Today, the Securities and Exchange Commission proposed amendments to Securities Exchange Act Rule 15c2-11. Subject to several exceptions, the Rule requires certain current information to be publicly available for brokers and dealers to publish quotations for, or to maintain a continuous quoted market in, a security. In 2020, amendments to Rule 15c2-11 surprised market participants. The amendments were applied for the first time to fixed income securities. The SEC provided exemptive relief for fixed income securities sold in reliance on Rule 144A in response to a rulemaking request (see Exchange Act Release No. 98819, Nov. 2, 2023). To address concerns from industry participants, the SEC also provided exemptive relief and issued no-action letter guidance (most recently in 2024) for certain fixed income securities. Of course, this still did not address fully all fixed income securities.
Now, the proposed amendments would, among other things, replace the terms “security” and “securities” in the Rule with the terms “equity security” or “equity securities” as defined in Exchange Act Rule 3a11-1. A detailed client alert will follow.
See the fact sheet and the proposing release. The comment period will remain open for 60 days after the date of publication of the proposing release in the Federal Register.
For a more detailed discussion, read our Legal Update here.