SEC’s New 144A ABS Rules
April 7, 2010
The Securities and Exchange Commission (SEC) today proposed new regulation that could change the disclosure requirements of asset-backed securities (ABS) under Rule 144A.
The new rules could substantially expand the disclosure requirements for ABS offerings. This would mean an ABS issuer would, upon request, have to provide investors with information similar to that of a SEC registered offering. Under this proposed regulation, investors who do not receive the requested information can sue for breach of contract.
Furthermore, a structured finance issuer who has an offering under Rule 144A would be required to file a notice of this offering with the SEC.
These new rules could in essence blur the distinction between disclosure required in the SEC-registered market and the Rule 144A ABS market.
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