New York, NY, December 21, 2020 – SIFMA today issued a white paper titled “U.S. Negative Interest Rates Policy Checklist.”  The checklist, which was co-authored by SIFMA and Ernst & Young LLP (EY), was developed to assist SIFMA and other market participants with planning for the potential of a negative interest rate policy in the U.S., accelerate readiness, and mitigate the risk of disruption to business activities and investors.

“While SIFMA is not forecasting a U.S. negative interest rates policy, near term, our members do consider the need to prepare for such a possibility. While the probability is low, the impact would be high,” said Charles DeSimone, vice president, SIFMA Operations, Technology and Business Continuity Planning.  “We believe it is prudent to consider policies for such an environment, just as we engage in other preparedness activities in the operations space.”

This paper describes how certain capital markets products may be impacted in the event of a U.S. negative interest rate policy.  It also provides a checklist of key considerations that can be used by industry participants and/or SIFMA member firms to assess the potential impacts of a U.S. negative interest rate policy and mobilize negative interest readiness programs within their institutions.

The checklist is structured across the following key themes: negative interest rates program governance and mobilization; financial exposure analysis; contract and counterparty customer analysis; portfolio strategies and profitability; technology and operations; finance, tax and accounting considerations; and regulatory and corporate policy considerations.

The paper focuses on potential impacts of a U.S. negative interest rate policy to capital markets products such as U.S. dollar bonds and securitizations, repo and reverse repo transactions, derivatives, and money market fund brokerage sweep accounts.

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SIFMA is the leading trade association for broker-dealers, investment banks and asset managers operating in the U.S. and global capital markets. On behalf of our industry’s nearly 1 million employees, we advocate for legislation, regulation and business policy, affecting retail and institutional investors, equity and fixed income markets and related products and services. We serve as an industry coordinating body to promote fair and orderly markets, informed regulatory compliance, and efficient market operations and resiliency. We also provide a forum for industry policy and professional development. SIFMA, with offices in New York and Washington, D.C., is the U.S. regional member of the Global Financial Markets Association (GFMA). For more information, visit http://www.sifma.org.