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Proposed Rule

Prohibition Against Conflicts of Interest in Certain Securitizations

Overview

The Securities and Exchange Commission ("Commission') is proposing for comment a new rule under the Securities Act of 1933 ("Securities Act') to implement the prohibition under Section 621 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 ("Dodd-Frank Act') on material conflicts of interest in connection with certain securitizations. Proposed Rule 127B under the Securities Act would prohibit certain persons who create and distribute an asset- backed security, including a synthetic asset-backed security, from engaging in transactions, within one year after the date of the first closing of the sale of the asset-backed security, that would involve or result in a material conflict of interest with respect to any investor in the asset-backed security. The proposed rule also would provide exceptions from this prohibition for certain risk-mitigating hedging activities, liquidity commitments, and bona fide market-making.

Last Reviewed or Updated: May 25, 2023

Details

Public Comments Due
File Number
S7-38-11
Rule Type
Proposed
Release Number
34-65942
SEC Issue Date
Federal Register Publish Date
Document Citation

76 FR 78181

RIN
3235-AL04