the transaction documents be filed, in substantially final form, and
made part of the registration statement by the date of the preliminary
prospectus is required to be filed remains outstanding and unchanged.
    In light of the comments received, we are also not adopting any
requirements that investors be provided with blacklines of how the
issuer's representations and warranties compare against the industry-
developed model provisions or blacklines of how the transaction
documents compare to the transaction documents from prior transactions
or from prior versions of the transaction documents filed for the
current transaction. While we believe that these types of marked
documents could be an important tool for the identification of discrete
or material changes between original and revised documents, we
acknowledge commenters' concerns that there is no consistent industry
standard at this time nor a clear identity of what other agreements to
use as a comparison. We also believe, at this time, that most investors
should have the capacity to produce documents marked to show
differences from prior documents.

VII. Definition of Asset-Backed Security

A. Proposed Rule

    As part of our effort to provide more timely and detailed
disclosure regarding the pool assets to investors, we proposed
revisions to the Regulation AB definition of an asset-backed
security.\1275\ A security must meet the definition of an ``asset-
backed security'' under Regulation AB in order to utilize the
disclosure requirements of Regulation AB and be eligible for shelf
registration as an asset-backed security.\1276\ As noted in previous
releases, a core principle of the Regulation AB definition of an asset-
backed security is that the security is backed by a discrete pool of
assets that by their terms convert into cash, with a general absence of
active pool management. However, in response to commenters and previous
staff interpretation, in 2004, we adopted certain exceptions to the
``discrete pool'' requirement in the definition of asset-backed
security to accommodate master trusts, prefunding periods, and
revolving periods.\1277\
---------------------------------------------------------------------------

    \1275\ See Item 1101(c) of Regulation AB.
    \1276\ See Item 1100 of Regulation AB.
    \1277\ See Item 1101(c)(3) of Regulation AB.
---------------------------------------------------------------------------

    In the 2010 ABS Proposing Release, we proposed to amend the
``discrete pool of assets'' exceptions to the current definition of
``asset-backed security'' by amending:
    (i) The master trust exception to exclude securities that are
backed by

assets that arise in non-revolving accounts;
    (ii) the revolving period exception to reduce the permissible
duration of the revolving period for securities backed by non-revolving
assets from three years to one year; and
    (iii) the prefunding exception to decrease the prefunding limit
from 50% to 10% of the offering proceeds or, in the case of master
trusts, from 50% to 10% of the principal balance of the total asset
pool.\1278\
---------------------------------------------------------------------------

    \1278\ See the 2010 ABS Proposing Release at 23389.
---------------------------------------------------------------------------

    We were concerned that pools that are not sufficiently developed at
the time of an offering to fit within the ABS disclosure regime may,
nonetheless, qualify for ABS treatment, which may result in investors
not receiving appropriate information about the securities being
offered.\1279\ Consequently, we proposed amendments to these exceptions
in order to restrict deviations from the ``discrete pool of assets''
requirement.
---------------------------------------------------------------------------

    \1279\ Id.
---------------------------------------------------------------------------

B. Comments on Proposed Rule

    While some commenters provided specific comments, several
commenters provided general comments on the proposal to change the
definition of asset-backed security. One commenter noted that the
changes to the definition would not prohibit public issuances of ABS
with larger prefunding accounts and revolving periods, and noted that
such offerings would be governed by the more extensive disclosure
requirements of Form S-1.\1280\ Another commenter requested that the
definition of asset-backed security be sufficiently narrow to restrict
access to only those securities where sufficient and robust disclosure,
including collateral pool disclosure, can be provided during the
initial offering process and at the same time, the definition should be
calibrated to permit a reasonable degree of flexibility to accommodate
innovation and new product development.\1281\
---------------------------------------------------------------------------

    \1280\ See letter from ELFA I.
    \1281\ See letter from FSR.
---------------------------------------------------------------------------

1. The Master Trust Exception
    One commenter supported the proposal to exclude securities that are
backed by assets that arise in non-revolving accounts.\1282\ This
commenter noted that master trust structures are appropriate for
sponsors with recurring variable collateral funding needs (e.g., credit
cards, fleet leases, floor plans, and rental cars) and that any asset
type that follows a traditional amortization schedule or without the
ability to redraw on the loan generally should not be included in a
publicly issued master trust structure.\1283\
---------------------------------------------------------------------------

    \1282\ See letter from Prudential I.
    \1283\ See letter from Prudential I.
---------------------------------------------------------------------------

    However, other commenters opposed the proposal to limit the
exception to master trusts backed by revolving accounts.\1284\ Several
commenters believed that distinguishing securities backed by revolving
versus non-revolving assets is unwarranted. One commenter noted that it
did not believe there is any credit, disclosure, or other investor
protection reason to support the change.\1285\ The issuer and investor
members of another commenter agreed that, in applying the master trust
exception, efforts to distinguish securities backed by revolving versus
non-revolving assets will impose artificial limits on which asset
classes may use the master trust structure, thereby eliminating an
investment option that both issuers and investors desire.\1286\
---------------------------------------------------------------------------

    \1284\ See letters from AFME/ESF, ASF I, BoA I, and IPFS I.
    \1285\ See letter from IPFS I.
    \1286\ See letter from ASF I.
---------------------------------------------------------------------------

    Some commenters noted that the master trust structure is commonly
used to securitize mortgages in the United Kingdom and that the
proposed rule would result in those mortgage master trusts no longer
being eligible for shelf registration.\1287\ One commenter noted that
European market participants expressed concern that since the proposed
change would reduce the ability of mortgage master trust issuers to
place their bonds in the U.S. market, it would effectively reduce the
efficiency of issuances for existing master trusts, which would
adversely impact the overall efficiency of the asset-backed
market.\1288\
---------------------------------------------------------------------------

    \1287\ See letters from AFME/ESF (noting that it would still be
possible for such transactions to be registered in the U.S. using a
new registration statement for each offering) and BoA I (noting that
while the domestic RMBS market does not currently utilize a master
trust structure, given the current mortgage finance market, we
should allow for the possibility that a master trust structure could
develop).
    \1288\ See letter from AFME/ESF.
---------------------------------------------------------------------------

2. The Revolving Period Exception
    Although an investor commenter supported the proposal relating to
reducing the revolving period for non-revolving assets (e.g., auto
loans and equipment loans), the commenter acknowledged that concerns
about lack of information about new collateral additions to the pool
would be mitigated if the issuer would be required to file loan-level
information at issuance and each month that new assets are added to the
collateral pool.\1289\ This commenter also noted that this transparency
will allow investors to evaluate the changing nature of the risk
layering introduced by the new assets.
---------------------------------------------------------------------------

    \1289\ See letter from Prudential I.
---------------------------------------------------------------------------

    Several commenters opposed the proposal.\1290\ One commenter noted
that investors have a significant interest in purchasing ABS supported
by non-revolving assets with longer maturities than are possible
without the use of revolving periods and reducing the revolving period
to one year would effectively eliminate the ability of issuers to
satisfy such investor demand.\1291\ One commenter stated that the
primary effect of not being able to register these offerings on Form
SF-3 would be to increase the timing and cost burdens placed on
issuers.\1292\ Another commenter stated that the proposed one-year
period for revolving periods should not apply to certain loans that are
homogenous in nature.\1293\ It explained, for example, that since all
loans issued under a federal student loan program such as the Federal
Family Education Loan Program (``FFELP'') \1294\ have the same credit
risk, investors need not be concerned that the addition of future FFELP
loans would adversely impact the credit quality of the asset
pool.\1295\
---------------------------------------------------------------------------

    \1290\ See letters from ASF I, Sallie Mae I, and VABSS I.
    \1291\ See letter from ASF I (also noting that the current
three-year limitation on the use of revolving periods for non-
revolving assets already limits the ability to issue publicly-
registered ABS matching investor preferences).
    \1292\ See letter from VABSS I.
    \1293\ See letter from Sallie Mae I (also proposing, in the
alternative, a three-year revolving period limitation for homogenous
assets, such as FFELP loans, and a one-year revolving period
limitation for other assets).
    \1294\ See letter from Sallie Mae I (noting that FFELP loans are
generally based on need, instead of credit quality of the underlying
obligor).
    \1295\ See letter from Sallie Mae I (also noting that revolving
periods allow issuers to efficiently manage their funding needs
without having to issue additional bonds).
---------------------------------------------------------------------------

3. The Prefunding Exception
    Certain investor members of one commenter were supportive of the
proposal to decrease the prefunding limitation.\1296\ Several
commenters did not support the proposal to decrease the prefunding
limitation and believed that the prefunding amount should remain at 50%
of the offering proceeds.\1297\ One commenter noted that by utilizing
securitizations rather than more expensive warehouse credit facilities
or other financing alternatives, it is able to pass along cost savings
to consumers via

low interest rates and that reducing the limit to 10% would reduce
flexibility and cost efficiencies when executing a
securitization.\1298\
---------------------------------------------------------------------------

    \1296\ See letter from ASF I.
    \1297\ See letters from AmeriCredit, IPFS I, and VABSS I.
    \1298\ See letter from AmeriCredit (also suggesting that
disclosures involving prefunding structures be required to include
certain representations and warranties that there has been no
material variation in the overall composition of the characteristics
(such as underwriting, origination, or pool selection criteria) of
the initial loans and the pool of loans as whole after giving effect
to the transfer of the subsequent loans).
---------------------------------------------------------------------------

    Issuer members of one commenter noted that the greater the limits
on prefunding, the more expensive the carrying costs for originators
and, potentially, the higher the borrowing rates for consumers and
small businesses.\1299\ This commenter suggested that the prefunding
limit instead be based on the duration of the prefunding period,\1300\
or the prefunding limit should decrease from 50% to 25% (but retain a
prefunding period of up to one year), which would make the standard
consistent with the prefunding standards under the Employee Retirement
Income Security Act of 1974 (``ERISA'').\1301\ Several other commenters
also suggested that a 25% prefunding ceiling would be more appropriate
for the same reason.\1302\ Another commenter suggested reducing the
limit to 20%, while imposing a 10% limit in the case of shelf offerings
on Form SF-3 because it would be more consistent with market practice
and more restrictive than the limitation on prefunding that is
applicable to ABS that are eligible for sale under ERISA.\1303\
---------------------------------------------------------------------------

    \1299\ See letter from ASF I.
    \1300\ See letter from ASF I (suggesting, for example,
permitting prefunding not in excess of 10% where a prefunding period
may last up to one year, prefunding not in excess of 25% where a
prefunding period may last up to nine months, and prefunding not in
excess of 50% where a prefunding period may last up to six months).
    \1301\ Pub. L. No. 93-406, 88 Stat. 829 (1974). ERISA is a
federal law that sets uniform minimum standards to ensure that
employee benefit plans are established and maintained in a fair and
financially sound manner. In addition, employers have an obligation
to provide promised benefits and satisfy ERISA's requirements for
managing and administering private retirement and welfare plans.
    \1302\ See letters from BoA I and Sallie Mae I.
    \1303\ See letter from SIFMA I (also noting that the Commission
staff would have the opportunity to review and comment on the
disclosure for an offering on Form SF-1 where the 20% limit would be
applicable and reiterating that a 10% limit on prefunding is
appropriate in a shelf offering).
---------------------------------------------------------------------------

    Lastly, one student loan issuer believed that the proposed 10%
limitation on prefunding should not apply to FFELP loans (or other
asset types) that are homogenous in nature.\1304\
---------------------------------------------------------------------------

    \1304\ See letter from Sallie Mae I.
---------------------------------------------------------------------------

C. Final Rule and Economic Analysis of the Final Rule

    We are adopting the prefunding limitation in the definition of
asset-backed security, as proposed, with some modification. The new
rule decreases the prefunding limit from 50% to 25% (instead of 10%, as
proposed) of offering proceeds or, in the case of master trusts, the
principal balance of the total asset pool. The new rule is based on
suggestions from several commenters that 25% would be an appropriate
restriction, in part, because it is consistent with prefunding
standards under ERISA.
    We believe that this reduction will result in the asset pool being
more developed at the time of the offering, which will provide
investors with more appropriate information about the securities being
offered. We recognize, however, that the rule could impose higher
carrying costs on originators and, in turn, potentially higher
borrowing rates for consumers and small businesses. We believe that our
final rule balances the need to provide investors with more appropriate
information and these cost concerns by raising the prefunding period
limit from the proposed 10% to 25% of the offering proceeds (or
principal balance of the total assets for master trusts).
    We are not adopting the revision to the master trust exception to
exclude securities that are backed by assets that arise in non-
revolving accounts because we are persuaded by commenters' concerns
that it would eliminate the use of shelf for certain master trusts. The
cost of not adopting this revision today is the possibility that more
ABS issuers of non-revolving assets will utilize master trust
structures, which will result in investors lacking access to
information about all pool assets before making an investment decision.
This concern is mitigated, to some extent, by the adoption of initial
and ongoing asset-level disclosure requirements for some asset classes.
    We are also not adopting the proposal to revise the revolving
period exception that would reduce the permissible duration of the
revolving period for securities backed by non-revolving assets from
three years to one year due to comments received. An investor commenter
noted, for example, that receiving updated asset-level information
about the pool's assets on an ongoing basis would mitigate concerns
regarding the duration of the revolving period.\1305\ We also
recognize, as noted by another commenter, that shortening the revolving
period for securities backed by non-revolving assets could preclude
certain issuers, such as auto and equipment issuers, from issuing
securities with longer maturities than the underlying loans.\1306\
---------------------------------------------------------------------------

    \1305\ See letter from Prudential I.
    \1306\ See letter from ASF I.
---------------------------------------------------------------------------

VIII. Exchange Act Reporting

A. Distribution Reports on Form 10-D

1. Delinquency Presentation
(a) Proposed Rule
    In the 2004 ABS Adopting Release, we stated that delinquency
disclosures required in the Form 10-D under Item 1121(a)(9) were based
on materiality \1307\ and not on Item 1100(b) of Regulation AB, which
requires presentation of delinquency data to be provided in 30- or 31-
day increments, as applicable, beginning at least with assets that are
30 or 31 days delinquent, as applicable, through the point that assets
are written off or charged off as uncollectable. However, in
registration statements, delinquency disclosures are to be presented
pursuant to Item 1100(b). Consistent with our efforts to standardize
the disclosure across all ABS, we proposed to add a new instruction to
Item 1121(a)(9) to require that pool-level delinquency disclosure in
periodic reports be provided in accordance with Item 1100(b) of
Regulation AB.
---------------------------------------------------------------------------

    \1307\ See footnote 477 of the 2004 ABS Adopting Release.
---------------------------------------------------------------------------

(b) Comments on Proposed Rule
    We received several comment letters that provided differing views
on the proposal. One commenter stated that it would not object to the
proposal because it would ``provide clarity and consistency in
reporting.'' \1308\ This commenter also indicated that disclosure
provided in the CREFC's IRP contains delinquency information in this
format.\1309\ On the other hand, several commenters expressed concern
about applying the requirements of Item 1100(b) to ongoing reporting in
that it applies a ``one-size-fits-all approach across different asset
classes.'' \1310\ They believed that for various asset classes the
presentation of delinquency information would be provided for
``considerably longer periods of time, or in more granular increments,
than would be required under general principles of materiality'' and in
ways that differ from the current disclosure

practices across different asset classes.\1311\ The commenter believed
that issuers and servicers should not be required to incur the
additional time and cost to track and present delinquency information
in additional prescribed increments as required under Item
1100(b).\1312\
---------------------------------------------------------------------------

    \1308\ See letter from MBA I.
    \1309\ See letter from MBA I. For more information about the
CREFC IRP, see footnote 104.
    \1310\ See letters from ASF I and VABSS I.
    \1311\ See letter from ASF I (noting that standard practice in
the mortgage industry has been to present delinquency information in
Form 10-D reports and in static pool information in 30- or 31-day
increments through the point that loans are 179 or 180 days
delinquent, followed by an additional 180-day increment and a final
increment of 359 or 360 days or more, and for ABS supported,
directly or indirectly, by motor vehicles, equipment and other
similar physical assets that have finite lives over which their
value depreciates, delinquency information is presented in 30- or
31-day increments through the point that loans are 119 or 120 days
delinquent, followed by a final increment of 119 or 120 days or
more).
    \1312\ Even though we did not propose any changes to Item
1100(b)(1), ASF I requested we make revisions to Item 1100(b)(1)
that they believed would provide for consistent presentation of
delinquency information across issuers within the same asset class,
while recognizing that ``some variation across asset classes is
meaningful and appropriate.'' See letter from ASF I (Exhibit L).
---------------------------------------------------------------------------

(c) Final Rule and Economic Analysis of the Final Rule
    We are adopting a revised requirement in light of comments
received. The final instruction to Item 1121(a)(9) requires delinquency
disclosures included in the Form 10-D to be presented in accordance
with Item 1100(b) with respect to presenting delinquencies in 30- or
31-day increments. In response to commenters' concerns that requiring
such granular presentation through charge-off is too long a time
period, we have modified the proposed instruction to require such
presentation through no less than 120 days. We believe that this
revised time period helps to address commenters' concerns about the
cost and burden of having to track and report this information in a
more granular manner for a longer period of time while still providing
investors with a more comprehensive picture of delinquencies and losses
in a uniform manner across asset classes. We also note that the revised
time period is consistent with the new asset-level data requirement for
presentation of delinquencies and losses in RMBS.\1313\ While investors
will not receive as granular a presentation as proposed (through
charge-off), investors investing in asset classes required to provide
asset-level disclosures will be receiving more detailed information
about the payment status of each individual asset, such as the paid
through date.\1314\ We recognize that to the extent that issuers will
now be required to present delinquencies and losses for a longer period
of time than previously provided in the distribution reports, such
issuers will incur some costs. We believe, however, the benefits gained
from standardized and comparable delinquency and loss disclosure
justify the costs issuers may incur to provide the information.
---------------------------------------------------------------------------

    \1313\ See new Item 1(g)(33) of Schedule AL.
    \1314\ See new Item 1(g)(28) of Schedule AL. See Section
III.A.2.b Asset Specific Disclosure Requirements and Economic
Analysis of These Requirements. Due to the transition period for
implementing the loan-level requirements, there will be a period of
time during which investors will not have access to this more
granular data about assets in prior securitized pools. See Section
IX.B Transition Period for Asset-Level Disclosure Requirements.
---------------------------------------------------------------------------

2. Identifying Information and Cross-References to Previously Reported
Information
    In the 2010 ABS Proposing Release, we proposed several revisions to
Exchange Act Form 10-D or to the requirements governing the disclosures
to be provided with the Form 10-D.\1315\ We proposed to revise General
Instruction C.3. of Form 10-D to provide that if information required
by an item has been previously reported,\1316\ the Form 10-D does not
need to repeat the information. Because information that is previously
reported may relate to a different issuer from the issuer to which the
report relates, such information may be difficult to locate. As a
result, we also proposed to amend Form 10-D to require disclosure of a
reference to the CIK number, file number, and date of the previously
reported information. Additionally, we proposed to revise the cover
page of the Form 10-D to include the name and phone number of the
person to contact in connection with the filing because we believed
this would assist the staff in its review of asset-backed
filings.\1317\ We did not receive any comments regarding these proposed
revisions to Form 10-D. We believe the costs of these requirements to
be very limited and offset by the benefit to investors and staff in
easily and quickly locating the previously reported information.
Because of that and since we did not receive any comments opposing
these proposed revisions to Form 10-D, we are adopting them as
proposed.
---------------------------------------------------------------------------

    \1315\ See the 2010 ABS Proposing Release at 23390.
    \1316\ The term ``previously reported'' is defined in Exchange
Act Rule 12b-2 [17 CFR 240.12b-2].
    \1317\ Issuers are also encouraged to provide the name and phone
number of the outside attorney or other contact in accompanying
correspondence to their reports on Form 10-D.
---------------------------------------------------------------------------

3. Changes in Sponsor's Interest in the Securities
(a) Proposed Rule
    To assist investors in monitoring the sponsor's interest in the
securities, we proposed to add a new item to Form 8-K to require the
filing of a Form 8-K for any material change in the sponsor's interest
in the securities. Under the proposal, the report on Form 8-K would be
required to include disclosure of the amount of change in interest and
a description of the sponsor's resulting interest in the transaction.
(b) Comments on Proposed Rule
    We received a mixed response to the proposal with some commenters
supporting the proposal \1318\ and other commenters opposing the
disclosure and suggesting that the disclosures were not material.\1319\
In support of the proposal, the investor members of a trade association
believed that if the sponsor retains exposure to the risks of the
assets, the sponsor will likely have greater incentives to include
higher quality assets and ongoing monitoring of this exposure helps to
align the interests of the sponsor and investors.\1320\ They also
believed that the sponsor is akin to an ``insider'' and its decision to
hold or sell its retained interest may be triggered based upon a
negative or positive view of the securitization. Another investor
stated that the sponsor and its affiliates should regularly report
their current risk retention related holdings by each tranche of a
securitization, because any change in risk retention holdings is
material.\1321\ Another commenter, an issuer of student loan ABS,
generally supported the proposal, but requested an instruction be added
to clarify that transfers by the sponsor to its affiliates or
subsidiaries would not trigger a filing obligation under Item 6.09
because transfers within a corporate family are not material changes
that should require a Form 8-K filing.\1322\
---------------------------------------------------------------------------

    \1318\ See letters from ASF I (expressed views of investors
only), Prudential I, and Sallie Mae I.
    \1319\ See letters from ASF I (expressed views of dealer and
sponsors only) (stating that the information has not been shown to
be material), BoA I, MBA I (questioning the materiality of the
disclosure and suggesting that all the disclosure would provide was
that the sponsor was at some level above the minimum required
level), and SIFMA I.
    \1320\ See letter from ASF I (expressed views of investors only)
(suggesting that because our shelf eligibility requirements proposed
in 2010 to require disclosure that the sponsor or an affiliate of
the sponsor retained a net economic interest in each securitization
that this requirement should be extended to affiliates of the
sponsor).
    \1321\ See letter from Prudential I.
    \1322\ See letter from Sallie Mae I.

---------------------------------------------------------------------------

    Some commenters who opposed the proposal suggested it was too broad
and should be limited to the monitoring of a sponsor's retention of
risk that is required as a condition of shelf eligibility, law, or
regulation.\1323\ Another commenter also opposed the proposal because
it did not see a benefit to the disclosure, the compliance costs would
be substantial, and the issuer would need information from parties that
it does not control.\1324\ In addition, the issuer members of a trade
association also disagreed with the investor members who suggested, as
discussed above, that a sponsor's decision to hold or sell any portion
of its interest in the securities may serve as an indicator of the
future prospects for the securitization \1325\ and that the requirement
should extend to changes in the interest of affiliates of the
sponsors.\1326\ The issuer members also stated that privacy concerns
could arise with disclosing this type of information, although no
further detail was provided.\1327\
---------------------------------------------------------------------------

    \1323\ See letters from BoA I and SIFMA I.
    \1324\ See letter from MBA I.
    \1325\ See letter from ASF I (expressed views of dealers and
sponsors only) (stating in many deals, the sponsor is not an
affiliate of the servicer and may not even be an affiliate of the
depositor and, in any event, a sponsor's affiliation with an issuer
or servicer does not involve the same level of relationship as the
relationship of an officer, director, or other control person to a
corporation).
    \1326\ See letter from ASF I (expressed views of dealers and
sponsors only) (suggesting that this new requirement would entail an
extraordinarily difficult monitoring process and that the sponsor
may never be able to administer with reliable results).
    \1327\ See letter from ASF I (expressed views of dealers and
sponsors only).
---------------------------------------------------------------------------

    We also received several comments seeking revisions to the
proposal. For instance, some commenters suggested that, if we adopt the
rule, it should not include the reporting of changes that arise as a
result of organic changes in the sponsor's interest in securities, such
as pool assets converting into cash in accordance with their terms or,
in the case of revolving pool assets, fluctuating account balances
based on credit line usage or those arising as a result of payments
made on other securities issued by the issuing entity.\1328\ One of
these commenters also suggested that we make clear that no reporting
requirement arises as a result of the ``sponsor's pledge of the
securities in the ordinary course of business for on balance sheet
funding purposes.'' \1329\ Finally, some commenters suggested that the
disclosure be provided in the Form 10-D rather than in the Form 8-
K.\1330\ One of these commenters believed that this approach would
permit issuers to avoid constant monitoring of changes in retained
interest and repeated filing of Forms 8-K, while keeping investors
informed of the sponsor's retained interest amount.\1331\
---------------------------------------------------------------------------

    \1328\ See letters from ABA I, ASF I (expressed views of dealers
and sponsors only), and Discover.
    \1329\ See letter from ASF I (expressed views of dealers and
sponsors only).
    \1330\ See letters from ASF I (expressed views of dealers and
sponsors only) (requesting that, in cases where the sponsor is not
an affiliate of the ABS issuer, the Commission except Item 6.09 Form
8-K reports from the Exchange Act filing requirements for Form SF-3
eligibility purposes. The dealer and sponsor members stated that
unlike other cases where the content or completeness of an Exchange
Act report is dependent on the timely receipt of reports or other
information from unaffiliated third parties, an ABS issuer would
have no way of even knowing whether and when a change in a sponsor's
interest in the securities had occurred and, therefore, it would be
inappropriate and unfair for a registrant to lose its eligibility to
use Form SF-3) and Discover.
    \1331\ See letter from Discover.
---------------------------------------------------------------------------

    (c) Final Rule and Economic Analysis of the Final Rule
    We are adopting the proposed requirement that disclosure be
provided regarding material changes in a sponsor's interest in the ABS
transaction with some modification. Instead of providing a description
in a Form 8-K as proposed, we are requiring that if there has been a
material change in the sponsor's interest during the period covered by
the Form 10-D, then a description of the material change must be
provided in the Form 10-D for that reporting period. We agree with the
commenters that suggested this approach because it would permit issuers
to avoid monitoring of changes in retained interest to meet the current
reporting requirements of Form 8-K, thus minimizing costs.\1332\ At the
same time, investors will continue to benefit from being kept informed
of the sponsor's retained interest amount. Further, we are also
clarifying that disclosure of any material change in the sponsor's
retained interest includes any interest held by an affiliate of the
sponsor in order to be consistent with the disclosure required in the
prospectus and to allow investors to monitor changes in the interest
held. The rule requires disclosure of a material change in the
sponsor's retained interest in the ABS transaction due to the purchase,
sale or other acquisition or disposition of the securities by the
sponsor or an affiliate.\1333\ While we note that the credit risk
retention rules under Section 15G of the Exchange Act have not yet been
adopted,\1334\ under the rules we are adopting, if there is a material
change (such as a transfer) in any interest or assets that are required
to be retained in compliance with law, disclosure of such change would
be required. In order to clarify the interplay of the disclosure
requirement with risk retention requirements, we have included an
instruction specifying that the disclosure about the resulting amount
and nature of any interest or asset retained in compliance with law
must be separately stated. Finally, we understand that the sponsor may
not be a party that is controlled by the issuer. We believe, however,
that contracts that relate to the transfer of the assets to the trust
can include an ongoing duty for the sponsor to provide the information
required for this disclosure. Furthermore, we believe that by requiring
changes in the sponsor's interest to be disclosed periodically on the
Form 10-D, instead of on a Form 8-K, lessens the burden of obtaining
this information from parties that the issuer may not control.
---------------------------------------------------------------------------

    \1332\ See letters from ASF I (expressed views of dealers and
sponsors only) and Discover. The obligation to file a report on Form
8-K is triggered by the occurrence of a reportable event described
in Form 8-K, which typically must be filed within four business days
of the event.
    \1333\ Activities like pledging would not be required. See
letter from ASF I (expressed views of issuers only).
    \1334\ See the 2013 Risk Retention Re-Proposing Release.
---------------------------------------------------------------------------

B. Annual Report on Form 10-K

1. Servicer's Assessment of Compliance With Servicing Criteria
(a) Proposed Rule
    The Form 10-K report of an asset-backed issuer is required to
contain, among other things, an assessment of compliance with servicing
criteria that is set forth in Item 1122 of Regulation AB by each party
participating in the servicing function.\1335\ The body of the Form 10-
K report must also contain disclosure regarding material instances of
noncompliance with servicing criteria. Our rules require an asset-
backed issuer to provide an assessment of compliance with respect to
all asset-backed securities transactions involving the asserting party
that are backed by assets of the type backing the asset-

backed securities.\1336\ In order to provide enhanced information
regarding instances of noncompliance with servicing criteria with
respect to the offering to which the annual report relates, including
information on steps taken to address noncompliance, we proposed to
expand the disclosure requirements to require in the body of the annual
report disclosure as to whether the instance of noncompliance
identified under Item 1122 involved the servicing of the assets backing
the asset-backed securities covered in the particular Form 10-K
report.\1337\ As part of its assessment of compliance, the asserting
party typically conducts a sampling of the transactions for which it is
responsible for the Item 1122 criteria in order to determine whether
there is a material instance of noncompliance in their servicing. The
proposed rule would require that if the examination of the sample found
a material instance of noncompliance and that material instance of
noncompliance involved the servicing of assets of a particular ABS,
then the annual report covering that particular ABS would include
disclosure indicating that the material instance of noncompliance
involved the servicing of the assets underlying the ABS. We also
proposed to require that the body of the annual report discuss any
steps taken to remedy a material instance of noncompliance previously
identified by an asserting party for its activities made on a platform
level.\1338\
---------------------------------------------------------------------------

    \1335\ Exchange Act Rules 13a-18(b) and 15d-18(b) [17 CFR
240.13a-18(b) and 17 CFR 240.15d-18(b)] and Item 1122 of Regulation
AB. Item 1122 of Regulation AB defines ``a party participating in
the servicing function'' as any entity (e.g., master servicer,
primary servicers, trustees) that is performing activities that
address the criteria set forth in paragraph (d) of Item 1122, unless
such entity's activities relate only to 5% or less of the pool
assets. See Instruction 2 to Item 1122. For purposes of this
discussion, we refer to the party that is required to provide a
servicer's assessment as the ``servicer.''
    \1336\ Issuers should provide descriptions of each servicing
party's role in the transaction, particularly if multiple servicing
parties have overlapping responsibilities, by describing in the Form
10-K the responsibilities assigned to each party and the servicing
criteria applicable to such party under Item 1122(d) of Regulation
AB.
    \1337\ See the 2010 ABS Proposing Release at 23391. While some
information about instances of noncompliance may also be required by
Item 1123 of Regulation AB, because of the differences in the
definition of servicer between Item 1122 and Item 1123, we believed
that Item 1123 does not cover the same information that our proposed
revision to Item 1122 would cover.
    \1338\ This proposed disclosure would be required whether or not
the instance of noncompliance involved the servicing of assets
backing the securities covered in the particular Form 10-K.
---------------------------------------------------------------------------

(b) Comments on Proposed Rule
    One commenter supported the proposed requirement that the body of
the annual report indicate whether an instance of noncompliance
identified under Item 1122 involved the servicing of the assets backing
the asset-backed securities covered in the particular Form 10-K
report,\1339\ while several commenters opposed the proposal.\1340\
---------------------------------------------------------------------------

    \1339\ See letter from ABA I.
    \1340\ See letters from ASF I, CREFC I, and KPMG (stating the
proposed requirement would require an issuer to identify each
transaction that involved the instance of noncompliance identified
in the Item 1122 assessment and attestation and then report in the
annual report of each transaction that had that instance of
noncompliance, which may offset the efficiencies gained by allowing
management to provide a platform-level assessment).
---------------------------------------------------------------------------

    The commenter, who supported the proposed requirement, noted that
such information is, in fact, already being reported in annual reports
on Form 10-K.\1341\ However, the commenter requested that we clarify
that the ``lack of such disclosure could not be interpreted as
confirmation that the transaction had not been affected.'' On the other
hand, a commenter who opposed the requirement stated that it is not
possible ``for the servicer (much less an ABS issuer) to identify each
transaction impacted by the instance of noncompliance'' and ``it would
be `inappropriate and arbitrary' to require an ABS issuer to identify
only those transactions within the test sample that were impacted by
the instance of noncompliance.'' \1342\ This commenter believed that if
an ABS issuer were required to disclose whether a reported instance of
noncompliance involved assets backing the ABS covered in a particular
10-K report, then investors may draw the incorrect conclusion that in
the absence of such disclosure, the reported instance of noncompliance
did not involve the servicing of assets backing its ABS.\1343\
---------------------------------------------------------------------------

    \1341\ See letter from ABA I.
    \1342\ See letter from ASF I.
    \1343\ See letters from ASF I (noting ``because the platform
level report is based on only a sampling of transactions, a reported
instance of noncompliance does not purport to, nor by its nature
could it, identify all transactions where noncompliance may have
occurred''), CREFC I, and KPMG.
---------------------------------------------------------------------------

    One commenter supported requiring the disclosure of any steps taken
to remedy a material instance of noncompliance previously identified by
an asserting party for the activities made on a platform level.\1344\
This commenter recommended, however, that instead of requiring the
disclosure in the body of the annual report that the disclosure be
included as part of the servicer's management assessment of compliance.
The commenter explained that in certain circumstances the management
responsible for the noncompliance (e.g., servicer management) is not
the same as management responsible for filing the Form 10-K (e.g.,
issuer). The commenter also requested that we clarify that the
remediation activity described in the servicer's management assessment
is not covered by the auditor's servicing compliance report because the
remediation activities are undertaken subsequent to the date of the
auditor's report. Another commenter generally requested that we not
adopt any of the proposed revisions to Item 1122.\1345\
---------------------------------------------------------------------------

    \1344\ See letter from KPMG.
    \1345\ See letter from CREFC I (without explaining why this
particular proposed revision to Item 1122 should not be adopted).
---------------------------------------------------------------------------

(c) Final Rule and Economic Analysis of the Final Rule
    After considering the comments received, we are adopting a
requirement that disclosure be provided in the body of the annual
report as to whether the identified material instance of noncompliance
pursuant to Item 1122 was determined to have involved the servicing of
the assets backing the asset-backed securities covered in the
particular Form 10-K report.\1346\ If the material instance of
noncompliance is identified as relating to a particular transaction,
investors with investments in that particular transaction will benefit
from receiving this information.\1347\ We continue to believe that
testing every transaction in the platform is cost prohibitive and that
a platform-level assessment for purposes of assessing servicing
compliance provides an appropriate level of information to investors
while balancing the substantial increase in cost that issuers would
incur to assess the compliance with servicing criteria for every
transaction in the platform.\1348\ The amendments that we adopt today
do not require any change in that approach.
---------------------------------------------------------------------------

    \1346\ For example, if the servicer selected 10 transactions as
part of their sample for purposes of assessing Item 1122 servicing
criteria and it was determined that five of those transactions
involved instances of noncompliance that are material to the
platform, then, under this requirement, each Form 10-K report for
those five transactions must disclose in the body of the 10-K report
that: (1) This transaction was part of the sample and (2) it was
determined that this particular transaction involved a material
instance of noncompliance.
    \1347\ We observe, however, that the absence of disclosure of
instances of noncompliance involving the servicing of assets backing
a particular transaction in an annual report is not necessarily an
indication that the transaction had not been affected. We also note
that, to the extent appropriate, issuers can provide explanatory
disclosure in the annual reports of the transactions that were not
part of the Item 1122 sample and explain that it is not clear
whether their transaction has been affected by the material instance
of noncompliance identified in the Item 1122 assessment and
attestation.
    \1348\ See Section III.D.7.b.iii of the 2004 ABS Adopting
Release.
---------------------------------------------------------------------------

    We understand that some commenters are concerned that requiring
issuers to disclose a reported instance of noncompliance involving
assets backing the ABS covered by the 10-K report may impose an
indirect cost to investors if investors draw the incorrect conclusion
that in the absence of such disclosure, the reported instance of

noncompliance did not involve the servicing of assets backing its
ABS.\1349\ We believe disclosure can be provided in the Form 10-K or in
the servicer's Item 1122 report regarding the scope and structure of
the assessment that can adequately addresses this concern.
---------------------------------------------------------------------------

    \1349\ See letters from ASF I, CREFC I, and KPMG.
---------------------------------------------------------------------------

    We are also adopting, as proposed, the requirement to disclose any
steps taken to remedy a material instance of noncompliance for
activities made on a platform level in the body of the annual report.
While we note one commenter's recommendation that such disclosure be
provided as part of the servicer's management assessment of compliance
rather than in the body of the Form 10-K, we continue to believe that
the issuer is ultimately responsible for the disclosure provided in the
Form 10-K and therefore should be assessing the information provided by
the servicers in their reports, including considering whether the
information provided by the servicers in their reports at the platform
level applies to the transaction for which the 10-K is filed.\1350\ The
final rule does not, however, prohibit the servicer from also providing
such disclosure in the servicer's assessment of compliance. We are
adopting the disclosure requirement in order to provide investors with
insight into the potential impact of the instance of noncompliance on
their transaction and whether they should reassess their continuing
investment decision. Further, we do not believe adding this disclosure
is burdensome to the issuers since the information should be readily
available to them and is a logical extension of the disclosure of
material instances of noncompliance.
---------------------------------------------------------------------------

    \1350\ See letter from KPMG.
---------------------------------------------------------------------------

    Finally, in the 2010 ABS Proposing Release, we noted the staff's
belief that the application of Item 1108(b)(2), which requires a
detailed discussion in the prospectus of the servicer's experience in,
and procedures for, the servicing function it will perform in the
current transaction for assets of the type included in the current
transaction, has not been consistent among issuers.\1351\ While we are
not adopting any changes to Item 1108(b)(2) at this time, we continue
to believe that Item 1108(b)(2) requires disclosure in the prospectus
of any material instances of noncompliance noted in the assessment or
attestation reports required by Item 1122 or the servicer compliance
statement that is required by Item 1123. In addition, the prospectus
should provide disclosure of any steps taken to remedy the
noncompliance disclosed and the current status of those steps. With
respect to requiring disclosure in the prospectus of a material
instance of noncompliance noted in Item 1123 servicer compliance
statements, we believe such disclosure is appropriate because investors
should have access to information related to the performance of
servicers.
---------------------------------------------------------------------------

    \1351\ See the 2010 ABS Proposing Release at 23383. Item 1108
also requires a general discussion of the servicer's experience in
servicing the assets of any type.
---------------------------------------------------------------------------

2. Codification of Prior Staff Interpretations Relating to the
Servicer's Assessment of Compliance With Servicing Criteria
    We also proposed to codify certain staff positions issued by the
Division of Corporation Finance relating to the servicer's assessment
requirement, with some modification. The first staff interpretation
that we proposed to codify related to aggregation and conveyance of
information between a servicer and another party (who may also be a
servicer for purposes of the servicer's assessment requirement).\1352\
This new criterion, as proposed, would, if information obtained in the
course of performing the servicer's duties is required by any party or
parties in the transaction in order to complete their duties under the
transaction agreements, require an assessment that the aggregation of
such information, as applicable, is mathematically accurate and the
information conveyed accurately reflects the information.\1353\
---------------------------------------------------------------------------

    \1352\ The staff had taken the position that, while the
conveyance of information to another party is not explicitly
contained in any of the criterion in Item 1122(d), the accurate
conveyance of the information was part of the same servicing
criterion under which the activity that generated the information
was assessed. See the Division of Corporation Finance's Manual of
Publicly Available Interpretations on Regulation AB and Related
Rules, Interpretation 11.03. We proposed to codify this position,
but instead of requiring it be included with an existing criterion,
the proposed rule would make it a new servicing criterion in Item
1122. See proposed Item 1122(d)(1)(v).
    \1353\ For example, if Servicer A is responsible for
administering the assets of the pool and passing along the
aggregated information about the assets in the pool to Servicer B,
and Servicer B is responsible for calculating the waterfall or
preparing and filing the Exchange Act reports with that information,
Servicer A's activity with respect to administering the assets would
be required to be assessed under Item 1122(d)(4). In addition to
assessing Servicer A's pool asset administration, Servicer A would
be required under proposed Item 1122(d)(1)(v) to separately assess
whether its aggregation of the information is mathematically
accurate and the information conveyed to Servicer B accurately
reflects the information. If instead of aggregating the individual
asset information, Servicer A conveys it un-aggregated, then
Servicer B would be required to include its own aggregation of the
individual asset data in Servicer B's assessment of calculating the
waterfall or preparing and filing Exchange Act reports. Servicer A
would still need to assess under proposed Item 1122(d)(1)(v) that
the un-aggregated information conveyed to Servicer B accurately
reflects the information.
---------------------------------------------------------------------------

    We also proposed to codify in an instruction to Item 1122 staff
interpretations relating to the scope of the Item 1122 servicer's
assessment. In a publicly available telephone interpretation the staff
explained, among other things, that the platform for reporting purposes
should not be artificially designed, but rather, it should mirror the
actual servicer practices of the servicer.\1354\ The servicer may,
however, take into account in determining the platform for reporting
purposes divisions in its servicing function by geographic locations or
among separate computer systems. Although, if the servicer includes in
its platform less than all of the transactions backed by the same asset
type that it services, the proposed instruction would provide that a
description of the scope of the platform should be included in the
servicer's assessment.
---------------------------------------------------------------------------

    \1354\ See the Division of Corporation Finance's Manual of
Publicly Available Interpretations on Regulation AB and Related
Rules, Interpretation 17.03.
---------------------------------------------------------------------------

    We received general support for the proposed codifications from
several commenters \1355\ and one commenter generally requested that we
not adopt any of the proposed changes to Item 1122.\1356\ We are
adopting these codifications, as proposed, because we continue to
believe that adopting these positions makes them more transparent and
readily available to the public. We do not anticipate that these
codifications will cause a hardship for servicers as they are
consistent with current servicer practices to the extent they were
executed under existing staff interpretations.
---------------------------------------------------------------------------

    \1355\ See letters from E&Y, KPMG, and Prudential I.
    \1356\ See letter from CREFC I (opposing without providing an
explanation why this particular proposed revision to Item 1122
should not be adopted).
---------------------------------------------------------------------------

C. Central Index Key Numbers for Depositor, Sponsor and Issuing Entity

    In the 2010 ABS Proposing Release, we noted that ABS offerings with
a particular file number may be associated with a registration
statement with a different file number and that Forms 8-K for ABS
offerings may be filed under the depositor file number, making it
difficult to track material for the related offering with only the
information provided in the Form 8-K. To make it easier for interested
parties to locate the depositor's registration statement and periodic
reports associated with a particular offering and information related
to the sponsor of the offering, we

proposed amendments to require that the cover pages of registration
statements on Form SF-1 and Form SF-3 include the CIK number \1357\ of
the depositor, and if applicable, the CIK number of the sponsor. We
also proposed to require that the cover pages of the Form 10-D, Form
10-K, and Form 8-K for ABS issuers include the CIK number of the
depositor, the issuing entity, and, if applicable, the sponsor.
---------------------------------------------------------------------------

    \1357\ The CIK is a number that we assign to each entity
(company or individual) that submits filings to the Commission. Use
of the CIK allows the Commission to differentiate between filing
entities with similar names. A CIK is used to identify all filers,
both EDGAR and non-EDGAR.
---------------------------------------------------------------------------

    Several commenters expressed general support for these proposals;
no commenters opposed.\1358\ These commenters agreed that adding the
CIK numbers of the depositor and the issuing entity to the cover pages
of filings will enhance the accessibility of information to
investors.\1359\
---------------------------------------------------------------------------

    \1358\ See letters from BoA I and MBA I.
    \1359\ See letter from MBA I (noting that sponsors' CIK numbers
should be required only if the sponsor has a CIK number). See also
letter from BoA I (stating our proposal to require CIK numbers for
the depositor and the sponsor (if applicable) on the cover pages of
the proposed Forms SF-l and SF-3 will also help investors locate
materials related to an ABS offering or ABS issuer).
---------------------------------------------------------------------------

    We are adopting these amendments, as proposed, given the benefits
that they will provide as recognized by commenters. Furthermore, we do
not believe that requiring this information on certain cover pages for
ABS filings will be burdensome to issuers, nor did we receive any
comments stating any cost concern.

IX. Transition Period

    In the 2010 ABS Proposing Release, we noted our belief that
compliance dates should not extend past a year after adoption of the
new rules, but we sought comment about feasible dates for
implementation of the proposed amendments. We also acknowledged that
the asset-level disclosure requirements may initially impose
significant burdens on sponsors and originators as they adjust to the
new requirements, including changes to how information relating to the
pool assets is collected and disseminated to various parties along the
chain of the securitization.\1360\ We also requested comment on whether
we should provide a transition period for compliance with the asset-
level disclosure requirements that would allow the filing of test
submissions.\1361\ We describe below the comments received and the
overall transition period for revisions to Regulation AB and the
additional transition period for asset-level disclosure requirements.
---------------------------------------------------------------------------

    \1360\ See Section VIII of the 2010 ABS Proposing Release.
    \1361\ EDGAR currently provides the ability to file a test
submission which allows the filer to test the ability to create a
filing in an EDGAR-acceptable format. For a test submission, fees
will not be deducted, the filing will not be disseminated, and the
filing will not count towards any filing requirements.
---------------------------------------------------------------------------

A. General Transition Period

    With respect to implementation of the overall proposals to revise
Regulation AB, a majority of commenters expressed a need for a longer
transition period. The commenters were generally concerned that the
proposed rules would impose new substantial obligations on various
industry parties, such as originators, sponsors, and other transaction
parties that will require changes to operational procedures and
infrastructures in order to meet the new disclosure requirements.\1362\
These commenters suggested that we consider various factors when
determining the implementation timeframe, including: The existence of
other rulemaking processes and regulatory developments,\1363\ how the
final regulations relate to and work with other new and revised
regulations,\1364\ and the ability of issuers to implement the various
rules' changes simultaneously.\1365\
---------------------------------------------------------------------------

    \1362\ See letters from ASF I, ABA I, BoA I, CREFC I, and MBA I
(requesting an 18-month implementation period because the new
obligations will require the implementation of new operational
procedures and infrastructures, and originators and servicers will
need sufficient time to evaluate and update their origination and
servicing platforms).
    \1363\ See, e.g., letters from ABA I, CREFC I, and MBA I.
    \1364\ See letters from CREFC I (stating we should take into
consideration how the final rules' new and revised regulations
relate to and work with other new or proposed regulations, such as
those described in Section 941(b) of the Dodd-Frank Act, which
provides for a two-year transition period for securitizers and
originators of all classes of asset-backed securities other than
RMBS to comply with risk retention requirements) and MBA.
    \1365\ See letter from MBA I.
---------------------------------------------------------------------------

    As noted above, several commenters suggested compliance timeframes
that would extend past the proposed one-year transition period. One
trade association suggested an implementation period of at least
eighteen months \1366\ and another suggested two years.\1367\ Another
commenter suggested that implementation of the proposed rules should be
staggered in one and two year increments with those changes that can be
implemented in the near-term implemented in a one-year timeframe and
the ``more elaborate implementation measures'' implemented within two
years.\1368\ Another trade association did not specifically suggest a
longer compliance period, but suggested that for the disclosure aspects
of the proposal that the effective date should be no earlier than one
year following the date of publication of the related final rules in
the Federal Register.\1369\
---------------------------------------------------------------------------

    \1366\ See letter from MBA I (with respect to RMBS).
    \1367\ See letter from CREFC I. See also letter from BoA I
(suggesting, in general, a longer transition period should be
provided).
    \1368\ See letter from MBA III (with respect to CMBS)
(reiterating its suggested implementation timeframes in its Oct. 4,
2011 letter submitted in response to the 2011 ABS Re-Proposing
Release).
    \1369\ See letter from ASF I (suggesting that if a prospectus is
included in a new registration statement filed on or after the
effective date that the new disclosure rules should apply to that
prospectus and that we should also allow for a period to convert to
the proposed new Form SF-3 so that a prospectus included in the
registration statement may be made compliant). The ASF reiterated
this position in its Oct. 4, 2011 letter submitted in response to
the 2011 ABS Re-Proposing Release. See letter from ASF III.
---------------------------------------------------------------------------

    We understand that some of the requirements that we are adopting,
including the asset-level disclosure requirements, will take time and
resources in order to satisfy the new requirements. We also understand
that issuers and market participants are working to implement many
different regulations that have recently been adopted or may be adopted
in the near future. We are therefore adopting a tiered approach. All
new rules, except for asset-level disclosures require compliance within
one year from the effective date of the rules. We believe that this
time period provides a sufficient transition period for compliance. We
believe that 12 months will allow the transaction parties to better
manage the changes necessary to their systems and processes. Therefore,
any registered offering of asset-backed securities commencing with an
initial bona fide offer one year after the effective date of the rules
and the asset-backed securities that are the subject of that offering
must comply with the new rules and forms, except for asset-level
disclosures. Consequently, after the one year transition period, ABS
issuers seeking to conduct a shelf ABS offering must conduct such
offering off of an effective Form SF-3 registration statement.
    In addition, any Form 10-D or Form 10-K that is filed after one
year after the effective date of the rules must include the information
required by the new rules, except for asset-level disclosures.

B. Transition Period for Asset-Level Disclosure Requirements

    We received substantial feedback with respect to the appropriate
compliance dates for our requirements related to the asset-level
disclosure requirements.

Issuers, market participants, and trade associations representing
issuers generally believed that a significant number of the proposed
data points required data that is currently not captured by originators
or servicers.\1370\ They also argued that there will be substantial
costs in time and resources to develop systems that will capture the
data in the required format and, therefore, believed an extended
implementation timeframe is appropriate.
---------------------------------------------------------------------------

    \1370\ See, e.g., letters from ABA I, ASF I, BoA I, CREFC I,
J.P. Morgan I, PricewaterhouseCoopers dated July 30, 2010 submitted
in response to the 2010 ABS Proposing Release (``PwC''), MBA I,
SIFMA I (expressed views of dealers and sponsors only), and Wells
Fargo I. None of these commenters provided a specific cost estimate
for compliance.
---------------------------------------------------------------------------

    Commenters suggested varying timeframes for implementation. For
instance, investor members of one group suggested that the transition
period should not exceed one year from the date the final rules are
published.\1371\ In contrast, other commenters suggested longer
timeframes, including: A transition period of no earlier than 12 months
from the publication of the final rules in the Federal Register,\1372\
18 months,\1373\ and 24 months.\1374\ We also received a number of
comments suggesting that the asset-level disclosures may not be
available for assets originated before the effective date of the asset-
level disclosure requirements or for assets underlying asset-backed
securities originated before the effective date of the
requirements.\1375\ These commenters suggested a range of possible
solutions, including a full exemption,\1376\ a multi-year phase-
in,\1377\ and an exemption to the extent that information called for
under those rules with respect to legacy loans is unknown and not
available to the issuer without unreasonable effort or expense.\1378\
However, investor members of one trade association suggested that any
grandfathering period for assets originated prior to the compliance
date should be limited to an additional one year after the compliance
date.\1379\
---------------------------------------------------------------------------

    \1371\ See letter from SIFMA I (expressed views of investors
only). The dealer and sponsor members of this commenter suggested
that a one-year transition period would be the minimum needed and
recommending 18 months for asset-level disclosure because many
securitizers are unprepared for these requirements and this
timeframe would also allow smaller originators and servicers to
examine the feasibility of converting their platforms to comply with
the disclosure requirements.
    \1372\ See letter from ASF I.
    \1373\ See letters from J.P. Morgan I (suggesting an 18-month
implementation period following the effective date of the rule
without specifying whether the recommended timeframe should apply to
all of the rules or just the new asset-level requirements), MBA I
(with respect to RMBS) (suggesting 18 months will ensure more
compliance and smoother transition), SIFMA I, and Wells Fargo I
(suggesting a 12-month implementation period followed by a six-month
test period).
    \1374\ See letters from CREFC I, MBA I (with respect to CMBS),
and PwC.
    \1375\ See, e.g., letters from ABA I, ASF I, BoA I, J.P. Morgan
I, MBA I, and SIFMA I. See also letters from J.P. Morgan II and
SIFMA III-dealers and sponsors.
    \1376\ See letters from ABA I and Citi (also suggesting we
create an explicit safe harbor for earlier-originated assets that
may not be able to satisfy all of the disclosure requirements based
on a Rule 409 type standard).
    \1377\ See letter from ABA I (without describing the multi-year
phase-in approach).
    \1378\ See letters from ASF I (suggesting that resecuritizations
supported by legacy underlying securities be grandfathered and not
be subject to the new and amended rules, at least to the extent that
information called for under those rules with respect to legacy
assets is unknown and not available to the issuer without
unreasonable effort or expense), Citi, and J.P. Morgan I (suggesting
that we provide a bright-line test for compliance based on the
origination date of the related asset, or allow as an acceptable
response to the data points an indication that certain data fields
for such asset are unavailable, accompanied by an explanation of why
the data is not available and whether it will be available in the
future). See also letters from ASF II and J.P. Morgan II.
    \1379\ See letter from SIFMA I (expressed views of investors
only).
---------------------------------------------------------------------------

    Some commenters also recommended allowing exemptions or
``deferrals'' from the reporting requirements for data that they were
unable to start collecting within the implementation timeframe.\1380\
One commenter also stated that it was important that the Commission
provide the public with the ``the detailed file layout that is
necessary with XML'' when the final rule is adopted so that market
participants can begin programming their systems and that any delay in
receiving this information will greatly affect the industry's ability
to comply in a timely manner.\1381\
---------------------------------------------------------------------------

    \1380\ See letters from ASF I (suggesting that some cases will
exist where compliance cannot be accomplished within the
implementation timeframe and in those cases, issuers should be able
to apply for a hardship exemption and be granted additional time to
comply as needed on a case-by-case basis, or on a ``class of
transactions'' basis, where the class might be defined by any number
of common characteristics (e.g., common depositor, sponsor or other
transaction party, asset type or transaction structure)) and BoA I
(suggesting we allow issuers to report exceptions or deferrals in
cases where responses to non-crucial data points cannot be provided
in the exact manner contemplated by the proposed rule to ease
transition concerns and indicating that this is consistent with
Regulation AB, which permits concessions when data requests require
significant cost or effort).
    \1381\ See letter from MBA I.
---------------------------------------------------------------------------

    As we noted earlier, we believe that, in order for investors to
have access to robust information concerning the pool assets, asset-
level disclosure needs to be provided. We understand that some of the
disclosures that we are requiring are not currently captured by
originators or servicers and that it will take time and resources to
reprogram systems and processes to capture the data and then report it
in XML. We also understand that issuers and market participants are
working to implement many different regulations that have recently been
adopted. Therefore, we have decided to delay the compliance date for
the asset-level disclosure requirements so that market participants
will have ample time to prepare and satisfy the new requirements. In
this regard, issuers will be required to provide asset-level
information no later than two years after the effective date of the
rules, which we believe is a reasonable implementation timeframe. We
believe the extended timeframe will ultimately benefit investors
because it will give issuers and market participants the time to plan
for and implement appropriate reporting processes and more meaningful
and relevant disclosure documents. In addition, as discussed in Section
III.A.2.b.5 Resecuritizations, we are adopting an exemption for
resecuritizations of ABS issued prior to two years after the effective
date of the rules, the compliance date for the asset-level disclosure
requirements.
    We also understand that certain changes to issuers' and market
participants' systems may not be able to occur until the final
technical requirements are published in the EDGAR Filer Manual and
EDGAR Technical Specification documents. In order to provide issuers
and other filers time to make adjustments to their systems, we
anticipate making a draft of the EDGAR Technical Specification
documents\1382\ available soon.
---------------------------------------------------------------------------

    \1382\ The draft EDGAR Technical Specification documents will
include preliminary tagging requirements for asset-level data
points.
---------------------------------------------------------------------------

    We also note that at least one commenter requested a test period.
We believe that submissions may assist both the Commission and issuers
with addressing unknown and unforeseeable issues that may arise with
the submission of the asset-level disclosures.\1383\ We will permit
issuers to file test submissions during the transition period.
---------------------------------------------------------------------------

    \1383\ See letter from Wells Fargo I (suggesting a six-month
test period).
---------------------------------------------------------------------------

    We are not adopting a commenter's suggestion that we adopt a
hardship exemption from the reporting requirements for those issuers
that may be unable to start collecting by the implementation timeframe.
We believe that our timeframe provides ample time for the necessary
reprogramming of systems and processes to capture the information,
including for smaller originators.

C. Compliance Dates

    As discussed above, we are adopting different compliance periods
for the new rules. Registrants must comply with new rules, forms, and
disclosures other than the asset-level disclosure requirements no later
than November 23, 2015. Offerings of asset-backed securities backed by
RMBS, CMBS, Auto ABS, and debt securities (including resecuritizations)
must comply with the asset-level disclosure requirements no later than
November 23, 2016. Any Form 10-D or Form 10-K filed after November 23,
2015, must comply with the new rules and disclosures, except asset-
level disclosures. If any provision of these rules, or the application
thereof to any person or circumstance, is held to be invalid, such
invalidity shall not affect other provisions or application of such
provisions to other persons or circumstances that can be given effect
without the invalid provision or application.

X. Paperwork Reduction Act

A. Background

    Certain provisions of the new rules and rule amendments contain
``collection of information'' requirements within the meaning of the
Paperwork Reduction Act of 1995 (``PRA'').\1384\ We published a notice
requesting comment on the collection of information requirements in the
2010 ABS Proposing Release and the 2011 ABS Re-Proposing Release, and
we submitted these requirements to the Office of Management and Budget
(``OMB'') for review in accordance with the PRA.\1385\
---------------------------------------------------------------------------

    \1384\ 44 U.S.C. 3501 et seq.
    \1385\ 44 U.S.C. 3507(d) and 5 CFR 1320.11.
---------------------------------------------------------------------------

    An agency may not conduct or sponsor, and a person is not required
to comply with, a collection of information unless it displays a
currently valid control number. The titles for the collections of
information are:
    (1) ``Form S-1'' (OMB Control No. 3235-0065);
    (2) ``Form S-3'' (OMB Control No. 3235-0073);
    (3) ``Form 10-K'' (OMB Control No. 3235-0063);
    (4) ``Form 10-D'' (OMB Control No. 3235-0604);
    (5) ``Form 8-K'' (OMB Control No. 3235-0060);
    (6) ``Regulation S-K'' (OMB Control No. 3235-0071);
    (7) ``Regulation S-T'' (OMB Control No. 3235-0424);
    (8) ``Form SF-1'' (OMB Control No. 3235-0707);
    (9) ``Form SF-3'' (OMB Control No. 3235-0690); and
    (10) ``Form ABS-EE'' (OMB Control No. 3235-0706).
    The forms listed in Nos. 1 through 7 were adopted under the
Securities Act and the Exchange Act and set forth the disclosure
requirements for registration statements and periodic and current
reports filed with respect to asset-backed securities and other types
of securities to inform investors. Regulation S-K, which includes the
item requirements in Regulation AB, contains the requirements for
disclosure that an issuer must provide in filings under both the
Securities Act and the Exchange Act. Regulation S-T specifies the
requirements that govern the submission of electronic documents.
    The regulations and forms listed in Nos. 8 through 10 are new
collections of information under the Securities Act and the Exchange
Act. Form SF-1 and Form SF-3 represent the new registration forms for
offerings of asset-backed securities, as defined in Item 1101(c) of
Regulation AB. Form SF-3 represents the registration form for asset-
backed offerings that meet certain shelf eligibility conditions and can
be offered off a shelf under Rule 415. Form SF-1 represents the
registration form for other asset-backed offerings. Form ABS-EE \1386\
is a new form for the filing of certain asset-level information
required in connection with registration statements and periodic
reports for asset-backed issuers. Under the requirements, an asset-
backed issuer is required to submit to the Commission specified, tagged
information on assets in the pool underlying the securities.
---------------------------------------------------------------------------

    \1386\ We proposed this new collection of information in the
2010 ABS Proposing Release under the title ``Asset Level Data.'' We
have revised the title of this collection of information to reflect
the location of the asset-level data requirements under the final
rule.
---------------------------------------------------------------------------

    The hours and costs associated with preparing disclosure, filing
forms, and retaining records constitute reporting and cost burdens
imposed by the collections of information. Compliance with the rule
amendments is mandatory. Responses to the information collection will
not be kept confidential, and there is no mandatory retention period
for the information disclosed.

B. Summary of Comment Letters on the PRA Analysis

    In the 2010 ABS Proposing Release and the 2011 ABS Re-Proposing
Release, we requested comment on the PRA analysis. While many
commenters provided qualitative comments on the possible costs of the
proposed rules and amendments, we received limited quantitative
comments on our PRA analysis. The only quantitative comment we received
on asset-level disclosure came from a commenter representing a group of
Auto ABS sponsors. This commenter estimated that, if we adopted each of
the Auto ABS data points originally proposed, the average costs and
employee hours per sponsor necessary to comply with the asset-level
requirements would be approximately $2 million and 12,000 hours,
respectively.\1387\ This commenter also noted that if we adopted the
reduced number of data points proposed in their comment letter, the
burden would decrease to $750,000 and 3,500 hours.
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    \1387\ See letter from VABSS IV. As the commenter noted, the
sponsors ``estimated the costs and employee hours necessary to
reprogram systems and business procedures to capture, track and
report all of the items for auto loans currently set forth in the
[2010 ABS Proposing Release].'' We assume that these costs and
burden hours include the costs and burden hours associated with
providing information at the time the ABS is issued as well as on an
ongoing basis, as was contemplated in the 2010 ABS Proposing
Release.
---------------------------------------------------------------------------

    We received only one comment letter with quantitative comments on
the additional burden to complete Form SF-3.\1388\ This commenter
believed that our 100 burden hour estimate for asset-backed issuers to
complete the disclosure requirements for Form SF-3, prepare the
information, and file it with the Commission is ``inadequate'' and
``not realistic.'' This commenter stated that at least 100 burden hours
should be separately allocated to certain of the shelf transaction
requirements, including the certification provision, the asset review
provision, and the dispute resolution provision. The commenter noted
that there would be an increased burden of at least 100 hours for the
certification requirement because the certifying officer would likely
need to rely on an independent evaluator or hire an additional
executive officer with the expertise necessary in order to provide the
certification. The commenter also noted that there will be additional
burden in retaining a reviewer and its counsel to comply with the asset
review provision. Finally, the commenter stated that the dispute
resolution provision alone could exceed our 100 burden hour estimate
without providing any quantitative analysis.
---------------------------------------------------------------------------

    \1388\ See letter from Kutak.
---------------------------------------------------------------------------

    Qualitative comments that we received generally noted that the new
data collection requirements will impose additional burdens on issuers
and sponsors. For example, we received several qualitative comments
noting that the proposal would likely impose burdens on sponsors by
requiring them

to collect, capture, maintain, evaluate and report data in new or
different ways.\1389\
---------------------------------------------------------------------------

    \1389\ See, e.g., letters from ABA I, J.P. Morgan II, MBA II,
and Wells Fargo I.
---------------------------------------------------------------------------

C. Revisions to Proposals

    We considered all of the comments we received, as we considered how
to quantify and possibly mitigate the burdens that could potentially be
imposed by the new requirements. In order to address commenters'
concerns about the asset-level requirements for Auto ABS, we have
significantly reduced the scope of the asset-level data required from
the proposal.
    For the new shelf eligibility criteria, we have made several
changes to address cost concerns--for example, we revised the
certification to indicate that the certification is not a guarantee
about the future performance of the assets and have clarified that the
certifying officer has any and all defenses available under the
securities laws. We also note, in response to one commenter's concern
discussed above,\1390\ that we do not believe that an additional
executive officer or independent evaluator will need to be hired as a
result of the new rules to actually structure the transaction because
the certifying officer may rely on senior officers under his or her
supervision that may be more familiar with the structuring of the
transaction. We do expect, however, that the certifying officer will
provide appropriate oversight over the transaction, including
supervision of the structuring, so that he or she is able to make the
certification. Finally, we believe that providing the certification
should not impose any additional significant burden in terms of
preparing additional disclosure, as such burden is already accounted
for in the preparation of prospectus disclosure that is part of the
Form SF-3 registration statement.
---------------------------------------------------------------------------

    \1390\ See letter from Kutak.
---------------------------------------------------------------------------

    We acknowledge that the asset review provision will impose an
upfront cost on the transaction since we are requiring that the
reviewer be named in the prospectus. We believe, however, that most of
the costs will be incurred in connection with reviews, which will occur
during the life of the securitization only if the triggering events
have been met. Consequently, if the reviewer does not perform any
reviews, then the costs will be limited to the retainer fee.
Recognizing that the bulk of the cost will be incurred with the actual
reviews, we have attempted to reduce the burden of ongoing compliance
with this shelf transaction requirement by requiring that a delinquency
threshold must first be reached or exceeded before investors will be
able to vote for a review. Disclosure is required in a Form 10-D only
if a review is triggered.
    We do not agree with a commenter that the dispute resolution
provision could exceed the 100 burden hour estimate to collect the
information. Under the final rules, a dispute resolution provision is
required in the pooling and servicing agreement and disclosure of that
provision is required in the prospectus. We acknowledge that additional
costs may be incurred as a result of the number of hours that will be
expended by certain personnel, including counsel, to come to a
resolution if a dispute occurs. Because we are not requiring additional
disclosures about the dispute resolution provision, we are not
increasing our burden estimates. Accordingly, while we recognize that
the new shelf conditions will impose additional costs on issuers, these
costs are not primarily disclosure or record keeping burdens. Thus, we
do not believe that we need to increase the 100 burden hour estimate to
complete and file Form SF-3.
    We have also made a number of changes in response to more general
qualitative comments in an effort to avoid potential unintended
consequences and reduce potential additional costs or burdens
identified by commenters. For example, for the asset-level
requirements, we have attempted to reduce burden and cost concerns by
aligning the requirements with industry standards where feasible. We
have also revised how we are calculating the burden hours and costs for
data collection to more accurately reflect how data will be captured
and organized in the industry, as described by commenters. Further, we
are providing for an extended implementation timeframe, which we also
believe will reduce the burden of implementing the requirements.

D. PRA Reporting and Cost Burden Estimates

    Our PRA burden estimate for each of the existing collections of
information, except for Form 10-D, are based on an average of the time
and cost incurred by all types of public companies, not just asset-
backed issuers, to prepare a particular collection of information. Form
10-D is a form that is prepared and filed only by asset-backed issuers.
In 2004, we codified requirements for asset-backed issuers in these
regulations and forms, recognizing that the information relevant to
asset-backed securities differs substantially from that relevant to
other securities.
    Our PRA burden estimates for the new rules and rule amendments are
based on information that we receive on entities assigned to Standard
Industrial Classification Code 6189, the code used for asset-backed
securities, as well as information from outside data sources.\1391\
When possible, we base our estimates on an average of the data that we
have available for years 2004 through 2013.\1392\ In some cases, our
estimates for the number of asset-backed issuers that file Form 10-D
with the Commission are based on an average of the number of ABS
offerings from 2006 through 2013.\1393\
---------------------------------------------------------------------------

    \1391\ In the 2010 ABS Proposing Release, we relied on the AB
Alert database for the initial terms of offerings and supplemented
that data with information from the Securities Data Corporation
(SDC). In this release, outside databases referenced in this section
include the AB Alert and CM Alert databases for the initial terms of
offerings.
    \1392\ We selected this time period in order to account for the
market disruption caused by the financial crisis by using data that
captures both pre-crisis and post-crisis filings.
    \1393\ Form 10-D was not implemented until 2006. Before
implementation of Form 10-D, asset-backed issuers often filed their
distribution reports under cover of Form 8-K.
---------------------------------------------------------------------------

1. Form ABS-EE
    The asset-level reporting requirement that we are adopting for
issuances of certain ABS is a new collection of information.\1394\ As
proposed, under the new rules the asset-level information will be
provided at the time the ABS is issued and on an ongoing basis. The
rules also require the information be filed as an exhibit to new Form
ABS-EE.
---------------------------------------------------------------------------

    \1394\ We proposed this new collection of information in the
2010 ABS Proposing Release under the title ``Asset Level Data.'' We
are revising the title to reflect that the asset-level information
will be filed as an exhibit to new Form ABS-EE. Also, the proposed
requirements would have required asset-level data across all asset
types, except for credit card receivables ABS and stranded costs
ABS. We proposed that credit card ABS issuers would be required to
provide grouped account data, both at the time of securitization and
on an ongoing basis. The rules we are adopting at this time,
however, only require asset-level data for ABS where the underlying
assets consist of residential mortgages, commercial mortgages, auto
loans or auto leases, resecuritizations of ABS, or of debt
securities. Also, we are not adopting at this time the proposed
requirement that credit card ABS issuers provide grouped account
data. Because of the number of data points involved, our estimates
for the asset-level requirements in the proposal were based on data
for RMBS, CMBS and credit card ABS issuers. In line with the
requirements we are adopting, we have revised our burden hour
estimate to base the estimate on the hours that sponsors of RMBS,
CMBS, Auto ABS, debt security ABS or resecuritizations may incur to
provide the required data.
---------------------------------------------------------------------------

    Our estimates in the 2010 ABS Proposing Release were based on the
costs to provide the required data at the time of securitization and on
an ongoing basis. We estimated that each unique

sponsor \1395\ would incur a one-time setup cost for the initial filing
of asset-level data.\1396\ Software costs and costs associated with
adjusting existing systems in order to provide the data are included in
the one-time setup costs. The burden estimate also included costs
associated with tagging the data and filing it with the Commission.
After the first filing of asset-level information, we estimated that
sponsors would incur costs to provide the required data with subsequent
offerings of ABS and with each Form 10-D.
---------------------------------------------------------------------------

    \1395\ In the proposal, we estimated that the number of unique
ABS sponsors from 2004 to 2009 was 343, for an average of 57 unique
sponsors per year. We have updated our estimate of the total number
of unique sponsors among the relevant assets classes. Based on our
updated estimate, we estimate 60 as the average number of unique
sponsors of registered ABS subject to the rules we are adopting per
year (23 RMBS sponsors, 25 CMBS sponsors, 20 Auto ABS sponsors, two
debt security ABS sponsors, and one resecuritization sponsor (the
total of these numbers for all asset classes is greater than the 60
unique sponsors estimate due to the fact that a single sponsor often
sponsors ABS from different asset classes). For purposes of our
updated estimate, the average annual number of unique sponsors for
RMBS, CMBS and Auto ABS is based on data from outside databases for
the period of 2004 through 2013. See footnote 1391. We believe the
time period selected provides a conservative estimate of the average
annual number of unique sponsors for these asset classes as the 2004
through 2013 timeframe captures both the time period prior to the
financial crisis when there was a larger number of unique ABS
sponsors per year and the more recent time period when the number of
unique sponsors per year has been substantially lower. For debt
security ABS and resecuritizations, we were unable to obtain from
outside databases the average annual number of unique debt security
ABS or resecuritization sponsors. Based on data available through
EDGAR for the period of 2010 to 2013, we estimate that for each year
there will be two unique debt security ABS sponsors. There have been
no registered resecuritization offerings over the past several
years. We assume for this estimate, however, that for each year
there will be at least one unique resecuritization sponsor.
    \1396\ Under the proposal, the asset-level information outlined
in proposed Schedule L would be required at the time of issuance. On
an ongoing basis, the asset-level information outlined in proposed
Schedule L-D would be required. Under the final rules, we are
condensing these schedules into one schedule titled Schedule AL. See
Section III.B.2 The Scope of New Schedule AL. The burden estimate in
the proposal provided an estimate for the one-time burden cost for
issuers to provide the asset-level disclosures required at issuance
and a separate estimate for the one-time burden cost for issuers to
provide the ongoing disclosures. For purposes of our updated
estimate and in line with the condensed schedule format we are
adopting, we combined the estimates for one-time setup costs into
one calculation. This change resulted in a substantially lower
estimate of average annual burden hours for filing asset-level data
on an ongoing basis, but a higher amount of professional costs
associated with the first filing of asset-level data at issuance.
---------------------------------------------------------------------------

    Some comments on the asset-level proposal suggested that sponsors
would incur substantial costs to capture the required data and to
provide it in the format requested.\1397\ We continue to assume that
asset-backed issuers currently required by Regulation AB to file pool-
level information on the assets in the underlying pool have access to a
substantial portion of the required asset-level information, although
we acknowledge that sponsors may incur additional costs to provide the
data currently collected in the format required by the rules we are
adopting. We recognize that some of the required data is not currently
collected by sponsors and that sponsors will incur costs to capture and
provide some of the required data in the format requested.
---------------------------------------------------------------------------

    \1397\ See, e.g., letters from ABA I, ABAASA I, SIFMA I
(expressed views of dealer and sponsors only), and VABSS I.
---------------------------------------------------------------------------

    To address concerns about the costs to provide the data, we revised
our calculation of the estimated number of burden hours a sponsor may
incur to acknowledge that a sponsor may need to revise its existing
systems or procedures for each required data point. The burden estimate
in the proposal assumed that approximately two percent of the proposed
asset-level data points would require a sponsor to adjust its existing
systems and procedures for capturing and reporting data. For each data
point that required the sponsor to adjust its existing systems and
procedures, a sponsor would expend at least 18 minutes per adjustment
for each asset in the pool. We have revised our estimate to assume that
before the first filing of asset-level information a sponsor will need
to adjust its existing systems and procedures in some way for each
required data point in order to provide the response to the data point
based on our definitions and that each adjustment will require ten
hours.\1398\
---------------------------------------------------------------------------

    \1398\ For instance, the requirements for RMBS include 270 data
points, and we estimate that for each of these 270 data points a
sponsor will need to adjust its systems and procedures in some way
and that each adjustment will require ten hours. In the proposal,
our calculation considered the number of assets in each pool. Since
we continue to assume that a sponsor will need to make a one-time
change to its existing systems and procedures before the first
filing of asset-level information, the number of assets in the pool
is less relevant because the revisions to a sponsor's existing
systems and procedures will be completed before it provides asset-
level data for any ABS. The revised estimate focuses on the changes
each required data point will cause to a sponsor's existing systems
and procedures before it must provide asset-level information.
---------------------------------------------------------------------------

    The burden estimate in the proposal for the initial filing of
asset-level data included ten hours to tag and file the data with the
Commission.\1399\ We continue to believe that a sponsor will incur
approximately ten hours to tag, review and file the required data the
first time the sponsor files the asset-level data to comply with our
rules. Based on comments received raising concerns about the burden to
provide the asset-level data in XML, we are also estimating that each
sponsor will also expend approximately 10 hours per data point in order
to adjust its systems to be able to provide the data in XML with the
first filing of asset-level data.\1400\ Based on the asset-level
requirements applicable to each asset class and our estimates for the
XML conversion costs and filing costs, we estimate that each RMBS
sponsor will incur 5,410 hours, each CMBS sponsor will incur 3,050
hours, each Auto ABS sponsor will incur 2,770 hours and each debt
security ABS sponsor or resecuritization sponsor will incur 1,210 hours
\1401\ in one-time setup costs and to provide the asset-level data for
the first time.\1402\ Based on the average number of unique sponsors in
each asset class, we estimate that the total burden estimate for the
initial filing of asset-level data, including the one-time setup cost
to be 259,711 hours.\1403\ We allocate 25% of

those hours (64,928) to internal burden hours and 75% of the hours
(194,783) to out-of-pocket expenses for software consulting and filing
agent costs at a rate of $250 per hour for a total cost of $48,695,625.
---------------------------------------------------------------------------

    \1399\ See the 2010 ABS Proposing Release at 23404.
    \1400\ The estimated per hour cost to convert the required data
into an XML format is based on the estimate of the cost to provide
the required asset-level data in XML provided in Section III.B.3.
See footnote 748. For purposes of that estimate, we assumed that a
sponsor would work with all asset types and would need to convert
the data for all asset classes into an XML format and that
conversion would require 6,283 hours. With a combined 680 unique
data points (RMBS = 270, CMBS = 152, Auto ABS = 138, debt security
ABS = 60 and resecuritizations = 60), we estimate that responding to
each data point in XML for the first time will require approximately
10 hours per data point.
    \1401\ For each resecuritization, the asset pool is comprised of
one or more ABS. The final rules require disclosures about the ABS
in the pool, and if the ABS in the asset pool is an RMBS, CMBS or
Auto ABS, issuers are also required to provide asset-level
disclosures about the assets underlying the ABS. For purposes of
this estimate, the one-time setup costs for resecuritizations is
based on the number of data points each resecuritization sponsor
must respond to for each ABS in the pool. Our estimate for the one-
time setup cost for providing asset-level data for resecuritizations
does not include the cost to provide asset-level data if the ABS in
the pool is an RMBS, CMBS or Auto ABS since these one-time setup
costs are already included in the one-time setup estimates for RMBS,
CMBS and Auto ABS and sponsors of resecuritizations may be able to
reference asset-level information about the assets underlying the
securities in the pool.
    \1402\ In the 2010 ABS Proposal, we estimated that an RMBS
sponsor would incur a total of 7,005 hours (3,194 hours for the data
required at securitization and 3,811 hours for the data required on
an ongoing basis), and a CMBS sponsor would incur a total of 178
hours (86 hours for the data required at securitization and 92 hours
for the data required on an ongoing basis). See the 2010 ABS
Proposing Release at 23404.
    \1403\ The burden estimate in the proposal estimated the total
annual burden hours for preparing, tagging and filing asset-level
disclosure at the time of securitization for all ABS issuers to be
151,368 with 25% of those hours allocated to internal burden costs
and 75% of those hours allocated to external burden hours. For a
description of the factors that contributed to differences between
the proposed and final estimates see footnotes 1396 and 1407.
---------------------------------------------------------------------------

    After a sponsor has made an initial filing of asset-level data, we
estimate that each subsequent filing of asset-level data will take
approximately 10 hours to prepare, review, tag and file the
information. Based on the number of offerings after the first filing of
asset-level data \1404\ and the number of Form 10-D filings per
year,\1405\ we estimate the average annual hours to prepare and file
asset-level disclosure after the first filing of asset-level data will
be 140,215 hours.\1406\ We allocate 75% of those hours (105,161) to
internal burden hours and 25% of the hours (35,054) to out-of-pocket
expenses for software consulting and filing agent costs at a rate of
$250 per hour totaling $8,763,438. Thus, we estimate the total annual
burden hours for the asset-level disclosure requirements at 170,089
hours \1407\ and the total amount of out-of-pocket expenses for
software and filing agent costs at $57,459,063.\1408\
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    \1404\ The burden estimate in the proposal estimated the average
number of offerings for all asset classes to be 958 per year. For
purposes of comparison, we have adjusted the average number of
offerings from 958 to 629 to account for the fact that we are
adopting asset-level requirements for fewer asset classes than we
had proposed. For purposes of this burden estimate because we are
adopting requirements only for certain asset classes, we estimate
there will be an average of 431 registered ABS offerings per year
(RMBS = 343, CMBS = 33, Auto ABS = 51, debt security ABS and
resecuritizations = 4). For purposes of this estimate, the average
annual number of registered RMBS, CMBS and Auto ABS offerings is
based on data from outside databases for the period of 2004 through
2013. We believe the time period selected provides a conservative
estimate of the average annual number of registered offerings for
these asset classes as the 2004-2013 timeframe captures both the
time prior to the financial crisis when there was a larger number of
registered ABS offerings per year and the more recent time period
when the number of registered ABS offerings per year has been
substantially lower. For debt security ABS and resecuritizations, we
are unable to obtain from outside databases the average annual
number of registered offerings of debt security ABS or
resecuritizations between 2004 and 2013. Based on data available
through EDGAR for the period of 2010 to 2013, we estimate there will
be three registered debt security ABS offerings per year. There have
been no registered resecuritization offerings over the past several
years. We assume for this estimate, however, that each year there
will be at least one registered resecuritization offering.
    \1405\ For purposes of estimating the number of expected Form
10-D filings, we are using the actual average annual number of Form
10-D filings, which was 13,014. We apportioned the burden of Form
10-D filings across each asset class based on the average number of
offerings per year for each asset class. We believe this results in
a conservative estimate because the rules we are adopting do not
require that all asset classes provide asset-level disclosure and
therefore not every Form 10-D filed will include asset-level data.
    \1406\ We estimated in the 2010 ABS Proposing Release that the
average annual burden hours to provide the asset-level data with
Form 10-D on an ongoing basis would be 207,009 hours for all ABS
issuers with 75% of those hours allocated to internal burden hours
and 25% allocated to external burden hours. The final estimate
reflects the cost of ongoing maintenance for XML, which we estimated
to be 5% of the initial XML conversion costs. For a description of
the factors that contributed to differences between the proposed and
final estimate and the proposed estimate see footnotes 1396 and
1407.
    \1407\ 170,089 = 64,928 + 105,161. The proposal estimated that
the total average annual burden hours to provide the asset-level
data or grouped asset data would be 193,099 hours and the total
amount of out-of-pocket expenses for software and filing agent costs
would be $41,319,571. The drop in total average annual burden hours
can be attributed to changes in the average annual number of unique
RMBS sponsors and the expected annual number of registered ABS
offerings. Also, other changes to our calculation to address
comments received (e.g., XML conversion cost, system changes) and
differences between the proposed requirements and the final
requirements (e.g., combining the initial and ongoing disclosure
schedules into one schedule) also impacted our estimate.
    \1408\ $57,459,063 = $48,695,625 + 8,763,438.
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2. Form S-3 and Form SF-3
    Our current PRA burden estimate for Form S-3 is 136,392 annual
burden hours. This estimate is based on the assumption that most
disclosures required of the issuer are incorporated by reference from
separately filed Exchange Act reports. However, because an Exchange Act
reporting history is not a condition for Form S-3 eligibility for ABS,
asset-backed issuers using Form S-3 often must present all of the
relevant disclosure in the registration statement rather than
incorporate relevant disclosure by reference. Thus, our current burden
estimate for asset-backed issuers using Form S-3 under existing
requirements is similar to our current burden estimate for asset-backed
issuers using Form S-1. During 2004 through 2013, we received an
average of 71 Form S-3 filings annually related to asset-backed
securities.
    Under the rules that we are adopting, we are moving the
requirements for asset-backed issuers into new forms that will be used
solely to register offerings of asset-backed securities. New Form SF-3
is the ABS equivalent of existing Form S-3. For purposes of our
calculations, we estimate that the provisions relating to shelf
eligibility will cause a 5% movement in the number of filers (i.e., a
decrease of four registration statements) out of the shelf system due
to the new requirements, which include the certification, the asset
review provision, the dispute resolution provision, the investor
communications provision, and the annual evaluations of compliance with
timely Exchange Act reporting and timely filing of the transaction
agreements and the related certifications.\1409\ On the other hand, we
estimate the number of shelf registration statements for asset-backed
issuers will increase by four as a result of the amendments eliminating
the practice of providing a base prospectus and a prospectus supplement
for ABS offerings.\1410\ Thus, we estimate that the annual number of
shelf registration statements concerning ABS offerings will remain the
same. Accordingly, since the rule amendments will shift all shelf-
eligible ABS filings from Form S-3 to Form SF-3, we estimate that the
amendments will cause a decrease of 71 ABS filings on Form S-3 and a
corresponding increase of 71 ABS filings on Form SF-3 filed
annually.\1411\
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    \1409\ We calculated the decrease of four Form SF-3s by
multiplying the average number of Form S-3s filed (71) by 5%.
    \1410\ Based on staff reviews, we believe that it is unusual to
see ABS registration statements with multiple unrelated collateral
types such as auto loans and student loans. There are occasionally
multiple related collateral types such as HELOCs, subprime mortgages
and Alt-A mortgages in ABS registration statements.
    \1411\ This is based on the number of registration statements
for asset-backed issuers currently filed on Form S-3 and the new
shelf eligibility requirements.
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    In 2004, we estimated that an asset-backed issuer, under the 2004
amendments to Form S-3, would take an average of 1,250 hours to prepare
a Form S-3 to register ABS.\1412\ Additionally, in the January 2011 ABS
Issuer Review Release, we estimated that the requirements described in
that release would increase the annual incremental burden to asset-
backed issuers by 30 hours per form.\1413\ For registration statements,
we estimate that 25% of the burden of preparation is carried by the
company internally and that 75% of the burden is carried by outside
professionals retained by the registrant at an average cost of $400 per
hour.
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    \1412\ See the 2004 ABS Adopting Release.
    \1413\ See the 2011 ABS Issuer Review Adopting Release.
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    We are also adopting additional disclosure requirements that will
impose some additional costs to asset-backed issuers with respect to
registration statements, which we have included as part of our burden
estimate for Form SF-3. We do not believe, however, that the shelf
eligibility requirements that we are adopting will substantially
increase the burden hours

of filing a Form SF-3 since they generally do not impose significant
new disclosure or record-keeping obligations.\1414\ We note that we
have added a disclosure component to the asset review provision to
require information about the reasonableness of the delinquency trigger
selected by the transaction parties. We did not increase the total
burden hours for this additional disclosure because the additional
burden to provide this information should be minimal since issuers
already have the required information.
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    \1414\ In connection with the new shelf eligibility
requirements, we are adopting a number of ongoing disclosure
requirements that will be triggered at the time a particular
provision (e.g., the asset review or investor communications
provision) is invoked. As discussed below, the burden of these
additional disclosure requirements is reflected in the revised
burden estimate for Form 10-D.
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    We estimate that the incremental burden for asset-backed issuers to
complete the additional disclosure requirements for Form SF-3, prepare
the information, and file it with the Commission will be 100 burden
hours per response on Form SF-3. As a result, we estimate that each
Form SF-3 will take approximately 1,380 hours to complete and
file.\1415\ We estimate the total internal burden for Form SF-3 to be
24,495 hours and the total related professional costs to be
$29,394,000.\1416\ This would result in a corresponding decrease in
Form S-3 burden hours of 22,720 and $27,264,000 in professional
costs.\1417\
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    \1415\ The total burden hours to file Form SF-3 are calculated
by adding the existing burden hours of 1,280 that we estimate for
Form S-3 and the incremental burden of 100 hours imposed by our new
requirements for a total of 1,380 total burden hours.
    \1416\ To calculate these values, we first multiply the total
burden hours per Form SF-3 (1,380) by the number of Forms SF-3
expected under the new requirements (71), resulting in 97,980 total
burden hours. Then, we allocate 25% of those hours to internal
burden, resulting in 24,495 hours. We allocate the remaining 75% of
the total burden hours to related professional costs and use a rate
of $400 per hour to calculate the external professional costs of
$29,394,000.
    \1417\ To calculate these values, we first multiply the total
burden hours per Form S-3 (1,280) by the average number of Forms S-3
over the period 2004-2013 (71), resulting in 90,880 total burden
hours. Then, we allocate 25% of these hours to internal burden,
resulting in 22,720 hours. We allocate the remaining 75% of the
total burden hours to related professional costs and use a rate of
$400 per hour to calculate the external professional costs of
$27,264,000.
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3. Form S-1 and Form SF-1
    New Form SF-1 is the ABS equivalent of existing Form S-1. As noted
above, for purposes of our calculation, we estimate that the new
requirements for shelf eligibility and new shelf procedures will cause
some movement in the number of filers from the shelf system to the non-
shelf system. For purposes of the PRA, we estimate four asset-backed
issuers will move from the shelf system to the non-shelf system of Form
SF-1.\1418\ From 2004 through 2013, an average of two Forms S-1 were
filed annually by asset-backed issuers. Correspondingly, we estimate
that the number of filings on Form SF-1 will be six, which is the sum
of the two average filings per year and the estimated incremental four
filings from shelf to Form SF-1.
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    \1418\ We estimate in the section above that the requirements
relating to shelf eligibility and new shelf procedures will cause a
5% movement in the number of ABS filers out of the shelf system. We
assume, for the purposes of our PRA estimates, that the other filers
that do not move to Form SF-1 will utilize unregistered offerings or
offshore offerings for offerings of ABS.
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    For ABS filings on Form S-1, we have used the same estimate of
burden per response that we used for Form S-3, because the disclosures
in both filings are similar.\1419\ Even under the new requirements, the
disclosures will continue to be similar for shelf registration
statements and non-shelf registration statements. The burden for the
new requirements for the Asset Data File to be filed as an exhibit to
Forms SF-1 and SF-3 is included in the new Form ABS-EE collection of
information discussed above. Thus, we estimate that an ABS Form SF-1
filing will impose an incremental burden of 100 hours per response,
which is equal to the incremental burden to file Form SF-3. We estimate
the total number of hours to prepare and file each Form SF-1 to be
1,380, the total annual burden to be 2,070 hours and added costs for
professional expenses to be $2,484,000.\1420\ This will result in a
corresponding decrease in Form S-1 burden hours of 640 and $768,000 in
professional costs.\1421\
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    \1419\ See Section IV.B.2 of the 2004 ABS Proposing Release.
    \1420\ The total burden hours to file Form SF-1 are calculated
by adding the existing burden hours of 1,280 and the incremental
burden of 100 hours imposed by the new requirements for total of
1,380 hours. To calculate the annual internal and external costs, we
first multiply the total burden hours per Form SF-1 (1,380) by the
number of Forms SF-1 expected under the new requirements (six),
resulting in 8,280 total burden hours. Then, we allocate 25% of
these hours to internal burden, resulting in 2,070 hours. We
allocate the remaining 75% of the total burden hours to related
professional costs and use a rate of $400 per hour to calculate the
external professional costs of $2,484,000.
    \1421\ To calculate these values, we first multiply the total
burden hours per Form S-1 (1,280) by the average number of Form S-1s
filed during 2004-2013 (two), resulting in 2,560 total burden hours.
Then, we allocate 25% of these hours to internal burden, resulting
in 640 hours. We allocate the remaining 75% of the total burden
hours to related professional costs and use a rate of $400 per hour
to calculate the external professional costs of $768,000.
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4. Form 10-K
    The ongoing periodic and current reporting requirements applicable
to operating companies differ substantially from the reporting that is
most relevant to investors in asset-backed securities. For asset-backed
issuers, in addition to a specified set of Form 10-K disclosure items,
the issuer must file a servicer compliance statement, a servicer's
assessment of compliance with servicing criteria, and an attestation of
an independent public accountant as exhibits to the Form 10-K. In 2004,
we estimated that 120 hours would be needed to complete and file a Form
10-K for an asset-backed issuer. We believe that our revisions related
to the disclosure requirements for material instances of noncompliance
will cause an increase in the number of hours incurred to prepare,
review, and file Form 10-K by five hours. We estimate that, for
Exchange Act reports, 75% of the burden of preparation is carried by
the company internally and that 25% of the burden is carried by outside
professionals retained by the registrant at an average rate of $400 per
hour. We also estimate that 1,046 Form 10-K filings for asset-backed
issuers are filed per year, based on the average number of Forms 10-K
filed over the period 2004-2013. Therefore, we estimate for PRA
purposes that the increase in total annual number of hours to prepare,
review, and file Form 10-K for asset-backed issuers will be 5,230
hours.\1422\ We allocate 75% of those hours (3,923) to internal burden
and the remaining 25% to external costs totaling $523,000 using a rate
of $400 per hour.
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    \1422\ To calculate the annual internal and external costs, we
first multiply the incremental burden of five hours imposed by the
new requirements by the number of Forms 10-K (1,046), resulting in
an increase of 5,230 burden hours.
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5. Form 10-D
    In 2004, we adopted Form 10-D as a new form for only asset-backed
issuers. This form is filed within 15 days of each required
distribution date on the asset-backed securities, as specified in the
governing documents for such securities. The form contains periodic
distribution and pool performance information.
    In 2004, we estimated that it would take 30 hours to complete and
file Form 10-D.\1423\ We also estimate that 13,014 Form 10-D filings
are filed per year based on current annual responses.\1424\

As discussed above, we are adopting asset-level disclosure requirements
that relate to ongoing performance of the assets to be filed at the
same time as Form 10-D; the burden of this requirement is included in
our estimate of the asset-level disclosure collection of information
requirements. We estimate that the new Regulation AB disclosure
requirements that will be included in Form 10-D related to the asset
review (Item 1121(d)), investor communications (Item 1121(e)), and
material changes to the sponsor's interest in the transaction (Item
1124) will result in an additional burden of five hours for Items
1121(d) & (e), plus two hours for Item 1124 per filing to prepare.
Therefore, we estimate that the new requirements will increase the
number of hours to prepare, review, and file a Form 10-D to 37 hours,
thereby increasing the total burden hours for all Form 10-Ds filed
annually to 481,518 hours. We allocate 75% of those hours (361,139) to
internal burden and the remaining 25% to external costs totaling
$48,151,800 using a rating of $400 per hour.
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    \1423\ See the 2004 ABS Adopting Release.
    \1424\ To calculate current annual responses, we used the
average number of respondents that filed Form 10-Ds between 2011 and
2013, which was 2,169. We then multiplied the average number of
respondents (2,169) by the average number of times that a respondent
would file a Form 10-D per year (6) for a total of 13,014 Form 10-Ds
per year. Different types of asset-backed securities have different
distribution periods, and the Form 10-D is filed for each
distribution period. We derived the multiplier of six by comparing
the number of Forms 10-D that have been filed since 2006 with the
number of Forms 10-K (which are only required to be filed once a
year) that have been filed.
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6. Form 8-K
    Our current PRA estimate for Form 8-K is based on the use of the
report to disclose the occurrence of certain defined reportable events,
some of which are applicable to asset-backed securities. In the 2010
ABS Proposing Release, we noted three portions of the proposal which
would cause an increase in the number of reports on Form 8-K for ABS
issuers; however, we are not adopting any of those proposed
requirements.\1425\ We are amending Form 8-K to include a specific item
number under which static pool information that is filed on Form 8-K
must be reported. This amendment will assist investors in locating
static pool information that is incorporated by reference into the
prospectus. Because the static pool requirement is included in the
existing burden estimate for Form S-3, which we are transferring to the
new Form SF-3, we are not assigning any additional burden hours to the
Form 8-K for this new requirement.
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    \1425\ See Section X.B.5. of the 2010 ABS Proposing Release.
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7. Regulation S-K and Regulation S-T
    Regulation S-K, which includes the item requirements in Regulation
AB, contains the requirements for disclosure that an issuer must
provide in filings under both the Securities Act and the Exchange Act.
As noted above, Regulation S-T contains the requirements that govern
the electronic submission of documents.
    The new rules and rule amendments that we are adopting will result
in revisions to Regulation S-K and Regulation S-T. The collection of
information requirements, however, are reflected in the burden hours
estimated for the various Securities Act and Exchange Act forms related
to asset-backed issuers. The rules in Regulation S-K and Regulation S-T
do not impose any separate burden. Consistent with historical practice,
we have retained an estimate of one burden hour each to Regulation S-T
and Regulation S-K for administrative convenience.

E. Summary of Changes to Annual Burden of Compliance in Collection of
Information

    The table below illustrates the changes in annual compliance burden
in the collection of information in hours and costs for existing
reports and registration statements and for the new registration
statements and forms for asset-backed issuers. Bracketed numbers
indicate a decrease in the estimate.
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    \1426\ The current annual responses reflects the average number
of filings that the Commission has received from 2011 to 2013.

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                                       Current                              Decrease or                                   Decrease or
                                        annual       Final       Current    increase in     Final          Current        increase in         Final
                Form                  responses      annual       burden       burden       burden      professional     professional     professional
                                        \1426\     responses      hours        hours        hours           costs            costs            costs
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