Featured Product

    FDIC Removes Disclosure Requirement in Securitization Safe Harbor Rule

    March 04, 2020

    FDIC is amending the Securitization Safe Harbor Rule, which relates to the treatment of financial assets transferred in connection with a securitization transaction. FDIC is revising the rule by removing a disclosure requirement that was established by the Securitization Safe Harbor Rule when it was amended and restated in 2010. As amended, disclosure is required under § 360.6(b)(2)(i)(A) only in the case of an issuance of obligations that is subject to Regulation AB. The final rule will be effective from May 04, 2020.

    The amendment is intended to eliminate a requirement that the securitization documents require compliance with Regulation AB of the SEC in circumstances where Regulation AB by its terms would not apply to the issuance of obligations backed by such financial assets. The policy objective of this final rule is to remove an unnecessary barrier to securitization transactions, particularly the securitization of residential mortgages, without adverse effects on the safety and soundness of insured depository institutions. The Securitization Safe Harbor Rule addresses circumstances that may arise if FDIC is appointed receiver or conservator for an insured depository institution that has sponsored one or more securitization transactions. FDIC is removing the requirement of the Securitization Safe Harbor Rule that the documents governing a securitization transaction require compliance with Regulation AB of the SEC in circumstances where Regulation AB is not applicable to the transaction under the terms of the regulation. 

    Regulation AB imposes significant asset-level disclosure requirements in connection with registered securitization issuances. While SEC has not applied the Regulation AB disclosure requirements to private placement transactions, the Securitization Safe Harbor Rule has required (except for certain grandfathered transactions) that these disclosures be required as a condition for eligibility for benefits of the Securitization Safe Harbor Rule. The net effect appears to have been a disincentive for insured depository institutions to sponsor securitizations of residential mortgages that are compliant with the rule.

    FDIC had proposed these amendments on August 22, 2019, with the comment period of the proposed rule ending on October 21, 2019. FDIC received ten comment letters—five from trade organizations, one from an insured depository institution, two from individuals, one from a financial reform advocacy group, and one from a financial market public interest group. FDIC considered all of the comments it received when developing the final rule. The final rule, however, remains unchanged from the proposed rule.

     

    Related Link: Final Rule

    Effective Date: May 04, 2020

    Keywords: Americas, US, Banking, Securities, Securitization, Disclosures, Securitization Safe Harbor Rule, Regulation AB, SEC, FDIC

    Related Articles
    News

    APRA Sets LAC for D-SIBs, Proposes to Enhance Crisis Preparedness

    APRA issued a letter on the loss-absorbing capacity (LAC) requirements for domestic systemically important banks (D-SIBs) and published a discussion paper, along with the proposed the prudential standards on financial contingency planning (CPS 190) and resolution planning (CPS 900).

    December 02, 2021 WebPage Regulatory News
    News

    EC to Review Macro-Prudential Rules while ESRB Assesses Policy Stance

    The European Commission (EC) launched a call for evidence, until March 18, 2022, as part of a comprehensive review of the macro-prudential rules for the banking sector under the Capital Requirements Regulation (CRR) and Directive (CRD IV).

    December 01, 2021 WebPage Regulatory News
    News

    FSB Sets Out Good Practices for Crisis Management Groups

    The Financial Stability Board (FSB) published a report that sets out good practices for crisis management groups.

    November 30, 2021 WebPage Regulatory News
    News

    APRA Penalizes Heritage Bank for Incorrect Reporting of Capital

    The Australian Prudential Regulation Authority (APRA) found that Heritage Bank Limited had incorrectly reported capital because of weaknesses in operational risk and compliance frameworks, although the bank did not breach minimum prudential capital ratios at any point and remains well-capitalized.

    November 29, 2021 WebPage Regulatory News
    News

    OSFI Releases Annual Report 2021-2022

    The Office of the Superintendent of Financial Institutions (OSFI) released the annual report for 2020-2021.

    November 29, 2021 WebPage Regulatory News
    News

    OSFI Updates Timeline for Implementation of Certain Basel Rules

    Through a letter addressed to the banking sector entities, the Office of the Superintendent of Financial Institutions (OSFI) announced deferral of the domestic implementation of the final Basel III reforms from the first to the second quarter of 2023.

    November 29, 2021 WebPage Regulatory News
    News

    EC Defers Adoption of Regulatory Standards for Disclosures Under SFDR

    EIOPA recently published a letter in which EC is informing the European Parliament and Council that it could not adopt the set of draft regulatory technical standards for disclosures under the Sustainable Finance Disclosure Regulation (SFDR) within the stipulated three-month period, given their length and technical detail.

    November 29, 2021 WebPage Regulatory News
    News

    FCA Releases MIFIDPRU Application Forms and Third Set of Rules on IFPR

    The Financial Conduct Authority (FCA) published the third in a series of policy statements that set out rules to introduce the UK Investment Firm Prudential Regime (IFPR), which will take effect on January 01, 2022.

    November 29, 2021 WebPage Regulatory News
    News

    APRA Finalizes Capital Adequacy Standards for Banks

    The Australian Prudential Regulation Authority (APRA) published, along with a summary of its response to the consultation feedback, an information paper that summarizes the finalized capital framework that is in line with the internationally agreed Basel III requirements for banks.

    November 29, 2021 WebPage Regulatory News
    News

    CPMI-IOSCO Seek Comments on Access to Central Clearing and Portability

    The Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) issued a consultative report focusing on access to central counterparty (CCP) clearing and client-position portability.

    November 29, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7751