48-hour rule

48-hour rule,

Definition of 48-hour rule:

  1. PSA Uniform Practices requirement that information of a to be announced (TBA) transaction on a mortgage backed security are to be communicated between the seller and buyer by 3pm EST two business days before the delivery takes place.

  2. The 48-hour rule was created to bring transparency to to-be-announced (TBA) trade settlements. The TBA market deals with mortgage-backed securities (MBS). At the time a TBA trade is made, the specific MBS that the seller will deliver to the buyer is not designated.

  3. The 48-hour rule is a requirement that sellers of to-be-announced mortgage-backed securities (MBS) communicate all pool information regarding the transactions to buyers before 3 p.m. EST 48 hours before the settlement date of the trade. The Securities Industry And Financial Markets Association (SIFMA) enforces this rule. SIFMA was formerly known as the Public Securities Association or Bond Market Association.

Meaning of 48-hour rule & 48-hour rule Definition