Thursday, May 13, 2010

S&P FAQ On The Implementation Of SEC Rule 17g-5

NEW YORK (Standard & Poor's) May 7, 2010--The compliance date for the
Securities and Exchange Commission's (SEC's) amended Rule 17g-5 for structured
finance transactions (the Rule) is June 2, 2010. Standard & Poor's Ratings
Services supports the goal of the Rule to provide market participants,
particularly investors, with as many credit rating opinions as possible. In
addition to providing greater transparency, the Rule can help mitigate
"ratings shopping" by encouraging nationally recognized statistical rating
organizations (NRSROs) to compete on the quality of their ratings.

Standard & Poor's has been working to create a password-protected Web site
(the Web site) to identify structured finance transactions covered by the
Rule. In the meantime, we continue to work with market participants to assist
in the effective implementation of the Rule. To further clarify important
implementation issues, we provide our current understanding of the Rule in the
following frequently asked questions (FAQs).

Please note that these FAQs address complicated interpretive issues that are
not free from doubt, and these FAQs are therefore based on our current good
faith understanding of the Rule. These FAQs are not intended to be, and may
not be relied upon as, legal advice. We may revise these FAQs in light of any
formal or informal guidance provided by the SEC or its staff after the date of
this publication.


Q: What is Standard & Poor's standard for posting information on the Web site
for complying with the Rule?

A: For securities under review by Standard & Poor's before June 2:


Standard & Poor's will not post any information on the Web site about
securities for which we have sufficient information to begin the ratings


If Standard & Poor's currently has insufficient information to begin the
rating process, but receives sufficient information prior to June 2, we
will inform the appropriate participants if a transaction will be posted.

When Standard & Poor's starts the process of determining an initial credit
rating on or after June 2, we will post information about securities on the
Web site when:


Standard & Poor's has received a signed engagement letter, and


Standard & Poor's has received sufficient information.

Q: Does the Rule apply globally, including securitizations backed by non-U.S.
originated assets or sold in local currency to local investors?

A: For transactions rated based on our global ratings scale, we will treat the
Rule as one that applies globally. However, absent further SEC guidance, we
will treat transactions rated solely on a national scale and relating to
securities issued outside the U.S. (e.g., brAAA in Brazil) as not covered by
the Rule.

For additional information concerning market participant's disclosure
requirements, please refer to the SEC's adopting release, which is available

Q: Does the Rule apply to ratings that are not available to the public?

A: Standard & Poor's will treat published ratings issued on or after June 2 on
publicly offered or privately-placed transactions (e.g., 144A offerings) as
covered by the Rule. We will treat ratings that are kept strictly confidential
by the issuer and sponsor as not covered by the Rule.

Q: What asset classes are covered by the Rule?

A: Standard & Poor's will apply the Rule to traditional structured finance
products, such as residential mortgage-backed securities (RMBS), commercial
mortgage-backed securities (CMBS), collateralized loan obligations (CLOs),
collateralized debt obligations (CDOs), and asset-backed securities (ABS)
(including in each case synthetic, hybrid, consumer, and commercial
transactions, as applicable). Given the uncertainty surrounding parts of the
Rule, we expect that we will make coverage determinations on a case-by-case
basis. We are reviewing the treatment under the Rule of existing ratings and
surveillance on ratings assigned before June 2, such as asset-backed
commercial paper (ABCP) programs. We will update the market as soon as we have
more information on this issue.

Standard & Poor's will continue to update the market with developments on
implementation and interpretation of the Rule as information becomes
available. Market participants should feel free to contact us with comments or

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