Selected Risk Retention Questions and Answers for CMBS Securitizations
On October 22, 2014, the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Securities and Exchange Commission, the Federal Housing Finance Agency and the Department of Housing and Urban Development (the Agencies) released a joint final rule (the Rule) implementing the credit risk retention requirements of Section 15G of the Securities Exchange Act of 1934. The adopting release was published in the Federal Register on December 24, 2014 (the Release). References to sections of the Rule set forth below are to the version of the common rule published in the Federal Register (79 Fed. Reg. 77602 (December 24, 2014)).
In an effort to facilitate implementation of the Rule, we (attorneys from Cadwalader, Wickersham & Taft LLP, Dechert LLP, Orrick, Herrington & Sutcliffe LLP and Sidley Austin LLP) have collaborated to set forth below selected questions that we and certain other participants in the commercial mortgage-backed securities (CMBS) market have identified as being raised by the Rule and the Release, and we have set forth our views as to the appropriate answers to those questions. These views do not constitute legal advice, have not been informed by formal or informal guidance provided by the Agencies and do not necessarily reflect the view of all CMBS market participants, but instead reflect what the group of legal participants identified above believes to be appropriate positions on the questions presented. These views are subject to change as market practices develop and/or if additional guidance from the Agencies becomes available.