Mr. James Wylie
Associate Director
Federal Housing Finance Agency
Office of Fair Housing Oversight
400 7th Street SW, 9th Fl
Washington, D.C. 20219

Re: Enterprise Single-Family Social Bond Policy

Dear Mr. Wylie,

SIFMA1 and SIFMA’s Asset Management Group2 are pleased to respond to FHFA’s request for information (“RFI”) on the Enterprises’ single-family social bond policy and program design. As you know, SIFMA members comprise the most active firms engaged in the secondary markets for the Enterprises’ MBS. Many of these members, particularly in our Asset Managers Group, manage funds with environmental, social, or governance mandates, and are interested in this RFI. In this letter we will address the requests for input that are most relevant to our membership.

Summary
• Engagement with the market is critical. Our members support FHFA’s outreach to collect market participants’ views on a labeled social bond program as well as the embedded request for views on the Enterprises’ Social Indices.
• Transparency is the theme of our response to this RFI. For any social bond program to be effective and achieve the goals described in the RFI, investors (and other market participants) must be able to clearly understand with specificity which “social” or other criteria bonds meet.
• Without transparency, funds may not be able to purchase Enterprise-issued securities to fulfill ESG mandates. Some of our members report this is the case today with the Enterprises’ Social Index scores, where an overall score is given but transparency is not provided into the social index categories that drive the score.
• The RFI correctly observes that a social bond program would co-exist with the vitally important TBA market. Care must be taken in designing a social bond program to ensure that the needed disclosures do not have an unintended consequence of creating an arbitrage, bifurcate, or otherwise disrupt the homogeneity that enables TBA trading.

Our detailed responses to specific questions may be found in the annex.

1 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 one million employees, we advocate on 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).

2 SIFMA AMG brings the asset management community together to provide views on U.S. and global policy and to create industry best practices. SIFMA AMG’s members represent U.S. and global asset management firms whose combined assets under management exceed $45 trillion. The clients of SIFMA AMG member firms include, among others, tens of millions of individual investors, registered investment companies, endowments, public and private pension funds, UCITS and private funds such as hedge funds and private equity funds.