The Dodd-Frank Act  requires “securitizers” to retain at least five percent of the underlying credit risk.  The Loan Syndications and Trading Association, or LSTA, challenged several aspects of the related rules jointly adopted by four regulators as contrary to law or arbitrary and capricious in the United States Court of Appeals for the District of Columbia Circuit.

The appeals court transferred the case to the District Court for lack of statutory authorization to review the rule.  The court noted the Exchange Act provides a limited grant of jurisdiction for appellate review.   Only rules implementing specific, enumerated  sections of the Exchange Act are entitled to direct review.  The section at issue  was not among them.

The parties argued that other statutes with direct review provisions provided authority for the court to review parts of the challenged rules. The court found those other statute did not authorize review of a rule adopted by multiple agencies.