The Securities and Exchange Commission has said it will begin accepting registration statements for ABS deals as early as March 1, as part of its pilot program to help issuers and their counsel gain comfort with Regulation AB, the industry's first rule tailored specifically for asset-backed securities. The rule becomes effective March 8, but many of its disclosure requirements become effective for deals securitized after Jan. 1, 2006, at which time the pilot program will end.
Hard copies of registration statements will be privately submitted to the SEC's Division of Corporation Finance for review. Staff of the Division will then reply to the issuer and its counsel with instructions on how the registration statement should be changed to better comply with Reg AB. Max Webb, head of the division's operations group, said personal meetings between counsel and division staff may be necessary in some cases, but most will be handled via written correspondence. "This is a great chance for issuers and law firms to gain familiarity with the rule on a confidential basis," said Webb.
The SEC announced the pilot program at last week's American Securitization Forum 2005 Conference, and Webb said that following the announcement, there was a great deal of interest in the program, with several people expressing interest in participating immediately. Webb could not estimate how many deals would be looked at during the course of the program, but said it would be determined primarily by what his staff is able to handle, meaning, there is a chance that not all issuers will be able to have their deals reviewed.
The program may also be tailored by asset class, meaning only a certain number of deals from each class will be reviewed, likely limiting the number of mortgage related ABS reviewed, allowing the SEC a chance to review transactions across the whole spectrum. For those who find themselves shut out of the program, finalized registration statements will be posted on the SEC's EDGAR system and can be used as guidelines.
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