SIFMA and sponsors of tender option bond (TOB) programs provide comments to the Office of the Comptroller of the Currency (OCC), the Securities and Exchange Commission (SEC), the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation (FDIC), the Federal Housing Finance Agency (FHFA), and the U.S. Department of Housing and Urban Development (HUD) (collectively, the Agencies) on the Agencies’ proposed rule for credit risk retention.

SIFMA and these entities represent participants in the municipal securities industry. Together the groups represent the interests of many of the TOB Program sponsors currently in the market.

The groups share concerns that the proposals do not:

1. adequately address the full breadth of the TOB market;
2. specifically reflect the risk reduction and retention mechanisms inherent in the tender option bond structure; or
3. fully accommodate existing market practice or structural requirements or limitations.

The groups continue to believe that the TOB programs should be exempted from the risk retention requirements that will be imposed on asset-backed securities transactions generally under the proposals.