The SEC approved new rules designed to help revitalize the important asset-backed securities (ABS) market by encouraging better disclosure for investors.  A second set of approved rules will require issuers of ABS's to conduct a review of the assets underlying those securities.

    New Disclosure of Repo History on New Form ABS-15G.   The final rules require ABS issuers to file with the SEC, in tabular format, the history of the requests they received and repurchases they made relating to their outstanding ABS's.  The table will provide comparable disclosures so that investors may identify originators with clear underwriting deficiencies.  Specifically, issuers are required to disclose the last 3 years of repurchase history in an initial filing on EDGAR, due by 2/14/12. 

After the initial filing, the ABS issuer is required to file updated information quarterly, including:

• Repurchase history for all outstanding ABS (regardless of whether the securities were offered in a transaction registered with the SEC) if the underlying transaction agreements include a covenant to repurchase or replace a pool asset.
•  History of all fulfilled and unfulfilled repurchase requests, including investor demands upon a trustee and pending requests.

The disclosure requirements will apply to issuers of unregistered ABS, including municipal ABS. However, municipal ABS are provided an additional 3-year phase-in period and will be permitted to provide their information on EMMA, the MSRB's centralized public database for information about municipal securities issuers and offerings.

    New Disclosures in Prospectuses and Ongoing Reports.   The final rules also provide investors with ready access to the most current information regarding an issuer's repurchase history by requiring an issuer in a registered ABS offering to include — in the body of a prospectus — repurchase history for the last 3 years for ABS of the same asset class as the securities being registered.  This information must be included in registered offerings in a phase-in period commencing on 2/14/12.  In its ongoing reports, an issuer will be required to provide updated repurchase history for the particular, related asset pool beginning with distribution reports required to be filed on Form 10-D after 12/31/11.  

For further details, go to:  [SEC PR 11-18, 1/20]  and [Final Rule Release No. 33-9175, 1/20]  and [Final Rule Release No. 33-9175, 1/20]