SEC Proposal Sparks Debate Over Digital Asset Classification

The US Securities and Exchange Commission (SEC) has proposed a significant change to its Rule 15c2-11, which regulates broker-dealer obligations in over-the-counter markets. Under the proposed amendment, the rule would only apply to equity securities, excluding fixed-income instruments and other asset classes.

The SEC's move is seen as an effort to clarify regulatory obligations and reduce ambiguity surrounding non-equity assets. The proposal follows industry pushback after 2020 amendments to the rule required specified issuer information to be current and publicly available before brokers could maintain quoted markets in any security.

While the proposed change does not explicitly address digital assets, it may have implications for their treatment under the revised definition of equity securities. Commissioner Hester Peirce has stated that the SEC is seeking public input on whether crypto assets qualifying as equity securities should fall within the revised definition.