SEC requires Python for ABS deals

Andy Nguyen

Andy Nguyen

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http://www.sec.gov/rules/proposed/2010/33-9117.pdf

We are proposing to require that most ABS issuers file a computer program that gives effect to the flow of funds, or “waterfall,” provisions of the transaction. We are proposing that the computer program be filed on EDGAR in the form of downloadable source code in Python. … (page 205)

Under the proposed requirement, the filed source code, when downloaded and run by an investor, must provide the user with the ability to programmatically input the user’s own assumptions regarding the future performance and cash flows from the pool assets, including but not limited to assumptions about future interest rates, default rates, prepayment speeds, loss-given-default rates, and any other necessary assumptions … (page 210)

The waterfall computer program must also allow the use of the proposed asset-level data file that will be filed at the time of the offering and on a periodic basis thereafter. (page 211)
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hahaa. I was just about to post that actually.

I don't think it's fair to specify a language.
 
That's weird, why wouldn't the requirement just be an executable? The SEC wants to be able to read the source, and allow others to check/test it?
 
Andy said:
You are always a second late, Mister ;)
This would be welcome news by the Python fans here.
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I don't mind it as much as I am still learning, so I would just know now to add Python to my arsenal. Since the majority still use C++ over Python, it is unfair to them.

As someone on another forum said.. "Regulators must specify objective, not method."
 
joelb said:
That's weird, why wouldn't the requirement just be an executable? The SEC wants to be able to read the source, and allow others to check/test it?
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Python is simple and readable. I'll take 2 pages written in Python to explain the liability structure over 200 pages written in legalese any day.
 
I'm sure lawyers will be able produce a 500 pages Python waterfall for each deal :) Then we will beg them to give us old good prospectus.
 
Complicated is better than complex.
Complex is better than simple.
In the face of ambiguity, smile and bill another hundred hours.
 
bob said:
Python is simple and readable. I'll take 2 pages written in Python to explain the liability structure over 200 pages written in legalese any day.
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Right. Reminds me of the 'Homer's Triple Bypass' Simpsons episode:

Dr Hibbert: Homer, I'm afraid you'll have to undergo a coronary bypass operation.
Homer: Say it in English, Doc!
Dr Hibbert: You're going to need open-heart surgery.
Homer: Spare me your medical mumbo jumbo!
Dr Hibbert: We're going to cut you open and tinker with your ticker.
Homer: Could you dumb it down a shade?
 
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