Regulators risk stifling a recovery in the securitization market if they subject privately offered securities to the same disclosure and reporting requirements as public offerings, SEC Commissioner Troy Paredas said today.
Speaking at the American Securitization Forum's conference in Las Vegas, Paredas noted that he had supported proposal of Regulation AB II rules last year in large part to give the financial industry the opportunity to provide feedback.
But he added that he had expressed concern at the time that the proposals might go too far in treating the private market like the public market.
In Paredes’ view, doing so could compromise the value offered by the private market.
"Generally speaking ... the private market ought to be treated differently.” Paredas said, adding that the sophisticated investors who buy these securities can fend for themselves.
Another topic tackled by Paredes was the notion that the market was over-reliant on credit ratings. He said when discussing this issue, players tend to focus on the relationship between issuers and ratings agencies, while understanding how the entire range of players use ratings is key to taking the right regulatory steps.