In response to the Dodd-Frank Act's "skin in the game" requirements for participants in asset-backed securities transactions, certain Federal agencies have released proposed risk retention rules that require "sponsors" of a securitization to retain a 5 percent interest in the credit risk of the underlying asset-backed securities. The definition of "asset-backed security" is broad and, depending on the specific structure of each transaction, may pick up finance subsidiaries, project bonds and other structured financings.
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