The Treasury Market Practices Group has recommended that firms be charged for failing to deliver Treasury securities.
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The move is meant to restore liquidity to the cash, financing and repo markets, which have been hobbled by record settlement failures as low interest rates have erased economic incentives to lend U.S. governmentbonds.
Adoption of the practices is voluntary, according to TMPG, a group of senior business and compliance personnel from dealers, banks and buy-side firms. However, the Federal Reserve Bank of New York, which sponsors TMPG and helped develop the recommendations, has endorsed the standards and says it will adopt them in connection with its Treasury transactions and operations.
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