May 4, 2016 Newsletter
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May 4, 2016
 
 
SFIG News

Industry Jobs

SFIG Calendar

Meetings

Events

Advocacy Outlook

Industry News Highlights

 
SFIG NEWS
ADDITIONAL DATES ANNOUNCED FOR BLOCKCHAIN SYMPOSIA SERIES!

As a follow-up from our announcement last week, SFIG is pleased to confirm three additional dates focused on education, and associated policy or operational initiatives, pertaining to the use of blockchain technology in the structured finance space. This symposia series is being developed in conjunction with the launch of SFIG’s Blockchain taskforce.

Events will be held as follows:

Tuesday, May 24th – D.C.
Registration available here.

Tuesday, June 7th – New York
Registration forthcoming.

Tuesday, October 4th – New York
Registration forthcoming.

Thursday, October 6th – D.C.
Registration forthcoming.

If you would like to be included in the newly created Blockchain task force, please email Alyssa.Acevedo@sfindustry.org.

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FEW SPOTS REMAIN FOR WiS EVENT IN WASHINGTON D.C.

SFIG’s Women in Securitization (“WiS”) is excited to welcome attendees for a panel discussion on women at the intersection of finance and policy. The following prominent Washington women will be featured on the panel:

  • Tara Foscato, Senior Vice President, Director of Federal Government Affairs at PNC
  • Courtney Geduldig, Executive Vice President, Public Affairs at S&P Global
  • Adrienne Harris, Special Assistant to the President for Economic Policy, National Economic Council at The White House
  • Jessica Milano, Deputy Assistant Secretary, Office of Small Business, Community Development & Housing at the U.S. Department of the Treasury
  • Kirsten Mork, Deputy Staff Director, House Committee on Financial Services 

Moderated by: Faith Schwartz, Senior Vice President, Government and Public Affairs at CoreLogic

The panel will include a Q&A session, during which the audience may pose questions related to the topics discussed.

The event will conclude with an indoor/outdoor cocktail reception hosted by Morgan Lewis & Bockius LLP.

Registration available here.

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SFIG ANNOUNCES TORONTO WiS EVENT IN CONCERT WITH OUR STRUCTURED FINANCE CANADA CONFERENCE

SFIG invites you to attend a Women in Securitization (“WiS”) event on the afternoon of May 31st in Toronto, ON. This event will feature a panel discussion with senior leaders in securitization to address how the industry can better retain and promote women. This will be an interactive session - come prepared with questions!  Men and women are encouraged to participate.

This event is graciously hosted by McCarthy Tétrault LLP.

Registration available here.

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SFIG INVITES YOU TO SUPPORT OR JOIN OUR STAFF IN OUR CHARITY WALK IN MEMORY OF REGGIE IMAMURA

Big THANK YOU to all who have supported and donated to SFIG’s Team Reggie in D.C.’s PurpleStride event, where we #WageHope against pancreatic cancer and help raise awareness and funds that advance research and support patients and loved ones with a promise of a better tomorrow.

Please sign up to be part of our team, come and cheer us on in D.C. on June 11th, or simply make a donation by visiting the Team Reggie link on the Pancreatic Cancer Action Network website here.

There are still 38 days left to give and help us to hit the goal of $10,000!

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INDUSTRY JOBS

SFIG Positions

With SFIG continuing to expand its reach across new conferences and additional policy challenges, we are looking for additional talent.

If you are smart, enthusiastic, hard-working, and want to be part of a growing organization in a fun and supportive environment, please contact us at jobs@sfindustry.org or visit our website at www.sfindustry.org/jobs.

Opportunities exist for a variety of experience sets, ranging from Data/Policy Analysts to Director of Advocacy. We look forward to hearing from you! 


Industry Positions

Some of the latest industry positions available include:

JOB TITLE COMPANY POSTING DATE
Principal - Structured Product Group (RMBS) PGIM 05-04-2016
Director/Senior Director - Data and Operations Leader Fitch Ratings 05-03-2016
Director/Senior Director - Research and Criteria Leader Fitch Ratings 05-03-2016
Director/Senior Director - Asset Manager Leader Fitch Ratings 05-03-2016
Enterprise Sales T-REX 03-04-2016
Associate Director/Director - Structured Finance - Model Management Fitch Ratings 02-29-2016
Research Analyst PeerIQ 02-25-2016
Credit Quant PeerIQ 02-22-2016
Mid-Level Corporate Trust Associate K&L Gates LLP 02-22-2016
Senior Analyst, Consumer ABS Kroll Bond Rating Agency 02-04-2016
Analyst, Financial Institutions Kroll Bond Rating Agency 02-03-2016

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.

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SFIG CALENDAR
MEETINGS
WEEKLY CREDIT CARD ISSUER COMMITTEE CALLS
  • THURSDAY, May 5, 2016
    10:00 a.m. – 11:00 a.m. (ET)
  • THURSDAY, May 12, 2016
    10:00 a.m. – 11:00 a.m. (ET)
 
 
REGULATORY CAPITAL & LIQUIDITY COMMITTEE CALL

THURSDAY, May 5, 2016
4:00 p.m. – 5:00 p.m. (ET)

 
 
MARKETPLACE LENDING COMMITTEE CALL

FRIDAY, May 6, 2015
11:00 a.m. – 12:00 p.m. (ET)

 
 
MASTER SERVICER AND SERVICER SUBCOMMITTEE WEEKLY CALL

MONDAY, May 9, 2016
1:00 p.m. – 2:00 p.m. (ET)

 
 
MONTHLY RESIDENTIAL MORTGAGE ISSUER SUBCOMMITTEE CALL

MONDAY, May 9, 2016
2:00 p.m. – 3:00 p.m. (ET)

 
 
STUDENT LOAN ISSUER COMMITTEE CALL

TUESDAY, May 10, 2016
1:00 p.m. – 2:00 p.m. (ET)

 
 
MONTHLY CHINESE MARKET COMMITTEE CALL

WEDNESDAY, May 11, 2016
9:00 a.m. – 10:00 a.m. (ET)

 
 
BIWEEKLY AUTO ISSUER COMMITTEE CALL

WEDNESDAY, May 11, 2015
2:00 p.m. – 3:00 p.m. (ET)

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EVENTS
SFIG WiS EVENT: WOMEN AT THE INTERSECTION OF FINANCE AND POLICY

THURSDAY, May 12, 2016
Morgan, Lewis & Bockius LLP
1111 Pennsylvania Ave NW
Washington, DC
Registration available here.

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IMN’s INVESTORS CONFERENCE ON CLOs AND LEVERAGED LOANS

MONDAY, May 16, 2016 – TUESDAY, May 17, 2016
Grand Hyatt New York
New York, NY
Registration available here.

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SFIG D.C. SYMPOSIUM ON BLOCKCHAIN TECHNOLOGY

TUESDAY, May 24, 2016
Dentons
1900 K Street NW
Washington DC 20006
Registration available here.

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SFIG WiS EVENT IN TORONTO

TUESDAY, May 31, 2016
McCarthy Tétrault LLP
TD Bank Tower, 53rd floor
66 Wellington Street West
Toronto, Ontario M5K 1E6
Registration available here.

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SFIG & IMN's STRUCTURED FINANCE CANADA 2016

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

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IMN’s GLOBAL ABS 2016 CONFERENCE

TUESDAY, June 14, 2015 – THURSDAY, June 16, 2016
The Barcelona International Convention Centre
Barcelona, Spain
Registration available here.

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ADVOCACY OUTLOOK

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 recently launched its “Best Practices” initiative to establish industry consensus and provide recommendations around one or multiple accepted approaches. The five established Best Practices work streams are 1) Data & Reporting 2) Representations & Warranties 3) Regulatory 4) Operational Considerations and 5) Enforcement.

The committee previously commented on the Treasury Department's Request for Input on Online Marketplace Lending on September 30th.

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 recently completed their White Paper, A Comprehensive Guide to U.S. Securitization, for Chinese regulators and the Chinese Securitization Forum to educate them on the U.S. securitization landscape. The committee also continues to hold discussions with a focus on SFIG’s partnership with the CSF, 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 will be developing a comment letter to the U.S. proposed net stable funding ratio (“NSFR”) requirements. The committee also recently submitted a response to Basel’s Consultative Document regarding Capital Treatment for STC Securitisations and will be addressing industry concerns related to the Federal Reserve Board’s Final Rule on the Liquidity Coverage Ratio (“LCR”). SFIG recently testified before Congress, focusing on global regulatory issues, including LCR, that affect lending across all asset classes.

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. SFIG recently testified before Congress, focusing on global regulatory issues, including HQS, that affect lending across all asset classes.

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

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INDUSTRY NEWS HIGHLIGHTS
SEC ANNOUNCES PILOT PROGRAM FOR ISSUERS TO RECEIVE FEEDBACK ON TEST ABS FILINGS REQUIRING ASSET-LEVEL DATA

Last Friday, April 29th, the U.S. Securities and Exchange Commission (“SEC”) announced an opportunity for issuers to receive feedback on test filings in preparation for ABS offerings that require asset-level data. Beginning on May 1st, issuers may request that SEC staff provide feedback on a test filing for compliance with the new rules, prior to the compliance date of November 23, 2016.

According to the SEC, this pilot program is intended to facilitate compliance with the asset-level rules in advance of the compliance date and will not be made available for public viewing.

Test filings received by July 15, 2016 will be eligible for staff feedback. 

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DELAWARE GOVERNOR WARNS OF “REGULATING AWAY THE BENEFITS” OF BLOCKCHAIN

According to an article in American Banker, Delaware Governor Jack Markell told audiences at a recent conference that his state will aim to avoid doling out prescriptive regulations when it comes to supervising blockchain companies and will instead be mindful of how the fledgling industry actually works. While regulators may be tempted to “get in early,” Governor Markell warns that such pre-emptive action risks “regulating away the benefits” of emerging technologies like blockchain. According to Markell, the state's legal community wants to enable the authorization of distributed ledger shares by Delaware corporations through smart contracts. As the Governor explained, "Smart contracts offer a powerful and innovative way to streamline cumbersome back-office procedures, lower transactional costs for consumers and businesses, and manage and reduce risk."

While Governor Markell urged caution over regulating blockchain, some speakers at the conference suggested that banks, exchanges, settlement firms and government bodies should work together to set standards for the industry. The Wall Street Journal reports Frederik Voss, vice president of blockchain innovation at Nasdaq as saying, “Regulators need to help us. There needs to be legal certainty.” Rob Palatnick, chief architect at Depository Trust & Clearing Corporation echoed this sentiment. “When it comes to people putting real money into [the systems] in retirement accounts, 401(k) accounts, insurance policies – there has to be somebody watching,” he told conference attendees.

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CFPB MAY PLAN TO SUPERVISE MARKETPLACE LENDERS

According to a recent Wall Street Journal article, the Consumer Financial Protection Bureau (“CFPB”) is planning to bring the largest online lenders under its supervision as soon as late 2017.

The CFPB is expected to release a proposal this fall to supervise the largest online lenders that offer small-dollar loans with set payment periods and lenders who tie such loans to car titles. According to the article, the agency is also now considering broadening its definition of “installment” lending to include marketplace lenders.

Former CFPB Deputy Enforcement Director, Lucy Morris, said the agency is using the rules on the biggest market participants “to really expand its supervisory authority, including over emerging lenders, and the statute allows for that.” Richard Horn, a former CFPB Senior Counsel and Special Adviser, also said that the agency’s decision to start taking consumer marketplace lending complaints last month is “a very strong signal that they’re planning to take action in the marketplace lending industry.”

The Wall Street Journal reported that the timing of the proposal is widely expected to slip a few months or into next year, meaning a rule likely wouldn’t be completed until late 2017 at the earliest.

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CMBS LOANS FOR MULTIFAMILY PROPERTIES ARE STARTING TO MAKING A COMEBACK

After a rocky start to the year, lenders are starting to originate a number of CMBS loans, according to an article in National Real Estate Investor. According to the article, shock waves rolled through the financial markets early this year as investors worried about negative economic news from Europe and China, while stock markets fell sharply. So far, CMBS issuance is down 41 percent from this time in 2015. 

CMBS loans are often important for multifamily borrowers who require smaller loans or financing for Class-B or Class-C apartment properties. As the markets have calmed, borrowers are now able to get a CMBS loan that covers 70 percent of the value of an apartment property, with an interest-only period of three years or less at an interest rate of 275 to 300 basis points over swaps. This rate is slightly higher than those offered by the government-sponsored enterprises in their multifamily programs. However, while interest rates for CMBS loans are almost as low as offers in the fall of 2015, lenders are still cautious, offering smaller loans relative to the size of the property. 

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FEDERAL RESERVE JOINS FDIC AND OCC IN PROPOSING NSFR REQUIREMENTS

Yesterday, May 3rd, the Federal Reserve announced the proposal of the Net Stable Funding Ratio (“NSFR”) requirements. This follows the Federal Deposit Insurance Corporation (“FDIC”) and Office of the Comptroller of the Currency’s (“OCC”) release of the proposal last week.

Federal Reserve Chair, Janet Yellen, stated, “By requiring our largest institutions to maintain an amount of stable funding that is appropriate given the liquidity of their assets, the NSFR would strengthen the financial system, making it more resilient to market stress.”

SFIG’s Regulatory Capital & Liquidity Committee will be commenting on the proposed NSFR requirements. If you would like to join this committee, please contact Alyssa.Acevedo@sfindustry.org.

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EUROPE’S SECURITIZATION SALES LOWEST IN FIVE YEARS

Europe’s securitization market has experienced its worst quarter in nearly five years for new sales, according to a recent Financial Times article. During the first three months of this year, €14.3 ($16.4) billion of securitizations were sold, marking the lowest quarterly level since mid-2011 despite recent efforts by the European Central Bank to revive the sector.

According to the Financial Times, market participants have pointed to stringent regulation on the sector, in particular the capital charges against structured products for banks and insurance companies, as a central factor in its decline.

“The rulemakers work on a different time horizon than the markets,” said Alexander Batchvarov, Head of International Structured Credit Research at Bank of America Merrill Lynch. “We’re getting into a negative spiral,” he added. “There is a collapse in secondary liquidity, a collapse in inventory, more and more structurers exiting the market. Who is going to do anything?”

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SOLAR ABS SECTOR SEES TWO NEW DEAL STRUCTURES

In the past week, two new types of solar ABS deals have priced globally – one in the U.S. and the other in Australia – demonstrating the continued growth and interest in this asset class by market participants.

Yesterday, SolarCity announced their first deal with a new structure, a “’cash equity’ investment that monetizes the revenue stream from a portfolio of solar leases.” The $227 million deal was reported in Bloomberg Tuesday, and will be done with Manulife Financial Corp.’s John Hancock Financial unit. While leasing is a significant source of growth for the company, it hasn’t translated into increased cash flow for SolarCity. This deal “lets SolarCity monetize leases, getting cash now to fund its operations.” Radford Small, SolarCity’s executive vice president of global capital markets said this transaction is “a further diversification of our financing sources,” and that it represents “an alternative to ABS, it doesn’t replace it.”

In Australia, another first-time deal backed by solar assets was issued by finance group FlexiGroup. As reported in CleanTechnica.com, the deal is a “landmark issue of green Asset Backed Securities, a type of bond, raising $50 million to refinance residential rooftop solar systems in the first issue of their type in Australia.” What’s encouraging about this development is the pricing execution of the deal, which priced “five basis points better than a non-green certified component” which was part of same $260 million financing.

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SFIG COMMITTEES AND TASK FORCES

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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