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.