SEC's shelf eligibility re-proposal: still a long way to go
.jpg)
In April, 2010 the SEC proposed a number of rules relating to shelf eligibility and various disclosure requirements in respect of asset-backed securities (the April 2010 Proposals). Among other proposals, the April 2010 Proposals contained certain eligibility requirements for use of a shelf prospectus including:
- A specified minimum amount of risk retention;
- A covenant to periodically furnish an opinion of an independent third party regarding instances in which securitized assets were not repurchased following a demand for repurchase based on an alleged breach of representations or warranty; and
- A certification by the chief executive officer of the depositor as to the adequacy of the cash flows generated by the securitized pool assets.
