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Syndicated Loan Market Advocacy & Regulatory

The LSTA advocates on behalf of the loan market, and focuses on critical matters (regulations under Dodd-Frank, Leveraged Lending Guidance, FATCA and Bankruptcy reform) that could dramatically affect the loan market and the broader economy.

Displaying 1-5 of 37 results.
DateTitle/DescriptionFiles
Oct 17, 2018

Comment Letter on Proposed Changes to the Volcker Rule

The LSTA submitted a comment letter on proposed changes to the Volcker Rule. Importantly for the loan and CLO markets, the proposal puts into play the issue of whether banks can own the debt securities of CLOs that hold bonds.  The LSTA’s comment letter focuses on two points.  First, it suggests that the final rule’s “loan securitization” exclusion be modified to include even traditional CLOs that have modest baskets for bonds or assets other than loans.  Including traditional CLOs in the definition of loan securitizations would be consistent with the congressional intent as reflected in the Volcker Rule’s “rule of construction” regarding loan securitizations since CLOs that existed at the time of the passage of Dodd-Frank did include bond baskets.  Second, it argues that the final rule’s definition of “ownership interest” that provides that the “rights of a creditor to exercise remedies upon the occurrence of an event of default…” include the right to participate in the removal of an investment manager “for cause” or participate in the replacement of a manger in such circumstances.

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Aug 9, 2018

Comment Letter on SEC Fiduciary Standard Proposal

The Securities and Exchange Commission earlier this year issued a two-part release that could impact investment managers - including loan managers.  The second part of the release requests comments regarding proposed enhanced investment adviser regulation.  The LSTA this week submitted a comment letter on the two proposals, broadly supporting the recommendations of the Investment Advisers Association (“IAA”).  The LSTA added a recommendation regarding Form CRS that would be relevant to some registered advisers that manage loans.  The IAA letters are available here and here.

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Oct 30, 2017

Comment Letter on “Request for Information Pertaining to Production of Rates”

In response to the “Request for Information Relating to the Production of Rates”, the LSTA submitted a letter to the Federal Reserve discussing the impact of a transition from LIBOR to SOFR (or another reference rate) on the U.S. syndicated loan market. The letter discusses key stakeholders in the syndicated loan market and why they care about the transition from LIBOR to a new reference rate. In addition, the letter addressed Question 3 “Are there any changes to one or more of these rates that would make them more useful? For what purposes?” 

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Apr 7, 2017

Risk Retention Letter to Treasury

In response to a recent Executive Order from president Trump outlining “Core Principles” for financial regulation and seeking suggestions for streamlining financial regulation, the LSTA submitted a letter to Treasury Secretary Mnuchin.  The letter outlines why the application of the Dodd-Frank risk retention provides no benefits but causes substantial harm to borrowers, investors, managers and, ultimately consumers, by restricting the flow of capital to American companies.  The LSTA identifies three avenues to reform and proposes that the SEC, as the agency that regulates the vast majority of managers, has the ability to exercise its authority to waive the risk retention rules for CLO managers.

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Aug 18, 2016

LSTA Incentive Compensation Letter

On Thursday August 18, 2016, the Loan Syndications and Trading Association (LSTA) submitted a comment letter to the OCC, Federal Reserve, FDIC, FHFA, NCUA and SEC in response to their notice of proposed rulemaking on Incentive-Based Compensation Arrangements.

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