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July 19, 2017

SIFMA Securitization Group (SSG) Update is a weekly update on securitization news, regulation, and events.

In the Spotlight

Housing Finance Discussed During Senate Banking Committee Hearing with Fed Chair Yellen

Earlier this week, the Senate Banking Committee conducted a hearing on “The Semiannual Monetary Policy Report to the Congress.” Key topics and takeaways can be found below:

  •  Housing Finance: Chairman Crapo asked Yellen if she agreed with the principles for housing finance reform that Federal Reserve Governor Jay Powell outlined in remarks he gave on July 6. Yellen said she agreed with those principles, which were: 1) reduce the possibility of future bailouts; 2) make any government guarantee explicit and transparent; 3) increase competition in securitization; 4) use existing regulatory and market infrastructure; and 5) Congress should build on areas of bipartisan support. Yellen agreed with Crapo that Congress needs to act to end the receiverships of Fannie Mae and Freddie Mac.
  • Orderly Liquidation Authority: Sen. Van Hollen asked Yellen about the importance of preserving the Orderly Liquidation Authority (OLA). Yellen said that it is “essential” that an orderly liquidation mechanism exist, saying that the inability of regulators to quickly resolve non-depository institutions during the financial crisis increased the severity of the crisis. Yellen did concede that bankruptcy should be the preferred route for resolution, but argued that OLA is an important safeguard due to the inability of regulators to predict the circumstances around the collapse of a major financial institution. Yellen also stressed the importance of living wills as a supplement to any resolution process.
  • Volcker Rule: Crapo noted that Fed Governor Powell recently said the Fed was reviewing the Volcker Rule, and asked Yellen to elaborate on the Fed’s review of the rule. Yellen said that any review of the Volcker Rule should be a multi-agency effort and that steps should be taken to reduce the rule’s complexity. Crapo asked Yellen if she supported having a lead regulator appointed to deal with this issue, and Yellen said that Congress should consider the question.

Hearing Information

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Of Interest

Semiannual Monetary Policy Report to the Congress

Chair Yellen discussed the current economic situation and outlook touching upon the continually strengthening labor market, the FOMC raising the target range for the federal funds rate, and the process the fed will follow in order to normalize the size of their balance sheet in coming months.

Yellens Testimony

 

Treasury International Capital Data For May

The U.S. Department of the Treasury today released Treasury International Capital (TIC) data for May 2017.  The next release, which will report on data for June 2017, is scheduled for August 15, 2017.

The sum total in May of all net foreign acquisitions of long-term securities, short-term U.S. securities, and banking flows was a monthly net TIC inflow of $57.3 billion.  Of this, net foreign private inflows were $87.2 billion, and net foreign official outflows were $29.9 billion.

Foreign residents increased their holdings of long-term U.S. securities in May; net purchases were $95.5 billion.  Net purchases by private foreign investors were $119.7 billion, while net sales by foreign official institutions were $24.2 billion.

U.S. residents increased their holdings of long-term foreign securities, with net purchases of $3.6 billion.

Taking into account transactions in both foreign and U.S. securities, net foreign purchases of long-term securities were $91.9 billion.  After including adjustments, such as estimates of unrecorded principal payments to foreigners on U.S. asset-backed securities, overall net foreign purchases of long-term securities are estimated to have been $77.4 billion in May.

Foreign residents increased their holdings of U.S. Treasury bills by $24.0 billion.  Foreign resident holdings of all dollar-denominated short-term U.S. securities and other custody liabilities increased by $32.0 billion.

Banks' own net dollar-denominated liabilities to foreign residents decreased by $52.2 billion.

Press Release

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Market Updates

Ginnie Mae Platinum WAC ARM Pool Disclosures

Ginnie Mae recently provided final updates to disclosure data, related to the anticipated new Platinum WAC ARM pools, planned for the 4th quarter of 2017.  This bulletin provides Final Disclosure file layout changes related to single class Loan Level Disclosure and single class Pool Level Disclosure, to add ARM information to these existing layouts.  This bulletin also provides a layout for a new Supplemental disclosure file that will be specifically for the Platinum WAC ARM pools. This new Supplemental file will be in addition to the information in the existing Enhanced Platinum Pool disclosures.

Notice

Trace Fact Book Now Available

The second-quarter data tables for the TRACE Fact Book are now available. The tables include aggregated information for securitized products as well as corporate and agency debt securities, including trades reported, the top 50 issues by trades and by par value, the average daily par value traded, customer buy vs. customer sell ratios and more. View the 2Q 2017 TRACE Fact Book tables. For additional information, contact us by phone at (888) 507-3665 or by email at TRACEDataServices@finra.org.

DTCC Important Notice Fixed income Clearing Corporation- MBSD

Communication with its membership remains a high priority of the Fixed Income Clearing Corporation (“FICC”). To ensure the Mortgage Backed Securities Division (“MBSD”) maintains ongoing communication in the event of an EPN or RTTM/Clearing interruption, FICC would like to remind all members that it is their responsibility to inform FICC of any contact information changes. 

To update or add a contact to the notification groups used to advise members of system interruptions or Important Notices, please contact your Relationship Manager. 

Any changes to the EPN and/or Full Service Contact lists posted on DTCC.com, please contact the MBS Allocations team at MBSallocations@dtcc.com.

Any questions on this notice can be directed to your Relationship Manager

DTCC Notice

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SSG Meetings

FINRA 4210 Implementation Working Group – Wednesdays

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SIFMA News

SIFMA’s Views on Tax Reform: Recommendations Submitted to Senate Finance Committee

Following Senator Orrin Hatch’s (R-UT), Senate Finance Committee chairman, request for comment on tax reform legislation, SIFMA submitted its views on tax reform including recommendations for consideration. The submission summarizes SIFMA’s current view on select tax policy issues including: comprehensive tax reform; international tax reform; federal tax exemption for municipal bond interest; tax incentives for retirement and savings; capital gains and dividends; and financial transaction tax. “SIFMA strongly supports tax legislation that will enhance economic opportunities for individual Americans, promote savings and encourage investment, and lower the tax rate for American businesses that compete in a global marketplace,” said Kenneth E. Bentsen, Jr., SIFMA president and CEO in a statement.  “We look forward to working with the Committee to improve the climate for economic growth and prosperity for all Americans.”

Press Release

SIFMA’s Views on Tax Reform

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Upcoming SIFMA Events

Senior Investor Protection Denver Regional Workshop
July 27, 2017 | Denver, CO

Preparing for New FINRA Senior Investor Protection Rules
September 13, 2017 | SIFMA Conference Center, New York, NY 

Global Tax Reporting Symposium 

October 3-4, 2017 | New York, NY

SIFMA Annual Meeting, The Capital Markets Conference
October 23-24, 2017 | JW Marriott Washington DC

Resources

SIFMA Resources
SIFMA Securitization Group Activity and Resources
SIFMA on Housing Finance Reform
SIFMA To-Be-Announced Market Factsheet
SIFMA Legal and Regulatory Action Pipeline
SIFMA Newsletters
SIFMA’s Upcoming Conference and Events

Regulator Resources
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…

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