Fed names new sellers to SMCCF including Jane Street, Tradeweb

Dan Barnes

The Federal Reserve Bank of New York has released the the first wave of additional counterparties that it has selected to support the Secondary Market Corporate Credit Facility (SMCCF).

As of 31 August, the last detailed reporting period, the SMCCF had acquired US$3.7 billion of corporate bonds, and US$8.7 billion of fixed income exchange traded funds for a total outstanding amount of the FRBNY’s loans under the CCFs of US$12.4 billion. This had increased to US$12.7 billion by 9 September but a more detailed breakdown was not available.

By widening the eligibility criteria for counterparties to these 13(3) facilities, the New York Fed is making an effort to support “diversity, inclusion, and opportunity” as it increases the facilities’ operational capacity and reach.

The selected firms represent a diverse range of market participants in terms of firm-size, business models, and ownership, including firms it classes as “Minority, Women, and Veteran Business Enterprises (MWVBEs)”.

The additional eligible sellers for the SMCCF are:
• Academy Securities;
• Jane Street Execution Services;
• Loop Capital Markets;
• MarketAxess;
• R. Seelaus;
• Sumridge Capital;
• Tradeweb.

The New York Fed has a continuing application process for these roles and says it intends to name additional firms as counterparties and agents, as applicable, for the SMCCF, and Term Asset-Backed Securities Loan Facility (TALF) in the weeks ahead.

It has also added a process whereby firms can apply to become Agency CMBS Dealers to support Open Market Trading Desk purchases of agency commercial mortgage backed securities (MBS).

Applications are limited to firms meeting designated eligibility requirements, including size restrictions, transaction capabilities, financial condition, compliance controls, and equal opportunity and diversity efforts.

Selected participants will only be able to act as counterparty or agent for the specific program for which they have been chosen, and not for any other 13(3) facilities or for other market operations of the New York Fed.

The existing list includes:
• Amherst Pierpont Securities (May 13, 2020)
• Barclays Capital (May 11, 2020)
• BMO Capital Markets (May 7, 2020)
• BNP Paribas Securities (May 12, 2020)
• BofA Securities (May 11, 2020)
• Cantor Fitzgerald (May 7, 2020)
• Citigroup Global Markets (May 14, 2020)
• Credit Suisse Securities (June 11, 2020)
• Daiwa Capital Markets America (May 14, 2020)
• Deutsche Bank Securities (May 13, 2020)
• Goldman Sachs (May 8, 2020)
• HSBC Securities (May 15, 2020)
• Jefferies (May 7, 2020)
• JP Morgan (May 22, 2020)
• Mizuho Securities (May 12, 2020)
• Morgan Stanley (May 11, 2020)
• NatWest Markets Securities (May 7, 2020)
• RBC Capital Markets (May 22, 2020)
• Scotia Capital (June 10, 2020)
• SG Americas Securities (June 26, 2020)
• TD Securities (May 12, 2020)
• UBS Securities (May 7, 2020)
• Wells Fargo Securities (May 7, 2020)

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