Operating Policy
Statement Regarding Aggregation of Agency Mortgage-Backed Securities Holdings
February 22, 2019

In March 2019, the Federal Reserve Bank of New York (New York Fed) Open Market Trading Desk will begin a process to streamline the administration of some of the Ginnie Mae-issued mortgage-backed securities (MBS) held in the System Open Market Account (SOMA) through a service offered by Ginnie Mae called CUSIP aggregation.  Through this process, aggregated CUSIPs are formed by consolidating existing agency MBS with similar characteristics into larger pass-through securities.  This process is commonly used by market participants and has previously been used by the New York Fed to consolidate existing Fannie Mae and Freddie Mac MBS holdings.  Because all of the payments on the underlying agency MBS flow through to the aggregated CUSIPs, the aggregation process will not otherwise affect the size or characteristics of the SOMA portfolio and does not indicate anything about the future timing or direction of changes in policy. 

The Ginnie Mae CUSIP aggregation process will further reduce the number of individual agency MBS CUSIPs held by the Federal Reserve, thereby reducing the administrative costs and operational complexity associated with managing the MBS portfolio.  The SOMA currently holds approximately 37,000 individual agency MBS CUSIPs.  The Ginnie Mae CUSIP aggregation process will reduce the number of CUSIPs to about 29,000. 

The New York Fed publishes detailed data on all settled SOMA agency MBS holdings on its public website on a weekly basis.  As CUSIP aggregation takes place, this weekly publication will include a listing of the individual agency MBS CUSIPs underlying each aggregated CUSIP.  In addition, Ginnie Mae provides information about aggregated CUSIPs on its public website.  Thus, the public will continue to have access to listings of all the MBS CUSIPs that are included in this aggregation effort.  For more details on the aggregation strategy, please refer to the frequently asked questions page.

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