The SEC staff agreed data centre securitisation sits outside Dodd-Frank risk retention
Nvidia announced $500bn of AI infrastructure financing last week, alongside Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs and KKR.
A fortnight earlier, the Securities and Exchange Commission staff answered a question. It concerned how deals of that general type are regulated. The exchange took six days.
What was asked, and what came back
Latham & Watkins wrote to the SEC on 23 July. It asked the staff a narrow question. Do data centre securitisations fall outside the Exchange Act definition of an asset-backed security?
The definition matters. It carries the risk retention rules written into Dodd-Frank after the 2008 crisis. Those rules require a deal sponsor to keep some risk on its own books.
Kayla Roberts, who chairs the SEC’s Office of Structured Finance, replied on 29 July. The staff agreed with Latham’s view.
The argument Latham made
The letter turns on a phrase. An asset-backed security rests on a...
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