January 29, 2024 - As we noted last November, the SEC  issued exemptive relief with respect to the application of Rule 15c2-11 (the “Rule”) to 144A securities, including, most relevantly, CLO securities. The LSTA had pressed for this result in partnership with SIFMA. While the SEC in December 2022 deferred the application of the Rule to fixed-income securities for two years, the exemptive relief seemed to put the issue to bed, likely for good.

Last week, Congressman Alex Mooney (R. WV) introduced H.R. 7092, the “Protecting Private Jobs Creators Act.”  According to Congressman Mooney, the bill would exempt all fixed income securities, not just 144A securities, and would prevent the SEC from walking back its exemptive relief in the future. Senator Bill Hagerty (R-TN) introduced the same legislation in the Senate.

As we previously explained, for 70 years the Rule had only been applied to equities but in 2021 the SEC proposed to extend the Rule to fixed income securities, including CLOs. Under the Rule, broker-dealers would have had to obtain and review for accuracy and timeliness public information about issuers, such as their earnings statements, before they could begin or maintain a secondary market in fixed-income securities.  The LSTA supports the Protecting Private Jobs Creators Act. The legislation would codify the exemption for all fixed-income securities from Rule 15c2-11 compliance (including 144A securities), consistent with the SEC’s historical practice. We will continue to closely follow the progress of this legislation.

Become a Member

Membership in the LSTA offers numerous benefits and opportunities. Chief among them is the opportunity to participate in the decision making process that ultimately establishes loan market standards, develops market practices, and influences the market’s direction.

View Current Members

Our Partners

CUSIPFitch Group logolseg_da_logo_hrz_rgb_posMorningstar
Total Results: 

Sort by:

The Kirschner Case: This is the End

The Supreme Court denied Kirschner's petition for certiorari, finally ending the case. As LSTA's Elliot Ganz explains, this cements that syndicated loans are not securities,…