SEC Seeks Public Feedback on Expanding Access to Public Securitization Markets

Collaborate with our Structured Finance Practice on comments to the SEC

On September 26, 2025, the Securities and Exchange Commission (SEC) published a concept release to solicit comments on whether to amend the asset-level disclosure requirements for residential mortgage-backed securities (RMBS) and whether to revise the definition of “asset-backed security” (ABS) and other definitions in Regulation AB. The SEC is considering taking steps to expand issuer and investor access to the registered asset-backed securities markets and facilitate enhanced capital formation and liquidity while maintaining investor protections.

The concept release, which is a rare invitation for public input that will inform the development of a formal proposed rulemaking, includes 39 questions for public consideration (many multi-part), covering everything from market practice in Rule 144A transactions to the feasibility and materiality of specific asset-level data points, privacy concerns, and the harmonization of ABS definitions.

Background

The SEC’s rules for registration, disclosure, and reporting for asset-backed securities, known as Regulation AB, were adopted in 2004. Following the financial crisis of 2007-2009, Congress enacted the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act), which, among other things, added a new statutory definition of “asset-backed security” along with other mandates to regulate the securitization market. In 2014, the SEC adopted revisions to Regulation AB, known as Regulation AB II. Market trends and developments since the adoption of Regulation AB II (such as new and expanding asset classes) have prompted the SEC to reassess the current framework.

Securitization plays a critical role in US capital markets, providing issuers with access to lower-cost capital and offering investors diversified investment opportunities. According to SEC data, there were approximately $1.1 trillion in securitized issuances in 2024 versus $39 billion in IPO proceeds and $1.2 trillion in corporate debt issuances, underscoring the scale and importance of the securitization market. Approximately $830 billion of those securitized issuances were issued in the private markets.

Specific Areas of SEC Interest

Reviving the Residential Mortgage-Backed Securities Market

In a separately issued statement, SEC Chairman Paul Atkins noted that there have been no public offerings of RMBS since June 2013, contrasting that figure against the $100 billion in RMBS issued annually in the Rule 144A market for five of the past six years. The SEC notes that while several factors may be contributing to the absence of registered offerings, including the dominance of government-sponsored entities Fannie Mae and Freddie Mac, it is important to consider whether the SEC’s rules may be contributing to the absence of registered offerings.

Almost every question in the concept release is multi-part.

With respect to RMBS, there are requests for comment on topics ranging from requesting information about Rule 144A market practice as well as which asset-level requirements are ambiguous, confusing, outdated, duplicative, or overly burdensome to provide.

Another group of questions relate to concerns about data sensitivity, namely about zip codes and credit scores, and seeks information about how these issues are managed in the Rule 144A market.

Interestingly, the SEC has revived the idea to provide asset-level data on password-protected websites. The SEC notes that based on market commentary and observation, a similar approach is commonly used for Rule 144A issuances. This idea was first introduced by SEC staff in 2014 by a memo to the comment file for Regulation AB II. Commenters generally opposed the use of a website, and it was excluded from the final rule.

Harmonizing ABS Definitions to Expand Access to Public Markets

Two definitions of “asset-backed security” are primarily used in the securities regulations. One definition was adopted by the SEC in 2004 to demarcate the securities and offerings to which Regulation AB would apply (Regulation AB ABS). In 2010, Congress added a separate statutory definition of “asset backed security” to implement certain sections of the Dodd-Frank Act (Exchange Act ABS). As noted in the concept release, while the two definitions share similarities, there are key differences — specifically the inclusion of managed pool and series and master trust structures in the Exchange Act ABS definition.

Harmonizing the two definitions could bring clarity and uniformity to the current regulatory regime. For example, all Exchange Act ABS are subject to the rules to implement Dodd-Frank requirements relating to credit risk retention, prohibition on conflicts of interest, disclosure of due diligence reports, and disclosure about asset repurchase demands. However, only Regulation AB ABS are eligible to use forms tailored for securitization, and Regulation AB ABS represents only a small subset of Exchange Act ABS.

Aligning the Regulation AB ABS definition with the Exchange Act ABS definition would expand direct access to the public markets for more asset classes and structures. The SEC poses several questions about whether and how to align the definitions. Questions also request feedback on the collateral impact of aligning the definitions given references in other rules, such as those under the Investment Company Act of 1940, and whether other definitions would also need to be adjusted.

Industry Considerations

The concept release provides a rare opportunity for the public to submit views that will inform the development of a formal proposed rulemaking. Since the implementation of Regulation AB II, the SEC staff has regularly engaged with market participants to understand the circumstances contributing to the lack of public issuance and to identify areas for regulatory revisions to address the changing needs of the market.

The SEC acknowledges that its rules may have created barriers to public market access, particularly for RMBS and new or emerging asset classes. The concept release and accompanying Commissioner statements emphasize the importance of the securitization market to the overall economy, and highlight how a more accessible public market could expand issuers’ access to prospective investors and offer investors a broader array of investment options — reducing reliance on any one source of liquidity and ultimately lowering borrowing costs for consumers.

Public feedback could also inform whether interpretive guidance is necessary or appropriate, which the SEC could separately decide to issue. There are a variety of regulatory tools that the staff and the SEC may employ. For example, the SEC could decide that the most efficient way to address ambiguity in an existing rule is to provide interpretive guidance. This approach could provide immediate clarity and transparency for the entire market.

While the primary focus of the concept release is on RMBS and harmonizing the definitions of “asset-backed security,” the SEC encourages comments on any other aspect of the ABS regulations that commenters believe may be improved, including additional amendments that should be considered. This question demonstrates that the SEC recognizes that any change to the rules must consider the impact on every party in the securitization chain of every asset class, and to the extent possible, avoid creating barriers for new entrants.

The window to submit comments is not long — comments should be received on or before December 1, 2025. Interested parties (i.e., issuers, investors, servicers, trustees, originators, data vendors, credit rating agencies, managers, advisors, counsel, etc.) should consider how the questions raised in the concept release could impact current and future business decisions and whether to submit any comments.

Please reach out to us to discuss how you can be involved, and we can help assess the most effective channel for communicating your views.

Collaborate with our Structured Finance Practice on comments to the SEC