ABS Shelf Eligibility Criteria: SEC Re-proposes Shelf Eligibility Criteria for Asset-Backed Securities

Sullivan & Cromwell LLP - September 1, 2011

On July 26, 2011, the Securities and Exchange Commission re-proposed eligibility criteria for shelf registration of asset-backed securities (ABS) that it proposed in April 2010 as part of a comprehensive reform of its rules governing disclosure and the offering process for ABS. The new proposal reflects extensive public comments on the original proposal and the impact of a number of provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act, enacted in July 2010, including mandated rulemakings regarding risk retention and ongoing reporting requirements for ABS issuers. It significantly modifies the proposed depositor certification requirement and introduces requirements for the appointment of a credit risk manager, mandatory dispute resolution for requests to repurchase pool assets and the facilitation of investor communication. The SEC is also proposing an earlier deadline for the filing of required exhibits to shelf registration statements and is requesting additional comment of various other aspects of its April 2010 proposals, including requirements for asset-level data and the introduction of enhanced disclosure requirements for privately placed ABS to be eligible for safe harbor exemptions from registration under the Securities Act.