The Dodd-Frank Act and the Implementation of Representations / Warranties / Repurchase Provisions and Due Diligence Provisions Affecting Securitization

March 10, 2011

As various aspects of the Dodd-Frank Act come into effect, the financial services industry is presented with the task of navigating the developing regulatory environment. In February 2011, the Securities and Exchange Commission released the final rules governing two crucial sections of the Dodd-Frank Act dealing with the regulation of securitization (Sections 943 and 945). In this seminar, we provided an overview of these new rules.

The following topics were addressed:

  • Rules requiring rating agencies to disclose in any report accompanying a rating in an asset-backed securities offering the representations, warranties and enforcement mechanisms (such as repurchase requirements) available to investors and describe how they differ from those in issuances of similar securities
  • Rules requiring securitizers to report repurchase requests related to breaches of representations
  • New disclosure requirements under Regulation AB regarding an issuer’s repurchase history
  • Rules regarding the performance and disclosure of due diligence in a securitization that is a public transaction
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