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ISITC Publishes UMBS Market Practice for Single Security Initiative
Traders Magazine Online News, June 4, 2019
ISITC, the industry trade group focused on developing standards and best practices in financial services operations, announced the release of its latest version of the market practice document, “US Settlements and Confirmation Common Elements Market Practice.” ISITC’s Settlements Working Group developed the document to help firms prepare for the May 7th, 2019 commencement date of the Single Security Initiative, a joint initiative of Fannie Mae and Freddie Mac under the direction of FHFA to develop a common mortgage-backed security.
The market practice document outlines the information that investment managers are recommended to provide on the transactions for the UMBS, such as relevant key field requirements and usage guidelines.
ISITC collaborated with SIFMA and Freddie Mac on the initiative. SIFMA recently published a fact sheet that offers contextual descriptions around the exchange and how the market should proceed. Freddie Mac has attended numerous ISITC events over the past year to inform ISITC’s membership of the changes and provide a clear direction as to what processes will minimize the impact for all constituents in the market.
“There’s been a lot of debate about corporate actions and trade solutions in response to this mandate, so ISITC offered a common platform to bring all of the industry players together to determine the proper reaction for moving forward,” said Aundrea Jarvis, Co-Chair of ISITC’s Settlements Working Group. “The Single Security Initiative is a significant event to our industry. At ISITC, our membership’s diverse set of skills and subject matter expertise gave us a broader lens to solve for this issue. The ISITC Forums and Working Groups complement one another for quicker consensus and adoption of standards.”
ISITC’s US market practice v39.3 was released in March 2019, and as other changes are announced by Freddie Mac, ISITC will amend as needed. ISITC’s Settlements Working Group held frequent calls to discuss the initiative and meets in person at ISITC’s events held throughout the year. ISITC’s next event is its Fall Forum in Baltimore, MD on September 15-17, 2019.
About ISITC
ISITC brings together investment managers, broker dealers, custodians, utilities and technology vendors to develop and promote standards and best practices that increase operational efficiencies across the securities industry, enabling member companies to provide essential and enhanced products and services. Founded in 1991, ISITC’s membership totals more than 2,000 financial services professionals representing more than 60 firms and trillions of dollars in AUM/AUA. Through its member committees and working groups, ISITC plays a direct role in shaping the future of securities operations by creating and updating market practices and educating the membership around emerging trends in technology and regulations. www.isitc.org
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