June
10, 2004
Communications Division
Public Information Room, Mailstop 1-5
Office of the Comptroller of the Currency
250 E St. SW,
Washington 20219
Jennifer J. Johnson
Secretary
Board of Governors of the Federal Reserve System
20th Street and Constitution Avenue, NW
Washington DC 20551
Robert E. Feldman
Executive Secretary
Attention: Comments
Federal Deposit Insurance Corporation
550 17th St NW
Washington DC 20429
Regulation Comments
Chief Counsel’s Office
Office of Thrift Supervision
1700 G Street NW
Washington DC 20552
Jonathan G. Katz
Securities and Exchange Commission
450 5th St, N.W.
Washington, DC 20549
Re:
Proposed Interagency Statement on Sound Practices Regarding
Complex Structured Finance Activities (69 Fed. Reg. 28980 (May
19, 2004))
Dear Sir or Madam:
The trade associations listed below
are in the process of preparing comments on the Proposed Interagency
Statement on Sound Practices Regarding Complex Structured Finance
Activities (“Proposed Guidance”) jointly issued by the Office of
the Comptroller of the Currency, the Board of Governors of the
Federal Reserve System, the Office of Thrift Supervision, the Federal
Deposit Insurance Corporation and the Securities and Exchange Commission.
However, we believe that the current deadline for comment letters
(June 18th) will not permit us to address appropriately the various
issues raised by the Proposed Guidance. We respectfully request
a 30-day extension of the deadline.
Our members believe the Proposed
Guidance presents both substantive and operational issues that
could significantly affect the business operations of institutions
engaging in the types of transactions purportedly covered in the
Proposed Guidance. Among the issues that discussions with our members
have identified are:
• the need for greater clarity as to the scope
of the Proposed Guidance, especially in the definition of "complex
structured finance transaction";
• the
need to distinguish in the proposal among the roles that
financial institutions play
in complex structured finance transactions – ranging from financial advisor
to arm's length provider of services;
• the possible creation of
new substantive obligations not present in current law;
• the
creation of new procedural requirements not clearly calibrated
to the degree
of risk, potential for abuse or materiality of a particular
transaction;
• the
impact of the proposal on internal controls and reporting;
• concern
over how to assess “reputational” risk;
• the impact of the Proposed
Guidance in the cross-border context; and
• the potential unintended
consequences which may increase the legal risk to regulated
institutions.
We are currently exploring these and other issues with our members,
some of whom have not been involved in previous discussions with
your agencies on these matters. We believe that an additional 30
days will allow us to provide you a fuller, more carefully considered
set of comments on the Proposed Guidance, including specific drafting
suggestions.
Accordingly, we respectfully request that the deadline
be extended to July 19, 2004.
Sincerely,
American Bankers Association
America’s Community Bankers
International Swaps and Derivatives
Association
Securities Industry Association
The Bond Market Association
The Clearing House
The Financial Services Roundtable
The Risk
Management Association
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