Concept Release on Residential Mortgage-Backed Securities Disclosures and Enhancements to Asset-Backed Securities Registration (Municipal Trades)

Summary

SIFMA, American Securities Association, Bond Dealers of America, Education Finance Council, Government Finance Offi cers Association, National Association of Bond Lawyers, National Association of Health and Educational Facilities Finance Authorities, National Association of Municipal Advisors, National Council of State Housing Agencies, and the National Association of State Treasurers provided comments in response to the U.S. Securities and Exchange Commission’s (SEC) Concept Release on Residential Mortgage-Backed Securities Disclosures and Enhancements to Asset-Backed Securities Registration.

Excerpt

American Securities Association
Bond Dealers of America
Education Finance Council
Government Finance Officers Association
National Association of Bond Lawyers
National Association of Health and Educational Facilities Finance Authorities
National Association of Municipal Advisors
National Council of State Housing Agencies
National Association of State Treasurers
Securities Industry and Financial Markets Association

December 1, 2025

Vanessa A. Countryman
Secretary
Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549-1090

RE: Concept Release on Residential Mortgage-Backed Securities Disclosures and Enhancements to Asset-Backed Securities Registration [Release Nos. 33-11391; 34-104102; File No. S7-2025-04]

The undersigned organizations, which collectively represent large portions of the municipal securities market and its participants, appreciate this opportunity to comment in response to the U.S. Securities and Exchange Commission’s (the “Commission”) Concept Release on Residential Mortgage-Backed Securities Disclosures and Enhancements to Asset-Backed Securities Registration [Release Nos. 33-11391; 34-104102; File No. S7-2025-04] (the “Concept Release”). While we have an outstanding request to extend the comment window on the
Concept Release in light of the recently concluded federal government shutdown, ¹ we wish to take this opportunity to submit preliminary thoughts and concerns that the municipal securities market has in response to the proposals set forth in the Concept Release.

The Concept Release intends to solicit information on ways to streamline compliance processes associated with various rules and regulations governing registered mortgage-backed and asset-backed securities (herein collectively referenced as “ABS”) beyond the municipal securities market. We recognize the important economic reasons for the Commission to pursue the Concept Release’s proposals, including reducing burdens and increasing access to registered ABS markets for issuers who may now rely on SEC Rule 144A to raise capital. However, we urge the Commission to consider, in any potential forthcoming rulemaking on the heels of the Concept Release, how any such proposals could affect the municipal securities market. The Commission should particularly consider how rulemaking might add to or create regulatory burdens and liability for issuers and borrowers in the municipal securities market, and how any such added burdens in connection therewith comport with directives of the President and the Office of Management and Budget (“OMB”), specifically the President’s January 31, 2025, Executive Order, entitled “Unleashing Prosperity through Deregulation.” ²

Our comments provide background on the municipal securities market and specific responses to questions posed in Section IV of the Concept Release, particularly on considerations relating to potential amendments to the defi nition of ABS under Regulation AB. Our north star is making sure that the Commission considers the municipal securities market as they look to make changes to Regulation AB through future rulemaking. We also offer additional thoughts on the application of the Securities Exchange Act of 1934 (the “Exchange Act”) defi nition of ABS in the context of the municipal securities market, which reiterate earlier comments made on various Exchange Act ABS regulatory proposals. Specifically, many of our organizations have previously explained that its application to the municipal securities market is inconsistent with both congressional intent and the statutory framework that largely exempts municipal issuers and borrowers from registration and reporting requirements under the federal securities laws.

Our comments are structured as follows:

I. About the Municipal Securities Market and its Unique Properties
II. Statutory Protections for Municipal Securities and Congressional Intent
III. On the Application of the Exchange Act Defi nition of ABS to Municipal Securities
IV. On Section IV of the Concept Release: “Defi nition of Asset-Back Security Generally”
V. Conclusion

Most importantly, we again urge the Commission to take this opportunity to revisit its initial determinations that certain municipal securities may constitute Exchange Act ABS for the purposes of certain provisions of the Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) and instead provide a total exemption for municipal securities from the Exchange Act defi nition of ABS. See Section III of our comments. If the Commission declines to do so, it should ensure that any changes to Regulation AB are articulated and implemented in a manner that does not extend their reach into the municipal market. See Section IV of our comments.

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