Preparing to comply with the SEC’s new rules governing offerings of asset‐backed securities

The SEC has proposed rules governing offerings of asset‐backed securities (ABS) that will impose extensive new requirements for disclosure and periodic reporting, including substantial additional information regarding various parties involved in securitization transactions. When final rules are adopted, probably by the end of this year, ABS issuers will need to have the necessary information available to them to permit them to comply with the new rules. This article summarizes the proposed rules, with emphasis on provisions that have caused particular concern in the asset‐backed securities markets. The article suggests steps that ABS issuers and their counsel should take time now to ensure that they are in a position to comply with the new rules regarding disclosure and reporting about originators, servicers, credit enhancers, and others, so as to avoid finding themselves unable to securitize portfolio assets in a public offering.