Rating Agency Developments

On November 6, S&P released its updated criteria for U.S. RMBS servicer advance transactions with 30-year or longer legal final maturities. S&P Release.

On November 11, Fitch released its amended global criteria report for cash flow analysis in CDOs which has been expanded to include all CDOs. The core criteria have not changed. Fitch Release. Fitch Report.

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ISDA Common Principles for Give-Up Agreements

On November 10, ISDA published recommended common principles intended to guide documentation for give-up agreements across central counterparties (CCPs) or clearing houses. The principles address: (i) fallbacks in the event of rejection for clearing, (ii) the ability to reject trades, (iii) a reduction of trading limits, and (iv) determinations of market decisional bodies in relation to CCPs. ISDA Release.

NAIC Approves RMBS Rating Model

On November 6, the National Association of Insurance Commissioners (NAIC) announced that its members approved a proposal to develop a new model for determining the regulatory treatment of RMBS, which will produce ratings designations for approximately 18,000 insurer-owned RMBS. These ratings designations will apply to year-end 2009 reporting and will replace ratings designations from NRSROs which, until now, have been used by regulators to score RMBS for solvency regulation. NAIC Release. NAIC Proposal.

FDIC Securitization Safe Harbor

On November 12, the FDIC approved an interim final rule extending the safe harbor of Section 360.6(b) until March 31, 2010 for securitizations and participations that will lose the sale accounting treatment required by that rule because of recent changes to GAAP (FAS 166/167). All securitizations and participations issued on or before March 31, 2010 (including securitizations by revolving trusts issued on or before March 31, 2010) will fall under the safe harbor so long as the securitizations or participations would satisfy the conditions for sale accounting treatment under GAAP as in effect prior to November 15, 2009, and would otherwise comply with existing Section 360.6. The FDIC intends to publish in December a Notice of Proposed Rulemaking to further amend Section 360.6 regarding the treatment of securitizations and participations issued after March 31, 2010 and in the interim will consult with appropriate regulators to solicit feedback on the proposal. Comments are requested within 45 days of publication of the rule in the Federal Register. FDIC Rule. FDIC Memorandum.