On May 2, 2013, Amy Starr, Chief of the SEC’s Office of Capital Markets Trends, spoke by teleconference at Structured Products magazine’s Americas conference.
Her remarks included a few items that are relevant for many issuers.
- Timetable for New Disclosures. The new estimated value disclosures mandated by the SEC’s February 2013 follow-up letter to issuers should be added within four months or so. As many readers are aware, a number of major issuers have already commenced rolling out their new disclosures.
- New Letters for Non-Recipients of the Prior Letters. Issuers that were not recipients of the April 2012 letter7 would likely receive a letter relating to the disclosures, with instructions along the lines of the SEC’s recent guidance.
- Application to Other Products. The SEC is not expected at this point to extend its views relating to estimated values to other product categories. The staff is principally concerned with instruments that contain an embedded derivative. Accordingly, simple LIBOR floating rate notes, for example, would not be subject to the new guidance.
- Substantive Review of Products/IOSCO Toolkit. The SEC has reviewed the "regulatory toolkit" recent published by IOSCO.8 The SEC does not intend to change its existing practices, and begin to approve of or disapprove of particular products. Instead, the SEC will continue its traditional approach of focusing on adequate disclosure of the terms of the instrument and their risks, and method of valuation.