July 15, 2015 Newsletter
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July 15, 2015

SFIG Calendar

Advocacy Outlook

Industry News Highlights

Upcoming Events in Washington


SFIG & IMN are excited to announce that ABS Vegas 2016 will take place February 28 - March 2, 2016, at the Aria Resort & Casino in Las Vegas. Following the success of the 2015 program, which featured over 6,000 registrants and more than 150 sponsors, we look forward to providing the securitization market with the industry's largest gathering in 2016.

SPONSORSHIP OPPORTUNITIES NOW AVAILABLE! SFIG members will receive special discounted rates off registration and sponsorship. For sponsorship information, please contact Christopher Keeping at (212) 901-0533 or ckeeping@imn.org.

The ABS Vegas 2016 three-and-a-half day program is developed by leaders within the structured finance industry representing the full spectrum of industry participants including investors, issuers, financial intermediaries, regulators, law firms, accounting firms, technology firms, rating agencies, servicers and trustees.

SFIG and IMN will work together to ensure all stakeholders’ interests are fairly and equally represented at the event. Topics to be covered range from the more traditional ABS asset classes including autos, credit cards, mortgage and student loans, to the more esoteric and high growth sectors such as CLOs, Chinese securitization, market-place lending and solar.

Click here to register today!


On Monday, July 13th, SFIG’s Executive Director, Richard Johns, along with SFIG members Keith Bickel of Bank of America, Raghu Kakumanu of Wells Fargo and Faith Schwartz of CoreLogic, participated in the first meeting of Fannie Mae, Freddie Mac (“GSEs”) and Common Securitization Solution’s (“CSS”) newly created Industry Advisory Group (“IAG”). The purpose of the IAG is to provide feedback and share information on efforts to build the Common Securitization Platform (“CSP”) and implement the Single Security. SFIG was selected to participate given its membership’s experience in both the GSE and private-label securitization marketplace.

To view SFIG’s statement on the creation of the IAG, please click here. To view the CSS press release, please click here. For questions regarding SFIG’s participation in the Industry Advisory Group, please contact Michael.Flood@sfindustry.org.


Given the large response to SFIG’s announcement of WiS Week Regional Roundtables, we have added the following dates:

New York City

  • August 17th
  • August 20th

Look for additional information on times and locations in the coming weeks, along with a link to register for the Regional Roundtable events.

If you are not yet part of this exciting initiative, register for Women in Securitization today! For questions or additional information, please email WiS@sfindustry.org.

  • THURSDAY, July 16, 2015
    10:00 a.m. – 11:00 a.m. (ET)
  • THURSDAY, July 23, 2015
    10:00 a.m. – 11:00 a.m. (ET)
TUESDAY, July 21, 2015
11:00 a.m. – 12:00 p.m. (ET)
WEDNESDAY, July 22, 2015
2:00 p.m. – 3:00 p.m. (ET)
THURSDAY, July 23, 2015
2:00 p.m. – 3:00 p.m. (ET)
WEDNESDAY, September 16, 2015 – FRIDAY, September 18, 2015
The Fontainebleau
Miami Beach, FL
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.

The RMBS 3.0 Task Force released its Second Edition RMBS 3.0 Green Paper in November of 2014. Following the successful SFIG/IMN Private Label RMBS Symposium, the task force will continue 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; and (3) Role of Transaction Parties and Bondholder Communications. Presently, the task force is working on (1) developing a comprehensive compilation of representations and warranties for release in the spring of 2015 and (2) a grid summarizing roles of transaction parties. We encourage members to participate in any or all of the working groups to contribute towards the mission of RMBS 3.0.

For additional information on RMBS 3.0, or to join the task force, please contact Mary.Robinson@sfindustry.org.

The GSE Reform Task Force is reviewing the FHFA’s update to the single security initiative and preparing a response to the agency. 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 including the Johnson-Crapo bill and the PATH Act. SFIG staff previously summarized members’ recommendations on the former in a briefing book, and plan to produce a similar book on the latter in the upcoming months. Additionally, the task force has been actively engaging the Federal Housing Finance Agency on several fronts, with comments submitted on its single security proposal, guarantee fee pricing and Strategic Plan for 2015-2019.

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 of 2014. SFIG also continues to have weekly Mortgage Industry Standards Maintenance Organization calls to go through data elements that lenders should deliver in securitizations. We 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 Alyssa.Acevedo@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 Amanda.Bateman@sfindustry.org to participate on the Task Force.

The Risk Retention Industry Guide Work Stream is 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.

SFIG’s Shadow Banking Task Force has established the following agenda:

  • Leverage the predictive powers of the G20’s shadow banking initiative to determine future SFIG advocacy initiatives
  • Assess the level of regulation to which our members are already subject
  • Measure the full impact of those regulations on lending decisions and business models
  • Provide input into IOSCO, BCBS and IAIS on the revitalization of securitization markets

The task force will have its first full meeting in the coming weeks, and members from across asset classes are encouraged to participate.

To register your interest in SFIG’s Shadow Banking Initiative, please contact Amanda.Bateman@sfindustry.org.

The Regulation AB II Task Force will focus on the disclosure and offering process requirements within the final rule. Two work streams have been formed to develop a comment letter on the proposed rules that remain outstanding and to produce an industry guide for critical elements of the final rule.

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 is 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.

SFIG members who are interested in learning more about this initiative should email Amanda.Bateman@sfindustry.org.

The Money Market Fund Reform Working Group submitted a comment letter on October 13, 2014 regarding the Securities and Exchange Commission’s July 23, 2014 proposal which includes, among other things, possibly amending rule 2a-7’s issuer diversification provisions to eliminate an exclusion that is currently available for securities subject to a guarantee issued by a non-controlled person. SFIG also submitted a comment letter in September 2013 on Money Market Fund Reform.

If you are interested in joining this working group, please contact Alyssa.Acevedo@sfindustry.org.

The High Quality Securitization ("HQS”) Task Force 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 Amanda.Bateman@sfindustry.org.


In a powerfully worded editorial published by Reuters on Sunday, July 12th, two senior financial market regulators attributed the drop in market liquidity to excessive overregulation, stating “t is an unavoidable fact that one of the greatest potential risks to the financial markets is the work of regulators themselves.” Describing the aftermath of the global financial crisis, Commissioner Michael S. Piwowar of the Securities and Exchange Commission (“SEC”) and Commissioner J. Christopher Giancarlo of the Commodity Futures Trading Commission (“CFTC”) argued that the real risks to financial stability continue to persist unchecked because “the two massive government sponsored enterprises that fueled the housing bubble, contributed to the crisis, and received the largest taxpayer funded bailouts, have been conveniently ignored.”

According to the editorial, as a result of prudential regulation, “federal banking policies such as Basel III capital requirements, the Volcker Rule’s ban on trading, flawed derivatives trading rules, and edicts from global shadow regulators like the Financial Stability Board are placing the entire economy at risk by draining much needed liquidity from our markets.” The commissioners predicted that due to diminished liquidity seen in markets today, “the next time our financial markets experience a sharp stress or shock, the cumulative effect of new banking regulation will likely be dramatic price fluctuations and the loss of trading liquidity that will be essential to the viability of many Main Street businesses.” Piwowar and Giancarlo concluded by stating that “less meddling from our banking counterparts, not more” is the only way to ensure the safety and efficiency of U.S. financial markets.


Last Thursday, July 9th, House Financial Services Committee Chairman Jeb Hensarling (R-TX), announced that he is organizing a series of three hearings to consider whether the Dodd-Frank Act has made the nation more stable, prosperous and free, according to a recent Market News International article.

Hensarling “believe[s] it remains an open question whether we have achieved greater stability..” and stated during opening remarks at a hearing last week that “Dodd-Frank’s Volcker Rule along with the Basel Accords caused a massive drop in corporate bond inventories. Many economists now believe the next financial crisis could very well result from the illiquidity and volatility in our bond market.”

Conversely, Treasury Secretary Jack Lew recently stated that Dodd-Frank has accomplished a great deal, and that continued efforts are needed to fund its reforms and ensure they are implemented.


As covered in an earlier newsletter, the European Commission is currently working on several proposals, including a plan to revive the EU securitization market for a capital markets union (“CMU”) that aims to create deeper and more integrated capital markets. According to an article in The Economic Times, a key element of the CMU will be to explore ways of diversifying financing sources in an economy where companies still mainly use banks for borrowing money. One of the central proposals of CMU will be to revive the market for securitized debt.

Commission Vice President Valdis Dombrovskis said, “We hope we can make substantial progress on securitization, ideally with a general approach by the end of the year.” The European Commission will be aim to propose a draft law in late September and if approved by the EU states and the European Parliament, the law would be directly binding on member countries. The article stated that, “the European Commission has said securitization of loans to small and medium sized firms was still half pre-crisis levels and could generate €20 ($23) billion of additional funding.”


Today, July 15th, Chair Janet Yellen presented the Federal Reserve’s ("FRB") semiannual Monetary Policy Report to the Committee on Financial Services. Since the previous Monetary Policy Report in February, the FRB states that, “[c]apital and liquidity positions at the largest banking firms have remained strong, maturity transformation outside the banking system has continued to trend lower, and debt growth by the household sector has been modest,” and that, “…liquidity conditions in the agency MBS market were generally stable.”

The report also states that the FRB's proposed amendment (proposed inclusion of municipal securities as high quality liquid assets) to the liquidity coverage ratio rule “…would maintain the strong liquidity standards of the liquidity coverage ratio rule while providing banking organizations with the flexibility to hold a wider range of instruments that would qualify as high-quality liquid assets.”


While U.S. CMBS bonds produced some of 2014’s strongest returns, concerns over underwriting standards and increased sensitivity to potential rate increases have contributed to poorer performance of CMBS securities in 2015. According to JPMorgan Chase & Co. data cited in a Bloomberg Business article, CMBS bond returns slipped 1.84 percent in June. The most recent deals are among the worst performing, due to weaker credit outlooks, modest price appreciation, and investor concern over long-term performance and underwriting standards. The rate sensitivity of the shorter 10-year terms have also factored in to performance on the bonds. However, some analysts note that widening spreads may make CMBS deals more attractive.

THURSDAY, July 16, 2015
9:30 a.m. – 3:30 p.m. (ET)
Multipurpose Room, SEC Headquarters, 100 F Street, NE, Washington, DC
THURSDAY, July 16, 2015
2:30 p.m. – 4:30 p.m. (ET)
538 Dirksen Senate Office Building

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 Director of ABS Policy

Michael Flood Director of Advocacy

Mary Robinson Policy Manager

Alyssa Acevedo Policy Analyst

Amanda Bateman Policy Analyst

Daniel Tees Policy Analyst

Jennifer Serpas Office Manager

Allison Creswell Executive Administration

1775 Pennsylvania Ave. NW
Suite 625
Washington, DC 20006

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