9.1.3.3.4. Collateralized Mortgage Obligations (CMOs)
Collateralized Mortgage Obligations (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 government agency backing