SEC: How should the Investment Company Act apply to issuers of asset backed securities and to REITs

SEC: The Securities and Exchange Commission is seeking public comment on how the Investment Company Act should apply to issuers of asset backed securities and to real estate investment trusts. Under rule 3a-7, adopted in 1992, asset-back securities issuers are exempt from the Investment Company Act as long as they meet conditions for safekeeping of assets and independent oversight. The Dodd-Frank financial reform law, however, mandates a fresh look at the ABS market. “[G]iven that the rule is nearly 20 years old, that the asset-backed securities market has experienced tremendous upheaval, and that the primary regulatory regime for asset backed securities is being substantially revised by the Dodd-Frank Act and SEC rulemaking, we are inviting public comment on rule 3a-7,” SEC Chairman Mary Schapiro said in a statement. Here is a link to the concept release.

Related Topics: Regulatory Moves