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Compliance Dates Set for ABS Risk Retention Rules
Practical Law Legal Update 3-593-9765 (Approx. 2 pages)
Compliance Dates Set for ABS Risk Retention Rules
| Published on 26 Dec 2014 • USA (National/Federal) |
US bank regulators have published in the Federal Register final risk retention rules for asset-backed securities (ABS), setting the compliance dates for these rules. Compliance is required for certain transactions beginning in December 2015.
On December 24, 2014, federal regulators published in the Federal Register the final risk retention rules, first announced in late October, for asset-backed securities (ABS) mandated under Section 941 of the Dodd-Frank Act. The rules require that securitizers, including sponsors of ABS transactions, retain 5% of the credit risk of securitized asset pools backing non-exempt ABS (see Practice Note, ABS Risk Retention under Dodd-Frank).
The final rules are technically effective on February 23, 2015. However, compliance is required as of:
- December 24, 2015 for residential mortgage-backed securities (RMBS).
- December 24, 2016 for all other classes of ABS.