SIFMA playing role in protocol for MBS trades with Lehman

NEW YORK, Sept 29 (Reuters) - The Securities Industry and Financial Markets Association said on Monday its Asset Management Group will play a role in developing protocol for forward to-be-announced U.S. mortgage-backed securities trades conducted with failed Lehman Brothers Holdings Inc LEH.N(LEHMQ.PK).

SIFMA's Asset Management Group, or AMG, convened "buy side" members to work with Lehman Brothers' court-appointed Securities Investor Protection Corporation ("SIPC") Trustee to develop an industry protocol that will give guidance to firms terminating outstanding trades with the company.

The protocol, known as 08-01, applies to to-be-announced mortgage-backed securities trades that were expected to settle in October, November and December.

"This protocol provides welcome certainty and a way to terminate trades in an orderly fashion," said Joe Sack, SIFMA managing director, in a statement.

"By working with the SIPC and SIPC Trustee, buy side firms have come up with a solution to terminate billions of dollars in trades that would have otherwise required firms to navigate the bankruptcy system," he said.

SIFMA said the protocol contains the essential components that provided a level of comfort to asset managers wanting to terminate forward-settling trades done with Lehman Brothers that do not clear through the Fixed-Income Clearing Corporation (FICC).

Both the protocol and the termination agreement can be found on SIFMA's web site here

Lehman Brothers Holdings Inc filed for bankruptcy protection on Sept. 15 after trying to finance too many risky assets with too little capital. Barclays Plc purchased many of the company's broker-dealer businesses, including its investment banking and capital markets operations, as well as its New York headquarters and other property. (Additional reporting by Dan Wilchins; Editing by Jan Paschal)