The Return of Dodd-Frank Rulemaking: SEC Proposes Expansive Prohibition on Conflicts of Interest in Securitization

February 07, 2023

Key Takeaways

  • After a decade of regulatory inaction on the matter, the SEC recently re-proposed regulations implementing the Dodd-Frank Act’s prohibition on material conflicts of interest in securitization transactions.

  • The proposed rule is wide-reaching in a number of respects; in particular, the definition of “sponsor” is significantly broader than the definition used in other ABS regulation, and industry participants are digesting both the implications of the applicability of the rule to affiliates and subsidiaries, and the scope of the exceptions to the prohibition.

  • The SEC’s comment deadline is March 27, 2023, or 30 days after the date the proposed rule is published in the Federal Register, whichever period is longer.


In 2010, Congress directed the U.S. Securities and Exchange Commission (the “SEC”) to issue rules prohibiting certain conflicts of interest among securitization participants. After its initial proposal in 2011, and after a decade of regulatory inaction on the matter, in January, the SEC revived its original rulemaking process and released Rule 192 for comment.

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