WILLIAMSBURG, Va. — A financial regulatory reform law provision that would require issuers of asset-backed securities to retain at least 5% of the debt they issue is so broad that some market participants are warning the retention requirements could apply to certain municipal bond transactions.

Richard Sigal of Hawkins Delafield & Wood LLP alerted treasurers meeting here this weekend to the provision and warned that applying it to municipalities would “not be consistent” with the way municipal issuers function.

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