Mar. 23, 2023
March 23, 2023
Hi,
I am opposed to the proposed rule based on the potential for the rule to allow some of the following issues:
1. Risk-mitigating hedging activities: This exception would allow securitizers to engage in hedging activities to reduce their risk exposure related to the securitization, but it could be exploited to engage in conflicted practices. For example, a securitizer could engage in
hedging activities that benefit their own interests at the expense of investors in the securitization.
2. Bona fide market making: This exception would allow securitizers to make a market in the securities being securitized, which could be used to ensure liquidity and pricing stability in the market. However, it could also be used as a loophole to engage in conflicted practices. For example, a securitizer could artificially manipulate the market to benefit their own interests.
3. Certain liquidity commitments: This exception would allow securitizers to make certain commitments to provide liquidity in the event of market disruptions or other contingencies. While this is intended to ensure the stability of the securitization market, it could also be used as a loophole to engage in conflicted practices. For example, a securitizer could use this exception to avoid losses at the expense of investors in the securitization.
I hope these issues are taken notice since they jeopardize the market and affect mostly retail investors.
Thank you for your time.