CUSIP Global Services announced the expansion of its TBA CUSIP algorithm for Federal Agency Pools to cover new product types. TBA CUSIPs are temporary IDs that were developed to provide a standard industry identifier for generically traded mortgage-backed securities executed at the TBA level. New instruments receiving TBA CUSIP identification will include Interest-Only Mortgages, ARMS and DUS Pools for Fannie Mae and Freddie Mac.
Working in collaboration with representatives from FINRA, SIFMA and DTCC, CUSIP Global Services has expanded the TBA system to facilitate seamless reporting of TBA trades in these specialized instruments to FINRA's TRACE system. The new TRACE-eligible reporting requirements for asset-backed securities will take effect on May 16. Additionally, Fixed Income Clearing Corp (FICC) will be exploring possible EPN eligibility for some of the new TBA products in the near future.
The algorithm for the expanded TBA coverage is available here.
CUSIP Global Services will distribute a refreshed master file on May 2 to TBA CUSIP subscribers incorporating these changes.
We will continue to keep you updated on our efforts to expand CUSIP coverage into new asset classes to improve transparency and efficiency in the capital markets.