Reg AB: Lessons Learned and Insights from Year One

In late 2004, the SEC issued final rules for the asset-backed securities (ABS) industry known as Regulation AB, which became effective on January 1, 2006. The intent of the new and amended rules and forms adopted under Reg AB was to update and clarify the Securities Act registration requirements for...

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Bibliographic Details
Published in:Bank Accounting & Finance 2008-06, p.33
Main Authors: Seelig, Mike, Freeman, Ron
Format: Article
Language:English
Subjects:
Agreements
Asset backed securities
Compliance
Conformity
Loan workouts
Noncompliance
Regulation AB
SEC regulations
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Summary:In late 2004, the SEC issued final rules for the asset-backed securities (ABS) industry known as Regulation AB, which became effective on January 1, 2006. The intent of the new and amended rules and forms adopted under Reg AB was to update and clarify the Securities Act registration requirements for ABS offerings, to provide disclosure guidance and minimum requirements and to establish a consistent servicing standard that would be used as the basis for measuring each servicer's performance. The results from the reports filed by issuers in early 2007 also reflect some of the challenges the ABS industry faced in implementing the new disclosure and servicer attestation requirements required under Reg AB in the first year. Those challenges included defining the platform, determining which servicing criteria were applicable, identifying and monitoring material outsourced activities, ensuring compliance monitoring was in place for the new servicing requirements and operating effectively and determining and disclosing material instances of noncompliance. Each of these challenges is discussed.
ISSN:0894-3958