Call to Action: The final risk retention rules
will change the status quo for nearly all CLO managers beginning in
the fourth quarter of 2016. All managers should begin assessing
whether and how they will comply with the final rules once they
come into effect and monitor ongoing market developments and work
closely with counsel to gauge the viability of emerging innovations
adopted to address risk retention requirements.
On October 21 and 22, 2014, six federal agencies, including the
Board of Governors of the Federal Reserve System, the U.S.
Securities and Exchange Commission, and the Federal Deposit
Insurance Corporation (collectively, the "Agencies"),
announced that they had approved a final rule requiring sponsors of
securitization transactions to retain risk in those transactions
(the "Final Rules") to implement the credit risk
retention requirements of Section 15G of the Securities Exchange
Act of 1934, as added by Section 941 of the Dodd-Frank Wall
