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Understanding the terms "Assessment, Assertion, and Attestation"
Much has been written regarding Item 1122 of Regulation AB, however, an element of uncertainty still exists regarding the terms "assessment, assertion, and attestation". Discussed below are these terms and their overall relevance regarding Item 1122. In short, it is the servicer's responsibility to conduct an assessment and assert on that assessment, while it is the CPA firm's responsibility to conduct an attest engagement on the servicer's assertion. Thus;

The term assessment is referring to servicers or any party participating in the servicing function and that they have performed an assessment of compliance applicable to Regulation AB Item 1122 servicing criteria.

The term assertion implies that servicers or any party participating in the servicing function has conducted an assessment applicable to Item 1122 servicing criteria and has now made an assertion on that very assessment.

The term attestation is referring to the report that evaluates the servicer's assertion that was made regarding the servicers assessment of compliance with Regulation AB Item 1122 servicing criteria. This attestation function is conducted by a PCAOB CPA firm only.
The information contained herein is general in nature and is based on authorities that are subject to change. It is not intended, and should not be construed, as legal, accounting, or tax advice, or as an opinion provided (expressed or implied) by NDB LLP to the reader or any other person. This material may not be applicable to, or suitable for, the specific circumstances or needs, and may require consideration of legal, regulatory compliance, non-tax, or tax factors. Contact NDB LLP for engagement and a consultation prior to taking any action based upon this information or other marketing information. NDB LLP assumes no obligations to inform the reader of any changes in SEC legislation/regulations or tax laws or other factors that could affect the information contained herein.
Regulation AB Information Portal
View the Securities and Exchange Commission's (SEC) final ruling on Regulation AB; a comprehensive document that has brought about significant changes to the ABS Market.
A discussion and anlysis of all 24 regulation AB Items, ranging from Item 1100 to Item 1123.