As I write this, we are awaiting SEC’s vote scheduled for tomorrow, August 27, on final Regulation AB2 Rule and the NRSRO Rules. I say “man the barricades or the bleachers” because I’m not sure whether there is much to do except watch these unfold.

Reg AB is coming to us almost three years after the last comprehensive re-proposal was published of the SEC’s 2010 effort at restating Reg AB. Having just reread the 2011 republication of Reg AB to prepare for the Great Unveiling, I was struck by how much was uncertain, and how extensive were industries’ comments. In both the first and second round of Reg AB rulemaking, there could be a lot of difficult surprises in this release, notably including the extension of Reg AB to the 144A market and weaponization of officer certifications on the structure and asset quality of securitizations under the new Rule. Another interesting question is what the transition rule will be. I hope it’s long. I’m prepared to be disappointed.

And let’s not forget the NRSRO Rule. Last thing we saw from the SEC on this topic was a white paper where the SEC literally threw up its hands in frustration over what to do with the Franken Amendment. God knows what will be in this set of rules.

Remarkably, the preparation of these two Rules has been a leak-free environment. No one seems to know much about them. So, we will get to enjoy the full measure of surprise tomorrow when we begin to read through these things.

What do we do if there are existential risks to capital formation in these Rules? What do we do if there are things here that simply do not make any sense? Do we have recourse? Well, it may be easier to climb onto the bleachers and watch this potentially game changing set of rules role out, I think we need to resist that and think about the barricades. I suspect that there will be much to do.