Document ID: SEC-2010-1548-0001
Agency: sec
Document Type: Proposed Rule
Title: Dodd-Frank Wall Street Reform and Consumer Act: Disclosure for Asset-Backed Securities
Posted Date: 2010-10-13T04:00Z

[Federal Register: October 13, 2010 (Volume 75, Number 197)]
[Proposed Rules]               
[Page 62718-62737]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr13oc10-15]                         

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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 Dodd-Frank Wall Street Reform and Consumer Protection Act

AGENCY: Securities and Exchange Commission.

ACTION: Proposed rule.

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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 asset-backed 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.
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    \1\ Public Law 111-203 (July 21, 2010).

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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 AB \3\ (a subpart

[[Page 62719]]

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\
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    \2\ 17 CFR 229.1104 and 17 CFR 229.1121.
    \3\ 17 CFR 229.1100 through 17 CFR 229.1123.
    \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.
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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 Dodd-Frank 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 asset-backed 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\
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    \9\ See Section 943 of the Act.
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    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 asset-backed 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.
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    \10\ See 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.
    \12\ See previously proposed Item 1121(c) of Regulation AB in 
the 2010 ABS Proposing Release.
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    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\
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    \13\ As 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 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).

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[[Page 62720]]

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 asset-
backed 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 self-liquidating 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.
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    \14\ Section 3(a)(77) of the Exchange Act provides that the term 
``asset backed security'' means a fixed-income 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 asset-backed 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 ``asset-backed 
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 
Mortgage-Backed Securities Markets'' (Jan. 2003) available at http:/
/www.sec.gov/news/studies/mortgagebacked.htm.
    \17\ For a discussion of municipal ABS, see generally Robert A. 
Fippinger, The Securities Law of Public Finance vol. 1, Sec.  
1:6.2[B], 1-70--1-72 (2d ed., Practicing Law Institute 2009).
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    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\
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    \18\ See Section 15G(a)(3) of the Exchange Act, as amended by 
the Act.
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    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 Act-ABS 
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

[[Page 62721]]

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\
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    \19\ Securities Act Rule 191 [17 CFR 230.191] generally defines 
an issuer as the depositor.
    \20\ A 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 ABS. See Section 
II. of the 2004 ABS Adopting Release.
    \21\ A 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.
    \22\ There 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.
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    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 Act-ABS, 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.
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    \23\ We 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.
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    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

[[Page 62722]]

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\
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    \24\ See 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.
    \25\ See 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.
    \26\ See 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-won-t-
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).
    \27\ This 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.
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    We are proposing that securitizers provide the information in the 
following tabular format in order to aid understanding:

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                                                                Assets that were subject of     Assets that were repurchased or  Assets that were not repurchased   Assets pending repurchase or
                                                                          demand                           replaced                         or replaced                     replacement
    Name of issuing entity      Check if        Name of     ------------------------------------------------------------------------------------------------------------------------------------
                               registered     originator                               (% of                             (% of                             (% of                          (% of
                                                              ()     ($)      pool)    ()     ($)      pool)    ()     ($)      pool)   ()    ($)     pool)
 (a)                                (b)    (c).............  (d)           (e)       (f)       (g)           (h)       (i)       (j)           (k)       (l)       (m)          (n)      (o)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
        Asset Class X                                        ............  ........  ........  ............  ........  ........  ............  ........  ........  ...........  .......  .......
Issuing Entity A.............         X    Originator 1      ............  ........  ........  ............  ........  ........  ............  ........  ........  ...........  .......  .......
CIK ................
                                           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 entities\28\ 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.
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    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).
---------------------------------------------------------------------------

    \30\ See Section 943(2) of the Act.
---------------------------------------------------------------------------

    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\
---------------------------------------------------------------------------

    \31\ If the ABS were offered in a registered transaction, an 
investor may be able to locate additional detailed information. In 
the 2010 ABS 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.

---------------------------------------------------------------------------

[[Page 62723]]

    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.
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    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\
---------------------------------------------------------------------------

    \33\ See 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).
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \34\ Filing 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.
---------------------------------------------------------------------------

    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\
---------------------------------------------------------------------------

    \35\ See 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).
    \36\ See e.g., comment letters from ASF, Bank of America, 
Financial Services Roundtable and the Mortgage Bankers Association 
on the 2010 ABS Proposing Release.
    \37\ For 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 five-year look back date.
---------------------------------------------------------------------------

    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\
---------------------------------------------------------------------------

    \38\ See 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).
    \39\ Form 10-Ds are required to be filed within 15 days of each 
required distribution date on the asset-backed 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.
---------------------------------------------------------------------------

    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

[[Page 62724]]

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 Act-ABS 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?
---------------------------------------------------------------------------

    \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.''
---------------------------------------------------------------------------

    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\
---------------------------------------------------------------------------

    \41\ See 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).
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \42\ See e.g., comment letters of Metropolitan Life Insurance 
Company and the SIFMA on the 2010 ABS Proposing Release.
---------------------------------------------------------------------------

    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?
---------------------------------------------------------------------------

    \43\ See 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.

---------------------------------------------------------------------------

[[Page 62725]]

    16. Is our proposal to require a securitizer to file its initial 
Form ABS-15G at the time it first offers Exchange-Act 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.
---------------------------------------------------------------------------

    \44\ However, 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.
    \45\ The 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.
---------------------------------------------------------------------------

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

[[Page 62726]]

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\
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    \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.
    \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.
    \48\ Securities 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.
---------------------------------------------------------------------------

    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 
Act-ABS 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 Act-ABS are sold to U.S. persons?
---------------------------------------------------------------------------

    \49\ 17 CFR 240.3b-4.
---------------------------------------------------------------------------

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

[[Page 62727]]

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.
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    \50\ See Section V.A. of the 2010 ABS Proposing Release.
    \51\ See previously proposed Item 1110(c) of Regulation AB in 
the 2010 ABS Proposing Release.
    \52\ See previously proposed Item 1104(f) of Regulation AB in 
the 2010 ABS Proposing Release.
    \53\ The 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.
    \54\ See 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.
    \55\ As 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.
    \57\ We 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 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.
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    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.
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    \58\ See previously proposed Item 1121(c) and Section V.A. of 
the 2010 ABS Proposing Release.
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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?
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    \59\ See proposed Item 1110(c) of Regulation AB in the 2010 ABS 
Proposing Release.
    \60\ Originators 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.
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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 asset-backed 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

[[Page 62728]]

securities.\63\ As discussed above, the Act also amended the Exchange 
Act to include the definition of an ``asset-backed 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.
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    \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.
    \62\ Current 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.
    \63\ As 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.
    \64\ See Section 3(a)(77) of the Exchange Act, as amended by the 
Act.
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    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\
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    \65\ We 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].
    \66\ We 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.
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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?
---------------------------------------------------------------------------

    \67\ For 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.
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    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, 
non-hired 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?
---------------------------------------------------------------------------

    \68\ See Amendments to Rules for Nationally Recognized 
Statistical Rating Organizations, SEC Release 34-61050 (November 23, 
2009), [74 FR 63832].
---------------------------------------------------------------------------

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

[[Page 62729]]

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, asset-backed 
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\
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    \69\ 44 U.S.C. 3501 et seq.
    \70\ 44 U.S.C. 3507(d) and 5 CFR 1320.11.
    \71\ The 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.
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    (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 asset-backed 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.
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    \72\ We 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).
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    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\
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    \73\ Public Law 109-291 (2006).
    \74\ See e.g., Section VIII of Proposed Rules for Nationally 
Recognized Statistical Rating Organizations, SEC Release 34-61051 
(December 4, 2009) [74 FR 63866].
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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

[[Page 62730]]

to the number of asset classes and number of ABS issued by a 
securitizer.
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    \75\ We base the number of unique sponsors on data from SDC.
    \76\ See e.g., comment letters from ASF, Bank of America, 
Financial Services Roundtable and the Mortgage Bankers Association 
on the 2010 ABS Proposing Release.
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    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.
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    \77\ The 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.
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    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\
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    \79\ The 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 x 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 x 12) + (90 unique securitizers year 
two x 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 x 12) + (90 unique 
securitizers year two x 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.
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    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\
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    \80\ 30 hours x 1,620 forms.
    \81\ 65,610 hours + 36,450 hours.
    \82\ $8,748,000 + $4,860,000.
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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\
---------------------------------------------------------------------------

    \83\ See the 2004 ABS Adopting Release.
---------------------------------------------------------------------------

    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

[[Page 62731]]

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\
---------------------------------------------------------------------------

    \84\ 100 hours x 30 NRSROs.
    \85\ 100 hours x 30 NRSROs.
---------------------------------------------------------------------------

    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 non-hired 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 (pre-sale 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\
---------------------------------------------------------------------------

    \86\ The 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.
    \87\ See Amendments to Rules for Nationally Recognized 
Statistical Rating Organizations, SEC Release 34-61050 (November 23, 
2009), [74 FR 63832].
    \88\ 4 reports x 2,067 ABS offerings x 11 hours (1 hour to 
review disclosures + 10 hours to compare and prepare).
---------------------------------------------------------------------------

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.''

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                             Decrease or                                    Decrease or
                                        Current      Proposed     Current    increase in     Proposed         Current       increase in      Proposed
                Form                     annual       annual       burden       burden     burden  hours   professional    professional    professional
                                       responses    responses      hours        hours                          costs           costs           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?
---------------------------------------------------------------------------

    \89\ We request comment pursuant to 44 U.S.C. 3506(c)(2)(B).
---------------------------------------------------------------------------

    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.

[[Page 62732]]

    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.
---------------------------------------------------------------------------

    \90\ See, 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-billion-problem-loan-repurchases-
2010-02-03.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \91\ See discussion in Section II.A. 3.
---------------------------------------------------------------------------

    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

[[Page 62733]]

warranties.\92\ However, securitizers may devise other disclosures and 
mechanisms to solve such problems in the long run, if they occur.
---------------------------------------------------------------------------

    \92\ See 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.
---------------------------------------------------------------------------

    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\
---------------------------------------------------------------------------

    \93\ See 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.
---------------------------------------------------------------------------

    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 asset-backed 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.
---------------------------------------------------------------------------

    \94\ 15 U.S.C. 78w(a).
---------------------------------------------------------------------------

    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

[[Page 62734]]

transparency regarding the use of representations and warranties in 
asset-backed securities transactions. This should improve investors' 
ability to make informed investment decisions. Informed investor 
decisions generally promote market efficiency and capital formation.
---------------------------------------------------------------------------

    \95\ 15 U.S.C. 77b(b).
    \96\ 15 U.S.C. 78c(f).
---------------------------------------------------------------------------

    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:
---------------------------------------------------------------------------

    \97\ Public Law 104-121, Title II, 110 Stat. 857 (1996).
---------------------------------------------------------------------------

     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.
---------------------------------------------------------------------------

    \98\ 17 CFR 230.157.
    \99\ 17 CFR 240.0-10(a).
    \100\ This is based on data from Asset-Backed Alert.
---------------------------------------------------------------------------

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 Sec.  229.1104 by adding paragraph (e) to read as follows:

Sec.  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 Sec.  229.1121 by adding paragraph (c) to read as follows:

Sec.  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.

[[Page 62735]]

    (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 Sec.  240.15Ga-1 and Sec.  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 Sec.  240.15Ga-1 to read as follows:

Sec.  240.15Ga-1  Repurchases and replacements relating to asset-backed 
securities.

    (a) General. With respect to any asset-backed 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       Name  of     Assets that  were subject  of  Assets that  were repurchased      Assets that were  not      Assets pending  repurchase or
--------------------------------------  registered      originator                demand                       or replaced             repurchased  or replaced              replacement
                                      ----------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                             (% of                          (% of                          (% of                          (% of
                 (a)                        (b)            (c)        ()  ($) (e)   pool)   ()  ($) (h)   pool)   ()  ($) (k)   pool)   ()  ($) (n)   pool)
                                                                          (d)                 (f)        (g)                 (i)        (j)                 (l)        (m)                 (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

[[Page 62736]]

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 Sec.  240.17g-7 to read as follows:

Sec.  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 Sec.  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 Sec.  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 Sec.  249.1300) 
to Part 249 to read as follows:

Subpart O-Forms for Securitizers of Asset-Backed Securities

Sec.  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 (Sec.  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)-----------------------
Commission File Number of secur- itizer:-------------------------------
Central Index Key Number of securitizer:-------------------------------
-----------------------------------------------------------------------
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.

[[Page 62737]]

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)----------------------------------------------------------

Date-------------------------------------------------------------------

(Signature)*-----------------------------------------------------------

* 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