The Securities and Exchange Commission announced Wednesday it was seeking public comment on a proposed rule that would require issuers of asset-backed securities to provide investors with new disclosures. The rule would also affect credit rating agencies that rate ABS.
The rule falls under section 943 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and requires the SEC to take action by Jan. 14, 2011.
The rules proposed by the SEC include a disclosure of repurchase history, which would require a repurchase history for the five years prior to a security's offering date. Furthermore, the issuer would have to file monthly updates with the repurchase history for all outstanding ABS, even if the securities were not registered with the SEC; and the history of all "fulfilled and unfulfilled" repurchase requests.