Alert October 19, 2010

SEC Proposes Rules Governing Issuer Review of Assets in Offerings of Asset-Backed Securities Pursuant to Dodd-Frank Act

To implement Section 945 and a portion of Section 932 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the SEC proposed (a) a new rule under the Securities Act of 1933 (the “1933 Act”) to require any issuer registering the offer and sale of an asset-backed security (“ABS”) to perform a review of the assets underlying the ABS; (b) amendments to Regulation AB that would require an ABS issuer to disclose the nature of that review and its findings and conclusions related to the review and the findings and conclusions of any third party engaged to review the assets underlying the ABS; and (c) a new form to be filed by the issuer or underwriter of an ABS offering providing certain disclosure relating to third-party due diligence providers.  Comments must be received on or before November 15, 2010.