MMI Comment Letter to The U.S. Treasury’s Request for Information on the Evolution of Treasury Market Structure

A well-functioning and efficient market built for the future is in everyone’s interest. For cash U.S. Treasuries, eSpeed and BrokerTec are registered ATSs that are subject to SEC Rule 15c3-5 requiring risk management controls. We believe these are transparent, open trading platforms subject to the kind of competition and oversight that has helped reduce investor costs in other asset classes. But there are large parts of the U.S. Treasuries market that have limited participation to bank-dealers only. In our experience, this leads to segmentation of the order flow and adverse selection opportunities that aren’t as efficient or cost-effective for investors as an all-to-all market.