Asset-backed market wins with Regulation AB

Author: | Published: 1 Feb 2005

It has been a long wait, but after nearly 30 years in business the US securitization industry can at last look forward to operating under a coherent, overarching set of rules. With the adoption in December of a final draft of Regulation AB and related rules, the Securities and Exchange Commission is finally addressing some of the fundamentals of one of the most important and growing sectors of the financial markets.

The first SEC-registered asset-backed securities (ABS) offering was made in 1977 - an offering of residential mortgage loan pass-through certificates issued by the Bank of America. In that transaction, the staff of the SEC worked closely with the issuer and underwriters to fashion appropriate prospectus disclosure for the new investment vehicle. The deal, and other firsts involving other asset classes and structures, became the templates for disclosure in the US public asset-backed market.

The market itself has grown beyond the...