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Abstract: 

In an appeal by the LSTA, the D.C. Circuit holds that managers of open-market CLOs are not subject to the Dodd-Frank credit risk retention rules. The author discusses the decision, beginning with an overview of the rules, the structure of open-market CLOs, and the controversy surrounding the identification of open-market CLO managers as sponsors. He then turns to the holding and rationale of the decision, the potential exemption of other securitization structures, and implications for identification of the sponsor in other securitization structures.

Keywords: Loan Syndications & Trading Ass’n v. SEC; Open-Market CLOs

Affiliations:  1: Morgan Lewis & Bockius LLP.