The U.​S. Treasury'​s Office of Financial Research published a paper on "Treasury Tri-​party Repo Pricing." It tells us, "The U.​S. tri-​party repurchase agreement (​repo) market segment is a large over-​the-​counter venue critical for more than $​2 trillion in daily funding and central bank open market operations. Using a confidential and comprehensive dataset, this paper examines the pricing of overnight tri-​party repos, a key input to the U.​S. Secured Overnight Financing Rate benchmark. Despite these transactions having negligible maturity, collateral, and counterparty risk, there is significant variation in the prices that market participants receive, which depend on (​1) the number of counterparties they frequently trade with, (​2) the degree of diversification across those counterparties, and (​3) the share of trading activity those counterparties represent. Notably, during periods of market stress, these features can significantly alter the pricing impact experienced by borrowers." The paper says, "This market provides a unique venue in which a diverse set of institutions invest their cash and obtain large amounts of funding on a daily basis. Beyond its important funding role, this market plays a critical function in U.​S. monetary policy as it is used by the Federal Reserve (​Fed) to influence rates through open market operations. Overnight transactions collateralized with U.​S Treasuries, or overnight tri-​party repos, are also important as their rates serve as a key input to the Secured Overnight Financing Rate (​SOFR). Despite its significance, pricing in this market remains imperfectly understood, largely due to the absence of publicly available disaggregated data. By leveraging a confidential, comprehensive transaction-​level dataset, we aim to fill this gap by empirically studying how frictions in this market can alter tri-​party repo pricing." The piece adds, "The bilateral nature of repos means that participants privately negotiate terms, each with partial knowledge about the terms available to others. As a result, prices can be influenced by participants' private information, preferences, and alternative trading opportunities. Also, because repos resemble collateralized loans, factors such as collateral, loan maturity, and counterparty risk can affect prices. To remove the impact of as many factors as possible, we deliberately focus on overnight Treasury tri-​party repos where considerations about maturity, collateral, and counterparty risk are likely to be negligible."

A new paper titled, "When Complexity Excuses Enforcement: The Regulatory Gap in Tax-​Exempt Money Market Fund Disclosure of Municipal VRDO Deemed Reissuances," written by Michael Lissack of Tongji University, says, "This Article exposes the most egregious enforcement asymmetry in modern securities regulation: while state attorneys general and federal prosecutors pursue remarketing agents for systematic Variable Rate Demand Obligation (​VRDO) manipulation through record settlements and ongoing litigation, money market fund managers whose shareholders directly profited from these violations have entirely escaped regulatory accountability. Despite collecting billions in management fees on artificially enhanced returns generated by systematic violations, fund managers have systematically concealed obvious deemed reissuance risks from investors while regulatory authorities pursue zero enforcement actions." The summary continues, "Justice Andrew Borrok'​s April 2025 decision in State of New York ex rel. Edelweiss Fund LLC v. JPMorgan Chase & Co. eliminates all remaining excuses for this enforcement failure. The court found substantial evidence that remarketing agents' systematic '​bucketing' practices operated outside disclosed parameters -- establishing the prerequisite condition that, when combined with interest rate changes of 25 basis points or more under Treas. Reg. § 1.​1001-​3, would trigger deemed reissuances affecting the tax-​exempt status of fund distributions. This judicial validation, combined with current market volatility creating mathematical certainty of ongoing Treasury Regulation threshold breaches, makes continued regulatory inaction toward money market fund managers a dereliction of investor protection duties." It adds, "The Article establishes that regulatory authorities can no longer justify enforcement asymmetry that protects primary beneficiaries while pursuing only those who implemented violations. The evidence is overwhelming, the judicial validation of undisclosed practices is explicit, and current violations are mathematically demonstrable when these practices combine with documented rate movements. The time for regulatory complexity excuses has ended."

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