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.










RELATED TERMS
  1. Current Face

    The current par value of a mortgage-backed security (MBS). Current ...
  2. Securities Industry And Financial ...

    An association that represents firms of all sizes in all financial ...
  3. Settlement Date

    1. The date by which an executed security trade must be settled. ...
  4. Settlement Period

    The period of time between the settlement date and the transaction ...
  5. Mortgage-Backed Security (MBS)

    A type of asset-backed security that is secured by a mortgage ...
  6. Guarantee Fees

    Fees charged by mortgage-backed securities (MBS) providers, such ...
Related Articles
  1. Investing Basics

    What is a Settlement Date?

    A settlement date is the day a security trade must be settled.
  2. Professionals

    Corporate And Municipal Securities Settlement Options

    Regular way transactions in corporate stocks and bonds and municipal bonds settle on the third business day or T+3. There are, however, times when either party to the transaction may request ...
  3. Options & Futures

    Give Mortgage-Backed Securities A Second Chance

    The only real difference between you and Warren Buffett is a few well-chosen stocks – the billion-dollar fortune is the result.
  4. Professionals

    C. Order Tickets

    Prior to executing a customer’s order the representative must fill out the appropriate order ticket and present it to the trading department or wire room for execution.
  5. Mutual Funds & ETFs

    The ABCs of Mortgage-Backed Securities ETFs

    ETFs focused on mortgage-backed securities, or MBS, offer an opportunity to further diversify the fixed-income portion of your portfolio.
  6. Mutual Funds & ETFs

    Top Mortgage-Backed Securities ETFs

    Investing in mortgage-backed securities has many advantages, but studying their history may make you wary.
  7. Professionals

    Settlement of Transactions and Delivery of Securities

    FINRA/NASAA Series 26 Section 8 - Settlement of Transactions and Delivery of Securities. In this section settlement cycle, prompt payment for investment company shares and Delivery of securities.
  8. Professionals

    Expiration And Exercise

    The OCC has set the following rules for stock and narrow based index options expiration and exercise: Options cease trading at 4:00 PM EST (3:00 PM CST) on the third Friday Prior to expiration. ...
  9. Professionals

    Market Terms

    FINRA Series 6 Exam Study Guide - Market Terms. This section explains different market ters and dates such as trade and settlement dates, regular-way settlement and dividend distribution date.
  10. Professionals

    Government Securities Settlement Options

    Regular way transactions in government securities settle on the next business day or T+1. There are however times when either party to the transaction may request an alternative settlement. Other ...
RELATED FAQS
  1. Do I own a stock as of the trade date or the settlement date?

    When it comes to buying shares, there are two key dates involved in the transaction. The first date is the trade date, which ... Read Answer >>
  2. What are the best ways to invest in mortgage-backed securities (MBS)?

    Find out how you can start investing in real estate through mortgage-backed securities. Read Answer >>
  3. Why do MBS (mortgage-backed securities) still exist if they created so much trouble ...

    Read several different arguments in favor of allowing the trade of mortgage-backed securities, even after the financial crisis ... Read Answer >>
  4. What is securitization?

    Securitization is the process of taking an illiquid asset, or group of assets, and through financial engineering, transforming ... Read Answer >>
  5. What's the difference between a collateralized mortgage obligation (CMO) and a mortgage-backed ...

    Find out more about collateralized mortgage obligations and mortgage-backed securities and the difference between the two ... Read Answer >>
  6. Are mortgage-backed securities backed by any guarantees?

    Actually, any mortgage-backed security (MBS) guarantee depends on who issued it.To review, an MBS is a security, created ... Read Answer >>
Hot Definitions
  1. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  2. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  3. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  4. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  5. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
  6. Generally Accepted Accounting Principles - GAAP

    The common set of accounting principles, standards and procedures that companies use to compile their financial statements. ...
Trading Center