On January 20, 2011, the US Securities and Exchange Commission (the “SEC”) voted to adopt two sets of new rules intended to enhance disclosure to investors in asset- backed securities. Specifically, the SEC’s rules implement Sections 943 and 945 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) as follows:
Pursuant to Section 943(2) of the Dodd-Frank Act, the new SEC Rule 15Ga-1 requires a securitizer under any registered or unregistered “asset-backed security” (which, as defined by the Dodd-Frank Act is broader than the definition in Regulation AB, as it expressly includes CMOs, CDOs, collateralized bond obligations and CDOs of ABSs and CDOs) to publicly disclose, in tabular form, information relating to its history of fulfilled and unfulfilled repurchase requests (aggregated for all asset-backed securities of such securitizer) if the underlying transaction agreements include a covenant to repurchase or replace a pool asset for breach of a representation or warranty. The first such disclosure is required to be made by February 14, 2012 and must cover repurchase requests during the three-year period ending December 31, 2011. After the first disclosure, disclosures must be made on a quarterly basis and must cover repurchase requests made during such quarter. The first disclosure and the subsequent quarterly disclosures are to be made by filing new Form ABS-15G on EDGAR. For issuers of municipal securities, however, the initial disclosure is not required to be made until February 14, 2015 and must cover repurchase requests during the three-year period ending December 31, 2014. Moreover, issuers of municipal securities are permitted to file such disclosures on the Electronic Municipal Market Access, a centralized database containing information on municipal securities issuers and offerings, rather than on EDGAR. A securitizer is not required to report if an affiliated securitizer in the same transaction files the required disclosures. In addition, a securitizer may suspend its ongoing quarterly reporting obligation if no repurchase requests have been made during that quarter, although it would still be required to file an annual confirmation that it had no repurchase requests during the year. Finally, in recognition of the fact that the data collection necessary to comply with these reporting requirements may be costly and that it may be very difficult to obtain information relating to prior repurchase requests, the rule permits a securitizer to omit information otherwise required by Form ABS-15G that is unknown and not available to the securitizer without unreasonable effort or expense so long as such securitizer provides information it does possess or can acquire without unreasonable effort or expense and submits a statement showing why unreasonable effort or expense would be involved in obtaining the omitted information.