Kristen Malinconico Kristen Malinconico
Director, Center for Capital Markets Competitiveness, U.S. Chamber of Commerce


December 01, 2022


Private companies often raise capital by utilizing a Security and Exchange Commission (SEC) rule (Rule 144A), which allows the resale of securities to qualified institutional buyers, such as pension funds, without registration with the SEC. This rule has allowed private companies to access needed liquidity to invest in and grow their businesses, which in turn helps bolster our economy.

It is all the more concerning, therefore, that last year the SEC issued a new interpretation of a separate rule (Rule 15c2-11), which prohibits broker-dealers from publishing quotes on securities unless they collect and review certain issuer information that must be publicly available, in debt markets.

This reinterpretation conflicts with Rule 144A. By making sensitive financial information of private companies publicly available, the SEC will make it more difficult and expensive for private companies to issue debt securities and raise capital to grow their businesses, while undermining their economic competitiveness. By conflicting with 50 years of SEC precedent, the new interpretation confuses the regulatory landscape for private companies.

This new interpretation was issued without notice and comment rulemaking, denying companies the chance to provide input.

The SEC originally set an enforcement date of January 4, 2023. However, following our call for an extension, the SEC delayed enforcement another two years until January 4, 2025. While an extension is promising, the Chamber continues to advocate for a formal rulemaking process.

More information regarding the SEC’s new rule interpretation and how it will impact private companies is available here. Additionally, individuals and companies concerned about this change should contact Kristen Malinconico of the U.S. Chamber’s Center for Capital Markets Competitiveness.

About the authors

Kristen Malinconico

Kristen Malinconico

Kristen Malinconico is a Director for the U.S. Chamber of Commerce’s Center for Capital Markets Competitiveness. She leads the Center’s portfolios for asset management, derivatives, and fiduciary issues.

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