Industry practices that are developing around risk-retention requirements for MBS and ABS might be rejected by federal regulators, according to a former special counsel at the Securities and Exchange Commission. The Dodd-Frank Act established risk-retention requirements for various types of MBS and ABS. The rule generally requires sponsors of a security to retain at least 5.0 percent of the issuance, in an effort to align the interests of issuers with the interests of investors. Among the options to comply with risk-retention requirements, sponsors can retain...