SEC Adopts ABS Disclosure and Review Rules

The SEC adopted two sets of rules governing disclosure
for asset-backed securities.  In new Form
ABS-15G, issuers must disclose 3 years of repurchase history for the pooled
assets so that investors “may identify originators with clear underwriting
deficiencies.”  Similar disclosure will
be required in prospectuses for ABS “of the same asset class.”  ABS issuers will also be required to conduct
a review of ABS assets to “provide reasonable assurance that the prospectus
disclosure about the assets is accurate in all material respects.”  The review may be conducted by a third
party.  The SEC indicated that the rules
“are designed to help revitalize the important asset-backed securities market
by encouraging better disclosure for investors.” 

OUR TAKE: The buy-side should welcome these rules because
they will enhance transparency. 

 http://www.sec.gov/news/press/2011/2011-18.htm