Capstead Mortgage Corporation Submits Comment Letter on SEC Concept Release

Capstead Mortgage Corporation (NYSE: CMO) announced today that it has submitted a comment letter to the U.S. Securities and Exchange Commission regarding the SEC's Concept Release reviewing interpretive issues related to the Section 3(c)(5)(c) exemption to the Investment Company Act of 1940.

Commenting on the submission, Andrew F. Jacobs, President and Chief Executive Officer, said, “In our letter we focused on why we believe the Commission should interpret the Investment Company Act of 1940 Section 3(c)(5)(c) exclusion from regulation as an investment company for real estate companies in a broad fashion. In particular, we asked that the Commission affirm its staff's past interpretations that companies holding so called whole pool certificates are appropriately excluded from regulation as investment companies.

Further we asked that the Commission designate both pass-through and pay-through partial pool certificates as qualifying interests for Section 3(c)(5)(c) exclusion purposes. This may become of critical importance given future changes that could occur as a result of implementing the Dodd-Frank Wall Street Reform and Consumer Protection Act and reforming Fannie Mae and Freddie Mac.

“Finally, we strongly endorse the findings and comments made in the National Association of Real Estate Investment Trusts' residential mortgage real estate investment trust comment letter and the Securities Industry and Financial Markets Association's comment letter regarding (a) the well-regulated environment in which mortgage REITs currently operate that fosters a culture within which investors are well-protected, and (b) the significant current and future role of mortgage REITs in supporting our nation's housing markets through capital formation.”