SIFMA issued the following statement from president and CEO Kenneth E. Bentsen, Jr. on the proposed rule from the Securities and Exchange Commission (SEC), “Prohibition Against Conflicts of Interest in Certain Securitizations”:

“SIFMA is reviewing the newly proposed SEC rule prohibiting conflicts of interest in certain securitization transactions with our members, with a particular focus on if and how the SEC addressed the numerous concerns commenters expressed regarding the previous version of the proposal, including those submitted by SIFMA. Asset-backed securities are a material source of funding for consumer and corporate credit in the United States, such as mortgages and auto loans, and we must ensure that these markets remain active and liquid so as to support the consumers, businesses, and the broader economy that depends on them.  Overly broad or unclear rules that suppress beneficial activity will have real and harmful economic consequences.

#AssetBackedSecurities are a material source of funding for consumer and corporate credit; we must ensure these markets remain active & liquid to support the consumers, businesses, and broader economy that depend on them. Our statement on @SECgov proposal: https://t.co/8bais3K8pI

— SIFMA (@SIFMA) January 25, 2023

“We are also concerned that the Commission is only allowing a 30-day comment period from when the rule proposal is officially published in the Federal Register.

Today’s proposal is a complicated and important rulemaking mandated by the Dodd-Frank Act, which was passed more than a decade ago, so we do not see a reason to move with such haste, especially since this rule applies to the same markets impacted by other pending SEC rulemakings such as a proposed best execution rule for fixed income securities.

We and others in the industry have repeatedly stressed to SEC Chair Gensler that sufficient time for meaningful public input into individual proposals and more holistically on the SEC’s rulemaking agenda and the possible interconnectedness of these proposals is vitally important and ultimately could have a significant impact on savers, investors, capital formation, and economic growth and job creation.”

Source: SIFMA