Market Guide to the Implementation of SEC Rule 192
Following the finalization of the SEC’s rule on conflicts of interest in securitization transactions (Rule 192) in late-2023, SIFMA formed a working group to discuss and develop an informative Market Guide that could help assist securitization participants in their implementation of Rule 192. The working group included SIFMA dealer and AMG members, as well as associate member outside counsel from a number of firms, and finally representatives from the LSTA and CREFC.
The Market Guide covers 10 broad topic areas that are subdivided into dozens of more specific questions and answers. They range from what kinds of securities and market participants are in scope, to criteria that may help identify a conflicted and therefore prohibited transaction, to what the hedging and market making exemptions require and how they differ from the Volcker Rule exemptions, to how the rule may apply extra-territorially, and more.
The final rule is effective February 5, 2024. Under the compliance date adopted in the release, any securitization participant must comply with the prohibition and the requirements of the exceptions to the final rule, as applicable, with respect to any ABS the first closing of the sale of which occurs on or after Monday, June 9, 2025. While the document is not an opinion or legal advice, it should provide a useful overview of what Rule 192 is, and help elucidate things securitization participants need to think about as the effective date approaches and transactions begin to fall within scope. We expect that this document may be updated in the future as interpretations and any SEC guidance crystallizes, and therefore label this as version 1.0.
Following the finalization of the SEC’s rule on conflicts of interest in securitization transactions (Rule 192) in late-2023, SIFMA formed a working group to discuss and develop an informative Market Guide that could help assist securitization participants in their implementation of Rule 192. The working group included SIFMA dealer and AMG members, as well as associate member outside counsel from a number of firms, and finally representatives from the LSTA and CREFC.
The Market Guide covers 10 broad topic areas that are subdivided into dozens of more specific questions and answers. They range from what kinds of securities and market participants are in scope, to criteria that may help identify a conflicted and therefore prohibited transaction, to what the hedging and market making exemptions require and how they differ from the Volcker Rule exemptions, to how the rule may apply extra-territorially, and more.
The final rule is effective February 5, 2024. Under the compliance date adopted in the release, any securitization participant must comply with the prohibition and the requirements of the exceptions to the final rule, as applicable, with respect to any ABS the first closing of the sale of which occurs on or after Monday, June 9, 2025. While the document is not an opinion or legal advice, it should provide a useful overview of what Rule 192 is, and help elucidate things securitization participants need to think about as the effective date approaches and transactions begin to fall within scope. We expect that this document may be updated in the future as interpretations and any SEC guidance crystallizes, and therefore label this as version 1.0.
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Learn about SIFMA's policy and market practice recommendations for securitized products – from the perspective of issuers, sponsors, and liquidity providers of securitization transactions – with the goal of increasing the efficiency, liquidity and resiliency of these markets.