Background
Following December and January’s proposal (the “JRR Proposal”) by the Japanese Financial Services Agency (the “JFSA”) to enhance its existing Supervisory Guidelines by introducing a risk retention rule with respect to investments in securitisations by certain Japanese investors, the JFSA published the final risk retention rule (the “Final Rule”) on 15 March 2019, which comes into effect on 31 March 2019. The publication of the Final Rule was accompanied by both (i) a detailed “Q&A” document (the “Q&A”) and (ii) a table of comments received on the JRR Proposal along with the JFSA’s responses (the “Commentary & Analysis”), both of which are instructive for industry participants in understanding and interpreting the Final Rule. Anderson Mori & Tomotsune and Milbank have been discussing the Final Rule, together with the Q&A and the Commentary & Analysis, with a view to understanding how the US and European CLO markets might be affected and, more importantly, how transactions might adapt to accommodate and assist Japanese investors complying with the Final Rule.
