Series 24: 3.6.2.3.4. Collateralized Mortgage Obligations (CMOs)

3.6.2.3.4. Collateralized Mortgage Obligations (CMOs)

CMOs are highly risky debt instruments backed by a pool of mortgage pass-through securities or mortgage loans. All advertisements, sales literature, and correspondence concerning CMOs:

• Must include in the name of the offered product the term “collateralized mortgage obligation”

• May not compare CMOs to any other investment vehicle

• Must disclose that a government agency backing applies only to the face value of th