US to Require Foreign Governments to Report Big Treasury Holdings

The U.S. Treasury Department will require foreign governments and central banks to report large holdings of U.S. federal debt, the Obama administration said on Wednesday.

The new rule was published in the Federal Register and takes effect on March 10. It will also require more disclosure from investors in interest rate derivatives contracts, the Treasury said.

The U.S. government began collecting information on large Treasuries positions in 1996 after short squeezes in some notes caused by traders at Salomon Brothers, which later became part of Citigroup Inc, raised concerns that market participants could use large positions to manipulate prices.

Foreign central banks and governments were exempt from the reporting requirements, although China and Japan have since grown to be giant holders of Treasuries.

The Treasury said more information from bondholders would help the government monitor supply and demand for U.S. debt.