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NEW YORK (Dow Jones)–A commercial real-estate trade group is seeking more flexibility in a new federal requirement that issuers of asset-backed securities retain a portion of the risk on their books.

The Dodd-Frank financial-overhaul law passed last summer mandated that issuers of securities backed by assets such as commercial and residential real-estate loans retain 5% of the risk. After the credit crisis, regulators wanted issuers of these securities to hold some parts of the bonds they were selling to investors to give them an incentive to make high-quality loans.

The board of directors …