Structured Finance Alert –The Final Volcker Rule: Impact on Securitizations

Skadden, Arps, Slate, Meagher & Flom LLP

Andrew M. Faulkner

The final rule implementing the Volcker Rule will have a significant impact on certain active segments of the securitization market, particularly collateralized loan obligations, asset-backed commercial paper conduits and insurance-linked securities, as well as on certain legacy transactions. The final rule imposes restrictions on the purchase or holding by a banking entity of an "ownership interest" in a "covered fund" and limits the relationships a banking entity may have with a covered fund. Ownership interest is broadly defined in a manner that may include some traditional debt securities, and covered fund as defined includes many securitization vehicles in the private market.

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