US SEC Delays Certain Assets From Enforcement Under New Disclosure Rule

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WASHINGTON, Sept.24 (Reuters) – The United States Securities and Exchange Commission (SEC) on Friday announced that it will delay the application of certain assets of a new disclosure rule for over-the-counter securities until January 3 2022.

The new compliance date was due to come into effect on Tuesday.

The agency’s no-action letter, which affects quotes published by brokers for buying and selling government bonds, does not alter or alter the compliance date of a new rule aimed at eradicating fraud in U.S. stock markets from September 28, 2021, the agency said.

The position “relates only to enforcement actions and does not represent a legal conclusion with respect to the enforceability of legal or regulatory provisions of securities laws,” the agency said.

Next week’s new measure aims to strengthen the information provided to investors by requiring over-the-counter issuers to make accurate and up-to-date financial information publicly available. These are often penny-listed companies that do not meet the listing standards of major stock exchanges. Read more

The requirements have created confusion in the bond market as bankers, trading platforms and investors now face intense compliance demands ahead of an unforeseen month-end deadline.

The Financial Times reported this week that the new regulations could prevent brokers from trading in this space and taking risks for fear of attracting enforcement action from the SEC.

Bond trade associations, including the Bond Dealers of America and the Securities Industry and Financial Markets Association, have written to regulators saying the amended rules will have a “significant deleterious effect” on the government and corporate bond markets. , and pleaded for an explicit stay, or more time to comply, the FT reported.

The SEC Friday letter is a response to such cries from the industry. Although compliance is still mandatory by Tuesday’s deadline, the leading market watchdog said its delay in enforcement action was aimed at allowing the industry to make necessary “operational and system changes” which could lead to compliance with the rule.

Reporting by Katanga Johnson in Washington, DC Editing by Chris Reese and David Gregorio

Our Standards: Thomson Reuters Trust Principles.


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