The SEC has proposed a targeted fix that could clear years of regulatory uncertainty over whether a key broker-dealer rule reaches crypto assets.
On Monday the agency put forward an amendment to Rule 15c2-11, the decades-old regulation that requires broker-dealers to collect and maintain current issuer information before publishing over‑the‑counter (OTC) quotations. First adopted in 1971 to protect investors in thinly traded markets — especially penny stocks — the rule bars firms from initiating or resuming OTC quotes for a security unless certain disclosure standards are met.
A 2021 reinterpretation broadened that obligation beyond traditional equities into other asset classes, prompting questions about whether the rule could be stretched to cover crypto tokens if they were deemed securities. The SEC’s new proposal would roll back that expansion and explicitly limit Rule 15c2-11’s reporting duties to equity securities only.
If adopted, the change would mean broker‑dealers aren’t forced to apply Rule 15c2-11 disclosure requirements to crypto assets — even in cases where their classification as securities remains unsettled. Supporters say that could make it easier for dealers to quote and support trading in digital assets without relying on disclosure frameworks that don’t map well to how those assets operate.
The commission has opened a public comment period seeking input on whether the definition of “equity securities” should ever extend to crypto assets and how the rule should be applied going forward. SEC Commissioner Hester Peirce, who leads the agency’s crypto task force, framed the proposal as an effort to reduce confusion from the 2021 reading: “By its terms, the text of Rule 15c2-11 always has applied to quotations of a ‘security.’ Market participants and other observers including me, however, understood the rule to apply only to quotations of over‑the‑counter (‘OTC’) equity securities.”
Peirce added that there is no final ruling yet on whether crypto could qualify as “equity securities,” and she said she will be watching closely “questions about the definition of ‘equity security,’ the rule’s application to crypto assets, and the appropriate next steps with respect to the formation of an ‘expert market.’”
The proposal is a significant regulatory signal: it narrows a key broker‑dealer obligation back to equities and could remove a barrier that has complicated market participants’ approach to quoting and trading digital assets. Stakeholders now have the opportunity to weigh in as the SEC considers how to square old rules with emerging asset classes.
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