CLO Retention Rules may have unintentionally stymied Business Development Companies (BDCs) that rely on CLOs as a mechanism for lending to middle market companies, an important engine of growth for the economy. 

This Dechert attorney makes the point well about the conflict between Dodd-Frank and the Investment Company Act of 1940 governing closed-end vehicles, and a number of our clients are focused on this. Let’s hope the SEC can provide guidance that helps CLOs continue to play an important role financing enterprises.