The secondary market could offer corporate treasurers new opportunities for liquidity management. Since secondary market trading will, for the first time, facilitate market pricing of securities, it will allow pension funds and mutual funds to value their fixed income portfolios on an ongoing basis. One would expect that a more accurate assessment of their portfolio will help pension funds better plan their investment strategies.
Another important advantage is that the secondary market will extend the menu of investment instruments; no longer will the investor be compelled to hold on to his five-year bond; rather, the pension fund can sell its five-year bond and invest in bonds of longer or shorter maturities according to interest rate expectations.