Action Line Update
August 13, 2007
Highlights
- Fixed Income Operations Conference Planning Committee
- Federal Financial Regulators Propose Illustrations of Consumer Information to Support Their Statement on Subprime Mortgage Lending
New
Indicates a new item. Items that are solely informational are generally removed after two weeks. New items normally will be posted to the website weekly.
CROSS MARKET ISSUES
New
Fixed Income Operations Conference Planning Committee: The Fixed Income Operations Conference Planning Committee has scheduled a meeting for Tuesday, August 21, 2007, at 4:00 p.m. The purpose of the meeting is to continue discussions regarding the development of the program agenda. If you have any questions or comments please contact Brian MacWilliams at 646.637.9227.
CORPORATE CREDIT MARKETS
No updates.
FUNDING
No updates.
GOVERNMENT AND FEDERAL AGENCY MARKETS
No updates.
MBS AND SECURITIZED PRODUCTS
New
Federal Financial Regulators Propose Illustrations of Consumer Information to Support Their Statement on Subprime Mortgage Lending: The federal financial regulatory agencies today issued proposed illustrations of consumer information for certain adjustable-rate mortgage (ARM) products described in the agencies' Statement on Subprime Mortgage Lending (Subprime Statement), effective July 10, 2007. The Subprime Statement recommends communications that ensure consumers have clear, balanced, and timely information about the relative benefits and risks of certain ARM products. The illustrations are intended to assist institutions in providing this information. The illustrations consist of (1) an explanation of some key features and risks that the Subprime Statement identifies, including payment shock, and (2) a chart that shows the potential consequences of payment shock in a concrete, readily understandable manner. The agencies seek public comment on all aspects of the proposed illustrations. Comments are due 60 days after publication in the Federal Register.
Fannie Mae to Provide Aggregated Third Party Origination Data: Beginning with pools issued September 1, Fannie Mae will begin to provide certain third party origination statistics. Information regarding the number of loans, percentage of total UPB, and aggregate UPB will be disclosed, broken out by a loans status as originated by retail, broker, or correspondent. Fannie Mae states that all single-family MBS issuances should have this data reported by year end. More information is available here.
MUNICIPAL MARKETS
EUROPEAN MARKETS
Bank of Italy Consults on Amendments to Regulations to be Made under MiFID: The Bank of Italy has published on its website a consultation document on amendments to Bank of Italy Regulations July 1, 1998 (Banking Deposit and Sub-Deposit of Clients' Securities and Money Regulation) and August 4, 2000 (Investment Firms Regulation) to be made under the Markets in Financial Instruments Directive (MiFID). The Consultation Document provides a first draft of the new regulation to be adopted. Whilst the Banking Deposit and Sub-Deposit of Clients' Securities and Money Regulation has been revised in its entirety, the Investment Firms Regulation has only been amended in respect of Italian investment firms' capital requirements and operations abroad. Comments are invited by August 27, 2007.
CONSOB Publishes Consultation Documents on Regulation Implementing MiFID: The Italian regulator (CONSOB) has published on its website a Consultation Document providing proposed amendments to CONSOB Regulation No. 11768/98 (Market Regulation) and Regulation No. 11522/98 (Intermediaries Regulation) ('CONSOB Regulations') to be made under the Legislative Decree implementing MiFID, currently under examination by the commissions of the Italian Parliament and due to enter into force on November 1, 2007. The Consultation Document is organised by subject and provides both an overview and specific comments on the amendments to be made to each sections and the relevant rules of CONSOB Regulations. The Consultation Document also provides a first draft of the new regulation to be adopted. Comments are invited by September 15, 2007.
FSA Policy Statement on Reforming Conduct of Business Regulations Implementing MiFID: The Financial Services Authority (FSA) has published Policy Statement 07/14 (PS07/14), which explains the FSA's final decisions in the light of the agreement it has reached with the EU Commission on notification under Article 4 of MiFID Level 2 Implementing Directive, following the publication of Policy Statement 07/6 (PS07/6) in May 2007. PS07/6 contained proposals for amendments to the UK conduct of business regime, in order to implement aspects of MiFID. PS07/14 also provides feedback on the responses received to the FSA Article 4 proposals for a new conduct of business sourcebook, as set out in Consultation Paper 06/19 (CP06/19).
CEIOPS Publishes Response to Commission Letter Regarding Further Solvency II Work: The Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS) has published its response to a letter from the EU Commission, which sets out CEIOPS's follow-up work on the Solvency II project whilst simultaneously making specific requests of CEIOPS where further work is required before Solvency II comes into force. Amongst other things, CEIOPS's response states that: (i) CEIOPS is highly committed to supporting the Commission in developing the Solvency II project; (ii) though expected delivery of Solvency II, both in its scope and timing, is particularly challenging, the consequent workload will characterise CEIOPS's work plan and priorities in the coming months and years; and (iii) delivery of a complete draft of a fourth quantitative impact study (QIS4) a month after the presentation of the report on the third quantitative impact study (QIS3) would be difficult as CEIOPS does not have the resources or the expertise to produce the report by itself.