The Securities Industry and Financial Markets Association’s Asset Management Group supports the Obama administration’s regulatory reform proposal that would require firms to retain an economic interest in securitized loans, SIFMA said Thursday.

SIFMA’s Asset Management Group announced that it “supports the administration’s proposed requirements for asset originators and transaction sponsors to retain a meaningful economic interest in securitized loans. We believe that retention of such an interest will help to align the incentives of originators and sponsors with securitization investors, thereby helping to restore confidence and functionality to the securitization markets.”

It also said that it agrees that federal regulators should be given the authority to design and apply retention requirements, although it would like to have a say in determining the form of risk retention for various asset classes.

IE