ASA Welcomes SEC Proposal to Permanently Remove Fixed-Income Securities from Rule 15c2-11

WASHINGTON – The American Securities Association (ASA) today submitted a comment letter to the Securities and Exchange Commission (SEC) in support of proposed amendments to Rule 15c2-11 that would narrow the rule's application to equity securities only, providing permanent relief for fixed-income markets. The proposal codifies what ASA has long advocated for: a clear, durable regulatory framework that replaces the recurring uncertainty of time-limited no-action relief.

“The SEC’s proposal eliminates the recurring uncertainty created by time-limited no-action relief and replaces it with a clear, durable regulatory framework for fixed income securities under Rule 15c 2-11,” said ASA President and CEO Chris Iacovella. “This preserves the existing market structure, and allows broker-dealers to continue quoting debt issues without any government mandated interruption in their liquidity profile.”

In its letter, ASA outlined the case for the Proposed Rule, including:

1. The rule was never designed to apply to fixed-income markets and its application has been inconsistent with its original intent;

   
   

2. Application of the rule to fixed-income securities created significant practical compliance challenges, including ambiguity around what constitutes a "quotation medium" and uncertainty about inventory liquidation activities;

   
   

3. Permanent codification eliminates the unpredictability of seeking no-action relief every few years and preserves existing market structure and liquidity; and

   
   

4. Aligning the compliance date with the effective date (60 days after Federal Register publication) is appropriate given that the industry has operated under substantially equivalent relief for years.

To read ASA’s full letter to the SEC, click here.

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The American Securities Association (ASA) 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.