takedown off an effective shelf registration statement, an ABS issuer
would be required to evaluate, as of ninety days after the end of the
depositor's fiscal year end, whether it continues to meet the
registrant requirements, which would be the same as our 2010 ABS
Proposal for Exchange Act reporting described above. In order to make
the provision more workable and to simplify the evaluation for shelf
compliance we are revising our proposal from a quarterly evaluation to
an annual evaluation.\108\ Under the re-proposal, to the extent the
depositor or any issuing entity previously established, directly or
indirectly, by the depositor or any affiliate of the depositor, is or
was at any time during the previous twelve months, required to comply
with the proposed new transaction requirements related to the
certification, credit risk manager and repurchase dispute resolution
provisions, and investor communication provision, with respect to a
previous offering of ABS involving the same asset class, such depositor
and each issuing entity must have filed on a timely basis, at the
required time for each takedown, all transaction agreements containing
the provisions that are required by the proposed transaction
requirements as well as all certifications.
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    \108\ Although we are revising our proposal, we emphasize that
failure to file the information required by the registrant
requirements would be a violation of our rules, and subject to
liability accordingly. Furthermore, failing to provide disclosure at
the required time periods may raise serious questions about whether
all required disclosure was provided to investors prior to investing
in the securities.
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    In response to commentators' concerns that the one-year penalty for
missed transaction requirements was too extreme, we are revising and
re-proposing to allow depositors and issuing entities to cure any
failure to meet the transaction requirements, or failure to file the
required certification or transaction agreements at the required time
for purposes of ABS shelf eligibility. Under the re-proposal, a
depositor and issuing entity could cure the deficiency if it
subsequently files the information that was required and after a
waiting period, it would be permitted to continue to use its shelf
registration statement.\109\ Under the proposed cure mechanism, the
depositor and issuing entity would be deemed to have met the registrant
requirements, for purposes of this Form, 90 days after the date all
required filings are filed.
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    \109\ Curing the deficiency would also allow the depositor, or
its affiliates to file a new registration statement, if it also
meets the other registrant requirements. See proposed General
Instruction I.A.1. to proposed Form SF-3.
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    For example, a depositor with a December 31 fiscal year end has an
effective shelf registration statement. On March 30, it evaluates
compliance with all registrant requirements under proposed Rule 401 (90
days after the last fiscal year end) and determines that it is in
compliance. The depositor then offers ABS and does not timely file the
required transaction agreements required to be filed on June 20. The
depositor would be able to continue to use its existing shelf until it
is required to perform the annual evaluation required by proposed Rule
401(g), on March 30 of the following year. After March 30 of Year 2 and
until June 20 of Year 2, the depositor would not be able to offer ABS
off of the shelf registration statement. Further, the depositor or its
affiliates would not be permitted to file a new shelf registration
statement after the missed filing on June 20, Year 1 because they could
not meet the registrant requirement of timely filing of the transaction
agreements containing the provisions required for any shelf offering
for the prior twelve months. But, if the depositor had cured the
defect, for example, on July 1 of Year 1, under the proposal, a new
registration statement could be filed 90 days after July 1 of Year 1
(or September 29 of Year 1), instead of waiting until June 20 of Year 2
(when it otherwise would meet the twelve month timely filing
requirement). Further, at the time of the next annual evaluation for
the old shelf (noted above as March 30 of Year 2), the depositor would
be deemed to have met the registrant requirements after 90 days after
it had cured the defect on July 1 of Year 1, and the depositor could
continue to use its old shelf registration statement (instead of
waiting until June 20 of Year 2, as noted above).
    Our approach is an attempt to strike a balance between encouraging
issuers' compliance with the proposed shelf transaction requirements
and commentator's concerns that the one-year penalty period was too
long.
Requests for Comment
    55. Should we add, as proposed, registrant requirements that would
require, as a condition to form eligibility, affiliated issuers of the
depositor that had offered securities of the same asset class that were
registered on Form SF-3 to have complied with the certification, credit
risk manager review and repurchase dispute resolution eligibility and
investor communication conditions that replace the investment grade
ratings

requirement? Will these requirements lead to better compliance by ABS
issuers with the new shelf eligibility conditions that we are
proposing? If not, what other mechanisms can we use to ensure
compliance?
    56. Is it appropriate to require, as proposed, that the
certifications and the transaction agreement(s) containing the credit
risk manager and repurchase dispute provisions and investor
communication provision be required to be filed pursuant to our
proposed shelf eligibility conditions and also filed on a timely basis?
    57. Should we revise Rule 401, as proposed, to require that as a
condition to continued use of an existing shelf registration statement
for takedowns, an issuer conduct a periodic evaluation of form
eligibility? If not, how should we approach the updating issue since
ABS issuers are not required to file amendments for purposes of Section
10(a)(3)?
    58. Should we require that the annual evaluation of all the
registrant requirements of affiliated issuers have been filed on a
timely basis be made as of the 90 days after the depositor's fiscal
year, as proposed? Should the evaluation be made on a different
timeframe, such as the last day of the most recent fiscal quarter,
consistent with our previous proposals?
    59. Should we include, as proposed, an ability to cure an issuer's
non-timely filing of the certification and agreements containing the
credit risk manager review and repurchase dispute resolution and
investor communication provisions? Should we require issuers to wait 90
days after curing the defect, as proposed, to be deemed to meet the
registrant requirements? Should the period be shorter (e.g., 30 or 45
days) or longer (e.g., 180 or 270 days)?

60. Should we require additional requirements for evaluating compliance
with registrant requirements, or an additional penalty for non-
compliance with the registrant requirements?
4. General Requests for Comment on Shelf Eligibility
    We request comment on our proposals for shelf-eligibility for
asset-backed securities.
    61. Are all of the proposed shelf eligibility conditions necessary?
Would one condition or a combination of fewer conditions be sufficient?
As noted above, the 2010 ABS Proposals included risk retention and
continued Exchange Act reporting as two of the four proposed
requirements for shelf eligibility. In light of the fact that the Risk
Retention proposals will apply to both registered and unregistered
transactions, and ABS issuers with Exchange Act reporting obligations
will continue to report without regard to shelf eligibility
requirements, should we require the proposed requirements for shelf
eligibility discussed above? Put another way, are risk retention and
continued Exchange Act reporting together, sufficient replacements for
the investment grade rating condition to eligibility for shelf
offerings, so that no other conditions are necessary or appropriate?
    62. We are also considering whether an additional or alternative
shelf eligibility condition based on previous offerings should be
included in our final rules. In this regard, would an ABS issuer having
sufficient experience in the ABS market be an appropriate criterion for
shelf registration? For example, would an additional or alternative
shelf eligibility condition that would restrict shelf eligibility to
depositors with a history of similar prior ABS issuances (e.g., a
requirement based on the number of past ABS transactions within the
same asset class and similar structure within a specified period of
time) be appropriate? What would be the economic impact of such a shelf
eligibility condition? Should such a shelf eligibility condition
require the registrant and its affiliates, as of a date within 60 days
prior to the filing of the registration statement, to have engaged in
at least three primary offerings of asset-backed securities in the last
three years, provided the following criteria are met: (i) At least one
of the previous offerings was registered under the Securities Act of
1933; (ii) the asset-backed securities issued in the previous offerings
are of the same asset class as the asset-backed securities registered
on the registration statement; and (iii) the structures of the
transactions of the previous offerings are similar to the structure of
each transaction registered on the registration statement. If so,
should the requirement be an additional shelf eligibility condition, or
should it replace one or more of the proposed conditions? Are the
criteria described above appropriate? In particular, should we use a
different measurement period than the 60 days prior to filing? Would a
three year look-back time period be appropriate, or should it be less
time (such as 2 years) or more time (such as 4 years)? What should be
the required minimum number of transactions? Should all the
transactions used for measuring be required to have been registered
under the Securities Act? Are the requirements related to the same
asset class and similar structure appropriate? Do we need to provide
guidance on what is a similar structure, and if so, what kind of
guidance? If private or offshore offerings are permitted to count for
purposes of this possible shelf eligibility condition, should we
require disclosure in the registration statement of these transactions
for the purpose of monitoring compliance with the shelf eligibility
condition? If so, what disclosure should be required? In order to
prevent parties that may otherwise fail this shelf eligibility
condition from simply using the registration statement of an
unaffiliated eligible depositor (e.g., rent-a-shelf transactions),
should the condition also require the registrant to be affiliated with
a sponsor and depositor in each of the previous transactions as well as
affiliated with a sponsor and depositor in the offerings conducted off
the shelf registration statement? Commentators are requested to provide
empirical data and other factual support for their views, if possible.
    63. Asset-backed issuers may rely on the exclusion from the
definition of investment company in Section 3(c)(5) of the Investment
Company Act rather than on Rule 3a-7 under the Investment Company
Act.\110\ Section 3(c)(5) was intended to exclude from the definition
of investment company certain factoring, discounting and mortgage
companies. However, Rule 3a-7 contains substantive conditions designed
to address, among other things, conflicts of interest concerning ABS
and Section 3(c)(5) does not contain the same substantive conditions.
Would it be appropriate to require, as an additional transaction
requirement for ABS shelf eligibility, that the ABS issuer of the
transaction meet the requirements of Rule 3a-7? We note that the
practical effect of such a requirement would be that transactions
excluded from the definition of

investment company under Section 3(c)(5) of the Investment Company Act
would not be eligible for shelf registration unless they satisfy Rule
3a-7. Would restricting shelf eligibility to those issuers that meet
the requirements of Rule 3a-7 give equal access to shelf for all
issuers of ABS across asset classes? Should we require disclosure of
the basis for the exclusion from the definition of investment company
in the prospectus?
---------------------------------------------------------------------------

    \110\ Section 3(c)(5) of the Investment Company Act excludes
from the definition of investment company any person who is not
engaged in the business of issuing redeemable securities, face-
amount certificates of the installment type or periodic payment plan
certificates, and who is primarily engaged in one or more of the
following businesses: (A) Purchasing or otherwise acquiring notes,
drafts, acceptances, open accounts receivable, and other obligations
representing part or all of the sales price of merchandise,
insurance and services; (B) making loans to manufacturers,
wholesalers and retailers of, and to prospective purchasers of,
specified merchandise, insurance, and services and (C) purchasing or
otherwise acquiring mortgages and other liens on and interests in
real estate. Certain asset-backed issuers, including those that
securitize retail automobile installment contracts, credit card
receivables, trade receivables, boat loans or equipment leases, have
sought to rely on the provisions of Section 3(c)(5)(A) or (B).
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III. Disclosure Requirements

A. Exhibits To Be Filed With Rule 424(h) Filing

    We are proposing to require ABS issuers to file copies of the
underlying transaction agreements, including all attached schedules,
and other agreements that are referenced (such as those containing
representations and warranties regarding the underlying assets), at the
same time as a preliminary prospectus that would be required under
proposed Rule 424(h).\111\
---------------------------------------------------------------------------

    \111\ See Section II. above and fn. 19. See also the 2010 ABS
Proposing Release at 23335.
---------------------------------------------------------------------------

    In the 2010 ABS Proposing Release, we proposed to revise the filing
deadlines in shelf offerings to provide investors with additional time
to analyze transaction-specific information prior to making an
investment decision. Under the proposed ABS shelf procedures, an ABS
issuer would be required to file a preliminary prospectus with the
Commission for each takedown off of the proposed new shelf registration
form for ABS (Form SF-3) at least five business days prior to the first
sale in the offering.\112\ We proposed to require that such information
be filed at least five business days before the first sale of
securities in the offering in an effort to balance the interest of ABS
issuers in quick access to the capital markets and the need of
investors to have more time to consider transaction-specific
information. Given many ABS investors' stated desire for more time to
consider the transaction and for more detailed information regarding
the pool assets, the proposed new filing deadlines were designed to
promote independent analysis of ABS by investors rather than reliance
on credit ratings. While commentators generally either supported \113\
or did not object to this proposed approach, some commentators asked
that we shorten the five-day period. For example, several commentators
generally suggested the period be reduced to two days.\114\ We have not
reached a conclusion on that aspect of the proposal and it remains
outstanding.
---------------------------------------------------------------------------

    \112\ We proposed new Rule 430D to provide the framework for
shelf registration of ABS offerings and related Rule 424(h) filing
requirements for a preliminary prospectus. Under proposed Rule 430D,
the Rule 424(h) preliminary prospectus must contain substantially
all the information for the specific ABS takedown previously omitted
from the prospectus filed as part of an effective registration
statement, except for pricing information. See the 2010 ABS
Proposing Release at 23335.
    \113\ See letters from AMI; California Public Employees'
Retirement System (CalPERS); CREFC; Rylee Houseknecht; Jamie L.
Larson; Investment Company Institute (ICI); AFL-CIO; CFA Institute;
Metlife; Prudential and Realpoint on the 2010 ABS Proposing Release.
    \114\ See letters from ABA; AmeriCredit; ASF; BOA; CNH;
Vanguard; Vehicle ABS Group; and Wells Fargo on the 2010 ABS
Proposing Release.
---------------------------------------------------------------------------

    Related to the proposal to require the preliminary prospectus be
made available in time to facilitate independent analysis by investors,
commentators on the 2010 ABS Proposal requested that investors also
have access to copies of the underlying agreements on a more timely
basis given the importance of the final documents to an investor's
understanding of the actual contractual provisions.\115\ In the staff's
experience with the filing of these documents, ABS issuers have delayed
filing such material agreements with the Commission until several days
or even weeks after the offering of securities off of a shelf
registration statement, even though these transaction agreements and
other documents provide important information regarding the terms of
the transactions, representations and warranties about the assets,
servicing terms, and many other rights that would be material to an
investor.\116\ In light of these concerns, we had proposed to amend
Item 1100(f) of Regulation AB \117\ to clarify the existing exhibit
filing requirements by making explicit that the exhibits filed with
respect to an ABS offering, registered on proposed Form SF-3, must be
on file and made part of the registration statement at the latest by
the date the final prospectus is required to be filed pursuant to Rule
424.\118\
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    \115\ See letter from CMBS investors on the 2010 ABS Proposing
Release (suggesting that the rules require that key disclosures,
including the pooling and servicing agreement, be made available to
investors during the marketing period so that investors have
adequate time to review prior to making an investment decision). See
also letter from Prudential on the 2010 ABS Proposing Release
(stating that last minute financial engineering may occur, thereby
contributing to poor understanding, and in some instances,
misunderstanding of the transaction).
    \116\ In the 2004 ABS Adopting Release we stated that consistent
with Item 601 of Regulation S-K, governing documents and material
agreements for an ABS offering such as the pooling and servicing
agreement, the indenture and related documents must be filed as an
exhibit.
    \117\ Item 1100(f) of Regulation AB allows ABS issuers to file
agreements or other documents as exhibits on Form 8-K and, in the
case of offerings on Form S-3, incorporate the exhibits by reference
instead of filing a post-effective amendment.
    \118\ We stated in the 2010 ABS Proposing Release that ABS shelf
offerings were designed to mirror non-shelf offerings in terms of
filing exhibits and final prospectuses. We also noted that the
filing requirements for Form S-3 are consistent with Form S-1
because all exhibits to Form S-1 must be filed by the time of
effectiveness. See 2010 ABS Proposing Release at 23388.
---------------------------------------------------------------------------

    As noted above, commentators urged that we should ensure that the
exhibits be available for investor review prior to making an investment
decision.\119\ In light of these concerns, we are re-proposing Item
1100(f) of Regulation AB to also require that the underlying
transaction documents, in substantially final form, be filed and made
part of the registration statement by the date the Rule 424(h)
prospectus is required to be filed. This requirement, if adopted, would
allow investors additional time to analyze the actual underlying
agreements containing the specific structure, assets, and contractual
rights regarding each transaction. If the exhibits filed with the Rule
424(h) prospectus remain unchanged at the time final prospectus under
Rule 424(b) is required to be filed, then an issuer would not be
required to re-file the same exhibits.\120\
---------------------------------------------------------------------------

    \119\ See fn. 116.
    \120\ Under this proposal, any change to the agreement could
only be minor. As we explained in the 2010 ABS Proposing Release, a
material change in the information provided in the Rule 424(h)
filing, other than offering price, would require a new Rule 424(h)
filing. See the 2010 ABS Proposing Release at 23335. Finalized
agreements at the time of the offering may be filed as provided by
Instruction 1 to Item 601 of Regulation S-K. The filing requirement
for an exhibit (other than opinions and consents) may be satisfied
by filing the final form of the document to be used; the final form
must be complete, except that prices, signatures and similar matters
may be omitted. See Elimination of Certain Pricing Amendments and
Revision of Prospectus Filing Procedures, Release No. 33-6714 (June
5, 1987) [52 FR 21252]. We also note that filing of final agreements
at the time the final prospectus is due will be after the time of
sale of the security for purposes of Rule 159 and Securities Act
Section 12(a)(2), and that information conveyed to the investor
after the time of sale will not be taken into account for purposes
of Section 12(a)(2) of the Securities Act. See Rule 159.
---------------------------------------------------------------------------

Request for Comment
    64. Is our proposed amendment to Item 1100(f) appropriate? Is there
any reason that exhibits, in substantially final form, could not be
filed by the time the preliminary prospectus is required to be filed
under proposed Rule 424(h)?
    65. Is it appropriate to require that exhibits be filed in
``substantially final form'' at the time of filing the Rule 424(h)
prospectus, as proposed? If we require something other than
``substantially final form'' what information should we require, and
what information may be omitted?

    66. Should we require the final form of the exhibits to be filed at
the same time as the Rule 424(b) prospectus, if the exhibits have not
changed since the 424(h) filing?
    67. One commentator also suggested that we require issuers provide
investors with a copy of the representations, warranties, remedies and
exceptions marked to show how it compares with model provisions
developed by the Commercial Real Estate Finance Council (CREFC).\121\
Should we require that issuers file as an exhibit a copy of the
representations, warranties, remedies and exceptions marked to show how
it compares to an industry developed model provisions? If so, should we
require that the industry developed model provisions be developed by an
industry group whose membership includes issuers, investors, and other
market participants? Do such model provisions exist for other asset
classes? Should we require that the marked copy be filed at the same
time as the Rule 424(h) prospectus? Should we require an updated marked
copy be filed at the same time as the Rule 424(b) prospectus if they
have not changed since the 424(h) filing?
---------------------------------------------------------------------------

    \121\ See letter from CMBS investors on the 2010 ABS Proposing
Release. CREFC is a trade organization for the commercial real
estate finance industry.
---------------------------------------------------------------------------

B. Requests for Comment on Asset-Level Information

1. Section 7(c) of the Securities Act
    Section 942(b) of the Act added Section 7(c) to the Securities Act
requiring the Commission to adopt regulations requiring an issuer of an
asset-backed security to disclose, for each tranche or class of
security, information regarding the assets backing that security.\122\
It specifies that in adopting regulations, the Commission shall:
---------------------------------------------------------------------------

    \122\ See Section 7(c) of the Securities Act, as added by
Section 942(b) of the Act.
---------------------------------------------------------------------------

    (A) Set standards for the format of the data provided by issuers of
an asset-backed security, which shall, to the extent feasible,
facilitate the comparison of such data across securities in similar
types of asset classes; and
    (B) Require issuers of asset-backed securities, at a minimum, to
disclose asset-level or loan-level data, if such data are necessary for
investors to independently perform due diligence including--
    (i) Data having unique identifiers relating to loan brokers and
originators;
    (ii) The nature and extent of the compensation of the broker or
originator of the assets backing the security; and
    (iii) The amount of risk retention by the originator and the
securitizer of such assets.\123\
---------------------------------------------------------------------------

    \123\ See Section 7(c)(2) of the Securities Act, as added by
Section 942(b) of the Act.
---------------------------------------------------------------------------

    In the 2010 ABS Proposing Release, to augment our current
principles-based pool-level disclosure requirements, we had proposed
new requirements to disclose asset-level information in prospectuses
and in periodic reports. We believe that our proposal for asset-level
data for registered offerings, which remains outstanding, would
implement the requirements of Section 7(c) because our proposal would
set standards that would facilitate the comparison of data across asset
classes, and within the same asset class. Further, our proposals
require issuers to disclose asset-level data, which we believe are
necessary for investors to independently perform due diligence.
    In the 2010 ABS Proposing Release, we explained that investors,
market participants, policy makers and others have increasingly noted
that asset-level information is essential to evaluating an asset-backed
security.\124\ We proposed to require, with some exceptions, that
prospectuses for public offerings of asset-backed securities and
ongoing Exchange Act reports contain specified asset-level information
about each of the assets in the pool.\125\ Because we believe that
issuers should provide transparent and comparable data, we proposed to
require asset-level information in a standardized format to be included
in the prospectus and periodic reports and filed on EDGAR. Our proposal
specifies and defines each item that must be disclosed for each asset
in the pool and requires that the asset-level information be provided
in a tagged data format using Extensible Markup Language (XML) in order
to facilitate data analysis, consistent with the requirements of
Section 7(c).\126\
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    \124\ See the 2010 ABS Proposing Release at 23355.
    \125\ We proposed that all asset classes, except for stranded
cost and credit cards issuers, provide asset-level data. For credit
card and charge card ABS, we proposed that issuers be required to
provide grouped account data. See 2010 ABS Proposing Release at
23355.
    \126\ By proposing to require the asset-level data file in XML,
a machine-readable language, we anticipate that users of the data
will be able to download the disclosure directly into spreadsheets
and databases, analyze it using commercial off-the-shelf software,
or use it within their own models in other software formats. As we
explained in the 2010 ABS Proposing Release, XML is an open standard
that defines or ``tags'' data using standard definitions. The term
``open standard'' is generally applied to technological
specifications that are widely available to the public, royalty-
free, at minimal or no cost. The tags establish a consistent
structure of identity and context. This consistent structure can be
recognized and processed by a variety of different software
applications. In the case of XML, software applications, such as
databases, financial reporting systems, and spreadsheets recognize
and process tagged information. Some issuers already file loan
schedules on EDGAR as part of the pooling and servicing exhibit or a
free writing prospectus. However, the data is currently filed on
EDGAR in ASCII or HTML, both of which do not facilitate data
analysis. See the 2010 ABS Proposing Release at 23374.
---------------------------------------------------------------------------

    Section 7(c) also requires that we require issuers of asset-backed
securities, at a minimum, to disclose asset-level or loan-level data,
if such data are necessary for investors to independently perform due
diligence, including data having unique identifiers relating to loan
brokers and originators. The 2010 ABS Proposal would require disclosure
of the name of the originator of an asset for all asset classes.\127\
If the asset is a residential mortgage, and a MERS number for the
originator is available, we proposed to require that the MERS number
for the originator be provided.\128\
---------------------------------------------------------------------------

    \127\ See proposed Item 1(a)(4) of Schedule L of Regulation AB
in the 2010 ABS Proposing Release.
    \128\ Mortgage Electronic Registration Systems, Inc. (MERS) is
affiliated with the Mortgage Industry Standards Maintenance
Organization (MISMO), a not-for profit subsidiary of the Mortgage
Bankers Association. MERS has developed a unique numbering system
and reporting packages to capture and report data at different times
during the life of the underlying residential or commercial loan.
---------------------------------------------------------------------------

    In addition, for residential mortgages only, we proposed that
issuers be required to disclose unique identifiers related to loan
originators and company, as required by the Secure and Fair Enforcement
for Mortgage Licensing Act of 2008, otherwise known as the NMLS
numbers.\129\ We note that the NMLS numbers for ``originator'' and
company refer to the individual and company taking the loan
application, which would include loan brokers and the company that the
broker works for.\130\

Therefore, we believe that our proposal to require NMLS numbers would
implement the requirements of Section 7(c) with respect to mortgages by
requiring a unique numerical identifier for a loan broker.
---------------------------------------------------------------------------

    \129\ See proposed Items 2(a)(11) and (12) of Schedule L of
Regulation AB in the 2010 ABS Proposing Release. In 2008, Congress
passed The Secure and Fair Enforcement for Mortgage Licensing Act of
2008 (the ``SAFE Act'') which required the creation of a Nationwide
Mortgage Licensing System and Registry and unique identifiers for
loan originators and company (NMLS numbers). The SAFE Act is
designed to enhance consumer protection and reduce fraud by
encouraging states to establish minimum standards for the licensing
and registration of state-licensed mortgage loan originators and for
the Conference of State Bank Supervisors (CSBS) and the American
Association of Residential Mortgage Regulators (AARMR) to establish
and maintain a nationwide mortgage licensing system and registry for
the residential mortgage industry. The SAFE Act was enacted as part
of the Housing and Economic Recovery Act of 2008, Public Law 110-
289, Division A, Title V, sections 1501-1517, 122 Stat. 2654, 2810-
2824 (July 30, 2008), codified at 12 U.S.C. 5101-5116.
    \130\ In contrast, note that for purposes of Regulation AB, we
have generally interpreted an originator to be the person or entity
that extends the credit to the borrower. See the 2004 Adopting
Release at 1538.
---------------------------------------------------------------------------

    We are unaware of any standardized unique identifying system used
for the purpose of identifying brokers or originators of other asset
classes, across all asset classes or within an asset class.\131\
Further, we believe that asset classes, other than RMBS and CMBS, do
not typically use brokers to originate loans; however we request
comment on whether brokers are used in other asset classes. We are also
requesting comment on whether unique identifiers for loan brokers and
originators exist for other asset classes (or a system of unique
identifiers could reasonably be established), and if so, whether the
data is necessary to independently perform due diligence for other
asset classes.
---------------------------------------------------------------------------

    \131\ See also Joint Study on the Feasibility of Mandating
Algorithmic Descriptions for Derivatives (April 7, 2011), available
at http://www.sec.gov/news/studies/2011/719b-study.pdf (also
concluding that before mandating the use of standardized
descriptions for all derivatives a universal entity identifier and
product or instrument identifiers, among other things, are needed).
---------------------------------------------------------------------------

    Section 7(c) also requires that we require issuers to disclose
asset-level data on the nature and extent of the compensation of the
broker or originator of the assets backing the security, if such data
are necessary for investors to independently perform due diligence. The
2010 ABS Proposals did not include requirements to provide asset-level
data regarding fees to brokers or originators. However, with respect to
RMBS, our proposal did include an asset-level disclosure requirement to
indicate whether a broker originated a loan.\132\ In addition,
disclosure of the origination channel for each loan is also required
under the 2010 ABS Proposals (i.e., was the loan originated through a
bank's own retail operation, a broker, a correspondent lender,
etc.).\133\ We are not proposing asset-level disclosure requirements
for broker's compensation at this time because we believe that the
proposed data points may provide the information necessary to perform
due diligence on an RMBS pool with respect to broker involvement
because investors can analyze the method in which a loan was
underwritten based on these data points. We request comment on whether
the specific compensation paid to brokers or originators would be
useful in performing due diligence for RMBS and for other asset classes
and should be required under our final rules. In light of the fact that
compensation may be paid in many different forms and calculated in
different ways we are requesting comment about the forms of
compensation. We also request comment on how to define these data
points so that the information provided is standardized and comparable
across asset classes or within an asset class.
---------------------------------------------------------------------------

    \132\ See proposed Item 2(a)(9) of Schedule L of Regulation AB
in the 2010 ABS Proposing Release.
    \133\ See proposed Item 2(a)(10) of Schedule L of Regulation AB
in the 2010 ABS Proposing Release.
---------------------------------------------------------------------------

    In addition, Section 7(c) requires that we require issuers to
disclose asset-level data related to the amount of risk retention by
the originator and securitizer of such assets, if such data are
necessary for investors to independently perform due diligence. The
2010 ABS Proposals include a requirement to disclose any interest the
sponsor has retained in the transaction, including the amount and
nature of that interest.\134\ Also, as discussed above, the joint
regulators proposed risk retention requirements as required by Section
15G of the Exchange Act and that proposal also includes disclosure
requirements concerning the risk retention option selected.\135\ The
outstanding Risk Retention Proposals do not require originators to
retain risk in individual assets of the pool.\136\ In light of the
outstanding Risk Retention Proposals and 2010 ABS Proposal for sponsor
risk retention disclosure, at this time we are not proposing additional
disclosure requirements but we are requesting comment on whether risk
retention disclosure on an asset-level basis is necessary for investors
to independently perform due diligence.
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    \134\ See proposed Item 1104(e) of Regulation AB in the 2010 ABS
Proposing Release.
    \135\ See fn. 12.
    \136\ See the Risk Retention Proposing Release at 24114.
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Requests for Comment
    68. Do the 2010 ABS Proposals implement Section 7(c) effectively?
Are there any changes or additions that would better implement Section
7(c)?
    69. Is the proposed XML format an adequate standard for the format
of data that, to the extent feasible, facilitates the comparison of
data across securities in similar types of asset classes? If not, how
could it be improved?
    70. Are unique identifiers for loan brokers and/or originators
necessary to permit investors to independently perform due diligence
for asset classes other than RMBS or CMBS? If so, is there a unique
system of identifiers for brokers and originators for other asset
classes?
    71. Do asset classes other than RMBS or CMBS use brokers?
    72. Would it be appropriate to require an originator's tax ID
number, RSSD ID number, FDIC Certificate Number or Routing Transit
Number (RTN) as a unique identifier? \137\ Would any of these
identifiers be an appropriate unique identifier across asset classes?
Do originators have multiple tax ID numbers, RSSD IDs, FDIC Certificate
Numbers, or RTNs? If so, how should we specify which one to use? With
respect to tax ID numbers, should we specify that social security
numbers should not be provided? Are there any other existing unique
identifiers that would be appropriate for these purposes? Should new
identification systems be developed? If so, by whom?
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    \137\ A tax ID number is a unique number assigned by the
Internal Revenue Service. An RSSD ID is a unique identifying number
assigned by the Federal Reserve for all financial institutions, main
offices, as well as branches. An FDIC Certification Number is a
unique number assigned by the FDIC used to identify institutions and
to issue insurance certificates. An RTN, or a routing transit
number, is a nine-digit unique bank identifier originally designed
by the American Bankers Association.
---------------------------------------------------------------------------

    73. Is asset-level disclosure related to the nature and extent of
the compensation of the broker or originator necessary to independently
perform due diligence across all asset classes?
    74. How are the brokers and originators compensated? Should we
require the fee to be expressed as a dollar amount, a percentage or
both? If percentage, what should be the basis for calculating the
percentage? Is it appropriate for RMBS or CMBS only? Any other asset
classes?
    75. How should the asset-level data points for broker or originator
compensation be defined so that the information provided will be
standardized and comparable across asset classes or within an asset
class?
    76. Is it more useful if the broker or originator compensation
disclosure is provided in a format other than at the asset-level? \138\
Could it be provided in

the prospectus in narrative form or some other tabular format?
---------------------------------------------------------------------------

    \138\ The Federal Deposit Insurance Corporation (``FDIC'')
recently amended its ``safe harbor'' rule from the FDIC's statutory
authority to disaffirm or repudiate contracts of an insured
depository institution (``IDI'') with respect to transfers of
financial assets by an IDI in connection with a securitization or a
participation (the ``FDIC Safe Harbor Rule''). Under the FDIC Safe
Harbor Rule the securitization documents must require disclosure to
investors of the nature and amount of compensation paid to any
mortgage or other broker, noting that this disclosure should enable
investors to assess potential conflicts of interests and how the
compensation structure affects the quality of the assets securitized
or the securitization as a whole. We note, however, that the FDIC
Safe Harbor Rule requires disclosure of compensation for RMBS only.
See Federal Deposit Insurance Corporation, Treatment by the Federal
Deposit Insurance Corporation as Conservator or Receiver of
Financial Assets Transferred by an Insured Depository Institution in
Connection With a Securitization or Participation After September
30, 2010 (Sep. 27, 2010) [70 FR 60287].
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    77. Is the amount of risk retention, on an asset-level basis,
necessary to independently perform due diligence? If so, how should we
require it be calculated in light of the outstanding Risk Retention
Proposal requiring risk retention in the securities and not the asset?
Should we require the amount of risk retention be expressed as a dollar
amount, a percentage or both? If percentage, what should be the basis
for calculating the percentage?
    78. Is it more useful to provide disclosure regarding risk
retention in a format other than asset-level? Could it be provided in
the prospectus in a narrative form or some other tabular format? Is the
2010 ABS Proposal to require disclosure of any interest the sponsor has
retained in the transaction, sufficient to address the purpose of the
asset-level risk retention disclosure requirements in Section 7(c)?
    79. In light of the joint Risk Retention Proposals, and the
servicing standards included in the proposal, we are requesting comment
on whether additional data points related to loss mitigation and RMBS
should be required.\139\ In the case of borrower default, most pooling
and servicing agreements require a servicer, among other things, to
take loss mitigation actions in the event the net present value (NPV)
of loss mitigation exceeds the estimated NPV of recovery through
foreclosure. Should the estimated NPV in both cases be required to be
disclosed as an asset-level data point? Should the method of
calculation be required to be disclosed as an asset-level data point?
Are there standard methods of calculating NPV? Are the formulas for
calculating NPV included in the underlying transaction agreements? If
not, who determines the method used and should that method be required
to be disclosed? Should the assumptions used be required to be
disclosed? If not, how can an investor evaluate the NPV? Is it
appropriate to require disclosure of the method of calculation and
assumptions on an asset-level with Schedule L? Or is it more
appropriate to require the disclosure in some other form, such as in
narrative form within a periodic report on Form 10-D or Form 8-K?
---------------------------------------------------------------------------

    \139\ See the Risk Retention Proposing Release at 24127.
---------------------------------------------------------------------------

    80. Also related to loss mitigation, should we require additional
data points related to compensation paid to servicers related to an
individual loan? The 2010 ABS Proposals included certain asset-level
data point requirements related to fees earned by the servicer (e.g.,
servicing fees claimed and performance incentive fees).\140\ Are there
other ways that servicers are compensated with respect to loss
mitigation? Are there any fees that servicers or their affiliates may
earn related to loss mitigation of a particular asset? Are there any
fees paid to any other parties related to loss mitigation of a
particular asset? If so, should we require disclosure of those fees,
even if the fees are not paid directly through the issuing entity?
Should that disclosure be provided on Schedule L-D, or within the Form
10-D in a narrative form, or both? Would it be appropriate to require
this type of disclosure across asset classes? Or should it only be
required for certain asset classes, such as RMBS and CMBS?
---------------------------------------------------------------------------

    \140\ See proposed Item 2(m)(1)(iii) and Item 2(m)(1)(xvi) of
Schedule L-D for RMBS in the 2010 ABS Proposing Release.
---------------------------------------------------------------------------

    As we noted in the 2010 ABS Proposing Release, we are sensitive to
the possibility that certain asset-level disclosure may raise concerns
about the personal privacy of the underlying obligors. In particular,
we noted that data points requiring disclosure about the geographic
location of the obligor or the collateralized property, credit scores,
income and debt may raise privacy concerns. However, information about
credit scores, employment status and income would permit investors to
perform better credit analysis of the underlying assets. In light of
privacy concerns, instead of requiring issuers to disclose a specific
location, credit score, or exact income and debt amounts, we proposed
ranges, or categories of coded responses.\141\ Several commentators
noted that our asset-level requirements, as proposed, would still raise
privacy concerns.\142\ Those commentators were generally concerned that
asset-level disclosures, despite our attempts to require that certain
information be provided in ranges (instead of exact amounts), would not
mitigate the possibility that information, including ``personally
identifiable financial information'' or information that would
constitute a ``consumer report'' \143\ could be linked to an obligor on
an underlying asset.\144\ On the other hand, several commentators
suggested that asset-level data should be required, and some
commentators specifically noted that exact data points, instead of
ranges, are needed to evaluate risk and appropriately price the
securities.\145\ In light of comment letters received and the
requirements of new Section 7(c) of the Securities Act, we are
soliciting additional comment on privacy concerns raised by the
proposed asset-level disclosure requirements.
---------------------------------------------------------------------------

    \141\ For instance, instead of exact zip code, we proposed that
issuers provide an MSA code, a regional geographic locator. For
asset-level disclosure data points that require disclosure of
obligor credit scores, we proposed coded responses that represent
ranges of credit scores (e.g., 500-549, 550-599, etc.). The ranges
were based on the ranges that some issuers already provide in pool-
level disclosure. For monthly income and debt ranges, we developed
the ranges based on a review of statistical reporting by other
governmental agencies (e.g., $1,000-$1,499, $1500-$1,999, etc.). See
2010 ABS Proposing Release at 23357.
    \142\ See, e.g., letters from ABA, Consumers Union, MBA, Vehicle
ABS Group, and World Privacy Forum.
    \143\ Personally identifiable financial information generally
means any information: that a consumer provides to obtain a
financial product or service; about a consumer resulting from any
transaction involving a financial product or service; or is
otherwise obtained about a consumer in connection with providing a
financial product or service to that consumer. See Rule 3(u)(1) of
Regulation S-P [17 CFR 248.3(u)(1)]. A consumer report, as defined
in the Fair Credit Reporting Act, in general means any information
about a consumer bearing on his/her credit or other personal
characteristics which will be used to establish a consumer's
eligibility for credit, employment and other authorized purposes
under the statute. [15 U.S.C. 1681a].
    \144\ Commentators were also concerned that it may be possible
to identify an individual obligor by matching asset-level data about
the underlying property or asset with data available through other
public or private sources about assets and their owners (a process
known as ``reverse engineering''). If an obligor was identified,
then the obligor's non-public personal financial status would be
discoverable. See, e.g., letter from ABA on the 2010 ABS Proposing
Release (explaining concerns related to the goals of the Gramm-
Leach-Bliley Act to limit disclosure of personal financial
information for marketing purposes without giving individuals an
opportunity to opt out of the use of such information).
    \145\ See letters on the 2010 ABS Release from ASF (requesting
disclosure of exact credit score and noting that requiring ranges
would be a step back in terms of transparency), Interactive Data
(noting that asset-level granularity is essential for robust
evaluation of loss, default and prepayment risk associated with
RMBS); Prudential (suggesting that ranges of FICO score bands are
not sufficient to appreciate the linkages between collateral
characteristics); and Wells Fargo (expressing concern that
restricting information available to investors could result in
substantially lower pricing for new RMBS offerings).
---------------------------------------------------------------------------

Request for Comment
    81. How should we require asset-level data, both initially and on
an ongoing basis, to implement Section 7(c) effectively, yet also
address commentators' privacy concerns?
    82. What particular data elements could be revised or eliminated
for each particular asset class in order to address commentator's
privacy concerns, yet still enable an investor to independently perform
due diligence? For instance, if we do not require information about an
obligor's credit score and income, while still requiring the other
proposed asset data points, are concerns about obligor privacy
alleviated while also

implementing the requirements of Section 7(c)?
    83. Would it be appropriate to require an obligor's credit score
and income be provided on a grouped basis in a format similar to our
credit card proposal in the 2010 ABS Proposing Release,\146\ in
addition to requiring all of the other proposed asset-level data points
with the prospectus? What would be appropriate groupings (i.e., should
the columns or ranges be different than our credit card proposal)?
Would that approach alleviate privacy concerns and also implement the
requirements of Section 7(c)?
---------------------------------------------------------------------------

    \146\ The 2010 ABS Proposals proposed that issuers of ABS backed
by credit cards provide disclosure more granular than pool-level
disclosure by creating ``grouped account data.'' As we explain the
2010 ABS Proposing Release, grouped account data would be created by
compressing the underlying asset-level data into combinations of
standardized distributional groups using asset-level characteristics
and providing specified data about these groups. Like the asset-
level data proposals, the grouped account data would be provided in
XML to facilitate data analysis. See the 2010 ABS Proposing Release
at 23372.
---------------------------------------------------------------------------

    84. Would any of these approaches be appropriate for RMBS, as well
as other asset classes?
    85. Are there other ways to present data that is useful to
investors but helps to address privacy concerns? How else can we
implement Section 7(c) and also address commentators' privacy concerns
related to asset-level reporting?
2. Additional Requests for Comment on Asset-Level Data
    As discussed above, in the 2010 ABS Proposing Release, we proposed
to require asset-level disclosures for ABS backed by residential
mortgages; commercial mortgages; automobile loans or leases; equipment
loans or leases; student loans; floorplan financings; corporate debt;
and resecuritizations. For ABS backed by credit and charge card
receivables we proposed requiring disclosure of grouped account data in
lieu of asset-level data. We received many helpful and detailed
suggestions regarding many of the proposed asset data points. We
received a mixed response to our proposal, with some commentators
supporting asset-level disclosure across asset classes and some
commentators suggesting that asset-level data would not be appropriate.
For several asset classes we received various recommendations for
either grouped account disclosures or grouped account and pool-level
disclosures in lieu of asset-level disclosures.\147\ Some of the
letters included detailed suggestions for group data. We will consider
these letters along with all the letters on the original proposal. We
have at this time made no determination regarding the final rules for
any asset class. However for two discrete asset classes, namely
Equipment ABS \148\ and Equipment Floorplan ABS,\149\ we are requesting
more information on possible data points.
---------------------------------------------------------------------------

    \147\ See, e.g., letters on the 2010 ABS Proposing Release from
ASF's auto ABS issuer members and certain investor members
(submitting a recommendation for grouped account and pool-level
disclosures for ABS backed by auto loans and leases); ASF issuer and
investor members (submitting a recommendation for grouped account
disclosures for auto floorplan ABS); Sallie Mae (submitting an
``aggregated and grouped representative line'' proposal for ABS
backed by student loans).
    \148\ For purposes of this discussion, we refer to ABS backed by
equipment loans and leases as ``Equipment ABS.''
    \149\ For purposes of this discussion, we refer to ABS backed by
equipment floorplan financings as ``Equipment Floorplan ABS.''
---------------------------------------------------------------------------

    For Equipment ABS, our proposal to require asset-level disclosure,
like other asset classes, received a mixed response from commentators.
Some commentators supported asset-level data for Equipment ABS, while
others suggested that asset-level data was not appropriate.\150\ The
Captive Equipment ABS Issuer Group, CNH, ELFA and Navistar each
suggested that asset-level data would create privacy issues, risk
dissemination of competitively sensitive information and increase
costs. The Captive Equipment ABS Issuer Group, CNH and ELFA also
suggested that asset-level data goes beyond what investors need or
require for Equipment ABS. Some commentators individually recommended
that Equipment ABS issuers should be permitted to present grouped
account disclosure similar to what we proposed for credit and charge
card issuers. CNH and Navistar also suggested that some of the proposed
asset-level data points are inapplicable to Equipment ABS.
---------------------------------------------------------------------------

    \150\ See, e.g., letters on the 2010 ABS Proposing Release from
MetLife and SIFMA (investors) (each letter suggesting support for
asset-level disclosures and revisions to the Commission's asset-
level proposal for Equipment ABS); CalPers (expressing general
support for asset-level disclosures for Equipment ABS). But see
letters on the 2010 ABS Release from CNH, Navistar Financial
Corporation (Navistar) and Equipment Leasing and Financing
Association (ELFA) and from a group of five captive equipment ABS
issuers (Captive Equipment ABS Issuer Group) (each suggesting that
asset-level data was not appropriate for Equipment ABS).
---------------------------------------------------------------------------

    We appreciate that Equipment ABS may share some characteristics
with other asset classes for which commentators have suggested grouped
account data may be appropriate. For example, commentators for the Auto
ABS asset class \151\ suggested grouped data was more appropriate due
to the privacy and competition concerns, and other concerns, raised by
asset-level disclosures,\152\ and one of these commentators submitted a
grouped data and pool-level disclosure format for the Commission to
consider as an alternative to asset-level reporting.\153\ Our proposal
did not include grouped account data for Equipment ABS, and it is
unclear whether the suggestions we received on a possible grouped
account approach for this asset class continued to be supported by
commentators based on the comments received.\154\ A group of issuers
through a trade association submitted a suggestion for standardized
pool-level disclosures, but we preliminarily believe that more granular
disclosure--either asset-level or grouped account data--is appropriate
at the time of offering and on an ongoing basis for Equipment ABS than
provided by only pool-level disclosures.\155\ In order to better
analyze comments received and formulate the appropriate disclosure
requirements for Equipment ABS, we request additional comment below.
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    \151\ For purposes of this discussion, we refer to ABS backed by
auto loans and leases as ``Auto ABS.''
    \152\ See letters from Americredit, ASF (auto ABS issuers),
Vehicle ABS Group on the 2010 ABS Proposing Release.
    \153\ See letter on the 2010 ABS Proposing Release from ASF's
auto ABS issuer members and certain investors members. The auto ABS
issuer members and certain investor members submitted a
recommendation for grouped account and pool-level disclosures for
ABS backed by auto loans and leases. The recommendation suggested
that at the time of an Auto ABS offering and monthly thereafter an
issuer would provide statistical information about the underlying
pool in the form of grouped-asset representative data lines and
prescribed stratification tables.
    \154\ Navistar submitted a grouped account disclosure proposal
for Equipment ABS, but Navistar subsequently was a signatory to a
standardized pool-level format submitted by the Captive Equipment
ABS Issuer Group. See letters about the 2010 ABS Proposing Release
from Navistar and the Captive Equipment ABS Issuer Group (located in
the memorandum to file dated March 8, 2011 covering the staff's
meeting with members of the Financial Services Roundtable). It is
unclear in light of their participation in the Captive Equipment ABS
Issuer Group letter whether Navistar's grouped account suggestion
still stands. Also, the Captive Equipment ABS Issuer Group submitted
in their letter dated December 13, 2010 (located in the memorandum
to filed dated December 15, 2010 covering the staff's meeting with
members of the Roundtable) a grouped data proposal. However, as
noted above, in March 2011 the Captive Equipment ABS Issuer Group
later recommended standardized pool-level disclosures.
    \155\ See letter regarding the 2010 ABS Proposing Release from
members the Captive Equipment ABS Issuer Group contained in the
memorandum to file dated March 8, 2011 (suggesting that their
recommended pool-level disclosure format was based on feedback they
received from investors. However, we did not receive any comment
letters from investors that supported this position).
---------------------------------------------------------------------------

Request for Comment
    86. Is it possible to require asset-level data, both initially and
on an ongoing

basis, and address commentators' privacy and competitive concerns
applicable to the Equipment ABS sector? What particular data elements
would need to be revised or eliminated?
    87. Is asset-level data necessary for investors to independently
perform due diligence for Equipment ABS? \156\ Or would a grouped
account disclosure requirement along with pool-level disclosures be
sufficient for investors to independently perform due diligence and
also address commentators' privacy and competition concerns? If so,
would it be appropriate to require for Equipment ABS similar disclosure
requirements that were recommended by commentators for Auto ABS? \157\
---------------------------------------------------------------------------

    \156\ See Section 7(c) of the Securities Act.
    \157\ See letter on the 2010 ABS Proposing Release from ASF's
auto ABS issuer members and certain investors members (submitting a
recommendation for grouped account and pool-level disclosures for
ABS backed by auto loans and leases.)
---------------------------------------------------------------------------

    88. Could the grouped account and pool-level disclosures that
commentators recommended for initial and ongoing reporting of Auto ABS
be used for Equipment ABS? Would commentators' recommended disclosure
requirements for Auto ABS need to be altered to fit the Equipment ABS
sector? If so, how would it need to change? Is there a more appropriate
grouped account format for Equipment ABS? Please be specific in your
response.
    For Equipment Floorplan ABS, some commentators suggested that
asset-level data was not appropriate.\158\ We recognize that Equipment
Floorplan ABS, as revolving assets, may share some characteristics with
other asset classes for which grouped account data may be appropriate;
for instance, credit cards are typically structured as revolving asset
master trusts and Equipment Floorplan ABS are also typically structured
as revolving asset master trusts. Like Equipment ABS, however, we did
not receive a recommendation for a grouped account data approach.\159\
A group of issuers through a trade association recommended that we
require standardized pool-level disclosures, but we preliminarily
believe that more granular disclosure is appropriate at the time of
offering and on an ongoing basis than is provided by only pool-level
disclosures.\160\ In order to better analyze comments and formulate the
appropriate disclosure requirements for Equipment Floorplan ABS, we
request additional comment below.
---------------------------------------------------------------------------

    \158\ See letters from Captive Equipment ABS Issuer Group, CNH
and Navistar on the 2010 ABS Proposing Release (expressing concerns
that asset-level reporting for floorplan receivables ABS was not
appropriate due to obligor privacy concerns, concerns over the
release of proprietary information and increased costs.)
    \159\ Navistar expressed support in their comment letter for the
floorplan grouped data disclosure proposal proposed in a letter from
the Vehicle ABS Group. See letters from Navistar and the Vehicle ABS
Group about the 2010 ABS Proposing Release. However, the Vehicle ABS
Group later withdrew support for their recommendation in favor of
the grouped account disclosure recommended by ASF's issuer and
investor members for ABS backed by auto floorplans. See letter from
the Vehicle ABS Group about the 2010 ABS Release dated November 8,
2010. ASF submitted a grouped account recommendation for vehicle
floorplan ABS, but it was not clear that this proposal covered
Equipment Floorplan ABS. See the letter on the 2010 ABS Proposing
Release from ASF issuer and investor members (submitting a
recommendation for grouped account disclosures for auto floorplan
ABS).
    \160\ See letter regarding the 2010 ABS Proposing Release from
members the Captive Equipment ABS Issuer Group contained in the
memorandum to file dated March 8, 2011 (suggesting that their
recommended pool-level disclosure format was based on feedback they
received from investors. However, we did not receive any comment
letters from investors that supported this position).
---------------------------------------------------------------------------

Request for Comment
    89. Is it possible to require asset-level data, both initially and
on an ongoing basis, and address commentators' privacy and competitive
concerns applicable to the Equipment Floorplan ABS sector? What
particular data elements would need to be revised or eliminated?
    90. Is asset-level data necessary for investors to independently
perform due diligence for Equipment Floorplan ABS? Or would a grouped
account disclosure requirement be sufficient for investors to
independently perform due diligence and also address commentator's
privacy and competition concerns? If so, would it be appropriate to
require for Equipment Floorplan ABS \161\ similar disclosure
requirements that were recommended for Auto Floorplan ABS? \162\ Would
it resolve commentators' privacy and competitive concerns?
---------------------------------------------------------------------------

    \161\ See letter from ASF on the auto sector setting forth the
alternative disclosure regime recommended by ASF's auto ABS grouped-
asset investor members and issuer members.
    \162\ For purposes of this discussion, we refer to ABS backed by
auto floorplans as ``Auto Floorplan ABS.''
---------------------------------------------------------------------------

    91. Could the grouped account disclosures that commentators
recommended for initial and ongoing reporting for Auto Floorplan ABS
also be used for Equipment Floorplan ABS? Would commentators'
recommended disclosure requirements for Auto Floorplan ABS need to be
altered to fit the Equipment Floorplan ABS sector? If so, how would it
need to change? Is there a more appropriate grouped account format for
Equipment Floorplan ABS? Please be specific in your response.
3. Additional Requests for Comment on When to Require Schedule L
    In our 2010 ABS Proposing Release under our proposed requirements
for when asset-level data would be required in a prospectus, we
proposed to require that issuers provide for each asset in the pool all
of the asset-level data points enumerated in proposed Schedule L of
Regulation AB as of a recent practicable date, defined as the
``measurement date,'' at the time of a Rule 424(h) prospectus.\163\ We
also proposed that an updated Schedule L, as of the cut-off date for
the securitization, be provided with the final prospectus under Rule
424(b). Finally, we proposed that if issuers are required to report
changes to the pool under Item 6.05 of Form 8-K, then an updated
Schedule L would be required.\164\
---------------------------------------------------------------------------

    \163\ See proposed Item 1111A of Regulation AB and the 2010 ABS
Proposing Release at 23356.
    \164\ In footnote 235 of the 2010 ABS Proposing Release we
stated that if a new asset is added to the pool during the reporting
period, an issuer would be required to provide the asset-level
information for each additional asset as required by our proposed
revisions to both Item 1111 of Regulation AB and Item 6.05 of Form
8-K. See the 2010 ABS Proposing Release at 23356.
---------------------------------------------------------------------------

    Under our proposed revisions to Item 6.05 of Form 8-K, however, we
proposed that a new Schedule L be required to be filed if any material
pool characteristic of the actual asset pool at the time of issuance of
the asset backed securities differs by 1% or more than the description
of the asset pool in the prospectus filed for the offering pursuant to
Securities Act Rule 424.\165\ In our discussion of asset-level ongoing
reporting requirements, we stated that if assets are added to the pool
during the reporting period, either through prefunding periods,
revolving periods or substitution, disclosure would be required under
our proposed revisions to Item 6.05 on Form 8-K along with the Schedule
L data contained in proposed Item 1111A of Regulation AB.\166\
---------------------------------------------------------------------------

    \165\ See the 2010 ABS Proposing Release at 23392. As proposed,
if any material pool characteristic of the actual asset pool at the
time of issuance of the asset backed securities differs by 1% or
more than the description of the asset pool in the prospectus filed
for the offering pursuant to Securities Act Rule 424 an issuer would
be required to file an Item 6.05 of Form 8-K and provide the
disclosures required under Item 1111 and Item 1112 of Regulation AB.
Under the proposed Item 1111(h) of Regulation AB issuers would be
required to provide a Schedule L. In addition, the item, as proposed
to be revised, also requires a description of the changes that were
made to the asset pool, including the number of assets substituted
or added to the asset pool.
    \166\ See the 2010 ABS Proposing Release at 23368.
---------------------------------------------------------------------------

    One investor, in response to our 2010 ABS Proposing Release,
recommended that if assets are added to the pool through prefunding
periods or revolving periods during the month a new

Schedule L should be provided.\167\ This commentator suggested that
such a requirement will allow investors to evaluate the risk layering
introduced by any new collateral that is added to securitizations after
issuance. This comment seemed to indicate that it was not clear an Item
6.05 Form 8-K was required when prefunding or revolving assets
increased or changed the pool by 1% or more, although that was the
intention of the language in the proposal. Therefore, we are requesting
additional comment to determine whether we should clarify this proposed
requirement by specifying in Item 6.05 that the filing of a Schedule L
is required when assets are added to the pool after the issuance of the
securities, either through prefunding periods, revolving periods or
substitution and the triggers in that item are met.
---------------------------------------------------------------------------

    \167\ See letter from Prudential (suggesting that for
securitizations with prefunding periods or revolving transactions a
new Schedule L should be filed monthly when new collateral is
added.)
---------------------------------------------------------------------------

Request for Comment
    92. Should we specify in Item 6.05 of Form 8-K that a new Schedule
L must be filed when assets are added to the pool after issuance,
either through prefunding periods, revolving periods or substitution
and the triggers in that item are met?
    93. Instead, should we require that filing of a new Schedule L be
triggered when assets are added to the pool during a month,
distribution period or some other timeframe?
    94. Rather than require that Schedule L be filed with or as an
exhibit to a current report on Form 8-K, under Item 6.05, should it be
required to be filed under a new requirement as an exhibit to Form 10-
D? Please be specific in your response.
    95. Should the Schedule L data include information about all assets
in the pool, including the new assets? If so, should we clarify in an
instruction this will just be repeating the original schedule or should
we require that it be updated? Could any of the information be updated?
If so, should we require that? Or should Schedule L data only be
required for the assets added during the reporting period?
    96. Could investors evaluate risk layering introduced by new assets
if a new Schedule L is required only for the new assets added during
the relevant period?
    97. Current disclosure requirements under Item 1121(b) of
Regulation AB require that during a prefunding or revolving period, or
if there has been a new issuance of asset-backed securities backed by
the same pool under a master trust, during the fiscal year of the
issuing entity, updated pool composition information in the Form 10-D
report is required to be provided in the last required distribution
report of the fiscal year of the issuing entity in accordance with
Items 1110, 1111 and 1112 of Regulation AB.\168\ If, as proposed in the
2010 ABS Proposing Release, updated asset-level information would be
required to be provided with an Item 6.05 Form 8-K when prefunding or
revolving assets change the pool by 1% or more, would the information
required by Item 1121(b) be necessary? Should Item 1121(b) be revised
to specifically require updated asset-level information be provided in
the last required distribution report of the fiscal year of the issuing
entity?
---------------------------------------------------------------------------

    \168\ Also, updated information is required in the first Form
10-D report for the period in which the prefunding or revolving
period ends (if applicable).
---------------------------------------------------------------------------

4. Additional Requests for Comment on Privately-Issued Structured
Finance Products
    In the 2010 ABS Proposing Release, we proposed amendments to our
safe harbors for exempt offerings and resales and new related rules
regarding the information that must be made available to investors in
privately-issued asset-backed securities.\169\ We proposed to require
that, in order for a reseller of a ``structured finance product,'' as
proposed to be defined,\170\ to sell a security in reliance on
Securities Act Rule 144A,\171\ or in order for an issuer of a
structured finance product to sell a security in reliance on Rule 506
of Regulation D,\172\ certain conditions had to be met.\173\
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    \169\ See the 2010 ABS Proposing Release at 23393.
    \170\ The 2010 ABS Proposals would apply to any ``structured
finance product,'' which would be more broadly defined than in the
Regulation AB Item 1101(c) definition of ``asset-backed security''
in order to reflect the wide range of securitization products that
are sold in the private markets.
    \171\ 17 CFR 230.144A.
    \172\ 17 CFR 230.506.
    \173\ See proposed revisions toRule 144A(a)(8), Rule 192, Rule
501 and Rule 502 in the 2010 ABS Proposing Release.
---------------------------------------------------------------------------

    For sales of structured finance products made in reliance on Rule
144A or Rule 506, first, under our proposal the underlying transaction
agreement of the issuer would have to grant any purchaser, any security
holder and any prospective purchaser of the securities designated by
the holder the right to obtain, upon request of the purchaser or
security holder, information that would be required if the offering
were registered on Form S-1 or proposed Form SF-1 under the Securities
Act and any ongoing information regarding the securities that would be
required by Section 15(d) of the Exchange Act, if the issuer were
required to file reports under that section. Second, the issuer would
have to represent that it would provide such information to the
purchaser, security holder, or prospective purchaser upon request of
the purchaser or security holder.\174\
---------------------------------------------------------------------------

    \174\ See the 2010 ABS Proposing Release at 23396
---------------------------------------------------------------------------

    As discussed above, in the 2010 ABS Proposing Release, we also
proposed an amendment to Regulation AB that would require issuers of
registered ABS offerings to disclose in the prospectus asset-level
information in a standardized format.\175\ Thus, together with the
proposed asset-level requirements, the proposed amendments for
privately issued structured finance products would require that issuers
in offers and sales of structured finance products in reliance on Rule
144A or Rule 506 would need to provide, upon request, asset-level
disclosures, along with other disclosures required by Regulation AB.
---------------------------------------------------------------------------

    \175\ See the ABS 2010 ABS Proposing Release at 23355.
---------------------------------------------------------------------------

    In the 2010 ABS Proposing Release, we requested comment on whether
we should provide more specificity in the rules for privately issued
structured finance products covering what disclosure would be required
to be provided and, if so, what types of disclosure we should
specifically require and whether the required disclosures should differ
by type of security and, if so, in what way. We also requested comment
on whether our proposal with respect to ongoing information regarding
the securities was appropriate.
    In response to our 2010 ABS Proposals, several commentators
expressed concern regarding the disclosure standards for privately
issued structured finance products.\176\ Commentators noted that there
are not clear information requirements for certain types of ABS that
are not typically offered under Regulation AB, such as CDOs, CLOs,
asset-backed commercial paper or synthetic ABS.\177\ Commentators
expressed concerns

regarding the standards for disclosure and noted that any novel asset
type or structure would face uncertainty regarding their disclosure
obligations.\178\ In addition, some commentators asked the Commission
to recognize the unique characteristics of different asset
classes.\179\
---------------------------------------------------------------------------

    \176\ See letters from ABA, ABAASA, Association of Financial
Markets in Europe/European Securitisation Forum (AFME/ESF), ASF,
Cleary Gottlieb Steen and Hamilton (Cleary), PPM America (PPM),
Sallie Mae, SIFMA (dealers and sponsors), Wells Fargo on the 2010
ABS Proposing Release.
    \177\ See letters from ABA, ASF and SIFMA on the 2010 ABS
Proposing Release. The ASF suggested that the proposed disclosure
regime would be untenable because the safe harbor for securities
that fall outside of the current Regulation AB definition would be
subject to a hybrid of the corporate and Regulation AB disclosure
requirements, without the benefit of detail on how those disclosure
requirements would apply.
    \178\ See letters from AFME/ESF, SIFMA (dealers and sponsors),
and Wells Fargo on the 2010 ABS Proposing Release. SIFMA (dealers
and sponsors) suggested that the uncertainty over disclosure
requirements could affect the ability of insurance-linked
securities, whole business securitizations, future flow
securitizations, securitizations of film rights, franchise fees, IP
licensing fees, charged-off assets, leases exceeding the limits of
the Reg. AB definition of ABS and non-revolving assets exceeding a
year to rely upon Rule 144A. Wells Fargo expressed concern regarding
the uncertainty in determining the applicable reporting requirements
for future flow, film rights, franchise fees, patent royalties,
certain lease transactions and novel asset classes and structures.
    \179\ See letters from ABASA, AFME/ESF and Cleary on the 2010
ABS Proposing Release. AFME/ESF suggested that it would be
inappropriate to apply Regulation AB to UK mortgage master trust
issuers without adjustment. Cleary urged the Commission to
``acknowledge that some of the detailed, asset-level disclosure
mandated by the Proposed Rules will simply not be possible for some
issuers, in some asset classes, to compile without expending levels
of time and expense that are simply not warranted.'' Cleary
recommended revising the proposal to require ``issuers to provide
(in connection with the initial placements) the information that
would be required if the offering were registered on Form S-1 or
Form SF-1 under the Securities Act, and to provide (on an ongoing
basis) the information that would be required by Section 15(d) of
the Exchange Act, in each case if requested, only to the extent that
the issuer possesses such information or can acquire it without
unreasonable effort or expense.'' Cleary also suggested that ``such
required information in each case may differ as to format,
presentation, or specific loan-level data points from the
requirements of Regulation AB, and that loan-level information may
be omitted for one or more portfolio components not exceeding a
specified percentage of the relevant portfolio individually and a
specified percentage of the relevant portfolio in the aggregate.''
---------------------------------------------------------------------------

    In light of these comments, we are requesting comment on whether we
should only require asset-level disclosures where the ``structured
finance product'' being sold in reliance on Rule 144A, or Rule 506 of
Regulation D, is backed by or collateralized by assets of an asset
class for which there are prescribed asset-level reporting requirements
in Regulation AB. As proposed, this would include: residential mortgage
backed securities; commercial mortgage backed securities; automobiles
loans or leases; equipment loans or leases; student loans; floorplan
financings; corporate debt; and resecuritizations.
Request for Comment
    98. Should we only require that the transaction agreements
underlying structured finance products sold in reliance on Rule 144A or
sold pursuant to Rule 506 be required to provide for asset-level
disclosures if the particular asset class of the securities are of an
asset class where asset-level disclosures are prescribed in Regulation
AB (i.e., residential mortgage backed securities; commercial mortgage
backed securities; automobiles loans or leases; equipment loans or
leases; student loans; floorplan financings; corporate debt; and
resecuritizations)? Should securities where the asset class is not of
an asset class where asset-level disclosure is required under
Regulation AB be exempted from providing asset-level disclosure?
    99. Is there any reason that we should not require structured
finance product issuers that utilize the safe harbors to comply with
the proposed asset-level disclosure requirements for initial and/or
ongoing information if asset-level disclosure for the particular asset
class underlying the transaction is required under Regulation AB?
    100. For securities that fall outside the Regulation AB definition
of ``asset-backed securities,'' how can the Commission address
commentators' concern that those securities would be subject to a
hybrid of the corporate and Regulation AB disclosure requirements?
\180\

    \180\ See letter from ASF on the 2010 ABS Proposing Release
(expressing that the array of structured finance products offered
and sold in the private placement market may technically fall
outside the Regulation AB definition of ``asset-backed securities,''
which would by default subject them to the corporate disclosure
regime, together with some elements of the Regulation AB disclosure
regime).
---------------------------------------------------------------------------

101. If we do not require asset-level disclosures for certain
``structured finance products'' or ``novel asset types or structures''
that fall outside the Regulation ABS definition of ``asset-backed
securities,'' are there other types of disclosure that we should
require the issuer to provide to investors or prospective purchasers?
How should ``novel asset types or structures'' be defined? Is there any
guidance that the Commission should provide for structured finance
products that fall outside of Regulation AB's definition of ABS?

C. Waterfall Computer Program

    In the 2010 ABS Proposing Release, we proposed to require that most
ABS issuers file a computer program that gives effect to the flow of
funds, or ``waterfall,'' provisions of the transaction. The proposal
was designed to make it easier for an investor to analyze the ABS
offering at the time of its initial investment decision and to monitor
ongoing performance of the ABS. In this way, market participants would
be able to better conduct their own evaluations of ABS. Although
several commentators supported the proposal because it would promote
transparency and enable investors to make better decisions,\181\
several commentators opposed the proposal for various reasons, such as
the lack of clarity of the requirements of our proposal,\182\ the cost
burden on issuers and/or investors,\183\ and concern about liability
under the federal securities laws.\184\ We received many helpful and
detailed suggestions regarding the proposed waterfall computer program
requirement, and plan to re-propose the requirement separately from
adopting requirements for ABS shelf eligibility, offering process and
disclosures, including asset-level disclosures. We believe these
requirements could be adopted and implemented together, separately from
any waterfall disclosure component.
---------------------------------------------------------------------------

    \181\ See comment letters from AMI; Bank of New York Mellon;
CalPERS; Keith G. Cascio; CoStar Group; Council of Institutional
Investors; Knowledge Decision Securities; Risk Management
Association/Securitization Risk Roundtable; and XBRL US on the 2010
ABS Proposing Release.
    \182\ See comment letters from ABA; BOA; Discover; FSR; Vehicle
ABS Group; JP Morgan; and Sallie Mae on the 2010 ABS Proposing
Release.
    \183\ See comment letters from ABASA; ABA; American Financial
Services Association (AFSA); BOA; Business Software Alliance;
Capital One Financial; Citigroup Global Markets (Citi); CREFC;
Discover; FSR; Vehicle ABS Group; Intex Solutions; IPFS Corp; JP
Morgan; MathWorks; MBA; Navistar; PPM; PricewaterhouseCoopers LLP;
Sallie Mae; SIFMA; Trepp; UBmatrix; Wells Fargo; and Wyndham
Worldwide on the 2010 ABS Proposing Release.
    \184\ See comment letters from ABASA; ABA; AFSA; AmeriCredit
Corp; BOA; (Citi); Discover; Intex Solutions; JP Morgan; MBA; Sallie
Mae; SIFMA; Vehicle ABS Group; Wells Fargo on the 2010 ABS Proposing
Release.
---------------------------------------------------------------------------

IV. Transition Period

    As we explained in the 2010 ABS Proposing Release, we believe that
compliance dates should not extend past a year after adoption of the
new rules. We are considering the appropriate timing for implementation
of the 2010 ABS Proposals and today's re-proposals, if adopted.
Request for Comment
    102. Should implementation of any proposals be phased-in? If so,
explain why and provide a reasonable timeframe for a phase-in (e.g.,
six months, one or two years)?
    103. Should implementation be based on a tiered approach that
relates to a characteristic other than the size of the sponsor? Is
there any reason to structure implementation around the asset class of
the securities?

V. General Request for Comment

    We request comment on the specific issues we discuss in this
release, and on any other approaches or issues that we should consider
in connection with the proposed amendments. We seek comment from any
interested persons, including investors, asset-backed issuers,
sponsors, originators, servicers, trustees, disseminators of EDGAR
data, industry analysts, EDGAR filing agents, and any other members of
the public.

VI. Paperwork Reduction Act

A. Background

    Certain provisions of the proposed rule amendments contain
``collection of information'' requirements within the meaning of the
Paperwork Reduction Act of 1995 (PRA).\185\ The Commission is
submitting these proposed amendments and proposed rules to the Office
of Management and Budget (OMB) for review in accordance with the
PRA.\186\ 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: \187\
---------------------------------------------------------------------------

    \185\ 44 U.S.C. 3501 et seq.
    \186\ 44 U.S.C. 3507(d) and 5 CFR 1320.11.
    \187\ The paperwork burden from Regulation S-K is imposed
through the forms that are subject to the requirements in those
regulations and is reflected in the analysis of those forms. To
avoid a Paperwork Reduction Act inventory reflecting duplicative
burdens and for administrative convenience, we assign a one-hour
burden to Regulation S-K.
---------------------------------------------------------------------------

    (1) ``Form S-3'' (OMB Control No. 3235-0073);
    (2) ``Form 10-D'' (OMB Control No. 3235-0604);
    (3) ``Regulation S-K'' (OMB Control No. 3235-0071); and
    (4) ``Form SF-3'' (a proposed new collection of information).
    The forms listed in Nos. 1 through 3 were adopted under the
Securities Act and the Exchange Act and set forth the disclosure
requirements for registration statements and periodic reports filed
with respect to asset-backed securities and other types of securities
to inform investors. The form listed in No. 4 is a newly proposed
collection of information under the Securities Act. Form SF-3, if
adopted, would represent the registration form for offerings that meet
certain shelf eligibility conditions and can be offered on a delayed
basis under Rule 415.
    Compliance with the proposed amendments would be mandatory, and
responses to the information collections would not be kept confidential
and there would be no mandatory retention period for proposed
collections of information.

B. Revisions to PRA Reporting and Cost Burden Estimates

    Our PRA burden estimate for the existing collection of information
on Form S-3 is based on an average of the time and cost incurred by all
types of public companies, not just ABS issuers, to prepare the
collection of information. In contrast, Form 10-D is a form that is
only prepared and filed by ABS issuers. In 2004, we codified
requirements for ABS 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 proposed amendments are based on
information that we receive on entities assigned to Standard Industrial
Classification Code 6189, the code used with respect to asset-backed
securities, as well as information from outside data sources.\188\ When
possible, we base our estimates on an average of the data that we have
available for years 2004 through 2010. 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 in
2006 through 2010.\189\
---------------------------------------------------------------------------

    \188\ We rely on two outside sources of ABS issuance data. We
use the ABS issuance data from Asset-Backed Alert on the initial
terms of offerings, and we supplement that data with information
from Securities Data Corporation (SDC).
    \189\ 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 S-3 and Form SF-3
    Our current PRA burden estimate for Form S-3 is 243,927 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 ABS issuers
using Form S-3 often present all of the relevant disclosure in the
registration statement rather than incorporate relevant disclosure by
reference, our current burden estimate for ABS issuers using Form S-3
under existing requirements is similar to our current burden estimate
for ABS issuers using Form S-1. During 2004 through 2010, we received
an average of 90 Form S-3 filings annually related to asset-backed
securities.
    We are proposing to move the requirements for asset-backed issuers
into new forms that would be solely for the registration by offerings
of asset-backed securities. Under the proposal, proposed Form SF-3
would be the ABS shelf equivalent form of existing Form S-3. For
purposes of our calculations, we estimate that the proposals relating
to shelf eligibility would cause a 5% movement in the number of filers
(i.e., a decrease of five registration statements) out of the shelf
system due to the new requirements which include the proposed executive
officer certification, the proposed transaction requirement for the
credit risk manager, the proposed transaction requirement related to
investor communications, and the proposed annual evaluations of
compliance with timely Exchange Act reporting and timely filing of
transaction agreements and certifications.\190\ On the other hand, we
estimate the number of shelf registration statements for ABS issuers
would increase by five as a result of the outstanding proposal from the
2010 ABS Proposing Release to eliminate the practice of providing a
base prospectus and a prospectus supplement for these issuers.\191\
Thus, we estimate that the annual number of shelf registration
statements concerning ABS offerings would remain the same. Accordingly,
since the proposals would shift all shelf eligible ABS filings from
Form S-3 to Form SF-3, we estimate that the proposals would cause a
decrease of 90 ABS filings on Form S-3 and a corresponding number of 90
ABS filings on Form SF-3s filed annually.\192\
---------------------------------------------------------------------------

    \190\ We calculated the decrease of five Form SF-3s by
multiplying the average number of Form S-3s filed (90) by 5 percent.
    \191\ See Section II.D. of the 2010 ABS Proposing Release. Based
on staff reviews, we believe it is very 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.
    \192\ This is based on the number of registration statements for
ABS issuers filed on Form S-3 and the four changes due to our rule
proposal.
---------------------------------------------------------------------------

    In 2004, we estimated that an ABS issuer, under the 2004
amendments, would take an average of 1,250 hours to prepare a Form S-3
to register ABS.\193\ 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 ABS issuers by
30 hours per form.\194\ Therefore, we currently estimate that it would
take an average of 1,280 hours to prepare a Form S-3 to register ABS.
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.\195\
---------------------------------------------------------------------------

    \193\ See 2004 ABS Adopting Release and 2004 ABS Proposing
Release.
    \194\ See January 2011 ABS Issuer Review Release at 4239.
    \195\ See, e.g., Credit Ratings Disclosure, Release No. 33-9070
(Oct. 7, 2009) [74 FR 53086].
---------------------------------------------------------------------------

    We are proposing new and revised disclosure requirements for ABS
issuers that, if adopted, would be a cost to filing on Form SF-3. In
particular, we are proposing to add a shelf eligibility condition that
the registrant file a certification at the time of each offering off of
a shelf registration statement, or takedown, by the chief executive
officer of the depositor or executive officer in charge of
securitization of the depositor concerning the disclosure contained in
the prospectus and the design of the securitization. We are also
proposing a shelf eligibility condition that the underlying transaction
agreement must provide for the appointment of a credit risk manager to
review assets upon the occurrence of certain trigger events and
provisions related to repurchase request dispute resolution.
Additionally, we are proposing to require that registrants include
disclosures concerning the credit risk manager in the prospectus in the
registration statement. Lastly, we are proposing a shelf eligibility
condition that the underlying transaction agreement include a provision
requiring that the party responsible for making periodic filings on
Form 10-D include any request received from an investor to communicate
with other investors during the reporting period related to investors
exercising their rights under the terms of the asset-backed security.
We are also proposing changes to Form 10-D relating to disclosure
regarding credit risk managers.
    If the proposals are adopted, we estimate that the incremental
burden for ABS issuers to complete the disclosure requirements in Form
SF-3, prepare the information, and file it with the Commission would be
100 burden hours per response on Form SF-3. As a result, we estimate
that each Form SF-3 would take approximately 1,380 hours to complete
and file.\196\ We estimate the total internal burden for Form SF-3 to
be 31,050 hours and the total related professional costs to be
$37,260,000.\197\ This would result in a corresponding decrease in Form
S-3 burden hours of 28,800 and $34,560,000 in professional costs.\198\
---------------------------------------------------------------------------

    \196\ 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 proposals
for a total of 1,380 total burden hours.
    \197\ To calculate these values, we first multiply the total
burden hours per Form SF-3 (1,380) by the number of Form SF-3s
expected under the proposal (90), resulting in 124,200 total burden
hours. Then, we allocate 25 percent of these hours to internal
burden, resulting in 31,050 hours. We allocate the remaining 75
percent of the total burden hours to related professional costs and
use a rate of $400 per hour to calculate the external professional
costs of $37,260,000.
    \198\ To calculate these values, we first multiply the total
burden hours per Form S-3 (1,280) by the average number of Form S-3s
over the period 2004-2010 (90), resulting in 115,200 total burden
hours. Then, we allocate 25 percent of these hours to internal
burden, resulting in 28,800 hours. We allocate the remaining 75
percent of the total burden hours to related professional costs and
use a rate of $400 per hour to calculate the external professional
costs of $34,560,000.
---------------------------------------------------------------------------

2. 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. We estimate that the
yearly average number of Form 10-D filings is 10,000 \199\ and that the
proposed new Regulation AB disclosure requirements that would be
included in Form 10-D related to investor communications (Item 1121(g))
and credit risk managers (Item 1121(f)) would result in an additional
burden of five hours per filing to prepare. Consistent with our
estimate in 2004, we estimate that it currently takes 30 hours to
complete and file a Form 10-D. Therefore, we estimate that the
proposals would increase the number of hours to prepare, review, and
file a Form 10-D to 35 burden hours; thus, increasing the total burden
hours for all annual Form 10-D responses to an estimate of 350,000
hours.\200\
---------------------------------------------------------------------------

    \199\ Our estimate is based on 1,000 respondents per year
multiplied by 10 filings per respondent.
    \200\ The burden hours are calculated by multiplying 10,000 Form
10-Ds by the 35 burden hours required to complete the form for a
total of 350,000 hours.
---------------------------------------------------------------------------

    We allocate 75% of those hours (262,500 hours) to internal burden
and the remaining 25% to external costs totaling $35,000,000 using a
rate of $400 per hour.
3. Regulation S-K
    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.
We assign one burden hour to Regulation S-K for administrative
convenience to reflect that the changes to the regulation did not
impose a direct burden on companies.
4. Summary of Proposed Changes to Annual Burden Compliance in
Collection of Information
    Table 1 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 proposed new registration statement
for asset-backed issuers. Bracketed numbers indicate a decrease in the
estimate.

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                             Decrease
                                          Current    Proposed     Current       or       Proposed        Current         Decrease or        Proposed
                 Form                     annual      annual      burden     increase     burden      professional       increase in      professional
                                         responses   responses     hours     in burden     hours          costs         professional          costs
                                                                               hours                                        costs
--------------------------------------------------------------------------------------------------------------------------------------------------------
S-3...................................       2,065       1,075     243,927    [28,800]     215,127      $292,711,500     [$34,560,000]      $258,151,500
SF-3..................................  ..........          90  ..........      31,050      31,050  ................        37,260,000        37,260,000
10-D..................................      10,000      10,000     225,000      37,500     262,500        30,000,000         5,000,000        35,000,000
--------------------------------------------------------------------------------------------------------------------------------------------------------

5. Solicitation of Comments
    We request comments in order to evaluate: (1) Whether the proposed
collection of information is necessary for the proper performance of
the functions of the agency, including whether the information would
have practical utility; (2) the accuracy of our estimate of the burden
of the proposed collection of information; (3) whether there are ways
to enhance the quality, utility, and clarity of the information to be
collected; and (4) whether there are ways to minimize the burden of the
collection of information on those who are to respond, including
through the use of automated collection techniques or other forms of
information

technology.\201\ We also specifically request comment regarding:
---------------------------------------------------------------------------

    \201\ We request comment pursuant to 44 U.S.C. 3506(c)(2)(B).
---------------------------------------------------------------------------

    104. Whether and to what extent the proposed shelf eligibility
requirements would cause a movement in filers that are currently
eligible for shelf registration on Form S-3 out of shelf registration
to proposed Form SF-3.
    Any member of the public may direct to us any comments concerning
the accuracy of these burden estimates and any suggestions for reducing
these burdens. Persons submitting comments on the collection of
information requirements should direct the comments to the Office of
Management and Budget, Attention: Desk Officer for the Securities and
Exchange Commission, Office of Information and Regulatory Affairs,
Washington, DC 20503, and should send a copy to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090, with reference to File No. S7-08-10.
Requests for materials submitted to OMB by the Commission with regard
to these collections of information should be in writing, refer to File
No. S7-08-10, and be submitted to the Securities and Exchange
Commission, Records Management, Office of Filings and Information
Services, 100 F Street, NE., Washington, DC 20549. OMB is required to
make a decision concerning the collection of information between 30 and
60 days after publication of this release. Consequently, a comment to
OMB is best assured of having its full effect if OMB receives it within
30 days of publication.

VII. Economic Analysis

A. Background

    In April 2010, we proposed rules that would revise the disclosure,
reporting and offering process for ABS.\202\ Among other things, in the
2010 ABS Proposing Release we proposed eligibility requirements to
replace the current credit rating references in shelf eligibility
criteria for asset-backed security issuers (i.e., a certification by
the chief executive of the depositor, risk retention, third party
opinion relating to representations and warranties, and ongoing
Exchange Act reporting). We also proposed to require that, with some
exceptions, prospectuses for public offerings of asset-backed
securities and ongoing Exchange Act reports contain specified asset-
level information about each of the assets in the pool in a
standardized tagged data format. Further, we proposed to require asset-
backed issuers to provide investors with more time to consider
transaction-specific information about the pool assets.
---------------------------------------------------------------------------

    \202\ See the 2010 ABS Proposing Release.
---------------------------------------------------------------------------

    In this release, we are re-proposing certain requirements for ABS
shelf eligibility and filing deadlines for exhibits in ABS shelf
offerings. We are also proposing new Form 10-D disclosure requirements
related to investor communications and credit risk managers. Section
23(a) of the Exchange Act \203\ requires the Commission, when making
rules and regulations under the Exchange Act, to consider the impact a
new rule would have on competition. Section 23(a)(2) prohibits the
Commission from adopting any rule that would impose a burden on
competition not necessary or appropriate in furtherance of the purposes
of the Exchange Act. Section 2(b) of the Securities Act \204\ and
Section 3(f) of the Exchange Act \205\ require the Commission, when
engaging in rulemaking that requires it to consider whether an action
is necessary or appropriate in the public interest, to consider, in
addition to the protection of investors, whether the action would
promote efficiency, competition, and capital formation. We have
considered and discussed below the effects of the proposed rules on
efficiency, competition, and capital formation, as well as the benefits
and costs associated with the Commission's decisions in the proposed
rulemaking. Except as noted below, our benefit-cost analysis included
in the 2010 ABS Proposing Release remains unchanged and outstanding.
---------------------------------------------------------------------------

    \203\ 15 U.S.C. 78w(a).
    \204\ 15 U.S.C. 77b(b).
    \205\ 15 U.S.C. 78c(f).
---------------------------------------------------------------------------

B. ABS Shelf Eligibility Proposals

    We are re-proposing the registrant and transaction requirements for
ABS shelf registration because two of the proposed transaction
requirements in the April 2010 Proposing Release--risk retention and
continued Exchange Act reporting--will be required for most registered
ABS offerings as a result of changes mandated by provisions of the
Dodd-Frank Wall Street Reform and Consumer Protection Act. Further, our
re-proposals for ABS shelf registration eligibility are also made in
connection with Section 939A of that Act which generally requires that
we modify our regulations to remove any references to or requirement of
reliance on credit ratings and to substitute in such regulations such
standard of credit-worthiness that we determine as appropriate for such
regulations. Therefore, instead of the investment grade ratings
requirement, under our re-proposal, taking into account the context and
purposes of the affected rules, we are proposing a CEO or executive
officer certification, provisions in the transaction agreements
requiring the appointment of an independent credit risk manager under
certain conditions and certain dispute resolution provisions, and
provisions in the transaction agreements related to investor
communications for any offering off the Form SF-3 shelf registration
statement, which we believe would be indicative of a higher quality
security.
    We are also proposing to require that, in order to conduct a
takedown off an effective shelf registration statement, an ABS issuer
would be required to conduct an annual evaluation of compliance with
the transaction requirements for shelf offerings conducted during the
past year as well as compliance with timely Exchange Act reporting.
Further, as re-proposed, issuers would be allowed to cure any failure
to timely file the required certification or transaction agreements
with required provisions. Specifically, under the re-proposal, the
depositor would be deemed to satisfy the registrant requirements
related to timely filing the certifications and transaction agreements
90 days after the date all required filings are filed.
1. Benefits
    We believe a benefit of the re-proposed ABS shelf eligibility
requirements is that they would replace the current investment grade
rating condition while providing improved investor protections that
would be indicative of a higher quality security. We believe that our
proposal to require a certification by the depositor's chief executive
officer or executive officer in charge of securitization may cause
these officials to review more carefully the disclosure, and in this
case, the transaction, and would encourage better oversight of the
securitization process. As a result, certifiers may provide a more
accurate review of the registration statement disclosures and the
transaction. To the extent that a more careful review improves the
securitization quality in the presence of such a certification, the
proposed certification would be an appropriate eligibility requirement
for shelf registration.
    We believe that our proposal requiring provisions in the underlying
transaction agreements requiring the appointment of a credit risk
manager to

review assets upon the occurrence of certain trigger events, requiring
that the credit risk manager provide a report to the trustee of the
findings and conclusions of the reviews of the assets, and requiring
repurchase dispute resolution procedures should help the enforceability
of contract terms surrounding representations and warranties regarding
the pool assets. We are proposing to require that the transaction
agreements require, at a minimum, review by the credit risk manager (1)
when the credit enhancement requirements, as specified in the
underlying transaction agreements, are not met; and (2) at the
direction of investors pursuant to the process provided in the
transaction agreement and disclosed in the prospectus. We believe
specifying these two minimum trigger requirements should facilitate the
ability of transaction parties to pursue transaction remedies, which we
believe would be a feature of a higher quality security, while at the
same time providing flexibility to transaction parties to develop more
robust trigger requirements as they deem appropriate.
    The requirement that the credit risk manager not be affiliated with
the sponsor, depositor, or servicer helps assure investors that the
review of assets is impartial. By not prescribing specific procedures
for the review and repurchase process, we are providing the credit risk
manager and ABS investors with the flexibility to determine the most
appropriate and efficient procedures for each ABS transaction. We
believe that taken together our transaction requirements related to the
appointment of a credit risk manager would better strengthen the
enforceability of contract terms surrounding the representations and
warranties regarding the pool assets for ABS shelf transactions and
incentivize obligated parties to better consider the characteristics
and quality of the assets underlying the securities, thus making them
appropriate criteria for shelf eligibility.
    We believe that our proposal requiring a provision in an underlying
transaction agreement to require the party responsible for making
periodic filings on Form 10-D include in the Form 10-D any request from
an ABS investor to communicate with other ABS investors related to
investors exercising their rights under the terms of the asset-backed
security would benefit ABS investors because facilitating communication
among ABS investors enables them to exercise the rights included in the
underlying transaction agreements. In this regard, as previously
discussed in Part II.B.1(c) of this release, we are aware that ABS
investors have had difficulty enforcing rights contained in
transactions agreements, and in particular, those relating to the
repurchase of underlying assets for breach of representations and
warranties. We also believe the disclosure would benefit investors by
helping solve collective action problems related to communication
between investors and issuers. By decreasing the costs of communication
among investors, this proposed requirement helps investors exercise the
rights included in the underlying transaction agreements.
    The above three shelf eligibility requirements are designed to
improve the quality of the securities being offered by strengthening
investor protections, so that the offerings may appropriately be
conducted quickly. To the extent that better investor protection
increases investors' trust in the fairness and security of the ABS
markets, the result could be lower cost of capital and increased
investor participation in ABS markets, which should facilitate capital
formation.
    We believe that requiring an annual evaluation of compliance with
the registrant requirements in order to continue using an effective
shelf registration statement would benefit investors because it would
encourage issuers to file their Exchange Act reports and transaction
documents in connection with prior offerings at the required time, and
therefore, enhance informed investment decisions. We also believe that
a 90-day cure period strikes an appropriate balance between monitoring
issuers' compliance with the proposed shelf transaction requirements
and commentator's concerns that the one-year penalty was too costly.
2. Costs
    We believe that the certification transaction requirement could
impose additional review and oversight costs, potential litigation
costs, and disclosure costs on ABS issuers. First, since the intent of
the certification is to enhance the accountability and oversight of the
ABS transaction, if effective, it will result in additional costs
related to further verifying the characteristics of the asset pool, the
payment and rights allocations, the distribution priorities and other
structural features of the transactions. We note that these costs could
be lessened to the extent that the certifier could rely in part on the
review that would already be required in order for an issuer to comply
with recently adopted Rule 193.\206\ Ultimately, we believe that for
shelf offerings the benefit of improving the accuracy of securitization
disclosures and enhancing the accountability and oversight of the ABS
transaction justifies these additional review and oversight costs
incurred by the ABS issuers.
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    \206\ Rule 193 implemented Securities Act Section 7(d), as added
by Section 945 of the Act, by requiring that any issuer registering
the offer and sale of an ABS perform a review of the assets
underlying the ABS.
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    We have considered that the certification transaction requirement
might also result in litigation costs for those signing the
certification with the magnitude of the costs dependent on the scope of
the certification. We received several comment letters indicating that
the certification language included in our 2010 ABS Proposing release
could be interpreted as a guarantee of the future performance of the
assets underlying the ABS.\207\ We realize that unexpected losses
incurred by security holders may be the result of misrepresentation by
the securitization parties but may also be the outcome of a negative
realization. Since the distinction is typically difficult to discern, a
certification misinterpreted as a guarantee could have increased the
likelihood of litigation, and therefore expected litigation costs to
the certifier. In an attempt to mitigate these costs, we are proposing
revised certification language, which we believe reduces a certifier's
exposure to unnecessary litigation and limits litigation costs that the
certification may create.
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    \207\ See letters from ASF (issuer members), ABASA, CREFC and
Wells Fargo on the 2010 ABS Proposing Release. Several commentators
offered, as an alternative, that the CEO of the depositor certify to
the adequacy and accuracy of the disclosure in the offering
documents. See letters from ABA; ABASA; ASF; AusSF; BOA; CNH; FSR;
JP Morgan; MBA; SIFMA (dealers and sponsors); Sallie Mae; and Wells
Fargo.
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    The proposed transaction requirements for shelf eligibility related
to the credit risk manager would increase costs of securitization to
ABS issuers to the extent a credit risk manager would not have
otherwise been appointed in the transaction because they would be
required to hire an additional participant in the transaction in order
to maintain shelf eligibility. We have attempted to mitigate these
costs by requiring that a credit risk manager be involved in the
transaction only upon the occurrence of certain triggering events. We
also recognize that not prescribing specific procedures for the review
and repurchase process may impose a cost to investors if the
transaction parties do not select

appropriate procedures for such process. This transaction requirement
would also result in some additional disclosure costs as information
about the credit risk manager will have to be provided in the ABS
prospectus.
    The proposed disclosure requirements related to investor
communications in distribution reports on Form 10-D would increase the
disclosure costs of preparing these respective filings for ABS issuers.
We also expect this requirement would impose additional costs on ABS
issuers because the person responsible for making periodic filings on
Form 10-D would need to design systems to receive investor requests to
communicate and verify the identity of the investor making the request.
    We believe that requiring an annual evaluation of compliance with
the registrant requirements would impose additional costs on ABS
issuers because of any systems needed to ensure and check compliance
with the reporting and filing requirements. However, we believe these
costs should be minimal because these issuers should already have in
most instances systems designed to ensure that reports and transaction
agreements are being filed timely in accordance with rules under the
Exchange Act or Securities Act, respectively.
    We recognize that some of the new shelf registration costs may be
passed down the chain of securitization and ultimately to borrowers.
The ability to pass costs on to borrowers would be constrained by
competition from non-securitizing lenders, which would weaken the
competitive ability of firms that solely rely on securitization for
funding relative to other financial firms that have other sources of
funding.
    Finally, if ABS sponsors are forced to bear all or some of these
new costs and if these new costs exceed the costs of obtaining a credit
rating, then ABS sponsors might choose to avoid the shelf registration
process by registering their ABS on the proposed Form SF-1.
Alternatively, they might choose to bypass SEC registration altogether
and issue in private markets instead. This will have the effect of
reduced efficiency and impeded capital formation. We seek comments and
empirical data to help us assess the macroeconomic impact of the costs
associated with the new shelf registration requirements.

C. Disclosure Requirements

    In addition to the shelf eligibility proposals, we are also
proposing a disclosure requirement that would require disclosure in the
prospectus concerning any party selected as a credit risk manager. We
are also proposing to require ABS issuers to file copies of the
underlying transaction agreements, including all attached schedules,
and other agreements that are referenced (such as those containing
representations and warranties regarding the underlying assets), at the
same time as a preliminary prospectus that would be required under
proposed Rule 424(h). We are also proposing to require in distribution
reports filed on Form 10-D disclosure related to the review of pool
assets by credit risk managers during the relevant distribution period
as well as events involving a change in the credit risk manager.
1. Benefits
    We believe that providing disclosure concerning credit risk
managers will facilitate an informed assessment by investors as to the
appropriateness of the selected credit risk manager. We also believe
that providing in distribution reports disclosure related to the credit
risk manager's review of assets and any change in the credit risk
manager would be beneficial to investors because it would provide them
material information concerning such matters on a timely basis.
Finally, requiring underlying transaction agreements to be filed in
substantially final form at the same time as the preliminary prospectus
should benefit investors by allowing them necessary time to analyze the
actual underlying agreements containing the specific structure, assets,
and contractual rights regarding each transaction. To the extent that
additional time for investment analysis results in investors making
better informed decisions on how to allocate capital, this requirement
could improve economic efficiency and facilitate capital formation.
2. Costs
    The proposed disclosure requirements related to credit risk
managers in prospectuses and distribution reports would increase the
disclosure costs of preparing these filings for ABS issuers. The
proposed requirement that ABS issuers file copies of the underlying
transaction agreements at the same time as a preliminary prospectus
that would be required under proposed Rule 424(h) may increase the
costs associated with conducting an offering to the extent that such
filing requirement exposes issuers to the risk of changing market
conditions; however, such uncertainty is similar to that faced by other
issuers of underwritten initial public offerings of debt whose final
offer prices are not set for weeks or months after filing. To the
extent the requirement requires that documents be completed earlier in
the offering process, ABS issuers may face additional costs to
accelerate drafting of the required documents. As noted earlier, for
purposes of the PRA, we estimate that the incremental burden for ABS
issuers to complete the disclosure requirements in Form SF-3, prepare
the information, and file it with the Commission would be 100 burden
hours per response on Form SF-3.

D. Requests for Comment

    We seek comments on all aspects of this Economic Analysis including
identification and quantification of any additional costs and benefits.
We also request comments on whether our proposals would promote
efficiency, competition, and capital formation. Commentators are
requested to provide empirical data and other factual support for their
views, if possible.
    We further ask the following specific questions:
    105. Would the proposed credit risk manager and certification
transaction requirement for shelf eligibility impose costs in addition
to those identified above? How much would a credit risk manager be
compensated for these services? Would insurance costs increase for
those providing credit risk manager services or providing a
certification? If so, by how much? Are there other measurable costs
associated with these proposed requirements?
    106. Could the costs associated with the proposed shelf
registration requirements be passed down the securitization chain?
Would these costs affect an ABS issuer's choice between registering
securities on proposed Form SF-3 or registering them on proposed Form
SF-1? Would these costs affect an ABS issuer's willingness to register
the securities altogether rather than issuing in the private markets?
    107. Do you believe that the proposed disclosure requirements will
impose costs on other market participants?

VIII. Small Business Regulatory Enforcement Fairness Act

    For purposes of the Small Business Regulatory Enforcement Fairness
Act of 1996,\208\ a rule is ``major'' if it has resulted, or is likely
to result in:
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    \208\ Public Law 104-121, Title II, 110 Stat. 857 (1996).
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