SEC Publishes Order with MBA-Supported Covered Agency Transactions Provisions
The Securities and Exchange Commission yesterday published an Order with Mortgage Bankers Association-supported provisions regarding margining requirements for covered agency transactions.
The Order (https://www.federalregister.gov/articles/2016/06/21/2016-14561/self-regulatory-organizations-financial-industry-regulatory-authority-inc-notice-of-filing-of), SEC Rule 4210, accelerates margining requirements for covered agency transactions proposed by the Financial Industry Regulatory Authority, also known as FINRA.
Key provisions of the Order:
–Further clarifies that a broker-dealer is not required to apply margin requirements on specified multifamily agency transactions;
–Provides a process for expanding the exception for substantially similar transactions; and
–Increases an exception for open positions in covered agency transactions from $2.5 million in the aggregate to $10 million.
MBA President and CEO David Stevens, CMB, said the Order’s favorable provisions from a multifamily securitization standpoint are the culmination of a two-year advocacy effort spearheaded by MBA and its members.
“MBA was successful earlier this year in obtaining an exception from mandatory margining requirements for multifamily agency securities as part of this rulemaking process,” Stevens said in a letter to MBA commercial/multifamily members. “The SEC’s recent release orders the approval of this rule on an accelerated basis, as modified by amendments that improve upon the exception.”
MBA will host a call in the near term with members and senior FINRA staff. For information about this call or any other aspects of the rule, contact Tom Kim, MBA senior vice president of commercial/multifamily, at tkim@mba.org; or Eileen Grey, MBA associate vice president of commercial/multifamily, at egrey@mba.org.
