The CMBS market waited with baited breath for Financial Accounting Standards Board's draft of responses (in question and answer form) addressing industry questions about the limitations imposed on servicer activities in CMBS transactions. This draft was the result of oral discussions between staff and board members held on May 16.

Though still disappointing, the draft provided some relief in the form of an ancillary provision (known as question no. 8). This provision allows security holders to transfer assets to an entity that is not a qualifying special purpose entity provided that the transferor has "no continuing involvement with the transferred assets." Experts believe that the transferee in this case can still exercise the functions of a special servicer.

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