Conference speakers and delegates hope that greater transparency will be at the top of the Securities and Exchange Commission's list of topics to be addressed during a project it is working on to develop regulations covering asset-backed securities. Mark Adelson, director and head of structured finance research at Nomura Securities International, explained that the SEC has signaled its intent to develop regulations covering the industry, but has not yet given any indication as to what the rules will address.
Marjorie Anderson, senior portfolio manager at Allstate Investments, said the initiative will be positive if it encourages transparency in servicing costs of securitized ABS vehicles. At present, this information is not typically offered by issuers, she noted. Not all ABS professionals, however, favor more transparency. John Devaney, president of United Capital Markets, said transparency is not always a plus. In order to take advantage of relative-value opportunities there has to be a lack of transparency, he said. "I look forward to the SEC's involvement, but hope it doesn't happen too quickly," he said. Devaney has pinned his hopes on the SEC requiring originators to declare whether they share the risk of the deals.
Stephen Etherington, first v.p. in securitization at Bank One, added that enhanced procedures for disclosure is not always the solution because the information is not necessarily meaningful. Instead investors may get better information by asking the managers tough questions, he said.
