Mar. 24, 2023
I am a retail/individual/household investor and I do not support any of the exemptions in this filing. 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. 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. The concept of guaranteed liquidity must be broadly removed from all markets in general as it encourages moral hazard and defeats natural price discovery. Guaranteed or ensured liquidity is the antithesis of a fair and properly functioning market. 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 will repeat, the concept of guaranteed liquidity must be broadly removed from all markets in general as it encourages moral hazard and defeats natural price discovery. Guaranteed or ensured liquidity is the antithesis of a fair and properly functioning market. Illiquid markets equate to price discovery. In no other market, globally, is there another example where supply is able to be artificially created. This concept is antiquated and detrimental to investors. Please think about what you’re doing. Supply & demand are forces you must leave to their own outcome. Thank you -Kyle Stewart