Reg AB Is here to stay: What does this mean for servicers?
November 2006
At a glance
The Securities Exchange Commission (“SEC”) issued final rules for the Asset Backed Securities (“ABS”) industry on December 22, 20041 entitled "Regulation AB", which became effective on January 1, 2006. Regulation AB is a set of newly amended rules and forms to address comprehensively the registration, disclosure and reporting requirements for ABS under the Securities Act of 1933 and the Securities Exchange Act of 1934.
By LaWanda Morris | Tom Knox
The Securities Exchange Commission (SEC) issued final rules for the Asset Backed Securities (ABS) industry on December 22, 2004 entitled "Regulation AB", which became effective on January 1, 2006. Regulation AB is a set of amended rules and forms to address comprehensively the registration, disclosure and reporting requirements for ABS under the Securities Act of 1933 and the Securities Exchange Act of 1934.
The final rules were intended to accomplish the following:
- Update and clarify the Securities Act registration requirements for ABS offerings, including expanding the types of securities that may be offered in delayed primary offerings on Form S-3;
- Consolidate existing positions, which allow modified Exchange Act reporting that is more relevant to ABS;
- Provide disclosure guidance and requirements for Securities Act and Exchange Act filings involving ABS;
- Streamline existing positions that permit the use of written communications in a registered offering of ABS in addition to the statutory registration statement prospectus; and
- Establish a consistent servicing standard that is used as the basis for measuring each Servicer's performance.
The entire set of requirements is enumerated §229.1100 through 229.1123. The section of Regulation AB that is of primary importance to Servicers is the annual assertion and accountant's attestation report. These requirements, and the associated servicing standard are described in §229.1122.