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Clifford Chance

Clifford Chance


US Court of Appeals Rules That Risk Retention Rules Do Not Apply to CLO Managers

9 February 2018

On February 9, 2018, the US Court of Appeals for the District of Columbia ruled in favor of The Loan Syndications and Trading Association in the case of The Loan Syndications and Trading Association v. Securities and Exchange Commission and Board of Governors of the Federal Reserve System. Specifically, the court decided that the credit risk retention rules adopted by the US Securities and Exchange Commission do not apply to managers of CLOs that purchase loans in the open market. The reason for this ruling was that these managers do not qualify as "securitizers" as defined in the applicable statutory provision.

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