US Treasury Clearing to Increase Trading Costs, Study Finds

Mandatory central clearing of US Treasuries will make the market safer, but at the expense of costlier trading and potentially curtailed volumes, according to a new Coalition Greenwich survey.

Over 70% of the 34 market participants questioned expect the cost of trading to rise due to new margin requirements and clearing fees, the study published Wednesday found. And around 85% of respondents believe increased margin costs could cause them to reduce their trading activity. The survey included four of the top five Treasury dealers by revenue, and was conducted during the second quarter.

The upcoming Securities and Exchange Commission rules ...