in this letter.
