A Look Back : 2003 AMF Committee Accomplishments

With the year behind us and the focus on 2004, we took a look back at a few accomplishments that some of the AMF Committees have achieved and topics that have been explored in 2003.

AMF Swaps Committee
The Swaps Committee focused primarily on two major components of Swaps: the confirmation process and valuation. A significant amount of information was gathered regarding the capabilities of a number of vendor and industry utilities involved in the confirmation process, including those of Swapswire, Swift and DTC. The committee has also been working with SQX to improve the process of sharing pricing and valuation information between various sides of the industry. In addition, the committee has proved to be indispensable in acting as a forum for general discussions on swaps and best practices, bringing together asset managers, broker dealers and custodians.

AMF Accounting Policies Committee
The committee established a forum to bring together member firms to discuss the guidance, interpretation and implementation of recent issues including FAS 149 and FAS 140 (an amendment resulting from FIN 46). The committee submitted a response letter to the FASB on FAS 140, which further restricts the already limited powers of QSPEs, collaborating with other trade organizations in order to clarify and improve the guidance. The revisions to FIN 46, released in late 2003 brought some relief to collateral managers who could be determined to be primary beneficiaries of CDOs, and be forced to consolidate assets and liabilities on their balance sheets. The committee also worked to reconcile how accounting firms were applying FAS 149 to TBAs for their insurance company clients. The interpretation of TBAs by auditors under this amendment has resulted in TBAs being treated as derivatives for accounting purposes. A representative from Deloitte & Touche spoke to the committee and answered questions to help clarify and explain the positions taken by the “Big 4” accounting firms. The committee is continuing to make both of these issues a concern.

The SQX system eliminates miscommunication and transcription errors, speeds up the collection of end-of-day quotes and creates an audit trail. Instead of having to wait until the next day to receive your valuations, prices are available as soon as the broker prices them. Additional information can be found on their web site at www.sqx.com or call 630-870-1101.