The Securities and Exchange Commission has made a move that has prevented what otherwise might have been a shutdown of the securitized market in late January, according to the American Securitization Forum.
The SEC has indefinitely extended its so-called no action position regarding the issuance of mortgage and other asset-backed securities without the inclusion of credit ratings in their registration statements. The SEC's original no-action position would have expired in late January.
The no-action letter addresses a concern linked to the new Dodd-Frank Act that raises potential legal liability issues for issuers that include credit ratings in their registration statements. The concern previously did briefly stall the market until the liability was addressed by the SEC's original, temporary no-action position.
The SEC also has issued a temporary order allowing foreign issuers of MBS and other ABS to sell them without complying with one of its new rules, according to the ASF. The order extends an SEC exemption from the new rule, 17-g5, for 12 months.
Without the temporary order regarding foreign issuers, a rating from a U.S. rating agency alone would have triggered a need for foreign issuers to comply with U.S. securities regulation, according to the ASF.
