Response to RIN 3064-AF09: Securitization Safe Harbor Rule
Summary
SIFMA provides comments to the Federal Deposit Insurance Corporation (FDIC) in response to their proposal to revise the requirements of its Securitization Safe Harbor Rule.
The FDIC’s Proposal would remove requirements in the current Securitization Rule that require securitization transactions to comply with the provisions of Regulation AB of the SEC, 17 C.F.R. 229.1100 et. seq. (Regulation AB) even if Regulation AB does not apply to those transactions. SIFMA strongly supports this proposed change for the reasons set forth in section A of this letter.
SIFMA provides commentary on additional aspects of the Rule that hinder securitization by insured depository institutions (IDIs), and impediments created by regulatory capital standards that impair IDI securitization issuance and investment.
Excerpt
October 21, 2019
Submitted electronically to [email protected]
Robert E. Feldman
Executive Secretary
Attention: Comments,
Federal Deposit Insurance Corporation
550 17th Street NW, Washington, DC 20429
Re: Response to RIN 3064-AF09: Securitization Safe Harbor Rule
Dear Mr. Feldman,
SIFMA1 is pleased to provide these comments on the FDIC’s proposal (“Proposal”)2 to revise the requirements of its Securitization Safe Harbor Rule (“Rule”). SIFMA’s members are active participants in securitization markets, in particular as issuers, sponsors, and liquidity providers of securitization transactions.
In the Proposal, the FDIC indicates that “the policy objective…is to remove unnecessary barriers to securitization transactions, in particular the securitization of residential mortgages, without adverse effects on the safety and soundness of insured institutions”.3 SIFMA strongly supports this policy objective, and is pleased to see this objective being addressed in concert with other parts of the Administration.4
The Proposal would remove requirements in the current Rule that require transactions to comply with the provisions of Regulation AB of the Securities and Exchange Commission (“SEC”), 17 C.F.R. 229.1100 et. seq. (“Regulation AB”) even if Regulation AB does not apply to those transactions. SIFMA strongly supports this proposed change for the reasons set forth in section A of this letter.
In section B this letter we provide commentary on additional aspects of the Rule (that are beyond the scope of the Proposal) that hinder securitization by insured depository institutions (“IDIs”), and impediments created by regulatory capital standards that impair IDI securitization issuance and investment.
1 SIFMA is the voice of the U.S. securities industry. We represent the broker-dealers, banks and asset managers whose nearly 1 million employees provide access to the capital markets, raising over $2.5 trillion for businesses and municipalities in the U.S., serving clients with over $18.5 trillion in assets and managing more than $67 trillion in assets for individual and institutional clients including mutual funds and retirement plans. SIFMA, with offices in New York and Washington, D.C., is the U.S. regional member of the Global Financial Markets Association (GFMA).
2 Available here: https://www.govinfo.gov/content/pkg/FR-2019-08-22/pdf/2019-15536.pdf
3 Proposal at 44733.
4 See, e.g., U.S Treasury Housing Reform Plan (available here: https://home.treasury.gov/system/files/136/Treasury-Housing-Finance-Reform-Plan.pdf), U.S. Treasury Paper on Capital Markets (available here: https://www.treasury.gov/press-center/press-releases/Documents/A-Financial-System-Capital-Markets-FINAL-FINAL.pdf).