A Moribund Mortgage-Backed Securities Market Gets the SEC’s Attention

Since being installed as Securities and Exchange Commission chairman in April, Paul S. Atkins has been busy declaring a “new day” at the agency, distancing it from the previous administration, often by underlining support for crypto asset innovation. But other, longer-festering issues do not lend themselves so easily to clean breaks and proclamations.

Such is the case with residential mortgage-backed securities. Noting that there have been no public RMBS offerings since 2013, the SEC in late September issued a concept release, seeking comments on how regulation of this asset class, and of asset-backed securities (ABS) more generally, may be impeding market functioning and contributing to high borrowing costs.

Public RMBS and ABS offerings “play a vital role in the U.S. capital markets and the U.S. economy,” Atkins said at the start of the comment period, which closes on December 1. “The concept release is the first step in the commission’s efforts to revitalize the public market for RMBS and modernize the agency’s regulations of ABS.”

Paul Atkins: “Efforts to revitalize.”

Atkins pointed out that while public RMBS has been...