Starting on Sept. 26, in all reports accompanying new ABS ratings, Moody's Investors Service will include comparisons to standard benchmarks for each transaction's representations and warranties and enforcement mechanisms.
The new feature is in compliance with Rule 17g-7, which was adopted by the Securities and Exchange Commission (SEC) last January.
The changes will apply to both U.S. and non-U.S. securities, including residential and commercial MBS, ABS, commercial paper, and CLOs.
The securities also include some public finance securities, such as housing bonds and tender option bonds.
Moody's will determine the benchmarks for comparable representations and warranties based on U.S. standards. Moody's is also evaluating the use of local benchmarks.