On April 7, 2010, the U.S. Securities and Exchange Commission (the “SEC”) released a proposed rule (the “Proposed Rule”) which, if adopted in its current form, would significantly revise Regulation AB1 (“Regulation AB”) and other rules applicable to registration, disclosure and reporting for asset-backed securities2 (“ABS”) and other structured finance products....

...The Proposed Rule would, among other things, revise the shelf offering process for ABS and require ABS issuers to provide prospective investors with significantly more time to make investment decisions than under the current rules. The proposal would also revise the eligibility criteria that must be satisfied for an issuer to use a shelf registration statement by removing the current rating criteria and adding requirements that issuers retain a 5% vertical slice of every tranche of every securitization they issue off of the shelf and that they deliver certain thirdparty opinions with regard to repurchase requests.

The Proposed Rule would also include a substantial overhaul of the current ABS disclosure requirements with regard to both cash flows (that is, the “waterfall”) and asset pool composition, including detailed disclosure, for most deals, of asset characteristics on an asset-by-asset basis. Finally, the proposal would revise Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), Rule 506 of Regulation D and other rules governing offerings of privately-placed ABS and other structured finance products to require the provision of more information to investors.