Saturday, June 5, 2010

ABS issuers rush to beat impact of SEC's Rule 17G-5

The SEC's new Rule 17G-5 requires that newly issued structured products data be simultaneously shared with the 10 accredited ratings agencies at once. Anyone wanting a particular deal exempt from the new rules would have to submit their products for rating by a June 2nd deadline.

Hence banks dumped bucketloads of paperwork on Moody's and S&P on June 1st. According to Asset Backed Alert:
Issuers took advantage of the loophole by submitting mountains of documents on June 1, in many cases for transactions that won't hit the market for some time. At least 15 issuers and underwriters were in on the act, including Bank of America, Citigroup and JP Morgan.

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