Mar. 15, 2023
March 15, 2023
I am writing to submit my comments on S7-01-23, the proposed rule prohibiting conflicts of interest in certain securitizations.
I commend the SEC for its efforts to strengthen the regulatory framework surrounding securitizations and eliminate conflicts of interest. However, I suggest that the proposed rule be revised to exclude exceptions for risk-mitigating hedging activities, bona fide market making, and certain liquidity commitments. Such exceptions would significantly undermine the effectiveness of the rule and create loopholes for securitizers to engage in conflicted practices.
Furthermore, I urge the SEC to expand the scope of the proposed rule to cover collateralized debt obligations (CDOs) and other securitization transactions. CDOs have been a source of numerous conflicts of interest and abuses, and their inclusion in the rule would promote transparency, protect investors, and maintain the integrity of the financial markets.
In conclusion, I appreciate the SEC's efforts to address conflicts of interest in securitizations and urge the agency to continue to strengthen the regulatory framework surrounding these transactions. Thank you for your consideration.
Sincerely,
David Valenzuela