On July 26, 2011, the Securities and Exchange Commission (“SEC”) re-proposed rules relating to registrant and transaction requirements for the shelf registration of asset-backed securities (“ABS”) and changes to exhibit filing deadlines under Regulation AB (the “Reg AB II Re-Proposal”). In addition, the SEC also requested additional comment on its proposal to require asset-level information about the pool assets, and has deferred its proposal to require the filing of a computerized waterfall cash flow program for each securitization. The comment period expires 60 days following publication in the Federal Register.

Regulation AB governs disclosure and reporting requirements for SEC-registered securitization transactions and was initially adopted in December 2004 in an environment in which the securitization market was large and still growing rapidly. At that time the SEC’s adoption of Regulation AB was largely grounded in its view that the securitization market had become so significant to the economy that additional regulatory attention was warranted. By 2009, the securitization market had fallen from $1.114 trillion dollar volume of U.S. mortgage-backed securities (“MBS”) issuance in 2005 to $331 billion in 2009, only 29% of 2005 volume (and almost all of the 2009 MBS issuances were sponsored or subsidized by the U.S. government).

Securitization has been identified by the American public and many politicians as being a contributor to, or even the principal cause of, the global financial meltdown. Accordingly, a number of political and regulatory bodies have targeted securitization for extensive “reform.” On April 7, 2010, the SEC joined the reform bandwagon by proposing substantial revisions to Regulation AB (the “April 2010 Reg AB II Proposal”). The proposed overhaul of Regulation AB was seen as an attempt to fix the securitization market by providing greater investor protection and restoring investor confidence. The April 2010 Reg AB II Proposal would have, among other things, revised the shelf offering process for ABS and required ABS issuers to provide prospective investors with significantly more time to make investment decisions than under the current rules. The April 2010 Reg AB II Proposal also would have revised the eligibility criteria that must be satisfied for an issuer to use a shelf registration statement to eliminate the use of credit ratings.