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Capital Markets

ABS: SEC takes aim at private ABS market

Disclosure proposals “too onerous”; Market recovery under threat

Goldman Sachs’ Abacus CDO was not the only part of the structured finance market that was occupying the SEC last month. On April 7 SEC Chairman Mary Schapiro proposed a new set of rules for the securitization market designed to "better protect the investor". But some participants fear that it will close down important parts of the ABS market just as it is reopening.

As with all new regulation aimed at this market since 2007 the focus is on increased transparency, but the regulator is seeking to go much further than simply increasing information flow. "The SEC has done a terrific job on Reg AB and the new proposed amendments reflect a lot of thought and hard work and are a clear attempt to balance all of the competing interests," explains Jason Kravitt, partner at Mayer Brown in New York. "But people have to take a step back.

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