Bloomberg – Bond dealers and hedge funds that fail to complete trades in Treasury securities face a penalty of as much as 3 percent on the proceeds of transactions, according to a Federal Reserve-backed industry code to be implemented in the next six months.

The plan, which strengthens official oversight of trading, will be unveiled as soon as Jan. 5, said Thomas Wipf, chairman of the Treasury Market Practices Group and the head of institutional securities group financing at Morgan Stanley in New York.

“It seems quite obvious that the Fed and Treasury cannot and will not accept the status quo for much longer,” Wipf said in an interview.

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bond dealers, federal-reserve, group financing, market practices, morgan stanley, oversight, practices group, proceeds, securities group, six months, trades, treasury market, treasury securities, wipf