On January 14, banking regulators released a non-exclusive list of qualified collateralized debt obligations backed by trust preferred securities (TruPS CDO) that have been determined to be in compliance with the final rule of section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Volcker Rule), which was adopted by the regulators on December 10, 2013.

Certain Issuers of TruPS CDOs Meet Exemption Requirements

This interim final rule by the regulators will amend the final rule to note that certain issuers of TruPS CDOs will meet the exemption requirements. Holders of these TruPS CDOs that meet the exemption requirements will not be required to divest their holdings by July 21, 2015, under the requirements of the Volcker Rule. Banking regulators have noted that if a banking entity owns an investment in a TruPS CDO that is not on the list, then it still might qualify for the exemption. In order to qualify, the TruPS CDO must have been established prior to May 19, 2010; the banking entity must reasonably believe that offering proceeds were invested primarily in Qualifying TruPS Collateral; and the banking entities interest in the TruPS CDO must have been obtained prior to December 10, 2013.