SEC Proposed Rules Regarding Third-Party Due Diligence Disclosure

On June 8, 2011, the Securities and Exchange Commission (the "SEC") issued a release¹ (the "Proposing Release") describing proposed rules (the "Proposed Rules") implementing the portion of Section 932 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act") relating to third-party due diligence. The Proposed Rules describe i) the obligations of issuers and underwriters to disclose the findings and conclusions of third-party due diligence reports and ii) the form this disclosure should take.

Highlights:

The Proposed Rules:

• Apply to all issuers or underwriters of all offerings, whether or not registered, of asset-backed securities ("ABS") rated by a nationally recognized statistical rating organization ("NRSRO");