Proposed Dodd-Frank Section 945 Rules: SEC Proposes Requirements Regarding Review of Assets Underlying Asset-Backed Securities Offerings and Disclosure of Findings and ConclusionsSullivan & Cromwell LLP - October 18, 2010
On October 13, 2010, the Securities and Exchange Commission proposed rules pursuant to Section 945 and a portion of Section 942 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Proposed Rule 193 under the Securities Act of 1933 would require any issuer registering the offer and sale of an asset-backed security to perform a review of the assets underlying the ABS. The SEC is also proposing amendments to Item 1111 of Regulation AB that would require an ABS issuer to disclose the nature of its review of the assets and the findings and conclusions of its review. If the issuer has engaged a third party to review the assets, the issuer would be required to disclose the third party’s findings and conclusions. The SEC is also proposing a new Rule 15Ga-2 under the Securities Exchange Act of 1934 to require that an issuer or underwriter of an ABS offering file a form to include certain disclosures relating to third-party due diligence providers.