SEC OKs Risk Retention, Compensation Rules

Law360, New York (March 30, 2011, 3:23 PM EDT) -- The U.S. Securities and Exchange Commission unanimously decided Wednesday to push forward proposed joint rules that would require issuers of asset-backed securities to hang onto some of their inherent risk and would establish requirements for compensation committees.

The risk retention rule would mandate that issuers of securitized assets retain 5 percent of the credit risk of those assets. The issuers would have a range of options as to how to fulfill that requirement, varying according to the type of asset, security or financial entity, and would...
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