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SEC Finalizes Its Rule To Prohibit Conflicts of Interest in Certain Securitizations

Provided by Structured Finance Association

On November 27, the Securities and Exchange Commission (SEC) finalized its rule to prohibit conflicts of interest in certain securitizations.

The rule, originally proposed in September 2011 and then re-proposed on January 25, 2023, is designed to implement Section 27B of the Securities Act of 1933, a provision added by Section 621 of the Dodd-Frank Act. This rule is intended to prevent the sale of asset-backed securities that are tainted by material conflicts of interest.

The Structured Finance Association (SFA) is carefully reviewing this rule. We look forward to sharing further information, and analysis of the finalized rule, soon.

For additional background on this rule and the SFA’s advocacy on behalf of our membership, please refer to the comment letters previously submitted to the SEC by the SFA on March 27th and July 13th of this year.