Law360, New York ( October 18, 2013, 5:54 PM EDT) -- The U.S. Securities and Exchange Commission's recent amendments to Rule 506 regarding "bad actors" have caused undue alarm among collateralized loan obligation market participants. Perhaps CLO market participants are a bit on edge as of late, having come to expect nothing but the worst from any new regulatory proposals. In any event, some CLO market Cassandras have conjectured, since CLOs frequently include subordinated certificated securities that are placed with "accredited investors," and Rule 506 applies to the offering and sale of securities to accredited investors, that CLOs must comply with the administrative burdens imposed by the new "bad actor" provisions of Rule 506. Our view, however, is that CLOs should not be impacted by this new rule (provided the CLOs do not use a general solicitation) for the simple reason that CLOs generally rely on a different exemption from registration....