SEC requests input to broaden access to public securitization markets

On October 1, 2025, the Securities and Exchange Commission (SEC) called for feedback on the existing framework for asset-backed securities registration and reporting to meet the current demands of the securitization market. The SEC highlighted that the implementation of asset-level disclosure requirements in 2014 has halted the public issuance of residential mortgage-backed securities. Market participants have identified these requirements as hindrances to the revival of the public securitization market.

The SEC’s move to seek public opinion stems from the emergence of new and expanding types of asset-backed securities, prompting a reevaluation of the existing registration and reporting framework. Due to intricacies in current regulations, some securitizations find it challenging to access public markets and remain confined to private markets.

The SEC’s concept release, published on September 26, 2025, raised questions about potential amendments to asset-level disclosure requirements for residential mortgage-backed securities (RMBS) and proposed revisions to the definition of “asset-backed security” (ABS) in Regulation AB. The purpose of these potential changes is to broaden issuer and investor access to registered asset-backed securities markets, channeling enhanced capital formation and liquidity while preserving investor protections.

The 39 questions posed in the concept release cover various aspects of the securitization market, including market practices in Rule 144A transactions, asset-level data points’ feasibility and materiality, privacy concerns, and harmonization of ABS definitions. The SEC aims to use the public feedback to shape a new regulatory framework, reflecting the current state of the securitization market.

Regulation AB, established in 2004, governs the registration, disclosure, and reporting requirements for asset-backed securities. The aftermath of the 2007-2009 financial crisis prompted Congress to pass the Dodd-Frank Act, which introduced a new statutory definition of “asset-backed security” and mandated regulatory measures for the securitization market. In 2014, the SEC revised Regulation AB, known as Regulation AB II, in response to evolving market trends and developments.

The securitization market plays a pivotal role in the US capital markets by providing issuers with access to cost-effective capital and offering investors diversified investment options. SEC data for 2024 revealed approximately $1.1 trillion in securitized issuances, surpassing IPO proceeds worth $39 billion and corporate debt issuances totaling $1.2 trillion. Among these, around $830 billion in issuances were made through private markets.

One critical area of concern for the SEC is the dormant state of the Residential Mortgage-Backed Securities Market, where no public offerings have occurred since June 2013. SEC Chairman Paul Atkins highlighted this contrast against the $100 billion in RMBS issued annually in the Rule 144A market. The SEC aims to explore whether its regulations are contributing to the absence of registered offerings. The concept release seeks feedback on Rule 144A market practices, the clarity of asset-level requirements, and data sensitivity with a particular focus on zip codes and credit scores.

The SEC’s exploration also extends to the harmonization of ABS definitions, aiming to facilitate broader access to public markets. The existence of two definitions of “asset-backed security” creates confusion, with the SEC’s 2004 definition for Regulation AB ABS differing from the statutory definition added in 2010 for Exchange Act ABS. The SEC aims to streamline these definitions to foster a more accessible and inclusive securitization market.