Asset Management: A voice for the buyside; Partnership with the sellside. Building relationships on Wall Street and across Washington.
The AMG is a unique leadership community of asset managers comprised of the largest and most influential market participants in the United States. The Group focuses on advancing market practices and enhancing legislative and regulatory effectiveness to improve the operations, efficiency, and trust in our markets.
Richard Weil of Pimco and Joan Binstock of Lord Abbett serve as Chair and Vice Chair, respectively, of the Asset Management Group of SIFMA.
Learn More about AMG
View AMG's Leadership Team
Latest Releases
SIFMA’s Asset Management Group Supports Proposed Retention Requirements
June 25, 2009
Initiatives of the Asset Management Group
As we approach mid-year, the Asset Management Group ("AMG") would like to express its appreciation to the many professionals affiliated with its member firms who have participated in trade group activities to foster industry-wide goals affecting the asset management industry. In this regard, the AMG leadership is also pleased to provide the following update regarding current AMG-sponsored initiatives, including a synopsis of the strategic objectives that form the basis of AMG's decision-making.
INITIATIVE: Public-Private Investment Program / AMG PPIP Subgroup
STRATEGIC OBJECTIVE: The intent of AMG members is to underscore to policy makers the relevance of asset managers with regard to the Administration's major financial services proposals. In fact, the full Steering Committee of the Asset Management Group will be charged with addressing the topics that will be included in President Obama's regulatory reform package that was announced on June 17th.
KEY POINTS:
a) The main purpose of the Subgroup is to promote raising capital and taking toxic assets out of the banking system.
b) The most important issues relating to public-private programs being addressed by the Subgroup are concerns about "look-back" by the government, investor privacy, and the status of executive compensation. In addition, the Subgroup is interested in clarifications regarding the expansion of TALF under PPIP.
c) Members of the AMG PPIP Subgroup met recently with House Majority Whip James Clyburn (D-SC), as well as representative Joseph Crowley (D-NY) and staff members of the Senate Banking Committee. These meetings were arranged by SIFMA's Washington Office. The Subgroup has already submitted a comment letter to FDIC regarding the loan component of PPIP, a letter to Congress regarding legislative amendments applicable to PPIP and letters to Secretary Geithner and Chairman Bair regarding investors' questions concerning public-private programs.
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INITIATIVE: Credit Default Swaps / Central Counterparty
STRATEGIC OBJECTIVE: AMG's Working Group concerning this matter has been focusing on this topic since the end of 2008. The goal has been to encourage the development of a Central Counterparty for the OTC derivatives markets that will protect the interests of clients of asset management firms and at the same time benefit the industry by reducing systemic risk in the markets. In addition, this strategy has been constructive for all market participants because it will help to preserve the basic structures of the OTC market. James Wallin of AllianceBernstein serves as Chair of the AMG CCP Working Group, which is responsible for this matter on behalf of the AMG Steering Committee.
KEY POINTS:
a) The Working Group has determined that segregation of collateral and portability in the event of counterparty default are essential elements of any CDS Central Counterparty. The Working Group has received agreement on these points from dealers.
b) In addition, the Working Group has formed a partnership with the MFA on this initiative and has held 5 meetings with the New York Fed to discuss buy-side views regarding the development of Central Counterparty facilities.
c) With ISDA and the OMG, the Working Group recently formed a "new group" that will expand AMG's efforts on this matter. There is equal representation of dealers and the buy-side on this new group, which will submit a report to the Fed by June 30th. Cleary Gottlieb serves as counsel for this group.
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INITIATIVE: Treasury Market Practices Group ("TMPG")
STRATEGIC OBJECTIVE: The primary purpose of this initiative was to support TMPG and the New York Fed in their efforts to enhance efficiencies in the Treasury securities market. The AMG basically took a set of generic guidelines from the Fed and turned those guidelines into a detailed implementation plan. This process of using AMG resources to solve a buy-side industry initiative has been given special recognition by the New York Fed and is now known within AMG as the "TMPG approach" to meeting an industry-wide securities processing challenge. This initiative involved extensive outreach to the community by AMG, and it was led by Paul Parseghian of Prudential who also serves as Vice Chair of The Asset Managers Forum.
KEY POINTS:
a) The AMG reached out to the sell-side and custodians in order to conduct a full industry effort to implement fails charge procedures in connection with Treasury trades.
b) This industry-wide initiative took place over a four month period and involved 22 industry meetings. AMG is committed to monitoring implementation of this program in the June/July/August timeframe.
c) In addition to the go-live of the fails charge program on May 1st, other recommendations were also announced by TMPG and SIFMA under which "dealer time" has been altered in connection with the processing of Fedwire-eligible securities transactions. Dealer time was identified as an issue in connection with the fails charge program by AMG.
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INITITATIVE: Definition of the term "fiduciary"
STRATEGIC OBJECTIVE: AMG members are interested in letting regulators know that large asset management firms have a significant interest in any proposed change in the definition of the term "fiduciary" and that the buy-side also is opposed to the creation of a self-regulatory organization that would apply to investment advisers. This initiative is being led by AMG's Market Practices and Standards Committee, which is chaired by Arthur Lev of Morgan Stanley Investment Management.
KEY POINTS:
a) Several AMG members recently met with SIFMA's Private Client Group to discuss the concept of a "universal standard of care" owed to customers which, if adopted, would apply to the retail securities brokerage business.
b) Some institutional investors, including participants in trade groups such as IAA, are concerned about possible changes in long-standing principles regarding the fiduciary responsibilities of asset managers as an indirect consequence of efforts to redefine retail practices.
c) The AMG is committed to working jointly with the sell-side and other buy-side groups to assure a comprehensive discussion of all related issues.
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INITIATIVE: Price Transparency / Expansion of TRACE to Agency Securities
STRATEGIC OBJECTIVE: The AMG has become a spokesperson for the buy-side with regard to policy issues relating to TRACE. Once again, this initiative is led by AMG's Market Practices and Standards Committee.
KEY POINTS:
a) The sentiment of a recent AMG comment letter to the SEC was supportive of price transparency, including the Agency securities proposal. AMG also informed regulators that the buy-side is interested in discussing the application of TRACE to other fixed-income markets at the appropriate time.
b) In its comment letter, AMG recommended that regulators should consider the operational hurdles described by SIFMA's sell-side members in a separate comment letter regarding this TRACE proposal.
c) AMG members are interested in forming a Working Group that will study transparency issues and any further expansion of TRACE in the marketplace.
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OTHER INITIATIVES:
1) Valuation Practices - A meeting of AMG members will be held in July to compare notes regarding the latest developments in the industry concerning valuation policies and practices. This will be a meeting of business people, and the goal is to produce takeaways that professionals can use at their shops to help enhance the process of dealing with vendors and understanding how to consider updating internal guidelines.
2) What Is An Asset Manager? - AMG members believe it is essential to produce a presentation that lobbyists and industry members can use in describing to policy makers and other constituencies the exact role of asset management firms in the financial services industry. Several AMG firms have already volunteered for this initiative; others would, of course, be most welcome.
3) TBAs - The AMF is working with utilities such as FICC and Omgeo to include TBAs in existing industry netting facilities. This effort is a follow-up to the protocols produced by AMG immediately following the Lehman bankruptcy.
4) AMF's Leadership Roundtable - This group of senior operations professionals meets three times a year and has recently focused its attention on best practices concerning risk management. The next meeting will be held in the early fall of 2009.
5) Credit Rating Agency Reform - AMG is monitoring whether new SEC rule proposals are consistent with SIFMA's 2008 CRA recommendations.
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Please contact Joseph Sack of the staff of the Asset Management Group with any questions or suggestions regarding the above initiatives. Mr. Sack can be reached at (212) 313-1165 or jsack@sifma.org.
News from Lehman Brothers Inc. Trustee
A Protocol Regarding Misdirected Funds was recently approved by the Bankruptcy Court in the liquidation of Lehman Brothers Inc. under the Securities Investor Protection Act. The protocol is posted on the Trustee's website at http://www.lehmantrustee.com.
You can also view the protocol by clicking here.
Lehman Brothers Inc. Trustee Letter Regarding Prime Brokerage Accounts
The Lehman Brothers Inc. Trustee issued a statement on 12/1/08 about the nature of protection available to prime brokerage accounts (PBAs) and the related PBAs protocol, including a reference to Lehman Brothers International (Europe). The Trustee had initiated this protocol, with the support of the Securities Investor Protection Corporation ("SIPC"), in an effort to allow PBAs to seek return of property to the extent permitted under applicable law and in view of the rights and obligations of affected parties.
Specified Trades Protocol 08-02 /
Schedules A, B, C
Protocol 08-02 relates to terminating certain specified and allocated trades done with Lehman Brothers in connection with mortgage-backed securities, which are known as "pool" trades. A SIPC Trustee was appointed with respect to the liquidation of Lehman Brothers on 9/19/08. The SIPC trustee issued a statement on September 26, 2008 which states, "Counterparties with securities and commodity transactions with Lehman Brothers Inc. may close them out and submit claims to the Trustee."
Click here to download Protocol 08-02
Click here to download Schedules A, B & C
This Protocol, which applies to non-FICC MBSD members, addresses the process for terminating such outstanding trades that were effected by asset managers with Lehman Brothers. The SIPC Trustee has cooperated in the development and has approved this industry Protocol. SIFMA appreciates the assistance and cooperation of its members, especially the input of members of the Association's Asset Management Group, with respect to the process of identifying the essential components of Protocol 08-02. Although SIFMA may not provide legal advice, questions concerning the implementation of Protocol 08-02 may be directed to Douglas Taggart, Manager, Asset Management Group of SIFMA, at 212-313-1173 or dtaggart@sifma.org. This Protocol is voluntary and non-FICC MBSD member firms are not required to follow this Protocol. This Protocol is only intended to provide a uniform process for resolving the specified trades and does not modify any existing right or obligation under any preexisting contracts. Firms should seek advice of counsel with respect to their rights or obligations in connection with the specified trades.
Protocol 08-01
Concerning Schedule A or B Extension Requests
AMG Protocol 08-01 was developed by SIFMA's Asset Management Group and the SIPC Trustee who was appointed with respect to the liquidation of Lehman Brothers on 9/19/08. This voluntary Protocol, which is for non-FICC MBSD members, addresses the process for terminating certain forward settling trades affected by asset managers with Lehman Brothers in connection with mortgage-backed securities ("TBA trades"). Schedules A and B that are part of the above-referenced Protocol are documents that under certain circumstances might be required to be submitted to the SIPC Trustee within ten (10) business days of the termination of TBA trades by users of the Protocol. In connection with the responsibility to submit Schedule A or B information within ten (10) business days, as suggested in the Protocol, SIFMA hereby informs its membership and other interested industry members that any request for an extension in order to fulfill this responsibility may be submitted via e-mail to the following address: termini@hugheshubbard.com. We appreciate your interest in this matter. Firms should seek advice of counsel with respect to their rights or obligations in connection with TBA trades. Questions regarding this 10/7/08 SIFMA notice may be directed to Elisa Nuottajarvi of the SIFMA staff at 212-313-1166.
Protocol 08-01
AMG Protocol 08-01 was developed by SIFMA's Asset Management Group and the SIPC Trustee who was appointed with respect to the liquidation of Lehman Brothers on 9/19/08. This Protocol, which is for non-FICC MBSD members, addresses the process for terminating certain forward settling trades effected by asset managers with Lehman Brothers in connection with mortgage-backed securities ("TBA trades").
This Protocol is voluntary and non-FICC MBSD member firms are not required to follow this Protocol. This Protocol is only intended to provide a uniform process for resolving the TBA trades and does not not modify any existing right or obligation under any preexisting contracts.
Firms should seek advice of counsel with respect to their rights or obligations in connection with the TBA trades.
SIFMA appreciates the assistance and cooperation of its members, especially the input of members of the Association’s Asset Management Group, with respect to the process of identifying the essential components of Protocol 08-01. SIPC and the SIPC Trustee have also cooperated in the development of this industry Protocol.
Although SIFMA may not provide legal advice, questions concerning the implementation of Protocol 08-01 may be directed to Elisa Nuottajarvi, Manager, The Asset Managers Forum, at 212-313-1166 or enuottajarvi@sifma.org.
As a follow-up to SIFMA's liaison with the SIPC Trustee, we are pleased to post the following links to protocols recently announced by the SIPC Trustee. These protocols are voluntary and AMG member firms are not required to follow them.
Protocol: Lehman Brothers Inc. Prime Brokerage Arrangements
Protocol: Lehman Brothers Inc. Outstanding Securities and Commodities Transactions
AMG's Goals
Working to create standards for SAS 70 audit reports, particularly in light of Sarbanes Oxley Section 404 requirements.
Emerging Issues
As a formal Group within SIFMA, the AMG works to be responsive
to emerging issues in the industry that may have
an impact on asset management firms. For example, the
AMG organizes and hosts “emerging issues” call-ins with
expert panelists on a variety of topics and trends, past topics
include the implementation of MiFID and the convergence
of the fixed-income and derivatives markets.
Latest Releases:
June 2, 2009
SIFMA Offers Framework for OTC Derivatives Risk Management - Read Group Letter
April 28, 2009
TMPG and SIFMA Announce Updated Closing Time Practice Recommendations for Delivering U.S. Treasury Securities
August 11, 2008
SIFMA Asset Management Group’s Steering Committee Announces New Chairs
July 31, 2008
SIFMA’s Asset Management Group Works with the Industry to Meet Goals of Expanded Derivatives Improvement Processing Plan
Industry Event on Derivatives Initiatives: Audio File to Download
Please note that this audio replay is for industry members and is not open to members of the press. To request a password, please contact Bianca Constance at bconstance@sifma.org.
June 9, 2008
Buy Side Implementation Plan
The
Buy Side Implementation Plan was jointly developed by International Swaps and Derivatives Association, Inc. (ISDA), Managed Funds Association (MFA), and Securities Industry and Financial Markets Association (SIFMA) submitted to the Federal Reserve Bank of New York. The plan will help enable market participants represented by the Operations Management Group to operate consistently with the relevant goals outlined in the March 27 Letter. (also see below)
March 27, 2008
SIFMA’s Asset Management Group to Play Key Role in Meeting 2008 Goals Outlined by Operations Management Group for Derivatives Trades Processing
Read Industry letter (pdf) with update to the Federal Reserve Bank of New York outlines goals, strategies and major benchmarks toward the continued improvement and streamlining of operational efficiency within the credit and equities derivatives market.
Operational Issues (AMF)
The Asset Managers Forum (AMF) serves as the AMG’s
voice on buy side operations and processing initiatives.The AMF is:
- Working on the development of a standardized fail report within its Fails Management Working Group;
- Promoting its STP Initiative that would help make “standing settlement instructions” available to counterparties and their agents on a real-time basis;
- Educating operations professionals on new derivatives processing initiatives;
- Advancing its Corporate Actions Best Practices program in cooperation with custodians, broker-dealers, vendors, DTCC and other industry utilities;
- Expanding its reach by working closely with organizations such as DTCC and SWIFT whose services are widely offered to diverse market participants;
- Providing educational training classes to members;
- Providing workshops, lunch and learns and other events on current industry topics.
Outreach and Networking
One of the benefits of membership in the AMG is the opportunity to build relationships with industry peers. The AMG is a bridge-builder between industry members and other constituencies that play a vital role in the financial markets. The AMG is:
- Developing ongoing relationships with regulatory and legislative bodies and with key market participants to improve the operations, efficiency, and trust in our markets.
- Building direct relationships with segments of the Street that are most relevant to AMG’s advocacy activities; most notably, these segments currently include rating agencies, exchanges and accounting policy-makers.
- Implementing Roundtables for CEO’s and other senior executives at buy side firms to discuss the “business of the business.”
- Reinforcing its relationship with the financial press by working with SIFMA’s Public Relations department.
- Communicating with its members through member-visits to ensure that a firm’s needs and issues are being addressed. AMG Steering Committee members will be routinely requested to suggest creative member-driven agenda items for the four AMG Steering Committee meetings scheduled to be held in 2007.
