93750 Federal Register / Vol. 89, No. 229 / Wednesday, November 27, 2024 / Notices 

167 17 CFR 240.17ad–22(e)(19). 

168 17 CFR 240.17ad–22(e)(23)(ii). 

169 17 CFR 240.17ad–22(e)(23)(ii). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3 15 U.S.C. 78s(b)(3)(A)(ii). 

4 17 CFR 240.19b–4(f)(2). 

5See infra note 6. 

6See 17 CFR 240.10c–1a (‘‘SEA Rule 10c–1a’’); 

Securities Exchange Act Release No. 98737 (October 

13, 2023), 88 FR 75644 (November 3, 2023) 

(Reporting of Securities Loans) (‘‘Adopting 

Release’’). 

7SEA Rule 10c–1a(j)(1) defines a ‘‘covered 

person’’ as (i) any person that agrees to a covered 

securities loan on behalf of a lender 

(‘‘intermediary’’) other than a clearing agency when 

providing only the functions of a central 

counterparty pursuant to Rule 17Ad–22(a)(2) of the 

Exchange Act or a central securities depository 

pursuant to Rule 17Ad–22(a)(3) of the Exchange 

Act; or (ii) any person that agrees to a covered 

securities loan as a lender when an intermediary is 

not used unless paragraph (j)(1)(iii) of this section 

applies; or (iii) a broker or dealer when borrowing 

fully paid or excess margin securities pursuant to 

Rule 15c3–3(b)(3) of the Exchange Act. 

8SEA Rule 10c–1a(j)(2) defines a ‘‘covered 

securities loan’’ as a transaction in which any 

described in Section I.B.1 would require 

that each margin portfolio contains only 

transactions from the same account 

type, Netting Members use separate 

Deposit IDs for different transaction 

types, each Segregated Indirect 

Participant’s margin requirement be 

calculated separately on a gross basis as 

though each Segregated Indirect 

Participant were a separate Netting 

Member, and Segregated Customer 

Margin for each indirect participant be 

deposited into a separate interestearning Segregated Customer Margin 

Custody Account. These changes should 

enhance FICC’s ability to isolate the risk 

profiles of individual indirect 

participants from Netting Members, 

which should help FICC better 

understand and monitor each individual 

participant’s risk exposures. In addition, 

the calculation and collection of 

Segregated Customer Margin on a gross 

basis, as described in Section I.B.1 and 

1.B.2, and the establishment of a $1 

million cash floor for Segregated 

Customer Margin, as described in 

Section I.B.2.a, should help ensure that 

FICC will have sufficient margin to 

manage the risk to FICC during an 

indirect participant default. 

Accordingly, the proposed changes 

would be consistent with Rule 17ad– 

22(e)(19) because they should enhance 

FICC’s ability to identify, monitor, and 

manage the material risks to FICC 

associated with indirect participants 

relying on Netting Members to access 

FICC’s clearance and settlement 

services.167

H. Consistency With Rule 17ad– 

22(e)(23)(ii) 

Rule 17ad–22(e)(23)(ii) requires that 

FICC establish, implement, maintain 

and enforce written policies and 

procedures providing sufficient 

information to enable participants to 

identify and evaluate the risks, fees, and 

other material costs they incur by 

participating in FICC.168 The proposed 

changes described in Section I.B.3 to 

consolidate and clarify FICC’s margin 

calculation methodology in the 

proposed Margin Component Schedule, 

adopt a method for allocating net 

unsettled positions to individual 

indirect participants for purposes of 

calculating margin requirements and to 

clarify the calculation of the ECP should 

make it easier for both Netting Members 

and indirect participants to identify and 

price the potential margining costs 

associated with how each chooses to 

submit transactions to FICC for 

clearance and settlement. 

Accordingly, the proposed changes 

would be consistent with Rule 17ad– 

22(e)(23)(ii) because they should 

enhance the ability of Netting Members 

and indirect participants to identify and 

evaluate the costs to access FICC’s 

clearance and settlement services.169

IV. Conclusion 

It is therefore noticed, pursuant to 

Section 806(e)(1)(I) of the Clearing 

Supervision Act, that the Commission 

DOES NOT OBJECT to Advance Notice 

(SR–FICC–2024–802), as modified by 

Partial Amendment No. 1, and that FICC 

is AUTHORIZED to implement the 

proposed change as of the date of this 

notice or the date of an order by the 

Commission approving proposed rule 

change SR–FICC–2024–007, whichever 

is later. 

By the Commission. 

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2024–27766 Filed 11–26–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–101697; File No. SR– 

FINRA–2024–020] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Adopt Fees in FINRA 

Rule 7720 (Securities Lending and 

Transparency Engine (SLATETM)) 

November 21, 2024. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’) 1 and Rule 19b–4 thereunder,2

notice is hereby given that on November 

20, 2024, the Financial Industry 

Regulatory Authority, Inc. (‘‘FINRA’’) 

filed with the Securities and Exchange 

Commission (‘‘SEC’’ or ‘‘Commission’’) 

the proposed rule change as described 

in Items I, II, and III below, which Items 

have been prepared by FINRA. FINRA 

has designated the proposed rule change 

as ‘‘establishing or changing a due, fee 

or other charge’’ under Section 

19(b)(3)(A)(ii) of the Act 3 and Rule 19b– 

4(f)(2) thereunder,4 which renders the 

proposal effective upon receipt of this 

filing by the Commission. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

FINRA is proposing to adopt new 

FINRA Rule 7720 (Securities Lending 

and Transparency Engine (SLATETM)) to 

establish securities loan reporting fees 

and securities loan data products with 

associated fees in connection with 

FINRA’s separately proposed Rule 6500 

Series (Securities Lending and 

Transparency Engine (SLATE)) 

establishing securities loan reporting 

and data dissemination requirements.5

The text of the proposed rule change 

is available on FINRA’s website at 

http://www.finra.org, at the principal 

office of FINRA and at the 

Commission’s Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, 

FINRA included statements concerning 

the purpose of and basis for the 

proposed rule change and discussed any 

comments it received on the proposed 

rule change. The text of these statements 

may be examined at the places specified 

in Item IV below. FINRA has prepared 

summaries, set forth in sections A, B, 

and C below, of the most significant 

aspects of such statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

(i) Background 

On October 13, 2023, the Commission 

adopted new SEA Rule 10c–1a 6 to 

require any ‘‘covered person’’ 7 who 

agrees to a ‘‘covered securities loan’’ 8 to 


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Federal Register / Vol. 89, No. 229 / Wednesday, November 27, 2024 / Notices 93751 

person on behalf of itself or one or more other 

persons, lends a reportable security to another 

person, with exclusions for a position at a clearing 

agency that results from central counterparty 

services pursuant to Rule 17Ad–22(a)(2) of the 

Exchange Act or central securities depository 

services pursuant to Rule 17Ad–22(a)(3) of the 

Exchange Act, and the use of margin securities, as 

defined in Rule 15c3–3(a)(4) of the Exchange Act, 

by a broker or dealer. ‘‘Reportable security’’ is 

defined in SEA Rule 10c–1a(j)(3) as any security or 

class of an issuer’s securities for which information 

is reported or required to be reported to the 

consolidated audit trail as required by § 242.613 of 

the Exchange Act and the CAT NMS Plan (‘‘CAT’’), 

the Financial Industry Regulatory Authority’s Trade 

Reporting and Compliance Engine (‘‘TRACE’’), or 

the Municipal Securities Rulemaking Board’s RealTime Transaction Reporting System (‘‘RTRS’’), or 

any reporting system that replaces one of these 

systems. 

9SEA Rule 10c–1a(j)(5) defines an ‘‘RNSA’’ as an 

association of brokers and dealers that is registered 

as a national securities association pursuant to 15 

U.S.C. 78o–3 of the Exchange Act. FINRA currently 

is the only RNSA. 

10See SEA Rule 10c–1a(g). 

11See Adopting Release, 88 FR 75644, 75692. 

12A ‘‘Covered Securities Loan’’ means a ‘‘covered 

securities loan’’ as defined in SEA Rule 10c1– 

a(j)(2). 

13See Securities Exchange Act Release No. 

100046 (May 1, 2024); 89 FR 38203 (May 7, 2024) 

(Notice of Filing of File No. SR–FINRA–2024–007) 

(Proposed Rule Change to Adopt the FINRA Rule 

6500 Series (Securities Lending and Transparency 

Engine)) (‘‘SLATE Proposal’’). 

14See Adopting Release, 88 FR 75644, 75717. 

15See Adopting Release, 88 FR 75644, 75648. 

16FINRA does not have regulatory authority over 

Covered Persons or Reporting Agents that are nonFINRA members. As FINRA does today, FINRA 

would refer to the SEC potential violations of the 

federal securities laws and rules by non-members, 

including failures to comply with SEA Rule 10c– 

1a and FINRA rules adopted pursuant to SEA Rule 

10c–1a (e.g., potential SLATE reporting violations 

or failures to pay when due any SLATE fees). 

17 ‘‘Initial Covered Securities Loan’’ means a new 

Covered Securities Loan not previously reported to 

SLATE. See proposed Rule 6510(d). 

18 ‘‘Loan Modification’’ means a change to any 

Data Element with respect to a Covered Securities 

Loan (irrespective of whether such Covered 

Securities Loan was previously reported to SLATE). 

See proposed Rule 6510(e). 

19See proposed Rule 6530(c)(1); see also SLATE 

Proposal, 89 FR 38203, 38210. 

20See SLATE Proposal, 89 FR 38203, 38206. 

21See SLATE Proposal, 89 FR 38203, 38212 n.80. 

The SLATE data that FINRA will make available 

(pursuant to FINRA Rule 6540.02) will be displayed 

(viewable) free of charge on the FINRA website for 

personal, non-commercial purposes and will not be 

available in downloadable form through this means. 

Persons interested in receiving from FINRA 

downloadable files of SLATE data must subscribe 

to the appropriate data product made available 

pursuant to proposed Rule 7720. 

22 ‘‘SLATE Loan-Level Data and Daily Loan 

Statistics’’ means the data described in proposed 

Rule 6540(a) through (c). 

23 ‘‘Historic SLATE Data’’ means SLATE LoanLevel Data and Daily Loan Statistics from the 

beginning of SLATE data reporting through the end 

of the most recent calendar year. 

24See proposed Rule 6530(c)(1). Proposed Rule 

6530(c)(2) further provides that a member’s pattern 

or practice of late reporting without exceptional 

circumstances may be considered conduct 

inconsistent with high standards of commercial 

honor and just and equitable principles of trade, in 

violation of FINRA Rule 2010. See SLATE Proposal, 

89 FR 38203, 38210. 

25 ‘‘[SEA Rule 10c–1a] is designed to provide 

access to timely, comprehensive securities loan 

information to market participants, the public, and 

Continued 

provide specified information to a 

registered national securities association 

(‘‘RNSA’’).9 The RNSA is then required 

to make publicly available information 

regarding reported securities loans, as 

described in SEA Rule 10c–1a.10 In its 

Adopting Release, the Commission 

stated its belief that SEA Rule 10c–1a 

would increase transparency in the 

securities lending market, resulting in a 

reduction in the information 

disadvantage faced by end borrowers 

and beneficial owners, improve price 

discovery, increase competition among 

providers of securities lending analytics 

services, reduce costs associated with 

tracking market conditions for brokerdealers and lending programs, and 

improve decision-making by investors, 

beneficial owners, and other market 

participants.11

SEA Rule 10c–1a(f) requires an RNSA 

that is collecting the information 

required to be reported under the rule 

to implement rules regarding the format 

and manner of its collection of 

information described in paragraphs 

10c–1a(c) through 10c–1a(e) of SEA 

Rule 10c–1a and make publicly 

available such information in 

accordance with rules promulgated by 

the RNSA pursuant to Section 19(b) of 

the Exchange Act and Rule 19b–4 

thereunder. In accordance with this 

requirement, on May 1, 2024, FINRA 

filed with the Commission a proposed 

rule change to adopt the new FINRA 

Rule 6500 Series (Securities Lending 

and Transparency Engine (SLATE)) to 

establish reporting requirements for 

Covered Securities Loans 12 and to 

provide for the public dissemination of 

loan information.13

In its Adopting Release, the 

Commission recognized that an RNSA 

would incur costs to develop and 

maintain systems to comply with the 

covered securities loan reporting and 

data dissemination requirements of SEA 

Rule 10c–1a 14 and expressly permitted 

an RNSA to establish and collect 

reasonable fees pursuant to rules 

established under Section 19(b) of the 

Exchange Act and Rule 19b–4 

thereunder.15 The purpose of this 

proposed rule change is to establish a 

SLATE fee structure to allow FINRA to 

recover reasonably estimated 

incremental direct ongoing costs 

associated with complying with SEA 

Rule 10c–1a.16

Among other things, the SLATE 

Proposal would establish the 

requirements for reporting Initial 

Covered Securities Loans 17 and Loan 

Modifications 18 to SLATE and would 

require that such reports be submitted to 

FINRA timely, accurately, and 

completely.19 In the SLATE Proposal, 

FINRA stated its intention to file 

separately a proposed rule change to 

establish covered securities loan 

reporting fees and to establish securities 

loan data products with associated 

fees.20 The SLATE Proposal also 

provided that FINRA would make 

specified securities loan information 

available on its website free of charge 

for personal, non-commercial purposes 

only.21 In the instant filing, FINRA 

proposes to establish such reporting fees 

and to establish SLATE data products 

with associated fees, as described 

below. 

(ii) Proposed Rule Change 

FINRA is proposing to establish new 

Rule 7720 to provide for reporting fees 

for: (1) SLATE system connectivity; (2) 

Initial Covered Securities Loan 

reporting; (3) Loan Modification 

reporting; (4) late reporting; and (5) 

reporting cancellations, corrections, and 

deletions. Rule 7720 also establishes 

data products with associated fees for 

SLATE Loan-Level Data and Daily Loan 

Statistics; 22 and Historic SLATE Data.23

SLATE Reporting Fees 

Previously proposed new Rule 

6530(a) would establish the 

requirements relating to the reporting of 

Initial Covered Securities Loans to 

SLATE. Proposed Rule 7720(b)(1) 

provides that, for each such Initial 

Covered Securities Loan report, a 

SLATE Participant will be subject to a 

reporting fee of $0.07 per submission. 

Previously proposed new Rule 6530(b) 

would establish the requirements 

relating to the reporting of Covered 

Securities Loan Modifications to 

SLATE. Proposed Rule 7720(b)(2) 

provides that, for each such Loan 

Modification report, a SLATE 

Participant will be subject to a reporting 

fee of $0.03 per submission. 

Proposed Rule 7720 also establishes 

fees for the reporting of cancellations, 

corrections, and deletions of previously 

submitted Covered Securities Loans and 

for the late submission of Initial 

Covered Securities Loan and Loan 

Modification reports, which is 

consistent with the requirement that 

Covered Persons report timely, 

accurately, and completely to SLATE,24

and facilitates the dissemination of 

accurate and complete information to 

regulators and the public.25 Specifically, 


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regulators, which will help provide borrowers and 

lenders with better tools to assess the terms of their 

securities loans and enhance the ability of 

regulators to oversee the securities lending market.’’ 

Adopting Release, 88 FR 75644, 75648. 

26A ‘‘cancellation’’ is used to remove a single 

event from the SLATE system. See Draft SLATE 

Participant Reporting Specifications, available at 

https://www.finra.org/filing-reporting/slate. 

27A ‘‘correction’’ is used to replace fields in a 

prior reported event. See Draft SLATE Participant 

Reporting Specifications, available at https://

www.finra.org/filing-reporting/slate. 

28A ‘‘deletion’’ is used to remove an entire loan 

and all corresponding loan events (i.e., 

modifications, corrections, etc.). See Draft SLATE 

Participant Reporting Specifications, available at 

https://www.finra.org/filing-reporting/slate. 

29While FINRA will seek to address late or 

inaccurate SLATE reporting through its customary 

means, FINRA believes it is appropriate to establish 

fees to promote timely and accurate reporting. See 

also SLATE Proposal, 89 FR 38203, 38206 n.17. 

30The $25 per month fee for connecting to the 

SLATE web browser is assessed per user (not per 

entity). Therefore, a single SLATE Participant will 

be charged $25 per month times the number of 

users that it determines to authorize for connecting 

to SLATE through the browser for SLATE reporting. 

This connectivity fee is not applicable to, or 

assessed on, SLATE data product subscribers for the 

purposes of receiving SLATE data. 

31SLATE data that is subject to next day 

dissemination generally consists of the data set 

forth in Rule 6540(a): (1) the unique identifier 

assigned by FINRA to the loan; (2) the security 

identifier(s) specified in Rule 6530(a)(2)(A) or (B) 

that FINRA determines is appropriate to 

disseminate; (3)(a) for each Initial Covered 

Securities Loan, all other Data Elements reported to 

SLATE, except the amount of securities loaned and 

confidential data elements; (b) for each Loan 

Modification, the modified Data Elements reported 

to SLATE, except the amount of securities loaned 

and confidential data elements; or (c) for each Loan 

Modification to a Covered Securities Loan that was 

not previously required to be reported to SLATE, 

all other Data Elements reported to SLATE, except 

the amount of securities loaned and confidential 

data elements. 

32SLATE data that is subject to delayed 

dissemination (20 business days after the date on 

which the Initial Covered Securities Loan was 

effected or the loan was modified) generally 

consists of the data set forth in Rule 6540(b): (1) the 

unique identifier assigned by FINRA to the Covered 

Securities Loan; (2) the security identifier(s) 

specified in Rule 6530(a)(2)(A) or (B) that FINRA 

determines is appropriate to disseminate; and (3) 

the amount of securities loaned reported to SLATE. 

33Aggregate loan transaction activity data 

generally consists of the data set forth in Rule 

6540(c)(1); specifically, the security identifier 

specified in Rule 6530(a)(2)(A) or (B) that FINRA 

determines is appropriate to disseminate and the 

aggregate volume of securities subject to an Initial 

Covered Securities Loan or modification to the 

amount of Reportable Securities loaned, reported on 

the prior business day. 

34Loan rate distribution data generally consists 

of: (1) the security identifier specified in Rule 

6530(a)(2)(A) or (B) that FINRA determines is 

appropriate to identify the relevant Reportable 

Security; (2) the highest rebate rate, lowest rebate 

rate, and volume weighted average of the rebate 

rates by U.S. currency and non-U.S. currency, as 

applicable, reported for Initial Covered Securities 

Loans collateralized by cash and for Loan 

Modifications collateralized by cash (where the 

Loan Modification involved a change to the rebate 

rate); and (3) the highest lending fee or rate, lowest 

lending fee or rate, and volume weighted average 

of the lending fees or rates reported for Initial 

Covered Securities Loans not collateralized by cash 

and for Loan Modifications not collateralized by 

cash (where the Loan Modification involved a 

change to the lending fee or rate). 

35A ‘‘Tax-Exempt Organization’’ means an 

organization that is described in Section 501(c) of 

the Internal Revenue Code (26 U.S.C. 501(c)) and 

has received recognition of the exemption from 

federal income taxes from the Internal Revenue 

Service. See Proposed Rule 7720(e)(3). 

36Bulk redistribution of SLATE data refers to the 

redistribution of the SLATE data files described in 

proposed Rule 7720. Bulk redistribution of SLATE 

data generally is not permitted, except for 

qualifying Tax-Exempt Organizations, subject to 

specified restrictions, as described in proposed Rule 

7720(c)(2) and (d)(2). 

pursuant to proposed Rule 7720(b)(3), a 

SLATE Participant will be charged a 

cancel,26 correct,27 or delete 28 fee of 

$0.10 per canceled, corrected, or deleted 

Covered Securities Loan report. In 

addition, proposed Rule 7720(b)(4) 

establishes a late fee of $0.20 per Initial 

Covered Securities Loan report or Loan 

Modification report that is not timely 

reported to SLATE as required pursuant 

to the Rule 6500 Series.29

Proposed Rule 7720 also sets forth the 

fees for connecting to SLATE. 

Specifically, proposed Rule 7720(a) 

provides that a SLATE Participant may 

choose to report Covered Securities 

Loans to FINRA pursuant to the Rule 

6500 Series either via: (1) the SLATE 

web browser; or (2) a third-party 

reporting intermediary (and such third 

party must use the SLATE web 

browser). The fee for connecting to the 

SLATE web browser is $25 per month 

per user ID and will be assessed for 

connecting to SLATE through the 

browser, whether a Covered Person 

Reporting Agent, or other third party.30

SLATE Loan-Level Data and Daily Loan 

Statistics 

FINRA is proposing Rule 7720(c) to 

establish the SLATE Loan-Level Data 

and Daily Loan Statistics data product 

with associated fees. As defined in Rule 

7720(e)(2), ‘‘SLATE Loan-Level Data 

and Daily Loan Statistics’’ means the 

data described in proposed Rule 6540 

(Dissemination of Loan Information) 

paragraph (a), which addresses next-day 

dissemination; 31 paragraph (b), which 

addresses delayed dissemination; 32 and 

paragraph (c), which addresses daily 

loan statistics (i.e., aggregate loan 

transaction activity 33 and loan rate 

distribution data 34). Proposed Rule 

7720(c) sets forth the fees applicable to 

subscribers that are persons and 

organizations other than qualifying TaxExempt Organizations 35 and subscribers 

that are qualifying Tax-Exempt 

Organizations. Recipients of the SLATE 

Loan-Level Data and Daily Loan 

Statistics product described herein will 

be required to execute appropriate 

agreements with FINRA to subscribe to 

SLATE Loan-Level Data and Daily Loan 

Statistics. 

Under proposed Rule 7720(c)(1)(A), a 

fee of $3,000 per month will apply for 

daily receipt of the SLATE Loan-Level 

Data and Daily Loan Statistics, except 

for qualifying Tax-Exempt 

Organizations. The data is enabled for 

unlimited internal use through any 

number of display applications; separate 

fees and uses apply to qualifying TaxExempt Organizations (as discussed 

below). As further provided in proposed 

Rule 7720(c)(1)(A), the fee of $3,000 per 

month entitles subscribers to use SLATE 

Loan-Level Data and Daily Loan 

Statistics in one or more of the 

following ways: internal operational and 

processing systems, internal monitoring 

and surveillance systems, internal price 

validation, internal portfolio valuation 

services, internal analytical programs 

leading to purchase/sale or other trading 

decisions, and other related activities, 

and the repackaging of market data for 

delivery and dissemination outside the 

organization, such as indices or other 

derivative products. Bulk redistribution 

of SLATE Loan-Level Data and Daily 

Loan Statistics 36 is not permitted under 

this subscription type, which is limited 

to internal use. In addition, any 

derivative products shall not permit end 

users to determine underlying SLATE 

Loan-Level Data and Daily Loan 

Statistics. 

Under proposed Rule 7720(c)(1)(B), a 

vendor display redistribution fee of 

$10,000 per month will apply for the 

display of SLATE Loan-Level Data and 

Daily Loan Statistics through any 

number of external display applications. 

However, bulk redistribution of SLATE 

Loan-Level Data and Daily Loan 

Statistics is not permitted. Therefore, 

any party wishing to receive a 

distribution of SLATE Loan-Level Data 

and Daily Loan Statistics files must 

subscribe directly with FINRA. 

Proposed Rule 7720(c)(2) establishes a 

monthly fee of $1,500 applicable to 

qualifying Tax-Exempt Organizations 

for the daily receipt of SLATE LoanLevel Data and Daily Loan Statistics. 

FINRA is establishing a fee level for 

qualifying Tax-Exempt Organizations 

that is half of the fee that will be 

assessed on parties other than qualifying 

Tax-Exempt Organizations. The data is 

enabled for unlimited internal use. A 

Tax-Exempt Organization qualifies to 

receive SLATE Loan-Level Data and 

Daily Loan Statistics if it does not 

redistribute such data in bulk, or it 

redistributes such data in bulk or 

otherwise (e.g., unlimited external 

display) at no charge solely to other 


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37See 10c–1a(i); see also Adopting Release 88 FR 

75644, 75687. 

38While SEA Rule 10c–1a does not require that 

securities loan reporting commence until January 

2026 or that loan data dissemination commence 

until April 2026, FINRA has necessarily already 

begun making financial expenditures in response to 

the SEC’s adoption of Rule 10c–1a so that FINRA 

will be positioned to comply with all of the 

obligations applicable to an RNSA under that rule. 

39To the extent possible, FINRA will leverage 

existing systems, personnel, and processes in 

connection with FINRA’s SLATE program 

consistent with FINRA’s structure as a not-for-profit 

self-regulatory organization. 

40See supra note 6. 

Tax-Exempt Organizations that agree to 

be subject to the same restrictions. 

Historic SLATE Data 

FINRA also is proposing Rule 7720(d) 

to establish the Historic SLATE Data 

product with associated fees. As defined 

in Rule 7720(e)(1), ‘‘Historic SLATE 

Data’’ means ‘‘SLATE Loan-Level Data 

and Daily Loan Statistics’’ from the 

beginning of SLATE data reporting 

(currently scheduled to commence on 

January 2, 2026) through the end of the 

most recent calendar year. Historic 

SLATE Data will be made available 

within one month of year-end (e.g., 

Historic SLATE Data for calendar year 

2026 will be available by January 31, 

2027; Historic SLATE Data for calendar 

year 2027 will be available by January 

31, 2028, and so on). Proposed Rule 

7720(d) sets forth the fees for Historic 

SLATE Data applicable to subscribers 

that are persons and organizations other 

than qualifying Tax-Exempt 

Organizations, and subscribers that are 

qualifying Tax-Exempt Organizations. 

Recipients of the Historic SLATE Data 

product described herein will be 

required to execute appropriate 

agreements with FINRA. 

Under proposed Rule 7720(d)(1)(A), a 

single fee of $2,000 will apply to 

persons or organizations other than 

qualifying Tax-Exempt Organizations 

for development and set-up to begin 

receiving Historic SLATE Data. The setup fee is a one-time fee. Proposed Rule 

7720(d)(1)(B) provides that a fee of 

$5,000 per calendar year will apply for 

receipt of Historic SLATE Data, except 

for qualifying Tax-Exempt 

Organizations. The data is enabled for 

unlimited internal use through any 

number of display applications. As 

further provided in proposed Rule 

7720(d)(1)(B), the fee of $5,000 per 

calendar year entitles persons or 

organizations other than qualifying TaxExempt Organizations to use Historic 

SLATE Data in one or more of the 

following ways: internal operational and 

processing systems, internal monitoring 

and surveillance systems, internal price 

validation, internal portfolio valuation 

services, internal analytical programs 

leading to purchase/sale or other trading 

decisions, and other related activities, 

and the repackaging of market data for 

delivery and dissemination outside the 

organization, such as indices or other 

derivative products. Bulk redistribution 

of Historic SLATE Data is not permitted 

under this subscription type, which is 

limited to internal use. In addition, any 

derivative products shall not permit end 

users to determine underlying SLATE 

Loan-Level Data and Daily Loan 

Statistics. 

Proposed Rule 7720(d)(2) establishes 

the fees applicable to qualifying TaxExempt Organizations for receipt of 

Historic SLATE Data. A Tax-Exempt 

Organization qualifies to receive 

Historic SLATE Data if it does not 

redistribute such data in bulk, or it 

redistributes such data in bulk or 

otherwise at no charge solely to other 

Tax-Exempt Organizations that agree to 

be subject to the same restrictions. 

Under proposed Rule 7720(d)(2)(A), a 

single fee of $1,000 will apply to any 

qualifying Tax-Exempt Organization for 

development and set-up to begin 

receiving Historic SLATE Data. The setup fee is a one-time fee and was 

established to amount to half of the fee 

that would be assessed on parties other 

than qualifying Tax-Exempt 

Organizations for data set up. Proposed 

Rule 7720(d)(2)(B) provides that a fee of 

$2,500 per calendar year will apply to 

any qualifying Tax-Exempt Organization 

for receipt of Historic SLATE Data, 

which is half of the fee that would be 

assessed on parties other than qualifying 

Tax-Exempt Organizations for these 

data. Historic SLATE Data is enabled for 

unlimited internal use and may be 

redistributed by a qualifying TaxExempt Organization in bulk or 

otherwise (e.g., unlimited external 

display) subject to the restrictions in 

paragraph (d)(2) (i.e., redistributed at no 

charge solely to other Tax-Exempt 

Organizations that agree to be subject to 

the same restrictions prescribed in the 

rule). 

SLATE Cost Recovery 

As further discussed below in the 

Economic Impact Assessment, the 

proposed fees described herein are 

designed to permit FINRA to recover 

costs associated with the operation of 

the SLATE program, as expressly 

permitted for an RNSA under the 

Exchange Act and SEA Rule 10c–1a.37

FINRA currently estimates an average of 

approximately $4.5 million in 

incremental direct ongoing costs per 

year from 2026 through 2028 (including 

the incremental direct ongoing costs 

incurred in 2024 and 2025 to be 

recovered over the 3-year period),38 and 

approximately $4.4 million in annual 

incremental direct ongoing costs 

thereafter. In an effort to make SLATE 

financially self-sustaining on an ongoing 

basis, the proposed fees are designed to 

generate an amount of revenue that is 

calibrated to align with the estimated 

incremental direct ongoing costs 

associated with the SLATE program, to 

enable FINRA to meets its obligations 

pursuant to the SEA Rule 10c–1a 

mandate, as further described below. 

Specifically, FINRA’s incremental 

direct costs associated with operating 

the SLATE program include costs for 

cloud resources (compute and storage), 

data validation, business rule 

processing, reference data, data 

dissemination, billing generation, 

technology operations monitoring and 

support, and alert escalation and 

remediation. Additional costs include 

staffing related to product management, 

application management, ongoing 

business and operational support for the 

user interface, and administration of 

participant information and applicable 

agreements.39

FINRA intends to reassess the SLATE 

reporting fees and data products and 

associated fees after the commencement 

of SLATE reporting and dissemination 

and obtaining additional information 

regarding reporting volumes and 

subscription interest. To the extent that 

FINRA determines that a change to the 

SLATE fee structure would be 

appropriate to better align SLATE 

revenues with the incremental direct 

ongoing costs incurred in connection 

with the SLATE program, FINRA would 

file a proposed rule change with the 

Commission pursuant to Section 19(b) 

of the Exchange Act and Rule 19b–4 

thereunder. 

FINRA has filed the proposed rule 

change for immediate effectiveness. The 

Commission’s release adopting SEA 

Rule 10c–1a specified the compliance 

dates applicable to securities loan 

reporting and data dissemination.40

Accordingly, if the Commission 

approves FINRA’s proposed rules 

establishing the reporting and 

dissemination requirements, unless an 

extension is provided pursuant to 

Commission order, the implementation 

date of the proposed FINRA rules 

establishing the securities loan reporting 

fees will correspond to the 

commencement of reporting to SLATE, 

and the implementation date of the 

proposed FINRA rules establishing the 

securities loan data products with 

associated fees will correspond to the 

commencement of SLATE data 


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41 15 U.S.C. 78o–3(b)(5). 

42 15 U.S.C. 78o–3(b)(6). 

43See generally Adopting Release, 88 FR 75644. 

See also Public Law 111–203, 124 Stat. 1376 (2010). 

44See SEA Rule 10c1–a(a)(1). 

45See SEA Rule 10c–1a(g). 

46As noted above, SEA Rule 10c–1a anticipates 

that an RNSA will propose rules consistent with the 

Commission’s mandate. See SEA Rule 10c–1a(i). 

Section 984(a) of the Dodd-Frank Wall Street 

Reform and Consumer Protection Act (‘‘Dodd-Frank 

Act’’) added section 10(c)(1) to the Exchange Act to 

provide the Commission with authority over 

securities lending. See 15 U.S.C. 78j(c)(1). Section 

984(b) of the Dodd-Frank Act mandates that the 

Commission increase the transparency of 

information available to brokers, dealers, and 

investors with respect to the loan or borrowing of 

securities. See Public Law 111–203, 124 Stat. 1376 

(2010). 

47 15 U.S.C. 78o–3(b)(2). 

48See SEA Rule 10c–1a(i). 

49 ‘‘Under the Exchange Act, RNSAs are allowed 

to adopt rules that impose the equitable allocation 

of reasonable fees among members and issuers, and 

other persons that use an RNSA facility or system.’’ 

(citation omitted). See Adopting Release, 88 FR 

75644, 75687. 

50See Adopting Release, 88 FR 75644, 75687. 

51See Adopting Release, 88 FR 75644, 75693. 

52FINRA understands that many members shift at 

least some of the regulatory fees incurred to other 

parties. For instance, it is regular practice among 

clearing and trading firms to ‘‘pass through’’ the 

Trading Activity Fee (‘‘TAF’’) to the underlying 

firm executing the trade. Further, FINRA 

understands that executing firms commonly pass 

the TAF directly on to their customers. See 

Securities Exchange Act Release No. 90176 (October 

14, 2020), 85 FR 66592, 66603 (October 20, 2020) 

(Notice of Filing and Immediate Effectiveness of 

File No. SR–FINRA–2020–032). ‘‘The entities that 

provide Rule 10c–1a information to an RNSA may 

absorb these costs in the form of lower profits or 

may pass them on to their customers in the form 

of increased fees for broker-dealer services or 

lending program services.’’ See Adopting Release 88 

FR 75644, 75693. 

53 15 U.S.C. 78o–3(b)(6). 

dissemination. If the SEC extends the 

compliance dates for SEA Rule 10c–1a’s 

reporting or dissemination 

requirements, FINRA’s proposed rules 

addressing covered securities loan 

reporting fees and securities loan data 

products with associated fees would 

become effective consistent with the 

SEC’s extended timeframe for reporting 

and data dissemination, respectively. 

2. Statutory Basis 

FINRA believes that the proposed rule 

change is consistent with the provisions 

of Section 15A(b)(5) of the Act, which 

requires, among other things, that 

FINRA rules provide for the equitable 

allocation of reasonable dues, fees, and 

other charges among members and 

issuers and other persons using any 

facility or system that FINRA operates 

or controls.41 FINRA also believes that 

the proposed rule change is consistent 

with the provisions of Section 15A(b)(6) 

of the Act, which requires, among other 

things, that FINRA rules are not 

designed to permit unfair 

discrimination between customers, 

issuers, brokers, or dealers.42

Consistent with Section 984(b) of the 

Dodd-Frank Act, which mandates that 

the Commission increase the 

transparency of information available to 

brokers, dealers, and investors regarding 

securities loan activity, on October 13, 

2023, the Commission adopted SEA 

Rule 10c–1a.43 SEA Rule 10c–1a 

requires a Covered Person who agrees to 

a Covered Securities Loan to provide 

specified information to an RNSA.44

The RNSA that is collecting the 

information required to be reported 

under the rule is then required to make 

publicly available information regarding 

reported securities loans, as described 

in SEA Rule 10c–1a.45 Because FINRA 

is an RNSA, FINRA proposed to adopt 

the SLATE rules and is building a 

system (the proposed SLATE system) to 

which Covered Securities Loan 

information would be reported. SEA 

Rule 10c–1a sets forth other related 

requirements for an RNSA, as described 

in SEA Rule 10c–1a and the Adopting 

Release.46 These mandates increase 

costs to FINRA, as an RNSA, that 

necessitate funding. 

Section 15A(b)(2) of the Act requires 

that an RNSA be ‘‘so organized and 

[have] the capacity to be able to carry 

out the purposes’’ of the Act and ‘‘to 

comply, and . . . to enforce compliance 

by its members and persons associated 

with its members,’’ with the provisions 

of the Exchange Act.47 FINRA therefore 

believes it is consistent with the Act 

that FINRA impose reasonable fees that 

are designed to support FINRA with 

regard to expenditures to meet its 

regulatory obligations in connection 

with the securities loan reporting and 

transparency initiative. In addition, 

FINRA notes that SEA Rule 10c–1a itself 

explicitly provides that the RSNA may 

establish and collect reasonable fees, 

pursuant to rules that are promulgated 

pursuant to Section 19(b) and Rule 19b– 

4 of the Exchange Act.48

As discussed above, and further 

below in the Economic Impact 

Assessment, FINRA is establishing a fee 

structure to implement reasonable fees 

relating to the SLATE program; 

specifically: (1) SLATE system 

connectivity fees; (2) fees in connection 

with reporting Covered Securities Loan 

information to SLATE; and (3) SLATE 

data products and associated fees. The 

fees being proposed herein are 

reasonable, including because they are 

designed to generate an amount of 

revenue that is calibrated to align with 

the estimated incremental direct 

ongoing costs associated with the 

SLATE program and to enable FINRA to 

meet its regulatory obligations. 

FINRA believes it is equitable, 

reasonable, and consistent with the 

Exchange Act that the proposed SLATE 

system connectivity and reporting fees 

be assessed directly on the parties that 

have been designated by the 

Commission as bearing the underlying 

regulatory responsibility for reporting 

securities loan information to an 

RNSA—i.e., Covered Persons that report 

to the SLATE system (and their 

agents).49 In the Adopting Release, the 

Commission stated that ‘‘. . . RNSAs 

may establish and collect reasonable 

fees, pursuant to rules that are effective 

pursuant to section 19(b) of the 

Exchange Act and Rule 19b–4 

thereunder, from each person who 

provides any data set forth in 

paragraphs (b) through (e) of this section 

directly to an RNSA.’’ 50 The Adopting 

Release also stated that ‘‘[t]the final rule 

will also impose direct costs on an 

RNSA responsible for collecting, 

maintaining, and distributing the data, 

who may pass on these costs by 

imposing fees on entities that provide 

Rule 10c–1a information to an RNSA 

and/or consumers of Rule 10c–1a 

data.’’ 51

FINRA also believes that it is 

equitable, reasonable, and consistent 

with the Exchange Act to require that 

the parties reporting data to SLATE be 

directly responsible for paying SLATE 

fees because the reporting process is a 

primary driver of the costs that the 

proposed fees are intended to recover. 

Thus, assessing the SLATE system 

connectivity and reporting fees on 

Covered Persons (and their agents) 

aligns the direct responsibility for 

SLATE cost recovery with the parties 

generating the information collection 

costs.52

The proposed SLATE data products 

are offered on equal terms to similarly 

situated parties that choose to access the 

data products. Thus, FINRA believes 

that the proposed SLATE data fees are 

not designed to permit unfair 

discrimination between customers, 

issuers, brokers, or dealers, as provided 

for in Section 15A(b)(6).53 Under the 

proposal, with one exception (qualifying 

Tax-Exempt Organizations), the content 

of the information in the data products 

and the data products’ usage rights are 

offered on the same terms to interested 

parties. Thus, any party (except for a 

qualifying Tax-Exempt Organization) 

that seeks to access SLATE Loan-Level 

Data and Daily Loan Statistics will pay 

a fee depending upon whether such 

party seeks the right to use the data 

solely internally, as described in 


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54See proposed Rule 7720(c)(1)(A)–(B). 

55See proposed Rule 7720(c)(1)(B). 

56See Rule 7730(d)(1)(B). 

57See supra note 35. 

58See proposed Rule 7720(c)(2) and (d)(2). 

59 15 U.S.C. 78o–3(b)(6). 

60See FINRA’s Financial Guiding Principles, 

https://www.finra.org/sites/default/files/finra_

financial_guiding_principles_0.pdf. As discussed 

above, FINRA intends to reassess the SLATE 

reporting fees and data products and associated fees 

after gaining experience with the operation of 

SLATE and obtaining additional information 

regarding reporting volumes and subscription 

interest. To the extent that FINRA determines that 

a change to the SLATE fee structure would be 

appropriate to better align SLATE revenues with the 

incremental direct ongoing costs incurred in 

connection with the SLATE program, FINRA would 

file a proposed rule change with the Commission 

pursuant to Section 19(b) of the Exchange Act and 

Rule 19b–4 thereunder. 

61The proposed data products will be offered on 

the same terms to any similarly situated party that 

seeks to subscribe. 62 15 U.S.C. 78o–3(b)(5). 63 15 U.S.C. 78o–3(b)(6). 

64 15 U.S.C. 78o–3(b)(9). 

65 ‘‘Providing Covered Persons’’ would provide 

information directly to an RNSA while ‘‘NonProviding Covered Persons’’ would use a reporting 

agent to provide information to an RNSA. See 

Adopting Release, 88 FR 75644, 75718. ‘‘Reporting 

Agent’’ is defined in SEA Rule 10c–1a(j)(4). 

66The quantity of Loan Modification reports will 

be impacted by Covered Persons’ reporting 

decisions, among other factors. For example, the 

extent to which Covered Persons choose to report 

rates as a spread to benchmark will affect the 

quantity of Loan Modification reports due to be 

reported, which in turn will impact fee revenues. 

67This estimate is based on FINRA’s experience 

with TRACE reporting. As of August 2024, the 

correction rate was approximately 0.8% for 

corporate bond reports and 0.68% for U.S. Treasury 

reports. The rate of late reports was 0.61% for 

corporate bonds and 0.42% for U.S. Treasury 

Securities. The correction and late reporting rates 

may be lower for SLATE reporting because 

proposed Rule 6530 generally provides a longer 

timeframe for reporting Covered Securities Loans to 

SLATE than is provided for corporates and U.S. 

Treasury Securities under the TRACE reporting 

regime. 

proposed Rule 7720(c)(1)(A) ($3,000 per 

month), or whether such party seeks the 

right to display the data externally, as 

described in proposed Rule 

7720(c)(1)(B) ($10,000 per month).54

The higher fee of $10,000 per month 

proposed in Rule 7720(c)(1)(B) is not 

unfairly discriminatory (as compared to 

the $3,000 per month fee for internal 

use only) given the significantly 

expanded usage rights authorized under 

proposed Rule 7720(c)(1)(B), which 

permits the display of SLATE LoanLevel Data and Daily Loan Statistics 

through any number of external display 

applications.55 All interested parties 

(except qualifying Tax-Exempt 

Organizations) will be assessed the same 

fee, with the same usage rights, for 

Historic SLATE Data. 

Proposed Rule 7720 would apply a 

lower fee to qualifying Tax-Exempt 

Organizations for both the SLATE LoanLevel Data and Daily Loan Statistics as 

well as the Historic SLATE Data. As is 

the case with other data products 

offered by FINRA, e.g., TRACE,56

FINRA offers data products at a reduced 

fee to qualifying Tax-Exempt 

Organizations that have received 

recognition of the exemption from 

federal income taxes from the Internal 

Revenue Service.57 In the proposed rule 

change, FINRA has established the 

proposed fees applicable to qualifying 

Tax-Exempt Organizations as half of the 

amounts that will be assessed to parties 

other than qualifying Tax-Exempt 

Organizations. FINRA also notes that 

Tax-Exempt Organizations only qualify 

for the reduced fees offered under the 

rule if they do not redistribute the data 

in bulk, or redistribute the data in bulk 

or otherwise at no charge solely to other 

Tax-Exempt Organizations that agree to 

be subject to the same restrictions.58

FINRA believes this aspect of the 

proposed rule change is appropriate 

given the not-for-profit nature of such 

organizations and therefore is not 

designed to permit unfair 

discrimination between customers, 

issuers, brokers, or dealers, as provided 

for in Section 15A(b)(6).59

FINRA also believes that the amounts 

of the proposed SLATE fees are 

equitable, reasonable, and consistent 

with the Exchange Act. As further 

discussed in the Economic Impact 

Assessment, in developing reporting 

activity estimates, FINRA used data 

gathered through outreach to industry 

participants, including data vendors, 

agent lenders, prime brokers, retail 

brokers, and beneficial owners. FINRA 

believes that the proposed SLATE data 

subscription fees also are reasonable 

given the usage rights and the use cases 

for the data. Because the proposed 

SLATE data products are a new product 

offering, it is difficult to estimate 

subscription levels and associated 

revenue. In addition, based on FINRA’s 

experience, subscribership to data 

products may be slower initially, with 

interest building over time. As a result, 

FINRA has initially sought to rely 

primarily on revenues through SLATE 

reporting to offset the costs that FINRA 

seeks to recover in connection with the 

SEA Rule 10c–1a mandate. As such, the 

proposed fees generally are consistent 

with FINRA’s efforts to align its 

operating expenses with its operating 

revenues, target break-even cash flows, 

and continue to responsibly manage 

expenses driven by mandatory 

initiatives in a manner consistent with 

FINRA’s public Financial Guiding 

Principles.60 The proposed SLATE fees 

will be applied consistently to all 

similarly situated parties that are 

required to report Covered Securities 

Loans (and their agents) (i.e., SLATE 

Participants) and to those that choose to 

subscribe to SLATE data products.61

For the reasons discussed herein, 

FINRA believes that the proposed rule 

change is consistent with Section 

15A(b)(5) of the Exchange Act, 

including that the proposal provides for 

the equitable allocation of reasonable 

dues, fees and other charges among 

members and issuers and other persons 

using any facility or system that FINRA 

operates or controls.62 FINRA likewise 

believes that the proposed rule change 

is consistent with Section 15A(b)(6) of 

the Act, which requires, among other 

things, that FINRA rules are not 

designed to permit unfair 

discrimination between customers, 

issuers, brokers, or dealers.63

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

Section 15A(b)(9) of the Act requires 

that FINRA’s rules not impose any 

burden on competition that is not 

necessary or appropriate in furtherance 

of the purpose of the Exchange Act.64

FINRA does not believe that the 

proposed rule change will result in any 

burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. 

Economic Impact Assessment 

FINRA has undertaken an economic 

impact assessment, as set forth below, to 

analyze the regulatory need for the 

proposed rule change, its potential 

economic impacts, including 

distributional and competitive effects, 

and the alternatives considered in 

assessing how to best meet FINRA’s 

regulatory objectives. The regulatory 

need is discussed above. 

Economic Baseline 

In its Adopting Release, the SEC 

estimated that 609 Covered Persons and 

Reporting Agents would be affected by 

SEA Rule 10c–1a, of which 255 were 

Providing Covered Persons, 248 were 

Non-Providing Covered Persons, and 

106 were Reporting Agents.65 FINRA 

has estimated that approximately 

125,000 Initial Covered Securities Loan 

reports and 200,000 Loan Modification 

reports per day may be reported to 

SLATE.66 FINRA estimates that 

approximately 0.5% of Initial Covered 

Securities Loan reports and Loan 

Modification reports could result in 

corrections, cancellations, or deletions, 

and approximately 0.5% could be 

reported late.67 FINRA anticipates that 

the volume of erroneous and late reports 


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68FINRA arrived at $2,205,000 by multiplying the 

estimated number of daily Initial Loan Reports 

(125,000) by the proposed fee rate of $0.07 by the 

number of business days per year (252 days). 

69FINRA arrived at $1,512,000 by multiplying the 

estimated number of daily Loan Modification 

Reports (200,000) by the proposed fee rate of $0.03 

by the number of business days per year (252 days). 

70FINRA arrived at $40,950 by multiplying the 

sum of the estimated number of daily Initial Loan 

Reports (125,000) and the estimated number of 

daily Loan Modification Reports (200,000) by the 

estimated rate of reports requiring a correction, 

cancellation, or deletion (0.5%) by the proposed fee 

rate of $0.10 by the number of business days per 

year (252 days). 

71FINRA arrived at $81,900 by multiplying the 

sum of the estimated number of daily Initial Loan 

Reports (125,000) and the estimated number of 

daily Loan Modification Reports (200,000) by the 

estimated rate of late reports (0.5%) by the 

proposed fee rate of $0.20 by the number of 

business days per year (252 days). 

72See Adopting Release, 88 FR 75644, 75718. 

73FINRA arrived at $365,400 by multiplying the 

estimated number of Covered Persons and 

Reporting Agents (609) by an assumed 2 user 

accounts per Covered Person by the proposed fee 

rate of $25 per month by 12 months per year. 

74FINRA arrived at $4,205,250 by adding the 

estimated annual revenue from reporting fees for 

Initial Covered Securities Loan Reports 

($2,205,000), the estimated annual revenue from 

reporting fees for Loan Modification Reports 

($1,512,000), the estimated annual revenue from 

correction, cancellation, and deletion fees 

($40,950), the estimated annual revenue from fees 

for late reports ($81,900), and the estimated annual 

revenue from connection fees ($365,400). 

75Separate from the SLATE data products and 

associated fees proposed herein, FINRA intends to 

make T+1 data, T+20 data, and daily loan statistics 

available on FINRA’s website free of charge for 

personal, non-commercial purposes only. See supra 

note 21. 

76See Adopting Release, 88 FR 75644, 75712. 77For a discussion of the current state of 

transparency in securities lending, see Adopting 

Release, 88 FR 75644, 75696–75700. 78See Adopting Release, 88 FR 75644, 75705, 

75717. 

will decrease over time as Covered 

Persons gain experience with SLATE 

reporting. 

Economic Impacts 

The economic impact of the currently 

proposed reporting fees, data products 

and associated subscription fees are 

discussed below. 

SLATE Reporting Fees 

As discussed above, Covered Persons 

will incur fees for reporting Initial 

Covered Securities Loans and Loan 

Modifications. Specifically, FINRA 

proposes that, for each Initial Covered 

Securities Loan report, a SLATE 

Participant will be subject to a fee of 

$0.07 per submission and for each Loan 

Modification report, a SLATE 

Participant will be subject to a fee of 

$0.03 per submission. FINRA also 

proposes that a SLATE Participant will 

be charged a cancel, correct, or delete 

fee of $0.10 per canceled, corrected, or 

deleted Covered Securities Loan report, 

and a late fee of $0.20 per Initial 

Covered Securities Loan or Loan 

Modification that is not reported timely 

to SLATE. 

Developing estimates for the 

anticipated number and type of SLATE 

reports is challenging due to the 

availability of only limited information 

upon which to base estimates. In 

developing estimates, FINRA used data 

gathered through outreach to industry 

participants, including data vendors, 

agent lenders, prime brokers, retail 

brokers, and beneficial owners. These 

estimates were used to develop the 

proposed fee structure, which is 

intended to align SLATE revenues with 

the incremental direct ongoing costs 

incurred in connection with the SLATE 

initiative. 

Given the estimated number of reports 

and proposed reporting fees discussed 

above, FINRA approximates that annual 

revenues from reporting fees would be 

$2,205,000 for Initial Covered Securities 

Loan reports,68 $1,512,000 for Loan 

Modification reports,69 $40,950 for 

corrections, cancellations, and 

deletions,70 and $81,900 for late 

reports.71 SLATE Participants will incur 

a $25 fee per user per month for 

connecting to the SLATE web browser. 

Given the estimated number of Covered 

Persons and Reporting Agents from the 

SEC’s Adopting Release,72 FINRA 

estimates the total connection fees per 

year would be $365,400.73 Together, 

FINRA estimates SLATE reporting fees 

would total $4,205,250 per year.74

FINRA considered the potential 

impact of the proposed SLATE reporting 

fee structure on securities lending 

activities. Covered Persons’ securities 

lending activities will impact the 

amount of reporting fees that they 

would incur. Some types of Covered 

Persons, such as lending agents, may 

incur relatively larger reporting fees 

compared to other Covered Persons due 

to their function in the securities 

lending market (e.g., agent lenders 

generally transact as Covered Persons in 

higher volumes relative to other 

securities lending market participants). 

Lending agents may pass along fully or 

partially the reporting fees to beneficial 

owners, for instance, in the form of a 

direct charge or higher fees charged for 

lending services. The reporting fees also 

may affect how Covered Persons 

structure or conduct their securities 

lending business—e.g., how lending 

agents determine to structure pool or 

lending programs. However, Covered 

Persons’ choices are also affected by 

other factors, including counterparty 

risk and business models. 

SLATE Data Products and Associated 

Fees 

As described above, FINRA is 

proposing to establish SLATE data 

products and associated fees.75

Specifically, FINRA is proposing to 

make SLATE Loan-Level Data and Daily 

Loan Statistics available on a 

subscription basis to qualifying TaxExempt Organizations (for $1,500/ 

month) as well as to persons and 

organizations other than qualifying TaxExempt Organizations (for $3,000/ 

month). Also as described above, 

vendors may subscribe to display 

externally SLATE Loan-Level Data and 

Daily Loan Statistics (for $10,000/ 

month). The proposed SLATE data 

products will enable a broader range of 

market participants to access 

comprehensive securities lending data 

than would otherwise be available in 

the absence of the proposed data 

products, which will further enhance 

market transparency and efficiency. As 

discussed in the Adopting Release, the 

broader availability of securities lending 

information may lead to increased 

competition for data analytics services 

as the barriers to entry for providing 

such services decline and new entrants 

compete to provide analytics services.76

The proposed fees associated with the 

SLATE Loan-Level Data and Daily Loan 

Statistics product apply only to market 

participants that choose to subscribe. 

Market participants likely will assess 

the costs and benefits of having access 

to these data as compared to their 

existing sources of securities lending 

data.77 Vendors externally displaying 

SLATE Loan-Level Data and Daily Loan 

Statistics may charge for access to 

SLATE data. If vendors use securities 

lending data obtained from FINRA to 

replace existing, more expensive 

sources of securities lending data, they 

may pass some or all of the savings on 

to their clients. 

As described above, in addition to 

SLATE Loan-Level Data and Daily Loan 

Statistics, FINRA also will make 

Historic SLATE Data available: (1) to 

qualifying Tax-Exempt Organizations 

(for a $1,000 set-up fee and $2,500 per 

calendar year); and (2) to persons and 

organizations other than qualifying TaxExempt Organizations (for a $2,000 setup fee and $5,000 per calendar year). 

Historic SLATE loan information would 

facilitate the availability of securities 

lending data to interested parties, such 

as academics, in connection with 

research efforts.78

Given the substantial uncertainty in 

future subscribership for new data 

products and the likelihood that interest 

may grow slowly over time, FINRA’s 


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79 15 U.S.C. 78s(b)(3)(A). 

80 17 CFR 240.19b–4(f)(2). 

81 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

best and conservative estimation of 

potential initial future revenues from 

data product subscriptions is $250,000. 

Together with the estimated reporting 

fee revenues discussed above, FINRA 

estimates approximately $4.2 million in 

annual revenue from reporting fees and 

$250,000 in revenue from data product 

subscriptions for total annual revenue of 

approximately $4.5 million. This aligns 

with FINRA’s estimated incremental 

direct ongoing costs of approximately 

$4.5 million per year from 2026 through 

2028, and approximately $4.4 million in 

incremental direct ongoing costs 

thereafter. 

Alternatives Considered 

In developing the proposed rule 

change, FINRA considered various 

alternatives and the potential costs and 

benefits of those alternatives. Among 

other things, FINRA considered a 

volume-based reporting fee structure 

where reporting fees would vary 

depending on loan size. However, 

because loan size may not be 

proportional to the potential revenue 

from reportable securities loans, a 

volume-based reporting fee structure 

may create distortions in the market. For 

example, the ratio of lending revenue to 

loan volume for short-term financing or 

balance sheet management is generally 

lower than for securities lending 

transactions used for accessing hard-toborrow securities. Volume-based 

reporting fees also could result in a 

substantial concentration of reporting 

fees on Covered Persons with a higher 

share of large-volume loans. Therefore, 

FINRA believes that a flat fee rate per 

report will distribute fees in a more 

equitable manner across market 

participants. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

Written comments were neither 

solicited nor received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective pursuant to Section 19(b)(3)(A) 

of the Act 79 and paragraph (f)(2) of Rule 

19b–4 thereunder.80 At any time within 

60 days of the filing of the proposed rule 

change, the Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

should be approved or disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

comment form (https://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include file number SR– 

FINRA–2024–020 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to file 

number SR–FINRA–2024–020. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

internet website (https://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549, on official 

business days between the hours of 10 

a.m. and 3 p.m. Copies of the filing also 

will be available for inspection and 

copying at the principal office of 

FINRA. Do not include personal 

identifiable information in submissions; 

you should submit only information 

that you wish to make available 

publicly. We may redact in part or 

withhold entirely from publication 

submitted material that is obscene or 

subject to copyright protection. All 

submissions should refer to File 

Number SR–FINRA–2024–020 and 

should be submitted on or before 

December 18, 2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.81

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2024–27742 Filed 11–26–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–101699; File No. SR– 

SAPPHIRE–2024–36] 

Self-Regulatory Organizations; MIAX 

Sapphire, LLC; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Amend Exchange 

Rule 402, Criteria for Underlying 

Securities To List and Trade Options 

on the iShares Bitcoin Trust (the 

‘‘Trust’’) 

November 21, 2024. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’) 1 and Rule 19b–4 thereunder,2

notice is hereby given that on November 

18, 2024, MIAX Sapphire, LLC 

(‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’) a proposed rule change 

as described in Items I and II below, 

which Items have been prepared by the 

Exchange. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend 

Exchange Rule 402, Criteria for 

Underlying Securities. The text of the 

proposed rule change is available on the 

Exchange’s website at https://

www.miaxglobal.com/markets/usoptions/miax-sapphire/rule-filings, at 

the Exchange’s principal office, and at 

the Commission’s Public Reference 

Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 


ddrumheller on DSK120RN23PROD with NOTICES1