{"id":744308,"date":"2026-08-18T08:12:07","date_gmt":"2026-08-18T05:12:07","guid":{"rendered":""},"modified":"2026-08-18T08:12:07","modified_gmt":"2026-08-18T05:12:07","slug":"the-sec-staff-agreed-data-centre-securitisation-sits-outside-dodd-frank-risk-retention-2","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/the-sec-staff-agreed-data-centre-securitisation-sits-outside-dodd-frank-risk-retention-2\/","title":{"rendered":"The SEC staff agreed data centre securitisation sits outside Dodd-Frank risk retention"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_86 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a85538563eab\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a85538563eab\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/the-sec-staff-agreed-data-centre-securitisation-sits-outside-dodd-frank-risk-retention-2\/#What_was_asked_and_what_came_back\" >What was asked, and what came back<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/the-sec-staff-agreed-data-centre-securitisation-sits-outside-dodd-frank-risk-retention-2\/#The_argument_Latham_made\" >The argument Latham made<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/the-sec-staff-agreed-data-centre-securitisation-sits-outside-dodd-frank-risk-retention-2\/#What_the_letter_covers\" >What the letter covers<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/buradabiliyorum.com\/en\/the-sec-staff-agreed-data-centre-securitisation-sits-outside-dodd-frank-risk-retention-2\/#What_the_letter_says_about_itself\" >What the letter says about itself<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/buradabiliyorum.com\/en\/the-sec-staff-agreed-data-centre-securitisation-sits-outside-dodd-frank-risk-retention-2\/#What_the_lawyers_say_it_means\" >What the lawyers say it means<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/buradabiliyorum.com\/en\/the-sec-staff-agreed-data-centre-securitisation-sits-outside-dodd-frank-risk-retention-2\/#Nvidias_position_and_its_release_cycle\" >Nvidia\u2019s position, and its release cycle<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/buradabiliyorum.com\/en\/the-sec-staff-agreed-data-centre-securitisation-sits-outside-dodd-frank-risk-retention-2\/#What_would_settle_it\" >What would settle it<\/a><\/li><\/ul><\/nav><\/div>\n<p><img decoding=\"async\" src=\"https:\/\/media.thenextweb.com\/2026\/05\/Jensen-Huang-1.avif\" \/><\/p>\n<div id=\"article-main-content\">\n<p>Nvidia announced $500bn of AI infrastructure financing last week, alongside Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs and KKR.<\/p>\n<p>A fortnight earlier, the Securities and Exchange Commission staff answered a question. It concerned how deals of that <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/general\/\" data-internallinksmanager029f6b8e52c=\"3\" title=\"General\" target=\"_blank\" rel=\"noopener\">general<\/a> type are regulated. The exchange took six days.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"What_was_asked_and_what_came_back\"><\/span>What was asked, and what came back<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Latham &amp; Watkins wrote to the SEC on 23 July. It asked the staff a narrow question. Do data centre securitisations fall outside the Exchange Act definition of an asset-backed security?<\/p>\n<p>The definition matters. It carries the risk retention rules written into Dodd-Frank after the 2008 crisis. Those rules require a deal sponsor to keep some risk on its own books.<\/p>\n<p>Kayla Roberts, who chairs the SEC\u2019s Office of Structured Finance, <a rel=\"nofollow\" target=\"_blank\" href=\"https:\/\/www.sec.gov\/rules-regulations\/no-action-interpretive-exemptive-letters\/division-corporation-finance-no-action\/certain-data-center-securitizations-072926\" target=\"_blank\" rel=\"nofollow noopener\">replied on 29 July<\/a>. The staff agreed with Latham\u2019s view.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"The_argument_Latham_made\"><\/span>The argument Latham made<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The letter turns on a phrase. An asset-backed security rests on a self-liquidating financial asset. Since 1992 the SEC has read that as one converting into cash within a finite period.<\/p>\n<p>A mortgage qualifies. Repayment extinguishes it.<\/p>\n<p>Latham argued a data centre does not. The facilities are tangible and physical, they endure beyond the life of the securities, and they may <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>reciate. When the notes are repaid, the issuer still owns the building.<\/p>\n<p>The firm set that against a single-asset commercial mortgage deal. There the issuer holds only the loan, and ends up with nothing once it is repaid. On that comparison the reasoning holds together, and the staff accepted it.<\/p>\n<p>Latham has worked on data centre securitisation since the first deal in 2018. It told the SEC the market has since passed $50bn in cumulative debt issuance.<\/p>\n<p>It also described how the market had behaved. Participants complied with the asset-backed rules throughout, the letter says, \u201cout of an abundance of caution\u201d rather than because the definition required it.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"What_the_letter_covers\"><\/span>What the letter covers<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The letter describes the securitised assets. Buildings and data halls, electrical and backup power systems, cooling, network connectivity. Then physical security, land, and the contracts needed to run the facilities.<\/p>\n<p>It does not mention chips or graphics processors.<\/p>\n<p>It also sets out the shape of these deals. Loan-to-value tops out at 70% of appraised value. Notes carry an anticipated repayment date of around five years. Final maturity runs 25 to 30 years.<\/p>\n<p>Nearly all use a master trust, the letter says. That structure lets sponsors issue further securities later, add data centres, and in some cases dispose of or substitute assets.<\/p>\n<p>Investors generally have no recourse to the sponsor or the operator. The letter records the usual exceptions as fraud, wilful misconduct and gross negligence in managing the sites.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"What_the_letter_says_about_itself\"><\/span>What the letter says about itself<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The SEC response sets its own limits, in its own words.<\/p>\n<p>It reflects the views of the staff of the Division of Corporation Finance, not the Commission. The Commission has \u201cneither approved nor disapproved its content\u201d. It is not a rule or a regulation. It has \u201cno legal force or effect\u201d.<\/p>\n<p>The staff add that their views rest on the representations in Latham\u2019s letter, and that \u201cany different facts or conditions might require the Division to reach a different conclusion\u201d.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"What_the_lawyers_say_it_means\"><\/span>What the lawyers say it means<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Orion Mountainspring, a securitisation lawyer at Orrick, told CNBC the response gives sponsors something specific. It is the chance to push down the equity required in a deal over time. He called it good <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">news<\/a> for them.<\/p>\n<p>B.K. Lee at Alston &amp; Bird expects structures that are more flexible and capital-efficient, and more deals now the guidance exists in writing.<\/p>\n<p>Seth Messner of Katten Muchin Rosenman <a rel=\"nofollow\" target=\"_blank\" href=\"https:\/\/www.cnbc.com\/2026\/08\/17\/nvidia-financing-initiative-follows-sec-guidance-taking-sponsors-off-the-hook.html\" target=\"_blank\" rel=\"nofollow noopener\">told Tobias Burns at CNBC<\/a> what Latham had sought. It asked the SEC to put these deals outside the risk retention rules. The SEC basically agreed, he said.<\/p>\n<p>Messner was more cautious on Nvidia. It is not clear whether its agreements are designed for securitisation, he said, only that the guidance sounds applicable if they are.<\/p>\n<p>Katten\u2019s data centre partners placed the rules in context. They date from after the 2008 crisis. Securitisations of poorly underwritten residential mortgages set that crisis off.<\/p>\n<p>The SEC and multiple ratings agencies declined to comment to CNBC.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Nvidias_position_and_its_release_cycle\"><\/span>Nvidia\u2019s position, and its release cycle<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Nvidia has not said whether the platforms it built with six finance giants will securitise anything. It agreed those arrangements through memoranda of understanding.<\/p>\n<p>Their stated purpose is to pool capital so AI labs, enterprises and cloud providers can reach compute hardware without drawing on their own balance sheets.<\/p>\n<p>It has described its hardware as a revenue-generating asset, and reached for four adjectives: productive, long-lived, fungible and flexible. <a rel=\"nofollow\" target=\"_blank\" href=\"https:\/\/qz.com\/sec-guidance-nvidia-ai-data-center-financing-500-billion-081726\" target=\"_blank\" rel=\"nofollow noopener\">Quartz noted<\/a> the wording.<\/p>\n<p>Its release cadence is a matter of record. Nvidia has grown by moving large customers to its newest hardware close to annually. At Computex in 2024 it shortened its release cycle from two years to one.<\/p>\n<p>Phoebe Liu framed the resulting question for The Information. Nvidia wants customers buying as many next-generation chips as possible. It also wants them to know their old chips will stay valuable. She asks whether it can manage both.<\/p>\n<p>The desk reported yesterday that Nvidia is backing the buildings behind an OpenAI data centre in Ohio, to the value of $105bn.<\/p>\n<p>Jeff Gundlach has said turning compute into an asset class looks like a market top.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"What_would_settle_it\"><\/span>What would settle it<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Four things, all checkable.<\/p>\n<p>Whether Nvidia discloses that any of the $500bn involves securitisation. Whether the staff position ever reaches hardware rather than facilities. The letter does not address that either way.<\/p>\n<p>Whether ratings agencies treat compute-linked collateral as they treat buildings. And where the risk finally sits. Five tech giants already hold $1.65tn off balance sheet, and lenders already issue GPU-backed debt.<\/p>\n<\/p><\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMN63nwsw68G3Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more like this article, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/buradabiliyorum.com\/en\/category\/technology\/\" target=\"_blank\" >Technology category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/thenextweb.com\/news\/sec-data-centre-securitisation-nvidia-500bn-dodd-frank\" target=\"_blank\" >Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Nvidia announced $500bn of AI infrastructure financing last week, alongside Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs and KKR. A fortnight earlier, the Securities and Exchange Commission staff answered a question. It concerned how deals of that general type are regulated. The exchange took six days. What was asked, and what came back Latham &amp; Watkins&#8230;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[18],"tags":[],"class_list":["post-744308","post","type-post","status-publish","format-standard","hentry","category-technology"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/744308","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=744308"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/744308\/revisions"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=744308"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=744308"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=744308"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}