SEC Final Rule: Issuer Review of Assets in Offerings of Asset-Backed Securities

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Dodd-Frank Timeline, Issuer Review of Assets in Asset-Backed Securities, SEC
Final Rule Issue Effective Date Compliance Date
January 25, 2011 March 28, 2011 December 31, 2011

On January 20, 2011, the SEC held an open meeting concerning issuer review of assets in offerings of asset-backed securities (ABS) under the Dodd-Frank Act. Among the topics at this meeting was encouraging transparency and better disclosure for investors in the ABS market.[1] Final rules were added to the Federal Register on January 25, 2011.

Final Rules

  • Issuers of asset-backed securities must conduct a review of the assets underlying those securities, while also providing:
  1. "Information about how the loans in the pool differ from the loan underwriting criteria disclosed in the prospectus.
  2. Information about loans that did not meet the disclosed underwriting criteria but were nonetheless included in the pool.
  3. Information about the entity that made the determination that such loans should be included in the pool, despite not having met the disclosed underwriting standards."

Background

On October 13, 2010, the SEC proposed the above rules concerning issuer review of assets in offerings of asset-backed securities.[2] Proposed rules were added to the Federal Register on October 19, 2010.

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References

  1. SEC Announcements - SEC Approves New Rules Regulating Asset-Backed Securities. SEC. Retrieved on January 21, 2011.
  2. Press Release - SEC Proposes Rules to Require Issuer Review of Assets Underlying Asset-Backed Securities. SEC. Retrieved on October 13, 2010.

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