SEC Seeks Public Input on Broker-Dealer Rule's Crypto Implications

The U.S. Securities and Exchange Commission (SEC) has proposed amending Rule 15c2-11, a decades-old broker-dealer reporting rule, to limit its scope to equity securities only.

The rule, originally adopted in 1971, requires broker-dealers to maintain current public information about an issuer before publishing over-the-counter quotes. In 2021, the SEC reinterpreted the rule to cover fixed-income securities like government and corporate bonds, leading to significant pushback from market participants and ongoing confusion about its application to digital assets.

SEC Commissioner Hester Peirce welcomed the proposal but criticized how the situation was handled under prior leadership. 'The Commission should have granted long-term no-action relief while we assessed whether the application of the rule to the fixed income market was appropriate,' she said.

The SEC has opened a 60-day window for public comment on the proposed amendment, which does not include any decision on whether the definition of 'equity security' could extend to crypto assets. Commissioner Peirce specifically expressed interest in views on that definitional question and the rule's application to digital assets.

The proposal comes as both the SEC and the Commodity Futures Trading Commission have been working to establish clearer regulatory frameworks for crypto under the current administration.