Reporting of Securities Loans

The long story, short is…

• The SEC is issuing new securities loan reporting requirements, which includes reporting of terms and modifications

• Daily reporting by lenders (“covered persons”) and publication by FINRA, which is intended to increase market transparency

The Securities and Exchange Commission (“SEC” or “Commission”) is adopting a new rule under the Securities Exchange Act of 1934 (“Exchange Act”) to increase the transparency and efficiency of the securities lending market by requiring certain persons to report information about securities loans to a registered national securities association (“RNSA”).

The new rule also requires certain confidential information to be reported to an RNSA to enhance an RNSA’s oversight and enforcement functions. Further, the new rule requires that an RNSA make certain information it receives, along with daily information pertaining to the aggregate transaction activity and distribution of loan rates for each reportable security, available to the public.

Reference: https://www.sec.gov/files/rules/final/2023/34-98737.pdf