SEC: Rule targets asset-backed securities
A proposal floated last month by the SEC calls for issuers of asset-backed securities to disclose more about the underlying loans and, in some circumstances, retain part of the potential risk.
A proposal floated last month by the SEC calls for issuers of asset-backed securities to disclose more about the underlying loans and, in some circumstances, retain part of the potential risk. The rule, proposed in response to the financial meltdown that arose from investors’ purchasing bundled mortgages that soured, would require banks to hold on to 5% of each class of an asset-backed security in certain cases. The rule also would require greater disclosure about the underlying loans so that investors could make better-informed decisions. More details and information on submitting comments by Aug. 2 can be viewed here.
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