| June 10
June 10 The U.S. Treasury on Tuesday proposed
expanding rules that require the reporting of large positions in
U.S. government debt to include positions held by foreign
central banks and governments, as well as to capture more
interest rate derivatives contracts.
The U.S. government began collecting information on large
Treasuries positions in 1996 after short squeezes in some notes
caused by traders at Salomon Brothers, which later became part
of Citigroup, raised concerns that market participants could use
large positions to manipulate prices.
Foreign central banks and governments were exempt from the
reporting requirements, though China and Japan have since grown
to be the largest holders of Treasuries. U.S. Federal Reserve
banks have also been exempt when holding bonds for their own
The Treasury is now proposing to eliminate those exemptions
and request the organizations and countries report their large
trade positions, saying that more information will help the
government monitor supply and demand for U.S. debt.
The Treasury is also proposing to alter the thresholds that
require trades be reported, from a minimum holding of $2 billion
to 10 percent of an outstanding Treasury security, which in the
case of some issues may fall below $2 billion.
It also wants more futures and options that are settled by
transferring Treasuries to be made subject to reporting
Comments on the proposed rule, which was published on
Tuesday in the Federal Resister, are due by August 9.
(Reporting by Karen Brettell; Editing by Dan Grebler)