CLOs should get risk retention exemption, says global regulatory body

Tuesday, November 20, 2012

International Organisation of Securities Commissions (Iosco) has called for CLOs to be excluded from securitisation risk retention rules

TAGS: Regulation Risk retention

Comment by: Anonymous. Posted 11 years ago [2012-11-22 10:49:45]

It is hard to justify a "carve out" for CLOs from risk retention rules. They are clearly complex investment products where the two key parties driving issuance (investment banks and managers) receive upfront or contractual fees. Possibly an unintended result (given the original motivation for risk retention rules for balance sheet transactions) but a bad thing? don't think so.

Comment by: Anonymous. Posted 11 years ago [2012-11-21 00:12:53]

Regardless of whether risk-retention rules or any other new regulations are worthwhile, why does IOSCO advocate arbitrary flexibility such as carving out CLOs from risk-retention and placing a pause on other rules? It's not like they actually know what they're doing .... (The pdf link did not open for me - so, thankfully, I did not have the ability to slog through the document to answer the question for myself.)

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