SEC sets asset-backed securities disclosure rules
U.S. regulators adopted new rules Thursday that seek to give investors better information before they decide to invest in asset-backed securities, a market that's still struggling to recover from the financial crisis. One rule, approved by the Securities and Exchange Commission in a 5-0 vote, would give investors a way to scope out the track record of asset-backed security issuers, like Bank of America Corp. Specifically, the rules would let investors see how often the issuers were asked to buy back assets such as those linked to toxic mortgages because they didn't meet the underwriting criteria laid out in the prospectus. The other rule, approved in a 3-2 vote, would require issuers to conduct a review of the assets underlying the securities and disclose it to investors. The rule would establish a minimum standard of review.