PART 330—GUARANTY OF MULTICLASS SECURITIES Authority: 12 U.S.C. 1721(g) and 1723a(a); and 42 U.S.C. 3535(d). Source: 60 FR 42018, Aug. 14, 1995, unless otherwise noted. § 330.1 Scope of part. This part is limited to multiclass securities. It does not purport to set forth all the procedures and requirements that apply to the issuance and guaranty of such securities. All such transactions are governed by the specific terms and provisions of the contracts entered into by the parties and by the GNMA Multiclass Securities Guide (Multiclass Guide). § 330.5 Definitions. As used in this part, the following terms shall have the meanings indicated: Consolidated securities. Depositor. Depository. GNMA electronic bulletin board. GNMA MBS certificates. Government mortgages. Multiclass Registrar. Participant. Sponsor. Structured securities. [66 FR 44265, Aug. 22, 2001] § 330.10 Eligible collateral. The Association, in its discretion, shall determine what collateral is eligible for inclusion in the Multiclass Securities program. Eligible collateral may include GNMA MBS certificates, government mortgages, consolidated securities, and other securities approved by the Association. Categories of these GNMA MBS certificates, government mortgages, consolidated securities, and other securities as approved by the Association become eligible collateral when they are published as eligible collateral in the Multiclass Guide or on the GNMA electronic bulletin board. Eligible collateral may differ for various Association guaranteed multiclass securities. § 330.15 Participation requirements. To participate in the Multiclass Securities program, a participant must meet the following criteria: (a) Certification. (b) Compliance with Multiclass Guide. (c) Material changes in status. (d) Integrity. (Approved by the Office of Management and Budget under control number 2503-0030) § 330.20 Eligible participants. In addition to requirements set forth in this part, a participant must meet the following requirements. (a) Structured securities Description. (2) Eligibility requirements for participants Sponsors. (A) Apply and be approved by the Association; (B) Demonstrate to the satisfaction of the Association its capacity to accumulate the eligible collateral, as described in this part, needed for a proposed structured securities issuance; (C) Be in good standing with and either have been responsible for at least one structured securities transaction with FNMA or FHLMC, or have demonstrated to the Association's satisfaction its capability to act as sponsor of GNMA guaranteed structured securities; (D) Have the minimum required amount, as set forth in the Multiclass Guide, in shareholders' equity or partners' capital, evidenced by the sponsor's audited financial statements, which must have been issued within the preceding 12-month period; (E) Represent the structural integrity of the issuance under all cash flow scenarios and demonstrate to the Association's satisfaction its ability to indemnify the Association for a breach of this representation; (F) Comply with the Association's policies regarding participation by minority and/or women-owned businesses and take appropriate measures to assure compliance by the other participants as specified in the Multiclass Guide; and (G) Provide the Association with the opinions of trust counsel and accounting firms which are acceptable to the Association and on which the Association may rely. (ii) Co-sponsors. (iii) Trustees. (b) Consolidated securities Description. (2) Eligibility requirements for participant. (i) It is an “accredited investor” within the meaning of 17 CFR 230.501(a)(1), (a)(3) or (a)(7); (ii) It has authority to deliver, and will deliver, the collateral to the trustee and that the collateral is free and clear of all liens and encumbrances; and (iii) The information set forth by the depositor regarding the eligible collateral is true and correct. (c) Other types of Association guaranteed multiclass securities. § 330.25 Fees. The Association, in its discretion, through publication in the Multiclass Guide or on the GNMA electronic bulletin board, may impose fees for application, guaranty, transfer, change from book entry to certificated form, or other related fees. Fees may vary, at the Association's discretion, depending upon, but not limited to, such factors as size, collateral characteristics, expense or risk of the guaranty transaction undertaken. § 330.30 GNMA Guaranty. (a) Securities held by Depositories. (b) Guaranty. (1) The Association makes no other guaranty, including any guaranty that a Depository will appropriately credit payments to beneficial owners of GNMA multiclass securities. The Association's guarantee of securities payable to a Depository or its nominee becomes effective when the Depository or its nominee is registered as the registered owner of the securities on the books and records of the Multiclass Registrar. (2) The Association guarantees the timely payment of principal and interest as provided by the terms of the multiclass security. The Association's guaranty is backed by the full faith and credit of the United States. [66 FR 44266, Aug. 22, 2001] § 330.35 Investors. Association guaranteed multiclass securities may not be suitable investments for all investors. No investor should purchase securities of any class unless the investor understands, and is able to bear, the prepayment, yield, liquidity and market risks associated with the class. The Association assumes no obligation or liability to any person with regard to determining the suitability of such securities for such investor. § 330.40 Consultation. The Association may consult with persons or entities in such manner as the Association deems appropriate to ensure the efficient commencement and operation of the Multiclass Securities program. § 330.45 Limitation on GNMA liability. Except for its guaranty, the Association undertakes no obligation and assumes no liability to any person with regard to or on account of the existence or operation of this part or the conduct of any participants in the Multiclass Securities program. § 330.50 Administration of multiclass securities. The GNMA guaranteed multiclass securities will be administered in accordance with the Association's requirements described in the Multiclass Guide. § 330.55 Basis for removal from participation. A participant may be removed from the Multiclass Securities program if the Association, in its discretion, determines that any of the following exists or has occurred: (a) The participant, at any time, fails to meet any condition for eligibility; (b) The participant fails to comply with any provision of the Multiclass Guide or this part; (c) The participant is unable or fails to truthfully, correctly or fully submit such certifications as are required; and (d) Such further reasons as the Association determines necessary to protect the safety and soundness of the Multiclass Securities program, as set out in the Multiclass Guide. § 330.60 Removal procedure. (a) A participant may be suspended from participation in the Multiclass Securities program upon written notice from the Association, which shall include the reasons for the suspension. The participant shall have the opportunity to submit a written presentation to the President of the Association, or designee, in support of its reinstatement, subject to such limitations as the Association in its discretion may impose as to length, time for submission, or otherwise. A determination by the President of the Association, or designee, shall exhaust the participant's administrative remedies. (b) If a participant is suspended from the Multiclass Securities program, the Association shall have no obligation to complete a pending transaction involving the participant. (c) After a participant has been removed from the Multiclass Securities program, the participant may request reinstatement. Approval of the reinstatement is at the sole discretion of the Association.