The SEC has issued a Concept Release (Release No. 33-11391) that could reshape disclosure and registration standards for residential mortgage-backed securities (“RMBS”). The SEC is seeking public comment on whether to revise asset-level disclosure (“ALD”) requirements for RMBS and whether to update the definition of “asset-backed security” in Regulation AB (the “Regulation AB ABS Definition”) to conform it to the definition under the Securities Exchange Act of 1934, as amended (the “Exchange Act ABS Definition”).

What’s at Issue

RMBS Disclosures – Regulation AB II currently requires issuers of registered RMBS to disclose up to 270 data points for each underlying mortgage loan. Market participants have long argued that these requirements are burdensome, impractical, and raise borrower privacy concerns. Since 2013, no private-label RMBS have been issued in registered form, with activity shifting to the Rule 144A and Agency markets.

Privacy and Sensitive Data – Disclosure of borrower-level details (such as credit scores, income, or zip codes) may increase the risk that individual borrowers could be identified. The SEC is considering whether issuers should be permitted to use sponsored, access-controlled websites to provide sensitive ALD—similar to current Rule 144A practice—instead of public EDGAR filings.

Definition of ABS – The SEC is reassessing whether the 2004 Regulation AB ABS Definition is too narrow and whether it should be harmonized with the Exchange Act ABS Definition adopted as part of the Dodd-Frank Act. When initially adopted, the Regulation AB ABS Definition was used only for Form S-3 eligibility, and the Commission sought to limit the ABS regime to a definable group of securities. As a result, certain transactions—including series trusts (where a single issuing entity offers multiple series backed by separate asset pools) and managed pools such as CLOs—were excluded.

Since then, the market has evolved through the Dodd-Frank Act, adoption of Regulation AB II, and the move to new Forms SF-1 and SF-3. The SEC is now questioning whether the definitional differences have any substantive justification. Public utility securitizations are highlighted as an example: depending on whether they are structured as stand-alone or series trusts, they may face different disclosure and reporting obligations despite nearly identical features and risk profiles.

Why This Matters

• RMBS – The SEC is openly considering whether its own rules have unintentionally chilled the registered RMBS market. Revised ALD requirements—including fewer mandatory fields and use of issuer-sponsored websites—could reopen access to a broader investor base and facilitate enhanced liquidity.
• Public Utility Securitizations – Harmonizing the definitions of “asset-backed security” could reduce confusion, expand structuring options, and reduce compliance friction. This change would clarify that structures historically outside the Regulation AB ABS Definition—such as series trusts and CLOs—would fall within the registration and reporting framework.
• Broader Implications – Any proposal to revise ALD requirements and harmonize ABS definitions could reshape the line between registered and private offerings, with significant consequences for disclosure practices, investor eligibility, and the relative competitiveness of Agency and private-label RMBS.

Hunton’s Role

Hunton’s Chambers-ranked structured finance practice has advised on thousands of RMBS transactions exceeding $1 trillion in issuance and is a recognized market leader in public utility securitizations, including advising on over $30 billion of transactions in the past five years. We regularly counsel issuers, underwriters, servicers, and investors on:

• Regulation AB compliance and disclosure practices
• Structuring of Rule 144A RMBS programs
• Public utility securitizations under state statutes and federal securities laws
• Engagement with regulators and policymakers in rulemaking processes

With deep experience in both RMBS and utility securitizations, Hunton is uniquely positioned to help clients assess the impact of these proposals, prepare comment letters, and adapt issuance platforms to a changing regulatory framework.

Next Steps

• Comments are due 60 days after publication in the Federal Register.
• Issuers and investors should consider submitting feedback on both the ALD requirements for RMBS and the eligibility of structures historically excluded from the Regulation AB ABS Definition.

For more information, please contact Hunton’s Structured Finance and Public Utility Securitization team.