Alert March 04, 2014

SEC Re-Opens Comment Periods for Asset-Backed Securities Rule Proposals

The SEC re-opened the comment periods on its rule proposals regarding asset-backed securities described in the releases entitled “Asset-Backed Securities” (the “2010 Release”) and “Re-Proposal of Shelf Eligibility Conditions for Asset-Backed Securities” (the “2011 Release” and, collectively with the 2010 Release, the “Releases”).  The 2010 Release, which was discussed in the April 13, 2010 Financial Services Alert, proposed significant revisions to Regulation AB including increased disclosure and reporting requirements.  The comment period on the 2010 Release initially closed on August 2, 2010.  The 2011 Release, which was discussed in the August 2, 2011 Financial Services Alert, re-proposed portions of the 2010 Release in light of the mandates of the Dodd-Frank Act.  The comment period on the 2011 Release initially closed on October 4, 2011.

Certain comments in response to the Releases expressed concern that the disclosures proposed in the Releases would include potentially sensitive data.  Noting that data submitted through the SEC’s EDGAR system would publicly available, the comments requested alternative means of providing sensitive information.  Some comments suggested that sensitive data could be provided through a limited-access website or otherwise available on a restricted basis.  In response to these comments, the SEC’s Division of Corporation Finance has prepared a memorandum describing an alternative approach for disclosing potentially sensitive asset-level information to investors and potential investors through an issuer’s website where it could be subject to appropriate safeguards on access.  To permit public comment on this alternative, the SEC has reopened the comment period for both Releases through March 28, 2014.