Mar. 24, 2023
To who it may concern, 1. Risk-mitigating hedging activities. This exemption would allow scrutinizers to engage in hedging activities to reduce their risk exposure related to securitization, but it could be exploited to engage in conflicted practices. For example, he scrutinizer could engage in hedging activities that benefit their own interests at the expense of investors in the scrutinization. 2. Bona fide market making. This exception would allow scrutinizers to make a market in the securities being scrutinized, which could be used to ensure liquidity and price stability in the market. However, it could also be used as a loophole to engage in conflicted practices. For example, a scrutinizer could artificially manipulate the market to benefit their own needs. 3. Certain liquidity commitments. This exception would allow scrutinizers to make certain comments to provide liquidity in the event of market disruptions or other contingencies. While, this is intended to ensure stability to the securitization market, it could be used as a loophole to engage in conflicted practices. For example, a securitizer could use this exemption to avoid losses at the expense of investors in the securitization. Sincerely, Jon Egli