New SEC Staff Guidance Provides Needed Clarity for Funds

Washington, DC; March 6, 2026—The Investment Company Institute (ICI) released the following statement regarding the Securities and Exchange Commission’s (SEC) Division of Investment Management’s newly released frequently asked questions (FAQs) on collateralized loan obligations (CLOs). 

 “Yesterday’s staff FAQ from the SEC’s Division of Investment Management on collateralized loan obligations (CLOs) provides a sound method for open-end funds to better incorporate bank syndicated loans and other forms of private loans in their investment strategies. This relief will allow funds that hold debt securities issued by CLOs to be included in target-date funds without artificial restrictions that funds holding similar securities, such as mortgage-backed securities, are not subject to. Leveling the playing field lets managers diversify their portfolios for the benefit of their investors free from unnecessary structural disadvantages. The FAQ is an important step towards the ‘responsible retailization’ that SEC Chairman Atkins and Director Daly seek.”