The Depository Trust & Clearing Corp. may charge higher processing fees for underwriters that issue hard-to-process collateralized mortgage obligations and asset-backed securities.
The DTCC, New York, has published that idea in a new analysis of strategies for automating the processing of CMOs, ABS and other “structured securities.”
Some of the major issuers of CMOs are insurers, according to the DTCC.
The DTCC runs processing systems that financial services firms use to complete transactions involving many different types of financial products, including stocks, bonds and structured securities.
Today, because of difficulties with obtaining and exchanging principal and interest rate information, financial services companies get out much of the information late, and they often have to make adjustments after sending out incorrect P&I payments, officials from the DTCC and other organizations write in the structured securities processing analysis.
The authors of the structured securities analysis recommend improving automation of structured securities processing by extending the deadline for submission of payment information on structured securities, and by distributing a new “paying agent report card.”
The report card would track the performance of the largest structured securities paying agents, according to the authors of the analysis.