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Title 15, Commerce and TradeRelease 119-73not60

§77z–2a Conflicts of Interest Relating to Certain Securitizations

Title 15 › Chapter 2A— SECURITIES AND TRUST INDENTURES › Subchapter I— DOMESTIC SECURITIES › § 77z–2a

Last updated Apr 3, 2026|Official source

Summary

Underwriters, placement agents, initial purchasers, sponsors, and their affiliates or subsidiaries must not do anything that creates a big conflict of interest with investors in an asset-backed security for one year after the first closing of the sale. "Asset-backed security" here also covers synthetic versions. The Securities and Exchange Commission had to write rules to carry this out within 270 days after July 21, 2010 (by April 17, 2011). The ban does not stop risk-reducing hedges tied to their own positions, purchases or sales made to meet liquidity commitments, or real market-making. It does not change other existing conflict-of-interest rules.

Full Legal Text

Title 15, §77z–2a

Commerce and Trade, Source: USLM XML via OLRC

(a)An underwriter, placement agent, initial purchaser, or sponsor, or any affiliate or subsidiary of any such entity, of an asset-backed security (as such term is defined in section 78c of this title, which for the purposes of this section shall include a synthetic asset-backed security), shall not, at any time for a period ending on the date that is one year after the date of the first closing of the sale of the asset-backed security, engage in any transaction that would involve or result in any material conflict of interest with respect to any investor in a transaction arising out of such activity.
(b)Not later than 270 days after July 21, 2010, the Commission shall issue rules for the purpose of implementing subsection (a).
(c)The prohibitions of subsection (a) shall not apply to—
(1)risk-mitigating hedging activities in connection with positions or holdings arising out of the underwriting, placement, initial purchase, or sponsorship of an asset-backed security, provided that such activities are designed to reduce the specific risks to the underwriter, placement agent, initial purchaser, or sponsor associated with positions or holdings arising out of such underwriting, placement, initial purchase, or sponsorship; or
(2)purchases or sales of asset-backed securities made pursuant to and consistent with—
(A)commitments of the underwriter, placement agent, initial purchaser, or sponsor, or any affiliate or subsidiary of any such entity, to provide liquidity for the asset-backed security, or
(B)bona fide market-making in the asset backed security.
(d)This subsection 11 So in original. Probably should be “section”. shall not otherwise limit the application of section 78o–11 of this title.

Legislative History

Notes & Related Subsidiaries

Statutory Notes and Related Subsidiaries

Effective Date

Pub. L. 111–203, title VI, § 621(b), July 21, 2010, 124 Stat. 1632, provided that: “section 27B of the Securities Act of 1933 [15 U.S.C. 77z–2a], as added by this section, shall take effect on the

Effective Date

of final rules issued by the [Securities and Exchange] Commission under subsection (b) of such section 27B, except that subsections (b) and (d) of such section 27B shall take effect on the date of enactment of this Act [July 21, 2010].”

Reference

Citations & Metadata

Citation

15 U.S.C. § 77z–2a

Title 15, Commerce and Trade

Last Updated

Apr 3, 2026

Release point: 119-73not60