Rules expanding investor protections and fair access in alternative trading systems that trade government securities and repurchase agreements on government securities were proposed Monday by the Securities and Exchange Commission.
The SEC also issued a concept release seeking public comment on the regulatory framework for electronic platforms that trade corporate debt and municipal securities.
Government securities, including U.S. Treasury securities and agency securities, make up more than half of the outstanding debt issued in the U.S. bond market, trading at a daily average of $835 billion over the last half of 2019, the SEC said.
SEC Chairman Jay Clayton said in a statement that government securities alternative trading systems, or ATSs, have become important to U.S. Treasury markets. The proposal, which received input from the Treasury Department, would extend SEC rules on transparency and enhancing systems integrity to those markets.
Under the proposal, all government securities ATSs would be required to comply with Regulation ATS, including investor protections that require written safeguards and procedures to protect confidential subscriber information, and enable SEC oversight. An ATS with significant market share for U.S. Treasury securities or agency securities would have to provide fair access to trading on such ATS.
The proposal will be open for a 60-day comment period when it is published in the Federal Register.
The concept release on electronic platforms trading in corporate debt and municipal securities started with a recommendation by the SEC's Fixed Income Market Structure Advisory Committee, and "will also enhance our understanding of the fixed income electronic trading space, including informing future modernization efforts," Mr. Clayton said.