On July 8, Comptroller of the Currency John Dugan informed President Obama that he plans to leave office on August 14, which is essentially the end of his five year term. OCC Release. Letter to President Obama.
Month: July 2010
Comments to FDIC Securitization Safe Harbor NPR
The comment period for the FDIC’s proposed rule with respect to the securitization safe harbor ended on July 1. Twenty comment letters were received. Comment Letters.
FHFA Proposed Rule on Fannie, Freddie and FHLB Conservatorship
On July 6, the FHFA announced a proposed rule to codify the terms of conservatorship and receivership operations for Fannie Mae, Freddie Mac, and the Federal Home Loan Banks, pursuant to the Housing and Economic Recovery Act of 2008. Comments to the proposed rule may be submitted no later than 60 days after date of publication in the Federal Register. Release. Proposed Rule.
European Parliament Approves Stricter Rules on Bankers’ Bonuses and Capital Requirements
On July 7, the European Parliament approved stricter rules on bankers’ bonuses and capital requirements. The adopted resolutions call for, among other things: (i) capping upfront cash bonuses at 30% of the total bonus and at 20% for particularly large bonuses, (ii) deferring between 40% and 60% of any bonus for at least three years, and (iii) awarding at least 50% of the total bonus in non-cash instruments. The more stringent capital requirements are expected to result in banks having to hold three to four times more capital against their trading risk than at present, and will tighten capital reserve requirements for resecuritizations. The EU Council of Ministers is set to formally approve the resolutions next week. The rules on bonus provisions will take effect in January 2011 and the rules on capital requirements will take effect by the end of 2011. Release. Resolution.
Rating Agency Developments
On June 29, Fitch announced that it will begin reviewing ratings on U.S. FFELP student loan ABS based on its updated surveillance criteria which incorporates a more refined approach to basis risk. Release.
On July 2, Fitch released a report detailing its rating criteria for asset managers on a national scale. Fitch’s National Asset Manager Rating scale provides investors with a relative measure of an asset management organization’s vulnerability to operational and investment management failures relative to other managers in the same country. Release.
On June 25 and 30, Moody’s released comprehensive reports outlining its current approach to rating CMBS and RMBS transactions in Japan. CMBS Release. RMBS Release.
Note: Free registration is required for Fitch and Moody’s releases and reports.
ISDA Publishes Best Practices for OTC Derivatives Collateral Process
On June 30, ISDA published Best Practices for the OTC Derivatives Collateral Process. The Best Practices focuses on OTC derivative trades collateralized on a bi-lateral basis under the ISDA English and New York law Credit Support Annexes and English Law Credit Support Deed agreed between two parties. Release.
SEC Adopts Measures Curtailing Pay to Play Practices by Investment Advisers
On June 30, the SEC approved new rules to restrict the “pay to play” practices by investment advisers in an effort to allow advisers of all sizes to compete for government contracts. The new rules become effective 60 days after publication in the Federal Register, and compliance generally will be required within six months of the rules’ effective date. Release.
New York Fed to Begin Agency MBS Coupon Swaps
On June 28, the New York Fed announced that, on or around June 29, it will begin conducting a limited amount of agency MBS coupon swap operations to facilitate the timely settlement of the Fed’s agency MBS purchases. The New York Fed plans to swap unsettled Fannie Mae 30-year 5.5% coupon securities for other agency MBS that are more readily available for settlement. Statement by NY Fed. Fed MBS Purchase Program FAQs.
Treasury and HUD Release Servicer Certification Guidance
On June 29, Treasury and HUD released Supplemental Directive 10-06: Guidance on Annual Servicer Certification Required by the “Servicer Participation Agreement” to provide additional guidance regarding the certification requirements and due dates for non-GSE servicers who have executed a Commitment to Purchase Financial Instrument and Servicer Participation Agreement under HAMP. Release. Supplemental Directive.
House-Senate Committee Passes Financial Regulatory Reform Legislation
On June 29, the House-Senate conference committee approved the Dodd-Frank Wall Street Reform and Consumer Protection Act Conference Report reconciling the House and Senate versions of financial regulatory reform legislation. The House and Senate will need to pass the bill in matching form before it can be presented to the President. Conference Report.