SEC Request for Comment on Asset-Level Information

On February 25, 2014, the SEC requested comment on a new proposal for disclosing asset-level information in connection with asset-backed securities.  This is a reopening of a request for comment originally made in 2010 in connection with the proposal for amending Regulation AB. Under the new disclosure proposal, the issuer of ABS would disclose asset-level information on its website rather than submitting such information to the SEC for disclosure through the SEC’s EDGAR system.  This new proposal was made in response to comments on the original proposal that raised significant privacy concerns.

The SEC proposes that issuers could restrict access to asset-level information only to investors in the related ABS and could require investors to certify that they would not “reverse engineer” downloaded data.

Under existing registration statements, the SEC does not require covered bond issuers to make asset-level information available. The no-action relief granted to Canadian covered bond issuers (see, e.g., the RBC letter) recognizes that covered bonds are not ABS, but nevertheless require disclosures regarding the cover pool assets consistent with ABS disclosure required under Regulation AB. The SEC has not committed to continue to take that position after the adoption of the amendments to Regulation AB.  Accordingly, covered bond issuers who issue into the U.S. have been waiting see whether the new Regulation AB (Reg AB II) would require disclosure of asset-level information for covered bonds.  This request for comment does not shed any light on that question.