asset security definition

129 See amendments to Form S-2, S-11, F-1, F-2 and F-3. S7-21-04. 41 See Exchange Act Rules 13a-15 and 15d-15. The emphasis on a materiality-based standard for the new disclosure items attempts to mitigate the possibility that immaterial information may overwhelm the disclosure. The definition is principles-based and allows broad flexibility as to asset types and structures that we believe should be subject to the alternative disclosure and regulatory regime that exists for asset-backed securities. Provide appropriate introductory and explanatory information to introduce the characteristics, the methodology used in determining or calculating the characteristics and any terms or abbreviations used. This form shall be used by asset-backed issuers to file periodic distribution reports pursuant to � 240.13a-17 or 240.15d-17 of this chapter. See also Gary Silverman et al., “A $2.5 Trillion Market You Hardly Know,” Business Week, Oct. 26, 1998 (“Securitization is one of the most important and abiding innovations to emerge in the financial markets since the 1930s” (quoting Leon T. Kendall)). As we explained in the Proposing Release, no other set of uniform servicing criteria exists for purposes of this type of compliance assessment today, nor are we aware of any that are under development in the market. Instead, the information must either be included in the filing or, if the conditions in Section III.B.10.a. Brokers, Reporting and recordkeeping requirements, Securities. Otherwise, their distribution must be registered. 507 See amendments to paragraph (e) of Exchange Act Rules 13a-14 and 15d-14. We proposed that the assessment of the servicing function would be for a full fiscal period, rather than just at a point in time. If the pool includes a mixture of leases and balloon loans, they should be treated together for purposes of those calculations. We also continue the practice of accountant involvement in assessing compliance with servicing criteria by adopting a requirement that a registered public accounting firm attest to the assertion of compliance. Bankers; ASF; Capital One; CMSA; and Wells Fargo. With each takedown of asset-backed securities by a new entity off the registration statement, a new reporting obligation under Exchange Act Section 15(d) is created. 10.511 The servicer’s assertion as to compliance and the accompanying accountant’s report are commonly referred to as a “USAP Report.”. We included the reference as general guidance on presenting delinquency and loss information. 33-8128 (Sep. 16, 2002) [67 FR 58480] and Release No. (14) Geographic distribution, such as by state or other material geographic region. For any such offerings that rely on Securities Act Rule 415(a)(1)(x), Securities Act registration statements filed after August 31, 2005 related to such offerings must be pre-effectively or post-effectively amended, as applicable, to make the prospectus included in Part I of the registration statement compliant and to make any required undertakings or other changes for Part II of the registration statement. Reflecting a longstanding staff position, if, with respect to a takedown off of a shelf registration statement on Form S-3, any material pool characteristic of the asset pool at the time of issuance of the asset-backed securities differs by 5% or more (other than as a result of the pool assets converting into cash in accordance with their terms)555 from the description of the asset pool in the final prospectus filed for the takedown pursuant to Securities Act Rule 424, disclosure about the actual asset pool will be required, including disclosure regarding any new significant obligors, servicers or significant originators.556 As proposed, no report will be required if substantially the same information was provided in a post-effective amendment to the Securities Act registration statement or in a subsequent Rule 424 prospectus. ISO/IEC 27001 is widely known, providing requirements for an information security management system ( ISMS ), though there are more than a dozen standards in the ISO/IEC 27000 family . As we noted in the Proposing Release, the safe harbor is a non-exclusive safe-harbor the same as existing Rules 137, 138 and 139. (3) The report for the transition period shall be filed on Form 10-K (� 249.310 of this chapter) responding to all items to which such asset-backed issuer is required to respond pursuant to General Instruction J. of Form 10-K. The separate filing of reportable events on Form 8-K will accelerate the delivery of information to the capital markets, which should enable investors to better monitor reportable events affecting the asset-backed securities or the relevant parties involved in the ABS transaction. Based on our estimated cost of in-house staff time, we estimate the incremental PRA hour burden would translate into an approximate cost of $831,250.590, We are adopting instructions, substantially as proposed, to specify which of the existing items of Form 8-K will be applicable to ABS issuers. Accordingly, we are adopting this approach without modification. for the security of an asset or asset category. 69. Investors will thus be better able to evaluate servicing responsibilities and performance and the reliability of the information they receive. In addition to the manner and presentation of disclosures, we also stated in the Proposing Release and remain concerned that existing disclosure standards have not adequately captured certain categories of information in respect of an asset-backed securities transaction, such as the background, experience, performance and roles of various transaction parties, including the sponsor, the servicer and the trustee, that may be material and should be disclosed when they are material. Recent events in both the ABS and non-ABS markets have highlighted the need for appropriate controls and processes and mechanisms to assess compliance with controls and processes.513 A disclosure-based assessment and attestation system identifies for investors those aspects of the standard servicing criteria that are in material compliance. The agreement relating to the material enhancement or support must be filed as an exhibit to the filing. These transactions will need to rely on non-ABS form eligibility for registration, and additional disclosures, depending on the type of offering and transaction, will be required. In addition, such a change would be costly and the commenters believed ABS investors, which are mostly institutional, already have sufficient access to information through proprietary and third party Web sites. We continue to believe that emphasis on certain core principles is appropriate for these purposes, such as that the securities are primarily backed by a pool of assets, that there is a discrete pool with a general absence of active pool management, and an emphasis on the self-liquidating nature of pool assets that by their own terms convert into cash. We continue to believe that investors are entitled to the information required to be included in the prospectus when making an investment decision for a transaction covered by the registration statement. Commenters argued that this market-making registration paradigm is not appropriate to ABS transactions.191 Unlike the relationship of an affiliated broker-dealer to a corporation, these commenters argued that a broker-dealer’s affiliation with the servicer does not involve the same level of relationship to the issuer, the transaction and the securities as that of a broker-dealer affiliated with a corporate issuer. Under our final rules, the scope of the static pool requirement will encompass, to the extent material, static pool information regarding delinquencies, cumulative losses and prepayments, as applicable for the respective asset type.257 As with prepayments, we also recognize that the particular metrics that would be material for delinquencies and cumulative losses may vary by asset class. While again recognizing that the characteristics that are material will vary depending on the nature of the pool assets, examples of illustrative characteristics in the disclosure item include: In addition to the above, we are retaining a reference in the disclosure list to standardized credit scores of obligors and other information regarding obligor credit quality. The transaction agreements for the asset-backed securities; The delinquency recognition policies of the sponsor, any affiliate of the sponsor that originated the pool asset or the servicer of the pool asset; or. We also have made several changes to the proposed disclosure items for prospectus and distribution report disclosure to further tailor and clarify the disclosure required, particularly in the areas where we proposed additional disclosure, such as that regarding the background, roles and experience of various transaction parties. There does not appear to be any consistency as to which USAP criteria are applied to a particular asset type outside of residential mortgage loans, so the list of exceptions varies from issuer to issuer, even in the same asset class. These additional features, some of which were suggested by issuers themselves, may impose certain additional marginal costs, but commenters agreed they will significantly increase the usefulness of the data and the resultant benefits to investors and the efficiency of the ABS market. All contents of the lawinsider.com excluding publicly sourced documents are Copyright © 2013-. We have revised the disclosure item to clarify further the second aspect of the related party disclosure that we proposed and that will be required under the Item, which is disclosure regarding specific material relationships involving or related to the current ABS transaction and the pool assets. and the enhancement provider for the pool assets is a guarantee agency as defined under the Higher Education Act, then the following information may be provided in lieu of providing financial information required pursuant to paragraph (b)(2) of this section: a. Apart from the two conditions for the exemption, we also are clarifying, as proposed and consistent with a similar provision in our communications exemptions for business combination transactions,399 that the exemption for ABS informational and computational material is applicable not only to the offeror of the asset-backed securities, but also to any other party to the asset-backed securities transaction and any persons authorized to act on their behalf that may need to rely on and complies with the rule in communicating about the transaction. Further, and as discussed in the Proposing Release, we understand that some issuers may experience costs in excess of our average estimates in the first year of compliance, such as revising their systems and practices to adjust to the new rules, but that costs should decrease in subsequent years. (B) Net operating income and net cash flow information, as well as the components of net operating income and net cash flow, for each mortgaged property. Such disclosure includes information on how residual values are estimated and derived, statistical information regarding estimated residual values and historical statistics on turn-in rates and residual value realization rates. (10)” and removing Note 2. We proposed codifying this safe harbor with several minor adjustments to add it to our existing research report safe harbors. 318 See, e.g., Section VIII.B.3.a.ii. However, as discussed in Section III.A.6., as concentration with a particular obligor or group of related obligors increases, additional disclosures regarding that obligor or group of related obligors, including financial information, is required. 4. definition. and A.3. 78l or 78o(d)). 159 See, e.g., Brian Bremner et al., “An Exit Plan for Japan?” Business Week, Oct. 26, 1998. We have deleted the reference in this item to Item 1100(b) of Regulation AB. Some commenters requested a change from this longstanding practice by limiting the Form 10-D to only distribution and pool performance information and moving the other disclosures from the modified reporting system to Form 8-K disclosure requirements, albeit with longer deadlines than current Form 8-K requirements.470 Given our other amendments to Form 8-K disclosure requirements for ABS, discussed below, we do not believe it is necessary at this time to deviate further from the established requirements of the ABS modified reporting system. ); Regulation 13A (17 CFR 240.13a-1 et seq. (4) Categorize all delinquency and loss information by pool asset type. 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