‘‘(v) REGULATORY
OVERSIGHT
RE-
QUIREMENTS.— 
‘‘(I) 
The 
manager 
of 
the 
collateralized loan obligation shall be 
registered with the Commission as an 
investment adviser under section 203 
of the Investment Advisers Act of 
1940 (15 U.S.C. 80b–3). 
‘‘(II) All purchases and sales of 
the assets of the collateralized loan 
obligation shall be conducted on an 
arm’s-length basis and in compliance 
with any applicable provisions of the 
Investment Advisers Act of 1940. 
‘‘(vi) REQUIREMENTS
RELATING
TO 
TRANSPARENCY
AND
DISCLOSURE.—A 
monthly report shall be made available to 
holders 
of 
debt 
securities 
of 
the 
collateralized loan obligation, which in-
cludes information regarding— 
‘‘(I) a list of assets of the 
collateralized loan obligation, includ-
ing, with respect to each asset, the ob-
ligor name; the CUSIP (or security 
identifier) if applicable, the interest 
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rate and maturity date, the type of 
asset, and the market price for each 
asset where available; 
‘‘(II) with respect to the portfolio 
of assets, the aggregate principal bal-
ance and aggregate adjusted collateral 
principal amount (adjusted as re-
quired by the collateralized loan obli-
gation governing transaction docu-
ments) and the percentage of such ag-
gregate adjusted collateral principal 
represented by each asset; 
‘‘(III) information relating to 
each applicable over-collateralization 
test and interest coverage test and the 
level of compliance in relation to each 
test; 
‘‘(IV) all purchases, repayments, 
and sales of assets; and 
‘‘(V) the identity of each de-
faulted asset as defined in the related 
transaction documents. 
‘‘(8) DEFINITIONS
FOR
PURPOSES
OF
PARA-
GRAPH (7).—For purposes of paragraph (7), the fol-
lowing definitions apply: 
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‘‘(A) BALANCE
SHEET
COLLATERALIZED 
LOAN
OBLIGATION.—The term ‘balance sheet 
collateralized 
loan 
obligation’ 
means 
a 
collateralized loan obligation— 
‘‘(i) whose assets consist predomi-
nantly of loans originated and transferred 
to the collateralized loan obligation by one 
or more of its affiliates other than in— 
‘‘(I) open market transactions; 
‘‘(II) from an open market 
collateralized loan obligation; or 
‘‘(III) from a collateralized loan 
obligation in existence as of the effec-
tive date of this paragraph that is not 
a balance sheet collateralized loan ob-
ligation; and 
‘‘(ii) the assets and liabilities of which 
are, immediately after issuance of its asset- 
backed securities in a securitization trans-
action, included under generally accepted 
accounting principles in the consolidated 
balance sheet of one or more of its affili-
ates. 
‘‘(B) COLLATERALIZED
LOAN
OBLIGA-
TION.—The term ‘collateralized loan obligation’ 
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means any issuing entity of an asset-backed se-
curity, as defined in section 3(a)(79) of the Se-
curities Exchange Act of 1934 (15 U.S.C. 
78c(a)(79)), that is comprised primarily of com-
mercial loans. 
‘‘(C) COVENANT
LITE
LOAN.—The term 
‘covenant lite loan’ means, at the time the 
collaterlized loan obligation enters into a com-
mitment to acquire such loan, a loan for which 
the underlying instruments neither— 
‘‘(i) require the obligor to comply with 
any maintenance covenant; nor 
‘‘(ii) contain a cross-default provision 
to a financing facility of the obligor that 
requires the obligor to comply with a main-
tenance covenant (including one that may 
apply only upon the funding of such other 
loan or financing facility); except that if 
such loan is pari passu with another loan 
of the obligor that would not be a covenant 
lite loan under the criteria in this clause, 
such loan shall be deemed not to be a cov-
enant lite loan. For purposes of this 
clause, the term ‘pari passu’ means treated 
equally and without preference. 
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‘‘(D) EQUITY.—The term ‘equity’ means 
the most junior class of securities issued by the 
collateralized loan obligation (excluding any 
non-economic security such as the issuer’s com-
mon stock) and any additional class(es) of secu-
rities junior to the collateralized loan obliga-
tion’s debt securities. 
‘‘(E) MANAGER.—The term ‘manager’ 
means an investment manager that is respon-
sible for managing a collateralized loan obliga-
tion under the collateralized loan obligation’s 
governing transaction documents. 
‘‘(F) OPEN
MARKET
COLLATERALIZED 
LOAN
OBLIGATION.—The term ‘open market 
collateralized 
loan 
obligation’ 
means 
a 
collateralized loan obligation— 
‘‘(i) whose assets consist predomi-
nantly of senior, secured syndicated loans 
acquired by such collateralized loan obliga-
tion directly from the sellers thereof in an 
open market transaction or from another 
collateralized loan obligation and of tem-
porary investments; 
‘‘(ii) that is managed by a manager; 
and 
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‘‘(iii) that is not a balance sheet 
collateralized loan obligation. 
‘‘(G) OPEN MARKET TRANSACTION.—The 
term ‘open market transaction’ means— 
‘‘(i) either an initial loan syndication 
transaction or a secondary market trans-
action in which a seller offers senior, se-
cured syndicated loans to prospective pur-
chasers in the loan market on market 
terms on an arm’s length basis, which pro-
spective purchasers include, but are not 
limited to, entities that are not affiliated 
with the seller; or 
‘‘(ii) a reverse inquiry from a prospec-
tive purchaser of a senior, secured syn-
dicated loan through a dealer in the loan 
market to purchase a senior, secured syn-
dicated loan to be sourced by the dealer in 
the loan market. 
‘‘(H) QUALIFIED
INVESTOR.—The term 
‘qualified investor’ means— 
‘‘(i) with respect to securities that re-
quire the payment of principal and inter-
est, an investor that is a qualified pur-
chaser, within the meaning of section 
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3(c)(7) of the Investment Company Act of 
1940 (15 U.S.C. 80a–3(c)(7)) or an entity 
owned exclusively by one or more qualified 
purchasers; or 
‘‘(ii) with respect to securities that do 
not require the payment of principal and 
interest— 
‘‘(I) if the qualified collateralized 
loan obligation relies on such section 
for its exclusion from the definition of 
investment company under the Invest-
ment Company Act of 1940— 
‘‘(aa) a qualified purchaser; 
‘‘(bb) a knowledgeable em-
ployee, within the meaning of 
Rule 3c–5 promulgated under the 
Investment 
Company 
Act 
of 
1940; or 
‘‘(cc) an entity owned exclu-
sively by such a qualified pur-
chaser 
or 
knowledgeable 
em-
ployee; or 
‘‘(II) 
if 
the 
qualified 
collateralized loan obligation relies on 
Rule 3a–7 promulgated under the In-
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