The Australian Securities and Investment Commission's job of devising a new regulatory regime for the securitisation market has been made difficult because of the divergent paths being taken to reform in the United States and Europe.ASIC is consulting with industry about disclosure rules and retention of economic interest (so-called 'skin in the game') before releasing new guidelines later this year.ASIC's senior executive leader for investment banks, Chris Van Homrigh, told delegates at a Finsia conference on trends in securitisation, held in Sydney yesterday, that one of his objectives was produce regulation similar to that developing in the US and Europe, so Australian issuers would be able to place their securities in those markets.But Europe is taking a hard line on retention of economic interest, while the US plans to give issuers more scope for exemptions and reductions.European issuers of mortgage and asset-backed securities will have to hold a minimum interest of five per cent in any RMBS issue. Van Homrigh said: "What we learned in the GFC is that there needs to be an alignment of interest between issuers and investors."We are not trying to protect investors from loss, but we want issuers to suffer loss at the same time investors do."The issuer might do this by taking a "vertical slice" (holding some of each tranche), by taking a horizontal slice (holding some of the subordinated tranche) or by holding a representative selection of securities.Van Homrigh said ASIC had to weigh up the European approach, where minimum retention levels are likely to be mandated, and the more flexible US approach.US regulators are looking at a scheme where issuers could get an exemption from the retention requirement if the underlying securities meet certain criteria. In the case of RMBS, the mortgages in the collateral pool would qualify for exemption if they were within loan-to-valuation limits.