The Securities and Exchange Commission (SEC) published a concept release requesting public comments on ways to improve its rules governing residential mortgage-backed securities (RMBS). The agency is also seeking general input on certain aspects of asset-backed securities (ABS).
The last public RMBS offering occurred in June 2013. The SEC stressed that 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 SEC is asking commenters to address whether there are SEC regulatory impediments contributing to the absence of public RMBS offerings over the past 12 years. Specifically, the agency is asking 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.
Additionally, the agency is seeking input 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,” SEC Chairman Paul Atkins said in a press release. “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.
“It is important for the commission to hear from market participants on steps it can take to revive the public RMBS market,” he added.
SEC concept releases are used to obtain public input in advance of decisions about possible rulemaking, according to the press release. They typically outline a topic of concern, identify different potential approaches and raise a series of questions for public commenters.
In this concept release, the SEC said it will welcome 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 is also being urged to 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.