MBA, CREFC Response to SEC Conflicts of Interest Proposal

As The Commercial Real Estate Finance Council (“CREFC”) noted in their comment letter to the original version of the rule proposed in 2011, market participants should not create asset-backed securities (“ABS”) transactions designed to default in order to benefit from the default. We are concerned, however, that the Proposed Rule, as currently written, could materially impair the proper functioning of the CRE financing market by inadvertently capturing entities and activities that do not “bet” against the relevant ABS.