Securities industry takes a beating in 2Q
The Securities Industry and Financial Markets Association, a leading trade group representing bond market players, reports total securities issuance during the second quarter was $1.6 trillion, an 11.6% drop from the previous quarter. SIFMA notes this dip represents a 23.7% year-over-year decline owing primarily to uncertainties surrounding the progress and shape of financial-regulatory reform under the Dodd-Frank Act. Issuance of mortgage-related securities in the second quarter totaled $356.5 billion; down 8.4% from the first quarter and 45.7% from the year earlier. Issuance from the government sponsored entities Fannie Mae and Freddie Mac still dominate the space with Ginnie Mae. In terms of the larger asset-backed securities market, SIFMA reports conflicts with Dodd-Frank and the authority of the Securities & Exchange Commission. "On May 3, the SEC issued a very significant and lengthy regulatory proposal that would amend fundamental aspects of Regulation AB, Rule 144a as it relates to MBS and ABS and many other securities regulations," according to SIFMA. "Certain provisions contained in the Dodd-Frank Act, however, overlap those in the SEC's rule proposal, and it remains unclear how these will be harmonized." The SIFMA report pulls data internally as well as from federal agencies, Bloomberg, the National Association of Realtors and the Thomson Reuters datastream. Write to Jacob Gaffney.