Wall Street Trades in Asset-Backed Securities Face SEC Scrutiny for Conflicts
- Regulator proposes plan to reduce conflicts of interest
- Banks issuing ABS couldn’t bet opposite investors for one year
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Wall Street firms that help issue asset-backed securities wouldn’t be able to bet against those products under a plan from the US Securities and Exchange Commission.
The SEC’s five commissioners on Wednesday voted unanimously to propose new conflicts-of-interest regulations for investment banks and others involved in securitizations. The new restrictions wouldn’t cover market making or trades to hedge against risk, according to the commission.