The US Loan Management and Trading Association has hailed a decision by the Court of Appeals for the District of Columbia Circuit to exempt Collateralised Life Obligation ( CLO ) funds from risk - retention rules . The Loan Syndications and Trading Association (LSTA) sued the Federal Reserve (Fed) and Securities and Exchange Commission (SEC) in 2014, arguing the risk-retention rules were “arbitrary, capricious” and “an abuse of discretion.” The rule forces managers to hold some of the risk of the securities they sell . The decision is a boost for smaller managers who struggled to find the capital to cover the retention . It 's been argued CLOs , a $ 501bn asset class , have been unfairly blamed for the 2008 financial crisis . The Federal Reserve is reviewing the court 's decision .
The US Loan Management and Trading Association has hailed a decision by the Court of Appeals for the District of Columbia Circuit to exempt Collateralised Life Obligation ( CLO ) funds from risk - retention rules . The rule forces managers to hold some of the risk of the securities they sell . The decision is a boost for smaller managers who struggled to find the capital to cover the retention . It 's been argued CLOs , a $ 501bn asset class , have been unfairly blamed for the 2008 financial crisis . The Federal Reserve is reviewing the court 's decision .