asset-backed securities

SEC new rule: ABS issuers and underwriters must disclose any third-party due diligence report

On August 27, 2014, as mandated by the Dodd-Frank Act, the Securities & Exchange Commission (the “SEC”) adopted several new rules and amendments designed to improve the quality of credit ratings and increase the accountability of Nationally Recognized Statistical Rating Organizations (“NRSROs”). The new rules, which become effective nine months after their publication in the Federal Register, significantly affect services in connection with asset-backed securities (“ABS”). Among other provisions, included is a requirement for ABS issuers and underwriters to disclose the findings and conclusions of any third-party due diligence report they obtain. The rule applies to both registered and unregistered offerings. Additionally, providers of ABS due diligence services must submit a written certification (signed by an individual who is duly authorized to make such a certification) to any NRSRO that is producing a credit rating regarding the ABS, and disclose information about the due diligence performed, along with a summary of the findings and conclusions, and identification of any relevant NRSRO due diligence criteria that the third-party intended to meet in performing the due diligence.

October 15th, 2014|Dodd-Frank|

SEC’s proposed rule requires issuers and underwriters of asset-backed securities to make due diligence findings available to the public

The Securities and Exchange Commission (SEC) issued on October 13, 2010 a proposal to enhance disclosure to investors in the asset-backed securities market. The proposed rule requires issuers of asset-backed securities (ABS) to perform a review of the assets underlying the securities, and publicly disclose information relating to the review. The proposal also requires an issuer or underwriter of ABS to make publicly available the findings and conclusions of any third-party due diligence report.

The SEC’s proposed rule would enhance ABS disclosure in three ways:
Issuers of ABS that are registered with the SEC would be required to perform a review of the bundled assets that underlie the ABS.
Proposed amendments to Regulation AB would require an ABS issuer to disclose the nature, findings and conclusions of this review of assets.
Issuer or underwriter of both registered and unregistered ABS offerings would be required to disclose the findings and conclusions of any review performed by a third-party that was hired to conduct such a review.

In addition to this rule, the Commission last week proposed regulations that require issuers of ABS — and credit rating agencies that rate ABS — to provide investors with new disclosures about representations, warranties, and enforcement mechanisms. And, in April 2010, the Commission proposed rules that would revise the disclosure, reporting and offering process for ABS to better protect investors in the securitization market.

The Dodd-Frank Wall Street Reform and Consumer Protection Act requires the Commission to adopt rules regarding the review of assets, such as loans, underlying the securities no later than 180 days after enactment.

October 15th, 2010|Educational Series, Legislation|

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asset-backed securities

SEC new rule: ABS issuers and underwriters must disclose any third-party due diligence report

SEC’s proposed rule requires issuers and underwriters of asset-backed securities to make due diligence findings available to the public

This is the development site for Scherzer International and the information may not be accurate.
Please visit our production website.