Statement Summary
The Office of Structured Finance’s response addresses SIFMA’s request for no action relief under Securities Act Rule 192 related to securitization transactions. The Division of Corporation Finance will not recommend enforcement action for transactions where securitization participants have implemented specific policies to prevent conflicts of interest between Non-Deal Team Employees and the ABS Deal Teams. Key conditions include ensuring Non-Deal Team Employees do not coordinate with Deal Teams or access restricted information. The letter emphasizes that this view is not a regulatory change and is contingent on the adherence to the stated conditions.
Original Statement
SIFMA et al.
Response of the Office of Structured Finance
Division of Corporation Finance
May 16, 2025
Via EmailChris Killian, SIFMA
David Dwyer, Structured Finance Association
Tess Virmani, LSTA, Inc.
Sairah Burki, CRE Finance Council (CREFC)
Brett Waxman, Bank Policy Institute
Stuart M. Litwin and Michelle M. Stasny, Mayer Brown LLPRe: Request for Rule 192 No Action Relief
Incoming Letter dated May 9, 2025Dear Mr. Killian et al.,
We are responding to your letter dated May 9, 2025, addressed to Kayla Roberts. To avoid having to recite or summarize the facts set forth in your letter, we attach a copy of your letter. Unless otherwise noted, capitalized terms in this response letter have the same meaning as in your letter.
Based on the facts and representations presented in your letter, the Division of Corporation Finance (the “Division”) will not recommend enforcement action to the Commission for a transaction under Securities Act Rule 192(a)(3)(iii) where the applicable securitization participant (as defined in Rule 192(c)) has adopted the policies and procedures, and satisfied the conditions, described under the heading “Requested Relief” in your incoming letter.
Specifically, the Division will not recommend enforcement action to the Commission under Rule 192(a)(3)(iii) with respect to a transaction entered into by a securitization participant related to an asset-backed security (as defined in Rule 192(c)) subject to the rule’s prohibition against engaging in conflicted transactions (as defined in Rule 192(a)(3)) where the person entering into such transaction is a Non-Deal Team Employee and the following conditions are satisfied:
- The Securitization Participant has written policies and procedures in place reasonably designed to:
- Prevent the coordination of ABS Deal Teams with Non-Deal Team Employees in connection with the relevant ABS;
- Prevent access to, and receipt of, Restricted ABS Information by Non-Deal Team Employees from ABS Deal Teams;
- The Non-Deal Team Employees did not engage in such coordination with ABS Deal Teams and there was no access to, or receipt of, Restricted ABS Information by Non-Deal Team Employees from ABS Deal Teams;
- Even if such individuals were in technical compliance with parts (a) and (b) above, they were not part of a plan or scheme to evade the prohibition in Rule 192(a)(1).
This letter reflects the views of the staff of the Division of Corporation Finance. It is not a rule, regulation, or statement of the Commission, and the Commission has neither approved nor disapproved its content. This letter, like all staff statements, has no legal force or effect: it does not alter or amend applicable law, and it creates no new or additional obligations for any person. Because the Division’s views are based on the representations in your letter, any different facts or conditions might require the Division to reach a different conclusion.
Sincerely,
/s/ Kayla M. Roberts
Kayla M. Roberts
Acting Chief, Office of Structured Finance
Division of Corporation Finance
Footnotes:
[1] 17 CFR 230.192(a)(3)(iii).
[2] For the avoidance of doubt, this letter does not address, and has no effect on, the requirements of Section 15(g) of the Exchange Act, which requires that brokers or dealers establish, maintain, and enforce written policies and procedures reasonably designed, taking into consideration the nature of their business, to prevent the misuse of material, nonpublic information by the broker-dealer or any person associated with the broker-dealer. See 15 U.S.C. 78o(g).
[3] As the Commission noted in the adopting release for Rule 192, “a securitization participant generally should consider the structure of its organization and the ways in which information is shared to assess what mechanisms should be employed to comply with Rule 192.” See footnote 307 and related discussion in the adopting release (Prohibition Against Conflicts of Interest in Certain Securitizations, Release No. 33-11254 (Nov. 27, 2023) [88 FR 85396, 85416-7 (Dec. 7, 2023)].
Last Reviewed or Updated: May 16, 2025
