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Ginnie Mae Securities Move to Fedwire

Ginnie Mae Securities Move to Fedwire

SAMPLE FAQS
Q What will be the fees for Ginnie Mae securities?
A Transfer fees and monthly maintenance fees will be the same as for other agency securities.

Q How will CUSIP information, related to the holdings to be converted, be made available to depositories?
A The Ginnie Mae CUSIP information will only be available to a Fedwire customer requesting a copy of our CUSIP directory, which will be transmitted via bulkdata. The Federal Reserve will not broadcast this information. All new issues, after the conversion, will be announced via the current broadcast message.

Q Our bank owns various Ginnie Mae securities, which we purchased in the secondary market, that are held at other custodians. In connection with the Ginnie Mae move to Fedwire, will we be able to transfer those securities to our Fed account?
A Yes, after the conversion from DTCC to the Federal Reserve, you can instruct your custodian to move securities to your Fed account.

Q Will the Federal Reserve distribute a tentative schedule of events for conversion weekends? In particular, will there be a "Go/No Go" decision at some predefined critical juncture on those weekends?
A Yes, more information regarding the schedule for conversion weekends will be made available on the Financial Services Internet site.

Q Will the Federal Reserve allow conversion of Ginnie Mae securities from book-entry to physical and vice versa?
A Yes, all requests are subject to a 3 p.m. ET cutoff and the process will be explained in a future clearing memo.
Last year, the Government National Mortgage Association (Ginnie Mae) announced plans to have its securities clear and settle on the Fedwire® Book-Entry Securities system and to automate payment adjustments among participants. This move is designed to enhance the attractiveness and liquidity of Ginnie Mae securities within the United States and abroad.

The Federal Reserve has developed a conversion plan, together with The Bond Market Association, Ginnie Mae and the Depository Trust & Clearing Corp. (DTCC). The plan, which is available online at www.frbservices.org (search "ginnie mae"), includes the following:

• Implementation Timeline for the Migration of Ginnie Mae Securities Settlement

• Consultative Paper: New Feature for Fedwire Book-Entry Securities Service

• Clearing Memo # 219, Fail Tracking

• Clearing Memo # 220, Interim Accounting

• Clearing Memo # 221, Repo Tracking

• Rollout and Conversion Schedule

The first document includes information on the sequence and timing of Ginnie Mae securities movement from the DTCC to Reserve Banks. DTCC participants will move their Ginnie Mae securities either directly to Fedwire securities accounts or, in the case of nonbanks, to their clearing banks for deposit to Fedwire securities accounts. Once a Ginnie Mae security is transferred to the Fedwire system, all Fedwire participants can move their holdings of that security to their respective Fedwire securities accounts.

The consultative paper describes the new feature being added to the Fedwire Book-Entry Securities Service and seeks your comments on the functionality and design of the feature, as well as on the operational aspects of automated adjustment payments among participants.

The next three documents are clearing memoranda describing operational changes that implement the new service feature. Examples of how the new feature will work are included in each memorandum. Computer interface protocol specifications for new reports related to fail tracking, interim accounting and repo tracking have been sent under separate cover to your bank's technical staff.

The rollout and conversion schedule lists the dates and deliverables associated with this plan.

A set of Frequently Asked Questions (FAQs) can be found at www.frbservices.org. Take a look at the outlined box below for some sample FAQs you might be wondering about.

Questions and comments on any aspect of these plans can be sent to fedwire.securities@ny.frb.org, or you can contact Cheryl Whitworth at the St. Louis Fed at (314) 444-8612 or toll-free at 1-800-333-0861 (then press 3).


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