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U.S. Securities and Exchange Commission

Speech by SEC Commissioner:
Opening Statement at SEC Open Meeting — Issuer Reviews of Assets in Offerings of Asset-Backed Securities


Commissioner Elisse B. Walter

U.S. Securities and Exchange Commission

Washington, D.C.
October 13, 2010

I would also like to thank the staff for your due diligence in crafting the release before us today. My thanks go especially to Meredith Cross, Paula Dubberly, Katherine Hsu, and Eduardo Alemon for all the time you spent with me and my counsel. I greatly appreciate your thoughtful consideration of my concerns and all of your very hard work in getting us to today's open meeting.

I know that everyone's time is at a premium as we fulfill our many obligations under Dodd-Frank. So, let me highlight just two things about this proposal that are of particular interest to me.

First, I understand that there are various levels and types of reviews that may be performed in a securitization. Yet, what is not clear to me is what level or type of review will, in fact, be performed if our rules do not require any standard for that review.

Section 945 of Dodd-Frank lays out two areas for the Commission to engage in rulemaking - (1) requiring asset-backed issuers to perform a review of the assets underlying the asset-backed securities they issue and (2) requiring issuers to disclose the nature of that review to investors.

The release before us today does not propose a standard of review. But, we do make extensive requests for comments about a standard and will consider whether the rule should include one. My preliminary view is that we should impose a standard. However, I would like to hear what commenters have to say on this issue.

Second, we all know that the problems that occurred in the public asset-backed market were prevalent in the private market as well. Although certain of the rules we are proposing today apply to issuers of ABS in registered offerings and not issuers of ABS in unregistered offerings, I am very concerned about how the rules we adopt will impact the private market and whether any additional rulemaking can help address those concerns.

I know that not only are we under tremendous time pressure to move forward in implementing Dodd-Frank on a myriad of fronts, but you too, as commenters, suffer from that issue as well.

Given the critical role that securitization played in the financial crisis and the role that it can play in our economy's continued recovery, I ask that you please carefully consider our proposals and requests for comment. When you submit your responses, please tell us whether our proposals strike the right balance and give us your constructive suggestions as to how we can best carry out Dodd-Frank's word and intent in a pragmatic way.

I am pleased to support your recommendation and have no questions.



Modified: 10/14/2010