The Australian Office of Financial Management has switched the focus of its Structured Finance Support Fund activities to the secondary market, where an emerging overhang is creating a distortion in pricing likely to weigh on sponsors' capacity to attract third party demand to new primary market issuance."To this end, the AOFM will purchase existing securities from investors who commit to supporting primary market transactions in which the SFSF can invest," the AOFM said in its latest SFSF update.Under the SFSF program, the government is providing the AOFM with A$15 billion to invest in structured finance markets used by smaller lenders, including small ADIs and non-ADIs.One of the priorities for the SFSF is to maximise third party investment activity in transactions.The AOFM said it is planning other interventions in the secondary term securitisation market with the aim of facilitating new primary issuance.It is working with the Australian Securitisation Forum on a "forbearance model" that will allow the SFSF to support term and warehouse structures where COVID-19 hardship cases can be shown to be restricting cash flow into securitisation vehicles.The ASF said the structure would enable the SFSF to invest in new senior ranking debt securities issued by a newly constituted "Forbearance Special Purpose Vehicle".The SPV would then advance funds to eligible securitisation trusts and warehouses that wish to draw liquidity advances to compensate for the issued interest component of scheduled payments.The Australian Competition and Consumer Commission has authorised members of the ASF to work together on the forbearance model. It has authorised the ASF and its members to discuss how the AOFM should administer the SFSF, including providing view to the AOFM about developing measures for issuing new debt, appropriate funding arrangements, allowing for hardship relief and ensuring the continued flow of funding to smaller lenders.However, ASF members "are not authorised to exchange information about margins, costs, payments, repayment terms or specific offers to customers," the ACCC said.