SEC order extended for exemption to Rule 17g-5
The Securities and Exchange Commission (SEC) has made an order extending the conditional temporary exemption from Rule 17g-5(a)(3) of the Exchange Act to rating covered transactions outside the US until the earlier of:
(i) 2 December 2019; or
(ii) the compliance date set forth in any final rule that may be adopted by the Commission that provides for a similar exemption.
However given the concerns expressed in submissions about the potential disruptions that Rule 17g-5(a)(3) could have to non-US securitisation markets and conflict with local laws, the SEC is considering recommending an amendment to Rule 17g-5(a)(3) to provide for a permanent exemption with respect to credit ratings satisfying the conditions of the exemption.
On 19 July the ASF and SFIG worked together on a joint submission to the SEC requesting a permanent extraterritoriality exemption from the requirements of Rule 17g-5 so that the Rule will no longer apply to non-US offerings.
The ASF and SFIG believe that a permanent exemption will provide certainty for market participants and regulators in jurisdictions outside the US and avoid certain unintended consequences that might otherwise arise in the context of rated deals involving non-US arrangers selling to non-US investors.
View the submission (PDF)
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