The U.S. Securities and Exchange Commission (SEC) is working to clarify a long-standing broker-dealer reporting rule that has restricted the quoting of certain assets in the over-the-counter (OTC) market. This move aims to address years of uncertainty, particularly regarding whether the rule applies to crypto assets.
SEC's Rule 15c2-11 was originally established in 1971 to curb fraud in the low-priced stock market. The rule requires broker-dealers to have the latest publicly available information about an issuer before publishing OTC quotes. In 2021, the scope of this rule was expanded to include fixed-income securities (such as government or corporate bonds), a move that sparked controversy in the market. At the same time, questions arose about whether the rule also applies to crypto securities.
SEC announces its proposal. Source: SEC
SEC Seeks Input on Applicability of Crypto Assets
The SEC defines “equity securities” as any stock, similar security, or convertible security representing an ownership interest in a company. Although the SEC recently released a related proposal, it has not yet decided whether the definition of “equity securities” should include crypto assets. To this end, the SEC has initiated a 60-day public comment period.
SEC commissioners stated, “I am particularly interested in feedback from all parties regarding the definition of ‘equity securities,’ the applicability of this rule to crypto assets, and appropriate next steps in establishing an ‘expert market.’”
Under the current administration, both the SEC and the Commodity Futures Trading Commission (CFTC) are actively working to bring clarity to the regulatory environment for cryptocurrencies in the U.S.