A task force at the National Association of Insurance Commissioners recommended adoption of a proposal to alter credit ratings on investments at insurance companies. However, NAIC didn’t move forward with the proposal at a meeting last week.
A bank sought approval from the OCC to have a special purpose vehicle treated as a securitization for capital requirement purposes. The OCC demurred, noting that just because the transaction was an SPV didn’t make it an ABS.
As AI becomes ubiquitous in both the origination and securitization of loans, the U.S. regulatory framework is likely to evolve closer to the stricter rules used in the European Union.
The SEC or another federal entity should map credit ratings among competing rating services, similar to efforts by regulators in other countries, according to Morningstar. The firm said rating mapping can help keep competition strong among rating services.
A proposal from FINRA to reduce the timeframe in which trades of MBS and ABS must be reported didn’t sit well with some industry participants, prompting the SEC to take a closer look at the proposal.
FINRA proposed reducing trade reporting requirements to one minute after execution from 15 minutes. Many trades of agency debt securities and TBA MBS already meet the proposed reporting requirements, while ABS reporting lags.
The SEC has finalized a rule prohibiting certain conflicts of interest in the securitization market. Industry participants are largely happy with changes in the final version of the rule.
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