Levels of e-trading in US treasuries in dealer-to-dealer (D2D) and dealer-to-client (D2C) markets have come into sharper focus thanks to data collected by FINRA in recent years.
A smaller proportion of Treasury trading is done electronically than was previously estimated. In 2023, 59% of volume was executed electronically, lower than Coalition Greenwich’s previous estimate of 64%, based on data from the New York Federal Reserve (the Fed).
Conversely, dealer-to-client trading is higher, is nearer 70%. FINRA’s dealer-to-client volume category is a more accurate depiction of the D2C market than the Fed’s “Other” category, Coaliiton Greenwich asserts, which also captured D2D trades not involving primary dealers. As such, total market D2C volume is lower than previously believed, while e-trading volume estimates remain intact.
As the proportion of the market traded with no primary dealer involvement, datasets from…
