FASB to Consider Delaying Implementation of EITF 03-1 and AMF/TBMA Submit Comment Letter

In a FASB ActionAlert issued on September 2, 2004, FASB announced that it will decide by September 9th whether to provide certain implementation guidance with respect to interest-rate impairments, and a delayed implementation date for the areas affected by this guidance. In a joint comment letter to FASB and the EITF submitted today, The Asset Managers Forum and The Bond Market Association strongly encourage the Board to postpone the effective date of EITF 03-1 and support FASB's consideration to revisit the issue.

Furthermore, since the guidance in EITF 03-1 appears to create an unanticipated and fundamental change in the accounting for available-for-sale securities, the AMF and TBMA have proposed a set of solutions that may be helpful in this matter. The proposed solutions include defining a "pattern of selling" based on volume, size and number positions, modifying the definition of impairment and evaluating the securities in the potentially impaired pool for recovery.

Cindi Finn of ING Investment Management and Esther Mills of Merrill Lynch are the chairs of the AMF and TBMA Accounting Policy Committees, respectively.

If you have any questions, please contact George Miller of The Bond Market Association or Joseph Sack or Douglas Taggart of The Asset Managers Forum.

Click here to read the AMF/TBMA Comment Letter on EITF 03-1

Click here to read the September 2, 2004 FASB ActionAlert

U.S. Treasury to Move to Six-Decimal Pricing for Auctions

Beginning on September 20, 2004, the U.S. Department of Treasury will compute price awards to six decimal places per hundred, which will permit price determinacy for all Treasury auctions and will result in settlement (purchase) prices to the exact penny for a $1,000,000 face amount. Since this change may require asset management firms to adjust their back-office systems, the Treasury has made six-decimal pricing calculation formulas available on its web site. The Treasury is encouraging asset management firms to use the calculation formulas on the Treasury web site for internal testing purposes.

Click here to view the new pricing calculation formulas

Click here to view the August 4, 2004 Press Release

Click here to view the February 4, 2004 Press Release

Any questions regarding this testing should be directed to the Bureau of the Public Debt, Office of Financing at (202) 504-3550.

Frank DiMarco Discusses STP and the SEC's Concept Release

In The Bond Market Association's Executive Feature (August, 2004), Frank DiMarco, Chair of The Bond Market Association's STP Steering Committee and Director of the Security Services Division at Merrill Lynch, answers questions relating to STP and the SEC's Concept Release. In the Executive Feature, Mr. DiMarco discusses the cost-reducing benefits of STP, the importance of FIX and overall standardization, the significance of the SEC Concept Release to the fixed income market and the role of industry trade groups such as TBMA, the AMF and SIA in STP initiatives.

Click here to read The Bond Market Association's Executive Feature on STP with Frank DiMarco

NOTE: This Weekly Report on Proposed Reforms Affecting Asset Managers is a service of the Technology, Operations and Asset Manager Relations Department of The Bond Market Association. We encourage your input as this communication is designed to promote dialogue among members of the Forum and the Association. Please feel free to contact Joseph Sack, Executive Director of the COO Group of The Asset Managers Forum or Douglas Taggart or Elisa Nuottajarvi of the staff of The Bond Market Association.