Treasury Operations Counterparty Pilot Program FAQs

Why is the New York Fed establishing the Treasury Market Operations Counterparty Pilot Program?
The pilot is being conducted to explore ways to broaden access to monetary policy operations, and to determine the extent to which additional counterparties beyond the Primary Dealers can augment the New York Fed's operational capacity and resiliency in its monetary policy operations.

How will the program work?
Pilot participants will participate in the SOMA Treasury purchase and sales operations along with the primary dealers. They will be expected to bid at prices that are reasonable when compared to the range of rates prevailing in the market, taking into account market volatility and other risk factors, and are competitive with prices that primary dealers quote. For reference, the FAQs for the current purchases of longer-term Treasury securities program can be found at

Who is eligible for the program?
To be eligible for the program and to maintain eligibility once a participant, a firm must:

  • Be an independent U.S. broker-dealer registered with and supervised by the Securities and Exchange Commission (SEC)
  • Have net regulatory capital of between $1 million and $50 million, and a minimum total owners' equity of $1 million, as of the date of submission of the expression of interest form
  • Be able to demonstrate a consistent and meaningful transaction presence (relative to the firm’s size) in the secondary market for Treasury securities, as both seller and buyer
  • Be able to confirm and arrange settlement of transactions with the New York Fed at volumes expected by the New York Fed
  • Maintain an effective compliance program and control environment.

Why are you selecting only five firms for this pilot?
Conducting the pilot program with a relatively small number of firms will keep the New York Fed’s operational costs relatively low, and will also reduce the time needed to onboard these new counterparties and launch the program, once they have been selected.

How will the New York Fed determine which firms to select for this program?
We anticipate that we may receive interest from more than five qualified firms. If that occurs, we will make an effort to select a diverse subset of the firms that meet our eligibility criteria and business expectations. We anticipate that we will learn the most by dealing with a relatively varied group of firms in the pilot program.

Will the Fed disclose the names of the pilot firms?
Yes, the New York Fed intends to make the names of the TOC pilot participants public on the New York Fed website.

When will the pilot firms be announced?
We hope to announce the selected pilot firms later this year. The exact timing of the announcement will be driven by the number of firms that apply and must be evaluated.

Over what time period will the program operate?
The pilot program will run for about one year.

Will participation in this pilot program guarantee the ability to participate in any permanent program that the New York Fed may establish in the future?
No. Pilot participants will need to re-apply for any permanent program that may be established in the future.

How do I apply for this pilot program?
Submit an Expression of Interest Form word and a letter (using Expression of Interest Letter Template) pdf to by February 27, 2013. Be sure to also submit all materials listed in a Request for Information pdf to by March 29, 2013.

Where should questions regarding the pilot program be directed?
Questions should be directed via e-mail to

Updated February 21, 2013

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