The Foreign Account Tax Compliance Act (FATCA) requires foreign financial institutions (FFIs) to conduct due diligence on their financial account owners to identify specified U.S. persons, report U.S. account owners to the U.S. IRS, and apply withholding as appropriate. The definition of “financial institution” is very broad and will encompass nearly all non-U.S. collateralized loan obligation (CLO) vehicles. CLOs invest in debt instruments, many of which are issued by U.S. corporations. Should the CLO vehicle fail to become FATCA compliant, issuers of U.S. debt will be required to withhold 30% of certain payments of interest starting on July 1, 2014, and certain payments of gross proceeds from the sale or other disposition of the underlying loans starting in 2017. To become compliant under FATCA and avoid the additional U.S. tax withholding, a CLO vehicle will be required either to enter into an FFI agreement with the IRS or to qualify under one of the categories established for deemed-compliant entities that are considered to present a lower risk of tax evasion. This special category falls into two regimes: registered deemed compliant, whereby the FFI still must register with the IRS but does not need an FFI agreement, and certified deemed compliant, whereby the entity can certify its compliance to counterparties and does not need to enter into an FFI agreement or register with the IRS. In addition, deemed-compliant status can be achieved by complying with the terms of an intergovernmental agreement (IGA). In response to the industry-specific issues raised by CLOs, the International Swaps and Derivatives Association, the Loan Syndications and Trading Association, and the Securities Industry and Financial Markets Association have been active in their efforts to carve out exceptions for both existing and new CLO vehicles.