§77z–2a Conflicts of interest relating to certain securitizations

Summary

Stops underwriters, placement agents, initial purchasers, sponsors, and their affiliates or subsidiaries from doing any deal that creates a major conflict of interest with investors in connection with an asset-backed security (the law’s term for securities backed by assets, and it also covers synthetic versions) for the period ending one year after the date of the first closing of the sale. The Securities and Exchange Commission must issue rules to put this into effect not later than 270 days after July 21, 2010. Allowed exceptions are hedges meant only to reduce the specific risks from their own positions tied to the offering, and buys or sells made to meet liquidity commitments or for real market-making. This rule does not change how other existing federal conflict-of-interest rules apply.