SEC Seeks Public Comment to Improve Rules on Residential Mortgage-Backed Securities and Asset-Backed Securities

The Securities and Exchange Commission today published a concept release soliciting public comment on how to improve current SEC rules governing residential mortgage-backed securities (RMBS) and certain aspects of asset-backed securities (ABS) generally.

The concept release notes there have been no public RMBS offerings since 2013, yet they are an important part of a healthy mortgage market because they provide access to a wider range of issuers and investors, reducing reliance on any one source of liquidity and contributing to lower consumer costs.

The concept release seeks feedback from the public on whether there are SEC regulatory impediments contributing to the absence of public RMBS offerings, including whether certain disclosure requirements should be revised and how certain sensitive information about mortgage loans underlying the RMBS may be shared with investors in light of privacy and confidentiality concerns.

The concept release also seeks comment on whether certain regulatory definitions should be revised, and whether revisions to any other ABS regulations should be considered to facilitate access to the public market.

"Home ownership has long been the cornerstone of the American Dream. Yet, this dream remains out of reach for too many Americans today due, in part, to mortgage costs. A vibrant public market for RMBS can have downstream effects of reducing these costs and benefitting the U.S. housing sector," said SEC Chairman Paul S. Atkins.

"It is important for the Commission to hear from market participants on steps it can take to revive the public RMBS market," Chairman Atkins continued.

SEC concept releases are a means for the Commission to obtain public input in advance of making decisions about possible rulemaking. Concept releases typically outline a topic of concern, identify different potential approaches, and raise a series of questions for public commenters.

In this concept release, the Commission welcomes comments on any costs, burdens, or benefits that may result from possible regulatory responses related to the RMBS and ABS items identified in the release or otherwise proposed by commenters. The public may comment on whether certain specific approaches, alternative approaches, or a combination of approaches would address the items identified in the release.

The public comment period will remain open for 60 days following publication of the comment request in the Federal Register.