The SEC extended the comment period for a proposed new rule for governing material conflicts of interest ("COI") in connection with certain securitizations (the “ABS Conflicts Proposal”).  Instead of ending the comment period on 12/19/11, it will now end on 1/13/12 - for interested persons more time to analyze the issues and prepare comments. Specifically, as proposed, Rule 127B under the Securities Act of 1933 would prohibit certain persons who create and distribute an asset-backed security ("ABS"), including a synthetic ABS, from engaging in transactions, within one year after the date of the first closing of the sale of the ABS, that would involve or result in a material conflict of interest with respect to any investor in the ABS.  The proposed rule also would provide exceptions from this prohibition for certain risk-mitigating hedging activities, liquidity commitments, and bona fide market-making. When the SEC originally released the proposed rule, it requested any comments about any potential interplay might exist between the ABS Conflicts Proposal the “Volcker Rule Proposal.”  The extended comment time is particularly targeted at those people who might submit comprehensive comments regarding the ABS Conflicts Proposal and any potential interplay with the Volcker Rule Proposal would benefit the Commission in its consideration of any final rules.

The Volcker Rule Proposal concerns prohibitions and restrictions on proprietary trading and certain interests in, and relationships with, hedge funds and private equity funds.  The Volcker Rule Proposal was published in the Federal Register on November 7, 2011 and the comment period for that proposal ends on January 13, 2012.

For further details, go to:   [SEC Proposed Rule Release 34-65942, 12/13/11]