Cabela's 2013 Annual Report Download - page 66

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On July 9, 2013, the FDIC adopted interim final rules which revised its risk-based and leverage capital
requirements for FDIC-supervised institutions. These interim final rules are substantially identical to the joint final
rules issued by the Office of the Comptroller of the Currency and the Board of Governors of the Federal Reserve
System on July 2, 2013. The interim final rules and the joint final rules implement the regulatory capital reforms
recommended by the Basel Committee on Banking Supervision in December 2010, commonly referred to as “Basel
III,” and capital reforms required by the Reform Act. Among other things, the interim final rules and the joint
final rules revise the agencies’ prompt corrective action framework by introducing a common equity tier 1 capital
requirement and a higher minimum tier 1 capital requirement. In addition, the interim final rules and the joint final
rules include a supplementary leverage ratio for depository institutions subject to the advanced approaches capital
rules. The phase-in period for the interim final rules will begin in January 2015 for WFB. WFB is continuing to
assess how the interim final rules and the joint final rules will impact it and its ability to comply with the new
common equity tier 1 capital requirement and higher minimum tier 1 capital requirement.
The ability of the Financial Services segment to engage in securitization transactions on favorable terms or at
all could be adversely affected by disruptions in the capital markets or other events, which could materially affect
our business and cause the Financial Services segment to lose an important source of capital. The Reform Act,
which was signed into law in July 2010, will also affect a number of significant changes relating to asset-backed
securities, including additional oversight and regulation of credit rating agencies and additional reporting and
disclosure requirements.
In addition, several rules and regulations have recently been proposed or adopted that may substantially affect
issuers of asset-backed securities. On September 19, 2011, the SEC proposed a new rule under the Securities Act
of 1933, as amended, to implement certain provisions of the Reform Act. Under the proposed rule, an underwriter,
placement agent, initial purchaser, or sponsor of an asset-backed security, or any affiliate of any such person,
shall not at any time within one year after the first closing of the sale of the asset-backed security, engage in
any transaction that would involve or result in any material conflict of interest with respect to any investor in a
transaction arising out of such activity. The proposed rule would exempt certain risk-mitigating hedging activities,
liquidity commitments, and bona fide market-making activity. It is not clear how the final rule will differ from the
proposed rule, if at all. The final rule’s impact on the securitization market and the Financial Services segment is
also unclear at this time.
The Trust is structured to qualify for the exemption from the Investment Company Act provided by
Investment Company Act Rule 3a-7. On August 31, 2011, the SEC issued an advance notice of proposed rulemaking
regarding possible amendments to Investment Company Act Rule 3a-7. At this time, it is uncertain what form the
related proposed and final rules will take, whether the Trust would continue to be eligible to rely on the exemption
provided by Investment Company Act Rule 3a-7, and whether the Trust would qualify for any other Investment
Company Act exemption.
On July 26, 2011, the SEC re-proposed certain rules for asset-backed securities offerings (“SEC Regulation
AB II”), which were originally proposed by the SEC on April 7, 2010. If adopted, SEC Regulation AB II would
substantially change the disclosure, reporting, and offering process for public and private offerings of asset-backed
securities. As currently proposed, SEC Regulation AB II would, among other things, impose as a condition for
the shelf registration of asset-backed securities the filing of a certification concerning the disclosure contained in
the prospectus and the design of the securitization at the time of each offering off the shelf and the appointment
of a credit risk manager to review assets when credit enhancement requirements are not met or at the direction
of investors. Issuers of publicly offered asset-backed securities would be required to disclose more information
regarding the underlying assets. Moreover, proposed SEC Regulation AB II would alter the safe harbor standards
for private placements of asset-backed securities imposing informational requirements similar to those applicable
to registered public offerings. The final form that SEC Regulation AB II may take is uncertain at this time, but
it may impact the Financial Services segment’s ability and/or desire to sponsor securitization transactions in
the future.