The Loan Syndications and Trading Assoc. v. SEC, No. 17-5004 (D.C. Cir. 2018)Annotate this Case
LSTA represents firms that serve as investment managers of open-market collateralized loan obligations (CLO). LSTA challenged the defendant agencies' decision, embodied in the Credit Risk Retention Rule, to apply the credit risk retention requirements to managers of CLOs in section 941 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The DC Circuit agreed with LSTA that, given the nature of the transactions performed by CLO managers, the language of the statute invoked by the agencies does not encompass their activities. Because CLO managers were not "securitizers" under section 941, the managers need not retain any credit risk. Accordingly, the court reversed the judgment of the district court and remanded with instructions to grant summary judgment to LSTA.