62718 Federal Register / Vol. 75, No. 197 / Wednesday, October 13, 2010 / Proposed Rules 

1Public Law 111–203 (July 21, 2010). 

2 17 CFR 229.1104 and 17 CFR 229.1121. 

3 17 CFR 229.1100 through 17 CFR 229.1123. 

P/N 08–32005–2 following Pacific Aerospace 

Limited Mandatory Service Bulletin PACSB/ 

FU/094, Issue 1, dated August 14, 2008. 

Installation of vertical stabilizer P/N 08– 

32005–2 terminates the repetitive inspection 

requirements of paragraphs (f)(1) and (f)(2) of 

this AD. 

(g) For airplanes that have been modified 

by installation of vertical stabilizer P/N 08– 

32005–2, do the following actions: 

(1) Within 300 hours TIS after installation 

of vertical stabilizer P/N 08–32005–2 or 

within 50 hours TIS after the effective date 

of this AD, whichever occurs later, and 

repetitively thereafter at intervals not to 

exceed 300 hours TIS, do a detailed visual 

inspection of the vertical stabilizer following 

paragraph 2.B.i) of Pacific Aerospace Limited 

Mandatory Service Bulletin PACSB/FU/094, 

Issue 1, dated August 14, 2008. 

(2) Within 3,000 hours TIS after 

installation of vertical stabilizer P/N 08– 

32005–2 or within 50 hours TIS after the 

effective date of this AD, whichever occurs 

later, and repetitively thereafter at intervals 

not to exceed 3,000 hours TIS, do an eddy 

current inspection following paragraph 

2.B.ii) of Pacific Aerospace Limited 

Mandatory Service Bulletin PACSB/FU/094, 

Issue 1, dated August 14, 2008. 

FAA AD Differences 

Note 2: This AD differs from the MCAI 

and/or service information as follows: 

(1) The inspections required in paragraph 

(f)(1) of this AD must be performed by a 

person authorized under 14 CFR part 43 to 

perform inspections, as opposed to the 

MCAI, which allows the holder of a pilot 

license to perform the inspections. 

(2) The 50-hour inspection required in the 

MCAI is not applicable because the ‘‘before 

the first flight of the day’’ inspection captures 

the intent. 

(3) The MCAI does not require the 

inspections listed in Pacific Aerospace 

Limited Mandatory Service Bulletin PACSB/ 

FU/094, Issue 1, dated August 14, 2008. To 

require compliance with these inspections 

for U.S. owners and operators we are 

requiring the inspections through this AD 

action. 

Other FAA AD Provisions 

(h) The following provisions also apply to 

this AD: 

(1) Alternative Methods of Compliance 

(AMOCs): The Manager, Standards Office, 

FAA, has the authority to approve AMOCs 

for this AD, if requested using the procedures 

found in 14 CFR 39.19. Send information to 

ATTN: Karl Schletzbaum, Aerospace 

Engineer, FAA, Small Airplane Directorate, 

901 Locust, Room 301, Kansas City, Missouri 

64106; telephone: (816) 329–4146; fax: (816) 

329–4090. Before using any approved AMOC 

on any airplane to which the AMOC applies, 

notify your appropriate principal inspector 

(PI) in the FAA Flight Standards District 

Office (FSDO), or lacking a PI, your local 

FSDO. 

(2) Airworthy Product: For any requirement 

in this AD to obtain corrective actions from 

a manufacturer or other source, use these 

actions if they are FAA-approved. Corrective 

actions are considered FAA-approved if they 

are approved by the State of Design Authority 

(or their delegated agent). You are required 

to assure the product is airworthy before it 

is returned to service. 

(3) Reporting Requirements: For any 

reporting requirement in this AD, under the 

provisions of the Paperwork Reduction Act 

(44 U.S.C. 3501 et seq.), the Office of 

Management and Budget (OMB) has 

approved the information collection 

requirements and has assigned OMB Control 

Number 2120–0056. 

Related Information 

(i) Refer to MCAI Civil Aviation Authority 

of New Zealand AD DCA/FU24/178, dated 

April 30, 2009; and Pacific Aerospace 

Limited Mandatory Service Bulletin PACSB/ 

FU/094, Issue 1, dated August 14, 2008, for 

related information. For service information 

contact Pacific Aerospace Limited, Hamilton 

Airport, Private Bag HN3027, Hamilton, New 

Zealand; telephone: + (64) 7–843–6144; fax + 

(64) 7–843–6134; email: 

pacific@aerospace.co.nz. 

Issued in Kansas City, Missouri, on 

October 6, 2010. 

Christina L. Marsh, 

Acting Manager, Small Airplane Directorate, 

Aircraft Certification Service. 

[FR Doc. 2010–25700 Filed 10–12–10; 8:45 am] 

BILLING CODE 4910–13–P 

SECURITIES AND EXCHANGE 

COMMISSION 

17 CFR Parts 229, 240, and 249 

[Release Nos. 33–9148; 34–63029; File No. 

S7–24–10] 

RIN 3235–AK75 

Disclosure for Asset-Backed Securities 

Required by Section 943 of the DoddFrank Wall Street Reform and 

Consumer Protection Act 

AGENCY: Securities and Exchange 

Commission. 

ACTION: Proposed rule. 

SUMMARY: Pursuant to Section 943 of the 

Dodd-Frank Wall Street Reform and 

Consumer Protection Act 1 we are 

proposing rules related to 

representations and warranties in assetbacked securities offerings. Our 

proposals would require securitizers of 

asset-backed securities to disclose 

fulfilled and unfulfilled repurchase 

requests across all transactions. Our 

proposals would also require nationally 

recognized statistical rating 

organizations to include information 

regarding the representations, 

warranties and enforcement 

mechanisms available to investors in an 

asset-backed securities offering in any 

report accompanying a credit rating 

issued in connection with such 

offerings, including a preliminary credit 

rating. 

DATES: Comments should be received on 

or before November 15, 2010. 

ADDRESSES: Comments may be 

submitted by any of the following 

methods: 

Electronic Comments 

• Use the Commission’s Internet 

comment form (http://www.sec.gov/ 

rules/proposed.shtml); 

• Send an e-mail to 

rule-comments@sec.gov. Please include 

File Number S7–24–10 on the subject 

line; or 

• Use the Federal Rulemaking Portal 

(http://www.regulations.gov). Follow the 

instructions for submitting comments. 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 

Securities and Exchange Commission, 

100 F Street, NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number S7–24–10. This file number 

should be included on the subject line 

if e-mail is used. To help us process and 

review your comments more efficiently, 

please use only one method. The 

Commission will post all comments on 

the Commission’s Internet Web site 

(http://www.sec.gov/rules/ 

proposed.shtml). Comments are also 

available for Web site viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street, NE., 

Washington, DC 20549, on official 

business days between the hours of 10 

a.m. and 3 p.m. All comments received 

will be posted without change; we do 

not edit personal identifying 

information from submissions. You 

should submit only information that 

you wish to make available publicly. 

FOR FURTHER INFORMATION CONTACT: 

Rolaine Bancroft, Attorney-Advisor, in 

the Office of Rulemaking, at (202) 551– 

3430, Division of Corporation Finance, 

U.S. Securities and Exchange 

Commission, 100 F Street, NE., 

Washington, DC 20549–3628 or, with 

respect to proposed Rule 17g–7, Joseph 

I. Levinson, Special Counsel, at (202) 

551–5598; Division of Trading and 

Markets, U.S. Securities and Exchange 

Commission, 100 F Street, NE., 

Washington, DC 20549–3628. 

SUPPLEMENTARY INFORMATION: We are 

proposing amendments to Items 1104 

and 1121 2 of Regulation AB3 (a subpart 


jlentini on DSKJ8SOYB1PROD with PROPOSALS
Federal Register / Vol. 75, No. 197 / Wednesday, October 13, 2010 / Proposed Rules 62719 

4 15 U.S.C. 77a et seq. 

5 17 CFR 240.15Ga–1. 

6 17 CFR 240.17g–7. 

7 17 CFR 249.1300. 

8 15 U.S.C. 78a et seq. 

9See Section 943 of the Act. 

10See Asset Backed Securities, SEC Release No. 

33–9117 (April 7, 2010) [75 FR 23328] (the ‘‘2010 

ABS Proposing Release’’). 

11 Depending on the transaction, the originator of 

the assets or, most typically, the sponsor of the 

securities—who could also function as the 

originator—would be the obligated party. See 

previously proposed Items 1104(f) and 1110(c) of 

Regulation AB in the 2010 ABS Proposing Release. 

12See previously proposed Item 1121(c) of 

Regulation AB in the 2010 ABS Proposing Release. 

13As we noted in the 2010 ABS Proposing 

Release, transaction agreements typically have not 

included specific mechanisms to identify breaches 

of representations and warranties or to resolve a 

question as to whether a breach of the 

representations and warranties has occurred. Thus, 

these contractual agreements have frequently been 

ineffective because, without access to documents 

relating to each pool asset, it can be difficult for the 

trustee, which typically notifies the sponsor of an 

alleged breach, to determine whether or not a 

representation or warranty relating to a pool asset 

has been breached. In the 2010 ABS Proposing 

Release, the Commission proposed a condition to 

shelf eligibility that would require a provision in 

the pooling and servicing agreement that would 

require the party obligated to repurchase the assets 

for breach of representations and warranties to 

periodically furnish an opinion of an independent 

third party regarding whether the obligated party 

acted consistently with the terms of the pooling and 

servicing agreement with respect to any loans that 

the trustee put back to the obligated party for 

violation of representations and warranties and 

which were not repurchased. See Section II.A.3.b. 

of the 2010 ABS Proposing Release. See also the 

Committee on Capital Markets Regulation, The 

Global Financial Crisis: A Plan for Regulatory 

Reform, May 2009, at 135 (noting that contractual 

provisions have proven to be of little practical value 

to investors during the crisis); see also Investors 

Proceeding with Countrywide Lawsuit, Mortgage 

Servicing News, Feb. 1, 2009 (describing class 

action investor suit against Countrywide in which 

investors claim that language in the pooling and 

servicing agreements requires the seller/servicer to 

repurchase loans that were originated with 

‘‘predatory’’ or abusive lending practices) and 

American Securitization Forum, ASF Releases 

Model Representations and Warranties to Bolster 

Risk Retention and Transparency in Mortgage 

Securitizations, (Dec. 15, 2009), available at 

Continued 

of Regulation S–K) under the Securities 

Act of 1933 (‘‘Securities Act’’).4 We also 

are proposing to add Rules 15Ga–1 5 and 

17g–7 6 and Form ABS–15G 7 under the 

Securities Exchange Act of 1934 

(‘‘Exchange Act’’).8

Table of Contents 

I. Background 

II. Discussion of Proposals 

A. Proposed Disclosure Requirements for 

Securitizers 

1. Definition of Exchange-Act ABS for 

Purposes of Rule 15Ga–1 

2. Definition of Securitizer for Purposes of 

Rule 15Ga–1 

3. Disclosures Required by Proposed Rule 

15Ga–1 

4. Proposed Form ABS–15G 

5. Offshore Sales of Exchange Act-ABS 

B. Proposed Disclosure Requirements in 

Regulation AB Transactions 

C. Proposed Disclosure Requirements for 

NRSROs 

III. Transition Period 

IV. General Request for Comments 

V. Paperwork Reduction Act 

A. Background 

B. PRA Reporting and Cost Burden 

Estimates 

1. Form ABS–15G 

2. Rule 15Ga–1 

3. Forms S–1 and S–3 

4. Form 10–D 

5. Regulation S–K 

6. Rule 17g–7 

7. Summary of Proposed Changes to 

Annual Burden Compliance in 

Collection of Information 

8. Solicitation of Comments 

VI. Benefit-Cost Analysis 

A. Benefits 

B. Costs 

C. Request for Comment 

VII. Consideration of Burden on Competition 

and Promotion of Efficiency, 

Competition and Capital Formation 

VIII. Small Business Regulatory Enforcement 

Fairness Act 

IX. Regulatory Flexibility Act Certification 

X. Statutory Authority and Text of Proposed 

Rule and Form Amendments 

I. Background 

This release is one of several that the 

Commission is required to issue to 

implement provisions of the DoddFrank Wall Street Reform and Consumer 

Protection Act (the ‘‘Act’’) related to 

asset-backed securities (‘‘ABS’’). In this 

release, we propose rules to implement 

Section 943 of the Act, which requires 

the Commission to prescribe regulations 

on the use of representations and 

warranties in the market for assetbacked securities: 

(1) To require any securitizer to 

disclose fulfilled and unfulfilled 

repurchase requests across all trusts 

aggregated by securitizer, so that 

investors may identify asset originators 

with clear underwriting deficiencies; 

and 

(2) To require each nationally 

recognized statistical rating organization 

(‘‘NRSRO’’) to include, in any report 

accompanying a credit rating for an 

asset-backed securities offering, a 

description of (A) the representations, 

warranties and enforcement 

mechanisms available to investors; and 

(B) how they differ from the 

representations, warranties and 

enforcement mechanisms in issuances 

of similar securities.9

The Act requires us to adopt these 

rules within 180 days of enactment of 

the Act. 

In April of 2010, we proposed rules 

that would revise the disclosure, 

reporting and offering process for assetbacked securities (the ‘‘2010 ABS 

Proposing Release’’).10 Among other 

things, the 2010 ABS Proposing Release 

proposed new disclosure requirements 

with respect to repurchase requests. 

Specifically, we proposed that issuers 

disclose in prospectuses the repurchase 

demand and repurchase and 

replacement activity for the last three 

years of sponsors of asset-backed 

transactions or originators of underlying 

pool assets if they are obligated to 

repurchase assets pursuant to the 

transaction agreements.11 These 

disclosure requirements would apply to 

offerings of ABS registered under the 

Securities Act or ABS offered and sold 

without registration in reliance upon 

Securities Act rules, which includes 

both offerings eligible for Rule 144A 

resales and other offerings conducted in 

reliance on exemptions from 

registration. We also proposed that 

issuers disclose the repurchase demand 

and repurchase and replacement 

activity concerning the asset pool on an 

ongoing basis in periodic reports.12 As 

described in Section II.B. below, we are 

re-proposing the disclosure 

requirements with respect to repurchase 

requests in Regulation AB in order to 

conform the disclosures to those 

required by Section 943 of the Act. 

In the underlying transaction 

agreements for an asset securitization, 

sponsors or originators typically make 

representations and warranties relating 

to the pool assets and their origination, 

including about the quality of the pool 

assets. For instance, in the case of 

residential mortgage-backed securities, 

one typical representation and warranty 

is that each of the loans has complied 

with applicable federal, state and local 

laws, including truth-in-lending, 

consumer credit protection, predatory 

and abusive laws and disclosure laws. 

Another representation that may be 

included is that no fraud has taken 

place in connection with the origination 

of the assets on the part of the originator 

or any party involved in the origination 

of the assets. Upon discovery that a pool 

asset does not comply with the 

representation or warranty, under 

transaction covenants, an obligated 

party, typically the sponsor, must 

repurchase the asset or substitute a 

different asset that complies with the 

representations and warranties for the 

non-compliant asset. The effectiveness 

of the contractual provisions related to 

representations and warranties has been 

questioned and lack of responsiveness 

by sponsors to potential breaches of the 

representations and warranties relating 

to the pool assets has been the subject 

of investor complaint.13


jlentini on DSKJ8SOYB1PROD with PROPOSALS
62720 Federal Register / Vol. 75, No. 197 / Wednesday, October 13, 2010 / Proposed Rules 

http://www.americansecuritization.com. It has been 

reported that only large ABS investors, such as 

Fannie Mae and Freddie Mac, have been able to 

effectively exercise repurchase demands. See 

Aparajita Saha-Bubna, ‘‘Repurchased Loans Putting 

Banks in Hole,’’ Wall Street Journal (Mar. 8, 2010) 

(noting that most mortgages put back to lenders are 

coming from Fannie Mae and Freddie Mac). 

14Section 3(a)(77) of the Exchange Act provides 

that the term ‘‘asset backed security’’ means a fixedincome or other security collateralized by any type 

of self-liquidating financial asset (including a loan, 

a lease, a mortgage, or a secured or unsecured 

receivable) that allows the holder of the security to 

receive payments that depend primarily on cash 

flow from the asset, including a collateralized 

mortgage obligation; a collateralized debt 

obligation; a collateralized bond obligation; a 

collateralized debt obligation of asset-backed 

securities; a collateralized debt obligation of 

collateralized debt obligations; and a security that 

the Commission, by rule, determines to be an assetbacked security for purposes of this section; and 

does not include a security issued by a finance 

subsidiary held by the parent company or a 

company controlled by the parent company, if none 

of the securities issued by the finance subsidiary are 

held by an entity that is not controlled by the parent 

company. Section 3(a)(77) of the Exchange Act, as 

amended by the Act. 

15 In 2004, we adopted the definition of ‘‘assetbacked security’’ in Regulation AB. The definition 

and our interpretations of it are intended to 

establish parameters for the types of securities that 

are appropriate for the alternate disclosure and 

regulatory regime provided in Regulation AB and 

the related rules for Form S–3 registration of ABS. 

The definition does not mean that public offerings 

of securities outside of these parameters, such as 

synthetic securitizations, may not be registered with 

the Commission, but only that the alternate 

regulatory regime is not designed for those 

securities. The definition does mean that such 

securities must rely on non-ABS form eligibility for 

registration, including shelf registration. See 

Section III.A.2 of Asset-Backed Securities, SEC 

Release 33–8518 (January 7, 2005) [70 FR 1506] (the 

‘‘2004 ABS Adopting Release’’) and Item 1101(c) of 

Regulation AB [17 CFR 1101(c)]. 

16 Government sponsored enterprises (GSEs) such 

as Fannie Mae and Freddie Mac purchase mortgage 

loans and issue or guarantee mortgage-backed 

securities (MBS). MBS issued or guaranteed by 

these GSEs have been and continue to be exempt 

from registration under the Securities Act and 

reporting under the Exchange Act. For more 

information regarding GSEs, see Task Force on 

Mortgage-Backed Securities Disclosure, ‘‘Staff 

Report: Enhancing Disclosure in the MortgageBacked Securities Markets’’ (Jan. 2003) available at 

http://www.sec.gov/news/studies/ 

mortgagebacked.htm. 

17For a discussion of municipal ABS, see 

generally Robert A. Fippinger, The Securities Law 

of Public Finance vol. 1, § 1:6.2[B], 1–70—1–72 (2d 

ed., Practicing Law Institute 2009). 

18See Section 15G(a)(3) of the Exchange Act, as 

amended by the Act. 

19Securities Act Rule 191 [17 CFR 230.191] 

generally defines an issuer as the depositor. 

20A sponsor, as defined in Regulation AB, is the 

person who organizes and initiates an asset-backed 

securities transaction by selling or transferring 

assets, either directly or indirectly, including 

through an affiliate, to the issuing entity. See Item 

1101(l) of Regulation AB [17 CFR 229.1101(l)]. 

Sponsors of asset-backed securities often include 

banks, mortgage companies, finance companies, 

investment banks and other entities that originate 

or acquire and package financial assets for resale as 

II. Discussion of Proposals 

A. Proposed Disclosure Requirements 

for Securitizers 

We are proposing to add new Rule 

15Ga–1 to implement Section 943(2) of 

the Act. This proposed rule would 

require any securitizer of asset-backed 

securities to disclose fulfilled and 

unfulfilled repurchase requests across 

all trusts aggregated by securitizer, so 

that investors may identify asset 

originators with clear underwriting 

deficiencies. Under our proposals, a 

securitizer would provide the disclosure 

by filing new proposed Form ABS–15G. 

1. Definition of Exchange Act-ABS for 

Purposes of Rule 15Ga–1 

The Act amended the Exchange Act to 

include a definition of an ‘‘asset-backed 

security’’ and Section 943 of the Act 

references that definition.14 The 

statutory definition of an asset-backed 

security (‘‘Exchange Act-ABS’’) is much 

broader than the definition of an assetbacked security in Regulation AB (‘‘Reg 

AB–ABS’’).15 The definition of an 

Exchange Act-ABS includes securities 

that are typically sold in transactions 

that are exempt from registration under 

the Securities Act, such as collateralized 

debt obligations (‘‘CDOs’’), as well as 

securities issued or guaranteed by a 

government sponsored entity, such as 

Fannie Mae and Freddie Mac.16

Similarly, if a municipal entity issues 

securities collateralized by a selfliquidating pool of loans that allow 

holders of the securities to receive 

payments that depend primarily on cash 

flow from those loans, that security 

would fall within the definition of an 

Exchange Act-ABS.17 Since Section 943 

uses the broader Exchange Act-ABS 

definition, our proposed Rule 15Ga–1 

would require a securitizer to provide 

disclosures relating to all asset-backed 

securities that fall within the statutory 

definition, whether or not sold in 

Securities Act registered transactions. 

However, as we discuss further below, 

even if a security meets the definition of 

an Exchange Act-ABS, the new 

disclosure requirement would not be 

triggered if the underlying transaction 

agreements do not contain a covenant to 

repurchase or replace an asset. 

Request for Comment: 

1. Is it clear what types of securities 

a securitizer would have to provide 

representation and warranty repurchase 

disclosure about under proposed Rule 

15Ga–1? If not, please identify which 

securities are not clearly covered and 

the reasons why those securities are not 

clearly included or excluded by the 

proposal. 

2. Should we provide further 

guidance regarding the application of 

proposed Rule 15Ga–1 to securities 

issued by municipal entities that would 

fall within the definition of Exchange 

Act-ABS? Is it clear what types of 

municipal securities a municipal 

securitizer would have to provide 

representation and warranty repurchase 

disclosure about under proposed Rule 

15Ga–1? If not, please identify those 

types of municipal securities that are 

not clearly covered and explain why 

they are not clearly included or 

excluded by the proposal. 

2. Definition of Securitizer for Purposes 

of Rule 15Ga–1 

Section 943 and proposed Rule 15Ga– 

1 impose the disclosure obligation on a 

‘‘securitizer’’ as defined in the Exchange 

Act. The Act amended the Exchange Act 

to include the definition of a 

‘‘securitizer.’’ Under the Exchange Act, a 

securitizer is either: 

(A) An issuer of an asset-backed 

security; or 

(B) A person who organizes and 

initiates an asset-backed securities 

transaction by selling or transferring 

assets, either directly or indirectly, 

including through an affiliate, to the 

issuer.18

The definition of securitizer is not 

specifically limited to entities that 

undertake transactions that are 

registered under the Securities Act or 

conducted in reliance upon any 

particular exemption. Consequently, we 

believe it is intended to apply to any 

entity or person that issues or organizes 

an Exchange Act-ABS as specified in 

Section 15G(a)(3) of the Exchange Act. 

As a result, proposed Rule 15Ga–1 

would require any entity coming within 

the Section 15G(a)(3) definition of 

securitizer, including government 

sponsored entities such as Fannie Mae, 

Freddie Mac, or a municipal entity, to 

provide the proposed disclosures. 

Further, as noted above, Section 943 

and Section 15G(a)(3) do not distinguish 

between securitizers of Exchange ActABS in registered or unregistered 

transactions, and our proposed Rule 

15Ga–1 would apply equally to 

registered and unregistered transactions. 

With respect to registered transactions 

and the definitions of transaction parties 

in Regulation AB, sponsors and 

depositors 19 both fall within the 

statutory definition of securitizer. A 

sponsor typically initiates a 

securitization transaction by selling or 

pledging to a specially created issuing 

entity a group of financial assets that the 

sponsor either has originated itself or 

has purchased in the secondary 

market.20 In some instances, the transfer 


jlentini on DSKJ8SOYB1PROD with PROPOSALS
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ABS. See Section II. of the 2004 ABS Adopting 

Release. 

21A depositor receives or purchases and transfers 

or sells the pool assets to the issuing entity. See 

Item 1101(e) of Regulation AB [17 CFR 229.1101(e)]. 

For asset-backed securities transactions where there 

is not an intermediate transfer of assets from the 

sponsor to the issuing entity, the term depositor 

refers to the sponsor. For asset-backed securities 

transactions where the person transferring or selling 

the pool assets is itself a trust, the depositor of the 

issuing entity is the depositor of that trust. 

22There may be other situations where multiple 

affiliated securitizers would have individual 

reporting obligations under proposed Rule 15Ga–1 

with respect to a particular transaction. Therefore, 

we propose that if one securitizer has filed all the 

disclosures required in order to meet the obligations 

under Rule 15Ga–1, which would include 

disclosures of the activity of affiliated securitizers, 

those affiliated securitizers would not be required 

to separately provide and file the same disclosures. 

23We propose to adopt this rule as an Exchange 

Act rule because of the relationship with other 

requirements under the Exchange Act and other 

statutory requirements we are implementing. 

24See e.g., comment letters of ASF, Bank of 

America, Community Mortgage Banking Project, 

CRE Finance Council and Mortgage Bankers 

Association on the 2010 ABS Proposing Release. 

The public comments are available at http:// 

www.sec.gov/comments/s7-08-10/s70810.shtml. 

25See Section XI.C.2. of the 2010 ABS Proposing 

Release where we note that disclosures about an 

originator’s or sponsor’s refusal to repurchase or 

replace assets put back to them for breach of 

representations and warranties might create 

incentives for originators to agree to repurchase or 

replace such assets even in cases where these assets 

were not in breach. We explained that if investors 

regard such disclosures as indicative of a 

willingness to comply with representations and 

warranties in the future, then originators and 

sponsors might try to preserve their reputation by 

taking back assets even when they do not have to 

do so. This might create an incentive for sponsors 

and possibly trustees to ask for repurchase or 

replacement of poorly performing assets that 

represent no breach of representations and 

warranties. However, a commentator on the 2010 

ABS Proposing Release stated that in certain 

situations, it may have the opposite effect, where 

the threat of a disclosure requirement may make a 

sponsor worry that a large number of successful 

repurchase claims could indicate that its initial due 

diligence, or the originator’s loan quality was poor. 

See letter from Commonwealth of Massachusetts 

Attorney General. 

26See Jody Shenn, ‘‘BNY Won’t Investigate 

Countrywide Mortgage Securities,’’ Bloomberg 

Business Week (Sep. 13, 2010) available at http:// 

www.businessweek.com/news/2010-09-13/bny-wont-investigate-countrywide-mortgage-securities.html 

(noting the difficulties that investors are facing to 

enforce contracts with respect to repurchase 

demands) and Al Yoon, ‘‘NY Fed joins other 

investors on loan repurchase bid,’’ Reuters (Aug. 4, 

2010) available at http://www.reuters.com/article/

idUSTRE6736DZ20100804 (noting that investors 

have been frustrated with trustees and servicers and 

are banding together to force trustees to act on 

repurchase requests). See also Kevin J. Buckley, 

‘‘Securitization Trustee Issues,’’ The Journal of 

Structured Finance (Summer 2010) (discussing 

investors demands upon trustees to enforce sellers’ 

repurchase obligations). 

of assets is a two-step process: the 

financial assets are transferred by the 

sponsor first to an intermediate entity, 

often a limited purpose entity created by 

the sponsor for a securitization program 

and commonly called a depositor, and 

then the depositor will transfer the 

assets to the issuing entity for the 

particular asset-backed transaction.21

Because both sponsors and depositors 

fit within the statutory definition of 

securitizers, both entities would have 

the disclosure responsibilities under 

proposed Rule 15Ga–1. However, if a 

sponsor filed all disclosures proposed to 

be required under Rule 15Ga–1, which 

would include disclosures of the 

activity of affiliated depositors, Rule 

15Ga–1 would provide that those 

affiliated depositors would not have to 

separately provide and file the same 

disclosures. Such disclosure would be 

duplicative and would not provide any 

additional useful information, since as 

noted above, the depositor usually 

serves as an intermediate entity of a 

transaction initiated by a sponsor.22

Request for Comment: 

3. Is it clear which entities or persons 

would have disclosure responsibilities 

under proposed Rule 15Ga–1? If not, 

please identify those possible entities or 

persons, describe their role in the 

transaction, and explain why they are 

not clearly included or excluded by the 

definition of a securitizer. 

4. Should we provide further 

guidance regarding the application of 

proposed Rule 15Ga–1 to municipal 

issuers that are within the definition of 

securitizers? Is it clear which municipal 

entities would have disclosure 

responsibilities under proposed Rule 

15Ga–1? If not, please identify those 

municipal entities that are not clearly 

covered and explain why they are not 

clearly included or excluded by the 

proposal. 

3. Disclosures Required by Proposed 

Rule 15Ga–1 

In accordance with Section 943 of the 

Act, we are proposing new Rule 15Ga– 

1 23 to require any securitizer of an 

Exchange Act-ABS to disclose fulfilled 

and unfulfilled repurchase requests 

across all trusts aggregated by 

securitizer, so that investors may 

identify asset originators with clear 

underwriting deficiencies. We are 

proposing that, if the underlying 

transaction agreements provide a 

covenant to repurchase or replace an 

underlying asset for breach of a 

representation or warranty, then a 

securitizer would be required to provide 

the information described below for all 

assets originated or sold by the 

securitizer that were the subject of a 

demand for repurchase or replacement 

with respect to all outstanding Exchange 

Act-ABS held by non-affiliates of the 

securitizer. If the underlying agreements 

of an Exchange Act-ABS do not contain 

a covenant to repurchase or replace an 

underlying asset, then no transaction 

party would be entitled to demand 

repurchase or replacement. Requiring 

securitizers to report the activity of 

those Exchange Act-ABS with no 

demands might give an incorrect 

impression of sound underwriting. As 

discussed further below, initially, we 

are proposing that a securitizer provide 

the repurchase history for the last five 

years by filing Form ABS–15G at the 

time a securitizer first offers an 

Exchange Act-ABS or organizes and 

initiates an offering of Exchange ActABS, registered or unregistered, after the 

effective date of the proposed rules, as 

adopted. Going forward, a securitizer 

would be required to provide the 

disclosures for all outstanding Exchange 

Act-ABS on a monthly basis by filing 

Form ABS–15G. Information would not 

be required for the time period prior to 

the five-year look back period of the 

initial filing. 

Section 943(2) requires disclosure of 

fulfilled and unfulfilled repurchase 

requests. It does not limit the required 

disclosure to those relating only to 

demands successfully made by the 

trustee. Therefore our proposal would 

require tabular disclosure of assets 

subject to any and all demands for 

repurchase or replacement of the 

underlying pool assets as long as the 

transaction agreements provide a 

covenant to repurchase or replace an 

underlying asset. For instance, we note 

that demands for repurchase may not 

ultimately result in a repurchase or 

replacement pursuant to the terms of the 

transaction agreement, either because of 

withdrawn demands or incomplete 

demands that did not meet the 

requirements of a valid demand 

pursuant to the transaction 

agreements.24 Furthermore, it may be 

the case that a repurchase or 

replacement may occur whether or not 

it is determined that the obligated party 

was required to repurchase the asset 

pursuant to the terms of the transaction 

agreement.25 Securitizers would be 

permitted to footnote the table to 

provide additional explanatory 

disclosures to describe the data 

disclosed. We also note that investors 

have demanded that trustees enforce 

repurchase covenants because 

transaction agreements do not typically 

contain a provision for an investor to 

directly make a repurchase demand.26

As we stated earlier, Section 943(2) does 

not limit the required disclosures to 

those demands successfully made by the 

trustee; therefore our proposals would 


jlentini on DSKJ8SOYB1PROD with PROPOSALS
62722 Federal Register / Vol. 75, No. 197 / Wednesday, October 13, 2010 / Proposed Rules 

27This situation, as well as others, may arise 

where the disclosures required by proposed Rule 

15Ga–1 alone may necessitate the disclosure of 

additional information in order to render the 

information not misleading. Securitizers would 

need to consider the antifraud provisions under the 

federal securities laws to determine what other 

information, if any, may need to be provided in 

offering materials given to an investor. 

28 Issuing entity is defined in Item 1101(f) of 

Regulation AB [17 CFR 229.1101(f)] as the trust or 

other entity created at the direction of the sponsor 

or depositor that owns or holds the pool assets and 

in whose name the asset-backed securities 

supported or serviced by the pool assets are issued. 

29 In a stand-alone trust structure, usually backed 

by a pool of amortizing loans, a separate issuing 

entity is created for each issuance of ABS backed 

by a specific pool of assets. The date of formation 

of the issuing entity would most likely be at the 

same time of the issuance of the ABS. In a 

securitization using a master trust structure, the 

ABS transaction contemplates future issuances of 

ABS by the same issuing entity, backed by the 

same, but expanded, asset pool. Master trusts would 

organize the data using the date the issuing entity 

was formed, which would most likely be earlier 

than the date of the most recent issuance of 

securities. 

30See Section 943(2) of the Act. 

31 If the ABS were offered in a registered 

transaction, an investor may be able to locate 

additional detailed information. In the 2010 ABS 

require investor demands upon a trustee 

be included in the table, irrespective of 

the trustee’s determination to make a 

repurchase demand on a securitizer 

based on the investor request. We are 

concerned, however, that initially a 

securitizer may not be able to obtain 

complete information from a trustee 

because it may not have tracked investor 

demands. Because securitizers may not 

have access to historical information 

about investor demands made upon the 

trustee prior to the effective date of the 

proposed rules, we are proposing an 

instruction that a securitizer may 

disclose in a footnote, if true, that a 

securitizer requested and was able to 

obtain only partial information or 

unable to obtain any information with 

respect to investor demands to a trustee 

that occurred prior to the effective date 

of the proposed rules and state that the 

disclosures do not contain all demands 

made prior to the effective date.27

We are proposing that securitizers 

provide the information in the following 

tabular format in order to aid 

understanding: 

Name of issuing entity 

Check 

if registered Name of originator 

Assets that were subject 

of demand 

Assets that were repurchased or replaced Assets that were not repurchased or replaced Assets pending repurchase or replacement 

(#) ($) (% of 

pool) (#) ($) (% of pool) (#) ($) (% of pool) (#) ($) (% of pool) 

(a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) (l) (m) (n) (o) 

Asset Class X 

Issuing Entity A ......

CIK # 

X Originator 1 

Originator 2 

Issuing Entity B ...... Originator 3 

Total ................ ............ ................................ # $ # $ # $ # $ 

Asset Class Y 

Issuing Entity C ..... ............ Originator 2 

Originator 3 

Issuing Entity D 

CIK#.

X Originator 1 

Total ................ ............ ................................ # $ # $ # $ # $ 

A single securitizer may have several 

securitization programs to securitize 

different types of asset classes. 

Therefore, in order to organize the 

information in a manner that would be 

useful for investors, we are proposing 

that the securitizer disclose the asset 

class and group the information in the 

table by asset class (column (a)). We are 

also proposing that securitizers list the 

names of all the issuing entities28 of 

Exchange Act-ABS, listed in order of the 

date of formation of the issuing entity in 

column (a) so that investors may 

identify the securities that contain the 

assets subject to the demands for 

repurchase and when the issuing entity 

was formed.29 Because the Act requires 

disclosure with respect to all Exchange 

Act-ABS, Rule 15Ga–1 would require 

securitizers to provide disclosure for all 

Exchange Act-ABS where the 

underlying agreements include a 

repurchase covenant, regardless of 

whether the transaction was registered 

with the Commission. Additionally, if 

any of the Exchange Act-ABS of the 

issuing entity were registered under the 

Securities Act, the Central Index Key 

(‘‘CIK’’) number of the issuing entity 

would be required so that investors may 

locate additional publicly available 

disclosure, if applicable. 

So that investors may distinguish 

between transactions that were 

registered, and those that were not, we 

are also proposing that securitizers 

check the box in column (b) to indicate 

whether any Exchange Act-ABS of the 

issuing entity were registered under the 

Securities Act. We believe this indicator 

would provide important information so 

an investor may locate additional 

publicly available disclosure for 

registered transactions, if applicable. 

The Act also provides that the 

disclosure is required ‘‘so that investors 

may identify asset originators with clear 

underwriting deficiencies.’’ 30 Therefore, 

we are proposing that securitizers 

further break out the information by 

originator of the underlying assets in 

column (c). 

Because the Act requires disclosure of 

all ‘‘fulfilled and unfulfilled’’ repurchase 

requests, we are proposing in Rule 

15Ga–1 that securitizers disclose the 

assets that were subject of the demand, 

the assets that were repurchased or 

replaced and the assets that were not 

repurchased or replaced. In order to 

provide investors with useful 

information about the repurchase 

requests in relation to the overall pool 

of assets, we are proposing that 

securitizers present the number, 

outstanding principal balance and 

percentage by principal balance of the 

assets that were subject of demand to 

repurchase or replace for breach of 

representations and warranties 

(columns (d) through (f)); the number, 

outstanding principal balance and 

percentage by principal balance of 

assets that were repurchased or replaced 

for breach of representations and 

warranties (columns (g) through (i)); and 

the number, outstanding principal 

balance and percentage by principal 

balance of assets that were not 

repurchased or replaced for breach of 

representations and warranties 

(columns (j) through (l)).31


jlentini on DSKJ8SOYB1PROD with PROPOSALS
Federal Register / Vol. 75, No. 197 / Wednesday, October 13, 2010 / Proposed Rules 62723 

Proposing Release, the Commission also proposed 

that issuers be required to provide loan-level 

disclosure of repurchase requests on an ongoing 

basis. Under the proposal, an issuer, with each 

periodic report on a Form 10–D, would have to 

indicate whether a particular asset has been 

repurchased from the pool. If the asset has been 

repurchased, then the registrant would have to 

indicate whether a notice of repurchase has been 

received, the date the asset was repurchased, the 

name of the repurchaser and the reason for the 

repurchase. See previously proposed Item 1(i) of 

Schedule L–D [Item 1121A of Regulation AB] in the 

2010 ABS Proposing Release. 

32 In response to our ABS 2010 Proposing Release, 

some commentators expressed concern about the 

timing of providing repurchase disclosures, noting 

that the person preparing repurchase disclosures 

may not be in a position to know what percentage 

of demands made in a period did not result in 

repurchase due to cure periods provided in the 

transaction agreements that typically last 60–90 

days. See letters from the American Securitization 

Forum (‘‘ASF’’) and Wells Fargo & Company on the 

2010 ABS Proposing Release. 

33See letter from Association of Mortgage 

Investors on the 2010 ABS Proposing Release 

(requesting that disclosure of information regarding 

claims made and satisfied under representation and 

warranties provisions of the transaction documents 

be broken down by securitization and then 

aggregated). 

34Filing proposed Form ABS–15G would not 

foreclose the reliance of an issuer on the private 

offering exemption in the Securities Act of 1933 

and the safe harbor for offshore transactions from 

the registration provisions in Section 5 [15 U.S.C. 

77e]. However, the inclusion of information beyond 

that required in proposed Rule 15Ga–1 may 

jeopardize such reliance by constituting a public 

offering or conditioning the market for the ABS 

being offered under an exemption. 

35See letter from Securities Industry Financial 

Markets Association (‘‘SIFMA’’) on the 2010 ABS 

Proposing Release (noting that their investor 

members believe that issuers should be required to 

make disclosures about repurchase requests 

regardless of the date of the securitization). 

36See e.g., comment letters from ASF, Bank of 

America, Financial Services Roundtable and the 

Mortgage Bankers Association on the 2010 ABS 

Proposing Release. 

37For the initial filing, we recognize that 

demands may have been made prior to the initial 

five-year look back date and that resolution may 

have occurred after that date. In this case, a 

securitizer would need to disclose that a demand 

was made, even though it occurred prior to the fiveyear look back date. 

38See letter from Prudential Fixed Income 

Management on the 2010 ABS Proposing Release 

(noting that claims made against a sponsor should 

be included in offering materials and regularly 

reported, together with detail that clarifies the 

number of such claims that were accepted by the 

sponsor and the number of claims that were and 

were not approved). 

39Form 10–Ds are required to be filed within 15 

days of each required distribution date on the assetbacked securities. See General Instruction A.2. of 

Form 10–D [17 CFR 249.312]. Because securitizers 

may sponsor various asset classes, we believe it 

would be difficult to tie the timing requirements of 

Rule 15Ga–1 disclosure to the timing of payments 

on the securities. 

Additionally, we are proposing to 

require disclosure of the number, 

outstanding principal balance and 

percentage by principal balance of the 

assets that are pending repurchase or 

replacement and proposing an 

instruction to include a footnote to the 

table that provides narrative disclosure 

of the reasons why repurchase or 

replacement is pending (columns (m) 

through (o)). For example, the 

securitizer would indicate by footnote if 

pursuant to the terms of a transaction 

agreement, assets have not been 

repurchased or replaced pending the 

expiration of a cure period. Without 

these additional columns, the 

disclosures about fulfilled and 

unfulfilled repurchase requests of a 

securitizer alone may not provide clear 

and complete disclosure about the 

repurchase request history. For instance, 

some transaction agreements specify a 

cure period that typically lasts 60–90 

days.32 Including those repurchase 

requests that are within a cure period as 

assets that were not repurchased or 

replaced (columns (j) through (l)) would 

provide inaccurate disclosure about the 

current pending status of those 

repurchase requests. 

Lastly, we are proposing that the table 

include totals by asset class for columns 

that require numbers of assets and 

principal amounts (columns (d), (e), (g), 

(h), (j), (k), (m) and (n)).33

The Act does not specify when the 

disclosure should first be provided, or 

the frequency with which it should be 

updated. We are proposing to require 

that securitizers first be required to file 

Form ABS–15G at the time a securitizer 

first offers an Exchange Act-ABS or 

organizes and initiates an offering of 

Exchange Act-ABS, registered or 

unregistered, after the effective date of 

the proposed rules, as adopted.34 The 

initial filing would include the 

repurchase demand and repurchase and 

replacement history of all outstanding 

Exchange Act-ABS of the securitizer 

with respect to which the underlying 

transaction agreements provide a 

covenant to repurchase or replace an 

underlying asset for breach of a 

representation or warranty for the last 

five years. The initial filing would be 

required to include all of the 

information in proposed Rule 15Ga–1, 

even if there had been no demands to 

repurchase or replace assets to report 

with respect to any issuing entity of an 

Exchange-Act ABS securitized by a 

securitizer. We believe that the ability to 

compare all issuing entities and the 

originators of the underlying pools 

would provide useful information for 

investors by making the disclosures 

comparable across securitizers, so that 

consistent with the purposes of Section 

943, an investor may identify originators 

with clear underwriting deficiencies. 

While Section 943 does not limit the 

time period for disclosure, we have 

proposed in Rule 15Ga–1 to limit the 

disclosure to Exchange Act-ABS that 

remain outstanding and are held by 

non-affiliates because we believe 

securitizers would more likely have 

ready access to this information, and it 

is more likely to be relevant to investors 

than information about securities that 

are no longer outstanding and held by 

non-affiliates. While we believe that 

Congress intended to provide investors 

with historical information about 

repurchase activity so that investors 

may identify asset originators with clear 

underwriting deficiencies,35 we also 

recognize that securitizers may not have 

historically collected the information 

required under our proposal.36 We are 

proposing that the initial disclosures be 

limited to the last five years of activity 

in order to balance the requirements of 

Section 943 and the burden on 

securitizers to provide the historical 

disclosures. Therefore, any demand, 

repurchase or replacement that had 

occurred within the five years 

immediately preceding the initial filing, 

as of the end of the preceding month, 

would need to be disclosed in the 

table.37

We are also proposing that 

securitizers file proposed Form ABS– 

15G, periodically on a monthly basis 

with updated information so that, 

consistent with the purpose of Section 

943 of the Act, an investor may monitor 

the demand, repurchase and 

replacement activity across all Exchange 

Act-ABS issued by a securitizer.38 For 

registered transactions, most ABS 

distribute payments monthly and file 

Forms 10–D on a monthly basis. 

Similarly, given the established 

frequency of reporting, we believe 

proposed Rule 15Ga–1 disclosure 

should be provided to investors on a 

monthly basis and filed on Form ABS– 

15G on EDGAR within 15 calendar days 

after the end of each calendar month.39

Under the proposal, securitizers 

would be required to continue periodic 

reporting through and until the last 

payment on the last Exchange Act-ABS 

outstanding held by a non-affiliate that 

was issued by the securitizer or an 

affiliate. We are also proposing that 

securitizers be required to file Form 

ABS–15G to provide a notice to 

terminate the reporting obligation and 

disclose the date the last payment was 

made. 

Request for Comment: 

5. Is the proposed requirement to 

require that any securitizer of an 

Exchange Act-ABS transaction disclose 

fulfilled and unfulfilled repurchase 

requests in a table appropriate? Would 


jlentini on DSKJ8SOYB1PROD with PROPOSALS
62724 Federal Register / Vol. 75, No. 197 / Wednesday, October 13, 2010 / Proposed Rules 

40 In a response to our 2010 ABS Proposing 

Release, the ASF noted in its comment letter that 

‘‘the requirement to report three years worth of 

repurchase activity would potentially result in a 

flood of unhelpful disclosure about transactions 

involving unrelated asset classes, particularly with 

respect to sponsors or originators that are large, 

diversified financial institutions engaging in 

securitization and sales of multiple asset classes 

through affiliated but often separately managed 

business units.’’ 

41See comment letter from Massachusetts Office 

of Attorney General on the 2010 ABS Proposing 

Release (noting that side letter agreements between 

a sponsor and an originator may contain early 

payment default warranties and that the existence 

of such warranties often have an effect upon the 

performance of a securitization). 

42See e.g., comment letters of Metropolitan Life 

Insurance Company and the SIFMA on the 2010 

ABS Proposing Release. 

43See e.g., comment letters of ASF, Bank of 

America, Community Mortgage Banking Project, 

CRE Finance Council and Mortgage Bankers 

Association on the 2010 ABS Proposing Release. 

another format be more appropriate or 

useful to investors? 

6. Should we require, as proposed, 

that securitizers list all previous issuing 

entities with currently outstanding ABS 

where the underlying transaction 

agreements include a repurchase 

covenant, even if there were no 

demands to repurchase or replace assets 

in that particular pool? Should we 

require, as proposed, that securitizers 

with currently outstanding Exchange 

Act-ABS held by non-affiliates list all 

originators related to every issuing 

entity even if there were no demands to 

repurchase or replace assets related to 

that originator for that particular pool? 

Put another way, would it be useful for 

investors to compare all the issuing 

entities and originators, related to one 

securitizer, listed in the table, so that 

investors may identify asset originators 

with clear underwriting deficiencies, as 

provided in the Act? 

7. Would it be appropriate for 

securitizers to omit the table if a 

securitizer had no prior demands for 

repurchases or replacements? If so, how 

would an investor be able to know why 

the securitizer omitted the disclosure? 

In lieu of a table that displayed no 

demands for repurchases or 

replacements, would it be appropriate 

for a securitizer to provide narrative or 

check box disclosure stating that no 

demands were made for any asset 

securitized by the securitizer? 

8. Is it appropriate to limit disclosure 

to Exchange Act-ABS that remain 

outstanding and held by non-affiliates, 

as proposed? Would such a limitation 

be consistent with the Act? 

Alternatively, should disclosure be 

required with respect to Exchange ActABS that are no longer outstanding? 

Would such disclosure reveal 

potentially important information? 

Would it be appropriate to require 

disclosure regarding Exchange Act-ABS 

that were outstanding during a recent 

period, such as one, three, or five years? 

9. Should the disclosure requirement 

only be applied prospectively, i.e., 

disclosure would be required only with 

respect to repurchase demands and 

repurchases and replacements 

beginning with Exchange Act-ABS 

issued after the effective date of the 

rule? Should disclosure only be 

required with respect to repurchase 

activity after the effective date? If so, 

please explain why limiting disclosure 

to activity regarding Exchange Act-ABS 

issued after the effective date would be 

consistent with the Act, as it specifies 

that the disclosure be provided by any 

securitizer across all trusts. 

10. In implementing the requirements 

of Section 943, should the disclosure 

requirement initially be limited to the 

last five years, as proposed? Would a 

different time frame be more 

appropriate, e.g., the last three, seven or 

ten years of activity? Underwriting 

standards of originators may change 

over time. While information regarding 

repurchases within a recent time period 

may assist investors in identifying 

originators with current underwriting 

deficiencies, is older information, such 

as information about repurchases within 

a time period of ten years, less useful in 

identifying current underwriting 

deficiencies? 40 Would information that 

covers the last three, five, seven or ten 

years of repurchase activity provide 

investors with the information they 

need so that they ‘‘may identify asset 

originators with clear underwriting 

deficiencies’’? To what extent would 

disclosure older than such a period add 

significant burdens and costs and 

produce information that would be of 

marginal utility to investors? 

11. Is our proposed instruction to 

permit securitizers to omit disclosure of 

investor demands made upon the 

trustee prior to the effective date of the 

proposed rules if the information is 

unavailable and provide footnote 

disclosure, if true, that the table omits 

such demands and that the securitizer 

requested and was unable to obtain the 

information appropriate? If not, how 

would securitizers obtain the 

information about investor demands 

upon a trustee prior to the effective date 

of the proposed rules, as adopted? 

12. Should the requirement only 

cover the last three, five, seven or ten 

years of repurchase requests on an 

ongoing basis? Would this format on an 

ongoing basis provide information in a 

more easily understandable manner? 

Would it still allow an investor to 

‘‘identify asset originators with clear 

underwriting deficiencies’’? 

13. Are there any other agreements, 

outside of the related transaction 

agreements for an asset-backed security 

that provide for repurchase demands 

and repurchases and replacements? If 

so, please tell us what those agreements 

are and why securitizers should be 

required to report the information, 

including why that information would 

be material to an investor in a particular 

asset-backed security.41

14. Is the information proposed to be 

required in the table appropriate? Is 

there any other information that should 

be presented in the table that would be 

useful to investors? Is the proposed 

disclosure regarding pending 

repurchase requests appropriate? 

Should we specify that securitizers 

provide more detail about the reasons 

why the assets were not repurchased or 

why the assets are pending repurchase 

or replacement? For example, should we 

require more detail such as the date of 

claim, the date of repurchase, whether 

claims have been referred to arbitration, 

whether the claims are in a cure period, 

and the costs associated and expenses 

born by each issuing entity? 42 Should 

we require securitizers to provide 

narrative disclosure of the reasons why 

repurchase or replacement is pending, 

as proposed? If so, should we specify 

the level of detail to be provided 

regarding pending asset repurchase or 

replacement requests? For instance, 

should we specify categories for the 

reasons why the request is pending, e.g., 

cure period, arbitration, etc. 

15. Section 943 of the Act requires 

that ‘‘all fulfilled and unfulfilled 

repurchase requests across all trusts’’ be 

disclosed. Should we require, as 

proposed, that all demands for 

repurchase be disclosed in the table? 

Some commentators on the 2010 ABS 

Proposing Release expressed concerns 

about disclosing demands for 

repurchase that ultimately did not result 

in a repurchase or replacement pursuant 

to the terms of the transaction 

agreement, either because of withdrawn 

demands or incomplete demands that 

did not meet the requirements of the 

transaction agreements.43 In order to 

address commentator’s concerns, should 

we also require, by footnote to the table, 

disclosure of whether the repurchase or 

replacement was required by the 

transaction agreements or whether it 

occurred for some other reason? Should 

the disclosure indicate the type of 

representation or warranty that led to 

the repurchase or replacement? 


jlentini on DSKJ8SOYB1PROD with PROPOSALS
Federal Register / Vol. 75, No. 197 / Wednesday, October 13, 2010 / Proposed Rules 62725 

44However, a portion of the information required 

by proposed Rule 15Ga–1 would be required in a 

registration statement and in periodic reports. We 

discuss those proposals below. 45The Form 10–K report for ABS issuers must be 

signed either on behalf of the depositor by the 

senior officer in charge of securitization of the 

depositor, or on behalf of the issuing entity by the 

senior officer in charge of the servicing. See General 

Instruction J.3. of Form 10–K [17 CFR 249.310] In 

addition, the certifications for ABS issuers that are 

required under Section 302 of the Sarbanes-Oxley 

Act of 2002 [15 U.S.C. 7241] must be signed either 

on behalf of the depositor by the senior officer in 

charge of securitization of the depositor if the 

depositor is signing the Form 10–K report, or on 

behalf of the issuing entity by the senior officer in 

charge of the servicing function of the servicer if the 

servicer is signing the Form 10–K report. In our 

2010 ABS Proposing Release, we also proposed to 

require that the senior officer in charge of 

securitization of the depositor sign the registration 

statement (either on Form SF–1 or Form SF–3) for 

ABS issuers. See Section II.F. of the 2010 ABS 

Proposing Release. 

46 Indeed, the International Organization of 

Securities Commissions (IOSCO) cites the recent 

crisis in the subprime markets, stemming from 

defaulted mortgage loans in the United States and 

affected by issues related to liquidity and 

transparency, as evidence of the interrelation of 

today’s global markets. See the Report on the 

Subprime Crisis—Final Report, Report of the 

Technical Committee of IOSCO, May 2008, 

available at https://www.iosco.org/library/pubdocs/ 

pdf/IOSCOPD273.pdf. 

16. Is our proposal to require a 

securitizer to file its initial Form ABS– 

15G at the time it first offers ExchangeAct ABS or organizes and initiates an 

offering of Exchange Act-ABS after the 

implementation date of the proposed 

rules appropriate? What are other 

possible alternatives to trigger the initial 

filing obligation? 

17. Is our proposal to require the 

disclosure on a monthly basis 

appropriate? If not, what would be the 

appropriate interval for the disclosures, 

e.g., quarterly or annually? 

18. Is our proposal to require that 

Form ABS–15G be filed within 15 

calendar days after the end of each 

calendar month appropriate? If not, 

would a shorter or longer timeframe be 

more appropriate, e.g., four days or 

twenty days? Please tell us why. 

19. We note that the transaction 

agreements for certain types of ABS, 

such as CDOs, may not typically contain 

a covenant to repurchase or replace an 

underlying asset. Is it appropriate to 

exclude, as proposed, those Exchange 

Act-ABS with transaction agreements 

that do not contain a covenant to 

repurchase or replace the underlying 

assets? 

20. Should the data in the table be 

tagged? If so, should the tagging be in 

XML or is a different tagging schema 

appropriate? If tagging is appropriate, 

would a phase-in period in which the 

disclosure would be provided without 

tagging pending completion of 

necessary technical specifications be 

appropriate? In order to tag the data, we 

would need to develop definitions that 

would result in consistent and 

comparable data across all issuing 

entities of all securitizers. For instance, 

how should we specify that securitizers 

tag the identity of an originator to 

provide consistency across disclosures 

provided by all securitizers? Should we 

assign codes that would specifically 

identify each originator? Or would text 

entry of the name of the originator be 

sufficient? Similarly, should we specify 

a unique code for all the issuing 

entities? For example, registered 

transactions would have a CIK number 

assigned for the issuing entity; however, 

unregistered transactions may not have 

a unique method of identification. What 

other definitions or responses would we 

need to specify in order to make the 

disclosure comparable across originators 

and securitizers? 

4. Proposed Form ABS–15G 

The disclosures required by proposed 

Rule 15Ga–1 do not fit neatly within the 

framework of existing Securities Act 

and Exchange Act Forms because those 

forms relate to registered ABS 

transactions and unregistered ABS 

transactions are not required to file 

those forms.44 Therefore, we are 

proposing new Form ABS–15G to be 

filed on EDGAR so that parties obligated 

to make disclosures related to Exchange 

Act-ABS under Rule 15Ga–1 could file 

the disclosures on EDGAR. As discussed 

above, proposed Rule 15Ga–1 would 

require securitizers to disclose 

repurchase demand and repurchase and 

replacement history with respect to 

registered and unregistered Exchange 

Act-ABS transactions for as long as the 

securitizer has ABS outstanding and 

held by non-affiliates. Consistent with 

current filing practices for other ABS 

forms,45 we are proposing, for purposes 

of making the disclosures required by 

Rule 15Ga–1, that Form ABS–15G be 

signed by the senior officer of the 

securitizer in charge of the 

securitization. 

Request for Comment: 

21. Is our proposal to require 

proposed Rule 15Ga–1 disclosures on 

new Form ABS–15G appropriate? 

22. Securitizers would be required, as 

proposed, to file Form ABS–15G on 

EDGAR. If a securitizer has already been 

issued a CIK number, we would expect 

Form ABS–15G to be filed under that 

number. However, a securitizer may 

already be a registrant that has other 

reporting requirements under the 

Securities Act or the Exchange Act. 

Should we assign a different file number 

to Form ABS–15G filings in order to 

differentiate Form ABS–15G filings 

made by a registrant in its capacity as 

a securitizer, from other filings made 

pursuant to its own reporting 

requirements under the Securities Act 

and the Exchange Act? Should we also 

provide on the SEC website the ability 

to exclude, include or show only Form 

ABS–15G for a particular CIK number in 

order make it easier to locate these 

filings on EDGAR? 

23. Instead of requiring, as proposed, 

that securitizers provide the Rule 15Ga– 

1 disclosures on Form ABS–15G, should 

we instead require that securitizers 

provide all the disclosures required by 

Section 943 of the Act in a manner 

consistent with disclosures in 

prospectuses and ongoing reports in a 

registered transaction? For instance, for 

registered offerings, would it be 

appropriate to permit issuers to satisfy 

their disclosure obligation by including 

all of the information required by 

proposed Rule 15Ga–1 in prospectuses 

and periodic reports on behalf of the 

securitizer for all of the affiliated trusts 

of a securitizer? Assuming that some 

securitizers offer several ABS across 

many asset classes, would taking this 

approach result in a prospectus that 

would be unwieldy considering the 

volume of information that would be 

required? If we took this approach, then 

how would that information be 

conveyed to investors in unregistered 

offerings, both initially and on an 

ongoing basis? Would securitizers be 

able to identify all of the investors that 

would be entitled to receive the 

information pursuant to Section 943 of 

the Act? How often should the 

information be conveyed to investors? 

What method would be used to convey 

the information to investors? Would 

securitizers post the disclosures on a 

Web site? 

24. We are proposing that for 

purposes of making the disclosures 

required by Rule 15Ga–1 that Form 

ABS–15G be signed by the senior officer 

in charge of the securitization of the 

securitizer. Is there a more appropriate 

party to sign the form? If so, please tell 

us who and why. 

5. Offshore Sales of Exchange-Act ABS 

The market for Exchange Act-ABS is 

global.46 Securitizers in the United 

States may sell ABS to offshore 

purchasers as part of a registered or 

unregistered offering. Under the 

proposal, these transactions would be 

subject to the requirements of proposed 

Rule 15Ga–1. In addition, U.S. investors 

may participate in offerings of ABS that 

primarily are offered by foreign 

securitizers to purchasers outside of the 


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47 15 U.S.C. 77d(2). Section 4(2) provides an 

exemption from registration for transactions by an 

issuer not involving any public offering. 48Securities Act Rule 144A [17 CFR 230.144A] 

provides a safe harbor for a reseller of securities 

from being deemed an underwriter within the 

meaning of Sections 2(a)(11) and 4(1) of the 

Securities Act for the offer and sale of non-exchange 

listed securities to ‘‘qualified institutional buyers’’ 

(QIBs), as defined in Rule 144A. 

49 17 CFR 240.3b–4. 

50See Section V.A. of the 2010 ABS Proposing 

Release. 

51See previously proposed Item 1110(c) of 

Regulation AB in the 2010 ABS Proposing Release. 

52See previously proposed Item 1104(f) of 

Regulation AB in the 2010 ABS Proposing Release. 

53The proposal would amend Regulation AB to 

require sponsors and originators (of greater than 

20% of the assets underlying the pool) to disclose 

the amount, if material, of publicly securitized 

assets originated or sold by the sponsor that were 

the subject of a demand to repurchase or replace for 

breach of the representations and warranties 

concerning the pool assets that has been made in 

the prior three years pursuant to the transaction 

agreements on a pool by pool basis as well as the 

percentage of that amount that were not then 

repurchased or replaced by the sponsor. Of those 

assets that were not then repurchased or replaced, 

disclosure would be required regarding whether an 

opinion of a third party not affiliated with the 

sponsor/originator had been furnished to the trustee 

that confirms that the assets did not violate the 

representations and warranties. See proposed Items 

1104(f), 1110(c) and 1121(c) of Regulation AB in the 

2010 ABS Proposing Release. 

54See Section 943 of the Act. We note that several 

commentators on the 2010 ABS Proposing Release 

expressed concerns about the difficulty of 

producing data to comply with the proposed 

requirement to report three years of repurchase 

activity. See e.g., letters of ASF, Bank of America, 

Financial Services Roundtable and Mortgage 

Bankers Association. However, in light of the 

requirements of Section 943 of the Act, we continue 

to believe that the information is important to 

include in prospectuses. 

55As discussed above, in the 2010 ABS Proposing 

Release, we proposed to amend Item 1110(c) of 

Regulation AB to require originators (of greater than 

20% of the assets underlying the pool) to disclose 

the amount, if material, of publicly securitized 

assets originated or sold by the sponsor that were 

the subject of a demand to repurchase or replace for 

breach of the representations and warranties 

concerning the pool assets that has been made in 

the prior three years pursuant to the transaction 

agreements on a pool by pool basis as well as the 

percentage of that amount that were not then 

repurchased or replaced by the sponsor. That 

proposal remains outstanding. 

56 In the 2010 ABS Proposing Release, we 

proposed that issuers provide all disclosures in one 

prospectus, instead of the current practice of 

providing information in a base prospectus and 

prospectus supplement to address concerns that the 

base and supplement format resulted in unwieldy 

documents with excessive and inapplicable 

disclosure that is not useful to investors. See 

Section II.D.1 of the 2010 ABS Proposing Release. 

57We are not proposing that issuers include all 

of the information that would be required of a 

securitizer under proposed Rule 15Ga–1 in 

prospectuses because information about other asset 

classes and information older than three years may 

make the size of the prospectus unwieldy and 

United States. For example, a small 

proportion of a primarily offshore 

offering of ABS may be made available 

to U.S. investors pursuant to Section 

4(2) of the Securities Act 47 or Securities 

Act Rule 144A.48

We recognize that Section 943 does 

not specify how its requirements apply 

to offshore transactions. As noted, 

consistent with Section 943, proposed 

Rule 15Ga–1 would require securitizers 

to disclose information about 

unregistered transactions, including 

those sold in unregistered transactions 

outside the United States. Securities 

that are sold in foreign markets and 

assets originated in foreign jurisdictions 

may be subject to different laws, 

regulations, customs and practices 

which can raise questions as to the 

appropriateness of the disclosures 

called for under Form ABS–15G. 

Although our proposed rules are 

required by the Act, and we believe the 

added protections of our rules would 

benefit investors who purchase 

securities in these offerings, we are 

mindful that the imposition of a filing 

requirement in connection with private 

placements of ABS in the United States 

may result in foreign securitizers 

seeking to avoid the filing requirement 

by excluding U.S. investors from 

purchasing portions of ABS primarily 

offered outside the United States, thus 

depriving U.S. investors of 

diversification and related investment 

opportunities. 

Request for Comment: 

25. Are there any extra or special 

considerations relating to these 

circumstances that we should take into 

account in our rules? Should our rules 

permit securitizers to exclude 

information from Form ABS–15G with 

respect to ‘‘foreign-offered ABS,’’ and if 

so, should foreign-offered ABS be 

defined to include Exchange Act-ABS 

that were initially offered and sold in 

accordance with Regulation S, the 

payment to holders of which are made 

in non-U.S. currency, and have foreign 

assets (i.e., assets that are not originated 

in the U.S.) that comprise at least a 

majority of the value of the asset pool? 

For this purpose, should the foreign 

asset composition threshold be higher or 

lower (e.g., 40%, 60%, or 80%)? Would 

another definition be more appropriate? 

26. Should our rules require 

securitizers that are foreign private 

issuers 49 to provide information on 

Form ABS–15G for those Exchange ActABS that are to be offered and sold in 

the United States pursuant to an 

exemption in an unregistered offering, 

as proposed? Instead should our rules 

only require disclosure about Exchange 

Act-ABS as to which more than a 

certain percentage (e.g., 5%, 10% or 

20%) of any class of such Exchange ActABS are sold to U.S. persons? 

B. Proposed Disclosure Requirements in 

Regulation AB Transactions 

The requirements in Section 943 of 

the Act are in many ways quite similar 

to the Commission’s proposal for 

additional disclosure regarding fulfilled 

and unfulfilled repurchase requests. In 

our 2010 ABS Proposing Release,50 we 

proposed expanded disclosure regarding 

originators 51 and sponsors,52 such as 

information for certain identified 

originators and the sponsor relating to 

the amount of the originator’s or 

sponsor’s publicly securitized assets 

that, in the last three years, has been the 

subject of a demand to repurchase or 

replace.53 However, the Commission’s 

proposals would only apply to 

registered offerings and would only 

require disclosure about other registered 

offerings, if material. In contrast, as we 

discuss in our proposals above, Section 

943 of the Act requires similar but 

expanded disclosure by requiring that 

any securitizer of Exchange Act-ABS 

disclose fulfilled and unfulfilled 

repurchase requests across all trusts 

aggregated by securitizer, so that 

investors may identify asset originators 

with clear underwriting deficiencies.54

In order to conform our 2010 ABS 

proposals to the rule proposed today to 

implement Section 943 of the Act, we 

are re-proposing our previous proposals 

for Regulation AB with respect to 

disclosures regarding sponsors in 

prospectuses and with respect to 

disclosures about the asset pool in 

periodic reports, so that issuers would 

be required to include the disclosures in 

the same format as required by proposed 

Rule 15Ga–1(a).55 Under our revised 

proposals, issuers of Reg AB–ABS 

would need to provide disclosures in 

the same format as proposed Rule 15Ga– 

1(a) within a prospectus and within 

ongoing reports on Form 10–D as 

described below. As we stated in the 

2010 ABS Proposing Release, we believe 

that investors must be able to readily 

access and understand the information 

for a specific offering.56 Consistent with 

that belief, we are proposing that certain 

repurchase history should be presented 

in the body of the prospectus and 

within ongoing reports in order to 

facilitate investor understanding and 

eliminate the need to locate all of the 

information that may be disclosed 

elsewhere and by a different party. Even 

though our proposals discussed above 

would require securitizers to provide 

repurchase history on Form ABS–15G, 

we believe that issuers should provide 

a subset of that information to investors 

in the body of a prospectus or a periodic 

report.57 However, the obligation of an 


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investors should have ready access to more current 

information. We are also not proposing that issuers 

include all of the proposed Rule 15Ga–1 in Form 

10–Ds for the same reasons, and because the 

purpose of Form 10–D is to provide periodic 

performance of a specific asset pool. 

58See previously proposed Item 1121(c) and 

Section V.A. of the 2010 ABS Proposing Release. 

59See proposed Item 1110(c) of Regulation AB in 

the 2010 ABS Proposing Release. 

60Originators may sell their assets to multiple 

securitizers. Proposed Rule 15Ga–1 would not 

require securitizers to disclose the demand, 

repurchase and replacement activity across all 

trusts across multiple securitizers that may contain 

an originator’s assets. For example, under proposed 

Rule 15Ga–1, if securitizers A, B and C securitize 

the loans of an originator, Securitizer A would only 

need to disclose the fulfilled and unfulfilled 

repurchase request activity with respect to loans 

with respect to Securitizer A securitizations. As we 

discuss above, proposed Rule 15Ga–1 would 

require disclosure that indicates the name of the 

originator in order to permit ‘‘investors [to] identify 

asset originators with clear underwriting 

deficiencies,’’ as required by Section 943 of the Act. 

61 In June 2008, the SEC proposed a new Rule 

17g–7 that would have required an NRSRO to 

publish a report containing certain information 

each time the NRSRO published a credit rating for 

a structured finance product or, as an alternative, 

use ratings symbols for structured finance products 

that differentiated them from the credit ratings for 

other types of debt securities. See Exchange Act 

Release No. 57967 (June 16, 2008), [73 FR 36212]. 

In November 2009, the SEC announced that it was 

deferring consideration of action on that proposal 

and separately proposed a new Rule 17g–7 to 

require annual disclosure by NRSROs of certain 

information. See Proposed Rules for Nationally 

Recognized Statistical Rating Organizations, SEC 

Release 34–61051 (November 23, 2009), [74 FR 

63866]. Although we are proposing a new rule with 

the same rule number, that proposal remains 

outstanding. 

62Current Item 1111(e) of Regulation AB [17 CFR 

1111(e)] already requires issuers to disclose the 

representations and warranties related to the 

transaction in prospectuses. Additionally, in the 

2010 ABS Proposing Release, the Commission 

proposed changes to this item to require a 

description of any representation and warranty 

relating to fraud in the origination of the assets, and 

a statement if there is no such representation or 

warranty. 

issuer to provide the disclosures in 

prospectuses and in ongoing reports 

under our proposed changes to 

Regulation AB would be independent 

from, and would not alleviate the 

disclosure obligations of a securitizer 

under, proposed Rule 15Ga–1. 

We are revising and re-proposing our 

previous proposal to amend Item 1104 

of Regulation AB. As noted above, the 

Commission’s previous proposals 

applied to disclosure of a sponsor’s 

repurchase demand and repurchase and 

replacement history concerning the last 

three years with respect to other 

registered transactions, if material. In 

order to conform our previous proposal 

to the format of the information that 

would be provided by the rule proposed 

today to implement Section 943 of the 

Act, we are proposing that if the 

underlying transaction agreements 

provide a covenant to repurchase or 

replace an underlying asset for breach of 

a representation or warranty, then 

issuers would be required to provide in 

the body of the prospectus disclosure of 

a sponsor’s repurchase demand and 

repurchase and replacement history for 

the last three years, pursuant to the 

format proscribed in proposed Rule 

15Ga–1(a). In addition, we are also 

proposing to limit the disclosure 

required in the prospectus to repurchase 

history for the same asset class as the 

securities being registered. We are also 

excluding the materiality threshold that 

was previously proposed as Section 943 

includes no such standard. Also, 

because we believe the complete 

historical information about repurchase 

activity may be useful to investors, an 

issuer would be required to reference 

the Form ABS–15G filings made by the 

securitizer (i.e., sponsor) of the 

transaction and disclose the CIK number 

of the securitizer so that investors may 

easily locate Form ABS–15G filings on 

EDGAR. 

Our previous proposal would amend 

Item 1121 of Regulation AB so that 

issuers would be required to disclose 

the repurchase demand and repurchase 

and replacement history with respect to 

assets that underlie a particular ABS on 

an ongoing basis in periodic reports on 

Form 10–D, if material.58 We are 

revising and re-proposing our previous 

proposal to require that issuers provide 

in Form 10–D, repurchase demand and 

repurchase and replacement disclosure 

regarding the assets in the pool in the 

format prescribed by proposed Rule 

15Ga–1(a). In order to conform our 

previous proposal to the rule proposed 

today to implement Section 943 of the 

Act, we are also excluding the 

materiality threshold that was 

previously proposed. Because we 

believe the complete historical 

information about repurchase activity 

may be useful to investors, the Form 10– 

D would also be required to include a 

reference to the Form ABS–15G filings 

made by the securitizer of the 

transaction and disclose the CIK number 

of the securitizer so that investors may 

easily locate Form ABS–15G filings on 

EDGAR. As discussed above, providing 

repurchase history disclosure for a 

particular pool in Form 10–D, is 

independent from and would not 

alleviate a securitizer’s obligation to 

disclose ongoing information for all of 

their transactions as required by 

proposed Rule 15Ga–1. 

Request for Comment: 

27. Is our re-proposal to require 

disclosure pursuant to the format 

prescribed in Rule 15Ga–1(a) for the 

same asset class in prospectuses and for 

pool assets in periodic reports 

appropriate? Is it appropriate to limit 

the disclosure in prospectuses to the last 

three years of activity, as proposed? 

Would a different period (e.g., one or 

five years) be more appropriate? 

28. Is it appropriate to omit a 

materiality requirement for disclosures 

in prospectuses, as proposed? What 

issues would arise by creating two 

different disclosure standards between 

what would be required to be disclosed 

in prospectuses and what would be 

disclosed by securitizers on Form ABS– 

15G? Are there any ways to address 

those issues? 

29. Should we permit issuers to 

incorporate the repurchase demand and 

repurchase and replacement disclosure 

by reference from Form ABS–15G, 

instead of requiring that it be provided 

in the body of the prospectus or Form 

10–D? Would it be burdensome for 

investors to search elsewhere to locate 

disclosure that would otherwise be 

included in a prospectus? 

30. In the 2010 ABS Proposing 

Release, the Commission also proposed 

that originators of over 20% of the pool 

assets provide disclosure regarding the 

fulfilled and unfulfilled repurchase 

requests on a pool by pool basis for 

publicly securitized assets.59 If we were 

to adopt that proposal, should we make 

any changes to conform that proposal 

given the information that would be 

required by proposed Rule 15Ga–1(a)? 

For example, should that information be 

provided in the same format as 

proposed Rule 15Ga–1(a) and should we 

require disclosures with respect to all 

originators of the pool assets? 60 Or is 

disclosure unnecessary in light of the 

other disclosures required by proposed 

Rule 15Ga–1? 

C. Proposed Disclosure Requirements 

for NRSROs 

We are proposing to add new 

Exchange Act Rule 17g–7, which would 

implement Section 943(1) of the Act by 

requiring an NRSRO to make certain 

disclosures in any report accompanying 

a credit rating relating to an assetbacked security.61 Specifically, in 

accordance with Section 943(1), Rule 

17g–7 would require an NRSRO 62 to 

include a description of the 

representations, warranties and 

enforcement mechanisms available to 

investors and a description of how they 

differ from the representations, 

warranties and enforcement 

mechanisms in issuances of similar 


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63As discussed further in Section V.B.6. below, 

we anticipate that one way an NRSRO could fulfill 

the requirement to describe how representations, 

warranties and enforcement mechanisms differ 

from those provided in similar securities would be 

to review previous issuances both on an initial and 

an ongoing basis in order to establish ‘‘benchmarks’’ 

for various types of securities and revise them as 

appropriate. 

64See Section 3(a)(77) of the Exchange Act, as 

amended by the Act. 

65We intend the term ‘‘preliminary credit rating’’ 

to include any rating, any range of ratings, or any 

other indications of a rating used prior to the 

assignment of an initial credit rating for a new 

issuance. See generally Credit Ratings Disclosure, 

SEC Release No. 33–9070 (October 7, 2009) [74 FR 

53086]. 

66We further note that Section 932 of the Act 

amends Section 15E of the Exchange Act to require 

a form to accompany the publication of each credit 

rating that discloses certain information. For the 

purposes of Section 943 and proposed Rule 17g–7, 

such a form would clearly be a ‘‘report’’ and its 

publication would therefore require the necessary 

disclosures regarding representations, warranties 

and enforcement mechanisms available to investors. 

The Commission has one year to adopt rules 

requiring NRSROs to prescribe and use a form to 

make certain required disclosures, whereas the Rule 

17g–7 disclosures that we are proposing in this 

release must be prescribed within 180 days from the 

date of enactment of the Act. See Section 937 of the 

Act. Given that Sections 932 and 943 both mandate 

rules requiring NRSROs to disclose information, we 

solicit comment below on whether the proposed 

Rule 17g–7 disclosure should eventually be scoped 

into proposals we will issue under Section 932 

regarding the disclosure that would need to be 

made by an NRSRO in the form accompanying the 

publication of each credit rating. 

67For example, the ASF has proposed model 

representations and warranties designed to enhance 

the alignment of incentives of mortgage originators 

with those of investors in mortgage loans. See 

American Securitization Forum Press Release, ‘‘ASF 

Proposes Risk Retention and Issues Final RMBS 

Disclosure and Reporting Packages,’’ July 15, 2009, 

available at http:// 

www.americansecuritization.com/ 

story.aspx?&fnl;id=3460. 

68See Amendments to Rules for Nationally 

Recognized Statistical Rating Organizations, SEC 

Release 34–61050 (November 23, 2009), [74 FR 

63832]. 

securities.63 As discussed above, the Act 

also amended the Exchange Act to 

include the definition of an ‘‘assetbacked security’’ and Section 943 of the 

Act references that definition.64

Therefore, Rule 17g–7 would provide 

that the NRSRO must provide the 

disclosures with respect to any 

Exchange Act-ABS, whether or not the 

security is offered in a transaction 

registered with the SEC. 

Section 943, by its terms, applies to 

any report accompanying a credit rating 

for an ABS transaction, regardless of 

when or in what context such reports 

and credit ratings are issued. Proposed 

Rule 17g–7 is intended to reflect the 

broad scope of this congressional 

mandate. In addition, we are proposing 

a note to the proposed rule which 

would clarify that for the purposes of 

the proposed rule, a ‘‘credit rating’’ 

would include any expected or 

preliminary credit rating issued by an 

NRSRO.65 In ABS transactions, pre-sale 

reports are typically issued by an 

NRSRO at the time the issuer 

commences the offering and typically 

include an expected or preliminary 

credit rating and a summary of the 

important features of a transaction. 

Disclosure at the time pre-sale reports 

are issued is particularly important to 

investors, since such reports provide 

them with important information prior 

to the point at which they make an 

investment decision.66

Request for Comment: 

31. The Act and our proposed new 

Rule 17g–7 require disclosure of how 

the representations, warranties and 

enforcement mechanisms in a particular 

deal differ from the representations, 

warranties and enforcement 

mechanisms in the issuance of similar 

securities. We are not specifying in this 

release a definition for the term ‘‘similar 

securities.’’ Should we define ‘‘similar 

securities’’? If so, how should it be 

defined? Should similar securities be 

defined by underlying asset classes (i.e., 

residential mortgages, commercial 

mortgages, auto loans, or auto leases, 

etc.)? Or should the distinction be 

narrower (i.e., prime residential 

mortgages, Alt–A residential mortgages, 

or subprime residential mortgages)? Or 

by sponsor (Originator A or Originator 

B, etc.)? Or by other ABS rated by the 

same NRSRO? 

32. Section 932 of the Act further 

amends the Exchange Act by adding a 

new paragraph (s) to Section 15E 

requiring a form to accompany the 

publication of each credit rating that 

discloses certain information and 

requiring that we adopt rules requiring 

NRSROs to prescribe and use such a 

form. Would it be appropriate to require 

the inclusion of the disclosures about 

representations, warranties and 

enforcement mechanisms required 

under proposed Rule 17g–7 in the form 

used to make the disclosures that will 

be required under rules adopted 

pursuant to Exchange Act Section 

15E(s)? Are there any timing issues that 

we should take into account in 

determining whether to do so? 

33. Should we require the proposed 

disclosure to include comparisons to 

industry standards in addition to similar 

securities? For instance, one 

organization has published model 

standards for representation, warranties 

and enforcement mechanisms with 

respect to residential mortgage backed 

securities.67 What would be an industry 

standard for other asset classes? 

34. Is there any reason not to consider 

an expected or preliminary credit rating 

to be a ‘‘credit rating’’ for the purposes 

of the proposed rule? If so, why? 

35. In the case of a registered ABS 

transaction, should we allow NRSROs to 

satisfy the requirement to disclose 

representations, warranties and 

enforcement mechanisms by referring to 

disclosure about those matters that is 

included in a prospectus prepared by an 

issuer? 

36. Rule 17g–5, among other things, is 

designed to facilitate the performance of 

unsolicited credit ratings for structured 

finance products by providing a 

mechanism for NRSROs not hired by 

arrangers of structured finance products 

to obtain the same information provided 

to NRSROs hired by such arrangers to 

rate those products.68 As such, nonhired NRSROs performing unsolicited 

credit ratings pursuant to the Rule 17g– 

5 mechanism would have access to the 

same information on a transaction’s 

representations, warranties, and 

enforcement mechanisms at the same 

time as hired NRSROs. However, in the 

event that a non-hired NRSRO elected to 

perform an unsolicited credit rating not 

pursuant to Rule 17g–5, it would likely 

not have access to such information 

until it was made public. It is the 

Commission’s understanding that prior 

to the introduction of the Rule 17g–5 

mechanism described above, NRSROs 

rarely, if ever, performed unsolicited 

credit ratings for structured finance 

products. Given the availability of the 

Rule 17g–5 mechanism, is it likely that 

any NRSROs would perform unsolicited 

credit ratings for structured finance 

products in the future without relying 

on that mechanism to obtain 

information from securitizers? If so, 

would such NRSROs be able to comply 

with proposed Rule 17g–7? Would it be 

appropriate for such NRSROs to include 

an explanatory note accompanying the 

disclosures required by proposed Rule 

17g–7 indicating that such disclosures 

were based only on publicly available 

information? 

III. Transition Period 

We are considering the appropriate 

timing for compliance and effectiveness 

of the proposals, if adopted, and request 

that commentators provide input about 

feasible dates for implementation of the 

proposed amendments. We currently 

anticipate that, if adopted, the new and 

amended rules would apply to all 

securitizers and NRSROs related to new 

issuances, including takedowns off of 

existing shelf registration statements, of 

Exchange Act-ABS. However, we note 

that Rule 15Ga–1, as proposed, would 


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69 44 U.S.C. 3501 et seq. 

70 44 U.S.C. 3507(d) and 5 CFR 1320.11. 

71The paperwork burden from Regulation S–K is 

imposed through the forms that are subject to the 

requirements in those regulations and is reflected 

in the analysis of those forms. To avoid a 

Paperwork Reduction Act inventory reflecting 

duplicative burdens and for administrative 

convenience, we assign a one-hour burden to 

Regulation S–K. 

72We rely on two outside sources of ABS 

issuance data. We use the ABS issuance data from 

Asset-Backed Alert on the initial terms of offerings, 

and we supplement that data with information from 

Securities Data Corporation (SDC). 

73Public Law 109–291 (2006). 

74See e.g., Section VIII of Proposed Rules for 

Nationally Recognized Statistical Rating 

Organizations, SEC Release 34–61051 (December 4, 

2009) [74 FR 63866]. 

75We base the number of unique sponsors on data 

from SDC. 

76See e.g., comment letters from ASF, Bank of 

America, Financial Services Roundtable and the 

Mortgage Bankers Association on the 2010 ABS 

Proposing Release. 

require disclosures about the repurchase 

demands and repurchases and 

replacements that occurred prior to the 

effective date of the new requirements. 

Request for Comment: 

37. Should implementation of any 

proposals be phased-in? If so, explain 

why and describe the timeframe needed 

for a phase-in (e.g., six months, one or 

two years) and basis for such period? 

38. Should implementation be based 

on a tiered approach that relates to a 

characteristic such as the size of the 

securitizer? Is there any reason to 

structure implementation around asset 

class of the securities? Because a 

reporting structure is already available 

for registered transactions, should 

prospectuses and periodic reports be 

required to include the demand, 

repurchase and replacement 

disclosures, as provided by our 

proposals to amend Items 1104 and Item 

1121 of Regulation AB, before Form 

ABS–15G is implemented? 

IV. General Request for Comments 

We request comment on the specific 

issues we discuss in this release, and on 

any other approaches or issues that we 

should consider in connection with the 

proposed amendments. We seek 

comment from any interested persons, 

including investors, securitizers, assetbacked issuers, sponsors, originators, 

servicers, trustees, disseminators of 

EDGAR data, industry analysts, EDGAR 

filing agents, and any other members of 

the public. 

V. Paperwork Reduction Act 

A. Background 

Certain provisions of the proposed 

rule amendments contain ‘‘collection of 

information’’ requirements within the 

meaning of the Paperwork Reduction 

Act of 1995 (PRA).69 The Commission is 

submitting these proposed amendments 

and proposed rules to the Office of 

Management and Budget (OMB) for 

review in accordance with the PRA.70

An agency may not conduct or sponsor, 

and a person is not required to comply 

with, a collection of information unless 

it displays a currently valid control 

number. The titles for the collections of 

information are:71

(1) ‘‘Form ABS–15G’’ (a proposed new 

collection of information); 

(2) ‘‘Regulation S–K’’ (OMB Control 

No. 3235–0071); and 

(3) ‘‘Rule 17g–7’’ (a proposed new 

collection of information). 

The regulation listed in No. 2 was 

adopted under the Securities Act and 

the Exchange Act and sets forth the 

disclosure requirements for registration 

statements and periodic and current 

reports filed with respect to assetbacked securities and other types of 

securities to inform investors. 

The regulations and forms listed in 

Nos. 1 and 3 are newly proposed 

collections of information under the 

Act. Rule 15Ga–1 would require 

securitizers to provide disclosure 

regarding all fulfilled and unfulfilled 

repurchase requests with respect to 

Exchange Act-ABS pursuant to the Act. 

Form ABS–15G would contain Rule 

15Ga–1 disclosures and be filed with 

the Commission. Rule 17g–7 would 

require NRSROs to provide disclosure 

regarding representations, warranties, 

and enforcement mechanisms available 

to investors in any report accompanying 

a credit rating issued by an NRSRO in 

connection with an Exchange Act-ABS 

transaction. 

Compliance with the proposed 

amendments would be mandatory. 

Responses to the information collections 

would not be kept confidential and 

there would be no mandatory retention 

period for proposed collections of 

information. 

B. PRA Reporting and Cost Burden 

Estimates 

Our PRA burden estimates for the 

proposed amendments are based on 

information that we receive on entities 

assigned to Standard Industrial 

Classification Code 6189, the code used 

with respect to asset-backed securities, 

as well as information from outside data 

sources.72 When possible, we base our 

estimates on an average of the data that 

we have available for years 2004, 2005, 

2006, 2007, 2008, and 2009. 

In adopting rules under the Credit 

Rating Agency Reform Act of 2006 (‘‘the 

Rating Agency Act’’),73 as well as 

proposing additional rules in November 

2009, we estimated that approximately 

30 credit rating agencies would be 

registered as NRSROs.74

1. Form ABS–15G 

This new collection of information 

relates to proposed disclosure 

requirements for securitizers that offer 

Exchange Act-ABS. Under the proposed 

amendments, such securitizers would 

be required to disclose demand, 

repurchase and replacement history 

with respect to pool assets across all 

trusts aggregated by securitizer. The 

new information would be required at 

the time a securitizer offers Exchange 

Act-ABS after the implementation of the 

proposed rule, and then monthly, on an 

ongoing basis as long as the securitizer 

has Exchange Act-ABS outstanding held 

by non-affiliates. The disclosures would 

be filed on EDGAR on proposed Form 

ABS–15G. We believe that the costs of 

implementation would include costs of 

collecting the historical information, 

software costs, costs of maintaining the 

required information, and costs of 

preparing and filing the form. Although 

the proposed requirements apply to 

securitizers, which by definition would 

include sponsors and issuers, we base 

our estimates on the number of unique 

ABS sponsors because we are also 

proposing that issuers affiliated with a 

sponsor would not have to file a 

separate Form ABS–15G to provide the 

same proposed Rule 15Ga–1 

disclosures. We base our estimates on 

the number of unique ABS securitizers 

(i.e., sponsors) over 2004–2009, which 

was 540, for an average of 90 unique 

securitizers per year.75 We base our 

burden estimates for this collection of 

information on the assumption that 

most of the costs of implementation 

would be incurred before the securitizer 

files its first Form ABS–15G. Because 

ABS issuers currently have access to 

systems that track the performance of 

the assets in a pool we believe that 

securitizers should also have access to 

information regarding whether an asset 

had been repurchase or replaced. 

However, securitizers may not have 

historically collected the information 

and systems may not currently be in 

place to track when a demand has been 

made, 76 and in particular, systems may 

not be in place to track those demands 

made by investors upon trustees. 

Therefore, securitizers would incur a 

one-time cost to compile historical 

information in systems. Furthermore, 

the burden to collect and compile the 

historical information may vary 

significantly between securitizers, due 


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77The value of 972 hours for setup costs is based 

on staff experience. We estimate that 672 of those 

hours will be to set up systems to track the 

information and is calculated using an estimate of 

two computer programmers for two months, which 

equals 21 days per month times two employees 

times two months times eight hours per day. 

78 972 hours to adjust existing systems per 

securitizer X 90 average number of unique 

securitizers. 

79The Form ABS–15G is required to be filed on 

a monthly basis; however, we are estimating that, 

in the first year after implementation, the number 

of Form ABS–15G per year would be a multiple of 

six times the number of unique securitizers per year 

since the obligation to initially file Form ABS–15G 

is an offering of Exchange Act-ABS, which could 

happen at any time of the year. Therefore, in the 

first year of implementation, a securitizer would 

most likely not be obligated to file Form ABS–15G 

for the full 12 months. Thus, we estimate the total 

number of Form ABS–15G to be filed in the first 

year after implementation to be 540 (90 unique 

securitizers year one × 6). 

In the second year after implementation, we 

estimate the number of Form ABS–15G to be filed 

will be 1080 for a total of 1,620 (90 unique 

securitizers year one × 12) + (90 unique securitizers 

year two × 6). In the third year after 

implementation, we estimate the number of Form 

ABS–15G to be filed will be 2,160 for a total of 

2,700 (90 unique securitizers year one × 12) + (90 

unique securitizers year two × 12) + (90 unique 

securitizers year three X 6). The total number of 

Forms 15G–ABS over three years, would therefore 

be 4,860. Therefore, for PRA purposes, we estimate 

an annual average of 1,620 Form ABS–15G filings. 

80 30 hours × 1,620 forms. 

81 65,610 hours + 36,450 hours. 

82 $8,748,000 + $4,860,000. 83See the 2004 ABS Adopting Release. 

to the number of asset classes and 

number of ABS issued by a securitizer. 

We estimate that a securitizer would 

incur a one-time setup cost for the 

initial filing of 972 hours to collect and 

compile historical information and 

adjust its existing systems to collect and 

provide the required information going 

forward.77 Therefore, we estimate that it 

would take a total of 87,480 hours for 

a securitizer to set up the mechanisms 

to file the initial Rule 15Ga–1 

disclosures.78 We allocate 75% of these 

hours (65,610 hours) to internal burden 

for all securitizers. For the remaining 

25% of these hours (21,870 hours), we 

use an estimate of $400 per hour for 

external costs for retaining outside 

professionals totaling $8,748,000. 

After a securitizer has made the 

necessary adjustments to its systems in 

connection with the proposed rule and, 

after an initial filing of Form ABS–15G 

disclosures has been made, we estimate 

that each subsequent filing of Form 

ABS–15G to disclose ongoing 

information by a securitizer will take 

approximately 30 hours to prepare, 

review and file. We estimate, for PRA 

purposes, that the number of Form 

ABS–15G filings per year will be 

1,620.79

Therefore, after the initial filing is 

made, we estimate the total annual 

burden hours for preparing and filing 

the disclosure will be 48,600 hours.80

We allocate 75% of those hours (36,450 

hours) to internal burden hours for all 

securitizers and 25% of those hours 

(12,150 hours) for professional costs 

totaling $400 per hour of external costs 

of retaining outside professionals 

totaling $4,860,000. Therefore, the total 

internal burden hours are 102,060 81 and 

the total external costs are 

$13,608,000.82

2. Rule 15Ga–1 

Rule 15Ga–1 contains the 

requirements for disclosure that a 

securitizer must provide in Form15G– 

ABS filings described above. The 

collection of information requirements, 

however, are reflected in the burden 

hours estimated for Form ABS–15G, 

therefore, Rule 15Ga–1 does not impose 

any separate burden. Therefore, we have 

not included additional burdens for 

proposed Rule 15Ga–1. 

3. Forms S–1 and S–3 

We are proposing that asset-backed 

securities offered on Forms 

S–1 and S–3 include the required Rule 

15Ga–1 disclosures for the same asset 

class in registration statements. The 

burden for the collection of information 

is reflected in the burden hours for 

Form ABS–15G filed by a securitizer; 

however, Forms S–1 and S–3 are filed 

by asset-backed issuers, and issuers may 

include only a portion of the 

information in the prospectus. 

Therefore, we have not included 

additional burdens for Forms S–1 and 

S–3. 

4. Form 10–D 

In 2004, we adopted Form 10–D as a 

new form limited to asset-backed 

issuers. This form is filed within 15 

days of each required distribution date 

on the asset-backed securities, as 

specified in the governing documents 

for such securities. The form contains 

periodic distribution and pool 

performance information. 

We are proposing that issuers of 

registered ABS include the proposed 

Rule 15Ga-1 disclosures for only the 

pool assets on Form 10–D. However, 

because the burden for the collection of 

information is reflected in the burden 

hours for Form ABS–15G, we have not 

included additional burdens for Form 

10–D. 

5. Regulation S–K 

Regulation S–K, which includes the 

item requirements in Regulation AB, 

contains the requirements for disclosure 

that an issuer must provide in filings 

under both the Securities Act and the 

Exchange Act. In 2004, we noted that 

the collection of information 

requirements associated with Regulation 

S–K as it applies to ABS issuers are 

included in Form S–1, Form S–3, Form 

10–K and Form 8–K. We have retained 

an estimate of one burden hour to 

Regulation S–K for administrative 

convenience to reflect that the changes 

to the regulation did not impose a direct 

burden on companies.83

The proposed changes would make 

revisions to Regulation S–K. The 

collection of information requirements, 

however, are reflected in the burden 

hours estimated for the various 

Securities Act and Exchange Act forms 

related to ABS issuers. The rules in 

Regulation S–K do not impose any 

separate burden. Consistent with 

historical practice, we have retained an 

estimate of one burden hour to 

Regulation S–K for administrative 

convenience. 

6. Rule 17g–7 

This new collection of information 

relates to proposed disclosure 

requirements for NRSROs. Under the 

proposed amendments, an NRSRO 

would be required to disclose in any 

report accompanying a credit rating the 

representations, warranties and 

enforcement mechanisms available to 

investors and describe how they differ 

from those in issuances of similar 

securities. We believe that the costs of 

implementation would include the cost 

of preparing the report and maintaining 

the information. In addition, it is our 

understanding that the disclosures and 

drafts of transaction agreements that 

contain the representations, warranties 

and enforcement mechanisms related to 

an ABS transaction are prepared by the 

issuer and made available to NRSROs 

during the rating process. We estimate 

it would take 1 hour per ABS 

transaction to review the relevant 

disclosures prepared by an issuer, 

which an NRSRO would presumably 

have reviewed as part of the rating 

process, and convert those disclosures 

into a format suitable for inclusion in 

any report to be issued by an NRSRO. 

The proposed rule would also require 

an NRSRO to include disclosures 

describing how the representations, 

warranties and enforcement 

mechanisms differ from those provided 

in similar securities. Although we are 

not prescribing how an NRSRO must 

fulfill this requirement, we anticipate 

that one way an NRSRO could do so 

would be to review previous issuances 

both on an initial and an ongoing basis 

in order to establish ‘‘benchmarks’’ for 


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84 100 hours × 30 NRSROs. 

85 100 hours × 30 NRSROs. 

86The annual average number of registered 

offerings was 958 and the annual average number 

of Rule 144A ABS offerings was 716 for an 

estimated annual average of 1,674 over the period 

2004–2009. See Section X. of the 2010 ABS 

Proposing Release. We also add 393 to estimate for 

offerings under other exemptions that were not 

within the scope of the 2010 ABS Proposing 

Release. Thus, in total we use an estimated annual 

average number of 2,067 ABS offerings for the basis 

of our PRA burden estimates. 

87See Amendments to Rules for Nationally 

Recognized Statistical Rating Organizations, SEC 

Release 34–61050 (November 23, 2009), [74 FR 

63832]. 

88 4 reports × 2,067 ABS offerings × 11 hours (1 

hour to review disclosures + 10 hours to compare 

and prepare). 

89We request comment pursuant to 44 U.S.C. 

3506(c)(2)(B). 

various types of securities and revise 

them as appropriate. We expect that an 

NRSRO would incur an initial setup 

cost to collect, maintain and analyze 

previous issuances to establish 

benchmarks as well as an ongoing cost 

to review the benchmarks to ensure that 

they remain appropriate. We estimate 

that the initial review and set up system 

cost will take 100 hours and that 

NRSROs will spend an additional 100 

hours per year revising the various 

benchmarks. Therefore, we estimate it 

would take a total of 3,000 hours 84 for 

NRSROs to set up systems and an 

additional 3,000 hours per year revising 

various benchmarks.85

On a deal-by-deal basis, we estimate 

it would take an NRSRO 10 hours per 

ABS transaction to compare the terms of 

the current deal to those of similar 

securities. Because NRSROs would need 

to provide the disclosures in connection 

with the issuance of a credit rating on 

a particular offering of ABS, we base our 

estimates on an annual average of 2,067 

ABS offerings.86 Typically, the terms of 

the transaction agreements condition 

the issuance of an ABS on a credit 

rating, and generally, two credit ratings 

are required, resulting in the hiring of 

two NRSROs per transaction, although 

some may only require one credit rating 

and thus the hiring of one NRSRO. 

However, we anticipate that our recent 

amendments to Rule 17g–5, which 

provide a mechanism for allowing nonhired NRSROs to obtain the same 

information provided to NRSROs hired 

to rate structured finance transactions, 

will promote the issuance of credit 

ratings by NRSROs that are not hired by 

the arranger.87 As a result, we assign 4 

to the number of credit ratings per 

issuance of ABS, based on an average of 

two NRSROs preparing two reports (presale and final) for each transaction. 

Therefore, we estimate that it would 

take a total of 90,948 hours, annually, 

for NRSROs to provide the proposed 

Rule 17g–7 disclosures.88

7. Summary of Proposed Changes to 

Annual Burden Compliance in 

Collection of Information 

Table 1 illustrates the annual 

compliance burden of the collection of 

information in hours and costs for the 

new proposed disclosure requirements 

for securitizers and NRSROs. Below, the 

proposed Rule 15Ga–1 requirement for 

securitizers is noted as ‘‘Form ABS– 

15G’’ and the proposed requirement for 

NRSROs is noted as ‘‘17g–7.’’ 

Form 

Current 

annual 

responses 

Proposed 

annual 

responses 

Current 

burden 

hours 

Decrease or 

increase in 

burden 

hours 

Proposed 

burden 

hours 

Current 

professional 

costs 

Decrease or 

increase in 

professional 

costs 

Proposed 

professional 

costs 

Form ABS–15G .................... 1,620 .................... 102,060 102,060 ........................ 13,608,000 13,608,000 

17g–7 ............... .................... 8,268 .................... 96,948 96,948 ........................ ........................ ........................

8. Solicitation of Comments 

We request comments in order to 

evaluate: (1) Whether the proposed 

collection of information is necessary 

for the proper performance of the 

functions of the agency, including 

whether the information would have 

practical utility; (2) the accuracy of our 

estimate of the burden of the proposed 

collection of information; (3) whether 

there are ways to enhance the quality, 

utility, and clarity of the information to 

be collected; and (4) whether there are 

ways to minimize the burden of the 

collection of information on those who 

are to respond, including through the 

use of automated collection techniques 

or other forms of information 

technology.89 In addition, we 

specifically ask whether it is 

appropriate to assume, as we have, that 

for the purposes of preparing the 

required disclosures describing how the 

representations, warranties and 

enforcement mechanisms differ from 

those provided in similar securities 

NRSROs would review previous 

issuances both on an initial and an 

ongoing basis in order to establish 

‘‘benchmarks’’ for various types of 

securities and revise them as 

appropriate? Would NRSROs use other 

means to prepare the required 

comparisons, for example, reviewing 

previous issuances on a de novo basis 

for every ABS transaction? 

Any member of the public may direct 

to us any comments concerning the 

accuracy of these burden estimates and 

any suggestions for reducing these 

burdens. Persons submitting comments 

on the collection of information 

requirements should direct the 

comments to the Office of Management 

and Budget, Attention: Desk Officer for 

the Securities and Exchange 

Commission, Office of Information and 

Regulatory Affairs, Washington, DC 

20503, and should send a copy to 

Elizabeth M. Murphy, Secretary, 

Securities and Exchange Commission, 

100 F Street, NE., Washington, DC 

20549–1090, with reference to File No. 

S7–24–10. Requests for materials 

submitted to OMB by the Commission 

with regard to these collections of 

information should be in writing, refer 

to File No. S7–24–10, and be submitted 

to the Securities and Exchange 

Commission, Office of Investor 

Education and Advocacy, 100 F Street, 

NE., Washington, DC 20549. OMB is 

required to make a decision concerning 

the collection of information between 30 

and 60 days after publication of this 

release. Consequently, a comment to 

OMB is best assured of having its full 

effect if OMB receives it within 30 days 

of publication. 

VI. Benefit-Cost Analysis 

The Act requires us to implement the 

requirements discussed in this release. 

These changes will affect all securitizers 

of Exchange Act-ABS, including 

unregistered Exchange Act-ABS, and 

NRSROs that provide credit ratings on 

Exchange Act-ABS. Further, the 

proposed rules would also require 

historical information with respect to 

Exchange Act-ABS issued by a 

securitizer. We also re-propose 

disclosure requirements with respect to 

repurchase requests in Regulation AB in 

order to conform disclosures that we 

previously proposed under our 2010 

ABS Proposals to those required by 

Section 943 of the Act. 


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90See, e.g., N. Timiaros and Aparajita Saha-Bubna 

‘‘Banks Face Fight Over Mortgage Loan Buybacks,’’ 

Wall Street Journal (Aug. 18, 2010); and Alistair 

Barr, ‘‘Loan repurchases are a $10 billion problem 

for big banks,’’ (Feb. 3, 2010) available at http:// 

www.marketwatch.com/story/banks-10-billionproblem-loan-repurchases-2010-02-03. 91See discussion in Section II.A. 3. 

We are sensitive to benefits and costs 

of the proposed rules, if adopted. We 

discuss these benefits and costs below. 

We request that commentators provide 

their views along with supporting data 

as to the benefits and costs of the 

proposed amendments. 

A. Benefits 

The proposals seek to fulfill the Act’s 

objective to provide greater 

transparency regarding the use of 

representations and warranties in ABS 

transactions in both the registered and 

unregistered ABS markets. The recent 

financial crisis has revealed various 

problems with existing representation, 

warranty and enforcement provisions. 

Poor underwriting standards coupled 

with unenforceable representations and 

warranties by securitizers exacerbated 

investors’ losses in ABS.90 Increasing 

transparency regarding all demands for 

repurchases and replacements, 

including investor demands upon a 

trustee, will help investors and market 

participants identify originators with 

clear underwriting deficiencies. By 

having better information to judge the 

origination and underwriting quality of 

the assets that were previously 

securitized, investors can make more 

informed investment decisions. 

The proposals may strengthen the 

incentives for securitizers to improve 

origination and underwriting standards 

and to refrain from securitizing assets 

that do not meet stated representations. 

In addition, following a securitization, 

securitizers may have stronger 

incentives to fulfill repurchase and 

replacement demands properly. We also 

propose to limit the scope of the 

disclosures to outstanding Exchange 

Act-ABS, and in the initial filing to the 

last five years of demand, repurchase 

and replacement history in order to 

ameliorate costs to securitizers, and still 

provide information so that investors 

may identify originators with 

underwriting deficiencies. 

We are proposing to require that the 

disclosures be filed on EDGAR on new 

Form ABS–15G. By requiring the 

proposed Form ABS–15G to be filed on 

EDGAR, the information proposed to be 

required would be housed in a central 

repository that would preserve 

continuous access to the information. 

After the initial filing, securitizers 

would be required to file Form ABS– 

15G, periodically, on a monthly basis 

with updated information, so that 

consistent with the purpose of Section 

943 of the Act, an investor may monitor 

the demand, repurchase and 

replacement activity across all Exchange 

Act-ABS issued by a securitizer. 

If an ABS is rated, the proposals 

would require more disclosures by 

NRSROs about the representations, 

warranties and enforcement 

mechanisms available to investors, and 

how they differ from those of other 

similar securities. The proposed 

disclosures will enhance the 

comparability of information across 

issuers in a relatively efficient manner 

by centralizing this disclosure in 

NRSRO reports. As a result, these 

disclosures will possibly expand the 

information available to investors and 

improve transparency regarding the use 

of representations and warranties in 

ABS transactions. 

As a result, proposed Rules 15Ga–1 

and 17g–7 disclosures are likely to help 

investors more accurately evaluate and 

price initial offerings and existing issues 

of ABS securities and in turn, are likely 

to improve capital allocation in both the 

markets for ABS and the original loan 

markets that back those ABS. Further, 

the proposed rules would require 

disclosures regarding the registered and 

unregistered transactions, thus 

extending the benefits of disclosure to 

the unregistered market. While it is 

difficult to quantify the benefits listed 

above, they are likely to be substantial 

in light of the recent financial crisis. 

B. Costs 

The proposals would implement the 

Act’s requirement on securitizers to 

disclose the repurchase and 

replacement demands resulting from 

breaches of representations and 

warranties in past ABS transactions 

initially, for the last five years and then 

updated disclosures going forward on a 

monthly basis. We understand that 

some of the data collection may be 

costly. In some cases, it may be very 

difficult to obtain repurchase or 

replacement records from the distant 

past.91 However, we believe that the 

information about whether an asset had 

been repurchased or replaced from 

recent years should be accessible by 

issuers of outstanding ABS, because the 

current servicing history of the 

underlying assets would still be 

accessible on servicers’ systems. 

However, systems may not currently be 

in place to track when a demand has 

been made and therefore, securitizers 

may incur a significant one-time cost to 

collect and compile historical 

information and that cost may vary 

substantially between securitizers, due 

to the number of asset classes and 

number of ABS issued by a securitizer. 

In addition to the costs on a securitizer, 

trustees would also incur costs of 

tracking investor demands upon the 

trustee. We also expect that the cost of 

compiling and reporting this 

information would require a one-time 

set-up cost to adjust existing systems to 

compile the initial historical 

information. Additionally, under the 

proposal, the securitizer would incur 

additional costs to satisfy the obligation 

to file ongoing monthly reports on 

EDGAR of repurchase demand and 

repurchase and replacement activity. 

Filing on EDGAR would require a 

securitizer to obtain authorization codes 

and to adhere to formatting instructions. 

The Act does not specify the periodicity 

with which information should be 

provided so that investors may identify 

originators with clear underwriting 

deficiencies. However, we believe that 

monthly reporting would provide a 

better picture of repurchase activity and 

a shorter interval might be too 

burdensome. Also, many ABS pay 

distributions to investors monthly and 

likewise, the related transaction 

agreements, including in unregistered 

transactions, typically provide for 

monthly reporting to investors. 

Therefore, because most securitizers 

would most likely be accustomed to 

preparing and providing monthly 

disclosures, we anticipate that it may be 

less costly than providing the 

disclosures at any other interval. 

However, any securitizers that do not 

make payments or provide reporting on 

a monthly basis may find it costlier to 

prepare the proposed disclosures. 

Indirectly, as we discussed in the 

2010 ABS Proposing Release, 

disclosures about an originator’s or a 

sponsor’s refusal to repurchase or 

replace assets put back to them for 

breach of representations and warranties 

might create incentives for originators to 

agree to repurchase or replace such 

assets even in cases where these assets 

were not clearly in breach. If investors 

regard such disclosures as indicative of 

a willingness to comply with 

representations and warranties in the 

future, then originators or sponsors 

might try to preserve their reputation by 

taking back assets even when they do 

not have an obligation to do so. This 

might create an incentive for sponsors 

and possibly trustees to ask for 

repurchase or replacement of poorly 

performing assets that represent no 

breach of representations and 


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92See Section XI.C.2. of the 2010 ABS Proposing 

Release. However, in certain situations, it may have 

the opposite effect, where the threat of such a 

disclosure requirement relating to an originator 

could induce a sponsor to be more reticent in 

pursuing repurchase claims where the originator 

may be affiliated with the sponsor. A sponsor may 

also be worried that a large number of successful 

repurchase claims could indicate that its initial due 

diligence, or the originator’s loan quality, was poor. 

See letter from Commonwealth of Massachusetts 

Attorney General in response to the 2010 ABS 

Proposing Release. 

93See generally, Kashyap, A. and J. Stein (2000) 

‘‘What Do a Million Observations on Banks Say 

About the Transmission of Monetary Policy,’’ The 

American Economic Review, Vol. 90, No. 3, at 407– 

428 and Loutskina, E. and P. Strahan (2009) 

‘‘Securitization and the declining impact of bank 

financial condition on loan supply: Evidence from 

mortgage originations,’’ The Journal of Finance, Vol. 

64, No. 2, at 861–889. 

94 15 U.S.C. 78w(a). 95 15 U.S.C. 77b(b). 

96 15 U.S.C. 78c(f). 

warranties.92 However, securitizers may 

devise other disclosures and 

mechanisms to solve such problems in 

the long run, if they occur. 

In the aggregate, the proposed 

requirements are likely to affect 

unregistered ABS more significantly 

because traditionally these securities 

have provided less disclosure. Since, as 

discussed previously, the Act requires 

disclosures with respect to all ABS 

issued by a securitizer, registered and 

unregistered, the initial and ongoing 

disclosures may significantly increase 

the direct and particularly indirect costs 

of issuing unregistered ABS relative to 

their historical cost structure. The 

indirect costs include the possibility of 

revealing information about the quality 

of assets to competitors. A possible 

effect of these requirements is that such 

issuers may look towards alternative 

forms of financing. Given that those 

issuers have historically preferred ABS 

issues, they may consider more 

expensive and less efficient forms of 

financing. Some of these incremental 

financing costs are likely to be passed to 

consumers and other borrowers whose 

loans make up the underlying pools 

backing the ABS. While it is difficult to 

quantify such incremental costs, 

researchers have estimated that 

securitization has generally been 

beneficial in banking and mortgage 

industries. However, other factors may 

be more determinative in deciding what 

form of financing a business will 

pursue.93

The proposals would also require 

NRSROs to disclose in any report 

accompanying a credit rating for an ABS 

transaction the representations, 

warranties and enforcement 

mechanisms available to investors and 

how they differ from those of other 

similar securities. NRSROs often issue a 

pre-sale report for ABS transactions that 

includes a preliminary credit rating as 

well as a summary of important features 

of a transaction; however, they do not 

usually provide disclosure of how 

representations and warranties would 

differ from other similar securities. We 

anticipate that in order to fulfill this 

requirement, NRSROs will incur a direct 

cost to review previous issuances both 

on an initial and an ongoing basis. In 

connection with that review, they may 

establish ‘‘benchmarks’’ for various types 

of securities and revise them as 

appropriate. To the extent that they 

have not already established such 

systems, we expect that an NRSRO 

would incur initial and ongoing costs to 

set up systems to collect, maintain and 

analyze previous issuances to establish 

such benchmarks as well as an ongoing 

cost to review the benchmarks to ensure 

that they remain appropriate. An 

NRSRO may pass those costs onto the 

issuers and underwriters by building 

them into the costs it charges to provide 

a credit rating, which in turn could be 

passed on as an indirect cost onto 

investors. We are not prescribing how 

an NRSRO must fulfill its responsibility 

to compare the terms of a deal to those 

of similar securities. 

We believe that the proposed 

requirements are necessary to 

implement the purposes of the Act. For 

purposes of the Paperwork Reduction 

Act, we have estimated that the 

proposed paperwork/disclosure 

requirements on securitizers would 

result in an approximate burden of 

102,060 internal hours and external cost 

of $13,608,000 paperwork/disclosure 

and the proposed requirement on 

NRSROs would result in an 

approximate burden of 96,948 internal 

hours. Additionally, we believe that the 

re-proposed requirements in Regulation 

AB on issuers would not impose a 

significant additional burden on assetbacked issuers because the disclosures 

would have already been prepared for 

purposes of filing on Form ABS–15G. 

C. Request for Comment 

We seek comments and empirical data 

on all aspects of this Benefit-Cost 

Analysis including identification and 

quantification of any additional benefits 

and costs. Specifically, we ask the 

following: 

39. Are there other more cost-effective 

ways securitizers can provide the 

disclosure of fulfilled and unfulfilled 

repurchase requests consistent with the 

requirements of Section 943 of the Act? 

VII. Consideration of Burden on 

Competition and Promotion of 

Efficiency, Competition and Capital 

Formation 

Section 23(a) of the Exchange Act 94

requires the Commission, when making 

rules and regulations under the 

Exchange Act, to consider the impact a 

new rule would have on competition. 

Section 23(a)(2) prohibits the 

Commission from adopting any rule that 

would impose a burden on competition 

not necessary or appropriate in 

furtherance of the purposes of the 

Exchange Act. 

The proposed amendments 

implement the Act and the re-proposals 

amend Regulation AB in order to 

conform the disclosures that would be 

required under our 2010 ABS Proposals 

to those required by Section 943 of the 

Act. The amendments are intended to 

increase transparency regarding the use 

of representations and warranties in 

asset-backed securities transactions. We 

anticipate that these proposals would 

enhance the proper functioning of the 

capital markets by providing investors 

with disclosures about the 

representations, warranties and 

enforcement mechanisms available to 

them and by giving investors greater 

insight into whether underlying pool 

assets met stated underwriting 

guidelines across registered and 

unregistered transactions of a 

securitizer. Because investors would be 

able to more easily understand the 

representations, warranties and 

enforcement mechanisms available to 

them and identify originators with 

better underwriting criteria, competition 

in the ABS markets should increase. 

We request comment on whether the 

proposed amendments, if adopted 

would impose a burden on competition 

not necessary or appropriate in 

furtherance of the purposes of the 

Exchange Act. Commentators are 

requested to provide empirical data and 

other factual support for their views if 

possible. 

Section 2(b) of the Securities Act 95

and Section 3(f) of the Exchange Act 96

require the Commission, when engaging 

in rulemaking that requires it to 

consider whether an action is necessary 

or appropriate in the public interest, to 

consider, in addition to the protection of 

investors, whether the action would 

promote efficiency, competition, and 

capital formation. The proposed 

amendments would enhance our 

reporting requirements. The purpose of 

the amendments is to increase 


jlentini on DSKJ8SOYB1PROD with PROPOSALS
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97Public Law 104–121, Title II, 110 Stat. 857 

(1996). 

98 17 CFR 230.157. 

99 17 CFR 240.0–10(a). 

100This is based on data from Asset-Backed Alert. 

transparency regarding the use of 

representations and warranties in assetbacked securities transactions. This 

should improve investors’ ability to 

make informed investment decisions. 

Informed investor decisions generally 

promote market efficiency and capital 

formation. 

However, the proposals could have 

indirect adverse consequences by 

changing the willingness of issuers to 

access securitization markets. If the 

required disclosures results in revealing 

information that would benefit 

competitors, issuers may instead prefer 

to use other funding sources that do not 

require such public disclosures. 

Finally, proposed Rule 17g–7 would 

require NRSROs to describe in any 

report accompanying a credit rating how 

the representations, warranties and 

enforcement mechanisms of the rated 

ABS differ from the representations, 

warranties and enforcement 

mechanisms in issuances of similar 

securities. We believe that the proposed 

additional disclosures and, especially, 

the required comparisons of the 

representations, warranties, and 

enforcement measures in a given ABS 

transaction to those available in similar 

transactions may provide an impetus to 

the development of more standardized 

representations, warranties, and 

enforcement mechanisms across the 

ABS markets, which is likely to benefit 

the efficiency of these markets. 

We request comment on whether the 

proposed amendments, if adopted, 

would promote efficiency, competition, 

and capital formation. Commentators 

are requested to provide empirical data 

and other factual support for their views 

if possible. 

VIII. Small Business Regulatory 

Enforcement Fairness Act 

For purposes of the Small Business 

Regulatory Enforcement Fairness Act of 

1996,97 a rule is ‘‘major’’ if it has 

resulted, or is likely to result in: 

• An annual effect on the U.S. 

economy of $100 million or more; 

• A major increase in costs or prices 

for consumers or individual industries; 

or 

• Significant adverse effects on 

competition, investment, or innovation. 

We request comment on whether our 

proposed amendments would be a 

‘‘major rule’’ for purposes of the Small 

Business Regulatory Enforcement 

Fairness Act. We solicit comment and 

empirical data on: 

• The potential effect on the U.S. 

economy on an annual basis; 

• Any potential increase in costs or 

prices for consumers or individual 

industries; and 

• Any potential effect on competition, 

investment, or innovation. 

IX. Regulatory Flexibility Act 

Certification 

The Commission hereby certifies 

pursuant to 5 U.S.C. 605(b) that the 

proposals contained in this release, if 

adopted, would not have a significant 

economic impact on a substantial 

number of small entities. The proposals 

relate to the registration, disclosure and 

reporting requirements for asset-backed 

securities under the Act, the Securities 

Act and the Exchange Act. Securities 

Act Rule 157 98 and Exchange Act Rule 

0–10(a) 99 defines an issuer, other than 

an investment company, to be a ‘‘small 

business’’ or ‘‘small organization’’ if it 

had total assets of $5 million or less on 

the last day of its most recent fiscal year. 

As the depositor and issuing entity are 

most often limited purpose entities in 

an ABS transaction, we focused on the 

sponsor in analyzing the potential 

impact of the proposals under the 

Regulatory Flexibility Act. Based on our 

data, we only found one sponsor that 

could meet the definition of a small 

broker-dealer for purposes of the 

Regulatory Flexibility Act.100 With 

respect to our proposals related to 

disclosures by an NRSRO, currently 

there are two NRSROs that are classified 

as ‘‘small’’ entities for purposes of the 

Regulatory Flexibility Act. As noted 

above, we are not prescribing how an 

NRSRO must fulfill its responsibility to 

compare the terms of a deal to those of 

similar securities. Accordingly, the 

Commission does not believe that those 

proposals, if adopted, would have a 

significant economic impact on a 

substantial number of small entities. 

X. Statutory Authority and Text of 

Proposed Rule and Form Amendments 

We are proposing the new rules, 

forms and amendments contained in 

this document under the authority set 

forth in Section 943 of the Act, Sections 

5, 6, 7, 10, 19(a), and 28 of the Securities 

Act and Sections 3(b), 12, 13, 15, 15E, 

17, 23(a), 35A and 36 of the Exchange 

Act. 

List of Subjects in 17 CFR Parts 229, 

240 and 249 

Reporting and recordkeeping 

requirements, Securities. 

For the reasons set out above, Title 17, 

Chapter II of the Code of Federal 

Regulations is proposed to be amended 

as follows: 

PART 229—STANDARD 

INSTRUCTIONS FOR FILING FORMS 

UNDER SECURITIES ACT OF 1933, 

SECURITIES EXCHANGE ACT OF 1934 

AND ENERGY POLICY AND 

CONSERVATION ACT OF 1975— 

REGULATION S–K 

1. The authority citation for part 229 

continues to read in part as follows: 

Authority: 15 U.S.C. 77e, 77f, 77g, 77h, 

77j, 77k, 77s, 77z–2, 77z–3, 77aa(25), 

77aa(26), 77ddd, 77eee, 77ggg, 77hhh, 777iii, 

77jjj, 77nnn, 77sss, 78c, 78i, 78j, 78l, 78m, 

78n, 78o, 78u–5, 78w, 78ll, 78mm, 80a–8, 

80a–9, 80a–20, 80a–29, 80a–30, 80a–31(c), 

80a–37, 80a–38(a), 80a–39, 80b–11, and 7201 

et seq.; and 18 U.S.C. 1350, unless otherwise 

noted. 

* * * * * 

2. Amend § 229.1104 by adding 

paragraph (e) to read as follows: 

§ 229.1104 (Item 1104) Sponsors. 

* * * * * 

(e) Repurchases and replacements. (1) 

If the underlying transaction agreements 

provide a covenant to repurchase or 

replace an underlying asset for breach of 

a representation or warranty, provide 

the information required by Rule 15Ga– 

1(a) (17 CFR 240.15Ga–1(a)) concerning 

all assets originated or sold by the 

sponsor that were subject of a demand 

to repurchase or replace for breach of 

the representations and warranties 

concerning the pool assets for all 

outstanding asset-backed securities (as 

that term is defined in Section 3(a)(77) 

of the Securities Exchange Act of 1934) 

where the underlying transaction 

agreements included a covenant to 

repurchase or replace an underlying 

asset of the same asset class held by 

non-affiliates of the sponsor, within the 

prior three years in the body of the 

prospectus. 

(2) Include a reference to the most 

recent Form ABS–15G filed by the 

securitizer (as that term is defined in 

Section 15G(a) of the Securities 

Exchange Act of 1934) and disclose the 

CIK number of the securitizer. 

3. Amend § 229.1121 by adding 

paragraph (c) to read as follows: 

§ 229.1121 (Item 1121) Distribution and 

pool performance information. 

* * * * * 

(c) Repurchases and replacements. (1) 

Provide the information required by 

Rule 15Ga–1(a) (17 CFR 240.15Ga–1(a)) 

concerning all assets of the pool that 

were subject of a demand to repurchase 

or replace for breach of the 

representations and warranties pursuant 

to the transaction agreements. 


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(2) Include a reference to the most 

recent Form ABS–15G (17 CFR 

249.1300) filed by the securitizer (as 

that term is defined in Section 15G(a) of 

the Securities Exchange Act of 1934) 

and disclose the CIK number of the 

securitizer. 

PART 240—GENERAL RULES AND 

REGULATIONS, SECURITIES 

EXCHANGE ACT OF 1934 

4. The authority citation for part 240 

is amended by adding authorities for 

§ 240.15Ga–1 and § 240.17g–7 to read as 

follows: 

Authority: 15 U.S.C. 77c, 77d, 77g, 77j, 

77s, 77z–2, 77z–3, 77eee, 77ggg, 77nnn, 

77sss, 77ttt, 78c, 78d, 78e, 78f, 78g, 78i, 78j, 

78j–1, 78k, 78k–1, 78 l, 78m, 78n, 78o, 78p, 

78q, 78s, 78u–5, 78w, 78x, 78 ll, 78mm, 80a– 

20, 80a–23, 80a–29, 80a–37, 80b–3, 80b–4, 

80b–11, and 7201 et seq.; and 18 U.S.C. 1350 

and 12 U.S.C. 5221(e)(3), unless otherwise 

noted. 

* * * * * 

Section 240.15Ga–1 is also issued under 

sec. 943, Pub. L. No. 111–203, 124 Stat. 1376. 

* * * * * 

Section 240.17g–7 is also issued under sec. 

943, Pub. L. No. 111–203, 124 Stat. 1376. 

* * * * * 

5. Add § 240.15Ga–1 to read as 

follows: 

§ 240.15Ga–1 Repurchases and 

replacements relating to asset-backed 

securities. 

(a) General. With respect to any assetbacked security (as that term is defined 

in Section 3(a)(77) of the Securities 

Exchange Act of 1934) for which the 

underlying transaction agreements 

contain a covenant to repurchase or 

replace an underlying asset for breach of 

a representation or warranty, then the 

securitizer (as that term is defined in 

Section 15G(a) of the Securities 

Exchange Act of 1934) shall disclose 

fulfilled and unfulfilled repurchase 

requests across all trusts by providing 

the information required in paragraph 

(1) concerning all assets originated or 

sold by the securitizer that were subject 

of a demand to repurchase or replace for 

breach of the representations and 

warranties concerning the assets for all 

outstanding asset-backed security held 

by non-affiliates of the securitizer. 

Name of 

issuing 

entity 

Check 

if 

registered 

Name 

of 

originator 

Assets that 

were subject 

of demand 

Assets that 

were repurchased 

or replaced 

Assets that were 

not repurchased 

or replaced 

Assets pending 

repurchase or 

replacement 

(a) (b) (c) (#) 

(d) 

($) 

(e) 

(% of 

pool) 

(f) 

(#) 

(g) 

($) 

(h) 

(% of 

pool) 

(i) 

(#) 

(j) 

($) 

(k) 

(% of 

pool) 

(l) 

(#) 

(m) 

($) 

(n) 

(% of 

pool) 

(o) 

Asset Class X 

Issuing Entity A CIK # ........... X Originator 1 

Originator 2 

Issuing Entity B ..................... Originator 3 

Total ............................... # $ # $ # $ # $ 

Asset Class Y 

Issuing Entity C ..................... Originator 2 .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... ..........

Originator 3 .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... ..........

Issuing Entity DCIK # ............ X Originator 1 .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... ..........

Total ............................... # $ # $ # $ # $ 

(1) The table shall: 

(i) Disclose the asset class and group 

the issuing entities by asset class 

(column (a)). 

(ii) Disclose the name of the issuing 

entity (as that term is defined in Item 

1101(f) of Regulation AB (17 CFR 

229.1101(f)) of the asset-backed 

securities. List the issuing entities in 

order of the date of formation (column 

(a)). 

(iii) For each named issuing entity, 

indicate by check mark whether the 

transaction was registered under the 

Securities Act of 1933 (column (b)) 

(iv) Disclose the name of the 

originator of the underlying assets 

(column (c)). 

(v) Disclose the number, outstanding 

principal balance and percentage by 

principal balance of assets that were 

subject of demand to repurchase or 

replace for breach of representations 

and warranties (columns (d) through 

(f)). 

Instruction to paragraph (a)(1)(v): If a 

securitizer requested and was unable to 

obtain all information with respect to 

investor demands upon a trustee that 

occurred prior to [effective date of the 

final rule], so state by footnote. In this 

case, also state that the disclosures do 

not contain investor demands upon a 

trustee made prior to [effective date of 

the final rule]. 

(vi) Disclose the number, outstanding 

principal balance and percentage by 

principal balance of assets that were 

repurchased or replaced for breach of 

representations and warranties 

(columns (g) through (i)). 

(vii) Disclose the number, outstanding 

principal balance and percentage by 

principal balance of assets that were not 

repurchased or replaced for breach of 

representations and warranties 

(columns (j) through (l)). 

(viii) Disclose the number, 

outstanding principal balance and 

percentage by principal balance of 

assets that are pending repurchase or 

replacement for breach of 

representations and warranties 

(columns (m) through (o)). 

Instruction to paragraph (a)(1)(viii): 

Indicate by footnote and provide 

narrative disclosure of the reasons why 

any repurchase or replacement is 

pending. For example, if pursuant to the 

terms of a transaction agreement, assets 

have not been repurchased or replaced 

pending the expiration of a cure period, 

indicate by footnote. 

(ix) Provide totals by asset class for 

columns that require number of assets 

and principal amounts (columns (d), (e), 

(g), (h), (j), (k), (m) and (n)). 

(2) [Reserved] 

(b) If a securitizer has filed all the 

disclosures required in order to meet the 

obligations under paragraph (a) of this 

section, which would include 

disclosures of the activity of affiliated 

securitizers, those affiliated securitizers 

are not required to separately provide 

and file the same disclosures. 

(c) The disclosures in paragraph (a) of 

this section shall be provided by a 

securitizer: 

(1) Initially, with respect to the five 

year period immediately preceding the 

date of filing, as of the end of the 

preceding month, by any securitizer that 

issues an asset-backed security, or 


jlentini on DSKJ8SOYB1PROD with PROPOSALS
62736 Federal Register / Vol. 75, No. 197 / Wednesday, October 13, 2010 / Proposed Rules 

organizes and initiates an asset-backed 

securities transaction by selling or 

transferring an asset, either directly or 

indirectly, including through an 

affiliate, to the issuer, at the time the 

securitizer, or an affiliate commences its 

first offering of the asset-backed 

securities after [effective date of the 

final rule], if the underlying transaction 

agreements provide a covenant to 

repurchase or replace an underlying 

asset for breach of a representation or 

warranty. 

(2) Periodically, for a securitizer 

which was required to provide the 

information required pursuant to 

paragraph (c)(1) of this section, as of the 

end of each calendar month, to be filed 

not later than 15 calendar days after the 

end of such calendar month. 

Information is not required for the time 

prior to that specified in paragraph 

(c)(1) of this section. 

(3) Except that, if a securitizer has no 

asset-backed securities outstanding held 

by non-affiliates, the duty under 

paragraph (c)(2) of this section to file 

periodically the disclosures required by 

paragraph (a) shall be terminated 

immediately upon filing a notice on 

Form ABS–15G (17 CFR 249.1300). 

6. Add § 240.17g–7 to read as follows: 

§ 240.17g–7 Report of representations and 

warranties. 

Each nationally recognized statistical 

rating organization shall include in any 

report accompanying a credit rating 

with respect to an asset-backed security 

(as that term is defined in Section 

3(a)(77) of the Securities Exchange Act 

of 1934) a description of: 

(a) The representations, warranties 

and enforcement mechanisms available 

to investors; and 

(b) How they differ from the 

representations, warranties and 

enforcement mechanisms in issuances 

of similar securities. 

Note to § 240.17g–7: For the purposes of 

this requirement, a ‘‘credit rating’’ includes 

any expected or preliminary credit rating 

issued by a nationally recognized statistical 

rating organization. 

PART 249—FORMS, SECURITIES 

EXCHANGE ACT OF 1934 

7. The authority citation for part 249 

is amended by adding an authority for 

§ 249.1300 to read as follows: 

Authority: 15 U.S.C. 78a et seq. and 7201 

et seq.; and 18 U.S.C. 1350, unless otherwise 

noted. 

* * * * * 

Section 249.1300 is also issued under sec. 

943, Pub. L. No. 111–203, 124 Stat. 1376. 

* * * * * 

8. Add Subpart O and Form ABS— 

15G (referenced in § 249.1300) to Part 

249 to read as follows: 

Subpart O–Forms for Securitizers of 

Asset-Backed Securities 

§ 249.1300 Form ABS–15G, Asset-backed 

securitizer report pursuant to Section 15G 

of the Securities Exchange Act of 1934. 

This form shall be used for reports of 

information required by Rule 15Ga–1 

(§ 240.15Ga–1 of this chapter). 

Note: The text of Form ABS–15G does not, 

and this amendment will not, appear in the 

Code of Federal Regulations. 

United States Securities and Exchange 

Commission, Washington, DC 20549 

Form ABS–15G 

Asset-Backed Securitizer Report 

Pursuant to Section 15G of the 

Securities Exchange Act of 1934 

Date of Report (Date of earliest event reported) lllllllllllllll

Commission File Number of securitizer: lllllllllllllll

Central Index Key Number of 

securitizer: lllllllllllll

lllllllllllllllllll

Name and telephone number, including 

area code, of the person to contact in 

connection with this filing 

GENERAL INSTRUCTIONS 

A. Rule as to Use of Form ABS–15G. 

This form shall be used to comply 

with the requirements of Rule 15Ga–1 

under the Exchange Act (17 CFR 

240.15Ga–1). 

B. Events To Be Reported and Time for 

Filing of Reports. 

Forms filed under Rule 15Ga–1. In 

accordance with Rule 15Ga–1, file the 

information required by Part I in 

accordance with Item 1.01, Item 1.02, or 

Item 1.03, as applicable. If the filing 

deadline for the information occurs on 

a Saturday, Sunday or holiday on which 

the Commission is not open for 

business, then the filing deadline shall 

be the first business day thereafter. 

C. Preparation of Report. 

This form is not to be used as a blank 

form to be filled in, but only as a guide 

in the preparation of the report on paper 

meeting the requirements of Rule 12b– 

12 (17 CFR 240.12b–12). The report 

shall contain the number and caption of 

the applicable item, but the text of such 

item may be omitted, provided the 

answers thereto are prepared in the 

manner specified in Rule 12b–13 (17 

CFR 240.12b–13). All items that are not 

required to be answered in a particular 

report may be omitted and no reference 

thereto need be made in the report. All 

instructions should also be omitted. 

D. Signature and Filing of Report. 

1. Forms filed under Rule 15Ga–1. 

Any form filed for the purpose of 

meeting the requirements in Rule 15Ga– 

1 must be signed by the senior officer in 

charge of securitization of the 

securitizer. 

2. Copies of report. If paper filing is 

permitted, three complete copies of the 

report shall be filed with the 

Commission. 

INFORMATION TO BE INCLUDED IN 

THE REPORT 

REPRESENTATION AND WARRANTY 

INFORMATION 

Item 1.01 Initial Filing of Rule 15Ga– 

1 Representations and Warranties 

Disclosure 

If any securitizer (as that term is 

defined in Section 15G(a) of the 

Securities Exchange Act of 1934), issues 

an asset-backed security, (as that term is 

defined in Section 3(a)(77) of the 

Securities Exchange Act of 1934), or 

organizes and initiates an asset-backed 

securities transaction by selling or 

transferring an asset, either directly or 

indirectly, including through an 

affiliate, to the issuer, provide the 

disclosures required by Rule 15Ga–1 (17 

CFR 240.15Ga–1) at the time the 

securitizer, or an affiliate commences its 

first offering of the asset-backed 

securities after [effective date of the 

final rule], if the underlying transaction 

agreements contain a covenant to 

repurchase or replace an underlying 

asset for breach of a representation or 

warranty. 

Item 1.02 Periodic Filing of Rule 

15Ga–1 Representations and 

Warranties Disclosure 

Each securitizer that was required to 

provide the information required by 

Item 1.01 of this form, shall provide the 

disclosures required by Rule 15Ga–1 (17 

CFR 240.15Ga–1) as of the end of each 

calendar month, to be filed not later 

than 15 calendar days after the end of 

such calendar month. 

Item 1.03 Notice of Termination of 

Duty to File Reports under Rule 15Ga– 

1 

If any securitizer has no asset-backed 

securities outstanding (as that term is 

defined in Section 3(a)(77) of the 

Securities Exchange Act of 1934) held 

by non-affiliates, provide the date of the 

last payment on the last asset-backed 

security outstanding that was issued by 

or issued by an affiliate of the 

securitizer. 


jlentini on DSKJ8SOYB1PROD with PROPOSALS
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SIGNATURES 

Pursuant to the requirements of the 

Securities Exchange Act of 1934, the 

reporting entity has duly caused this 

report to be signed on its behalf by the 

undersigned hereunto duly authorized. 

(Securitizer) llllllllllll

Date llllllllllllllll

(Signature)* llllllllllll

* Print name and title of the signing 

officer under his signature. 

* * * * * 

By the Commission. 

Dated: October 4, 2010. 

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. 2010–25361 Filed 10–12–10; 8:45 am] 

BILLING CODE 8011–01–P 

DEPARTMENT OF THE TREASURY 

Office of the Secretary 

31 CFR Part 1 

RIN 1505–AC27 

Privacy Act of 1974; Proposed 

Implementation 

AGENCY: Departmental Offices, Treasury. 

ACTION: Proposed rule. 

SUMMARY: In accordance with the 

requirements of the Privacy Act of 1974, 

5 U.S.C. 552a, the Department of the 

Treasury gives notice of a proposed 

amendment to update its Privacy Act 

regulations, and to add an exemption 

from certain provisions of the Privacy 

Act for a system of records related to the 

Office of Foreign Assets Control 

(OFAC). 

DATES: Comments must be received no 

later than November 12, 2010. 

ADDRESSES: Comments should be sent 

to: Assistant Director, Disclosure 

Services, Office of Foreign Assets 

Control, Department of the Treasury, 

1500 Pennsylvania Avenue, NW., 

Washington, DC 20220. The Department 

will make such comments available for 

public inspection and copying in the 

Department’s Library, Room 1428, Main 

Treasury Building, 1500 Pennsylvania 

Avenue, NW., Washington, DC 20220, 

on official business days between the 

hours of 10 a.m. and 5 p.m. Eastern 

Time. You can make an appointment to 

inspect comments by telephoning (202) 

622–0990 (not a toll free number). All 

comments, including attachments and 

other supporting materials, received are 

part of the public record and subject to 

public disclosure. You should submit 

only information that you wish to make 

available publicly. 

FOR FURTHER INFORMATION CONTACT: 

Assistant Director, Disclosure Services, 

Office of Foreign Assets Control, 

Department of the Treasury, 1500 

Pennsylvania Avenue, NW., 

Washington, DC 20220, tel.: 202–622– 

2510 (not a toll free number), or Chief 

Counsel (Foreign Assets Control), Office 

of General Counsel, Department of the 

Treasury, 1500 Pennsylvania Avenue, 

NW., Washington, DC 20220, tel.: 202– 

622–2410 (not a toll free number). 

SUPPLEMENTARY INFORMATION: In 

reviewing Treasury regulations 

implementing the Privacy Act, the 

Department found that Executive Order 

11652 listed in Section 1.26(g)(6)(ii)(A) 

has been superseded and needs to be 

updated. This section is being amended 

to reference Executive Orders 12958, 

13526, or successor or prior Executive 

Orders as may be necessary. 

Under 5 U.S.C. 552a(k)(1), the head of 

an agency may promulgate rules to 

exempt a system of records from certain 

provisions of 5 U.S.C. 552a if the system 

of records is subject to the provisions of 

5 U.S.C. 552(b)(1), which regards 

matters specifically authorized under 

criteria established by an Executive 

Order to be kept secret in the interest of 

national defense or foreign policy and 

are in fact properly classified pursuant 

to such Executive Order. 

To the extent that systems of records 

contain information subject to the 

provisions of 5 U.S.C. 552(b)(1), the 

Department of the Treasury proposes to 

exempt the systems of records from the 

following provisions of the Privacy Act 

pursuant to 5 U.S.C. 552a(k)(1): 

5 U.S.C. 552a(c)(3), 

5 U.S.C. 552a(d)(1), (2), (3), and (4), 

5 U.S.C. 552a(e)(1), 

5 U.S.C. 552a(e)(4)(G), (H), and (I), and 

5 U.S.C. 552a(f). 

The reason for invoking the 

exemption is to protect material 

authorized to be kept secret in the 

interest of national defense or foreign 

policy pursuant to Executive Orders 

12958, 13526, or successor or prior 

Executive Orders. 

This document also creates a new 

table in paragraph 31 CFR 1.36(e)(1) 

under the new heading designated as 

‘‘(i) Departmental Offices:’’. The system 

of records entitled ‘‘DO .120—Records 

Related to Office of Foreign Assets 

Control Economic Sanctions’’ will be 

added to the table under (i). The current 

heading ‘‘Financial Crimes Enforcement 

Network:’’ and the associated table is 

designated as ‘‘(ii).’’ 

The Department of the Treasury has 

published separately in the Federal 

Register the notice of a consolidated 

system of records related to OFAC on 

October 6, 2010, at 75 FR 61853. 

This proposed rule is not a 

‘‘significant regulatory action’’ under 

Executive Order 12866. 

Pursuant to the requirements of the 

Regulatory Flexibility Act (RFA), 5 

U.S.C. 601–612, it is hereby certified 

that this rule will not have significant 

economic impact on a substantial 

number of small entities. The term 

‘‘small entity’’ is defined to have the 

same meaning as the terms ‘‘small 

business,’’ ‘‘small organization,’’ and 

‘‘small governmental jurisdiction,’’ as 

defined in the RFA. 

The proposed regulation, issued 

under section 522a(k) of the Privacy 

Act, is to exempt certain information in 

the above systems of records within the 

Department from certain provisions 

under the Privacy Act, including those 

regarding notification, access to a 

record, and amendment of a record by 

individuals who are citizens of the 

United States or an alien lawfully 

admitted for permanent residence. 

Inasmuch as the Privacy Act rights are 

personal and apply only to U.S. citizens 

or an alien lawfully admitted for 

permanent residence, small entities as 

defined in the RFA are not provided 

rights under the Privacy Act and are 

outside the scope of this regulation. 

List of Subjects in 31 CFR Part 1 

Privacy. 

Part 1, subpart C of title 31 of the 

Code of Federal Regulations is proposed 

to be amended as follows: 

PART 1—[AMENDED] 

1. The authority citation for part 1 

continues to read as follows: 

Authority: 5 U.S.C. 301 and 31 U.S.C. 321. 

Subpart A also issued under 5 U.S.C. 552, as 

amended. Subpart C also issued under 5 

U.S.C. 552a, as amended. 

Subpart C—Privacy Act 

2. Section 1.26 is amended by revising 

the first sentence in paragraph 

(g)(6)(ii)(A) to read as follows: 

§ 1.26 Procedures for notification and 

access to records pertaining to 

individuals—format and fees for request for 

access. 

* * * * * 

(g) * * * 

(6) * * * 

(ii) * * * 

(A) Requests for information classified 

pursuant to Executive Orders 12958, 

13526, or successor or prior Executive 

Orders require the responsible 

component of the Department to review 


jlentini on DSKJ8SOYB1PROD with PROPOSALS