SIFMA Submits Comments in Support of Restoring Proven Financing for American Employers Act

SIFMA submitted comments to the U.S. House Financial Services Committee, urging the Committee to approve the Restoring Proven Financing for American Employers Act (H.R. 4167).

According to SIFMA, the drafting of the final Volcker Rule called into question whether or not debt securities issued by collateralized loan obligations ("CLOs") are prohibited ownership interests in covered funds. H.R. 4167, introduced by Congressmen Andy Barr (R-KY), would provide an "important clarification" of how the Volcker Rule should affect the securitization of commercial loans.

SIFMA stated that if the situation is not addressed, the CLO markets would be seriously harmed from fire sales of assets into the secondary market, which would "weaken the ability of CLOs to fund corporate credit to Main Street businesses all across America."

See: SIFMA Comment Letter. See generally: The Cabinet's Volcker Materials (accessible to Cabinet subscribers only). Related news: House Bill Would Clarify Ownership Interest Definition for CLOs under Volcker Rule (March 7, 2014); Trade Associations Request Further Clarification Regarding Ownership Interests for Debt Securities under New Volcker Rule Regulations (January 7, 2014); Trade Associations Request Clarifications Regarding Holding Debt Securities under New Volcker Rule Regulations (with Lofchie Comment) (December 26, 2013).