In the Spotlight

SIFMA Submits Comments to the California Conference Committee Reconciling State Senate and Assembly Financial Services Bills:  SIFMA provided comments to the California Conference Committee on Assembly Bill 278 and Senate Bill 900 on how the mortgage servicing legislation the Committee is considering relates to the secondary mortgage markets that fund the vast majority of credit for California borrowers.  The letter can be viewed here.

FHFA Publishes Strategic Plan: Federal Housing Finance Agency (FHFA) acting director Edward J. DeMarco released for public comment the Agency’s draft Strategic Plan: Fiscal Years 2013-2017.  FHFA is updating its plan in order to incorporate the strategic plan for the conservatorships of Fannie Mae and Freddie Mac sent to Congress in February 2012.  In accordance with the Government Performance and Results Modernization Act of 2010, FHFA is soliciting the views of those potentially affected by, or interested in, the plan. The strategic plan can be found here.

Week in Washington

HFS Subcommittee Discusses SIFI Designations: At a House Financial Services Subcommittee hearing, lawmakers discussed the impacts systemically important financial institution (SIFI) designations would have on individual firms and the marketplace. Officials from the Federal Reserve and the Treasury Department testified as well as a panel of industry stakeholders and academics.

Of Interest

Federal Open Market Committee Publishes Meeting Minutes: May 16, 2012, the Federal Reserve Board and the Federal Open Market Committee on Tuesday released the attached minutes of the Committee meeting held on April 24-25, 2012.  The minutes can be viewed here.

Federal Reserve Announces Agencies Finalize Large Bank Stress Testing Guidance: May 14, 2012, the Federal Reserve Board, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation issued final supervisory guidance regarding stress-testing practices at banking organizations with total consolidated assets of more than $10 billion. The guidance outlines general principles for a satisfactory stress testing framework and describes various stress testing approaches and how stress testing should be used at various levels within an organization. The Federal Register notice can be found here.

European Central Publishes Euro Area Securities Issues Statistics for March 2012: May 14, 2012, the European Central Bank (ECB) released the euro area securities issues statistics for March 2012. Of note, the annual growth rate of the outstanding amount of debt securities issued by euro area residents increased to 4.6% in March 2012 from 4.3% in February. For the outstanding amount of quoted shares issued by euro area residents, the annual growth rate was 1.6% in March 2012, compared with 1.5% in February.

Fitch Ratings Issues Report - AG Settlement Impact on U.S. RMBS (Subscription might be needed to view report):  Principal reductions are unlikely to change long-term ratings for U.S. RMBS, according to Fitch Ratings in a new report.

Elizabeth Dukes discusses Housing Recovery:  On May 15, 2012, Federal Reserve governor Elizabeth Dukes discussed possible actions that could help foster a recovery in the housing market.

New Positions at SIFMA Posted to Career Center: New positions at SIFMA are now posted on our Career Center, a forum to connect jobseekers and employers/recruiters on opportunities within the securities industry. SIFMA is currently seeking a Vice President of Member Engagement to manage key aspects of the Association’s corporate membership recruitment efforts. We offer excellent benefit packages and salaries commensurate with experience. Check out the career center to learn more about this and other opportunities, post your resume, view new job listings, or view resumes/post a job.

SIFMA’s Pennsylvania + Wall  Blog on  “FATCA, Mortgages, China: A Busy Week for SIFMA”: This past week, SIFMA and representatives of our member firms testified (or submitted testimony)testified on many important issues—this blog post highlights three. First, Nicole Tanguy, Director and Tax Counsel at Citigroup Inc testified on behalf of SIFMA before the Internal Revenue Service on the need to push back some compliance deadlines for implementing the Foreign Account Tax Compliance Act (FATCA) from 2013 to 2014. In addition, SIFMA submitted testimony to the Conference Committee of the California State Legislature outlining serious concerns with pending mortgage servicing legislation.  Finally, SIFMA’s David Strongin testified before the House Financial Services Subcommittee on International Monetary Policy and Trade on market access in China and progress made in the Strategic & Economic Dialogue (S&ED) on how to ensure a level playing field for SIFMA member firms currently doing business in China.

Market Updates

SIFMA Raises Concerns about FINRA's Mortgage-Bond Plan: SIFMA has voiced concerns about a plan from the Financial Industry Regulatory Authority intended to bolster transparency in part of the mortgage-bond market. Market participants are concerned that strategies could be revealed if FINRA publishes detailed information on government-backed securities trades. Read SIFMA's letter on FINRA's proposal.

Mortgage-Backed Securities Division 2:00 PM Pass and TBA Netting Schedule Update: On October 7, 2011, the Mortgage-Backed Securities Division (MBSD) of the Fixed Income Clearing

Corporation (FICC) published an Important Notice (#MBS156.11) recapping the increased netting benefits realized by Participants via the move to a 2:00 PM pass (E.S.T.) and subsequent TBA Netting cycle (when applicable). MBSD is planning to change the timing of the current 2:00 PM (E.S.T.) pass to 4:00 PM (E.S.T.) effective November 2, 2012. Once this change is implemented, all TBA Netting cycles, starting with the November 8, 2012 Class A TBA Netting cycle will be executed immediately following the completion of the 4:00 PM pass.

Mortgage-Backed Securities Division Clearing Participant Pool Netting Update: Participants who support any or all of their MBSD accounts solely via the Web-Front-End must contact their Relationship Manager to schedule a date in which their account(s) will become active for Pool Netting. The deadline for these activations is August 3, 2012.  Participants who will process Pool Netting activity solely via the Web-Front-End will be required to participate in a limited series of test cases with FICC UAT group. To schedule testing please send an email to mailto:QA@FICC.com.

Daily Trading Data of Agency and Non-Agency Securities – This spreadsheet, updated each week, compiles information provided by FINRA/FT Interactive Data.

Federal Reserve Reinvestments of Principal Payments into Agency MBS

Purchases from May 10 through May 16: $6,100 million

Sales (dollar rolls) from May 10 through May 16: $0 million

Resources

SIFMA Securitization Group Activity and Resources

Current Issue of SIFMA’s Washington Weekly Newsletter (Updated Friday afternoons)

SEC’s Dodd-Frank Rulemaking Calendar

FDIC’s Dodd-Frank Page – links to initiatives, rule proposals, events, meetings, etc…

Federal Reserve Dodd-Frank Page – links to initiatives, rule proposals, events, meetings, etc…

SIFMA on Housing Finance and Securitization

SIFMA Dashboard 

SIFMA on Dodd-Frank Rulemaking

SIFMA Legal and Regulatory Action Pipeline

Index of SIFMA Newsletters

SIFMA To-Be-Announced Market Factsheet

2011 Prepayment Tables

Please visit SIFMA’s Upcoming Conference and Events webpage