On November 23, 2010, the Division of Corporation Finance issued a no-action letter extending the relief originally granted in July 2010 to permit asset-backed issuers to omit credit ratings disclosure from registration statements filed under Regulation AB. Regulation AB requires disclosure of the credit rating if the sale of asset-backed securities is conditioned on the assignment of a rating by a rating agency. Dodd-Frank repealed Rule 436(g), which provided an exemption from the requirement to include the consent of the rating agency where the registration statement includes disclosure of a credit rating by the rating agency. As a result, disclosure of a credit rating in a registration statement requires inclusion of the consent by the rating agency to be named as an expert.
The prior relief was set to expire with respect to any registered offerings of asset-backed securities commencing on or after January 24, 2011. In granting the relief, the Division noted that rating agencies continue to indicate that they are not willing to provide their consent, and without an extension of the no-action position, offerings of asset-backed securities would not be able to be conducted on a registered basis.