The Securities and Exchange Commission (SEC) put on hold one change that could have shuttered the ABS market starting in early January. But a long line of proposals marching into 2011 will keep ABS compliance departments busy and, in some cases, may fundamentally alter the market.
The Dodd-Frank financial reform statute enacted in July repealed the SEC's Rule 436g that exempted rating agencies as experts and their ratings from being included in registration statements, which would subject these firms to Section 11 liability. When the law passed, the rating agencies essentially stopped rating deals and the market briefly halted, until the SEC extended the exemption to January. On Nov. 23, the SEC extended the exemption indefinitely.