MFA submitted a letter to the Treasury Market Practices Group (TMPG), sponsored by the Federal Reserve Bank of New York, commenting on the group’s proposed updates to its best practices guidelines for non-centrally cleared bilateral repos (NCCBRs).
In the letter, MFA urged TMPG to:
- Delay revisions to the Best Practices until after the transition to central clearing is complete and its market impact is understood.
- Wait for analysis of new data from the U.S. Treasury Department’s Office of Financial Research (OFR) before recommending changes.
- Avoid mandating rigid margin practices that could undermine effective risk management.
