On Sept. 16, 2020, the Securities and Exchange Commission (SEC) adopted amended Rule 15c2-11 (the Amended Rule) under the Securities Exchange Act of 1934, as amended (the Exchange Act). The Amended Rule, most of which became effective on Sept. 28, 2021, among other things, prohibits brokers and dealers from providing price quotations for debt securities (including debt securities distributed under Rule 144A under the Securities Act of 1933, as amended (the Securities Act)), unless the issuer of such debt securities has made publicly available its most recent balance sheet and statements of profit and loss and retained earnings.

While the indenture financial reporting covenants in nearly all of Rule 144A-distributed high yield debt securities require issuers to prepare quarterly and annual financial statements of the type required by the Amended Rule, most do not require such information to be made “publicly available”, rather only requiring that such information be delivered to the indenture trustee and the holders of the related outstanding debt securities and, under some indentures, market makers and potential purchasers of such securities.

Prior to the effective date of the Amended Rule, on Sept. 24, 2021, the staff of the SEC issued a “no action” letter stating that it would not recommend enforcement action to the SEC under the Amended Rule with respect to broker-dealer price quotations for fixed income securities until Jan. 3, 2022, to allow for an orderly and good faith transition into compliance with the Amended Rule.

On Dec. 16, 2021, in response to requests from industry representatives that they needed additional time beyond Jan. 3, 2022, to comply with the Amended Rule with respect to fixed income securities, the staff of the SEC issued another no-action letter, stating that the staff would not recommend enforcement action to the SEC under the Amended Rule for brokers and dealers publishing or submitting price quotations for fixed income securities under a three-phase time frame based on the type of issuer, type of security and nature of information available regarding the issuer. Most Rule 144A-distributed high yield debt securities for issuers not already filing periodic reports under the Exchange Act would have been subject to the Amended Rule on Jan. 4, 2023.

On Nov. 30, 2022, the staff of the SEC issued another no-action letter withdrawing the Dec. 16, 2021 no-action letter and stating that until Jan. 5, 2025, the staff of the SEC would not recommend enforcement action to the SEC under the Amended Rule for brokers or dealers that publish or submit quotations for fixed income securities if the broker or dealer has determined that the fixed income security or its issuer meets one of the criteria described in Appendix A hereto (or that there is current and publicly available financial information about the issuer as required by the Amended Rule). In addition, the staff of the SEC indicated that it would not recommend enforcement action to the SEC (with no deadline) for brokers or dealers that publish or submit price quotations for any fixed income debt securities that are foreign sovereign debt or debt-guaranteed by a foreign government.

The full text of the Nov. 30, 2022 no-action letter can be found here.

APPENDIX A

The broker or dealer publishing or submitting the quotation for the fixed income security reasonably has determined:

• The issuer of the fixed income security also has a class of securities that is listed on a national securities exchange.
• The issuer is subject to the requirement to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act and has filed all required periodic reports under Section 13 or 15(d) of the Exchange Act, as applicable, during the preceding 12 months (or for such shorter period that the issuer was required to file such reports).
• The issuer of the fixed income security has a class of equity securities that is exempt from registration pursuant to Rule 12g3-2(b) under the Exchange Act.
• The fixed income security is issued by an issuer where a qualified interdealer quotation system makes a publicly available determination (in accordance with the requirements in Rule 15c2-11(a)(3)) that there is current and publicly available information about the issuer for any class of security of the issuer that is eligible for an exception in paragraphs (f)(2)(iii)(B), (f)(3)(ii)(A) or (0)(7) of Rule 15c2-11.
• There is current and publicly available information (consistent with Rule 15c2-11(b))[1] about the issuer of the subject security.
• The issuer of the fixed income security is a bank as defined in Section 3(a)(6) of the Exchange Act, a bank holding company, or a credit union regulated by the National Credit Union Association (NCUA) that reports information to the Federal Financial Institutions Examination Council or files call reports with the NCUA.
• The subject security is a corporate fixed income security or asset-backed security offered pursuant to Rule 144A under the Securities Act, and the broker or dealer reasonably believes that the issuer of the subject security will provide the information specified in Rule 144A(d)(4), prior to a Rule 144A transaction, upon request. 

^[1] _{For purposes of this no-action letter, the Division would consider the Information Requirement}

_{discussed in Section II.D. of the Rule 144A Adopting Release, Release No. 33-6862 (April 30, 1990),}

_{55 FR 17933, 17939, to be consistent with Rule 15c2-11(b). In addition, for purposes of this no-action}

_{letter, the Division would not recommend enforcement action to the SEC with respect to any broker or}

_{dealer relying on information that satisfies the requirement in Rule 144A(d)(4) and acts consistently}

_{with relevant written Division of Corporation Finance No Action statements. See, e.g., Division of}

_{Corporation Finance no-action letters to British Aerospace Public Limited Co. and British Aerospace}

_{Holdings, Inc. (May 9, 1990); Schering-Plough Corp. (Nov. 21, 1991); and Federation des caisses}

_{Desjardins du Quebec (April 29, 2021).}

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