SEC Chair Warns of Risks from Leveraged Treasury Trades, Proposes Reforms
-
SEC Chair Gensler warned about risks from leveraged trading in Treasuries market, especially basis trades between futures and cash Treasuries.
-
Gensler says SEC proposals like central clearing and broker registration can reduce systemic risks.
-
Regulators worried about lack of visibility into amount of risk from leveraged basis trades.
-
Industry executives support basis trades as providing needed liquidity, but trades face more scrutiny internationally too.
-
Gensler acknowledged concerns about meeting T+1 settlement deadline, especially for foreign exchange trades.