February 17, 2016 Newsletter
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February 17, 2016

Industry Jobs

SFIG Calendar



Advocacy Outlook

Industry News Highlights


Last Thursday, February 11th, SFIG staff met with the staff of Congressman Andy Barr (R-KY) to discuss ABS bond liquidity. The discussion focused on European regulatory efforts to implement "High-Quality Securitization" standards that would grant qualifying ABS products on bank balance sheets capital and potential liquidity relief, and the Basel Committee’s pending release of a final consultative document regarding the Fundamental Review of the Trading Book (“FRTB”).

SFIG will continue to present its members’ views and insights to Congress on matters affecting ABS bond liquidity. To view SFIG’s letter to the regulators on FRTB, please click here. To hear Federal Reserve Chair Janet Yellen respond to a question on the FRTB, please click here (FRTB Question at 2:58:20).

To learn more about SFIG’s advocacy efforts, please contact Michael.Flood@sfindustry.org. To learn more about our Financial Intermediary Committee, contact Alyssa.Acevedo@sfindustry.org


Yesterday, February 16th, SFIG staff and auto issuer members held a call with staff of the US Securities and Exchange Commission (“SEC”) to address requests for clarifications, guidance or changes to EDGAR XML Technical Specifications.

SFIG’s Auto Issuer Committee previously submitted a comment letter to the SEC regarding these technical specifications for auto loan and lease ABS. The committee has been working to review and interpret the asset level data requirements and XML specifications for auto loan and lease ABS with the view to a successful and consistent implementation of these requirements before the November 2016 compliance date.

If you would like to join SFIG’s Auto Issuer Committee, please contact Alyssa.Acevedo@sfindustry.org.


Registration is filling quickly as we prepare to welcome industry members to SFIG’s Women in Securitization (“WiS”) ABS Vegas 2016 event, Winning Outside the Workplace. We invite you to join your fellow industry members and learn about leveling the playing field outside of the board room with educational insight on wine tastings, gaming, and social engagement.

Registration is open to all Vegas attendees. To register, please click here. Space is limited with very few spots remaining, so reserve your place today!

To become a member of WiS and support this important initiative, please click here.

To support WiS and take advantage of all of the benefits available to our sponsors, please submit your WiS sponsorship form to sponsorship@sfindustry.org.


There will be a lively Twitter conversation going on during ABS Vegas 2016. Share your thoughts with other attendees using #ABSVegas2016. Join the conversation!

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SFIG currently has open positions for:

  • Advocacy Manager: will be an integral member of SFIG staff, being second-in-command of the association’s Advocacy department. The successful candidate will design and execute advocacy strategies for SFIG’s policy priorities and support the association’s advocacy efforts through development and growth of its political action committee. Additional information on the position, as well as a link to the application, is available here.

  • Data/Policy Analyst: will help support group-wide strategy efforts and initiatives as they relate to the association’s database and various policy requirements. The Analyst will also support SFIG’s advocacy efforts through development of a political action committee database. Additional information on the position, as well as a link to the application, is available here.

  • Executive/Administrative Assistant: will be responsible for supporting the Executive Director and Directors of Policy and Advocacy while directing overall front office activities, including the reception area, mail, calendar coordination, meeting set-up, purchasing requests and overall office management. Additional information on the position, as well as a link to the application, is available here.

Some of the latest industry positions available include:

Senior Analyst, Consumer ABS Kroll Bond Rating Agency 02-04-2016
Analyst, Financial Institutions Kroll Bond Rating Agency 02-03-2016
Associate Director, Structured Finance - Toronto Standard & Poor's 01-29-2016
Attorney- Project Finance/Corporates Kroll Bond Rating Agency 01-28-2016

Analyst – CMBS Analytics

Kroll Bond Rating Agency 01-28-2016

Structured Finance Analyst

Assured Guaranty 01-19-2016

Associate Director/Director, Asset Backed

Fitch Ratings 01-12-2016

Associate Director/Director, Residential
Mortgage Backed Securities

Fitch Ratings 01-07-2016
Associate Director, ABS Ratings Standard & Poor's 01-07-2016
Analyst Moody’s Investors Services

Please visit our Jobs page for a full listing of available positions.

For questions about positions at SFIG, please contact Jobs@sfindustry.org. For questions about the website jobs portal, please contact Website@sfindustry.org.


TUESDAY, February 23, 2016
11:00 a.m. -12:00 p.m. (EST)


THURSDAY, February 25, 2016
10:00 a.m. – 11:00 a.m. (EST)


SUNDAY, February 28, 2016 – WEDNESDAY, March 2, 2016
The Aria Resort & Casino
Las Vegas, NV
Registration is available here.


SUNDAY, February 28, 2016 
3:00 p.m. - 5:00 p.m. PT
The Aria Resort & Casino
Las Vegas, NV


WEDNESDAY, March 16, 2016
12:00 p.m. – 5:00 p.m. (ET)
Hogan Lovells LLP
New York, NY
Note: Closed Meeting


TUESDAY, May 31, 2016 – WEDNESDAY, June 1, 2016
Hyatt Regency Toronto
Toronto, Ontario
Registration is available here.


If you would like to participate in the work SFIG is undertaking through our committees as highlighted below, please e-mail Committees@sfindustry.org. For specific inquiries on any of SFIG’s advocacy efforts, please contact the staff member listed for the related project.

SFIG’s Marketplace Lending Committee was established in August 2015, as an SFIG participant committee and is open to all SFIG members who have a legitimate interest in marketplace lending. The committee was formed with two primary intentions: 1) to work with members involved in marketplace lending to educate the industry as a whole, with a particular focus on the securitization of assets generated through that lending channel; and 2) to determine appropriate securitization-specific policy and engage in related advocacy, leveraging SFIG’s prominence and experience across all asset classes to support the continued responsible growth of securitization in marketplace lending. The committee is currently working on establishing and documenting recommended market best practices. The committee previously commented on the Treasury Department's Request for Input on Online Marketplace Lending on September 30th.

Members interested in participating should contact Alyssa.Acevedo@sfindustry.org.

SFIG’s Student Loan Committee recently responded to Fitch’s proposed amendments to FFELP student loan ABS rating methodology. The committee also submitted a response to the Proposed Changes to Moody’s Approach to Rating Securities Backed by FFELP Student Loans this past October.

To join SFIG’s Student Loan Committee and learn more, please contact Alyssa.Acevedo@sfindustry.org.

The RMBS 3.0 Task Force released its Third Edition RMBS 3.0 Green Papers in November 2015. The task force has continued its efforts to address key issues specific to private label mortgage securities through work-streams relating to (1) Representations, Warranties, and Repurchase Enforcement; (2) Due Diligence, Data, and Loan-Level Disclosure; (3) Role of Transaction Parties; and (4) Bondholder Communications. We encourage members to participate in any or all of the working groups to contribute towards the mission of RMBS 3.0. For its 2016 agenda, the task force will address topics including the inclusion of an independent Deal Agent in transactions, Bondholder Communications, Data and Loan-Level Disclosure, Repurchase Enforcement, and Settlements, as well as undertake a review of the previously published Green Papers.

For additional information on RMBS 3.0, please contact Amanda.Bateman@sfindustry.org.

SFIG, through its GSE Reform Task Force, along with several other trade associations, submitted a letter to the FDIC, Fed and OCC regarding the effect of homeowner’s association ‘super-liens’ on private-label RMBS and whole loan transactions. The task force also submitted comments on FHFA’s update to the single security initiative on October 7, 2015. The task force is expecting to receive an update from the SFIG participants on the Industry Advisory Group for the Common Securitization Platform and Single-Security following its second meeting on December 7th. The task force has also formed policy positions on the Carney-Delaney-Himes GSE Reform bill and updated its briefing book to support its advocacy efforts. With the release of the bill, SFIG staff also updated its GSE Reform Legislative Comparison, which analyzes key provisions in the five most recent housing finance reform bills.

To join SFIG’s GSE Reform Task Force and learn more, please contact Amanda.Bateman@sfindustry.org.

The Mortgage Loan-Level Disclosure Task Force is studying the recent Regulation AB II release of Schedule AL and comparing it to SFIG’s Schedule L submission to the Securities and Exchange Commission in February 2014. SFIG also continues to have weekly Mortgage Industry Standards Maintenance Organization calls to go through data elements that lenders should deliver in securitizations. The task force will also be conducting an analysis of the data elements included in SFIG’s Schedule L submission in order to determine any privacy concerns.

Please contact Amanda.Bateman@sfindustry.org for additional information on SFIG’s work on this topic.

The Volcker Task Force has been working with SFIG’s various asset class and legal counsel committees to identify areas within the Volcker Rule in need of clarification, particularly questions regarding covered funds and the loan securitization exemption.

Please contact Alyssa.Acevedo@sfindustry.org to participate on the Task Force.

The Risk Retention Industry Guide Working Group recently launched its interim Industry Guide, ahead of the RMBS compliance date, focused on issues either relevant to all asset classes or specific to RMBS. The working Group continues to work on a final guide focused on creating best practices and developing consensus positions around several areas within the Credit Risk Retention final rule.

Please contact Alyssa.Acevedo@sfindustry.org with any questions.

SFIG’s Chinese Market Committee continues to hold discussions with a focus on SFIG’s partnership with the Chinese Securitization Forum, potential upcoming educational discussions and the sharing of recent market developments in China.

If you would like more information on SFIG’s work with respect to Chinese securitization, please contact Alyssa.Acevedo@sfindustry.org.

The Regulation AB II Task Force has been focused on the disclosure and offering process requirements within the final rule. Asset specific work streams have been formed to develop comment letters on the outstanding proposals within the final rule and the Task Force submitted the first part of its comment letter this past June. SFIG submitted a supplemental comment letter covering credit card and equipment floorplan asset classes on January 12, 2016.  Future discussions across asset class committees and the Regulation AB II Task Force will focus on the remaining outstanding proposed rules, including potentially requiring issuers to provide the same disclosure for Rule 144A offerings as required for registered offerings.

SFIG members who are interested in joining this task force or asset specific committees should contact Alyssa.Acevedo@sfindustry.org

The Regulatory Capital and Liquidity Committee recently submitted a response to Basel’s Consultative Document regarding Capital Treatment for STC Securitisations. The committee is also addressing industry concerns related to the Federal Reserve Board’s Final Rule on the Liquidity Coverage Ratio (“LCR”). This committee will also develop a comment letter when U.S. regulators release their proposed Net Stable Funding Ratio (“NSFR”). 

To become involved in SFIG’s advocacy on the final LCR or NSFR rules, please contact Alyssa.Acevedo@sfindustry.org.

The Derivatives in Securitization Task Force obtained no-action relief from the CFTC giving swap dealers comfort that the CFTC would not take enforcement action against swap dealers that did not comply with certain CFTC Regulations when taking actions in response to the credit ratings downgrade of a counterparty to a legacy swap. The relief applies to swaps with SPVs that were in existence prior to October 10, 2013. The task force also commented on the CFTC’s proposal on margin requirements for uncleared swaps, as well as the prudential regulators’ proposal regarding margin and capital requirements for covered swap entities. In October 2015, the prudential regulators approved a Joint Final Rule on Swap Margin Requirements. In November 2015, the CFTC issued their final rule regarding margin requirements for uncleared swaps for swap dealers and major swap participants.

The High Quality Securitization ("HQS”) Task Force recently submitted a response to Basel’s Consultative Document regarding Capital Treatment for STC Securitisations. The task force previously responded to the European Commission’s consultation on an EU framework for simple, transparent and standardized securitization on May 12, 2015. The task force also previously responded to the BCBS-IOSCO consultation on its criteria for identifying simple, transparent and comparable securitizations. SFIG’s comments were built off of those sent to the European Banking Authority on January 14th (available here) regarding its proposed criteria and to the European Central Bank and Bank of England last summer (available here) regarding the development of a sustainable securitization market in Europe.

To join the HQS Task Force, please contact Alyssa.Acevedo@sfindustry.

The US Supreme Court appears less likely to hear and overturn the lower-court decision in Madden v. Midland Funding after the unexpected death of Justice Antonin Scalia thus affecting marketplace lenders, according to a recent American Banker article.

In December 2015, SFIG and the Securities Industry and Financial Markets Association submitted an amicus curiae brief to the US Supreme Court in support of Midland Funding requesting judicial review of Second Circuit Court of Appeals’ decision in the case. Originally, a vote on whether to grant review was expected in February.

The outcome of Madden v. Midland Funding could have far-reaching implications for the securitization of consumer loans, including those funded through marketplace lending channels. If the Second Circuit’s decision is upheld, then industry participants would need to evaluate the applicability of state usury laws for loans included in a securitization.

According to American Banker, even if the Supreme Court hears the case, the votes of five out of the eight remaining justices would be necessary to overturn the Second Circuit’s decision.

If the Supreme Court splits four to four on whether to overturn the ruling, the earlier decision would remain binding in New York, Connecticut and Vermont.

Before, the votes of five Republican justices would have been enough for a reversal. Now, at least one of the four Democratic appointees, who more typically side with consumers in disputes with businesses, would have to be persuaded.

To join SFIG’s Marketplace Lending Committee, please contact Jennifer.Wolfe@sfindustry.org.


The Financial Times recently reported that new rules in the Markets in Financial Instruments Directive (“MiFiD”) may be relaxed for bond trading in Europe. According to the article, MiFiD may be tweaked “to reduce disclosure around the price and size of bond orders, which would discourage trading especially when markets are moving fast.” The new standards under MiFiD II are still being finalized by the European Commission (“EC”), which “formally proposed a delay to MiFiD II’s implementation by a year to January 2018”. The standards go “beyond similar rules in the US by forcing certain over-the-counter quotes to be made public, as well as actual transactions.” The initial MiFiD proposal caused concern that “too much transparency could make it difficult to trade in a market already suffering from a lack of liquidity after banks have pulled back from market-making to reduce the amount of capital consumed by their trading arms.”

Christian Krohn, Managing Director at the Association for Financial Markets in Europe, said that “there is a lot of [discussion] going on to get a better result in the area of bond transparency generally, and there does seem to be some room for movement.” Last October, a number of members of European Parliament wrote to the EC “to raise a number of concerns with MiFiD II’s regulatory technical standards, including bond rules and commodity position limits.”


The first RMBS transaction to comply with both US and EU risk retention rules was recently closed by Virgin Money, according to an article in International Financial Law Review. The $1.3 billion RMBS was issued in US dollars, British pounds and euros and is fully compliant with the EU Capital Requirements Directive and Regulation S and Rule 144A in the US. The new risk retention rules, which require issuers to retain five percent interest in the securitized asset, came into effect for the mortgage industry in December 2015. For other asset classes, the compliance date is December 24, 2016.

If you would like to join SFIG’s Risk Retention Industry Guide Working Group, please contact Alyssa.Acevedo@sfindustry.org.


Last Thursday, February 11th, the US Court of Appeals for the District of Columbia Circuit ("DC Circuit") questioned how the credit risk of a Collateralized Loan Obligation (“CLO”) should be calculated during oral arguments for a request by the Loan Syndications and Trading Association (“LSTA”) to review the risk retention rules and their application to CLOs, according to a recent Reuters’ article.

The DC Circuit requested an explanation of how credit risk should be calculated, and asked technical questions about how a CLO works. The court also asked whether it has jurisdiction to decide the case and whether managers should be required to hold 5 percent of the investment fund comprising the CLO or 5 percent of the equity tranche.

In January 2014, SFIG, the Securities Industry and Financial Markets Association, and the LSTA submitted a comment letter to regulators encouraging a compromise to the 5 percent of the fund proposal with a so-called qualified CLO structure, where managers retain 5 percent of the equity.

The DC Circuit is still considering the question of jurisdiction and if they choose not to transfer the case, according to Reuters, they may release a decision around July.


On Monday, February 15th, the President of the European Central Bank (“ECB”), Mario Draghi, presented the ECB’s perspective on economic and monetary development at a European Parliament’s Economic and Monetary Affairs Committee hearing. During his remarks, Draghi stated that the ECB would now accept ABS backed by non-performing loans (“NPL”) as collateral from banks, provided that the ABS has a credit rating above a certain threshold, according to a recent Reuters' article.

During the hearing, the Italian Treasury raised the prospect that the ECB could buy ABS based on bad loans as part of its quantitative easing program, which Draghi dismissed.

We're not talking about buying anything; the question is whether the NPLs in a specific ABS format could be accepted as collateral. The ABS will have to have a minimum second-best rating of single A. Therefore, the inclusion of NPLs in the pool of underlying assets does not preclude these ABSs ... from collateral eligibility.


SFIG has a number of Committees and Task Forces meeting and working on many topics of interest to the securitization industry. Please email us for more information, including how to join.

SFIG is pleased to share this edition of its newsletter with our members, as well as our supporters in the structured finance community. To ensure that you receive future editions of the newsletter, please visit our website or email us to learn more about membership opportunities.

Contact Information

Richard Johns Executive Director

Kristi Leo Investor Relations

Sairah Burki Senior Director, ABS Policy

Michael Flood Director, Advocacy

Dan Goodwin Director, Mortgage Policy

Jennifer Wolfe ABS Policy Manager

Hua Liu Communications & Social Media Manager

Alyssa Acevedo Senior Analyst, ABS Policy

Amanda Bateman Senior Analyst, MBS Policy

Jennifer Serpas Office Manager

Sarah Clarke Events Coordinator

1775 Pennsylvania Ave. NW
Suite 625
Washington, DC 20006

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