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MFA suggests changes to SEC’s Treasury clearing protocol

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The Managed Funds Association, the trade association for the global alternative asset management industry, has submitted a comment letter to the US Securities and Exchange Commission suggesting several changes to a proposed Treasury clearing protocol.

The Managed Funds Association (MFA), the trade association for the global alternative asset management industry, has submitted a comment letter to the US Securities and Exchange Commission (SEC) suggesting several changes to a proposed Treasury clearing protocol.

The MFA says that while it welcomes the proposal, its recommendations will help better calibrate the protocol to avoid negative, unintended consequences on the US Treasury market.
 
The MFA’s letter commends the SEC for taking steps to improve the resiliency of the US Treasury market, and argues that expanding central clearing could help promote greater participation, enhance efficiency, and improve access to market-wide protections. However, MFA stresses that the SEC needs to take a phased approach and expand the availability of central clearing before imposing a mandate.
  
The MFA letter also highlights that central clearing requirements should focus on bilateral repo and reverse repo transactions rather than triparty repo transactions and cash market transactions saying that the benefits of central clearing are the most significant and existing market infrastructure is best able to support central clearing for these transactions. 
 

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