SEC Adopts Rules Requiring Asset-Backed Issuers to Review Securitized Assets and Disclose Asset Repurchase History; Rating Agencies Required to Report on Representations and Remedies in Securitizations

On January 20, the SEC adopted several final Dodd-Frank mandated rules relating to asset-backed securities (ABS), including some that apply to ABS offered under registration exemptions such as Rule 144A or by GSEs such as Fannie Mae and Freddie Mac as well as ABS registered with the SEC. The new rules require ABS issuers to conduct a review of the assets they securitize and disclose the findings of that review; require securitization parties with obligations to repurchase assets for breaches of representations to publicly disclose their repurchase history; and require rating agency reports to describe and compare representations and enforcement mechanisms in the rated ABS transaction.