The Federal Reserve Bank of New York’s Open Market Trading Desk (the Desk) has developed and tested the capability to conduct agency mortgage-backed securities (MBS) transactions over FedTrade, its proprietary trading platform. The FedTrade platform allows the Desk to conduct large-scale operations with all of its counterparties, and is currently used to conduct the Desk’s permanent Treasury securities transactions, repurchase and reverse repurchase agreements, and securities lending operations.
On April 9, 2014, the Desk will begin to increasingly conduct agency MBS purchases over FedTrade. These purchases will be counted toward the monthly additional agency MBS purchases and reinvestments of principal payments on holdings of agency securities that the Desk has been conducting at the direction of the Federal Open Market Committee. Any monthly purchases not conducted over FedTrade will be conducted over the commercial trading platform currently used by the Desk. Over the coming months, the Desk plans to gradually increase the size and frequency of its agency MBS purchases conducted over FedTrade. All dollar roll transactions will continue to be conducted on the existing commercial trading platform.
Purchases of agency MBS will continue to be concentrated in newly-issued agency MBS in the To-Be-Announced market. The Desk will publish a tentative schedule each Friday for agency MBS purchases to be conducted over FedTrade for a weekly period beginning on the following Monday. On occasions where Friday is a holiday, the schedule will be published on the previous business day. The tentative schedule will include the operation dates, times, security types (agency and coupon), and maximum operation sizes. All other purchase details remain the same at this time.
Results of the outright agency MBS purchases made over FedTrade will be posted on the Federal Reserve Bank of New York’s website following the completion of each operation. The results will include the security type, the total amounts submitted and accepted, and the settlement months. The Desk will continue to publish transaction prices for all agency MBS operations at the end of each monthly period.
Additional information on the purchases of agency MBS securities can be found in a set of Frequently Asked Questions in the following location: