Feb. 23, 2023
February 23, 2023 Dear SEC, As a household investor, this is why the rule for Prohibition Against Conflicts of Interest in Certain Securitizations is important and need to enforce immediately. Protecting investors: Conflicts of interest can arise when the issuer, sponsor, or underwriter of an ABS has a financial interest that conflicts with the interests of investors. This can result in investors being misled or not receiving the returns they were promised. By prohibiting conflicts of interest, investors are better protected. Promoting transparency: The regulation requires parties involved in securitizations to disclose any potential conflicts of interest, as well as compensation they receive for arranging the securitization. This promotes transparency and helps investors make informed decisions. Preventing abuse: Without proper regulation, parties involved in securitizations may engage in abusive practices, such as intentionally selecting low-quality assets for securitization or overvaluing them. Prohibiting conflicts of interest can help prevent such abuses. Maintaining financial stability: Securitization plays an important role in the financial system by providing a means for banks and other lenders to transfer risk off their balance sheets. If securitization is not conducted in a transparent and fair manner, it can lead to financial instability. Prohibiting conflicts of interest helps ensure that securitization is conducted in a responsible manner. Overall, the prohibition against conflicts of interest in certain securitizations is important for protecting investors, promoting transparency, preventing abuse, and maintaining financial stability.