FINRA has significantly increased transparency in the so-called “to-be-announced” (TBA) market for agency pass-through mortgage-backed securities, it announced Monday. The body has begun disseminating transaction information, including the CUSIP, time of transaction, price, size and other related information, for the TBA market, which represents more than $270 billion traded on an average daily basis in 8,400 trades.
In addition to the TBA market, the Securities and Exchange Commission has approved a FINRA proposal to publicly disseminate transaction information in agency pass-through mortgage-backed securities traded “specified.” This market represents approximately $19 billion traded on an average daily basis in 3,000 trades. The effective date of this proposal will be announced in a forthcoming FINRA Regulatory Notice.
Together, the market for agency pass-through mortgage-backed securities traded TBA and specified represent more than 93% of par value traded in all asset- and mortgage-backed securities.
FINRA continues to study collateralized mortgage obligations and asset-backed securities, which together represent 7% of par value traded in all asset- and mortgage-backed securities. In a statement, FINRA Vice President Ola Persson said, “As we look to increase transparency in collateralized mortgage obligations and asset-backed securities, we will seek an approach that takes into account their complex nature and different market dynamics.”