Welcome to theassetmanager.com, the website that reports on the activities and events of The Asset Managers Forum.
This website is a resource for sell side and buy side operations professionals to pursue development of industry-wide securities processing and operations projects and enhancements.
The Asset Managers Forum’s current activities are summarized here.
June 25, 2009SIFMA’s Asset Management Group Supports Proposed Retention Requirements
New York, NY, June 25, 2009— The Asset Management Group (AMG) of the Securities Industry and Financial Markets Association (SIFMA) today issued the following statement on the proposed retention requirements in the Obama Administration’s regulatory reform proposal:
“SIFMA’s Asset Management Group supports the administration's proposed requirements for asset originators and transaction sponsors to retain a meaningful economic interest in securitized loans. We believe that retention of such an interest will help to align the incentives of originators and sponsors with securitization investors, thereby helping to restore confidence and functionality to the securitization markets, an essential step in the path to economic recovery and growth.
“Further, AMG agrees with the administration that Federal regulators should be given the authority to design and apply retention requirements in a manner that specifies permissible forms and amounts of retention, how retention requirements may be calculated and measured, the duration of retention requirements, whether and to what extent hedging of retained interests is permissible, and other important implementation details. We would like to suggest that the form of risk retention for various asset classes should be determined through public-private discussion. In this connection, industry and staff representatives of AMG look forward to working directly with policy makers to achieve what we believe are mutual objectives in the interest of the investment community and the clients of asset management firms.”
SIFMA’s AMG represents U.S. asset management firms whose combined assets under management exceed $20 trillion. The clients of AMG member firms include state and local pension funds, universities, and individuals saving for retirement. AMG members conduct their businesses as fiduciaries for their clients even if they are part of a larger financial organization.
June 23, 2009AMF Member Meeting
The Asset Managers Forum is hosting a full day meeting for members on Thursday, July 16th at our new conference center 120 Broadway, 2nd Floor, New York City. In addition to checking out the brand new space, you will have a chance to share ideas and insights with other professionals in the asset management industry.
Set yourself ahead of the pack by participating in this unique event for the buy side where you will obtain information about the following important topics:
The state of the buy-side industry, its future trends and the impacts of upcoming regulatory changes;
Key issues in pricing and valuation;
Insights on sell-side and buy-side operations;
TBA matching and FICC membership for the buy-side;
FICC presentation on mortgage backed securities services;
SIFMA Washington Office on regulatory reform and government programs;
A presentation on same day affirmation.
You will also have a chance to attend one of the following Committees during a breakout session: AMF Derivatives Operations Committee or Asset Manager & Custodian Working Group on TMPG.
Register online now for the Asset Managers Forum Member Meeting, on Thursday, July 16th from 8:30 a.m. to 4:30 p.m. EST. The meeting is open to all AMF members and there is no charge to attend.
Click here to register.
Click here for more information.
For questions regarding the AMF Member Meeting, please contact Diane Trupia of the AMF staff at 212-313-1170 or dtrupia@sifma.org.
June 9, 2009TMPG and SIFMA Finalize Closing Time Practice Recommendations
TMPG and SIFMA announced on May 28, 2009 the final closing time practice recommendation for delivering Fed-wire eligible securities. These updated closing time practices take effect on July 1, 2009. TMPG and SIFMA recommend that, in general, market participants observe 3:00 p.m. EST deadline for origination of deliveries of Fed-wire eligible securities. In addition, some market participants may negotiate bilaterally with some of their counterparties alternative closing time arrangements to originate and receive deliveries with each other up until 3:15 p.m. EST. Each market participant should consult with its custodian or custodians about the cost and complexity of entering into an alternative closing time arrangement.
Announcement: click here. Recommended Closing Time Practices: click here. Frequently Asked Questions: click here. TMPG and SIFMA will host a Lunch and Learn event on Tuesday, June 9, 2009 from 11:30 a.m. to 1:30 p.m. at SIFMA's 120 Broadway, 2nd floor, conference center. The purpose of this event is to describe the closing time practice recommendations and to illustrate the application of these recommendations with hypothetical examples developed by industry practitioners. You may register for this event online at the following link: click here. For more information about this event, please contact Laura Crispo of the AMG staff at 212-313-1167 or lcrispo@sifma.org. The registration fee for this event, which includes a box lunch and hand-out materials, is $90 per attendee. A conference call is available for those outside of New York City for $35.June 1, 2009TMPG Fails Charge Claim Industry Contact List
SIFMA has created for its members an Industry Contact List for the TMPG Fails Charge Claims. This list identifies industry firm representatives responsible for processing TMPG Fails Charge claims. The list contains both buy-side and sell-side contacts, and is available for those firms that contributed their information to the list. If you would like to contribute information to the list or have any questions or comments regarding the Contact List, please contact Elisa Nuottajarvi at enuottajarvi@sifma.org or 212-313-1166 or Brian MacWilliams at bmacwilliams@sifma.org or at 212.313.1127.
April 29, 2009AMF Roundtable Discussion on 3-Way Reconciliation
The Asset Managers Forum is hosting a Roundtable to discuss the challenges and best practice recommendations related to 3-Way Reconciliation on Monday, May 11th from 11:30 a.m. to 1:30 p.m.
Asset managers perform reconciliation to mitigate risks related to inaccurate OTC-derivatives positions, their market values, and related collateral positions. The 3-Way Reconciliation Working Group of the Asset Managers Forum was established because of the need for a standard and automated reconciliation process for asset managers. The working group created the 3-Way OTC Derivatives Reconciliation White Paper that sets forth guidelines so that buy side, sell side, custodians, fund administrators, and prime brokers can be more efficient in risk management and handle higher OTC derivative volumes while maintaining prudent operational controls.
The Roundtable Discussion session will take place from 11:30 a.m. to 12:45 p.m. will cover the following topics:
- The need for reconciliation as a risk management tool
- 3-way reconciliation vs. traditional counterparty reconciliation
- Who are the parties to the process and what are their roles?
- Description of the reconciliation process - asset manager, custodian and dealer perspective
- Challenges related to reconciliation
- Service Agreements (legal liabilities and understanding who is responsible for reporting breaks)
- AMF white paper: What does it cover and recommendations
- Benefits of best practices
- New industry initiatives that may alleviate reconciliation challenges
- What should the industry focus now? Are there some low-hanging fruit?
Vendor solutions presentations will take place from 12:45 p.m. to 1:30 p.m.
Register online now: click here.
The registration fees for this event are as follows: $150 for SIFMA member in person attendee, $190 for non-member in person attendee, and $35 for telephone attendees.
For questions regarding this event, please contact Diane Trupia of the Asset Managers Forum staff at 212-313-1170 or dtrupia@sifma.org.
April 28, 2009News from Lehman Brothers Inc. Trustee
A Protocol Regarding Misdirected Funds was recently approved by the Bankruptcy Court in the liquidation of Lehman Brothers Inc. under the Securities Investor Protection Act. The protocol is posted on the Trustee's website at http://www.lehmantrustee.com.
You can also view the protocol by clicking here.April 27, 2009Asset Managers and Custodians Agree on Procedures to Implement TMPG Fail Charge Recommendation
Approximately 125 asset management firms, custodians and vendors attended an AMG-sponsored event yesterday to discuss the buy-side's procedures to implement a new fail charge in the Treasury securities market. This recommendation will be effective as of May 1, 2009. Those in attendance at the AMG meeting were generally in agreement that this recommendation of the Treasury Market Practices Group can be expected to be implemented efficiently next month.
The firms that were in agreement at yesterday's meeting heard from Tom Wipf of Morgan Stanley who serves as Chair of TMPG. Mr. Wipf assured the industry that TMPG will monitor implementation of the new fail charge recommendation and will be responsive to any questions that arise. In addition to Tom Wipf, speakers at yesterday's event also included:
- Marcellus Fisher, PIMCO
- Louis Nazzaro, J.P. Morgan Chase
- Paul Parseghian, Prudential Investment Management
- Joe Sack, SIFMA
- Ray Tyrrell, Brown Brothers Harriman.
To listen to a replay of yesterday's event on the TMPG recommendation, please click here.
Fails Charge Market Practice: Asset Management and Custodian Industry Procedures click here.
April 23, 2009TMPG Fails Charge - Industry Procedures for Asset Managers and Custodians
The Treasury Market Practices Group (TMPG) has recommended a new market practice to charge a fee for settlement fails in U.S. Treasury securities. SIFMA Asset Management Group and the Asset Managers Forum created a working group for custodians and asset managers to help implement the TMPG fails charge market practice which goes into effect on May 1, 2009. The working group created a document "Asset Management and Custodian Industry Procedures" that describes the work flows of various parties relating to fails, delineates responsibilities, and addresses many issues regarding the claims process. For more information relating to this initiative, please contact Elisa Nuottajarvi of the AMF staff at 212-313-1166 or enuottajarvi@sifma.org.
Fails Charge Market Practice: Asset Management and Custodian Industry Procedures click here.
April 1, 2009Updated TMPG Documents
The Treasury Market Practices Group (TMPG) released on 3/31 three revised documents incorporating the updates to its fails charge recommendation announced on Monday, March 30, 2009. Please click on the links below to view the updated Fails Charge Trading Practice, Frequently Asked Questions, and Treasury Market Best Practices documents.
To view the Fails Charge Trading Practice click here.
To view Frequently Asked Questions click here.
To view Treasury Market Best Practices click here.
March 31, 2009 Treasury's Rules of the Road for Regulatory Reform
Please click here for a copy of the Davis Polk memorandum entitled Treasury's Rules of the Road for Regulatory Reform. This memorandum describes Treasury's framework for regulatory reform, issued on March 26, 2009, focusing on the comparatively more detailed proposals for addressing systemic risk. Treasury has proposed, among other things, the regulation of: "systemically important" firms; private funds; CDS and other OTC derivatives; and money market funds. Treasury's proposals in these areas are discussed and issues are set forth that the government and private sector may consider as details of the proposals are debated and further developed.
Treasury's Proposed Resolution Authority for Systemically Significant Financial Companies
Please click here for a copy of the Davis Polk memorandum entitled Treasury's Proposed Resolution Authority for Systemically Significant Financial Companies, a companion piece to Treasury’s Rules of the Road for Regulatory Reform. As a result of the potential for disruption under current laws if a systemically important financial group were to enter bankruptcy proceedings during the current financial crisis, Treasury recently asked for a unified federal resolution authority over all systemically significant financial companies. The legislation was proposed as part of a larger Treasury framework for regulatory reform. This memorandum analyzes the key provisions of Treasury’s proposed legislation, compares it to the specialized FDIA regime on which it is modeled and to certain provisions of the Bankruptcy Code that it would replace, and identifies some of the most important policy and technical issues raised by the proposal.
March 30, 2009 TMPG Announcement
The Treasury Market Practices Group (TMPG) today announced two updates to its fails charge recommendation. These include (1) the incorporation of a minimum threshold for fails charges and (2) support for the billing of claims on a one-time basis tied to the date when a transaction actually settles. In addition, the TMPG issued a clarification regarding the reference rate used to calculate fails charges.
Please click here to view the announcement.
March 20, 2009 CDS Central Counterparty Update - Lunch & Learn
Audio Recording Available Here!
On March 20th, AMG and MFA co-sponsored a Lunch and Learn titled: Update on CDS Central Counterparty Proposals for Asset Managers and Hedge Funds. This event reviewed the basic framework of CCPs, discussed the benefits of a clearinghouse environment in the OTC derivative markets, described why asset managers and hedge funds intend to segregate customers' collateral when dealing with a CCP, and offered insights regarding legislative and regulatory developments that might affect the structure of CCPs. This educational event also featured audience Q & A.
The panelists of this event were:
-James Wallin – AllianceBernstein (Co-moderator)
-Joseph W. Sack – Securities Industry and Financial Markets Association (Co-moderator)
-Mazy Dar – Creditex Group, Inc.
-Arthur Leiz – Goldman Sachs Asset Management
-Chip Stevens – Barclays Global Investors
-Cory Strupp – Securities Industry and Financial Markets Association
-Kimberly Taylor – CME Group
-Marshall Terry – Brevan Howard
For any questions regarding this initiative, please contact Elisa Nuottajarvi or Joe Sack of the AMG/AMF staff.
February 12, 2009 TMPG Fail Penalty - Custodian / Asset Manager Working Group
The Treasury Market Practices Group (TMPG) has recommended that a charge for settlement fails in U.S. Treasury securities be adopted as a standard market practice. The Asset Managers Forum has created a working group for custodians and asset managers to discuss how they can address the TMPG fail penalty which goes into effect on May 1, 2009. The working group will analyze work flows of various parties relating to fails, delineate responsibilities and issues regarding the claims process and possibly recommend an industry-wide solution. If you would like to participate in the AMF Custodian / Asset Manager working group, please contact Diane Trupia of the AMF staff at 212-313-1170 or dtrupia@sifma.org.
More information on the TMPG Fail Penalty:
Click here to read the TMPG Frequently Asked Questions (February 2, 2009).
Click here to read the TMPG Fails Charge Trading Practice (January 15, 2009).
Click here to read the TMPG Treasury Fail Penalty Conference Video Jerry Pucci, BlackRock (January 8, 2009).
Click here to read the TMPG Claiming a Fails Charge (January 5, 2009).
Click here to read the TMPG Timeline (January 5, 2009).
Click here to read the TMPG Announcement (November 12, 2008).
Charge Date for Section 31 Fee Rate
Equities: Trade Date Effective Tuesday April 7, 2009
Settlement Date Effective Monday, April 13, 2009
Options: Trade Date Effective Thursday April 9, 2009
Settlement Date Effective Monday, April 13, 2009
Twice a year the Securities and Exchange Commission (SEC) issues a bulletin advising the industry of any rate changes to the Section 31 fee rate. The fee rate changes are made as of a certain effective date, which is specified in the bulletin. This effective date refers to the charge date for fees charged under Section 31 of the Securities Exchange Act, which defines the charge date as the settlement date for most transactions. Although firms may have been using the trade date rather than the settlement date to determine the applicable Section 31 fee for transactions, firms need to review their procedures and make sure that they are using the settlement date to calculate the fees in the future. The SEC has announced Friday, April 10, 2009 as the effective date for the next rate change. The rate is changing from $5.60 per million principal to $25.70 per million principal. Please see the SEC Fee Rate Advisory #5 for further information. In order to ensure that transactions and fees are synchronized, the industry is targeting the effective trade dates of Tuesday April 7, 2009 for regular way equities (this includes the equity portion of exercise and assignment activity) and Thursday April 9, 2009 for regular way options as the first date for firms to make any necessary changes to their procedures to ensure that they are using the correct effective settlement date mentioned above to calculate the applicable fees under Section 31. (Please note that trades on shortened settlement and “as of” trades may be different.)
Any questions or concerns regarding this change can be directed to Sal Marra, NYFIX at (646) 525-3184 or salvatore.marra@nyfix.com, or Anthony Principato, Goldman Sachs Execution & Clearing at (212) 357-8015 or anthony.principato @gs.com.
January 8, 2009 AMG's Guiding Principles for Loan Modification Programs
On December 31, 2008, SIFMA's asset management member firms formulated a set of policy positions concerning loan modifications relating to residential mortgage-backed securities. The Guiding Principles for Loan Modification Programs (the " Guiding Principles" ) were adopted by the Advocacy Committee of the Asset Management Group (AMG) of SIFMA. The AMG is comprised of the leading firms in the asset management industry, including 18 of the top 20 firms based on assets under management (AUM). AMG member firms manage the pension, IRA, mutual fund, or personal investments for more than 112 million American workers and retirees.
AMG's Guiding Principles were developed in coordination with the industry leadership of investor participants in the American Securitization Forum.
Along with other asset classes, asset management firms, as financial advisers, manage mortgage securities investments for investors. Thus, AMG wholeheartedly endorses a diligent method of underwriting loan modifications, coupled with innovative principal forbearance structures, and believes that such an approach can benefit homeowners and improve performance for investors.
AMG's Guiding Principles are currently comprised of 13 specific recommendations, including a suggestion that loan modification programs establish reasonable monthly payments using justifiable debt-to-income (DTI) and loan-to-value (LTV) ratios. The Guiding Principles also state that the best way to achieve large scale loan modifications is to use TARP as originally intended; that is, to purchase or insure troubled loans.
The AMG further suggests in its Guiding Principles that streamlined loan modifications should only be made for occupied primary residences and that loan modification programs should address re-default risk and include a process to resolve issues raised by second liens on homeowners' properties.
The asset management industry is committed to supporting viable housing industry solutions, as underscored in a Guiding Principles recommendation that supports incentives for borrowers experiencing hardship to work cooperatively with loan servicers.
Finally, the Guiding Principles document recommends transparent loan modification programs that would provide full details of modifications to security holders.
Click here to view AMG's Guiding Principles for Loan Modification Programs.
Any suggestions or questions concerning AMG's Guiding Principles for Loan Modification Programs may be directed to Joseph W. Sack, Managing Director of SIFMA, at 212-313-1165 or jsack@sifma.org.
December 4, 2008 MBS Netting
The Asset Management Group & FICC have announced a meeting to discuss asset manager participation in the MBS netting process and membership in the FICC. This meeting will take place on Tuesday, December 16, 2008, from 11:00 a.m. to 12:30* pm ET. There will be a presentation by the DTCC Fixed Income Clearing Corporation on how asset managers can increase operational efficiency, reduce risk and lower cost by using the mortgage backed clearing services of the FICC. The presentation will cover the plan to utilize the central counterparty model for MBS and how asset managers can participate in the netting process and benefit from the CCP. After the presentation, there will be time for questions and discussion so that asset managers can share their viewpoints and ask pertinent questions relating to buy side access and membership in the FICC and other possible methods of reducing risk and making TBA trade processing more efficient. To participate in this event, you must contact Laura Crispo at lcrispo@sifma.org or 212-313-1167. A conference call number is available for those outside of New York City. For any questions regarding this event, please contact Elisa Nuottajarvi at enuottajarvi@sifma.org or 212-313-1166.
November 7, 2008 AMF Workshop & Exhibit-Custodian Summit on January 20, 2009
Asset management firms rely on custodians to perform many core functions critical to ensuring efficient and secure operations of the asset management industry. Especially during these times of market contraction as asset managers tackle many difficult issues, it is essential that asset managers get the most out of their custodian relationships and can work together in a way that reduces risks and minimizes processing hurdles. The Custodian Summit is designed to give both asset managers and custodians a voice in discussing how to improve service of their clients while reducing risk.
For the full agenda, please click here.
To reserve a seat, register online now.
For more information regarding this event, please contact Diane Trupia of The Asset Managers Forum at 212-313-1170.
November 5, 2008 AMF Operations Update
1) FICC Resources for TBAs
After the bankruptcy of Lehman Brothers, asset managers would like to explore the possible utilization of FICC to reduce risk and protect against the failure of a counterparty. The AMG/AMF is arranging for the FICC to meet with asset managers to discuss the FICC’s planned central counterparty and guaranteed delivery structure for mortgage backed securities. The AMF will advise the members of the presentation dates in Boston and New York.
Click here for document
2) Master Securities Forward Transaction Agreement
The bankruptcy of Lehman Brothers has demonstrated the need for asset managers to re-assess their risks when executing forward delivery transactions. SIFMA developed the Master Securities Forward Transaction Agreement to be executed between counterparties to set forth their mutual responsibilities for collateralizing exposure and handling events of default including bankruptcy. The AMF is planning a meeting for interested members to discuss this agreement and how it may protect clients.
Click here for document.
3) SEC Hard Delivery Rules (Rule 204T) for Equity Fails
Within the recently amended Short Sale rules (SHO) the SEC implemented Rule 204T permitting the buy-in of all equity fails after settlement date. The Rule states “Pursuant to that emergency order we (SEC) imposed enhanced delivery requirements on sales of all equity securities by adding and making immediately effective a temporary rule Regulation SHO, Rule 204T. To further our goal of preventing substantial disruption in the securities markets, we are adopting Rule 204T as an interim final temporary rule, with some modifications to address operational and technical concerns resulting from the requirements of the temporary rule as adopted in the September Emergency Order. We intend that the temporary rule will address potentially abusive “naked” short selling by requiring that securities be purchased or borrowed to close out any fail to deliver position in an equity security by no later than the beginning of regular trading hours on the settlement day following the date on which the fail to deliver position occurred. This temporary rule should provide a powerful disincentive to those who might otherwise engage in potentially abusive “naked” short selling.”
Please note that asset managers and other market participants are welcomed to submit comments to the SEC proposed SHO rule on or before December 16, 2008 (see page 61706 in the Federal Register on October 17, 2008 for instructions on the methods to submit comments).
Click here for document
4) Treasury Fail Problems
The Treasury Market Practice Group (TMPG) is meeting at the behest of the US Treasury and the NY Fed to review and recommend solutions to the high fail rates on Treasury securities resulting from the unprecedented flight to quality occurring during the credit crunch and current market turmoil. At this time, there are no specific recommendations that are finalized. The good news is that the fail situation is ameliorating but it is still excessive relative to normal trading activities. The AMF will keep you apprized of developments.
5) OTC Derivatives Central Counterparty Proposals for CDS
Several parties, including CME/Citadel, ICE/The Clearing Corporation, NYSE/Euronext and possibly others, have announced plans to operate as a central clearinghouse for the CDS market. The AMF will provide information concerning the developments for the central counterparty for CDS as these plans are unfolded. For additional information, please contact the staff below.
6) OTC Derivative Audit Confirmation Paper
The AMF is soliciting comments through November 12th to the Audit Confirmation Initiative document describing the current audit confirmation challenges and recommended steps to alleviate the manual and paper intensive process involved in providing confirmations to auditors by adopting the electronic record-keeping services available for CDS and IRS.
Click here for document.
Please forward questions in connection with any of the above items to the AMF staff:
Elisa Nuottajarvi tel. 212-313-1166
George Reis tel. 212-313-1180
Joseph Sack tel. 212-313-1165
Douglas Taggart tel. 212-313-1173
Diane Trupia tel. 212-313-1170
October 9, 2008 Specified Trades Protocol 08-02 (Schedules A, B, C Attached)
Protocol 08-02 relates to terminating certain specified and allocated trades done with Lehman Brothers in connection with mortgage-backed securities, which are known as “pool” trades. A SIPC Trustee was appointed with respect to the liquidation of Lehman Brothers on 9/19/08. The SIPC trustee issued a statement on September 26, 2008 which states, “Counterparties with securities and commodity transactions with Lehman Brothers Inc. may close them out and submit claims to the Trustee.”
Click here to download Protocol 08-02
Click here to download Schedules A, B & C
This Protocol, which applies to non-FICC MBSD members, addresses the process for terminating such outstanding trades that were effected by asset managers with Lehman Brothers. The SIPC Trustee has cooperated in the development and has approved this industry Protocol. SIFMA appreciates the assistance and cooperation of its members, especially the input of members of the Association’s Asset Management Group, with respect to the process of identifying the essential components of Protocol 08-02. Although SIFMA may not provide legal advice, questions concerning the implementation of Protocol 08-02 may be directed to Douglas Taggart, Manager, Asset Management Group of SIFMA, at 212-313-1173 or dtaggart@sifma.org.
This Protocol is voluntary and non-FICC MBSD member firms are not required to follow this Protocol. This Protocol is only intended to provide a uniform process for resolving the specified trades and does not modify any existing right or obligation under any preexisting contracts. Firms should seek advice of counsel with respect to their rights or obligations in connection with the specified trades.
October 8, 2008 News on AMF October Events
The Asset Managers Forum strives to provide our members events that relate to market conditions and focus on current challenges of the asset management industry. Due to the current market situation the Custodian Summit has been rescheduled to January 20, 2009. The AMF Member Meeting on October 22nd has been re-engineered to focus exclusively on the challenges that asset managers are facing right now as a result of the recent market events. The Member Meeting will offer valuable insights on how asset managers are coping with operational hurdles stemming from the Lehman situation, what has been the industry’s response and what are the lessons learned for individual firms as well as the asset management industry at large. The Member Meeting will commence at 8:30 am and end at 1:00 p.m. There is no charge for this event. The agenda will be distributed shortly. To reserve a seat please register here.
For more information regarding this event, please contact Diane Trupia of the AMF staff at 212-313-1170 or dtrupia@sifma.org.
October 7,2008 Protocol Of The Lehman Brothers Inc. Trustee Regarding Prime Brokerage Arrangements & Other Broker-Dealer Transactions
The above-mentioned Protocol was developed by the SIPC Trustee who was appointed with respect to the liquidation of Lehman Brothers on 9/19/08. This Protocol addresses prime brokerage arrangements and other broker-dealer transactions.
This Protocol is voluntary and member firms of SIFMA are not required to follow this Protocol. This Protocol is only intended to provide a uniform process for resolving prime brokerage arrangements and other broker-dealer transactions and does not modify any existing right or obligation under any preexisting arrangements.
Firms should seek advice of counsel with respect to their rights or obligations in connection with this matter. Although SIFMA may not provide legal advice, questions concerning the posting by SIFMA of this Protocol may be directed to Joseph Sack, Managing Director, The Asset Managers Forum, at 212-313-1165 or jsack@sifma.org.
October 7, 2008 Protocol 08-01 Issued by SIFMA’s Asset Management Group/ Contact Information Concerning Schedule A or B Extension Requests
AMG Protocol 08-01 was developed by SIFMA’s Asset Management Group and the SIPC Trustee who was appointed with respect to the liquidation of Lehman Brothers on 9/19/08. This voluntary Protocol, which is for non-FICC MBSD members, addresses the process for terminating certain forward settling trades affected by asset managers with Lehman Brothers in connection with mortgage-backed securities (“TBA trades”).
Schedules A and B that are part of the above-referenced Protocol are documents that under certain circumstances might be required to be submitted to the SIPC Trustee within ten (10) business days of the termination of TBA trades by users of the Protocol. In connection with the responsibility to submit Schedule A or B information within ten (10) business days, as suggested in the Protocol, SIFMA hereby informs its membership and other interested industry members that any request for an extension in order to fulfill this responsibility may be submitted via e-mail to the following address: termini@hugheshubbard.com.
We appreciate your interest in this matter. Firms should seek advice of counsel with respect to their rights or obligations in connection with TBA trades. Questions regarding this 10/7/08 SIFMA notice may be directed to Elisa Nuottajarvi of the SIFMA staff at 212-313-1166.
September 25, 2008 Protocol 08-01 ISSUED BY SIFMA’S ASSET MANAGEMENT GROUP
AMG Protocol 08-01 was developed by SIFMA’s Asset Management Group and the SIPC Trustee who was appointed with respect to the liquidation of Lehman Brothers on 9/19/08. This Protocol, which is for non-FICC MBSD members, addresses the process for terminating certain forward settling trades effected by asset managers with Lehman Brothers in connection with mortgage-backed securities (“TBA trades”).
This Protocol is voluntary and non-FICC MBSD member firms are not required to follow this Protocol. This Protocol is only intended to provide a uniform process for resolving the TBA trades and does not not modify any existing right or obligation under any preexisting contracts.
Firms should seek advice of counsel with respect to their rights or obligations in connection with the TBA trades.
SIFMA appreciates the assistance and cooperation of its members, especially the input of members of the Association’s Asset Management Group, with respect to the process of identifying the essential components of Protocol 08-01. SIPC and the SIPC Trustee have also cooperated in the development of this industry Protocol.
Although SIFMA may not provide legal advice, questions concerning the implementation of Protocol 08-01 may be directed to Elisa Nuottajarvi, Manager, The Asset Managers Forum, at 212-313-1166 or enuottajarvi@sifma.org.
As a follow-up to SIFMA’s liaison with the SIPC Trustee, we are pleased to post the following links to protocols recently announced by the SIPC Trustee. These protocols are voluntary and AMG member firms are not required to follow them.
Protocol: Lehman Brothers Inc. Prime Brokerage Arrangements
Protocol: Lehman Brothers Inc. Outstanding Securities and Commodities Transactions
September 25, 2008 AMF Member Meeting 10/22
The Asset Managers Forum is hosting a Member Meeting on October 22. At this meeting AMF members have the opportunity to discuss challenges created by current market conditions. There will also be updates of the AMF committees and working groups, as well as a discussion on outsourcing.
Click here for the agenda.
September 19, 2008 AMF Workshop - Custodian Summit on October 21, 2008
This Workshop will focus on the custodian - asset manager affiliation. The investment management servicing model is changing as asset managers' investment strategies are expanding to include OTC derivatives and other new asset classes, and as the plan sponsors demand ever-more sophisticated services and reports. This change is apparent in the operations area as systems and resources are being upgraded to provide services. Attend this Custodian Summit to get the full picture of the challenges involved and the proposed solutions.
For more information regarding this event, please contact Diane Trupia of the AMF staff at 212-313-1170.
July 21, 2008 New Documents To Be Released at Derivatives Service Providers Roundable on July 22, 2008
On Tuesday, July 22, 2008, the AMF will release a Frequently Asked Questions brochure (left) on credit derivatives processing standards for industry members. This FAQ brochure will explain the industry's credit derivative processing goals and provide information on the Trade Information Warehouse, various service providers and the new electronic notation requirements. Additionally, a Handbook (right) has been developed that includes profiles of 35 OTC derivatives service providers. This project was undertaken specifically to raise the awareness of the asset management industry on the services available and to help them navigate through multiple service options to meet their derivatives processing goals
July 7, 2008 Derivatives Service Providers Roundtable on July 22, 2008
The industry has committed to modernizing derivatives processing methods and SIFMA, ISDA® and MFA have joined forces in an effort to socialize these commitments. Service providers play a critical role by rendering the services that enable buy side firms to achieve their processing commitments. In recognition of this role, SIFMA, together with the other trade groups, is sponsoring a Derivatives Service Providers Roundtable and Exposition on July 22, 2008, from 9 a.m. to 1 p.m. This event will take place in New York City, at the SIFMA midtown Manhattan offices located at 360 Madison Avenue. There is no registration fee for this event. Attendees may participate in person or via conference call (limit of 2 in-person attendees per firm.)
Click here to register
Panel topics will include:
Electronic Confirmations
What exists and what is ahead? Panelists will discuss what the buy side should know about on-boarding new products to electronic confirmation services and will address the process of back-loading trades. Frank De Maria, COO of DerivSERV, will lead this presentation.
Allocations
The industry's goal is to send allocations on trade date. This panel, which will be moderated by James Wallin of AllianceBernstein, will discuss how the buy side can send electronic allocations, which is the key to timely turnaround by the sell side.
Novations
The industry has committed to upgrading to automated novation processing this year. During this panel, learn about the various options and how the buy side can implement a cost-efficient solution with ease and confidence. Bloomberg, Deriv/SERV, MarketAxess, MarkitWire, OpenLink, SimCorp, TradeWeb and T-Zero will be participants.
Going Beyond Electronic Confirmation and Affirmation
Since the industry has set submission, matching and accuracy targets, this panel will address 1) how the buy side can achieve these targets and 2) how the buy side can leverage order management systems to help meet its goals.
This event is intended for industry members and is not open to the press.
For more information, please contact Elisa Nuottajarvi.
June 18, 2008 AMF Corporate Actions Committee Update
The AMF Corporate Actions Committee is working on templates to help the securities industry to agree on which information should be included in corporate actions announcements and which format the information should be in. This will reduce the risk of misinterpretation, and enable automation and standardization making the corporate actions process more efficient. DTCC has helped the industry by compiling templates from various sources, beginning with the AMF templates, thus creating a master template to ensure that data elements are consistent and harmonized. This DRAFT spreadsheet includes the following templates: Dividend reinvestment, Dividend with currency option, Dutch auction, Merger, Rights distribution, Rights subscription, Tender, Stock/Cash optional dividend.
The templates DRAFT is available here.
Please contact Elisa Nuottajarvi of the Asset Managers Forum staff with any questions regarding this initiative.
June 12, 2008 —Industry Event on Derivatives Initiatives
SIFMA’s Asset Management Group, ISDA® and Managed Funds Association are providing education and raising awareness on the industry’s derivatives processing goals, which were outlined in a letter to the NY Federal Reserve in March 2008. The three trade associations hosted a live session on June 5, 2008, that addressed operational enhancements in the credit derivatives market.
Click here to listen to an audio replay of the June 5th Event.
Please note that this audio replay is for industry members and is not open to members of the press. To request a password, please contact Elisa Nuottajarvi.
May 20, 2008 Collateral Management White Paper
The AMF Collateral Management Working Group has drafted guidelines relating to collateral activities, which are put forth in the Collateral Management White Paper. The White Paper is being distributed to the buyside and custodian members of the Asset Managers Forum for comments which are due on July 31, 2008. Any comments and/or questions regarding the collateral management initiative or the white paper should be directed to Elisa Nuottajarvi of the AMF staff at enuottajarvi@sifma.org.
May 19, 2008 AMF Workshop July 28, 2008: Managing Operational Risk in Today’s Environment
As the title states, this Workshop will discuss managing operational risk in today’s environment. We invite you to discuss, with your industry peers, operational risk management practices and ways to quantify them through metrics. We will discuss how firms compare procedures and will share information on benchmarking. The Workshop will include a panel discussing risks associated with 130/30 strategies, especially as it relates to 40-Act funds, and how to reduce risk on managing collateral, 3-way reconciliations and cash movements. We will discuss risk on subprime instruments as well. There will also be a panel on data, including discussion on data feeds, security set-ups, trading related data and audits/controls related to data. Other topics covered during this one day event on operational risk are ops risk function in an organization and Basel II capital requirements.
Click here to register.
For questions regarding this Workshop and for Sponsorship Opportunities, please contact Diane Trupia of the AMF staff at 212-313-1170.
May 14, 2008 OTC Derivatives Market - Vendor Profiles
As an important part of the derivatives processing initiative, the AMF is soliciting product/service profiles from vendors in the OTC Derivatives markets in order to educate asset management firms on the many available options to automate the processing of OTC derivative transactions as well as position reconciliations, novations and other processing aspects. For more information click here.
March 27, 2008 — OMG Letter to the Federal Reserve on Credit and Equity Derivatives
The Operations Management Group submitted today a letter to the Federal Reserve Bank of New York, which outlines its commitments to improve credit and equity derivatives processing. In the letter, the OMG commits to:
improve levels of timeliness and accuracy in the immediate post-trade process
automate novations processing by the end of 2008
universal use of standard reference data and,
full implementation of centralized settlement among major dealers by September 2008.
Asset managers commit to helping the process by submitting correct allocations on trade date.
Click here to read the OMG Letter to the NY Fed
Click here to read the Fed’s Press Release
Click here to read SIFMA’s Press Release
These topics will be among several items discussed at the next AMF Derivatives Ops Meeting on Tuesday, April 22, 2008.
March 18, 2008 — Omgeo No-Action Letter re: Electronic Trade Confirmations
Omgeo received a “no-action” letter from the Securities Exchange Commission under Exchange Rule 10b-10(a). Specifically, Omgeo’s Broker-Dealer participants can rely on TradeSuite to satisfy their confirmation delivery obligations to Customers under Rule 10b-10(a) where the disclosures customarily on the back of the paper confirmations are provided electronically.
When Omgeo implements this service, asset managers can elect to receive only electronic confirmations and avoid receiving paper confirmations. Please review the SEC’s letter for more information.
Click here to view Omgeo’s Request for Relief Pursuant to Rule 10b-10(f)
March 11, 2008 — Standard Fail Report White Paper
After a thorough review process, the AMF is pleased to announce the publication of its Standard Fail Report White Paper. The White Paper was officially published and promulgated at the AMF Member Meeting on Thursday, February 28, 2008, in New York City. The White Paper recommends the usage of an industry standard fail report and discusses the benefits of using a standard.
Click here to view the Standard Fail Report White Paper
Click here to view the Standard Fail Report Sample Template
March 11, 2008 Overdrafts Guidelines Open for Comment
After extensive work, the Overdraft Working Group is releasing for public comment, “Guidelines Relating to Overdrafts." The AMF is seeking comments on the exposure draft from managers, custodians and other industry participants, which should be submitted to the AMF by April 30, 2008.
Click here to view the AMF's "Guidelines Relating to Overdrafts"
Click here to write and submit your comments to the AMF
February 28, 2008 — AMF Member Meeting
Join your fellow AMF members for progress reports and discussion on creating best practices in topics including Overdrafts, Corporate Actions, Collateral Management, Derivatives Operations, STP and Fails.
The AMF Member Meeting will also feature a panel exploring methods for implementing industry best practices. The panel will discuss how AMF members can get the most out of their membership commitment and translate that commitment into tangible business results.
This meeting is open for AMF Members and Associate Members only. Ensure a seat by registering online.
For more information regarding this event, please contact Diane Trupia of the AMF staff at 212-313-1170.
February 27, 2008 — AMF Derivatives Workshop
Come to the Asset Managers Forum Derivatives Workshop to learn about the most recent developments in the Derivatives operations landscape. The workshop will begin with a summary of the reasons why asset managers are increasingly using derivatives in investment portfolios, and what type of operational hurdles are involved; we will then take a look at the overall derivatives processing landscape and current improvement initiatives; discuss what service providers have to offer for derivatives operations; as well as discuss issues such as 3-way reconciliation, valuation and pricing practices; and collateral management.
The cost of this workshop is $795 for members and $995 for non-members.
Seats are limited so please sign up quickly!
For more information regarding this event, please contact Diane Trupia of the AMF staff at 212-313-1170.
February 1, 2008 — Information Session on the Trade Information Warehouse for Derivatives
The Asset Managers Forum hosted a conference call on January 23 to update its members on the Trade Information Warehouse progress in 2007 and plans for 2008. Frank DeMaria and Marisol Collazo of DTCC reviewed the accomplishments during the past year including, implementing settlement services through CLS and piloting an improved novation protocol. A summary of planed initiatives for 2008 is included in a PowerPoint (link provided below). The AMF agreed to form a new Working Group of asset managers and custodians under its Derivatives Operations Committee to work to promote the efficient backloading of trades among the buy side and to encourage custodians to use the Warehouse for reconciliation and payments. The AMF will host additional buy side and custodian information sessions on industry advancements in derivatives processing throughout 2008. For additional information on the 1/23/08 Information Session, please click on two links to the conference call presentations.
Payment Calculations & Settlement Processing
February 1, 2008 — AMF Presents at Operations Meeting
The Asset Managers Forum participated in the SIFMA Operations Committee Offsite Meeting on January 30 & 31. At the meeting, AMF Steering Committee member & Treasurer, Steve Chittenden of Loomis Sayles and staff provided an updated on the six major buy side operations initiatives which include:
-- derivatives processing
-- corporate actions
-- collateral management
-- standardized fail reporting
-- overdrafts prevention and resolution
-- enhancing STP
The major follow-up items for AMF include:
-- continuing to work with the Corporate Actions Division on U.S., then global, corporate actions processing matters
-- presenting the finalized Standard Fail Report to the Operations Committee
-- continuing to support industry efforts to eliminate paper confirms
-- updating the Operations Committee on buy side and custodian derivatives processing matters at a future meeting
The AMF appreciates the opportunity to meet with the SIFMA Operations Committee and looks forward to continuing the dialogue at future meetings. Norman Eaker of Edward Jones serves as Chair of the Operations Committee. Lisa Ilaria of New York Life Investment Management serves as Chair of The Asset Managers Forum.
January 23, 2008 at 11:00 a.m. — AMF Industry-wide call-in: Update from Deriv/SERV/TIW
The call will explain the new services and enhancements planned for 2008. Also, the presentation will cover issues such as trade backloading into the Trade Information Warehouse, what’s new for matching and confirmation, and how can asset managers and custodians start using the payment reconciliation service of Deriv/SERV.
Register now for this informative session. There is no charge for this event.
For more information regarding this event, please contact Diane Trupia of the AMF staff at 212-313-1170.
Click here to view AMF Vendor Profiles
If there are additional vendors with products in this sector, please contact George Reis at 212.313.1180 for inclusion in this profile project.
Virtual Vendors Exhibit Hall
