The SEC recently sent a letter to numerous financial entities that have disclosed being “involved” with non-consolidated conduits, structured investment vehicles, and CDOs. The letter is to “highlight” disclosure issues that SEC staff recommends be considered regarding off-balance sheet entities. The issues relate to categories and rating of assets; weighted-average life of assets; forms of funding and weighted-average life of the funding; material difficulties the offbalance sheet entity has experienced in financing; material write-downs or downgrades of assets; limits on losses to be borne by any first loss note holders; types of variable interests held; disclosure regarding obligations under the liquidity facilities; purchases of commercial paper or other securities issued by managed off-balance sheet entities; assistance to any off-balance sheet entity, and the potential impact if the off-balance sheet entity is required to be consolidated
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SEC sends reminder about disclosure obligations
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