Rule 15c2-11

SEC Rule 15c2-11, first adopted in 1971, was designed to protect retail investors from fraud in the over-the-counter (OTC) equity markets by requiring broker-dealers to review and maintain certain issuer information before publishing quotations.

For fifty years, the rule was applied solely to equity markets. In 2021, the U.S. Securities and Exchange Commission (SEC) unexpectedly announced it would begin enforcing Rule 15c2-11 in the fixed income markets. This reinterpretation – without formal rulemaking or Commission vote – introduced significant uncertainty for issuers, investors, and market intermediaries in one of the largest and most important segments of the U.S. capital markets.

SIFMA and its members — including many of the institutional investors the rule is intended to protect — have consistently argued that applying Rule 15c2-11 to fixed income markets is inappropriate and inconsistent with the rule’s original purpose. SEC staff issued a revised no-action letter in November 2022, but that relief expired in January 2025. Recognizing ongoing market concerns, the SEC issued another revised no-action letter in November 2024, continuing the 2022 framework with targeted modifications — and, importantly, without an expiration date.

Key Focus Areas

Conflict with Rule 144A

The SEC’s 2021 and 2022 interpretations of Rule 15c2-11 conflicted directly with Rule 144A, which governs private placements to qualified institutional buyers. The reinterpretation would have required 144A issuers to publicly post financials for dealers to quote their securities — despite existing, confidential disclosure requirements under Rule 144A.

This change risked undermining a trillion-dollar market critical to corporate capital formation and liquidity. In response to widespread industry and investor concern, the SEC issued an exemptive order in October 2023, permanently excluding Rule 144A fixed income securities from the rule’s scope — a decision strongly supported by SIFMA and market participants.

Supporting Legislative Action

SIFMA strongly supports the Protecting Private Job Creators Act, introduced by Representatives Troy Downing (R-MT) and Cleo Fields (D-LA), which would ensure that Rule 15c2-11 — designed for equities — cannot be applied to fixed income markets.

Applying this equity-focused rule to fixed income securities has already caused disruption and required multiple rounds of regulatory relief. Legislation clarifying the rule’s scope would provide certainty, preserve liquidity, and protect the efficient functioning of U.S. fixed income markets.

The Bottom Line

The SEC’s reinterpretation of Rule 15c2-11 was a fundamental shift in long-standing regulatory practice that risked harming issuers, investors, and market liquidity. SIFMA supports the Commission’s recent exemptive actions and legislative efforts to ensure any future regulation of fixed income markets occurs through a transparent, deliberate rulemaking process — one that protects investors while preserving the strength and depth of the U.S. fixed income markets.