48-Hour Rule


DEFINITION of '48-Hour Rule '

A requirement that all pooled information regarding to-be-announced transactions on forward mortgage-backed securities (MBS) be communicated to the buyer from the seller before 3 p.m. EST 48 hours prior to the settlement date of the trade. The 48-hour rule is a requirement under the Securities Industry And Financial Markets Association (SIFMA), which is formerly known as the Public Securities Association (PSA) or Bond Market Association.

BREAKING DOWN '48-Hour Rule '

Assume that the agreed upon settlement date between the buyer and the seller is July 14. The 48-hour rule requires that on July 12 by 3 p.m. EST the seller will have informed the buyer of the exact details of the MBS pooled that will be delivered on July 14. Also known as 48-hour day.

  1. Public Securities Association - ...

    The predecessor association to the Bond Market Association, which ...
  2. Securities Industry And Financial ...

    An association that represents firms of all sizes in all financial ...
  3. Mortgage-Backed Security (MBS)

    A type of asset-backed security that is secured by a mortgage ...
  4. Settlement Date

    1. The date by which an executed security trade must be settled. ...
  5. To Be Announced - TBA

    A term used to describe a forward mortgage-backed securities ...
  6. Hedge

    Making an investment to reduce the risk of adverse price movements ...
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