On July 22, the SEC released a ‘No Action Letter’ allowing issuers to omit credit rating disclosure from ABS prospectuses for a period of six months. The Dodd-Frank Wall Street Reform and Consumer Protection Act eliminated SEC Rule 436(g) which effectively exempted NRSROs from liability as experts under Section 11 of the Securities Act. For the six month period covered by the No Action Letter, issuers will be able to omit prospectus disclosure of ratings and accordingly will not need to obtain rating agency consent to be named as an expert. Also in connection with the repeal of Rule 436(g) under the Act, S&P, Moody’s, Fitch, and DBRS have each released comments addressing the effect of the Act on credit rating agencies. Sec No Action Letter. S&P. Moody’s. Fitch. DBRS.
Dodd-Frank Act
Senate Passes Financial Reform Bill
On July 15th, the Senate passed the Dodd-Frank Wall Street Reform and Consumer Protection Act, which was passed by the House of Representatives on June 30th and which will likely be signed by the President next week. The legislation covers a wide variety of topics in an effort to address the causes of the recent turmoil in the financial markets. Unofficial Conference Report (H.R. 4173).
Dodd-Frank Bill Orrick Client Alerts:
TITLE IV – Regulation of Advisors to Hedge Funds and Others
TITLE IX – Investor Protections and Improvements to the Regulation of Securities
- Subtitle C – Improvements to the Regulation of Credit Rating Agencies
- Subtitle D – Improvements to the Asset-Backed Securitization Process
- Subtitle H – Municipal Securities
House-Senate Committee Passes Financial Regulatory Reform Legislation
On June 29, the House-Senate conference committee approved the Dodd-Frank Wall Street Reform and Consumer Protection Act Conference Report reconciling the House and Senate versions of financial regulatory reform legislation. The House and Senate will need to pass the bill in matching form before it can be presented to the President. Conference Report.