The Revised ABS Risk Retention Proposal: A Flawed Approach? | Practical Law
The revised Dodd-Frank risk retention proposal for asset-backed securities (ABS) released by regulators on August 28, 2013 misses the mark, with lenient standards for qualified residential mortgages (QRMs), which would make it easy to arrange residential mortgage-backed securities transactions that are exempt from risk retention rules. At the same time, the revised proposal retains features that could stifle the historically harmless US CLO market.