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The Asset Management Group (AMG) of the Securities Industry and Financial Markets Association (SIFMA) today issued the following statement on the proposed retention requirements in the Obama Administration’s regulatory reform proposal:
“SIFMA’s Asset Management Group 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, an essential step in the path to economic recovery and growth.
“Further, AMG agrees with the administration that Federal regulators should be given the authority to design and apply retention requirements in a manner that specifies permissible forms and amounts of retention, how retention requirements may be calculated and measured, the duration of retention requirements, whether and to what extent hedging of retained interests is permissible, and other important implementation details. We would like to suggest that the form of risk retention for various asset classes should be determined through public-private discussion. In this connection, industry and staff representatives of AMG look forward to working directly with policy makers to achieve what we believe are mutual objectives in the interest of the investment community and the clients of asset management firms.”
SIFMA’s AMG represents U.S. asset management firms whose combined assets under management exceed $20 trillion. The clients of AMG member firms include state and local pension funds, universities, and individuals saving for retirement. AMG members conduct their businesses as fiduciaries for their clients even if they are part of a larger financial organization.
