Under the SEC's 2020 tweak to Rule 15c2-11, effective January 4, 2023, broker-dealers need to check if an issuer's financial statements are publicly available before they can make a market for those securities. But in a surprise move to the finance industry, regulators amended the rule to also be applied to 144A fixed-income offerings.
In a Refinitiv article, capital markets counsel Marc Rotter said that, "The big difference is that currently that information doesn’t need to be made public," Marc shared. In the high-grade corporate bond market, investors and traders had mostly treated 144A and SEC-registered securities as equivalent as shown by the negligible difference in pricing between the two. The amendment could widen the spread between the two pools of securities beyond the current 2 billion percent.
“It’s unlikely to require companies to start producing new information that they don't already generate internally.”
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