What additional responsibilities does a primary dealer that is an underwriter of an issue of asset-backed securities have under section 10.1(d) of the MLSA?
While primary dealers generally do not have responsibility for the accuracy of disclosure contained in the offering materials, section 10.1(d) of the MLSA makes an exception for primary dealers acting as underwriters. Under section 10.1(d), a primary dealer that acts as underwriter for an ABS issue represents that no information contained in the ABS’ offering materials furnished by it is untrue as to any material fact, or omits any material fact. The intention is that the underwriter’s representation under Section 10.1(d) of the MLSA as to the offering materials, taken together with the “reasonable care” standard of liability under Section 17.0, would impose a duty as to this disclosure coextensive with the underwriter’s legal obligations under the federal securities laws. If, on the date offering materials were delivered to the New York Fed or its custodian, the issuance and distribution of the securities have been completed so that the primary dealer is no longer acting as underwrite
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