[Federal Register Volume 79, Number 125 (Monday, June 30, 2014)]
[Notices]
[Pages 36872-36873]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-15355]
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DEPARTMENT OF THE TREASURY
Public Input on Development of Responsible Private Label
Securities (PLS) Market
AGENCY: Office of the Undersecretary for Domestic Finance, Department
of the Treasury.
ACTION: Notice and Request for Information.
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SUMMARY: Consistent with the Obama Administration's commitment to
openness and transparency and the President's Open Government
Initiative, the Department of the Treasury (Treasury) is seeking public
input on the
[[Page 36873]]
private sector development of a well-functioning, responsible private
label securities (PLS) market.
DATES: Comment Due Date: August 8, 2014.
ADDRESSES: Interested persons are invited to submit comments regarding
this notice according to the instructions for ``Electronic Submission
of Comments'' below. All submissions must refer to this document.
Treasury encourages the early submission of comments.
Electronic Submission of Comments. Interested persons must submit
comments electronically through the Federal eRulemaking Portal at
http://www.regulations.gov. Electronic submission of comments allows
the commenter maximum time to prepare and submit a comment, ensures
timely receipt, and enables Treasury to make them available to the
public. Comments submitted electronically through the http://www.regulations.gov Web site can be viewed by other commenters and
interested members of the public. Commenters should follow the
instructions provided on that site to submit comments electronically.
Note: To receive consideration as public comments, comments must be
submitted through the method specified above.
No Facsimile Comments. Facsimile (FAX) comments will not be
accepted.
Public Inspection of Public Comments. In general, all properly
submitted comments will be available for inspection and downloading at
http://www.regulations.gov.
Additional Instructions. Please note the number of the question to
which you are responding at the top of each response. Though the
responses will be screened for appropriateness, in general comments
received, including attachments and other supporting materials, are
part of the public record and are immediately available to the public.
Do not enclose any information in your comment or supporting materials
that you consider confidential or inappropriate for public disclosure.
FOR FURTHER INFORMATION CONTACT: For general inquiries, submission
process questions or any additional information, please call 202-622-
2108. All responses to this Notice and Request for Information should
be submitted via http://www.regulations.gov to ensure consideration.
SUPPLEMENTARY INFORMATION: Treasury is seeking public comment on the
following questions:
1. What is the appropriate role for new issue PLS in the current
and future housing finance system? What is the appropriate interaction
between the guaranteed and non-guaranteed market segments? Are there
particular segments of the mortgage market where PLS can or should be
most active and competitive in providing a channel for funding mortgage
credit?
[ssquf] Comments could address: The role of the government in the
mortgage market; access to mortgage credit; cost of mortgage finance;
capital available for this type of investment; the source of loans for
securitization; product and structure innovation; types of mortgage
products; and borrower characteristics.
2. What are the key obstacles to the growth of the PLS market? How
would you address these obstacles? What are the existing market
failures? What are necessary conditions for securitizers and investors
to return at scale?
[ssquf] Comments could address: Structural, operational, economic,
regulatory, loan level data, other disclosures, and legal challenges.
[ssquf] Challenges may include methods of investor protections;
desire for standardization; secondary market liquidity and size;
underwriting standards; origination volumes; servicing practices;
credit ratings; and risks arising from borrower default.
3. How should new issue PLS support safe and sound market
practices?
[ssquf] Comments could address: Underwriting standards;
transparency and disclosure requirements; borrower protections;
alignment of interests; and regulatory oversight.
4. What are the costs and benefits of various methods of investor
protection? In particular, please address the costs and benefits of
requiring the trustee to have a fiduciary duty to investors or
requiring an independent collateral manager to oversee issuances.
[ssquf] Comments could address: Willingness of parties to accept a
fiduciary duty; capital requirements and sufficiency; fiduciary duty as
a means of addressing conflicts of interest; and alternative methods of
investor protection.
5. What is the appropriate or necessary role for private industry
participants to address the factors cited in your answer to Question
2? What can private market participants undertake either as
part of industry groups or independently?
[ssquf] Comments could address: Methods of achieving agreement
around establishment of industry-wide standards; or development and
adoption of a limited number of structural options from which
securitizers can choose.
6. What is the appropriate or necessary role for government in
addressing the key factors cited in your answer to Question 2?
What actions could government agencies take? Are there actions that
require legislation?
[ssquf] Comments could address: Suggested role in facilitating
resolution of issues impeding the return of an active PLS market;
actions that are required from government agencies; and actions that
require legislation.
7. What are the current pricing characteristics of PLS issuance
(both on a standalone basis and relative to other mortgage finance
channels)? How might the pricing characteristics change should key
challenges be addressed? What is the current and potential demand from
investors should key challenges be addressed?
[ssquf] Comments could address: Amount and sources of demand for
new issue PLS; cost of funding and capital; appropriate parties or
processes to address the current pricing of PLS issuance; pricing in
other mortgage financing channels.
8. Why have we seen strong issuance and investor demand for other
types of asset-backed securitizations (e.g., securitizations of
commercial real estate, leveraged loans, and auto loans) but not
residential mortgages? Do these or other asset classes offer insights
that can help inform the development of market practices and standards
in the new issue PLS market?
[ssquf] Comments could address: Relevant terms, standards, and
covenants; key differences in underlying assets; comparisons of
structural features; documentation; alignment of interests; relative
value, relative risks, and required returns; and examples of other
asset classes' emergence and growth over time.
9. Is there any additional information regarding the PLS market not
already addressed that you would like to provide?
David G. Clunie,
Executive Secretary, Department of the Treasury.
[FR Doc. 2014-15355 Filed 6-27-14; 8:45 am]
BILLING CODE P