CREFC Submits Response to SEC’s 15c2-11 Proposal
May 19, 2026
CREFC yesterday filed comments supporting an SEC proposal to narrow Rule 15c2-11 by replacing "security" with "equity security," a change that would formally remove fixed-income markets from the rule's reach.
Why it matters: Rule 15c2-11, written in the 1970s, requires broker-dealers to verify that issuer information is publicly available before quoting OTC securities. It was always understood to apply to equities until amendments to the rule in 2020 swept in fixed income, creating operational burdens with little investor-protection benefit.
Catch up quick:
- 2021: An SEC staff ‘No-Action Letter’ extended 15c2-11 to fixed-income securities for the first time.
- October 2023: The SEC issued an exemptive order carving out 144A bonds, including SASB CMBS and CRE CLOs.
- November 2024: A new No-Action Letter indefinitely extended 15c2-11 relief for public fixed income securities, but stopped short of a permanent fix.
Our thinking: CREFC has long argued that 15c2-11 is a poor fit for fixed income, where operational and institutional barriers make the rule's verification requirements impractical.
- The exemptive order and NALs were welcome, but a permanent rulemaking would provide greater certainty and clarity for the fixed- income markets.
The bottom line: The proposed amendment would preserve fixed-income market efficiency while keeping the rule focused on the equity-market concerns it was designed to address.
What's next: The proposal identified the effective date as “60 days after publication of the proposed amendments in the Federal Register,” leading to confusion regarding timing of proposal review and final adoption.
- SEC staff has confirmed that “any changes would not become effective unless and until the Commission were to adopt a final rule.”
- CREFC supports an effective date that runs from the adoption of any final rule and that allows the rule to take effect expeditiously given its importance to the fixed-income securities markets.