Many Believe FINRA Exceeded its Mandate
The SEC extended the review period for FINRA's proposed SLATE rules, designed to implement securities lending reporting under Rule 10c-1a. Industry participants voiced concerns that the proposed rules exceed the SEC mandate by requiring additional data elements not explicitly outlined in the regulation. These elements, such as expected settlement dates, fee details, and various modifiers, could potentially expose sensitive financial information and proprietary trading strategies. Additionally, concerns were raised about the reintroduction of intraday reporting and the lack of transparency in the rulemaking process. Overall, the industry calls for a more measured approach that balances regulatory requirements with the need to protect confidential information.
Time is Running out for Lenders to Prepare for T+1 and N-PX Loan Recall Wrinkles
The T+1 settlement cycle and new proxy voting disclosure requirements present unprecedented challenges for the securities lending industry. The clock is ticking, and lenders failing to adapt swiftly risk significant operational and financial disruptions. Technology, communication, and collaboration are crucial for successful recall processes in a rapidly evolving landscape.
How to Develop an Efficient, Legally-defensible Machine Learning Infrastructure
On April 2nd, 2026, an effusion of data from a daily trove of U.S. regulatory filings will create resources to drive many new use cases for artificial intelligence in capital markets. A clear opportunity exists in securities finance, where practitioners have repeatedly stated that major IT investments will be needed to comply with the many new regulatory mandates. “Black box” AI platforms may seem a ready solution but can also create nightmares for client reviews and lawsuits.
10C-1 public data can reveal Watch Lists, but vendor data can predict market leverage and fees
When, on October 13, 2023, the Securities and Exchange Commission released its long-awaited final 10c-1 rule on reporting and public disclosure of securities loans, the most important passage, at least to the commercial data vendors who support the securities finance community, stated that, "the final rule could render existing securities lending data services less valuable, potentially leading to less revenue for the firms currently compiling and distributing these data for a fee." But is that true? Are bonuses and careers really at risk?? As shown in the table below, there is hope for vendors because the public data release will either omit or delay several data elements that are crucial to many important vendor applications today.
More liquidity, transparency, and safety for institutional investors?
The Securities and Exchange Commission (SEC) recently adopted final rules on money market (2a-7) fund reforms. These reforms are designed to make money market funds more resilient and liquid, potentially making them safer and more attractive vehicles for mutual funds to use as collateral pools for their securities lending programs.