SIFMA forms covered-bond-traders group

In order to bolster liquidity in the covered-bond market, the Securities Industry and Financial Markets Association have announced the formation of the U.S. Covered Bonds Traders Committee. The member firms on the new committees have agreed to take a series of actions to enhance the U.S. covered-bond market, including providing their respective indicative price information to electronic platforms available to U.S. covered-bond investors and devoting research and other resources to foster growth. The firms making up Washington- and New York-based SIFMA’s new committee are Banc of America Securities LLC, Barclays Capital, Citigroup Inc., Deutsche Bank Securities Inc., The Goldman Sachs Group Inc., HSBC Securities (USA) Inc., JPMorgan Chase & Co., Lehman Brothers Holdings Inc., UBS Investment Bank, Merrill Lynch & Co. Inc. and Morgan Stanley, all of New York, RBS Greenwich (Conn.) Capital Markets Inc. and BNP Paribas of Paris. SIFMA's announcement came on the same day the U.S. Treasury Department issued its "Best Practices for Residential Covered Bonds" in an effort to promote additional sources of mortgage finance and to strengthen financial institutions. Covered bonds are issued by financial institutions and secured by pools of assets. They differ from mortgage-backed securities because they remain on an issuer's balance sheet.