RT Journal Article SR Electronic T1 Regulatory Developments in the United States and Europe:
An Analysis of Recent Reforms Affecting Securitization Transactions JF The Journal of Structured Finance FD Institutional Investor Journals SP 8 OP 17 DO 10.3905/jsf.2012.18.3.008 VO 18 IS 3 A1 Peter Humphreys A1 Ben Jaffe YR 2012 UL https://pm-research.com/content/18/3/8.abstract AB In this article, the authors provide an analysis of the recent regulatory developments that have taken place in the United States and the European Union and highlight the impact that such regulatory developments have had on securitization transactions. The authors summarize and compare the regulatory developments in the United States and the European Union across three key areas: risk retention, due diligence and disclosure, and the role of credit rating agencies (conflicts of interest and disclosure). They also analyze the differences between U.S. and European reforms in these areas and attempt to explain the reactions that such reforms have received and whether or not these reforms seem to be accomplishing their intended goals. In addition, the article summarizes several key U.S. reforms for which no E.U. equivalent currently exists but which nonetheless have important impacts on the regulatory treatment of securitization transactions in Europe. These additional U.S. reforms fall into six areas: disclosure of repurchases, due diligence reports, credit rating agencies (description of representations and warranties), proprietary trading, commodity pool issues, and conflicts of interest. Finally, the article addresses whether any parallel reforms are being considered in the E.U. as well as how recent economic events in both the U.S. and Europe may impact the proposed reforms that have yet to be finalized.TOPICS: Developed, security analysis and valuation, legal and regulatory issues for structured finance