This Update, like previous Updates, reviews activity and progress at the Enterprises, CSS, and FHFA related to the development of the CSP and implementation of the SSI. In addition, this Update focuses on outreach by the Enterprises and FHFA to inform and prepare market participants for SSI implementation. This Update also summarizes efforts made by the Enterprises and FHFA to inform and engage market participants and ensure regulatory clarity. This Update also includes details about steps FHFA and the Enterprises are taking to support alignment of cash flows to investors after SSI implementation.
A key objective of this Update is to emphasize the need for market participants to begin now to plan and prepare for SSI implementation. FHFA joins the Enterprises in strongly encouraging market participants to commit adequate resources to these activities. The timeframe that FHFA announced in March 2017 calls for the SSI to be implemented in Q2 2019. Because forward trading in the TBA market could start in Q1 2019, market participants need to complete preparations by year-end 2018.
As reported in previous Updates, the Enterprises and CSS are developing the CSP in two stages:
- Release 1 implements the CSP's Data Acceptance, Issuance Support, and Bond Administration modules for Freddie Mac's existing fixed-rate single-class securities. The development and implementation of Release 1 did not involve or affect Fannie Mae.
- Release 2 will allow both Enterprises to use those modules, plus the Disclosure module, to perform activities related to their current fixed-rate, single-class securities, and multi-class securities; to issue UMBS and related resecuritizations, including commingled resecuritizations; and to perform activities related to the underlying loans. In addition, both Enterprises will use certain modules to perform activities related to securities backed by adjustable-rate loans.