CUSIP Global Services announced the expansion of its TBA CUSIP algorithm for Federal Agency Pools to cover new product types.
TBA CUSIPs are generic IDs assigned to agency mortgage pools that allow market participants to trade pooled instruments before the mortgage pool is finalized. New instruments receiving TBA CUSIP identification include Interest-Only Mortgages, ARMS and DUS Pools for Fannie Mae and Freddie Mac and Project and Construction Loan Pools for Ginnie Mae.
Working in collaboration with representatives from FINRA, SIFMA and DTCC, CUSIP Global Services has expanded the TBA system to facilitate seamless reporting of TBA trades in these specialized instruments to FINRA's TRACE system. This expansion of the TBA algorithm allows market participants to meet the new TRACE-eligible reporting requirements for asset-backed securities that took effect on May 16.
"The ability to track pre-pooled agency mortgages at the individual CUSIP level is essential for asset managers, risk managers and regulators who need to have full transparency into any potential counterparty risks that may exist in a portfolio of asset-backed securities," said Jim Taylor, Managing Director and Head of CUSIP Global Services. "We applaud the efforts of FINRA, SIFMA and DTCC to develop new reporting requirements in the TBA marketplace."
The algorithm for the expanded TBA CUSIP coverage is available here. CUSIP Global Services began to distribute a refreshed master file incorporating these changes to TBA CUSIP subscribers earlier this month.