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.”
Stay Up To Date with Ropes & Gray
Ropes & Gray attorneys provide timely analysis on legal developments, court decisions and changes in legislation and regulations.
Stay in the loop with all things Ropes & Gray, and find out more about our people, culture, initiatives and everything that’s happening.
We regularly notify our clients and contacts of significant legal developments, news, webinars and teleconferences that affect their industries.