Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Wednesday, October 6, 2010

SEC Proposes Rules on Disclosure of ABSs

The SEC seeks public comment on proposed regulations to require issuers of asset-backed securities (ABS) — and credit rating agencies that rate ABS — to provide investors with new disclosures about representations, warranties, and enforcement mechanisms.  Section 943 of the Dodd-Frank Wall Street Reform and Consumer Protection Act requires the Commission to prescribe regulations on the use of representations and warranties in the ABS market by Jan. 14, 2011, so that investors receive information about the representations and warranties and repurchase history so they may identify originators with clear underwriting deficiencies.

The SEC’s proposed rules would:

  • Require Disclosure of Repurchase History
  • Require Disclosure of Repurchase History in Prospectuses and Ongoing Reports
  • Require NRSROs to Provide Disclosure in Any Report Accompanying a Credit Rating

The public comment period ends on Nov. 15, 2010.

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