SEC Proposes Major Overhaul of Asset-Backed Securities Rules; Significant Impact on Private Placements of CLOs, CDOs and Other Structured Finance Products

April 15, 2010

On April 7, 2010 the Securities and Exchange Commission (the “SEC”) released for comment proposed rules that would dramatically change the disclosure, reporting and offering process for asset-backed securities (“ABS”). The proposed regulations (collectively the “ABS Proposals”) establish extensive new requirements for ABS offered publicly pursuant to Regulation AB. At the same time, through modifications to Rule 144A, Rule 144 and Regulation D, the ABS Proposals would indirectly impose most of the disclosure and reporting requirements of Regulation AB even on structured finance or synthetic securities sold only in non-registered transactions. This memorandum summarizes the principal features of the proposed amendments to Regulation AB, outlines the major effects of the ABS Proposals on privately placed and Rule 144A transactions and discusses timing of implementation of the ABS Proposals.