Speech by SEC Commissioner :
Remarks before the Open Meeting to Consider the ABS Final Rule
Paul S. Atkins
U.S. Securities and Exchange Commission
December 15, 2004
Thank you Mr. Chairman. I agree with the comments made today about the staff and this rule, one that I am particularly enthusiastic to support. This is a wonderful piece of work that you should be proud of. There are many things that I like about this rule - a few of which I want to highlight.
First and foremost, this rule is a thoughtful way to bring this huge market from the murky waters of the no-action process to the place where it clearly ought to be - in the SEC rulebook. This is very significant. In a time where it is certainly easier and more expeditious to provide informal guidance, I am particularly pleased that we have chosen the more difficult path and provided the marketplace with a comprehensive document that can be referred to for years.
Second, I would like to congratulate the staff on its approach in getting this work accomplished. I understand that the staff had many meetings with all of the affected parties to address the many questions that surfaced about our proposal. These concerns were addressed and our release is clear why we made the judgments that we have made. I would like to note that I take particular comfort in the fact that during the entire comment process, I did not hear one negative comment about this release from investors, securities industry groups, or issuers. For a release of this magnitude, with these sophisticated players, this is a significant achievement.
I also want to talk briefly about the static pool data provisions. I am pleased that the staff has proposed the innovative website approach in an effort to get the desired information to investors, in the form that they want it, in a cost-effective manner. Of course, even though this information is not actually delivered to the Commission it is NOT exempted from the Securities Act requirements, including Section 11. We have added a sunset provision to this filing exemption because we seek to balance the concerns of providing a cost-effective, useful approach to get this information to investors with the Commission's need to have access to this information for oversight purposes. The Commission does need to modify EDGAR so that this information can be made part of the Commission's filing system. In an effort to ensure that we will get this done, we have added a self-imposed deadline to the static pool filing exemption. However, I want to emphasize a statement that is made in the release about this sunset provision. In the release we state that we wish to assure market participants that our future EDGAR filing requirement will not undercut the objective of providing this information to investors in the format that investors want it in a cost-effective manner. It is important that issuers focus on this statement and do not view the sunset provision as a warning not to innovate or expend capital to get this critically important information to investors because at some point in the future the Commission would like this information to be filed via EDGAR. It is my hope that future Commissioners acknowledge that we labored over this very issue as they consider a future EDGAR filing requirement for static pool information.
I have just one question. I understand that this rule is rather novel in that you have recommended uniform disclosure-based servicing criteria. Could you discuss (a) how you first established this criteria and (b) the marketplace reaction to it?