A recent trend in the fintech space is what is being coined by market participants as a “co-sponsored” securitization. The transaction is usually structured such that the company will sell its assets in a whole loan sale flow arrangement between it and an investor. Once enough loans are aggregated by the investor, it will typically securitize them in a capital markets transaction where it will act as the sponsor for risk retention purposes. Counsel must carefully consider the investor’s role to ensure it performs sufficient sponsor-type activities, such as structuring the transaction, retaining the rating agencies and service providers, retaining drafting counsel and directing the accountant’s agreed upon procedures review. If it can be established that both the investor and the company are acting as sponsors of the transaction, then the risk retention regulations provide that the sponsors can agree that one of the two sponsors can covenant to hold the requisite risk retention. Typically, the investor, which also wants a long-term investment in the collateral pool, will agree to retain the risk retention piece in compliance with the US (and possibly EU and Japanese, if applicable) risk retention regulations. This is obviously appealing to companies that want to securitize their assets but don’t want to burden their balance sheet with risk retention. We expect to see many of these types of transactions in 2020.