House Democrats call for regulatory guidance on Volcker Rule CLO issue

A group of U.S. House Democrats urged regulators to craft guidance clarifying the treatment of senior debt securities issued by collateralized loan obligations under final rules implementing Dodd-Frank’s Volcker Rule. The rule, finalized by several agencies in December 2013, prohibits banks from having an ownership interest in certain funds, and the lawmakers argued that certain creditor-protective voting rights typically associated with senior debt securities issued by CLOs should not, on their own, cause such debt securities to be treated as equity interests.