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SEC Adopts New Rules for Asset-Backed Securities

Announced via press release Wednesday, the Securities and Exchange Commission (“SEC”) has adopted revised rules for overseeing the disclosure, reporting, and offering process for asset-backed securities (ABS). The new rules address problems and significant losses ABS holders suffered from the 2008 financial crisis, as well as increase transparency, enhance investor protection and assist capital formation in the securitization market.

Required by the new rules are loan-level reporting for certain assets, including residential and commercial mortgages, and car loans. Further, the rules give investors additional time to review a securitization offering, update the criteria for using an accelerated offering process and make key changes to reporting requirements.

The new rules are effective 60 days after being published in the Federal Register. Issuers are required comply with new rules, forms, and disclosures aside from the asset-level disclosure provisions no more than one year after being published in the Federal Register. Additionally, offerings of ABS backed supported by residential and commercial mortgages, car loans and leases, and debt securities must comply with the asset-level disclosure provisions no more than two years after the new rules are published in the Federal Register.

Are you an asset-backed securities holder? Let Cherry Bekaert assist in the adoption of the SEC’s new rules.

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