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On September 19, 2011, the Securities and Exchange Commission (the "SEC") issued a release (the "Release") proposing new rule 127B (the "Proposed Rule") under the Securities Act, which would prohibit "material conflicts of interest" in securitizations. The Proposed Rule is intended to implement Section 621 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act"), codified as Section 27B ("Section 27B") of the Securities Act of 1933, as amended (the "Securities Act"). Subject to certain exceptions, Section 27B prohibits certain participants in asset-backed securities ("ABS") transactions from engaging in transactions within a designated time period that would involve or result in any material conflict of interest. Disclosure of such material conflicts of interest would not otherwise permit such prohibited transactions. https://www.cadwalader.com/resources/clients-friends-memos/sec-proposes-a-new-rule-prohibiting-conflicts-of-interest-in-securitizations