Regulatory Alerts2006-09-06
Guidelines on Capital Requirements for Underwriters and Issuers of Asset-Backed Securities
The Trinidad and Tobago Securities and Exchange Commission issued these guidelines to harmonize capital requirements for underwriters registered under the Securities Industry Act with those licensed under the Financial Institutions Act. The document mandates that underwriters must maintain net assets equal to five percent of the transaction value, subject to a five million dollar minimum, and applies these rules to all securities including government issues and best efforts underwriting. Additionally, issuers of asset-backed securities must demonstrate the capacity to acquire at least eight percent of the underlying security, register as reporting issuers, and file detailed disclosures regarding the new security's structure and performance.