September 30, 2015 Newsletter
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September 30, 2015

Industry Jobs

SFIG Calendar



Advocacy Outlook

Industry News Highlights


Today, September 30th, SFIG submitted comments to the U.S. Department of Treasury in response to its Request for Input on Online Marketplace Lending. In the letter, SFIG provides an overview of how marketplace lending functions, with a description of the different roles the loan originator, the aggregator and ABS investors play. SFIG's letter also highlights the role and impact of existing regulations and industry standards along the full marketplace lending chain.

The comment letter, with Chapman and Cutler LLP serving as drafting counsel, is the first advocacy material produced via SFIG’s new Marketplace Lending Committee. To join the committee and engage in advocacy in this growing area of the market, please contact


This week, SFIG members and staff are meeting with the offices of several Members of Congress to discuss the prudential regulators’ and U.S. Commodity Futures Trading Commission’s re-proposed rules for margin requirements for uncleared swaps entered into by covered swap entities. The re-proposed rules would require swap participants to post margin on uncleared swaps for fluctuations in swap market values. As currently drafted, the rules would apply to almost all special purpose vehicles, potentially impacting the financing activities of consumer lenders who extend credit in major asset classes, such as credit cards, auto loans and equipment leases.

To view SFIG’s responses to the proposed rule, please click here and here.

Contact to learn more about SFIG’s policy positions. Contact to learn more about SFIG’s Congressional outreach efforts.
Last Friday, September 25th, SFIG’s Auto Issuer Committee submitted a comment letter to the U.S. Securities and Exchange Commission (“SEC”) regarding EDGAR XML Technical Specifications for Auto Loan and Auto Lease ABS. The committee has been working to review and interpret the asset level data requirements and XML Specifications for auto loan and auto lease ABS with the view of a successful and consistent implementation of these requirements by the issuers before the November 2016 compliance date. The letter focused on a list of technical questions and requests for clarifications, guidance or changes to the XML Specifications.

If you would like to join SFIG’s Auto Issuer Committee, please contact

There are a very limited number of spaces remaining for SFIG’s upcoming DC Symposium: Marketplace Lending Panel Discussion on Tuesday, October 6th. Congressman David Schweikert (R-AZ) will provide the keynote speech, which will be followed by a panel discussion on Marketplace Lending. 

Panelists include:

  • Richard Johns, Executive Director, SFIG (moderator)
  • Andrew Hallowell, CEO, Arcadia Funds
  • Conor French, Director, Legal & Regulatory, Funding Circle
  • John Di Paolo, Principal, Structured Products, Prudential Fixed Income
  • Peter Manbeck, Partner, Chapman and Cutler LLP
  • Will Black, Managing Director - Structured Finance, Moody’s Investors Service

The full agenda can be found here.

TUESDAY, October 6, 2015
5:30 – 8:00 p.m. (ET)
Chapman and Cutler LLP
1717 Rhode Island Ave. NW
Washington, DC 20036

To register, please click here. Registration is open to SFIG members and non-member industry participants and will close this Friday, October 2nd at noon. The event is closed to the press. Due to security concerns, walk-ins cannot be accommodated. The symposium will be followed by a cocktail reception.


Space is filling up quickly for SFIG’s NYC Fall Symposium on Thursday, October 8thSairah Burki, Senior Director of ABS Policy at SFIG, will discuss the High Quality Securitization ("HQS") initiatives underway in Europe and at the Basel Committee on Banking Supervision and the International Organization of Securities Commissions. Ms. Burki will also provide an overview of discussions SFIG has had with U.S. regulators on HQS. Following the HQS briefing, there will be a panel discussion on Marketplace Lending moderated by Kristi Leo, Senior Advisor at SFIG.

Panelists include:

  • Kristi Leo, Senior Advisor, SFIG (moderator)
  • Adelina Grozdanova, Vice President, Head of Institutional Investors, Lending Club
  • Joshua Rand, COO and Principal, Petra Partners
  • T.J. Gordon, Partner, Sidley Austin LLP

The full agenda can be found here.

THURSDAY, October 8, 2015
5:00 – 8:00 p.m. (ET)
300 Madison Avenue
New York, NY 10017

To register, please click here. Registration is open to SFIG members and non-member industry participants. The event is closed to the press. Due to security concerns, walk-ins cannot be accommodated. The symposium will be followed by a cocktail reception.


SFIG currently has a position open for:

  1. Communications and Media Manager: will be an integral member of SFIG staff, providing support across the whole organization and serving as a vital link between SFIG, its membership and other external audiences. Additional information on the position, as well as a link to the application, is available here.

Some of the latest industry positions available include:

Attorney - Securitization   Ford Motor Credit Company 9-29-15
Consumer ABS Analysts   Kroll Bond Rating Agency, Inc. 8-19-15
Senior Vice President, RMBS Monitoring   Moody’s Corporation 8-18-15
Associate Analyst 1   Moody’s Corporation 7-29-15
Vice President, Senior Credit Officer (ABS Surveillance)   Moody’s Corporation 7-31-15
Associate Analyst 3   Moody’s Corporation 7-29-15
Associate Analyst 1   Moody’s Corporation 7-28-15
Capital Markets Associate   Cadwalader, Wickersham & Taft LLP 7-21-15
Director - Credit Process Management   Fitch Ratings 7-09-15
Associate Director / Director, Asset Backed Securities   Fitch Ratings 7-08-15

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

For questions about positions at SFIG, please contact For questions about the website jobs portal, please contact

  • THURSDAY, October 1, 2015
    10:00 a.m. – 11:00 a.m. (ET)
  • THURSDAY, October 7, 2015
    10:00 a.m. - 11:00 a.m. (ET)
MONDAY, October 5, 2015
2:00 p.m. - 3:00 p.m. (ET)
TUESDAY, October 6, 2015
10:00 a.m. - 11:00 a.m. (ET)
TUESDAY, October 6, 2015
11:00 a.m. – 12:00 p.m. (ET)
WEDNESDAY, October 7, 2015
9:00 a.m. – 10:00 a.m. (ET)

TUESDAY, October 6, 2015
5:30 – 8:00 p.m. (ET)
Chapman and Cutler LLP
1717 Rhode Island Avenue NW
Washington, DC 20036

Please click here to register. Registration will close at noon on October 2nd. The full agenda can be found here.

Please note, this event is closed to the press.


THURSDAY, October 8, 2015
5:00 – 8:00 p.m. (ET)
PricewaterhouseCoopers LLP
300 Madison Avenue
New York, NY 10017

Please click here to register. The full agenda can be found here.

Please note, this event is closed to the press and seating priority will be given to SFIG members.


WEDNESDAY, October 14, 2015 – THURSDAY, October 15, 2015

Workshop: Clifford Chance's Office, Hong Kong
Main Conference: Conrad Hong Kong, Grand Ballroom, Lower Lobby, Hong Kong

  • Sairah Burki will speak at the "Developments in the US/EU Securitization and Covered Bonds Markets” workshop
  • Richard Johns will be a discussion leader on the "Impact of European Regulation (AIFMD, CRD II/IV, CRA3) and US Regulation (Volker, Dodd-Frank and Commodity Pool Operator)" roundtable

More information on the conference can be found here.


THURSDAY, October 29, 2015
Marriott New York Downtown
New York, NY

Registration is available here. The agenda can be found here.


THURSDAY, November 12, 2015
Marriott New York Downtown
New York, NY

Registration is available here. The agenda can be found here.


SUNDAY, February 28, 2016 – WEDNESDAY, March 2, 2016
The Aria Resort & Casino
Las Vegas, NV
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 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. For its first initiative, the committee commented on the Treasury Department's Request for Input on Online Marketplace Lending. The comments were submitted on September 30th and drafted by counsel at Chapman and Cutler LLP.

Members interested in participating should contact

SFIG’s Student Loan Working Group is focusing on and responding to the Proposed Changes to Moody’s Approach to Rating Securities Backed by FFELP Student Loans. SFIG submitted an extension request on August 14th and Moody’s announced the deadline for comments has been extended to October 30th.  

To join SFIG’s Student Loan Working Group and learn more, please contact

The RMBS 3.0 Task Force released its Second Edition RMBS 3.0 Green Paper in November of 2014. The task force’s most recent work product will be presented at the November 12th SFIG/IMN Private Label RMBS Symposium. 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; 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 fall 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

The GSE Reform Task Force reviewed a draft response to the FHFA’s update to the single security initiative earlier this month. The task force also recently received an update from the SFIG participants on the Industry Advisory Group for the Common Securitization Platform and Single-Security. 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. Additionally, the task force will continue to engage the Federal Housing Finance Agency 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

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 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 to participate on the Task Force.

The Risk Retention Industry Guide Working Group is creating best practices and developing consensus positions around several areas within the Credit Risk Retention final rule.

Please contact 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

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

To register your interest in SFIG’s Shadow Banking Initiative, please contact

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

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

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

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 nbsp;comment letter in September 2013 on Money Market Fund Reform.

If you are interested in joining this working group, please contact

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


Today, September 30th, the European Commission (“EC”) officially published its securitization proposals developed as part of its Capital Markets Union Action Plan. The proposals include two pieces of legislation: a Securitization Regulation that creates a framework for simple, transparent and standardized (“STS”) securitizations; and an amendment to the Capital Requirements Regulation (“CRR”) that would allow for a more risk-sensitive capital treatment of securitizations.

The Securitization Regulation sets out the criteria by which transactions may qualify as STS. The EC states it sought to align this with existing criteria in the Liquidity Coverage Ratio (“LCR”) and the Solvency II delegated acts and that of the Basel Committee on Banking Supervision (“BCBS”) and International Organization of Securities Commissions, available here, and European Banking Authority (“EBA”), available here.

As previously reported by SFIG, the EC leaves the onus of ensuring compliance with originators and investors, with supervisory oversight. In addition to adopting new requirements for due diligence, risk retention and transparency, the EC proposal is the first to explicitly state that future actions will be taken to amend the LCR so it accounts for high quality securitizations (“HQS”).

The amendment to the CRR would recalibrate downward the hierarchy of approaches for calculating capital requirements and incorporates preferential treatment for STS securitizations. Among the key changes it proposes is establishing a risk weight floor of 10 percent for senior positions in STS securitizations (instead of 15 percent as required under the BCBS final capital framework) and cutting the supervisory parameter “p” factor in half. These changes are consistent with the recommendations laid out by the EBA in its report to the EC in July.

The legislation now goes to the European Parliament and European Council for review. In the meantime, SFIG will determine an appropriate response to this development via its HQS Task Force. To join the task force and learn more, please contact


During a recent speech, U.S. Commodity Futures Trading Commission Chairman Timothy Massad commented on the state of the derivatives marketplace. Part of his speech focused on the forthcoming margin for uncleared swaps rule:

This rule plays a key role in the new regulatory framework. We recognize that there will always be a large part of the swaps market that is not centrally cleared. There will always be some products that are not suitable for clearing mandates because of liquidity concerns or other risk characteristics. And clearinghouses will be stronger if we exercise care in what is centrally cleared.

That’s why margin for uncleared swaps is critical. Our proposed rule requires swap dealers to post and collect margin on uncleared swaps with one another – and with certain financial counterparties.

This helps reduce the risk of those trades, and thus reduce the risk to our financial system as a whole. I would also note that our proposed rule exempts commercial end-users from these requirements.

We have been working closely with the banking regulators, who are also responsible for developing rules on margin for uncleared swaps. Our goal is to ensure that our respective rules are similar.

In addition, we have been working with European and Japanese regulators, who are currently considering margin rules, to harmonize as much as possible. I expect our final rule will use the same overall threshold for defining material swaps exposure, and follow the same implementation schedule as Japan and Europe. We are also continuing to work with them on matters such as requirements for margin models, lists of eligible collateral, and collateral haircuts. I expect our final rule to come out before the end of the year.


China’s securitization market has taken off with ABS issuance rising by a quarter in the first eight months of 2015, according to a recent Wall Street Journal article. New data from Dealogic shows that ABS issuance in China rose to $26.3 billion from $20.8 billion in the same period last year. China is now the largest securitization market in Asia, outpacing the other more developed markets throughout the region.

As previously reported by SFIG, China has been increasing its efforts to expand securitization to lower financing costs for companies and increase investment opportunities. Earlier this summer, Chinese regulators began allowing local provincial bank regulators to approve Chinese commercial banks’ new issuance. The central bank and the banking regulators are also aiming to speed up the process by allowing select issuers to sell ABS freely after registering with regulators. Previously, each issuer had to be approved on a deal-by-deal basis.


According to a recent article in the Wall Street Journal, federal programs that allow borrowers to scale back their student loan repayments are creating turmoil in the bond market and may lead banks to reduce lending. The programs are meant to address the fact that millions of Americans are falling behind on loan repayments, but as a result investors are shying away from purchasing new bonds backed by the debt due to fears they may not be repaid in time, leaving banks with less capital to make new loans.

As noted in the Wall Street Journal, Moody’s Investor Services and Fitch Ratings warn that more than $36 billion of these bonds could end up in default as borrowers likely will not repay their loans on time; they have therefore put the market on watch for a possible downgrade. While the capital markets struggle to deal with the uncertainty brought on by federal repayment programs, the Education Department is standing by them, stating that the programs help reduce the rate of short-term delinquencies.

The long-term cost may be greater however. According to the article, “[s]ome analysts say this part of the securitization market could stay frozen until Moody’s finishes its review, possibly having ripple effects into the ability of banks to increase new loan originations to students and other consumers.”

SFIG’s Student Loan Committee is responding to the Proposed Changes to Moody’s Approach to Rating Securities Backed by FFELP Student Loans. Please contact if you would like to join.


Last Thursday, September 24th, Federal Reserve (“Fed”) Chairwoman Janet Yellen announced that an interest rate increase is still expected this year. The speech was Yellen's first since the Fed’s recent decision to delay a much-anticipated rate "lift-off." “It will likely be appropriate to raise the target range of the federal-funds rate sometime later this year and to continue boosting short-term rates at a gradual pace thereafter as the labor market improves further and inflation moves back to our 2 percent objective,” Ms. Yellen said.

Ms. Yellen also stated that the Fed “do[es] not currently anticipate that the effects of these recent [global economic and financial market] developments on the U.S. economy will prove to be large enough to have a significant effect on the path for policy” and that inflation is expected to “gradually return to 2 percent over the next two or three years.”


Industry experts have recently commented that the expected interest rate hike in the U.S. will be positive for the CMBS industry and will encourage investors and lenders to slow down, resulting in transactions that are more prudent.

Huxley Somerville, Managing Director, and Head of the CMBS Group at Fitch Ratings explained, “A rise will be a good thing for CMBS if it encourages people to pause for a moment. Commercial real estate and CMBS are currently, on a relative basis, high yielding assets. If other options open up because of rising interest rates, it will take some of the heat out of the commercial real estate market.”

Somerville also commented on the quality of underwriting and believes that some lenders and borrowers are making aggressive assumptions on net operating income and building occupancy. “Increasingly we are seeing aggressive assumptions on the income side; low vacancy expectations, credit for letters of intent to sign a lease rather than an actual lease, denial of negatives around options to vacate and a willingness to accept current market rents will last forever at this stage in the cycle,” he said.


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

Mary Robinson Policy Manager

Alyssa Acevedo Senior Analyst, ABS Policy

Amanda Bateman Policy Analyst

Daniel Tees Policy Analyst

Jennifer Serpas Office Manager

Allison Creswell Events Coordinator

Sarah Clarke Executive Administration

1775 Pennsylvania Ave. NW
Suite 625
Washington, DC 20006

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