The Structured Finance Industry Group wants more time to evaluate proposed revisions to rules governing reporting and disclosure requirements for asset-backed securities.
The trade group said late Monday that it has requested a 60-day extension to the comment period, which ends March 28.
Revisions to what is known collectively as “Regulation AB” had been on the back burner for some time. But last month, the Securities and Exchange Commission re-opened the comment period to permit comment on an approach for the dissemination of potentially sensitive asset-level data to address privacy issues.
This approach contemplates that the complete set of asset-level data required under revised Regulation AB would be provided through an issuer or issuer-sponsored website.
“We believe this proposed approach is largely unprecedented, raises significant new concerns and does not address the risk that the provided data could be used to identify individual borrowers, and in turn attribute the disclosed data set to each borrower,” the SFIG stated in an email to its membership.
“We believe that this approach could have serious implications for not only Federal securities law, but also for laws and regulations that protect consumer privacy rights.” The trade group said that mandatory disclosure is a clear conflict with mandatory restriction on disclosure to potential investors. At the same time, the ability to reconstruct personal information from the posted data creates risks for consumers and liability for securitization participants. “These are novel issues of securities and privacy law,” it stated.
The SFIG plans to engage experts on privacy law to help it assess the proposed approach.