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2705 Asset-Backed Securities — Presentation of Certain Third Party Financial Information [S-K 1100]
us SEC - Financial Reporting Manual
2705.1 Regulation AB - Background - Regulation AB is the source of various disclosure items and requirements for "asset-backed securities" filings under the Securities Act of 1933 and the Securities Exchange Act of 1934. "Asset-backed security" is defined in S-K 1101(c)(1) as a security that is primarily serviced by cash flows of a discrete pool of receivables or other financial assets, either fixed or revolving, that by their terms convert into cash within a finite time period, plus any rights or other assets designed to assure the servicing or timely distributions of proceeds to the security holders; provided that in the case of financial assets that are leases, those assets may convert to cash partially by the cash proceeds from the disposition of physical property underlying such leases. The definition of "asset-backed security" has a number of additional conditions listed at S-K 1101(c)(2) which must be met in order for a security to be considered an "asset-backed security."
2705.2 Regulation AB — Requirement for Certain Third Party Financial Information
Regulation AB requires certain third party financial information for:
a. "Significant Obligors" (defined at S-K 1101(k)) of Pool of Assets [S-K 1112(b)]
b. Credit enhancement and other support, except for certain derivative instruments [S-K 1114(b)(2)]
c. Certain Derivative Instruments [S-K 1115(b)]
2705.3 Regulation AB - Certain Third Party Financial Information for “Significant Obligors” (defined at S-K 1101(k)) of Pool of Assets [S-K 1112(b)]
- If pool assets relating to a significant obligor represent 10% or more, but less than 20% of the asset pool, then depending on type of significant obligor, provide either selected financial data required by S-K 301 or net operating income only for the most recent fiscal year and interim period. See S-K 1112(b).
- If pool assets relating to a significant obligor represent 20% or more of the asset pool, provide financial statements of the significant obligor meeting the requirements of Regulation S-X (S-X 1—01 through S-X 12—29), except S-X 3—05 and S-X Article 11. Financial statements of such obligor and its subsidiaries consolidated [as required by Proxy Rules 14a—3(b)] shall be filed. See details and exceptions at S-K 1112(b).
NOTE to SECTION 2705.3
Financial statements meeting all of the requirements of Regulation S-X (S-X 1-01 through S-X 12-29) are required notwithstanding the reference to Proxy Rules 14a-3(b), which might be read to suggest certain components of Regulation S-X, such as financial statement schedules, need not be provided.
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2705.4 Regulation AB - Certain Third Party Financial Information for Credit Enhancement and Other Support, except for certain derivative instruments [S-K 1114(b)(2)]
- If any entity or group of affiliated entities providing enhancement or other support described in S-K 1114(a) is liable or contingently liable to provide payments representing 10% or more, but less than 20%, of the cash flow supporting any offered class of the asset-backed securities, provide financial data required by Item 301 of Regulation S-K for each such entity or group of affiliated entities.
- If any entity or group of affiliated entities providing enhancement or other support described in S-K 1114(a) of this section is liable or contingently liable to provide payments representing 20% or more of the cash flow supporting any offered class of the asset-backed securities, provide financial statements meeting the requirements of Regulation S-X (S-X 1— 01 through S-X 12—29), except S-X 3—05 and S-X Article 11, of such entity or group of affiliated entities. Financial statements of such enhancement provider and its subsidiaries consolidated (as required by Proxy Rules 14a—3(b)) shall be filed under this item. See details and exceptions at S-K 1114(b)(2).
2705.5 Regulation AB - Certain Third Party Financial Information for Certain Derivative Instruments [S-K 1115(b)]
- If the aggregate significance percentage related to any entity or group of affiliated entities providing derivative instruments contemplated by S-K 1115 is 10% or more, but less than 20%, provide financial data required by Item 301 of Regulation S-K for such entity or group of affiliated entities.
- If the aggregate significance percentage related to any entity or group of affiliated entities providing derivative instruments contemplated by S-K 1115 is 20% or more, provide financial statements meeting the requirements of Regulation S-X (S-X 1—01 through S-X 12—29), except S-X 3—05 and S-X Article 11, of such entity or group of affiliated entities. Financial statements of such entity and its subsidiaries consolidated (as required by Proxy Rules 14a—3(b)) shall be filed under this item. See details and exceptions at S-K 1115(b).
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