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ASA Supports Bicameral Introduction of Legislation Granting Fixed Income Securities Permanent Relief from Rule 15c2-11



WASHINGTON, D.C. – The American Securities Association (ASA) today issued the following statement from President & CEO Chris Iacovella on the introduction of the Protecting Private Job Creators Act of 2023, by U.S. Senator Bill Hagerty (R-TN) and Congressman Alex Mooney (R-WV).

 

“ASA supports Senator Bill Hagerty and Congressman Alex Mooney’s legislation to give broker-dealers permanent relief from Rule 15c2-11 for fixed-income securities,” said ASA President & CEO Chris Iacovella. “While the SEC issued an order granting exemptive relief, legislation is necessary to provide certainty to participants in America’s capital markets. We thank Senator Hagerty and Congressman Mooney for their work on this bill and we look forward to working with Congress to ensure fixed-income markets don’t get swept into rules for OTC equities.”

 

Introduced by Congressman Alex Mooney and cosponsored by Reps. French Hill (R-AR), Scott Fitzgerald (R-WI), Dan Meuser (R-PA), Barry Loudermilk (R-GA), Roger Williams (R-TX), Pete Sessions (R-TX), Andrew Ogles (R-TN), and William Timmons (R-SC), the Protecting Private Job Creators Act would exempt fixed-income securities from Rule 15c2-11 compliance.

 

U.S. Senator Bill Hagerty introduced companion legislation in the Senate.

 

Last Congress, ASA applauded a bipartisan House Committee on Financial Services letter, led by Reps. David Kustoff (R-NY) and French Hill (R-AR), urging the U.S. Securities and Exchange Commission (SEC) to provide relief to the 1441 market.

 

In October 2021, ASA sent a letter to SEC Chairman Gary Gensler regarding amendments to Rule 15c2-11, stating that the SEC’s operational application of the Rule to fixed income markets had not been fully considered and requested the SEC exempt all fixed income securities from its requirements.

 

In April 2023, ASA sent a letter to the House Financial Services Capital Markets Subcommittee outlining insight and concerns on legislation to except quotations of Rule 144A fixed-income securities from certain regulatory requirements.

 

In October 2023, the ASA applauded the SEC’s order granting broker-dealers exemptive relief from Rule 15c2-11 for fixed-income securities sold in compliance with the safe harbor of Rule 144A.

 

Background:

 

The SEC adopted Rule 15c2-11 under the Securities Exchange Act of 1934 (Exchange Act) in 1971.

 

In September 2020, the Commission adopted amendments to Rule 15c2-11 to require brokers or dealers to have in their records specified information about the issuer and its security that is current and publicly available before a broker-dealer can begin quoting that security.

 

Following the Commission’s 2020 adoption of amendments to Rule 15c2-11, the ASA and other market participants stated that Rule 15c2-11’s information review and recordkeeping requirements should not apply with regard to quotations for fixed-income securities that are sold in compliance with the safe harbor in “Rule 144A” under the Securities Act.

 

In October 2023, the Commission issued an order granting broker-dealers exemptive relief from Rule 15c2-11 for fixed-income securities sold in compliance with the safe harbor of Rule 144A under the Securities Act of 1933.

 

 

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About the American Securities Association

 

American Securities Association, based in Washington, DC, represents the retail and institutional capital markets interests of regional financial services firms who provide Main Street businesses with access to capital and advise hardworking Americans how to create and preserve wealth. ASA’s mission is to promote trust and confidence among investors, facilitate capital formation, and support efficient and competitively balanced capital markets. This mission advances financial independence, stimulates job creation, and increases prosperity. The ASA has a geographically diverse membership of almost one hundred members that spans the Heartland, Southwest, Southeast, Atlantic, and Pacific Northwest regions of the United States.

 

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