The sponsor is the party that drives a securitization transaction. The term "sponsor" was introduced with the implementation of Regulation AB by the SEC on January 1, 2006. The sponsor, usually a major financial institution, is often the originator or an affiliate of the originator or of the primary originator in a multi-seller conduit transaction in which more than one originator contributes assets to the securitized asset pool (see Practice Note, Securitization: US Overview: Multi-Seller Conduits ("Two-Step" Securitizations)).

More specifically, the sponsor is often the parent entity or an affiliated arranger of the loan-origination subsidiary that is the primary originator for an asset-backed securities (ABS) transaction (many of the parties to a securitization transaction, such as the depositor, arranger, servicer and underwriter, are often affiliates of the sponsor institution). The sponsor may not always be a direct party to the transaction. Note that the terms "originator" and "sponsor" are sometimes used interchangeably by market participants.

For further details on the role of the sponsor in a securitization transaction, see Practice Note, Securitization: US Transaction Parties and Documents: The Sponsor.

Sponsors of ABS transactions in the US are subject to risk-retention rules under the Dodd-Frank Act (see Practice Note, US Risk Retention Requirements for Asset-Backed Securities (ABS)).