Potential Legal and Regulatory Issues Affecting the Securitization Industry in 2017

Abstract

The most important issues facing the securitization industry during 2017 are 1) questions relating to the application of the U.S. Risk Retention Rule, 2) the Commodity Futures Trading Commission’s rules regarding margin requirements for uncleared swaps, 3) the impact of Representative Hensarling’s Financial Choice Act if it is passed, and 4) the possible repeal or amendment of the Dodd–Frank Act and the related rules and regulations. There are a number of interpretation issues and questions relating to the Risk Retention Rule, and the CFTC’s margin requirements for uncleared swaps are creating significant issues for warehouse facilities and securitizations. The recent unsuccessful attempt to amend the Affordable Care Act suggests that amending the securitization-related provisions of Dodd–Frank may be more difficult than originally anticipated. The article briefly examines those issues and considers possible outcomes.

TOPICS: Fixed income and structured finance, derivatives applications, exchanges/markets/clearinghouses