CLO risk retention less certain following lawsuit

By Ryan Bolger
25 Nov 2014

CLO managers could escape burdensome risk retention requirements following a law suit to block the rule on grounds it was an arbitrary and capricious overstep by financial regulators. That argument has proved successful in the past, but CLO managers are not yet changing course as a result of the news.

The Loan Syndications and Trading Association (LSTA) filed the suit against the Securities and Exchange Commission (SEC) and the Federal Reserve Board on November 10, according to a copy of the complaint obtained by GlobalCapital. The LSTA alleged that the risk retention rule was an arbitrary and capricious abuse ...

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