Risk retention rule: Difference between revisions
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===Transfer=== | ===Transfer=== | ||
To be in scope for risk-retention, the sponsor needs to be offloading the assets in the first place. If it just originates them in the market (as is the case for certain CLO structures, for example) the requirement for there to be a “transfer” is not met. On February 9, 2018, the Circuit Court, reversing an earlier ruling, ruled<ref>See [https://www.lsta.org/news-resources/clo-risk-retention-ruling-analysis-from-the-trenches/ press release].</ref> that collateral managers in “open-market” CLO transactions are not subject to the risk retention rule or any related regulations. | To be in scope for risk-retention, the sponsor needs to be offloading the assets in the first place. If it just originates them in the market (as is the case for certain CLO structures, for example) the requirement for there to be a “transfer” is not met. On February 9, 2018, the Circuit Court, reversing an earlier ruling, ruled<ref>See [https://www.lsta.org/news-resources/clo-risk-retention-ruling-analysis-from-the-trenches/ press release].</ref> that collateral managers in “open-market” CLO transactions are not subject to the risk retention rule or any related regulations. | ||
===[[Loan]]s=== | |||
If you do your repack in non-securities format — such as a loan — then the risk retention rules don’t seem to apply. Which — if true — is nice. | |||
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*[https://www.law.cornell.edu/cfr/text/17/part-246/subpart-B Cornell legislation resource] | *[https://www.law.cornell.edu/cfr/text/17/part-246/subpart-B Cornell legislation resource] | ||