The Bond Market Association objected last week to a major proposed overhaul of regulations by the Securities and Exchange Commission that could jeopardize a separate SEC effort that is currently developing new rules specifically for asset securitizations.
The association's letter said under the proposed regulatory overhaul issuers of asset securitizations might be denied immediate and predictable access under the SEC's proposed regulatory overhaul. Further, issuers could likely hit delays and uncertainties in completing deals because of what the association terms impractical and unwarranted advance disclosure requirements.
The rapidly expanding markets for asset securitizations and the fundamental difference between securitizations and other debt securities suggest a need to avoid a one-size-fits-all approach to regulating this unique sector just like other parts of the capital markets the association said.
Rather, according to the bond association, the SEC should take a regulatory route that recognizes the salient features and distinctive characteristics of offerings in this sector.
The association recommends a number of "reforms," including revision of registration forms for securitizations as well as eligibility requirements and required disclosures. - ES