SIFMA and FSR Submit Additional Comments to SEC Regarding Dissemination of Asset-Level Data

SIFMA and the Financial Services Roundtable ("FSR") (together, the "Associations") submitted additional comments to the SEC regarding the SEC Division of Corporation Finance's Disclosure of Asset-Level Data Memorandum.

The comment letter stressed that it is "absolutely necessary" for the SEC to provide issuers with an express guarantee of relief from omissions liability in connection with any disclosure mechanism that places asset-backed securities sponsors in a position in which they must limit or restrict access to asset-level data. The Associations further explained that many of the practical and legal issues related to the disclosure of asset-level information would be resolved if the SEC or another federal authority were to assume responsibility for maintaining a central asset-level data repository. Alternatively, since the SEC has stated it is not open to this suggestion, the comment letter suggested two approaches to disclosing asset-level data:

• the "Less Prescriptive Approach," which would provide issuers with greater flexibility to withhold, aggregate or modify particular data fields as reasonably necessary to protect consumer privacy, to comply with other legal and regulatory obligations, and to limit the disclosure of nonmaterial information. Specifically, the Associations suggested that issuers be allowed the flexibility to make case-by-case determinations to withhold, aggregate or otherwise modify the asset-level data fields made available to investors and potential investors, as reasonably necessary; and
• the "CRA Model," which would allow issuers to choose between either disclosing the asset-level data through the Web site-based disclosure mechanism (preferably in conjunction with the less prescriptive approach to the underlying disclosure obligation); or (ii) providing the asset-level data to investors and potential investors through one or more consumer reporting agency ("CRA") administered repositories. The Associations noted that disclosing all of the data fields through a CRA appears to solve most of the issuers' Fair Credit Reporting Act ("FCRA") risks, since the CRA would be the entity to provide consumer information to investors for an FCRA-permissible purpose, which is the activity that the Consumer Financial Protection Bureau and other regulatory authorities would be most likely to consider a consumer-reporting function.

See: Comment Letter; SEC Memo.Related news: SEC Releases Memo and Reopens Comment Period for Asset-Backed Securities Disclosure Data and Registration (February 25, 2014); SEC Reopens Comment Period for ABS (Fed. Reg.) (February 28, 2014); SIFMA and FSR Submit Comments to SEC Regarding Dissemination of Asset-Level Data (March 31, 2014).