Thursday, April 8, 2010
The SEC has proposed significant revisions to the rules regarding the offering process, disclosure and reporting for asset-backed securities. The proposal would:
- revise filing deadlines for ABS offerings to provide investors with more time to consider transaction-specific information, including information about the pool assets.
- repeal the current credit ratings references in shelf eligibility criteria for asset-backed issuers and establish new shelf eligibility criteria that would include, among other things, a requirement that the sponsor retain a portion of each tranche of the securities that are sold and a requirement that the issuer undertake to file Exchange Act reports on an ongoing basis so long as its public securities are outstanding.
- require that, with some exceptions, prospectuses for public offerings of asset-backed securities and ongoing Exchange Act reports contain specified asset-level information about each of the assets in the pool. The asset-level information would be provided according to proposed standards and in a tagged data format using eXtensible Markup Language (XML).
- require, along with the prospectus filing, the filing of a computer program of the contractual cash flow provisions expressed as downloadable source code in Python, a commonly used open source interpretive programming language.
The SEC is also proposing new information requirements for the safe harbors for exempt offerings and resales of asset-backed securities.