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In case you missed it . . .
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| CMBS deals larger, market more concentrated |
| SEC issues post-crisis white paper |
Since the financial crisis, CMBS deals have increased in size and the CMBS market has become highly concentrated, with the top five bookrunners accounting for 64.2% of the market share, the SEC said in their white paper "Issuance Activity and Inter-Connectedness in the CMBS Market." Some highlights:
- Median deal size in 2015, excluding foreign, agency, and resecuritization transactions, was $523m, while median deal size in 2009 was $247m
- Deals have also grown in the number of classes per deal, with 25% of deals having 17 or more tranches in 2015
- The CMBS market is highly concentrated: in 2015 the top 5 book runners had 64.2% market share, the top 5 U.S. CMBS loan contributers had a 44.1% market share, and the top 5 B-piece buyers had ~70.4% market share by dollar volume; a third of deals by dollar volume had the same master and special servicer
- In 2015, there were 304 CMBS deals, accounting for more than $168.8b raised
- The individual networks of bookrunners and loan contributors have decreased in size and have become more interconnected after the financial crisis
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OFR to host conference in October
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In October, the Office of Financial Research and the Center on Finance, Law and Policy will host a conference - Big Data: Improving the Scope, Quality, and Accessibility of Financial Data -
designed to bring together a wide range of scholars, regulators, policymakers, and practitioners to explore how big data can be used to enhance financial stability and address other challenges in financial markets. For example, the conference will explore ways to make financial data more accessible and more secure, as well as more useful to regulators, market participants, and the public.
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Protecting customer funds
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(Aug 8) A Commodity Futures Trading Commission order would exempt from liability, under the Commodity Exchange Act (CEA), Federal Reserve banks that maintain customer accounts for derivatives organizations (DCOs), one of three separate measures designed to enhance the protection of customer funds. DCOs that have been designated systemically important would be able to use Fed banks to hold customer funds, as long as they don't mix client funds with the cash, securities, or property in any other person's account. Other measures address the use of money market funds (MMFs) by CDOs and futures commission merchants (FCMs). According to the CFTC's announcement, "DCOs will not be allowed to accept or hold initial margin in MMFs, or to invest funds belonging to the DCO, its clearing members, or clearing members' customers in MMFs that retain authority to impose redemption restrictions. Government MMFs that do not retain the authority to impose redemption restrictions would continue to be viewed as acceptable margin collateral and investments."
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