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Regulatory Updates
Regulation AB contains a comprehensive body of disclosure and periodic reporting regulations relating to asset-backed securities. The regulation currently applies to registered ABS offerings but Regulation AB II, which is yet to be finalized, proposes to extend public-style disclosure requirements to an array of privately-placed structured finance products.
Section 945 of Dodd-Frank and Securities Act Rule 193 impose an obligation on asset-backed issuers to perform pool asset reviews in connection with registered ABS offerings, and related disclosure requirements in Regulation AB require the issuer to disclose the nature, findings and conclusions of such reviews.
Section 943 of Dodd-Frank and Exchange Act Rule 15Ga-1 require securitizers to disclose and regularly update their history of fulfilled and unfulfilled repurchase requests for breaches of representations and warranties in both registered and unregistered ABS offerings, and related disclosure requirements in Regulation AB require an asset-backed issuer to disclose comparable information in prospectuses and periodic reports.
Dodd-Frank also nullifies Securities Act Rule 436(g). As a result, an asset-backed issuer must obtain and file an NRSRO’s consent in order to include an NRSRO credit rating in a registration statement. The SEC has, however, issued a no-action letter relieving asset-backed issuers from the requirement to disclosure ratings in a registration statement.
The FDIC Securitization Safe Harbor Rule imposes disclosure and periodic reporting requirements on asset-backed issuers by reference to Regulation AB. These requirements apply to both private placements and public issuances.
Section 941 of Dodd-Frank directs a group of federal regulators to jointly adopt risk retention regulations. These regulations have been proposed and re-proposed and include related disclosure requirements.
