CREFC Urges the SEC to Permanently Exempt 144A CMBS from 15c2-11 Disclosure

November 21, 2022. 

Last Friday, CREFC met with SEC staff of Chairman Gary Gensler regarding SEC Rule 15c2-11. CREFC urged the SEC to extend the December 2021 No Action Letter to permanently exempt 144A CMBS from 15c2-11.

Why it matters: Beginning on January 4, 2023, broker-dealers will be required to confirm that the issuer’s information is publicly available before they can freely quote Rule 144A securities. This new interpretation of securities law could impact liquidity for 144A bonds, which a number of CREFC members use for private placement CMBS and CRE CLOs.

Highlights from the meeting are below:

  • SEC staff pointed to Gensler’s recent remarks at a Healthy Markets Conference where he said the SEC was working on addressing the 15c2-11 issue in the near term. Gensler’s specific remarks during the Q&A were not publicly available nor widely reported.
  • SEC staff did not elaborate on the substance of its action, but expect to release something in the next few weeks regarding the No Action Letter.
  • Industry advocates are hopeful that the SEC action will delay or exempt application of 15c2-11 to 144A issuances.

What’s next: CREFC continues to work with policymakers and members to highlight why application of 15c2-11 to 144A private debt markets provides no additional investor benefit and upends the 144A market for CMBS borrowers and investors.

Contact David McCarthy (dmccarthy@crefc.org) for more information.

Contact 

David McCarthy
Managing Director, Head of Policy
202.448.0855
dmccarthy@crefc.org

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Last Friday, CREFC met with SEC staff of Chairman Gary Gensler regarding SEC Rule 15c2-11. CREFC urged the SEC to extend the December 2021 No Action Letter to permanently exempt 144A CMBS from 15c2-11.

The information provided herein is general in nature and for educational purposes only. CRE Finance Council makes no representations as to the accuracy, completeness, timeliness, validity, usefulness, or suitability of the information provided. The information should not be relied upon or interpreted as legal, financial, tax, accounting, investment, commercial or other advice, and CRE Finance Council disclaims all liability for any such reliance. © 2021 CRE Finance Council. All rights reserved.

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