Company: PDCC
Filing Date: 2025-09-16
Form Type: N-2/A
Source: 0001214659-25-013826
Chunk: 91

Company: Pearl Diver Credit Co Inc.
Filing Date: 2025-09-16
Form: N-2/A
Chunk 91
---
 Also, under the Volcker Changes,
a debt interest would no longer be considered an "ownership interest" solely because the holder has the right to remove or replace
the manager following a cause-related default. The Volcker Changes were effective October 1, 2020. Following the effectiveness of the
Volker Changes, most CLOs elected to be structured as covered funds and rely on the loan securitization exclusion from the definition
of ownership interest allowing CLOS to invest in bonds and other senior debt interests thus having more flexibility in work-out situations.

| 58 |

Also, in October 2014, six federal
agencies (the Federal Deposit Insurance Corporation, or the “FDIC,” the Comptroller of the Currency, the Federal Reserve Board,
the SEC, the Department of Housing and Urban Development and the Federal Housing Finance Agency) adopted joint final rules implementing
certain credit risk retention requirements contemplated in Section 941 of the Dodd-Frank Act, or the “Final U.S. Risk Retention
Rules.” These rules were published in the Federal Register on December 24, 2014. With respect to the regulation of CLOs, the Final
U.S. Risk Retention Rules require that the “sponsor” or a “majority owned affiliate” thereof (in each case as
defined in the rules), will retain an “eligible vertical interest” or an “eligible horizontal interest” (in each
case as defined therein) or any combination thereof in the CLO in the manner required by the Final U.S. Risk Retention Rules.

The Final U.S. Risk Retention Rules
became fully effective on December 24, 2016, or the “Final U.S. Risk Retention Effective Date,” and to the extent applicable
to CLOs, the Final U.S. Risk Retention Rules contain provisions that may adversely affect the return of our investments. On February 9,
2018, a three judge panel of the United States Court of Appeals for the District of Columbia Circuit, or the “DC Circuit Court,”
rendered a decision in The Loan Syndications and Trading Association v. Securities and Exchange Commission and Board of Governors of the
Federal Reserve System, No. 1:16-cv-0065, in which the DC Circuit Court held that open market CLO collateral managers are not “securitizers”
subject to the requirements of the Final U.S. Risk Retention Rules, or the “DC Circuit Ruling.” Thus,