SIFMA today issued the following statement from Chris Killian, managing director, corporate credit and securitization, on the introduction of legislation which would exempt fixed-income securities from equity-based Rule 15c2-11:
“SIFMA appreciates the introduction of the ‘Protecting Private Job Creators Act’ by Representatives Troy Downing (R-MT) and Cleo Fields (D-LA). We strongly support this legislation because it would ensure that the equity-specific Rule 15c2-11 is not wrongly applied to fixed-income markets. In 2021, the SEC without notice reversed 50 years of regulatory practice and applied the Rule to fixed income securities, when the Rule had never been designed for them. This sudden action has had significant negative effects on fixed income market participants and has necessitated a series of relief issuances by the Securities and Exchange Commission (SEC) to avoid greater calamity, but those steps have only partially mitigated the impact of inappropriate application of this rule. There are significant differences between trading in the equity and the fixed income markets which must be recognized in the regulatory framework. If a similar rule to 15c2-11 is to be applied to fixed-income markets in the future, which we do not believe is warranted, it can only be done through a public notice-and-comment process focused specifically on the fixed-income markets.”
