Electronic trading has slowly become more key in the world’s biggest debt market. Even the U.S. Treasury department has given a nod to the role of electronic trading firms in that business, having named several of them in recent years to have a stint on their debt-advisory committee.
$50 Trillion
Sufficient liquidity in Treasuries to ensure the true value of more than $50 trillion in global assets directly or indirectly linked to them may also never be more important. That’s because retail and institutional investors alike are on a razor’s edge wondering just how bad the economic fallout -- and any lasting hits to their portfolios -- from a shutdown of activity.
Ease in trading Treasuries is also crucial to Treasury Secretary Steven Mnuchin as he’s been ramping up issuance -- with quarterly sales set to hit a record $3 trillion -- to fund economic stimulus.
It’s against that backdrop that Citadel Securities hopes to eventually join the elite bond trading club known as primary dealers. The firm has slowly been expanding its Treasury offerings as it moves toward that goal. That group is currently made up of 24 firms, mostly banks.
Read More: Wall Street’s Elite Bond Club Is Cracking at Worst Possible Time
“One of the great things about U.S. Treasury market structure is that you don’t have to be a primary dealer to be a major market maker,” Griffin said. “With that said, Citadel Securities obtaining the designation would be constructive for the market and investors, making it a win all around.”
This article was provided by Bloomberg News.