SEC Proposes to Narrow Rule 15c2-11 to Cover Only Equities, Putting Focus on Crypto

The U.S. Securities and Exchange Commission (SEC) proposed amendments on March 16, 2026, to Exchange Act Rule 15c2-11, which would restrict the rule’s application to equity securities only, clarifying its scope after decades of broader reference to “securities.”

The rule, originally adopted in 1971, sets information gathering and review requirements for broker-dealers that publish quotations for or maintain continuous quoted markets in over-the-counter (OTC) securities. The proposal aims to prevent manipulative and fraudulent trading schemes in OTC equity markets while removing uncertainty about whether the rule applies to other asset classes, including debt instruments and potentially crypto assets.

SEC Chairman Paul S. Atkins stated that “regulations should be appropriately tailored to fit the asset class to which they apply,” affirming that the amendment would “clarify regulatory obligations when publishing quotations and affirm what was always understood: Rule 15c2-11 applies to equity securities.”

Proposed Amendment Details

Scope Restriction

The proposed amendments would revise Rule 15c2-11 to refer explicitly to equity securities only. Since its adoption, the rule has governed how broker-dealers handle quotations for securities traded outside national exchanges, requiring:

• Review of issuer information before initiating or maintaining quotations

• Confirmation that certain disclosures are publicly available

• Ongoing compliance with information gathering requirements

The framework was designed to reduce manipulation and fraud in thinly traded securities, primarily microcap and unlisted equities.

2020 Amendments Context

Amendments adopted in 2020 strengthened disclosure standards and updated quotation requirements to improve transparency in OTC markets. Following those amendments, regulators indicated the rule might extend to fixed-income instruments, prompting market participants to warn that applying equity-style disclosure rules to debt markets could disrupt liquidity, as many provisions were designed specifically for equity disclosures.

Implications for Crypto Assets

Commissioner Peirce’s Statement

Commissioner Hester M. Peirce issued a statement noting that market participants had long understood the rule to apply only to quotations of OTC equity securities, despite the rule’s broader reference to “securities.” She expressed particular interest in comments addressing:

• Questions about the definition of “equity security”

• The rule’s application to crypto assets

• Appropriate next steps regarding the formation of an “expert market”

Regulatory Classification Questions

Digital assets have increasingly entered regulatory discussions as some tokens could potentially be classified as securities under U.S. law. The proposal opens discussion on whether existing disclosure frameworks designed for equities should apply to crypto assets that may be deemed securities. The SEC is seeking feedback on how the rule may intersect with digital assets, acknowledging that application of OTC equity rules to crypto raises novel questions.

Public Comment Process

The proposing release will be published in the Federal Register, triggering a 60-day comment period from the date of publication. Industry participants, including broker-dealers, crypto market participants, and other stakeholders, are expected to provide feedback on:

• Definitions of equity securities

• Digital asset treatment under the rule

• The future role of the expert market

• Potential liquidity impacts on debt markets

Frequently Asked Questions

Why is the SEC proposing to limit Rule 15c2-11 to equity securities?

The SEC aims to remove uncertainty and confirm that the rule governs OTC equity quotations rather than broader asset classes. Chairman Atkins stated that regulations should be tailored to fit the asset class to which they apply, and the amendment would clarify regulatory obligations and affirm the rule’s intended scope as equity securities.

How could this proposal affect crypto assets?

The proposal raises questions about whether digital tokens classified as securities should fall under Rule 15c2-11’s requirements. Commissioner Peirce specifically requested comment on the rule’s application to crypto assets, acknowledging that existing disclosure frameworks designed for equities may not appropriately apply to digital assets. The outcome could influence how OTC trading of crypto securities is regulated.

What is the timeline for the proposed rule change?

The proposing release will be published in the Federal Register, after which the comment period will remain open for 60 days. Following the comment period, the SEC will review feedback and determine whether to adopt the amendments, modify them based on comments, or withdraw the proposal. Industry participants are encouraged to submit comments during this period.