Home About Lawyers Offices Practices Media Center Publications Careers

Financial Markets Update

SEC Proposes Substantial New Regulations for Public and Private Offerings of Asset-Backed Securities

On April 7, 2010, at an open meeting of the Securities and Exchange Commission ("SEC"), the SEC unanimously approved for public comment proposed rules that, if adopted, would substantially revise Regulation AB and other rules regarding the offering process, disclosure and reporting for publicly-issued asset-backed securities ("ABS"), and impose new disclosure standards for privately-placed ABS. The SEC’s proposing release – 667 pages in length – has been issued and the comment period will be open for 90 days following its publication in the Federal Register.

The SEC indicates that the proposed changes were prompted by the recent financial crisis, which "highlighted that investors and other participants in the securitization market did not have the necessary tools to be able to fully understand the risk underlying those securities and did not value those securities properly or accurately."

In an effort to enhance investor protection and promote more efficient ABS markets, the SEC concluded that three areas of fundamental change are needed:

  • Enhanced disclosure and reporting for publicly-issued ABS.
  • Better alignment of the interests of issuers and sponsors of ABS with those of investors.
  • Enhanced disclosure and transparency for privately-placed ABS.

In the client alert available through the link below, we provide a brief overview of certain proposed regulations that the SEC believes will advance these objectives.  This overview is based on the remarks of the SEC Commissioners and staff at the open meeting and on the Executive Summary included in the proposing release.

To read more of the client alert, please click here.

Permission is granted to make and redistribute, without charge, copies of this entire document provided that such copies are complete and unaltered and identify Orrick as the author. All other rights reserved.

To ensure future delivery of Orrick communications, please add [email protected] to your safe sender list or address book.

You are receiving this communication because we believe you have an existing business relationship with Orrick or have previously indicated your desire to receive such communications. You may unsubscribe from future messages by adjusting your subscription preferences or be removed from all mailing lists by e-mailing u[email protected].

IRS Circular 230 disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any tax advice contained in this communication, unless expressly stated otherwise, was not intended or written to be used, and cannot be used, for the purpose of (i) avoiding tax-related penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any tax-related matter(s) addressed herein.

This publication is designed to provide Orrick clients and contacts with information they can use to more effectively manage their businesses and access Orrick's resources. The contents of this publication are for informational purposes only. Neither this publication nor the lawyers who authored it are rendering legal or other professional advice or opinions on specific facts or matters. Orrick assumes no liability in connection with the use of this publication.

Attorney advertising. As required by New York law, we hereby advise you that prior results do not guarantee a similar outcome. 2010 Orrick, Herrington & Sutcliffe LLP, 666 Fifth Avenue, New York, NY, 10103-0001,
+1-212-506-5000.