Treasury market reforms draw flak from funds and high-speed traders

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Some of the world’s largest high-frequency traders, funds and cryptocurrency advocates are pushing back against reforms to the $23tn US Treasury bond market that they say will hit the wrong targets and curb trading.

Citadel, Two Sigma, Virtu Financial and T Rowe Price are among those sounding the alarm on the sweeping scope of the rules proposed by the US Securities and Exchange Commission.

The standards are intended to cover the high-speed traders and hedge funds that are crucial participants in one of the world’s most important markets, because it sets the borrowing costs for securities worldwide.

Gary Gensler, chair of the SEC, has made improving the market’s resilience to shocks a priority. A series of regulatory reports has argued that hedge funds and proprietary traders have played a central role in crises over the past decade, pulling back from making markets in moments of stress or generating volatility when leveraged positions…

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