March 3, 2022 - Earlier this week the LSTA submitted a letter to the Securities and Exchange Commission (SEC), on behalf of itself and 12 other financial trade associations, requesting a 90-day extension of the comment period for the SEC’s recent proposal on private fund disclosure and a 30 day extension of comment period relating to the SEC’s proposal relating to Rule PF. We have previously written about how the proposed private fund rule would impact CLOs (not well) and analyzed the first part of the SEC’s own cost-benefit economic analysis contained in that rule proposal. Despite its great length and breadth (it runs 341 pages and requests answers to more than 800 questions), the SEC allotted only 30 days from the publication of the proposal in the Federal Register. The trade associations note that in addition to the proposals on private funds and Rule PF, the SEC has recently published proposed rules on shortening the securities transaction settlement cycle, beneficial ownership reporting, security-based swap position reporting, and cybersecurity risk management (collectively representing more than 1,000 additional pages of text and thousands of additional individual questions from the SEC). As we note in the letter, in the short comment periods provided, “it simply is not practical for us and our members to conduct and submit the analyses that the Commission itself has requested and properly recognizes are material to understanding the proposals’ impacts. Meaningful stakeholder input—through substantial and carefully considered comments—will be crucial to inform the Commission’s deliberations and judgments about whether and how to move forward with these packages of regulatory reforms.” The extension request letter is available here. We hope to hear back from the SEC in the coming days.
We have also recently recorded an on-demand webinar describing in details the implications of the proposed rule for CLOs featuring Amy Doberman of WilmerHale, Nicole Skalla of Paul Hastings, and Lee Shaiman and Elliot Ganz of the LSTA. The webinar is available here.