A Public Securities Association survey of dealers has raised questions about the value of the new regulations and procedures implemented during the past year for the sale of securities by government-sponsored enterprises. including the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation. The changes were made in the wake of disclosure in 1991 of violations of trading rules by selling group members.

'It is unclear whether customers have benefited from the recent market changes.' the study said. 'There was consensus on the part of respondents that there were fewer customers in the agency market and that investor demand had decreased as a result of the new policies and procedures.'

The PSA survey results will be forwarded to the General Accounting Office, which is conducting a study into the GSE market and distribution process.

'Results of the PSA survey indicate that, on the whole, respondents feel that progress has been made, but that costs associated with implementing the changes has been high,' said PSA President Heather L. Ruth.

Twenty-six dealers answering the survey were members of Fannie Mae's selling group and 13 were members of Freddie Mac's.

A principal concern of respondents was a lack of standardization in agency agreements. They also agreed that they preferred the selling group mechanism instead of underwritten transactions.

Respondents were divided on whether price stability had improved. They linked it to the distribution mechanism used by the GSEs. If a transaction was underwritten, price stability decreased, they said.

The study focused on agency debt instruments, not mortgage-backed securities or their derivatives.

The survey also suggests that costs could be reduced by eliminating outside audits. Some GSEs. including Fannie Mae, make outside audits optional.

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