Federal Register / Vol. 90, No. 5 / Wednesday, January 8, 2025 / Notices 1563 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 100046 

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

(‘‘Notice’’). 

4See Securities Exchange Act Release No. 100305 

(June 10, 2024), 89 FR 50644 (June 14, 2024). 

5See Securities Exchange Act Release No. 100655 

(August 5, 2024), 89 FR 65441 (August 9, 2024) 

(‘‘OIP’’). 

6See Securities Exchange Act Release No. 101450 

(October 28, 2024), 89 FR 87448 (November 1, 

2024). 

7See Securities Exchange Act Release No. 101645 

(November 15, 2024), 89 FR 92228 (November 21, 

2024) (‘‘Partial Amendment No. 1’’). All defined 

terms herein have the same meaning as they do in 

the Notice and in Partial Amendment No. 1, as 

applicable. 

8Comments are available at: https://www.sec.gov/ 

comments/sr-finra-2024-007/srfinra2024007.htm. 

9See Letter from Racquel L. Russell, Senior Vice 

President, Director of Capital Markets Policy, Office 

of General Counsel, FINRA (November 14, 2024), 

available at https://www.sec.gov/comments/sr-finra2024-007/srfinra2024007-540615-1548002.pdf 

(‘‘FINRA Letter’’). 

10The term ‘‘Proposal’’ as used herein refers to 

the proposed rule change, as amended by Partial 

Amendment No. 1. 

11See Notice, 89 FR 38204–06. 

12See Partial Amendment No. 1, 89 FR 92229. 

13 17 CFR 240.10c–1a. 

14Notice, 89 FR 38206. See infra Part III.I. 

15Notice, 89 FR 38213. 

16Notice, 89 FR 38213. 

17As described in more detail in the Notice, as 

well as below, in Part II.C, a Covered Person may 

engage a Reporting Agent to comply with the 

reporting obligations on its behalf. 

18Partial Amendment No. 1 modified originally 

proposed Rule 6510 by removing the subparagraph 

providing the definition of ‘‘Affiliate,’’ re-lettering 

all subsequent subparagraphs under proposed Rule 

6510, and updating cross-references in proposed 

Rule 6510 to other SLATE provisions. 

19See proposed Rule 6530(a)(1)(A). As originally 

proposed in the Notice, an Initial Covered 

Securities Loan effected on a business day at or 

after 12:00:00 a.m. ET through 7:45:00 p.m. ET 

would have been reported the same day before 

8:00:00 p.m. ET. 

20See proposed Rule 6530(a)(1)(B). As originally 

proposed in the Notice, an Initial Covered 

Securities Loan effected on a business day after 

7:45:00 p.m. ET would have been reported no later 

than the next business day (T+1) before 8:00:00 

p.m. ET. 

21See proposed Rule 6530(a)(1)(C). As originally 

proposed in the Notice, an Initial Covered 

Securities Loan effected on a Saturday, a Sunday, 

a federal or religious holiday, or other day on which 

Continued 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–102093; File No. SR– 

FINRA–2024–007] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Order Approving a 

Proposed Rule Change, as Modified by 

Partial Amendment No. 1, To Adopt the 

FINRA Rule 6500 Series (Securities 

Lending and Transparency Engine 

(SLATETM)) 

January 2, 2025. 

I. Introduction 

On May 1, 2024, the Financial 

Industry Regulatory Authority, Inc. 

(‘‘FINRA’’) filed with the Securities and 

Exchange Commission (‘‘Commission’’ 

or ‘‘SEC’’), pursuant to Section 19(b)(1) 

of the Securities Exchange Act of 1934 

(‘‘Exchange Act’’ or ‘‘SEA’’),1 and Rule 

19b–4 thereunder,2 a proposed rule 

change to adopt the new FINRA Rule 

6500 Series (Securities Lending and 

Transparency Engine (SLATETM)) to (1) 

require reporting of securities loans; and 

(2) provide for the public dissemination 

of loan information. The proposed rule 

change was published for comment in 

the Federal Register on May 7, 2024.3

On June 10, 2024, the Commission 

extended until August 5, 2024, the time 

period within which to approve the 

proposed rule change, disapprove the 

proposed rule change, or institute 

proceedings to determine whether to 

disapprove the proposed rule change.4

On August 5, 2024, the Commission 

instituted proceedings to determine 

whether to approve or disapprove the 

proposed rule change, and allow for 

additional analysis of, and input from 

commenters with respect to, the scope 

and implementation of the proposed 

rules.5 On October 28, 2024, the 

Commission designated January 2, 2025, 

as the date by which the Commission 

shall either approve or disapprove the 

proposed rule change.6 On November 

14, 2024, FINRA filed a partial 

amendment to the original proposed 

rule change. On November 15, 2024, the 

Commission published notice of Partial 

Amendment No. 1.7 The Commission 

received comment letters in response to 

publications of the Notice, OIP, and 

Partial Amendment No. 1,8 as well as a 

response letter from FINRA.9 This order 

approves the proposed rule change, as 

modified by Partial Amendment No. 1 

(collectively, ‘‘Proposal’’).10

II. Description of the Proposed Rule 

Change, as Modified by Partial 

Amendment No. 1 

As described in more detail in the 

Notice 11 and in Partial Amendment No. 

1,12 FINRA stated that it proposed, 

consistent with Exchange Act Rule 10c– 

1a (‘‘Rule 10c–1a’’),13 to adopt the new 

FINRA Rule 6500 Series (Securities 

Lending and Transparency Engine 

(SLATETM)) to establish reporting 

requirements for Covered Securities 

Loans and to provide for the 

dissemination of individual and 

aggregate Covered Securities Loan 

information and loan rate statistics. 

These proposed rules would define key 

terms for the reporting of Covered 

Securities Loans and specify the 

reporting requirements with respect to 

both Initial Covered Securities Loans 

and Loan Modifications. FINRA stated 

its intent to file, and has filed, 

separately a proposed rule change to 

establish Covered Securities Loan 

reporting fees and securities loan data 

products and associated fees.14

According to FINRA, the proposed 

Rule 6500 Series is designed to improve 

transparency and efficiency in the 

securities lending market, consistent 

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

Act, Rule 10c–1a, and Section 984 of the 

Dodd-Frank Wall Street Reform and 

Consumer Protection Act.15 FINRA 

stated that the proposed rule change 

would do so by facilitating the 

collection of specified securities loan 

information from Covered Persons and 

Reporting Agents, both of which may 

include non-FINRA members, and 

providing access to such information to 

market participants, the public, and 

regulators.16

A. Reporting Initial Covered Securities 

Loans 

Proposed Rule 6530(a) would govern 

the reporting requirements applicable to 

Covered Persons for reporting Initial 

Covered Securities Loans.17 Proposed 

Rule 6510 18 would define ‘‘Initial 

Covered Securities Loan’’ as a new 

Covered Securities Loan not previously 

reported to SLATE. The definitions of 

‘‘Covered Person’’ and ‘‘Covered 

Securities Loan’’ for the purposes of this 

proposed rule change would be the 

same as set forth in Rule 10c–1a. Initial 

Covered Securities Loans would be 

required to be reported within the time 

periods outlined in proposed Rule 

6530(a)(1) (When and How Initial 

Covered Securities Loans Are Reported). 

Specifically, as modified by Partial 

Amendment No. 1, for Initial Covered 

Securities Loans effected on a business 

day at or after 12:00:00 a.m. Eastern 

Time (‘‘ET’’) through 7:00:00 p.m. ET 

the required information must be 

reported the same day by 11:59:59 p.m. 

ET.19 Additionally, as modified by 

Partial Amendment No. 1, for Initial 

Covered Securities Loans effected on a 

business day after 7:00:00 p.m. ET, the 

required information must be reported 

no later than the next business day 

(T+1) by 11:59:59 p.m. ET; 20 Initial 

Covered Securities Loans effected on a 

Saturday, a Sunday, a federal or 

religious holiday, or other day on which 

SLATE is not open at any time during 

that day (determined using ET) must be 

reported the next business day (T+1) by 

11:59:59 p.m. ET.21


lotter on DSK11XQN23PROD with NOTICES1
1564 Federal Register / Vol. 90, No. 5 / Wednesday, January 8, 2025 / Notices 

SLATE is not open at any time during that day 

(determined using ET) would have been reported 

the next business day (T+1) before 8:00:00 p.m. ET. 

22As originally proposed in the Notice, each 

SLATE report would have contained the expected 

settlement date of the Covered Securities Loan. 

Partial Amendment No. 1 removed this proposed 

data element. In addition, as originally proposed in 

the Notice, each SLATE report would have 

contained the data element ‘‘[a]ny other fees or 

charges’’ separately from the data element 

concerning the rebate rate, as applicable to a 

Covered Securities Loan collateralized by cash or a 

Covered Securities Loan not collateralized by cash. 

FINRA stated that, when reporting a rebate rate or 

lending fee pursuant to (originally) proposed Rule 

6530(a)(2)(I) or (J), respectively, a Covered Person 

must report the rebate rate or lending fee as a 

percentage, and separately report the dollar cost of 

any other fees or charges. See Notice, 89 FR 38206 

n.30. The data element ‘‘[a]ny other fees or charges’’ 

has been removed by Partial Amendment No. 1. In 

light of the removal of these data elements, Partial 

Amendment No. 1 re-lettered the paragraphs under 

proposed Rule 6530(a)(2). Changes from Partial 

Amendment No. 1 regarding specific data elements 

are discussed below with respect to such data 

elements. 

23Partial Amendment No. 1 added the text ‘‘or 

other security identifier’’ to this list. 

24Partial Amendment No. 1 added the text ‘‘name 

of the’’ before the word ‘‘platform.’’ FINRA stated 

that it will make available a list of platforms/venues 

and their associated identifiers for reporting 

purposes; if a loan occurs on a platform/venue not 

yet included on the FINRA list, the Covered Person 

must enter the name of the platform/venue in the 

SLATE report. See Notice, 89 FR 38206 n.28. 

25Proposed Rule 6530(a)(3) specifies that, for a 

Covered Securities Loan of a security reportable to 

CAT, a Covered Person must report the number of 

shares loaned. For a Covered Securities Loan of a 

security reportable to Trade Reporting and 

Compliance Engine (‘‘TRACE’’) or the Municipal 

Securities Rulemaking Board’s Real-Time 

Transaction Reporting System (‘‘RTRS’’), a Covered 

Person must report the total par value of the 

securities loaned. Notice, 89 FR 38206 n.29. 

26Partial Amendment No. 1 modified this 

proposed data element by adding the text ‘‘or any 

other fee or charges.’’ 

27Partial Amendment No. 1 modified this 

proposed data element by adding the text ‘‘or rate, 

or any other fee or charges.’’ 

28As originally proposed in the Notice, such 

information would have been provided in 

connection with a Covered Securities Loan with a 

specified term. Partial Amendment No. 1 modified 

this data element by removing the modifying text 

‘‘[f]or a Covered Securities Loan with a specified 

term.’’ 

29Proposed Rule 6510 would define the terms 

‘‘Broker,’’ ‘‘Dealer,’’ ‘‘Clearing Agency,’’ ‘‘Bank,’’ 

and ‘‘Custodian’’ by reference to their respective 

definitions under section 3(a) of the Exchange Act. 

See Notice, 89 FR 38207 nn.32–36. 

30As originally proposed in the Notice, each 

SLATE report would have specified whether the 

Covered Person is the lender, borrower or 

intermediary; if the Covered Securities Loan is an 

allocation of an omnibus loan effected pursuant to 

an agency lending agreement, the unique internal 

identifier for the associated omnibus loan assigned 

by the Covered Person responsible for reporting the 

Covered Securities Loan to SLATE; and such 

modifiers and indicators as required by either the 

Rule 6500 Series or the SLATE Participant (defined 

in proposed Rule 6510(g)) specification. Partial 

Amendment No. 1 removed these proposed data 

elements. Changes from Partial Amendment No. 1 

regarding specific data elements are discussed 

below with respect to such data elements. 

31Partial Amendment No. 1 added this data 

element to the list of loan information to be 

reported. FINRA stated that the conforming change 

to proposed Rule 6530(a)(2) to require a Covered 

Person to submit their MPID, if known, when 

reporting an Initial Covered Securities Loan, 

consistent with the requirement in proposed Rule 

6530(b)(2)(C) for Loan Modification reports, will 

identify in the audit trail the party on whose behalf 

a SLATE report is submitted. Partial Amendment 

No. 1, 89 FR 92231. 

32Partial Amendment No. 1 removed the text ‘‘if 

applicable’’ at the end of this data element. 

33Partial Amendment No. 1 replaced the word 

‘‘the’’ with the word ‘‘a’’ before the text ‘‘customer 

of such Broker or Dealer.’’ 

34Partial Amendment No. 1 added the word 

‘‘and’’ between originally proposed paragraphs 

(a)(2)(T) and (a)(2)(U). 

35As originally proposed in the Notice, this data 

element would have provided the following: ‘‘The 

unique internal identifier assigned to the Covered 

Securities Loan by the Covered Person responsible 

for reporting the loan to SLATE.’’ 

36See Notice, 89 FR 38207–08. 

37These modifiers and indicators would have 

been the following: Exclusive Arrangement; Loan to 

Affiliate; Unsettled Loan; Terminated Loan; Rate or 

Fee Adjustment; and Basket Loan. For a discussion 

of each of these modifiers and indicators, see 

Notice, 89 FR 38208. 

Proposed Rule 6530(a)(2) (Loan 

Information To Be Reported) would 

specify the items of information that 

must be reported to FINRA. Specifically, 

as modified by Partial Amendment No. 

1,22 proposed Rule 6530(a)(2)(A) 

through (L) would require that Initial 

Covered Securities Loan reports must 

contain the below non-confidential data 

elements: 

(A) The legal name of the security 

issuer and the Legal Entity Identifier 

(‘‘LEI’’) of the issuer (if the issuer has a 

non-lapsed LEI); 

(B) Security symbol, CUSIP, ISIN, or 

FIGI, or other security identifier; 23

(C) The date the Covered Securities 

Loan was effected; 

(D) The time the Covered Securities 

Loan was effected; 

(E) The name of the platform or venue 

where the Covered Securities Loan was 

effected; 24

(F) The amount of the Reportable 

Securities loaned; 25

(G) The type of collateral used to 

secure the Covered Securities Loan; 

(H) For a Covered Securities Loan 

collateralized by cash, the rebate rate or 

any other fee or charges; 26

(I) For a Covered Securities Loan not 

collateralized by cash, the securities 

lending fee or rate, or any other fee or 

charges; 27

(J) The percentage of collateral to 

value of Reportable Securities loaned 

required to secure such Covered 

Securities Loan; 

(K) The termination date of the 

Covered Securities Loan; 28

(L) Whether the borrower is a Broker 

or Dealer, a customer (if the person 

lending securities is a Broker or Dealer), 

a Clearing Agency, a Bank, a Custodian, 

or other person.29

As modified by Partial Amendment 

No. 1,30 proposed Rule 6530(a)(2)(M) 

through (U) would also require that 

Initial Covered Securities Loan reports 

contain the below confidential data 

elements: 

(M) If known, the market participant 

identifier (‘‘MPID’’) of the Covered 

Person; 31

(N) If known, the legal name of each 

party to the Covered Securities Loan 

(other than the customer from whom a 

Broker or Dealer borrows fully paid or 

excess margin securities pursuant to 

SEA Rule 15c3–3(b)(3)); 

(O) If known, the CRD Number or 

Investment Adviser Registration 

Depository (‘‘IARD’’) Number of each 

party to the Covered Securities Loan; 32

(P) If known, the MPID of each party 

to the Covered Securities Loan; 

(Q) If known, the LEI of each party to 

the Covered Securities Loan; 

(R) If known, whether each party to 

the Covered Securities Loan is the 

lender, the borrower, or an intermediary 

between the lender and the borrower; 

(S) If the person lending securities is 

a Broker or Dealer and the borrower is 

its customer, whether the security is 

loaned from the Broker’s or Dealer’s 

securities inventory to a 33 customer of 

such Broker or Dealer; 

(T) If known, whether the Covered 

Securities Loan is being used to close 

out a fail to deliver pursuant to Rule 204 

of SEC Regulation SHO or to close out 

a fail to deliver outside of Regulation 

SHO; and 34

(U) Where a Covered Person’s daily 

submission includes two or more 

reports related to the same Covered 

Securities Loan (e.g., an Initial Covered 

Securities Loan and a Loan Modification 

to terminate the Covered Securities 

Loan) and FINRA has not yet assigned 

a unique identifier to the Initial Covered 

Securities Loan, a unique identifier 

assigned to the Covered Securities Loan 

by the Covered Person responsible for 

reporting the loan to SLATE.35

FINRA originally proposed six 

modifiers and indicators set forth in 

proposed Rule 6530(c), which would 

have applied to specific scenarios where 

additional detail is appropriate to clarify 

the information required to be reported 

pursuant to proposed Rule 6530(a)(2) 

and (b)(2).36 These modifiers or 

indicators would have been appended 

to all SLATE reports.37 FINRA stated 

that it planned to use these modifiers for 

data validation purposes (e.g., in 

instances where FINRA’s data 


lotter on DSK11XQN23PROD with NOTICES1
Federal Register / Vol. 90, No. 5 / Wednesday, January 8, 2025 / Notices 1565 

38See Notice, 89 FR 38208. 

39See supra note 18. 

40As originally proposed in the Notice, a Loan 

Modification effected on a business day at or after 

12:00:00 a.m. ET through 7:45:00 p.m. ET would 

have been reported the same day by 8:00:00 p.m. 

ET. 

41As originally proposed in the Notice, a Loan 

Modification effected on a business day after 

7:45:00 p.m. ET would have been reported no later 

than the next business day (T+1) by 8:00:00 p.m. 

ET. 

42As originally proposed in the Notice, a Loan 

Modification effected on a Saturday, a Sunday, a 

federal or religious holiday, or other day on which 

SLATE is not open at any time during that day 

(determined using ET) would have been reported 

the next business day (T+1) by 8:00:00 p.m. ET. 

43As originally proposed in the Notice, for Loan 

Modifications, each SLATE report would have 

contained the following data elements: if the 

Covered Securities Loan is an allocation of an 

omnibus loan effected pursuant to an agency 

lending agreement, the unique internal identifier for 

the associated omnibus loan; the expected 

settlement date for modifications to the loan 

amount (if the expected settlement date is a date 

other than the date of the Loan Modification), or the 

effective date for all other Loan Modifications (if the 

effective date is a date other than the date of the 

Loan Modification); whether the Covered person is 

the lender, borrower or intermediary; and such 

modifiers and indicators as required by either the 

Rule 6500 Series or the SLATE Participant 

specification. Partial Amendment No. 1 removed 

these proposed data elements. In light of the 

removal of these data elements, Partial Amendment 

No. 1 re-lettered the paragraphs under proposed 

Rule 6530(b)(2). Changes from Partial Amendment 

No. 1 regarding specific data elements are discussed 

below with respect to such data elements. 

44As originally proposed in the Notice, the 

following information concerning this requirement 

would have been reported with respect to Loan 

Modifications: the unique identifier assigned by 

FINRA to the Initial Covered Securities Loan, or, if 

a unique identifier has not yet been assigned by 

FINRA, the unique internal identifier assigned to 

the Covered Securities Loan by the Covered Person 

responsible for reporting the loan to SLATE. 

45Partial Amendment No. 1 added the text ‘‘[i]f 

known’’ to the beginning of this data element. 

46Partial Amendment No. 1 added the word 

‘‘and’’ between paragraphs (b)(2)(D) and (b)(2)(E). 

47As originally proposed in the Notice, this data 

element would have concerned ‘‘[t]he modified 

Data Elements for a Loan Modification to a Covered 

Securities Loan previously reported to SLATE or all 

Data Elements for a Loan Modification to a Covered 

Securities Loan that was not previously required to 

be reported to SLATE.’’ Partial Amendment No. 1 

replaced that text with the text included above. 

48See Notice, 89 FR 38209. 

validation logic identified the reported 

rate as potentially erroneous).38 Partial 

Amendment No. 1 removed the 

proposed requirement to append to each 

SLATE report specified modifiers and 

indicators. Partial Amendment No. 1 

also modified proposed Rule 6510 

(Definitions) by removing the definition 

of the term ‘‘affiliate’’ because that term 

is no longer needed given the deletion 

of the related indicator.39

Partial Amendment No. 1 added 

proposed Rule 6530(a)(4) (Reporting 

Loan Rates Based on a Spread to a 

Benchmark or Reference Rate) to permit 

Covered Persons to—as an alternative to 

reporting the rebate rate or lending fee 

or rate for a Covered Securities Loan— 

report the spread and identity of the 

benchmark or reference rate for Covered 

Securities Loans that are priced based 

on a spread to a benchmark or reference 

rate. Specifically, new proposed Rule 

6530(a)(4)(B) would provide that, where 

a rebate rate or lending fee or rate is 

determined based on a spread to a 

benchmark or reference rate, a Covered 

Person may report: (1) the rebate rate or 

lending fee or rate as of the date the 

Covered Securities Loan was effected; 

(2) the spread; and (3) the identity of the 

benchmark or reference rate. 

Alternatively, a Covered Person may 

report only the rebate rate or lending fee 

or rate. 

B. Reporting Securities Loan 

Modifications 

Proposed Rule 6530(b) would govern 

the reporting requirements applicable to 

Covered Persons for reporting Loan 

Modifications. Proposed Rule 6510 

would define ‘‘Loan Modification’’ as 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), where ‘‘Data Element’’ refers 

to the required non-confidential data 

elements reported pursuant to proposed 

Rule 6530(a)(2). Proposed Rule 

6530(b)(1) (When and How Loan 

Modifications Are Reported) would 

require that Loan Modifications be 

reported within the same timeframes 

applicable to the reporting of Initial 

Covered Securities Loans. Specifically, 

as modified by Partial Amendment No. 

1, for Loan Modifications effected on a 

business day at or after 12:00:00 a.m. ET 

through 7:00:00 p.m. ET, the required 

information must be reported the same 

day by 11:59:59 ET.40 As modified by 

Partial Amendment No. 1, for Loan 

Modifications effected on a business day 

after 7:00:00 p.m. ET, the required 

information must be reported no later 

than the next business day (T+1) by 

11:59:59 ET; 41 Loan Modifications 

effected on a Saturday, a Sunday, a 

federal or religious holiday, or other day 

on which SLATE is not open at any time 

during that day (determined using ET) 

must be reported the next business day 

(T+1) by 11:59:59 ET.42

Proposed Rule 6530(b)(2) (Loan 

Modifications—Information To Be 

Reported) would specify the items of 

information that must be reported to 

FINRA. Specifically, as modified by 

Partial Amendment No. 1,43 proposed 

Rule 6530(b)(2)(A) through (E) would 

require that each Loan Modification 

report contain the information below: 

(A) The unique identifier assigned by 

FINRA to the Initial Covered Securities 

Loan, or where a Covered Person’s daily 

submission includes two or more 

reports related to the same Covered 

Securities Loan and FINRA has not yet 

assigned a unique identifier to the 

Covered Securities Loan, the identifier 

reported pursuant to paragraph (a)(2)(U) 

of this Rule; 44

(B) If known, the MPID of the Covered 

Person; 45

(C) The date of the Loan Modification; 

(D) The time of the Loan 

Modification; and 46

(E) (i) If the Loan Modification occurs 

after the Data Elements for such Covered 

Securities Loan are reported to SLATE, 

and results in a change to information 

previously required to be reported to 

SLATE, the specific modification and 

the specific Data Elements being 

modified, or (ii) If the Loan 

Modification is to a Covered Securities 

Loan for which reporting to SLATE was 

not required on the date the loan was 

agreed to or last modified and results in 

a change to any of the Data Elements, all 

Data Elements as of the date of 

modification and an identifier described 

in paragraph (a)(2)(U) of this Rule.47

As originally proposed in the Notice, 

Rule 6530.01 (Intraday Loan 

Modifications) would have addressed a 

Covered Person’s reporting obligations 

when multiple Loan Modifications 

occur on a given day. Specifically, if a 

Covered Securities Loan (whether or not 

previously reported to SLATE) were 

modified multiple times throughout the 

day, proposed Rule 6530.01 would have 

set forth the requirement for a Covered 

Person to report each Loan Modification 

that occurred on a given day as set forth 

in proposed Rule 6530(b).48 Partial 

Amendment No. 1 removed proposed 

Rule 6530.01. 

As originally proposed in the Notice, 

Rule 6530.02 (Changes to the Parties to 

a Covered Securities Loan) would have 

provided that, with respect to a 

previously reported Covered Securities 

Loan, following the addition or removal 

of a party required to be identified 

pursuant to Rule 6530(a)(2)(O) a 

Covered Person must: (1) report the 

termination of the previously reported 

Covered Securities Loan as a Loan 

Modification pursuant to Rule 6530(b) 

that reflects the date and time the party 

was added or removed and select the 

Terminated Loan indicator; and (2) 

report an Initial Covered Securities Loan 

pursuant to Rule 6530(a) that reflects 

the new parties to the loan, if known 

(other than the customer from whom a 

Broker or Dealer borrows fully paid or 


lotter on DSK11XQN23PROD with NOTICES1
1566 Federal Register / Vol. 90, No. 5 / Wednesday, January 8, 2025 / Notices 

49Partial Amendment No. 1 re-lettered this 

provision paragraph to (c). 

50See, e.g., FINRA Rule 6380A(a)(4); FINRA Rule 

6622(a)(4); FINRA Rule 6623; FINRA Rule 6730(f). 

51See supra note 49. 

52As originally proposed in the Notice, this 

paragraph would have been (d)(4). Partial 

Amendment No. 1 re-lettered and re-numbered this 

paragraph to (c)(3). 

53As originally proposed in the Notice, this 

requirement would have applied with respect to a 

reporting obligation under both Rule 10c–1a and 

SLATE. Partial Amendment No. 1 removed the text 

‘‘and this Rule 6500 Series’’ from proposed Rule 

6530(c)(3). 

54Notice, 89 FR 38210. 

55Partial Amendment No. 1 changed the word 

‘‘changes,’’ as originally proposed in the Notice, to 

‘‘updates.’’ 

56Notice, 89 FR 38210. 

57As originally proposed in the Notice, SLATE 

System Hours would have meant the hours SLATE 

is open, which would be 6:00:00 a.m. ET through 

7:59:59 p.m. ET on a business day, unless otherwise 

announced by FINRA. Partial Amendment No. 1 

modified this proposed text from ‘‘7:59:59 p.m. 

Eastern Time’’ to ‘‘11:59:59 p.m. Eastern Time.’’ 

excess margin securities pursuant to 

SEA Rule 15c3–3(b)(3)). Partial 

Amendment No. 1 removed originally 

proposed Rule 6530.02. 

C. Compliance With Reporting 

Obligations 

FINRA proposed to adopt, as 

modified by Partial Amendment No. 1, 

proposed Rule 6530(c) (Compliance 

with Reporting Obligations) to 

implement provisions regarding 

Covered Persons’ ongoing reporting 

obligations and the use of third parties 

in meeting Exchange Act Rule 10c–1a 

and FINRA 6500 Rule Series 

obligations.49 Specifically, proposed 

Rule 6530(c)(1) provides that Covered 

Persons (other than Covered Persons 

that engage a Reporting Agent) have an 

ongoing obligation to report Initial 

Covered Securities Loans and Loan 

Modifications to FINRA timely, 

accurately, and completely. In addition, 

a Covered Person may employ an agent 

for the purpose of submitting loan 

information to SLATE; however, unless 

the Covered Person has retained a 

Reporting Agent as permitted under 

Exchange Act Rule 10c–1a, the primary 

responsibility for the timely, accurate, 

and complete reporting of loan 

information to SLATE remains the nondelegable duty of the Covered Person 

with the reporting obligation. Similar to 

requirements that exist with respect to 

reporting obligations under other FINRA 

rules,50 proposed Rule 6530(c)(2) 

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. 

As originally proposed in the Notice, 

even where a member employs a 

Reporting Agent consistent with Rule 

10c–1a(a)(2), the member would 

nonetheless have been required to take 

reasonable steps to ensure that the 

Reporting Agent is in fact complying 

with the securities lending reporting 

requirements of Rule 10c–1a and 

proposed FINRA Rule 6530 on its 

behalf. Originally proposed Rule 

6530(d)(3) 51 would have provided that 

a member relying on a Reporting Agent 

has an obligation under FINRA Rule 

3110 (Supervision) to take reasonable 

steps to ensure that the Reporting Agent 

is complying with Rule 10c–1a and 

FINRA Rule 6530 on its behalf. Partial 

Amendment No. 1 removed this 

proposed requirement. 

As modified by Partial Amendment 

No. 1, proposed Rule 6530(c)(3) 52

would provide that, if a Covered Person 

makes a good faith determination that it 

has a reporting obligation under Rule 

10c–1a,53 the Covered Person or 

Reporting Agent, as applicable, must 

report the Covered Securities Loan as 

provided in proposed Rule 6530. If the 

Reportable Security is not entered into 

the SLATE system, proposed Rule 

6530(c)(3) would also require the 

Covered Person or Reporting Agent, as 

applicable, to promptly notify and 

provide FINRA Operations, in the form 

and manner required by FINRA, the 

information specified in Rule 

6530(a)(2)(A) and (B), along with such 

other information as FINRA deems 

necessary to enter the Reportable 

Security for reporting through SLATE. 

FINRA stated that this requirement 

would enable FINRA to set the security 

up in its systems and facilitate reporting 

of the Covered Securities Loan to 

SLATE, as required by Rule 10c–1a and 

proposed Rule 6530.54

D. Participation in SLATE 

Proposed Rule 6520 (Participation in 

SLATE) would establish the 

requirements applicable to Covered 

Persons and Reporting Agents with 

respect to participation in SLATE. Rule 

6510 would define a ‘‘SLATE 

Participant’’ as ‘‘any person that reports 

securities loan information to SLATE, 

directly or indirectly.’’ ‘‘SLATE 

Participant’’ therefore would include 

both persons who connect to SLATE 

directly to report Covered Securities 

Loan information, including Reporting 

Agents, as well as any Covered Person 

who has engaged a Reporting Agent or 

other agent. 

Paragraph (1) of proposed Rule 

6520(a) (Mandatory Participation) 

would provide that participation in 

SLATE is mandatory for purposes of 

reporting Covered Securities Loans. 

Such mandatory participation would 

obligate a Covered Person to submit 

Covered Securities Loan information to 

SLATE in conformity with Rule 10c–1a 

and the FINRA Rule 6500 Series. 

Proposed Rule 6520(a)(2) would provide 

that participation in SLATE would be 

conditioned on the SLATE Participant’s 

initial and continuing compliance with 

specified requirements. Specifically, 

SLATE Participants must: (1) obtain an 

MPID for reporting Covered Securities 

Loans to SLATE; (2) execute and 

comply with the SLATE Participant 

application agreement and all 

applicable rules and operating 

procedures of FINRA and the SEC; and 

(3) maintain the physical security of the 

equipment located on the premises of 

the SLATE Participant to prevent 

unauthorized entry of information into 

SLATE. Proposed Rule 6520(a)(3) would 

provide that SLATE Participants would 

be obligated to inform FINRA of noncompliance with, or changes to, any of 

the participation requirements set forth 

in paragraph (a)(2) of this Rule. 

Proposed Rule 6520(b) (Reporting 

Agents) would set forth the 

participation requirements specific to 

Reporting Agents. Proposed Rule 

6520(b) would require a SLATE 

Participant acting as a Reporting Agent 

to provide FINRA with a list naming 

each Covered Person on whose behalf 

the Reporting Agent is providing 

information to SLATE and any 

updates 55 to the list of such persons by 

the end of the day on which any such 

change occurs, in the form and manner 

specified by FINRA. FINRA stated that 

this requirement is consistent with Rule 

10c–1a(b)(4).56

Finally, proposed Rule 6520(c) 

(SLATE Participant Obligations) would 

provide that, upon execution and 

receipt by FINRA of the SLATE 

Participant application agreement, a 

SLATE Participant may commence 

input of Covered Securities Loan reports 

into SLATE. Proposed Rule 6520(c) also 

would require that a SLATE Participant 

must report Covered Securities Loan 

information using its MPID and would 

provide that a SLATE Participant may 

access SLATE via a FINRA-approved 

facility during SLATE System Hours.57

E. Dissemination of Loan Information 

Proposed Rule 6540 (Dissemination of 

Loan Information) would provide for the 

public dissemination of securities loan 

data reported to SLATE and information 

pertaining to the aggregate loan 

transaction activity and distribution of 

loan rates for each Reportable Security. 


lotter on DSK11XQN23PROD with NOTICES1
Federal Register / Vol. 90, No. 5 / Wednesday, January 8, 2025 / Notices 1567 

58Partial Amendment No. 1 added the text ‘‘for 

an Initial Covered Securities Loan.’’ 

59Partial Amendment No. 1 added this paragraph 

(a)(2) to proposed Rule 6540 and re-numbered the 

subsequent paragraphs under proposed Rule 

6540(a). 

60See Notice, 89 FR 38211. 

61See Partial Amendment No. 1, 89 FR 92234–35. 

62See Notice, 89 FR 38211. 

63See Partial Amendment No. 1, 89 FR 92235. 

64Partial Amendment No. 1 added the text ‘‘for 

an Initial Covered Securities Loan.’’ 

65Partial Amendment No. 1 added this paragraph 

(b)(2) to proposed Rule 6540 and re-lettered the 

subsequent paragraphs under proposed Rule 

6540(b). 

66Notice, 89 FR 38211. 

67Partial Amendment No. 1 removed the text 

‘‘(both in total and by collateral type)’’ following the 

word ‘‘securities.’’ 

68Notice, 89 FR 38212. 

69As originally proposed in the Notice, Rule 

6540.01 (De Minimis Loan Transaction Activity) 

would have provided that FINRA may omit from 

the aggregate loan activity volume information for 

Reportable Securities for which there were three or 

fewer types of Initial Covered Securities Loan and 

Loan Modification events reported to SLATE in 

total on the prior business day. Notice, 89 FR 38212 

n.74. 

70FINRA stated that, in addition to the items of 

information specified in paragraphs (A) and (B) of 

proposed Rule 6540(c)(2), FINRA may, in its 

discretion, publish or distribute additional metrics 

regarding loan rebate rates and lending fees free of 

charge. Notice, 89 FR 38212 n.79. 

71Partial Amendment No. 1 added the text ‘‘by 

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

Continued 

The publicly available data would 

include: (1) next day (T+1) loan-level 

data dissemination for Initial Covered 

Securities Loans and Loan 

Modifications (except for the loan 

amount); (2) T+20 dissemination of the 

loan amount for Initial Covered 

Securities Loans and Loan 

Modifications; and (3) daily loan 

statistics (i.e., aggregate loan activity 

and distribution of loan rates). 

1. T+1 Loan-Level Data Dissemination 

Under proposed Rule 6540(a) (Next 

Day Dissemination), as modified by 

Partial Amendment No. 1, for each 

Initial Covered Securities Loan and 

Loan Modification reported to SLATE 

on a given business day, no later than 

the morning of the next business day, 

FINRA would make publicly available: 

(1) for an Initial Covered Securities 

Loan,58 the unique identifier assigned 

by FINRA to the Covered Securities 

Loan; (2) for a Loan Modification, the 

unique identifier assigned by FINRA to 

the Covered Securities Loan if reported 

to SLATE or otherwise identified by 

FINRA; 59 (3) the security identifier(s) 

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

that FINRA determines is appropriate to 

disseminate; and (4) the requisite Data 

Elements,60 except the amount of 

Reportable Securities loaned.61

2. T+20 Loan Amount Dissemination 

As discussed in greater detail in the 

Notice,62 and as described in Partial 

Amendment No. 1,63 pursuant to Rule 

6540(b) (Delayed Dissemination), for 

each Initial Covered Securities Loan and 

Loan Modification reported to SLATE, 

20 business days after the date on which 

the Initial Covered Securities Loan was 

effected or the loan amount was 

modified, FINRA would make publicly 

available: (1) for an Initial Covered 

Securities Loan,64 the unique identifier 

assigned by FINRA to the Covered 

Securities Loan; (2) for a Loan 

Modification, the unique identifier 

assigned by FINRA to the Covered 

Securities Loan if reported to SLATE or 

otherwise identified by FINRA; 65 (3) the 

security identifier(s) specified in Rule 

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

determines is appropriate to 

disseminate; and (4) the amount of 

Reportable Securities loaned reported to 

SLATE. FINRA stated that, for Initial 

Covered Securities Loans, the 20-day 

delay period would begin the day after 

the Covered Securities Loan is effected 

(even in the case of late reports).66

3. Daily Loan Statistics 

In addition to T+1 loan-level data 

disseminated pursuant to proposed Rule 

6540(a), FINRA would disseminate 

statistics regarding Covered Securities 

Loans reported to FINRA, including 

aggregate loan activity and distribution 

of loan rebate rates and lending fees. 

Pursuant to paragraph (1) (Aggregate 

Loan Transaction Activity) of proposed 

Rule 6540(c), for each Reportable 

Security for which an Initial Covered 

Securities Loan or Loan Modification is 

reported to SLATE on a given business 

day, FINRA would disseminate, no later 

than the morning of the next business 

day, aggregated loan activity in the 

Reportable Security (along with the 

security identifier specified in Rule 

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

determines is appropriate to 

disseminate). As modified by Partial 

Amendment No. 1, the aggregated data 

would include, for each Reportable 

Security, under proposed Rule 

6540(c)(1), the aggregate volume of 

securities 67 subject to an Initial Covered 

Securities Loan or modification to the 

amount of Reportable Securities loaned, 

reported on the prior business day. 

FINRA stated that these data would 

provide the public with useful 

information concerning the daily 

lending activity in Reportable 

Securities, including insight into how 

this activity is distributed across 

collateral types.68 To that end, proposed 

Rule 6540.01 (De Minimis Loan 

Transaction Activity), as modified by 

Partial Amendment No. 1, would state 

that FINRA will not include aggregate 

volume information for a Reportable 

Security unless there were reports 

submitted to SLATE on the prior 

business day for at least ten distinct 

Covered Securities Loans in the 

Reportable Security (represented by 

different FINRA-assigned unique loan 

identifiers).69

Partial Amendment No. 1 also 

removed four other originally proposed 

provisions related to FINRA’s 

dissemination of aggregate loan 

transaction activity. As originally 

proposed in the Notice, the aggregated 

loan transaction activity data 

disseminated pursuant to proposed Rule 

6540(c)(1) would also have included 

under: (1) proposed Rule 6540(c)(1)(B), 

the aggregate volume of securities (both 

in total and broken down by collateral 

type) subject to a rebate rate or fee 

modification reported on the prior 

business day; (2) proposed Rule 

6540(c)(1)(C), the aggregate volume of 

securities subject to an Initial Covered 

Securities Loan or modification to the 

amount of Reportable Securities loaned 

subject to a loan with a specified term 

and subject to a loan without a specified 

term reported on the prior business day; 

(3) proposed Rule 6540(c)(1)(D), the 

aggregate volume of securities subject to 

an Initial Covered Securities Loan or 

modification to the amount of 

Reportable Securities loaned to one or 

more borrower types specified in Rule 

6530(a)(2)(N) reported on the prior 

business day; and (4) proposed Rule 

6540(c)(1)(E), the aggregate number of 

Initial Covered Securities Loans and 

terminated Covered Securities Loans 

(both in total and broken down by 

collateral type) reported on the prior 

business day. 

Pursuant to paragraph (2) (Loan Rate 

Distribution Data) of proposed Rule 

6540(c), for each Reportable Security for 

which an Initial Covered Securities 

Loan or Loan Modification is reported to 

SLATE on a business day, FINRA would 

also disseminate, not later than the 

morning of the next business day, the 

security identifier (specified in Rule 

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

determines is appropriate to identify the 

relevant Reportable Security and 

information pertaining to the 

distribution of loan rebate rates or 

lending fees or rates, as applicable,70

including: 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,71 reported to SLATE for 


lotter on DSK11XQN23PROD with NOTICES1
1568 Federal Register / Vol. 90, No. 5 / Wednesday, January 8, 2025 / Notices 

applicable.’’ FINRA stated that the modification 

made by Partial Amendment No. 1 is appropriate 

because the currency used as collateral will impact 

the rebate rate reported to SLATE and, therefore, 

separating the rate information by U.S. currency 

collateral and non-U.S. currency collateral will 

make the disseminated information more useful. 

Partial Amendment No. 1, 89 FR 92232. 

72Notice, 89 FR 38212. 

73As originally proposed in the Notice, FINRA 

would not have disseminated any modifier or 

indicator required by either the Rule 6500 Series or 

the SLATE Participant specification that FINRA 

determines shall not be publicly disseminated. 

Partial Amendment No. 1 removed this language. 

74Notice, 89 FR 38212 (citing FINRA Rule 6770). 

75Notice, 89 FR 38213. 

76 In approving this proposed rule change, the 

Commission has considered the proposed rule’s 

impact on efficiency, competition, and capital 

formation. See 15 U.S.C. 78c(f). See also infra Part 

III.E. 

77 15 U.S.C. 78o–3(b)(6). 

78 15 U.S.C. 78o–3(b)(9). 

79Reporting of Securities Loans, Securities 

Exchange Act Release No. 98737 (October 13, 2023), 

88 FR 75644 (November 3, 2023) (‘‘Rule 10c–1a 

Adopting Release’’), at 75646. 

80 17 CFR 240.10c–1a(f). 81See 17 CFR 240.10c–1a(g). 82See Rule 10c–1a Adopting Release, 88 FR 

75706. 83See Rule 10c–1a Adopting Release, 88 FR 

75706–7. 84See Rule 10c–1a Adopting Release, 88 FR 

75707. 85See Rule 10c–1a Adopting Release, 88 FR 

75707. 86See Rule 10c–1a Adopting Release, 88 FR 

75707. 

87See Rule 10c–1a Adopting Release, 88 FR 

75724. 

Initial Covered Securities Loans 

collateralized by cash and, separately, 

for Loan Modifications collateralized by 

cash (where the Loan Modification 

involved a change to the rebate rate). 

FINRA would also disseminate 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, separately, for Loan 

Modifications not collateralized by cash 

(where the Loan Modification involved 

a change to the lending fee or rate). 

FINRA stated that these rate distribution 

metrics would provide market 

participants with both an overall view 

of the range of daily loan pricing for 

each Reportable Security, as well as 

insight into the relationship between 

loan rates/fees and loan amounts.72

Proposed Rule 6540(d) (Loan 

Transaction Information Not 

Disseminated), as modified by Partial 

Amendment No. 1, would specify that 

FINRA will not disseminate any 

Confidential Data Elements reported to 

SLATE.73 As proposed in Rule 6540.02 

(Means of Data Dissemination), FINRA 

would make the data pursuant to 

proposed Rule 6540(a) through (c) 

available on FINRA’s website free of 

charge for personal, non-commercial 

purposes only. For other uses, FINRA 

would publish or distribute SLATE data 

for fees that have been filed with the 

SEC pursuant to Rule 19b–4 under the 

Exchange Act. 

F. Other Provisions 

Proposed Rule 6550 (Emergency 

Authority) would provide that, as 

market conditions may warrant, FINRA, 

in consultation with the Commission, 

may suspend the reporting or 

dissemination of certain Covered 

Securities Loans, or the reporting of 

certain Data Elements or Confidential 

Data Elements or the dissemination of 

certain Data Elements for such period of 

time as FINRA deems necessary. FINRA 

stated that this proposed rule is 

consistent with FINRA’s rules governing 

other reporting facilities that it 

operates.74

FINRA stated that, if the Commission 

approves the proposed rule change, 

unless an extension is provided 

pursuant to Commission order, the 

implementation date of the proposed 

FINRA rules establishing the reporting 

requirements will be January 2, 2026; 

and the implementation date of the 

proposed FINRA rules establishing the 

dissemination requirements will be 

April 2, 2026.75

III. Summary of Comments, FINRA’s 

Response, and Commission Findings 

After reviewing the Notice, Partial 

Amendment No. 1, and comment letters 

received, the Commission finds that the 

Proposal is consistent with the 

requirements of the Exchange Act and 

the rules and regulations thereunder 

applicable to a national securities 

association.76 In particular, the 

Commission finds that the Proposal is 

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

Exchange Act,77 which requires, among 

other things, that FINRA rules be 

designed to promote just and equitable 

principles of trade, to foster cooperation 

and coordination with persons engaged 

in regulating, clearing, settling, 

processing information with respect to, 

and facilitating transactions in 

securities, to remove impediments to 

and perfect the mechanism of a free and 

open market and a national market 

system, and, in general, to protect 

investors and the public interest; and 

are not designed to permit unfair 

discrimination between customers, 

issuers, brokers, or dealers. The 

Commission also finds that the Proposal 

is consistent, in particular, with Section 

15A(b)(9) of the Exchange Act,78 which 

requires that FINRA rules do not impose 

any burden on competition not 

necessary or appropriate in furtherance 

of the purposes of the Exchange Act. 

In adopting Rule 10c–1a, the 

Commission stated that the rule’s 

requirements are designed to increase 

the transparency of information 

available to brokers, dealers, and 

investors with respect to loans or 

borrowing securities.79 Rule 10c–1a 

requires, among other things, that 

FINRA implement rules regarding the 

format and manner of its collection of 

information described in Rule 10c–1a(c) 

through (e) and make publicly available 

such information in accordance with 

rules promulgated pursuant to Section 

19(b) and Rule 19b–4.80 Rule 10c–1a 

also requires that FINRA make publicly 

available, in accordance with Rule 10c– 

1a’s specified timeframes, certain 

securities loan information that FINRA 

receives.81 As discussed in greater detail 

below, in Part III, the Proposal is 

consistent with these requirements. 

Price transparency plays a 

fundamental role in promoting fairness 

and efficiency of U.S. capital markets. 

The Proposal, by implementing the 

applicable requirements of Rule 10c–1a, 

would increase transparency in the 

securities lending market through 

improvements to the 

comprehensiveness, breadth, accuracy, 

and accessibility of securities lending 

data.82 The loan information filed in 

SLATE reports and disseminated by 

FINRA will be more comprehensive and 

include additional data fields than the 

data currently offered by commercial 

data vendors.83 Moreover, this 

information will be available to all 

market participants.84 This increased 

transparency will, among other things, 

allow end borrowers and beneficial 

owners to determine the extent to which 

their broker-dealers and lending agents 

are obtaining terms that are better, 

worse, or consistent with current market 

conditions for loans with similar 

characteristics.85 The Proposal would 

facilitate this comparison by providing 

comprehensive transaction-bytransaction information about the cost to 

borrow and other loan characteristics 

that are currently mostly unavailable to 

end borrowers and beneficial owners.86

Furthermore, the Proposal, by 

implementing the applicable 

requirements of Rule 10c–1a, will 

increase transparency in the securities 

lending market, which will have 

positive effects on capital formation, in 

particular, by improving price discovery 

in securities markets and improving 

balance sheet management by financial 

institutions.87


lotter on DSK11XQN23PROD with NOTICES1
Federal Register / Vol. 90, No. 5 / Wednesday, January 8, 2025 / Notices 1569 

88See Rule 10c–1a Adopting Release, 88 FR 

75715–16. 

89See Rule 10c–1a Adopting Release, 88 FR 

75716. 

90See Rule 10c–1a Adopting Release, 88 FR 

75716. 

91See Rule 10c–1a Adopting Release, 88 FR 

75716. 

92See Rule 10c–1a Adopting Release, 88 FR 

75716. 

93See Rule 10c–1a Adopting Release, 88 FR 

75716. 

94See Rule 10c–1a Adopting Release, 88 FR 

75716. 

95See supra note 8. 

96See, e.g., Letter from Anonymous (May 14, 

2024); Letter from Jimit Raithatha (August 7, 2024); 

Letter from Patrick O’Ney (August 9, 2024); Letter 

from Heinrich M. (August 9, 2024); Letter from 

Corey (September 12, 2024); Letter from 

Anonymous (September 16, 2024). See also Form 

Letter A; Form Letter D; Form Letter E; Letter from 

Freddy Lo (August 9, 2024); Letter from Graham 

Ladner (August 9, 2024); Letter from Kevin 

McNulty, Managing Director, Head of RegTech, 

EquiLend Holdings LLC (August 27, 2024) 

(‘‘EquiLend Letter 2’’), at 1; Letter from Jane 

Plumberg (September 10, 2024); Letter from Traci 

Olafson (September 12, 2024). 

97Letter from Jennifer (May 15, 2024). 

98Letter from Suzanne Shatto (May 22, 2024). See 

also Letter from Suzanne Shatto (August 21, 2024). 

99Letter from Derek Madden (September 12, 

2024). 

100See, e.g., Letter from Robert Toomey, 

Managing Director and Associate General Counsel, 

and Joseph Corcoran, Managing Director and 

Associate General Counsel, Securities Industry and 

Financial Markets Association (May 28, 2024) 

(‘‘SIFMA Letter’’), at 3; Letter from Sarah A. Bessin, 

Deputy General Counsel, Investment Company 

Institute, et al. (May 24, 2024) (‘‘Associations 

Collective Letter’’), at 2; Letter from Paul Cellupica, 

General Counsel and Kimberly Thomasson 

Assistant General Counsel, Investment Company 

Institute, et al. (July 30, 2024) (‘‘ICI Letter’’), at 2; 

Letter from Brian P. Lamb, CEO, EquiLend Holdings 

LLC (May 28, 2024) (‘‘EquiLend Letter 1’’), at 6–7; 

Letter from Fran Garritt, Head of Business, and 

Mark Whipple, Chairman of the Board of Directors, 

International Securities Lending Association 

Americas (July 16, 2024) (‘‘ISLA Americas Letter 

1’’), at 4; Letter from Tony Holland, Director of 

Market Practice, International Securities Lending 

Association (May 28, 2024) (‘‘ISLA Letter 1’’), at 2– 

3; Letter from Jennifer W. Han, Executive Vice 

President, Chief Counsel and Head of Global 

Regulatory Affairs, Managed Funds Association 

(July 31, 2024) (‘‘MFA Letter’’), at 2; Letter from 

Lindsey Weber Keljo, Esq., Head—Asset 

Management Group, and William C. Thum, 

Managing Director and Associate General Counsel, 

Securities Industry and Financial Markets 

Association Asset Management Group (May 28, 

2024) (‘‘SIFMA AMG Letter 1’’), at 2; Letter from 

William C. Thum, Managing Director and Associate 

General Counsel, Securities Industry and Financial 

Markets Association Asset Management Group (July 

31, 2024) (‘‘SIFMA AMG Letter 2’’), at 2; Letter from 

Matt Billings, President, Robinhood Financial, LLC 

and Robinhood Securities, LLC (August 30, 2024) 

(‘‘Robinhood Letter’’), at 2; Letter from Robert 

Sloan, Managing Partner, S3 Partners, LLC (August 

5, 2024) (‘‘S3 Partners Letter’’), at 4. 

101See Notice, 89 FR 38206 n.30. 

102See SIFMA Letter, at 3–4. See also EquiLend 

Letter 1, at 6–7; ISLA Letter 1, at 2, 5, 8. 

103See, e.g., EquiLend Letter 1, at 1, 6–7; SIFMA 

Letter, at 4; ICI Letter, at 2–3; MFA Letter, at 7. 

The Proposal, by improving 

transparency and efficiency in the 

securities lending market consistent 

with Rule 10c–1a, would thus help 

protect investors and promote just and 

equitable principles of trade, consistent 

with Section 15A(b)(6). By 

implementing the requirements of Rule 

10c–1a, the Proposal would improve 

upon current data sources that identifies 

the parties to the loans, indicates when 

a broker-dealer loans its own securities 

to its customers, and indicates whether 

the purpose of such a loan was to close 

out a failure to deliver.88 Further, the 

improved access and 

comprehensiveness and reduced bias of 

the publicly available data will also 

accrue to FINRA and the Commission, 

as well as any other regulators using 

these data.89 This access will benefit 

investors by enhancing regulatory tools 

employed to promote fair and orderly 

securities markets. In particular, 

investors may benefit from improved 

surveillance and enforcement uses, 

market reconstruction uses, and market 

research uses.90

The disclosure of party identities and 

purpose information under the Proposal 

may facilitate better surveillance by 

FINRA for regulatory compliance by its 

members and may improve its ability to 

enforce such regulations. For example, 

for FINRA, the information on whether 

the security is loaned from a brokerdealer’s securities inventory to its 

customer may assist FINRA in 

determining whether a broker-dealer is 

charging lending fees or paying rebates 

commensurate with the market. Thus, 

beneficial owners and end borrowers, 

who engage in securities lending 

transactions, will be better protected 

against potential unfair pricing of 

securities loans by broker-dealers.91

FINRA’s enhanced surveillance 

capabilities facilitated by the Proposal 

could better protect investors by helping 

to ensure that entities engaging in 

certain securities lending transactions 

are authorized to do so and are in 

compliance with applicable 

regulations.92 FINRA can also use the 

information to monitor when brokerdealers are building up risk, thereby 

protecting broker-dealers’ customers 

against potential instabilities.93 FINRA 

can use data on the identity and activity 

of its members to provide an early 

warning with regard to the behavior of 

its members during a short squeeze.94

The Commission received comments 

on the proposed rule change.95 Some 

commenters expressed general support 

for the proposed rule change.96 One 

commenter stated that the proposed rule 

change will ‘‘aid in the protection of 

investors by ensuring they are 

appropriately informed about the terms 

of securities loans and the parties 

involved’’ and that the proposed 

‘‘requirement to report comprehensive 

data elements will contribute to a fair 

and orderly market.’’ 97 Another 

commenter stated that the proposed rule 

change ‘‘is a great idea.’’ 98 One 

commenter stated its agreement with the 

proposed rule change and that it will 

‘‘build a stronger market.’’ 99 Comments 

regarding specific aspects of the 

proposed rule change are discussed 

below, in Parts III.A through III.J. 

A. Loan Information To Be Reported 

1. Data Elements Not Included in Rule 

10c–1a 

Some commenters stated that the 

proposed rule change, as originally 

proposed in the Notice, would impose 

on market participants reporting 

requirements that go beyond the 

requirements of Rule 10c–1a.100 Some 

commenters identified the data 

elements that would be required to be 

reported under the proposed rule 

change, as originally proposed in the 

Notice, that they stated were not 

included under Rule 10c–1a, including: 

(1) the expected settlement date of the 

Covered Securities Loan; (2) any other 

fees or charges (i.e., the dollar cost of 

any other fees or charges in addition to 

the rebate rate or securities lending fee 

separately required to be reported); 101

(3) whether the Covered Person is the 

lender, borrower, or intermediary; (4) if 

the Covered Securities Loan is an 

allocation of an omnibus loan effected 

pursuant to an agency lending 

agreement, the unique internal identifier 

for the associated omnibus loan 

assigned by the Covered Person 

responsible for reporting the Covered 

Securities Loan to SLATE; (5) the 

expected settlement date for 

modifications to the loan amount (if the 

expected settlement date is a date other 

than the date of the Loan Modification), 

or the effective date for all other Loan 

Modifications (if effective date is a date 

other than the date of the Loan 

Modification); (6) such modifiers and 

indicators as are required by FINRA 

under the Rule 6500 Series or the 

SLATE Participant specification; and (7) 

the unique internal identifier assigned 

to the Covered Securities Loan by the 

Covered Person responsible for 

reporting the loan to SLATE.102 Some 

commenters stated that the additional 

data and information requirements that 

are not specifically mentioned in Rule 

should be removed.103 Some 

commenters stated that the proposed 


lotter on DSK11XQN23PROD with NOTICES1
1570 Federal Register / Vol. 90, No. 5 / Wednesday, January 8, 2025 / Notices 

104See, e.g., SIFMA AMG Letter 1, at 2; SIFMA 

AMG Letter 2, at 2, 4–6; SIFMA Letter, at 4; ISLA 

Letter 1, at 2; ISLA Americas Letter 1, at 4, 9; ICI 

Letter, at 3–4; EquiLend Letter 1, at 1, 6–7. See also 

Associations Collective Letter, at 2; MFA Letter, at 

2; Letter from Senator Bill Hagerty (October 25, 

2024) (‘‘Hagerty Letter’’), at 1. 

105See ISLA Americas Letter 1, at 8–9; ISLA 

Letter 1, at 7; SIFMA AMG Letter 2, at 7. 

106 ISLA Americas Letter 1, at 9. 

107 ISLA Americas Letter 1, at 9. 

108See EquiLend Letter 1, at 7. 

109SIFMA Letter, at 4. See also Robinhood Letter, 

at 2; MFA Letter, at 2–3. 

110MFA Letter, at 2–3. 111 ISLA Americas Letter 1, at 4–5. See also 

SIFMA AMG Letter 2, at 7–8; Hagerty Letter, at 1– 

3. FINRA rule filings are not agency rulemakings. 

As discussed above, in Part I, FINRA filed the 

Proposal with the Commission pursuant to Section 

19(b)(1) Exchange Act and Rule 19b–4 thereunder. 112FINRA stated that the removal of this data 

element is appropriate because it simplifies the 

initial reporting framework. FINRA also stated that 

the file submission process would provide 

information sufficient to allow FINRA to identify 

the submitting party and therefore the ability to 

ascertain whether a SLATE report is being 

submitted by the Covered Person, a Reporting 

Agent, or another party. See Partial Amendment No. 

1, 89 FR 92231. Some commenters supported 

Partial Amendment No. 1’s removal of originally 

proposed Rules 6530(a)(2)(V) and 6530(b)(2)(G). See 

Letter from Fran Garritt, Head of Business, and 

Mark Whipple, Chairman of the Board of Directors, 

International Securities Lending Association 

Americas (Dec. 6, 2024) (‘‘ISLA Americas Letter 2’’), 

at 5; Letter from Robert Toomey, Managing Director 

and Associate General Counsel, et al. (December 6, 

2024) (‘‘SIFMA and SIFMA AMG Letter’’), at 3. 

113See infra Part III.A.3 (discussing why the 

Proposal’s data element concerning the unique 

identifier assigned to the Covered Securities Loan 

by the Covered Person responsible for reporting the 

loan to SLATE is necessary to be reported in order 

for FINRA to comply with the requirements of Rule 

10c–1a(g)). 

114See Rule 10c–1a Adopting Release, 88 FR 

75669. 

115Partial Amendment No. 1, 89 FR 92229 n.21. 

116FINRA Letter, at 4. FINRA provided the 

example that a Covered Person that agrees to a 

Covered Securities Loan that ultimately does not 

settle would still be required to report the 

termination of that loan pursuant to proposed Rule 

6530(b)(2) by submitting a Loan Modification to 

terminate a Covered Securities Loan. However, 

because the securities were never transferred to the 

borrower, the Loan Modification termination report 

would not modify the loan amount to zero (unlike 

in the case of a loan that was terminated because 

the shares were returned, which would modify the 

loan amount to zero), which would allow FINRA to 

identify the loan as being terminated because it was 

unsettled as opposed to a return of shares. FINRA 

Letter, at 4 n.19. 

rule change, as originally proposed in 

the Notice, would result in the 

disclosure of highly sensitive 

information and contribute to 

significant increased costs, burdens, and 

complexity for implementation and 

compliance due to the introduction of 

additional data elements that go beyond 

the requirements of Rule 10c–1a.104

Some commenters stated that the 

‘‘increased complexity’’ of the securities 

loan information in the proposed rule 

change, as originally proposed in the 

Notice, as compared to the Rule 10c–1a 

information, could increase Covered 

Persons’ reliance on Reporting Agents 

for compliance purposes, which could 

increase costs and data security risks for 

the industry.105 One commenter stated 

that the expansion of the number of 

reportable fields under the proposed 

rule change, as originally proposed in 

the Notice, could require Covered 

Persons using a Reporting Agent to 

share with that Reporting Agent ‘‘very 

sensitive transaction level details, 

including the identity of each party to 

the transaction.’’ 106 The commenter 

also stated its concern that, if this data 

were to become exposed by a data 

security incident, ‘‘lenders would 

choose to restrict lending, which could 

negatively impact lendable supply and 

market liquidity.’’ 107

One commenter stated that some of 

the additional data fields in the 

proposed rule change, as originally 

proposed in the Notice, may not 

currently be captured by market 

participants at the trade level and were 

not considered in the Commission’s 

cost-benefit analysis of Rule 10c–1a.108

Another commenter stated that the 

addition of these data elements in the 

proposed rule change, as originally 

proposed in the Notice, ‘‘would 

constitute an impermissible end-run 

around the Commission rulemaking 

process . . . without being subject to 

the public comments and economic 

analyses required to be performed under 

such rulemaking process.’’ 109 Another 

commenter stated that the proposed rule 

change, as originally proposed in the 

Notice, ‘‘significantly exceed[s]’’ 

FINRA’s rulemaking mandate under 

Rule 10c–1a.110 Another commenter 

stated that ‘‘the significant increase in 

reportable fields and complexity’’ of the 

proposed rule change, as originally 

proposed in the Notice, warrants ‘‘a 

proper cost-benefit analysis as required 

under Federal agency rulemaking.’’ 111

In response, Partial Amendment No. 1 

removed the following data elements 

from the proposed rule change’s 

reporting requirements for Initial 

Covered Securities Loans and Loan 

Modifications: (1) the expected 

settlement date of the Covered 

Securities Loan; (2) any other fees or 

charges (i.e., the dollar cost of any other 

fees or charges in addition to the rebate 

rate or securities lending fee separately 

required to be reported); (3) whether the 

Covered Person is the lender, borrower, 

or intermediary; 112 (4) if the Covered 

Securities Loan is an allocation of an 

omnibus loan effected pursuant to an 

agency lending agreement, the unique 

internal identifier for the associated 

omnibus loan assigned by the Covered 

Person responsible for reporting the 

Covered Securities Loan to SLATE; (5) 

the expected settlement date for 

modifications to the loan amount (if the 

expected settlement date is a date other 

than the date of the Loan Modification), 

or the effective date for all other Loan 

Modifications (if effective date is a date 

other than the date of the Loan 

Modification); and (6) such modifiers 

and indicators as are required by FINRA 

under the Rule 6500 Series or the 

SLATE Participant specification. With 

the exception of the data element 

concerning the unique identifier 

assigned to the Covered Securities Loan 

by the Covered Person responsible for 

reporting the loan to SLATE, where a 

Covered Person’s daily submission 

includes two or more reports related to 

the same Covered Securities Loan, and 

FINRA has not yet assigned a unique 

identifier to the Initial Covered 

Securities Loan,113 all of the additional 

data elements listed above that 

commenters objected to as being beyond 

the scope of Rule 10c–1a were removed 

in Partial Amendment No. 1. 

In light of the removal of the text ‘‘any 

other fees or charges’’ as a data element 

that must be reported separately from 

the rebate rate (for a Covered Securities 

Loan collateralized by cash) or the 

securities lending fee (for a Covered 

Securities Loan not collateralized by 

cash), as applicable, Partial Amendment 

No. 1 also added the text ‘‘or any other 

fee or charges’’ to the Covered Securities 

Loan information specified in proposed 

Rule 6530(a)(2)(H) and the text ‘‘or rate, 

or any other fee or charges’’ to the 

Covered Securities Loan information 

specified in proposed Rule 6530(a)(2)(I). 

Proposed Rules 6530(a)(2)(H) and 

6530(a)(2)(I) mirror Rule 10c–1a(c)(8) 

and (c)(9), respectively, which helps to 

ensure the collection of data elements 

required to be reported pursuant to Rule 

10c–1a(c) through (e). The Proposal is 

reasonably designed to facilitate the 

collection of pricing information, which 

is a material term of a Covered 

Securities Loan, consistent with Rule 

10c–1a.114

FINRA stated that, while Partial 

Amendment No. 1 removed several of 

the originally proposed fields and the 

indicators and modifiers to facilitate a 

timely initial implementation of SLATE, 

the absence of these elements may 

impact the quality and completeness of 

the resultant SLATE data.115 FINRA 

stated that, in some cases, FINRA has 

identified alternative means of 

addressing the data gap.116 In other 

cases, FINRA plans to reassess the need 

for the data after gaining experience 


lotter on DSK11XQN23PROD with NOTICES1
Federal Register / Vol. 90, No. 5 / Wednesday, January 8, 2025 / Notices 1571 

117FINRA Letter, at 4. 

118Partial Amendment No. 1, 89 FR 92229 n.21. 

See FINRA Letter, at 4. 

119See, e.g., SIFMA Letter, at 3–4; EquiLend 

Letter 1, at 6–7; ICI Letter, at 2–3. See also ISLA 

Americas Letter 1, at 13–14. 

120See, e.g., EquiLend Letter 1, at 1, 6–7; SIFMA 

Letter, at 4; ICI Letter, at 2–3; MFA Letter, at 7. 

121See ISLA Americas Letter 1, at 14; SIFMA 

AMG Letter 2, at 6; ISLA Letter 1, at 8. 

122See ISLA Letter 1, at 8; ICI Letter, at 4–5; ISLA 

Americas Letter 1, at 14; SIFMA AMG Letter 2, at 

6. See also S3 Partners Letter, at 5. 

123 ISLA Americas Letter 1, at 14. 

124 ISLA Americas Letter 1, at 11. 

125 ISLA Americas Letter 1, at 11. 

126See Notice, 89 FR 38208. 

127 ISLA Americas Letter 1, at 9. 

128 ISLA Letter 1, at 7. See Robinhood Letter, at 

2. 

129 ISLA Letter 1, at 7. 

130FINRA stated that, while FINRA removed the 

requirement that Covered Persons append a 

Terminated Loan indicator, FINRA is retaining the 

requirement that Covered Persons populate a field 

with the termination date of the Covered Securities 

Loan, which is expressly required to be reported to 

an RNSA under Rule 10c–1a(c)(11). Accordingly, 

FINRA stated that, when reporting to SLATE an 

Initial Covered Securities Loan that is an open loan, 

a Covered Person would be required to leave the 

termination date field blank; when reporting an 

Initial Covered Securities Loan that is a term loan, 

a Covered Person would report the loan’s 

termination date in the termination date field. 

Partial Amendment No. 1, 89 FR 92229 n.20. 

131See FINRA Letter, at 4. 

132See Notice, 89 FR 38208. 

133Partial Amendment No. 1, 89 FR 92229 n.21. 

See FINRA Letter, at 4. 

134See ISLA Americas Letter 2, at 4; SIFMA and 

SIFMA AMG Letter, at 2. 

135See ISLA Americas Letter 1, at 12; ICI Letter, 

at 7; SIFMA AMG Letter 2, at 7; FIF Letter, at 7. 

with the operation of SLATE and the 

initial data set and will revisit whether 

changes are appropriate,117 including to 

improve the quality and completeness 

of SLATE data, and that any such efforts 

would be subject to a separate proposed 

rule change filed with the Commission 

and subject to notice and comment.118

The data elements required to be 

included in SLATE reports are 

consistent with the data elements 

required to be reported pursuant to Rule 

10c–1a. Further, as discussed below, in 

Part III.A.3, the data element concerning 

the unique identifier assigned to the 

Covered Securities Loan by the Covered 

Person responsible for reporting the 

loan to SLATE is consistent with Rule 

10c–1a. The Proposal is reasonably 

designed to facilitate the collection of 

loan information consistent with Rule 

10c–1a. FINRA’s inclusion of the data 

elements in proposed Rules 6530(a)(2) 

and 6530(b)(2) is reasonably designed to 

facilitate the timely implementation of 

SLATE while helping to ensure the 

collection of data elements required to 

be reported pursuant to Rule 10c–1a(c) 

through (e) and the publication of data 

required pursuant to Rule 10c–1a(g). 

2. Modifiers and Indicators Not 

Included in Rule 10c–1a 

Commenters identified modifiers and 

indicators in the proposed rule change, 

as originally proposed in the Notice, as 

data elements that they stated were not 

specified in Rule 10c–1a: (1) Exclusive 

Arrangement; (2) Loan to Affiliate; (3) 

Unsettled Loan; (4) Terminated Loan; 

(5) Rate or Fee Adjustment; and (6) 

Basket Loan.119 Some commenters 

stated that the additional data and 

information requirements that are not 

specifically mentioned in Rule 10c–1a 

should be removed.120

Some commenters stated that the 

Loan to Affiliate indicator would not 

provide useful information and could 

potentially expose confidential 

information.121 Some commenters 

stated that the intermediary negotiating 

a loan may not be aware of an affiliate 

relationship between the borrower and 

lender, requiring additional resources to 

monitor whether an affiliate 

relationship was established.122 Another 

commenter stated that, because 

requiring the reporting of the Loan to 

Affiliate indicator ‘‘may be costly’’ and 

require ‘‘additional resources’’ for 

compliance, this proposed requirement 

‘‘at least warrants a cost-benefit 

analysis.’’ 123 One commenter stated that 

the inclusion of the Unsettled Loan 

indicator will greatly increase reporting 

complexity and increase the odds that 

reported data will be ‘‘unclear or 

confusing.’’ 124 The commenter stated 

that the Unsettled Loan indicator is 

unnecessary because, according to the 

commenter, it is ‘‘generally accepted 

market practice to cancel loans that 

remain unsettled’’ and because the 

cancelation of a previously reported 

trade is already contemplated elsewhere 

within the proposed rule change.125

In the Notice, FINRA stated that it 

planned to use the proposed modifiers 

for data validation purposes.126 One 

commenter stated that there is 

‘‘increased complexity’’ and that 

‘‘significantly increasing the number of 

reportable data fields, requiring the 

reporting of all intraday activity, and 

imposing a data validation process has 

created commercial opportunities for 

data service providers at the expense of 

market participants, and ultimately end 

investors.’’ 127 One commenter 

requested clarification of the use of the 

Rate or Fee Adjustment modifier for 

data validation and whether ‘‘FINRA 

will be performing validation testing to 

a defined tolerance level and a 

rejection/correction process.’’ 128 The 

commenter stated that, if FINRA were to 

perform such validations, ‘‘there is the 

potential for a large number of rejections 

that could result in a substantial amount 

of manual intervention.’’ 129

In response, Partial Amendment No. 1 

removed the originally proposed 

requirement to append the applicable 

modifiers or indicators as specified by 

FINRA to all SLATE reports: (1) 

Exclusive Arrangement; (2) Loan to 

Affiliate; (3) Unsettled Loan; (4) 

Terminated Loan; 130 (5) Rate or Fee 

Adjustment; and (6) Basket Loan. 

FINRA stated that it removed these 

modifiers and indicators in the interest 

of achieving the timely implementation 

of SLATE and the new Rule 6500 

Series.131 In proposing the inclusion of 

these modifiers and indicators in 

SLATE reports, FINRA stated that it 

intended to use the modifiers and 

indicators to provide regulators and the 

public with important information 

regarding the reported securities 

loan.132 In later removing this proposed 

requirement, FINRA stated its plans to 

(1) reassess the need for the data after 

gaining experience with the operation of 

SLATE and the initial data set and (2) 

revisit whether changes are appropriate. 

FINRA stated that any such efforts 

would be subject to a separate proposed 

rule change filed with the Commission 

and as such, subject to notice and 

comment.133 All of the modifiers and 

indicators listed above that commenters 

objected to as being beyond Rule 10c– 

1a were removed in Partial Amendment 

No. 1. Some commenters supported 

Partial Amendment No. 1’s removal of 

these modifiers and indicators.134

The Proposal is reasonably designed 

to facilitate the collection of loan 

information consistent with Rule 10c– 

1a. The list of data elements in proposed 

Rules 6530(a)(2) and 6530(b)(2) is 

reasonably designed to facilitate the 

timely implementation of SLATE while 

helping to ensure the collection of data 

elements required to be reported 

pursuant to Rule 10c–1a(c) through (e). 

3. Data Elements Modified by Partial 

Amendment No. 1 

The Commission received comments 

on the proposed rule change, as 

originally proposed in the Notice, 

addressing the reporting to SLATE of 

rebate rates based on a spread to a 

benchmark. Commenters requested 

flexibility to report the loan fees as a 

lending fee, a loan rebate rate, or a 

spread to a benchmark rate along with 

the associated benchmark rate, reducing 

the number of modifications that would 

be required to be reported as a result of 

fluctuations in the benchmark.135 Some 

commenters stated that FINRA should 

allow for the reporting of a spread and 


lotter on DSK11XQN23PROD with NOTICES1
1572 Federal Register / Vol. 90, No. 5 / Wednesday, January 8, 2025 / Notices 

136See SIFMA AMG Letter 2, at 7; ICI Letter, at 

7; FIF Letter, at 7. 

137 ISLA Americas Letter 1, at 11. 

138See ISLA Americas Letter 2, at 4–5. 

139See Partial Amendment No. 1, 89 FR 92230. 

FINRA stated that a Covered Person would be 

required to report a Loan Modification pursuant to 

proposed Rule 6530(b)(2) in the event of a change 

to the negotiated spread or to the identity of the 

benchmark or reference rate. Partial Amendment 

No. 1, 89 FR 92230 n.29. See Rule 10c–1a Adopting 

Release, 88 FR 75672 (stating that if a registered 

national securities association (‘‘RNSA’’) chooses to 

allow market participants to report a spread and a 

benchmark, then no modification would be 

required to be reported from day to day unless there 

were a change in the negotiated spread or 

benchmark). 

140See FINRA Letter, at 8. 

141See Rule 10c–1a Adopting Release, 88 FR 

75669. 

142See Rule 10c–1a Adopting Release, 88 FR 

75668–71. 

143See, e.g., SIFMA Letter, at 3; ICI Letter, at 2. 

As originally proposed in the Notice, Rules 

6530(a)(2)(W) and 6530(b)(2)(A) would have 

required Covered Persons to report the unique 

internal identifier assigned to the covered securities 

loan. With respect to an allocation of an omnibus 

loan effected pursuant to an agency lending 

agreement, proposed Rules 6530(a)(2)(X) and 

6530(b)(2)(B) would have required Covered Persons 

to report the unique internal identifier for the 

associated omnibus loan. 

144See Partial Amendment No. 1, 89 FR 92231. 

FINRA stated that it had intended originally to use 

the reported information to identify where multiple 

loan reports were related to a single omnibus loan, 

thereby providing additional clarity in the loan 

activity statistics disseminated to the public and to 

improve the completeness of the audit trail 

available to regulators. Partial Amendment No. 1, 

89 FR 92231. 

145See Partial Amendment No. 1, 89 FR 92231. 

146See ISLA Americas Letter 2, at 5. 

147Partial Amendment No. 1, 89 FR 92231. 

148FINRA Letter, at 5. 

149See Rule 10c–1a Adopting Release, 88 FR 

75667 n.365. 

a benchmark rate because reporting 

benchmark rate changes would be 

onerous and costly and would not 

provide useful information.136 In 

addition, one commenter recommended 

that FINRA ensure that SLATE can 

accommodate negative rebates, stating 

that even for cash collateral loans, there 

may be scenarios where the loan is 

negotiated at a fee rather than a rebate 

(e.g., when a security is particularly 

hard to borrow).137

In response, Partial Amendment No. 1 

added proposed Rule 6530(a)(4) to 

permit Covered Persons to—in addition 

to reporting the rebate rate or lending 

fee or rate for a Covered Securities 

Loan—also report the spread and 

identity of the benchmark or reference 

rate for Covered Securities Loans that 

are priced based on a spread to a 

benchmark. Specifically, proposed Rule 

6530(a)(4)(B) provides that, where a 

rebate rate or lending fee or rate is 

determined based on a spread to a 

benchmark or reference rate, a Covered 

Person may report: (1) the rebate rate or 

lending fee or rate as of the date the 

Covered Securities Loan was effected; 

(2) the spread; and (3) the identity of the 

benchmark or reference rate. 

Alternatively, a Covered Person may 

report only the rebate rate or lending fee 

or rate. One commenter on Partial 

Amendment No. 1 supported proposed 

Rule 6530(a)(4).138

FINRA stated that this will provide 

Covered Persons with additional 

options regarding the manner in which 

they may report a rebate rate or lending 

fee or rate, and that these proposed 

amendments are appropriate to provide 

Covered Persons flexibility with how 

they must report the rebate rate or 

lending fee.139 FINRA stated that this 

flexibility should address commenters’ 

concern that Covered Persons would be 

required to report loan rate 

modifications when the rebate rate 

changes solely as a result of a change to 

the underlying benchmark rate (where 

there is no change in the negotiated 

spread or identity of the benchmark). To 

accommodate market practices and 

rebate rate variability, FINRA stated that 

it intends to accept negative values in 

the rebate rate field if the collateral type 

is reported as cash. SLATE’s validation 

logic will accept a wide range of values 

in the rebate rate/lending fee or rate 

fields, and SLATE will not reject reports 

because a cash collateral loan is 

reported with a negative rebate rate.140

Proposed Rule 6530(a)(4) (Reporting 

Loan Rates Based on a Spread to a 

Benchmark or Reference Rate) is 

reasonably designed to facilitate the 

collection of pricing information, which 

is a material term of a Covered 

Securities Loan.141 It also is consistent 

with Rule 10c–1a(c)(8).142 Proposed 

Rule 6530(a)(4) is reasonably designed 

to provide the flexibility that 

commenters requested while helping to 

ensure the collection of data elements 

required to be reported pursuant to Rule 

10c–1a(c) through (e). 

As discussed above in Part III.A.2, 

commenters stated that the internal loan 

and omnibus loan identifiers, as 

originally proposed in the Notice, 

extended beyond the data elements 

specified in Rule 10c–1a and increased 

the proposed rule change’s complexity 

and implementation burdens.143 In 

response, Partial Amendment No. 1 

removed these provisions.144 However, 

to allow FINRA to link same-day T+0 

reports that relate to the same Covered 

Securities Loan in fulfilling its data 

dissemination obligations under Rule 

10c–1a(g), Partial Amendment No. 1 

added proposed Rule 6530(a)(2)(U), 

which is a targeted provision providing 

that, where a Covered Person’s daily 

submission includes two or more 

reports related to the same Covered 

Securities Loan (e.g., an Initial Covered 

Securities Loan and a Loan Modification 

to terminate the Covered Securities 

Loan), and FINRA has not yet assigned 

a unique identifier to the Initial Covered 

Securities Loan, the Covered Person 

must report a unique identifier assigned 

to the Covered Securities Loan by the 

Covered Person responsible for 

reporting the loan to SLATE. FINRA 

stated that this requirement is limited to 

instances where a Covered Person’s 

daily submission includes two or more 

T+0 reports related to the same Covered 

Securities Loan—which is the 

circumstance that gives rise to the audit 

trail gap sought to be addressed by the 

requirement.145 Similarly, with respect 

to Loan Modifications, where a Covered 

Person’s daily submission includes two 

or more T+0 reports related to the same 

Covered Securities Loan, the Covered 

Person must report the identifier that 

was provided with respect to the 

associated same-day report for that 

Covered Securities Loan. One 

commenter supported proposed Rule 

6530(a)(2)(U).146

FINRA stated that, without a way to 

link such reports, it would be unable to 

accurately incorporate modifications 

into the daily loan statistics where 

FINRA cannot identify the amount of 

securities impacted by the 

modification.147 Further, it would be 

unable to determine the information 

necessary to incorporate the 

modification into the volume 

information described in proposed Rule 

6540(c)(1). FINRA stated that this 

requirement involving a unique 

identifier is appropriate and necessary 

in that it streamlines initial SLATE 

reporting requirements while 

continuing to allow FINRA to accurately 

record and disseminate information on 

transactions reported pursuant to Rule 

10c–1a. FINRA stated that this 

requirement is necessary to allow 

FINRA to link same-day reports that 

relate to the same Covered Securities 

Loan, which allows FINRA to accurately 

record transactions reported pursuant to 

Rule 10c–1a and to incorporate 

modifications into the daily loan 

statistics.148

Proposed Rule 6530(a)(2)(U) is 

reasonably designed to allow FINRA to 

link same-day reports that relate to the 

same Covered Securities Loan and 

accurately record transactions reported 

pursuant to Rule 10c–1a.149 The 

Proposal addresses comments that the 

originally proposed internal loan and 

omnibus loan identifiers reporting 


lotter on DSK11XQN23PROD with NOTICES1
Federal Register / Vol. 90, No. 5 / Wednesday, January 8, 2025 / Notices 1573 

150See Rule 10c–1a(g)(1)(i)(A), (g)(3). 

151See Rule 10c–1a Adopting Release, 88 FR 

75685. 

152See SIFMA Letter, at 3–4. 

153 ISLA Letter 1, at 7. See EquiLend Letter 2, at 

2; SIFMA AMG Letter 2, at 7. 

154SIFMA AMG Letter 2, at 7. 

155 ISLA Americas Letter 1, at 15. See ISLA 

Americas Letter 2, at 8. 

156FIF Letter, at 10. 157FINRA Letter, at 10. 158FINRA Letter, at 10 n.39. 159See 17 CFR 240.10c–1a(c)(1). 160See Rule 10c–1a Adopting Release, 88 FR 

75670–71. 161See S3 Partners Letter, at 2. 162S3 Partners Letter, at 2–3. 

163See, e.g., 17 CFR 240.10c–1a(d)(1), (d)(2). 

164See Form Letter D; Letter from Freddy Lo 

(August 9, 2024); Letter from Jane Plumberg 

(September 10, 2024); Letter from Traci Olafson 

(September 12, 2024); Letter from Anonymous 

(September 16, 2024). 

165Letter from Jennifer (May 15, 2024). 

166See Rule 10c–1a Adopting Release, 88 FR 

75715. 

167 ISLA Letter 1, at 9. The proposed FINRA rules 

do not use the acronym ‘‘UTI,’’ which the 

Continued 

requirements are not included in Rule 

10c–1a while helping to ensure the 

collection of data elements required to 

be reported pursuant to Rule 10c–1a(c) 

through (e) and the publication of data 

required by Rule 10c–1a(g). Rule 10c– 

1a(g) requires that an RNSA, as soon as 

practicable, and not later than the 

morning of the business day after the 

covered securities loan is effected, 

assign a unique identifier to the covered 

securities loan and make certain 

information publicly available.150 In 

adopting Rule 10c–1a, the Commission 

stated that the assignment of unique 

identifiers is necessary for an RNSA to 

easily track certain covered securities 

loans and facilitate the identification 

and reporting of any subsequent 

modifications.151 Although the data 

element in proposed Rule 6530(a)(2)(U) 

does not mirror a particular data 

element included in Rule 10c–1a, as one 

commenter stated,152 its reporting is 

necessary for FINRA to accurately 

record, incorporate, and disseminate 

modifications to daily loan statistics to 

fulfill the requirements of Rule 10c– 

1a(g). The Proposal is reasonably 

designed to facilitate the collection and 

dissemination of loan information 

consistent with Rule 10c–1a. 

4. Data Elements Not Modified by 

Partial Amendment No. 1 

One commenter stated that the 

proposed data element concerning the 

LEI of the issuer should be removed or 

made optional to include in a SLATE 

report because, according to the 

commenter, issuer LEIs are not easily 

accessible and are not always 

available.153 Another commenter stated 

that it would be ‘‘highly costly’’ for 

market participants to build out their 

systems to obtain LEI information (as 

compared to using existing identifiers) 

because LEI information is ‘‘not 

available to market participants in a 

systematic way.’’ 154 One commenter 

stated that it should be optional to use 

the LEI of a ‘‘third-country issuer’’ (i.e., 

a non-European Union (‘‘EU’’) issuer) 

because ‘‘a large percentage of thirdcountry issuers have not obtained 

LEIs.’’ 155 Another commenter requested 

that FINRA clarify whether a Covered 

Person would be permitted to report an 

issuer’s LEI even if such LEI has 

lapsed.156

In response, FINRA stated that the 

comments regarding the reporting of an 

issuer’s LEI, if the issuer has a nonlapsed LEI, are examples of 

requirements that are established 

directly by Rule 10c–1a and cannot be 

amended by FINRA.157 FINRA also 

stated that proposed Rule 

6530(a)(2)(A)’s requirement to report the 

LEI of an issuer, if non-lapsed, mirrors 

the requirement in Rule 10c–1a(c)(1).158

The Commission agrees that this 

proposed requirement that the LEI of the 

issuer must be included in a SLATE 

report if the issuer has a non-lapsed LEI 

is consistent with Rule 10c–1a(c)(1). 

FINRA’s proposed limitation for SLATE 

regarding the LEI of an issuer, which 

requires reporting only if the issuer has 

a non-lapsed LEI (i.e., instead of 

including lapsed LEIs, too), is consistent 

with the requirements of Rule 10c– 

1a(c)(1).159 The reporting of the issuer’s 

LEI, to the extent the issuer has a nonlapsed LEI, facilitates the identification 

of the security about which the Covered 

Securities Loan information is being 

provided. The proposed inclusion of an 

issuer’s LEI, if the issuer has a nonlapsed LEI, is reasonably designed to 

facilitate the collection and 

dissemination of loan information 

consistent with Rule 10c–1a.160

One commenter recommended that, 

as opposed to each SLATE reporter 

tracking the status of a Covered 

Securities Loan, the SLATE system 

‘‘should perform the calculations of loan 

status’’ (e.g., Initial Covered Securities 

Loan, Loan Modification, pre-existing 

Loan Modifications) and other derived 

information, centrally.161 This 

commenter stated that ‘‘[c]entralization 

within SLATE of these functions should 

not only reduce costs but also increase 

data quality.’’ 162 The commenter’s 

suggestion that SLATE should ‘‘perform 

the calculations of loan status’’ would 

require the daily reporting of the full list 

of loan positions, including those that 

were effected prior to SLATE 

implementation, and those that have not 

changed. Such information is not 

included in the securities loan 

information that is required to be 

reported pursuant to Rule 10c–1a nor 

did FINRA include it in its proposal. As 

discussed above, in Parts III.A.1 and 

III.A.2, the Proposal aligns the loan 

information reported to SLATE with the 

data elements in Rule 10c–1a(c) through 

(e) and is reasonably designed to 

facilitate the timely implementation of 

SLATE while helping to ensure the 

collection of data elements required to 

be reported pursuant to Rule 10c–1a(c) 

through (e). Rule 10c–1a requires, 

among other things, that Covered 

Persons provide to FINRA specified 

loan information that relates to the loan 

status.163 Further, the reporting of loan 

information as it relates to loan status is 

necessary for FINRA to link reports and 

disseminate volume information as is 

required in Rule 10c–1a(g)(5). The 

Proposal, which requires Covered 

Persons to track the status of a reported 

Covered Securities Loan, is reasonably 

designed to facilitate the collection and 

dissemination of loan information 

consistent with Rule 10c–1a. 

Some commenters stated, without 

providing any specificity, that ‘‘broader 

transparency measures’’ than those 

required by Rule 10c–1a are necessary 

and beneficial to the market.164

Rule 10c–1a sets forth a list of 

specified loan information that Covered 

Persons must report and that FINRA 

must collect and make publicly 

available. Further, the Commission also 

agrees with the comment discussed 

above that the proposed rule change 

will ‘‘aid in the protection of investors 

by ensuring they are appropriately 

informed about the terms of securities 

loans and the parties involved’’ and that 

the proposed ‘‘requirement to report 

comprehensive data elements will 

contribute to a fair and orderly 

market.’’ 165 The Proposal’s list of 

required data elements is appropriately 

tailored to help increase the 

transparency of information available to 

brokers, dealers, and investors with 

respect to the loan or borrowing of 

securities consistent with the 

transparency goals of Rule 10c–1a.166

5. Requests for Clarification 

One commenter on the proposed rule 

change, as originally proposed in the 

Notice, requested confirmation whether, 

if FINRA does not generate a ‘‘UTI’’ for 

a Covered Securities Loan, the Covered 

Person responsible for reporting it 

would be required to generate a UTI.167


lotter on DSK11XQN23PROD with NOTICES1
1574 Federal Register / Vol. 90, No. 5 / Wednesday, January 8, 2025 / Notices 

commenter did not define but may refer to the term 

‘‘unique transaction identifier’’ and, under the 

proposed rule change, as originally proposed in the 

Notice, the ‘‘unique internal identifier assigned to 

the Covered Securities Loan by the Covered Person 

responsible for reporting the loan to SLATE.’’ 

Notice, 89 FR 38207, 39209. 

168 ISLA Letter 1, at 9. 

169 ISLA Letter 1, at 9. Another commenter 

recommended that FINRA ‘‘assign a Submission 

Unique Identifier based on the concatenation of 

fields in the full data inventory file that will 

uniquely identify a submission.’’ S3 Partners Letter, 

at 3. As discussed in the Rule 10c–1a Adopting 

Release, it is appropriate to allow the administrative 

details of the process of assigning a unique 

identifier under Rule 10c–1a to be left to the 

discretion of an RNSA. See Rule 10c–1a Adopting 

Release, 88 FR 75685. 

170See Rule 10c–1a Adopting Release, 88 FR 

75685. 

171 ISLA Americas Letter 1, at 17. Other 

commenter letters provided similar comments on 

Partial Amendment No. 1. See ISLA Americas 

Letter 2, at 7; SIFMA and SIFMA AMG Letter, at 

7 (providing an alternative that the SLATE system 

could open at 6:00:00 a.m. ET). 

172 ISLA Americas Letter 1, at 17. 

173See FIF Letter, at 4–5 (stating that SLATE 

should accept files until 11:59 p.m. ET); EquiLend 

Letter 2, at 1–2 (stating that the reporting deadline 

should be extended to 8:30 p.m. ET for Reporting 

Agents to allow for additional time to collect and 

prepare Covered Persons’ data). 

174See FIF Letter, at 4. 

175FINRA Letter, at 9 n.34. 

176See ISLA Americas Letter 2, at 7. 

177See SIFMA and SIFMA AMG Letter, at 7. 

178See, e.g., Rule 10c–1a Adopting Release, 88 FR 

75682, 75685; FINRA Rule 6730(a); FINRA Rule 

6273. 

179See EquiLend Letter, at 1; FIF Letter, at 4–5. 

180See FIF Letter, at 5. 

181See Partial Amendment No. 1, 89 FR 92232. 

182See, e.g., EquiLend Letter, at 1; FIF Letter, at 

4–5. 

183Rule 10c–1a Adopting Release, 88 FR 75648 

n.72. FINRA stated that, given the operation of the 

securities lending market, including that many 

loans will not be finalized until after the traditional 

4:00 p.m. ET close of the U.S. equities markets, 

FINRA does not believe it would be appropriate to 

move the cut-off time for same-day reporting to 4:00 

p.m. ET. FINRA also stated that the fixed income 

markets generally have later trading hours, and the 

same-day reporting cut-off time for transactions in 

many TRACE-eligible securities is 6:15:00 p.m. ET. 

FINRA Letter, at 9 n.34. 

The commenter also stated that, under 

the EU’s Securities Finance Transaction 

Regulation (‘‘SFTR’’), firms agree which 

party will be responsible for generating 

and distributing the UTI prior to a 

trade.168 The commenter recommended 

that FINRA ‘‘follow the SFTR waterfall 

protocol, where possible for generation 

and distribution of UTI’s, as many firms 

will already be familiar with this 

method for the purposes of reporting 

their EU securities loans.’’ 169

As discussed above, proposed Rule 

6530(a)(2)(U) would provide that, where 

a Covered Person’s daily submission 

includes two or more reports related to 

the same Covered Securities Loan for 

which FINRA has not yet assigned a 

unique loan identifier, the Covered 

Person must report a unique identifier 

assigned to the Covered Securities Loan 

by the Covered Person responsible for 

reporting the loan to SLATE. This is the 

only scenario in which the Covered 

Person is responsible for generating and 

reporting a unique loan identifier. In 

response to the commenter’s suggestion 

that FINRA follow the SFTR waterfall 

protocol, the assignment of a unique 

identifier may be appropriate for 

consistency with FINRA’s rules and 

systems, even if a Covered Securities 

Loan already has an identifier that is 

reported to the SFTR.170 FINRA is 

required by Rule 10c–1a(g)(1) to assign 

a unique identifier to each covered 

securities loan. Proposed Rule 

6530(a)(2)(U) is reasonably designed to 

facilitate the dissemination of accurate 

loan information consistent with Rule 

10cndash;1a(g). 

B. Timing for SLATE Reports 

One commenter on the proposed rule 

change, as originally proposed in the 

Notice, recommended that ‘‘FINRA 

develop the SLATE system so that it can 

accept files transmitted outside of [the 

SLATE system] hours for processing the 

following business day.’’ 171 The 

commenter stated that restricting 

SLATE file submissions to U.S. hours, 

given the ‘‘extra-territorial scope’’ of 

Rule 10c–1a, could cause compliance 

difficulties because firms have staff 

located outside of the U.S.172 Other 

commenters also recommended an 

expansion of the SLATE reporting hours 

in the proposed rule change, as 

originally proposed in the Notice.173

One commenter asked whether the 

SLATE system would provide feedback 

outside of the SLATE system hours.174

In response, Partial Amendment No. 1 

extended the reporting deadline to 

11:59:59 p.m. ET and made a 

corresponding change to the definition 

of ‘‘SLATE System Hours’’ in proposed 

Rule 6510 to specify that the SLATE 

system is open through 11:59:59 p.m. 

ET. FINRA stated that the extension of 

SLATE System Hours is appropriate to 

provide additional time to process 

SLATE submissions at the end of the 

day. FINRA stated that, while the 

SLATE system will provide reporters 

feedback on submissions that are 

submitted during SLATE System Hours, 

the SLATE system will not accept 

reports submitted after the close of the 

SLATE system.175 One commenter on 

Partial Amendment No. 1 stated that the 

extension of the SLATE System Hours 

will ease the reporting burden on 

covered firms.176 Another commenter 

on Partial Amendment No. 1 stated that 

it appreciates that FINRA extended the 

cut-off time for SLATE reports to be 

filed.177 The Proposal’s timing 

requirements for filing a SLATE report 

regarding an Initial Covered Securities 

Loan are reasonably designed to 

facilitate the collection of transaction 

data. FINRA’s response to the comments 

regarding the extension of SLATE 

System Hours to provide additional 

time to process SLATE submissions, as 

well as provide reporters feedback on 

such submissions, at the end of the day, 

is reasonable and appropriate, as well as 

consistent with Rule 10c–1a’s end-ofday reporting requirements for covered 

securities loans. Additionally, the 

Proposal’s timing requirements for filing 

a SLATE report, including those with 

respect to filing a SLATE report outside 

of SLATE System Hours, are consistent 

with FINRA’s experience in establishing 

and maintaining systems that are 

designed to capture transaction 

reporting.178

Some commenters stated that the 

originally proposed 7:45:00 p.m. ET cutoff time for same-day reporting would 

not capture certain end-of-day activity, 

which would make end of day processes 

challenging.179 One commenter stated 

that the cut-off time for same-day 

reporting should be moved up to 4:00 

p.m. ET to align with the ‘‘close of 

trading’’ such that loans effected after 

4:00 p.m. would not need to be reported 

until the next business day.180

In response, Partial Amendment No. 1 

changed the reporting cut-off time in 

proposed Rule 6530(a)(1)(A) and 

(b)(1)(A) to 7:00:00 p.m. ET. FINRA 

stated that the modification of the 

proposed loan cut-off time from 7:45:00 

p.m. ET to 7:00:00 p.m. ET would 

provide additional time to report loans 

that are effected near the end of the day, 

including time to complete any 

necessary security set up in SLATE.181

The Proposal’s inclusion of 7:00:00 p.m. 

ET instead of 4:00 p.m. ET, as the 

commenter suggested, for the cut-off 

time for same-day reporting is 

reasonable because it provides, in 

response to comments,182 additional 

time to process submissions to SLATE 

(that contain Rule 10c–1a information) 

and to provide feedback on such 

submissions, at the end of the day.183

Thus, the Proposal is reasonably 

designed to facilitate the collection of 

loan information consistent with Rule 

10c–1a. 


lotter on DSK11XQN23PROD with NOTICES1
Federal Register / Vol. 90, No. 5 / Wednesday, January 8, 2025 / Notices 1575 

184 ISLA Letter 1, at 4. 

185 ISLA Letter 1, at 3–4. 

186 ISLA Americas Letter 1, at 6. 

187 ISLA Americas Letter 1, at 6. 

188 ISLA Americas Letter 1, at 6. 

189See, e.g., Rule 10c–1a Adopting Release, at 88 

FR 75664. 

190See Rule 10c–1a Adopting Release, 88 FR 

75681. 

191See Rule 10c–1a Adopting Release, 88 FR 

75666, 75666 n.358. 

192See, e.g., Rule 10c–1a Adopting Release, 88 FR 

75680–81. 

193See Rule 10c–1a Adopting Release, 88 FR 

75680. 

194See FIF Letter, at 4. 

195See FIF Letter, at 4. 

196See Rule 10c–1a Adopting Release, 88 FR 

75666. 

197See Rule 10c–1a Adopting Release, 88 FR 

75681. 

198See FIF Letter, at 4. 

199See SIFMA and SIFMA AMG Letter, at 4. 

200SIFMA and SIFMA AMG Letter, at 4. 

201See Rule 10c–1a Adopting Release, 88 FR 

75662, 75662 n.288, 75717. 

C. When and How Loan Information Is 

Reported 

1. Initial Covered Securities Loans 

One commenter on the proposed rule 

change, as originally proposed in the 

Notice, requested a ‘‘clear and concise’’ 

definition of the term ‘‘effected.’’ 184 The 

commenter stated that it would like to 

understand if the term ‘‘effected’’ means 

(1) ‘‘an ‘event date’ file i.e., the event 

date that the trade took place,’’ (2) ‘‘an 

execution timestamp that would carry 

both date and time,’’ or (3) the date 

when a trade is verbally agreed upon.185

Another commenter recommended that 

the ‘‘interpretation for time ‘effected’ 

and ‘agrees to a covered securities loan’ 

is prior to loan settlement but only once 

all contractual terms, including the 

identity of the lender, are agreed.’’ 186

The commenter further stated that, until 

all contractual terms of a securities loan, 

including the final details related to the 

identity of the lender, are agreed 

between the lending agent, as agent for 

the lender and the borrower, the trading 

desk will view the borrower’s offer 

discussions as a ‘‘potential loan—not an 

actual loan’’ and will book the securities 

loan into its system when all contractual 

terms are agreed upon.187 This 

commenter stated that ‘‘[o]nly when the 

securities loan is booked into the 

lending agent’s trading system, will the 

lending agent view it to be ‘effected’— 

an actual securities loan pending 

settlement.’’ 188 Whether a securities 

loan must be reported as an Initial 

Covered Securities Loan will depend 

upon the facts and circumstances, 

including the structure of such lending 

program.189

The requirement for covered persons 

to report to FINRA, by the end of the 

day on which a covered securities loan 

is effected, specified loan information— 

which includes, among others, the date 

the covered securities loan was effected, 

the time the covered securities loan was 

effected, and the name of the platform 

or venue where the covered securities 

loan was effected—is established by 

Rule 10c–1a(c)(3)–(c)(5). In adopting 

Rule 10c–1a, the Commission stated that 

whether or not a loan has been effected 

is a legal/factual question, and a delay 

in settlement (or if one of the agreed to 

loan terms is modified the next day) 

does not impact the initial requirement 

to report all loans (and modifications) 

within the required timeframes under 

Rule 10c–1a.190

Further, the Commission stated that 

use of the term ‘‘agrees to’’ in the 

definition of covered person under Rule 

10c–1a clarifies that covered securities 

loans are required to be reported after 

the parties agree to the loan, which is 

before settlement.191 Parties to a 

securities loan may agree to some of the 

basic terms initially, but some or many 

of the securities loan terms may not be 

agreed to (or may be updated 

throughout the day and, thus, not 

finalized) until the end of the day.192

The Proposal’s requirement for end-ofday reporting after a Covered Securities 

Loan has been ‘‘effected’’ is consistent 

with the requirement in Rule 10c–1a(c) 

that a covered person shall provide 

specified loan information to FINRA by 

the end of the day on which the covered 

securities loan is effected. The 

Proposal’s end-of-day reporting 

requirement, therefore, is reasonably 

designed and is appropriately balanced 

to facilitate the collection of timely 

information while helping to prevent an 

excessive number of incomplete or 

slightly modified reports that otherwise 

would occur throughout the day yet 

without providing sufficient 

incremental value.193

One commenter stated that a Covered 

Person should instead be required to file 

a SLATE report only for a loan that has 

been settled, whereby the Covered 

Person would report the date and time 

that it recorded the Covered Securities 

Loan in its books and records.194 The 

commenter stated that in many cases 

where a lending agent is involved, the 

parties to the loan do not know the 

identity of the counterparty until the 

loan is settled.195

Consistent with the requirements of 

Rule 10c–1a, an Initial Covered 

Securities Loan is required to be 

reported prior to settlement.196 As 

discussed above, in this Part, settlement 

does not impact the initial requirement 

to report all loans (and modifications) 

within the required timeframes under 

Rule 10c–1a.197 With respect to the 

comment that the parties to the loan do 

not know the identity of the 

counterparty until the loan is settled,198

proposed Rule 6530(a)(2)(N) uses the 

qualifier ‘‘if known’’ with respect to the 

requirement for a SLATE report for an 

Initial Covered Securities Loan to 

include the legal name of each party to 

the Covered Securities Loan (other than 

the customer from whom a Broker or 

Dealer borrows fully paid or excess 

margin securities pursuant to Rule 

15c3–3(b)(3)). FINRA’s use of the 

qualifier ‘‘if known’’ in proposed Rule 

6530(a)(2)(N) mirrors that used in Rule 

10c–1a(e)(1), which concerns the legal 

name of each party to a covered 

securities loan. Proposed Rule 

6530(a)(2)(N), therefore, is reasonably 

designed to facilitate the collection of 

loan information consistent with Rule 

10c–1a(e)(1). 

One commenter on Partial 

Amendment No. 1 stated that unsettled 

loans are not transactions because no 

loan transaction ‘‘occurs’’ and that, 

therefore, unsettled loans should not be 

required to be reported to SLATE.199

The commenter stated that a Covered 

Person may have to incur incremental 

costs to report unsettled loans to 

SLATE, given that these 

‘‘unconsummated transactions’’ may not 

be captured on the books and records of 

the Covered Person ‘‘comparably to how 

consummated loan transactions are 

recorded.’’ 200

The term ‘‘Covered Securities Loan’’ 

under proposed Rule 6510(j) mirrors the 

definition under Rule 10c–1a, which 

means a transaction in which any 

person on behalf of itself or one or more 

other persons lends a reportable security 

to another person. In adopting Rule 

10c–1a, the Commission stated that the 

reporting requirement did not require 

‘‘that the loan be settled’’ and also 

acknowledged that various entities will 

incur costs in developing recording and 

reporting systems to comply with Rule 

10c–1a.201 The Proposal’s requirement 

regarding the reporting of unsettled 

loans that are Covered Securities Loans 

is consistent with Rule 10c–1a. The 

Proposal is reasonably designed to 

facilitate the collection of loan 

information consistent with Rule 10c– 

1a. 

2. Loan Modifications 

Proposed Rules 6530.01 (Intraday 

Loan Modifications) and 6530.02 

(Changes to the Parties to a Covered 

Securities Loan), as originally proposed 

in the Notice, included a requirement 


lotter on DSK11XQN23PROD with NOTICES1
1576 Federal Register / Vol. 90, No. 5 / Wednesday, January 8, 2025 / Notices 

202See ISLA Americas Letter 1, at 6–8; ISLA 

Letter 1, at 4; SIFMA AMG Letter 1, at 2; SIFMA 

AMG Letter 2, at 2–4; SIFMA Letter, at 4–6; 

Associations Collective Letter, at 2; ICI Letter, at 5– 

7; FIF Letter, at 2–3; Robinhood Letter, at 2. See also 

S3 Partners Letter, at 2. 

203See ISLA Americas Letter 1, at 8. 

204 ISLA Americas Letter 1, at 8. See ICI Letter, 

at 6–7; Robinhood Letter, at 2. 

205Associations Collective Letter, at 2. 

206See ISLA Americas Letter 1, at 17; ISLA 

Americas Letter 2, at 8. 

207See Partial Amendment No. 1, 89 FR 92229. 

208See Partial Amendment No. 1, 89 FR 92229. 

209See Partial Amendment No. 1, 89 FR 92229. 

See also FINRA Letter, at 5. 

210See ISLA Americas Letter 2, at 3–4; SIFMA 

and SIFMA AMG Letter, at 2. 

211See Rule 10c–1a Adopting Release, 88 FR 

75671. 

212See ICI Letter, at 8. See also FIF Letter, at 3. 

213FINRA Letter, at 6 (citing Rule 10c–1a 

Adopting Release, 88 FR 75679–80). 

214FINRA Letter, at 6 (citing Rule 10c–1a 

Adopting Release, 88 FR 75679–80). 

215FINRA Letter, at 6 (citing Rule 10c–1a 

Adopting Release, 88 FR 75681). 

216 ISLA Letter 1, at 9–10 (suggesting that 

reporting ‘‘lifecycle events’’ be done in 

‘‘chronological order for ease’’). 

217See FINRA Letter, at 6. 

218See, e.g., Rule 10c–1a Adopting Release, 88 FR 

75672. 

219See Rule 10c–1a Adopting Release, 88 FR 

75672. 

220See Rule 10c–1a Adopting Release, 88 FR 

75672. 

221See ISLA Letter 1, at 9–10. 

222See ISLA Letter 1, at 9. 

that all intraday changes to a Covered 

Securities Loan be reported as Loan 

Modifications, which several 

commenters stated is inconsistent with 

the requirements of Rule 10c–1a.202 One 

commenter stated that the proposed rule 

change’s inclusion of intraday activity 

as required reporting would be 

misleading to the public.203 One 

commenter stated that the intraday 

reporting requirements in the proposed 

rule change, as originally proposed in 

the Notice, are ‘‘costly and 

burdensome’’ and that ‘‘the costs and 

complexity of reporting these intraday 

loan modifications greatly undermines 

any purported utility.’’ 204 Another 

commenter stated that it is not clear that 

FINRA has ‘‘adequately analyzed the 

costs and benefits’’ of the proposed rule 

change’s intraday reporting 

requirement.205 One commenter 

recommended consolidating Loan 

Modification and Loan Correction 

events, as well as Loan Cancellation and 

Delete Loan events, stating that tracking 

multiple event types would be complex 

and burdensome.206

In response, FINRA stated that 

Covered Persons must report Loan 

Modifications consistent with Rule 10c– 

1a.207 FINRA stated that proposed Rule 

6530 is not intended to alter when loan 

events are required to be reported as 

Loan Modifications (including 

terminations) or when new loans must 

be reported under Rule 10c–1a.208 To 

the extent a loan event is not reportable 

under Rule 10c–1a, there would 

likewise be no SLATE reporting 

obligations. FINRA stated that, to make 

this clearer, Partial Amendment No. 1 

removed originally proposed Rules 

6530.01 (Intraday Loan Modifications) 

and 6530.02 (Changes to the Parties to 

a Covered Securities Loan).209 Some 

commenters supported Partial 

Amendment No. 1’s removal of these 

two originally proposed provisions.210

The Commission agrees that the 

Proposal’s inclusion of an end-of-day 

reporting requirement for Initial 

Covered Securities Loans and Loan 

Modifications is consistent with the 

requirements of Rule 10c–1a. Consistent 

with Rule 10c–1a, which requires the 

individual reporting of the specific 

modification and the specific data 

element being modified,211 under 

proposed Rule 6510(e), the term 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). This 

definition is reasonably designed to 

facilitate the collection of Loan 

Modification information and is 

consistent with the requirements of 

paragraphs (d)(1)(ii) and (d)(2) of Rule 

10c–1a, which require the reporting of 

modified data elements by the end of 

the day on which a covered securities 

loan is modified. 

Commenters on the proposed rule 

change, as originally proposed in the 

Notice, recommended that FINRA 

clarify that loan information concerning 

intraday events is not required to be 

reported until all terms of a loan are 

agreed upon.212 In response, FINRA 

stated its understanding that, based on 

the Rule 10c–1a Adopting Release, Loan 

Modifications are required to be 

reported to an RNSA pursuant to Rule 

10c–1a once the Loan Modification is 

finalized, and that indicative terms are 

not reportable.213 FINRA stated that the 

Rule 10c–1a Adopting Release explains 

that Rule 10c–1a’s ‘‘final end-of-day 

requirement was intended to better 

capture final loan information.’’ 214

FINRA also stated that whether or not 

a loan has been effected is a legal/ 

factual question and that Covered 

Persons must report loan events, 

including Loan Modifications, in a 

manner consistent with Rule 10c–1a.215

FINRA’s response regarding the 

reporting of information concerning 

Loan Modifications, as well as the 

Proposal’s requirement for the reporting 

of information concerning Loan 

Modifications, are consistent with the 

requirements of Rule 10c–1a. Further, 

the Proposal is reasonably designed to 

facilitate the collection of information 

regarding Loan Modifications consistent 

with Rule 10c–1a. 

One commenter on the proposed rule 

change, as originally proposed in the 

Notice, requested clarification as to 

whether intraday reporting of ‘‘lifecycle 

events’’ is required, and whether there 

is a specific sequence in which firms 

must report.216 As discussed above, in 

this Part, FINRA stated that Covered 

Persons must report Loan Modifications 

consistent with Rule 10c–1a.217 The 

Proposal is consistent with Rule 10c– 

1a’s requirement for the end-of-day 

reporting of same-day loan 

modifications. In adopting Rule 10c–1a, 

the Commission stated that whether 

there is a change that will trigger the 

reporting of a Loan Modification data 

element may involve a facts-andcircumstances-based determination.218

There may be certain lifecycle events in 

the course of an open-ended loan and 

that some market participants may view 

as a modification to an existing loan that 

other market participants might view as 

a termination of an existing loan and the 

entry into a new loan.219 In these cases, 

the Covered Person (or Reporting Agent) 

may elect to report the required 

information as either a termination (and 

therefore a modification) of an existing 

loan and a creation of a new loan, or as 

two modifications to an open-ended 

loan.220 SLATE does not impose a 

timing sequence for the reporting of 

Loan Modifications that are effected on 

the same day, as the commenter 

asked,221 and the Proposal would not 

prohibit a Covered Person (or its 

Reporting Agent) from reporting Loan 

Modifications in chronological order so 

long as such reporting is done in 

accordance with the Proposal and Rule 

10c–1a. 

One commenter stated that it sought 

clarity as to whether a market 

participant who ‘‘books a loan’’ that is 

not reported ‘‘at the time,’’ and such 

loan is modified that same day, could 

report the Initial Covered Securities 

Loan along with all ‘‘subsequent 

lifecycle events,’’ at 6:00 p.m., by 

reporting the Initial Covered Securities 

Loan and Loan Modification.222

Proposed Rule 6530(a)(2)(U) and 

proposed Rule 6530(a)(b)(A) are 

designed to permit such reporting (i.e., 

reporting the Initial Covered Securities 

Loan along with all ‘‘subsequent 

lifecycle events,’’ at 6:00 p.m., by 

reporting the Initial Covered Securities 


lotter on DSK11XQN23PROD with NOTICES1
Federal Register / Vol. 90, No. 5 / Wednesday, January 8, 2025 / Notices 1577 

223See FINRA Letter, at 5. 

224 ISLA Americas Letter 1, at 8. 

225See Rule 10c–1a Adopting Release, 88 FR 

75681–82. 

226 ISLA Americas Letter 1, at 8. 

227See Rule 10c–1a Adopting Release, 88 FR 

75667 n.365 (describing Rule 10c–1a as allowing 

FINRA ‘‘the necessary flexibility to propose and 

implement rules regarding the format and manner 

with respect to the collection of information’’). 

228See Robinhood Letter, at 2. 

229Robinhood Letter, at 2. 

230See Rule 10c–1a Adopting Release, 88 FR 

75667 n.365. 231 ISLA Americas Letter 1, at 6. 232FIF Letter, at 6. 233 ICI Letter, at 7. See FIF letter, at 6 (requesting 

confirmation that an intermediary would not be 

required to report an omnibus transaction to SLATE 

and would report only finalized allocations). In 

response, FINRA cited the Rule 10c–1a Adopting 

Release, which states that ‘‘[w]hether the parties to 

a covered securities loan change for purposes of the 

reporting requirements under final Rule 10c– 

1a(e)(1) depends on how a pool or lending program 

is structured (e.g., whether the pool or lending 

program itself or the individual underlying 

participants are the party or parties identified as the 

lender for the loan).’’ Rule 10c–1a Adopting 

Release, 88 FR 75664 (citation omitted). 

234FINRA Letter, at 6. 235FINRA Letter, at 7. 236FINRA Letter, at 7 (citing Rule 10c–1a 

Adopting Release, 88 FR 75664). 

237See Rule 10c–1a Adopting Release, 88 FR 

75664. 

238See Rule 10c–1a Adopting Release, 88 FR 

75664. 

239 ISLA Letter 1, at 4. 

240 ISLA Letter 1, at 4. 

241 ISLA Letter 1, at 4. See S3 Partners Letter, at 

4. 

242 ISLA Letter 1, at 4–5. 

Loan and Loan Modification) while 

allowing FINRA to link same-day 

reports that relate to the same Covered 

Securities Loan, accurately record 

transactions reported pursuant to Rule 

10c–1a, and incorporate Loan 

Modification information into the daily 

loan statistics.223 The Proposal is 

reasonably designed to facilitate end-ofday reporting for same-day Initial 

Covered Securities Loans and Loan 

Modifications not previously reported 

consistent with Rule 10c–1a. 

One commenter suggested that, to 

differentiate from ‘‘other securities 

lending industry participants, such as 

prime brokers, engage[d] in intraday 

activities that could be reported as 

lifecycle events, . . . FINRA and the 

Commission . . . [should] consider the 

inclusion of a flag that identifies a party 

as a lending agent, in which case, such 

intraday lifecycle events would not 

need to be reported.’’ 224 As discussed 

above, in this Part, FINRA stated that 

Covered Persons must report Loan 

Modifications consistent with Rule 10c– 

1a.225 The commenter’s suggested flag is 

not required by Rule 10c–1a to be 

reported to an RNSA. FINRA’s decision 

not to include a flag that identifies a 

party as a lending agent, as suggested by 

the commenter,226 is consistent with 

Rule 10c–1a.227

Another commenter sought 

clarification on the ‘‘treatment of 

corporate actions’’ under the proposed 

rule change, as originally proposed in 

the Notice, where, according to the 

commenter, firms may need to adjust 

the terms of an existing Covered 

Securities Loan (e.g., during a tender 

offer).228 This commenter stated that 

FINRA should ‘‘propose specific 

guidelines that recognize such changes 

and adjustments and consider the utility 

to investors of reporting based on what 

may be outlier events and that may 

occur long after the actual lending 

activity,’’ without providing any 

specificity as to what the ‘‘guidelines’’ 

should address.229 FINRA’s decision not 

to include in the Proposal ‘‘specific 

guidelines,’’ as the commenter 

suggested, is reasonable because 

covered Persons must report Loan 

Modifications consistent with Rule 10c– 

1a, and Loan Modifications are required 

to be reported once they are finalized.230

The Proposal is reasonably designed to 

facilitate the reporting of Loan 

Modification information consistent 

with Rule 10c–1a(d). 

With regard to allocations of 

securities loans by lending agents, one 

commenter stated that, ‘‘until the 

reallocation is finalized, there is no 

utility to requiring a covered person to 

report potential loan modifications.’’ 231

Another commenter requested 

confirmation that an intermediary 

would not report a block (i.e., omnibus) 

transaction to SLATE and would instead 

report the allocations for the block 

transaction once the allocations have 

been finalized.232 One commenter stated 

that requiring the reporting of 

allocations of an omnibus loan 

contradicted the Commission’s decision 

in Rule 10c–1a ‘‘not to treat 

reallocations among a pooled loan’s 

underlying constituents as a new 

covered loan or as a modification.’’ 233

As discussed above, FINRA stated its 

understanding that, under Rule 10c– 

1a(d), loan modifications are required to 

be reported once they are finalized, and 

that indicative terms are not 

reportable.234 FINRA stated that, in the 

context of omnibus loans and 

reallocations, proposed Rule 6530 does 

not alter which entities must be 

reported as parties to a loan, whether a 

change to the parties to a loan triggers 

a reporting obligation, or whether such 

report must reflect a modification or a 

new loan (and therefore, also a 

termination of the prior loan); rather, 

these obligations are prescribed by Rule 

10c–1a as discussed in the Rule 10c–1a 

Adopting Release.235 FINRA stated its 

understanding that Rule 10c–1a 

generally requires that a change in the 

parties to a loan be reported as a 

termination of the prior loan and the 

initiation of a new loan (reflecting the 

new parties, if known).236 In adopting 

Rule 10c–1a, the Commission stated that 

whether a reallocation of a loan among 

participants in a lending program 

requires the reporting of a new covered 

securities loan depends upon the facts 

and circumstances, including the 

structure of such lending program.237

The Proposal’s information reporting 

requirements concerning omnibus loans 

that are Covered Securities Loans, by 

mirroring the requirements in Rule 10c– 

1a(e)(1), are reasonably designed to 

facilitate the collection of loan 

information consistent with Rule 10c– 

1a.238

Another commenter stated that the 

proposed rule change, as originally 

proposed in the Notice, would require 

that ‘‘all Partials and Full Returns to be 

checked for settlement first, prior to 

being reported.’’ 239 This commenter 

suggested to align SLATE with the 

SFTR, which the commenter stated 

‘‘only requests the final close out of a 

trade to be reported, i.e., under SFTR, 

partials only have to be reported on a 

contractual settlement basis as opposed 

to an actual settlement basis.’’ 240 The 

commenter stated that, under the 

proposed rule change, as originally 

proposed in the Notice, ‘‘market 

participants would have to consider 

how to monitor settlement separately to 

what they are reporting for regulatory 

purposes,’’ which the commenter stated 

would be challenging for systems from 

a books a records perspective.241 The 

commenter also stated that ‘‘[i]ncluding 

partials that follow the settlement 

driven reporting requirement i.e., the 

need to check for successful settlement 

prior to regulatory reporting, is going to 

create several challenges for market 

participants.’’ 242

As discussed above in Part III.A.1, 

Partial Amendment No. 1 removed the 

originally proposed requirement for the 

reporting of certain information, 

including the Unsettled Loan indicator, 

the expected settlement date for 

Covered Securities Loans, and the 

expected settlement date for 

modifications to the loan amount (if the 

expected settlement date is a date other 

than the date of the loan modification). 

FINRA stated that it eliminated the 

settlement-related elements in the 

interest of achieving the timely 


lotter on DSK11XQN23PROD with NOTICES1
1578 Federal Register / Vol. 90, No. 5 / Wednesday, January 8, 2025 / Notices 

243FINRA Letter, at 4. 

244See Rule 10c–1a Adopting Release, 88 FR 

75681. 

245See, e.g., ISLA Letter 1, at 4; S3 Partners 

Letter, at 4. 

246See SIFMA Letter, at 6. See also Robinhood 

Letter, at 2; SIFMA AMG Letter 2, at 3. 

247S3 Partners Letter, at 1. 

248See Rule 10c–1a Adopting Release, 88 FR 

75667 n.365. 

249See, e.g., Rule 10c–1a Adopting Release, 88 FR 

75682, 75685; FINRA Rule 6730. 

250See Rule 10c–1a Adopting Release, 88 FR 

75671. 

251MFA Letter, at 5. 

252See MFA Letter, at 5. 

253SIFMA Letter, at 8–9. 

254See FINRA Letter, at 9–10. 

255FINRA Letter, at 6–7. The Commission agrees 

with FINRA. See 17 CFR 242.204(b). 

256See Letter from Tony Holland, Director of 

Market Practice, International Securities Lending 

Association (December 20, 2024). 257See, e.g., Rule 10c–1a Adopting Release, 88 FR 

75658, 75661–67, 75689. 258Rule 10c–1a Adopting Release, 88 FR 75649. 259See Rule 10c–1a Adopting Release, 88 FR 

75666–67. 260See, e.g., SIFMA Letter, at 8; ISLA Letter 1, at 

2. 261Letter from Tony Holland, Director of Market 

Practice, International Securities Lending 

Association (July 16, 2024) (‘‘ISLA Letter 2’’), at 2– 

3. 

262 ISLA Letter 2, at 4–5. The acronym ‘‘SEDOL’’ 

stands for ‘‘Stock Exchange Daily Official List,’’ 

which is a list of security identifiers used in the 

United Kingdom and Ireland for clearing purposes. 

implementation of SLATE.243 FINRA 

also stated that it plans to reassess the 

need for some data after gaining 

experience with the operation of SLATE 

and the initial data set, and that any 

such efforts would be subject to a 

separate proposed rule change filed 

with the Commission and as such, 

subject to notice and comment. SLATE 

is designed to be consistent with Rule 

10c–1a, which imposes a unique and 

different regulatory regime from the 

SFTR, with differences in their 

underlying objectives.244 FINRA’s 

decision in the Proposal not to require 

the reporting of settlement-related data 

elements—the Unsettled Loan indicator, 

the expected settlement date for 

Covered Securities Loans, and the 

expected settlement date for 

modifications to the loan amount (if the 

expected settlement date is a date other 

than the date of the loan modification)— 

addresses comments concerning the 

potential need to monitor the settlement 

of Covered Securities Loans.245 Further, 

the Proposal is consistent with Rule 

10c–1a because above-mentioned 

settlement-related data elements are not 

required to be reported pursuant to Rule 

10c–1a(c) through (e). 

Commenters stated that the proposed 

rule change, as originally proposed in 

the Notice, should allow reporters to 

submit a single, consolidated daily file. 

One commenter stated that the proposed 

rule change should ‘‘implement the 

single, consolidated, end-of-day 

reporting requirement contemplated by 

SEC Rule 10c–1a.’’ 246 Another 

commenter recommended to allow 

reporters to submit a single daily file of 

all required elements associated with 

their current inventory’’ including 

‘‘every loan required to be reported 

including new and modified loans.’’ 247

FINRA’s decision not to accept SLATE 

reports in the form of a single daily file 

is reasonable . In adopting Rule 10c–1a, 

the Commission provided FINRA with 

the necessary flexibility to propose and 

implement rules regarding the format 

and manner with respect to the 

collection of information.248 As such, 

the Proposal’s requirements concerning 

the manner of reporting are consistent 

with FINRA’s experience in establishing 

and maintaining systems that are 

designed to capture transaction 

reporting 249 as well as the requirements 

of Rule 10c–1a.250 As discussed above, 

in Part III.C.2, the Proposal’s 

requirement for reporting information 

concerning Loan Modifications is 

consistent with the requirements of Rule 

10c–1a. 

D. Definitions 

One commenter stated that the 

proposed rule change, as originally 

proposed in the Notice, appears to 

sustain ‘‘the ongoing lack of clarity 

regarding whether certain uses of 

securities that are not documented or 

priced as securities loans in the market 

may nonetheless be reportable under 

Rule 10c–1a as ‘covered securities 

loans.’ ’’ 251 The commenter stated that 

rehypothecating shares to make delivery 

on short positions should not be treated 

as a Covered Securities Loan for 

purposes of Rule 10c–1a.252 Another 

commenter stated that the delivery by a 

broker-dealer of securities to settle a 

short sale—and the consequent carrying 

of a short position in a brokerage 

account—is not reportable under Rule 

10c–1a as a ‘‘covered securities 

loan.’’ 253

In response, FINRA stated that 

whether a particular transaction is a 

‘‘covered securities loan’’ is an example 

of an issue that is not related to 

determinations that FINRA has made 

regarding the proposed reporting 

requirements or dissemination 

provisions of SLATE.254 FINRA stated 

that these comments are addressed in 

the Rule 10c–1a Adopting Release. 

Further, FINRA stated that, with respect 

to a Covered Securities Loan used to 

close out a fail-to-deliver pursuant to 

Rule 204 of Regulation SHO, where the 

broker-dealer is complying by entering 

into a bona fide arrangement to borrow 

the security by no later than the 

beginning of regular trading hours on 

the settlement day following the 

settlement date in question, firms would 

view such loans as having been agreed 

to in the morning consistent with the 

timing parameters of Rule 204 of 

Regulation SHO (albeit that the loan is 

not required to be reported until the end 

of the day under Rule 10c–1a).255 One 

commenter on Partial Amendment No. 1 

sought clarity on whether certain 

conduct constitutes ‘‘effecting, 

accepting, or facilitating’’ a lending 

transaction.256

The Commission agrees with FINRA 

that the definition of ‘‘covered securities 

loan’’ is addressed by Rule 10c–1a(j)(2) 

and is discussed in the Rule 10c–1a 

Adopting Release.257 In adopting Rule 

10c–1a, the Commission stated that the 

definition of covered securities loan 

excludes the use of margin securities by 

a broker or dealer (e.g., rehypothecation) 

other than the lending of such margin 

securities by a broker or dealer, as well 

as a position at a clearing agency that 

results from certain central counterparty 

or central securities depository 

services.258 Because the definitions of 

Covered Securities Loan and Reportable 

Security in SLATE mirror the 

definitions of ‘‘covered securities loan’’ 

and ‘‘reportable security’’ in Rule 10c– 

1a, respectively, FINRA has reasonably 

set forth the scope of SLATE reports and 

distinguished Covered Securities Loans 

from other types of transactions that are 

not required to be reported.259 The 

definitions under the Proposal are 

reasonably designed to facilitate 

compliance with, and clarify the scope 

of, SLATE reporting consistent with 

Rule 10c–1a. 

Commenters on the proposed rule 

change, as originally proposed in the 

Notice, sought clarity on the 

jurisdictional scope of the proposed rule 

change, including the applicability to 

foreign entities and foreign securities.260

One commenter asked whether 

securities that are traded within the U.S. 

and have ‘‘ ‘F-share’ tickers’’ are 

Reportable Securities under Rule 10c– 

1a.261 With regard to foreign securities 

traded outside of the U.S., the 

commenter asked if a transaction would 

be reportable under Rule 10c–1a in the 

U.S. if the security has multiple 

SEDOLs/tickers, where only one of 

which is Consolidated Audit Trail 

(‘‘CAT’’) reportable, and the securities 

lending trade references one of the other 

SEDOLs/tickers (i.e., the foreign ticker 

traded on a foreign exchange, and thus 

not the ‘‘F-shares ticker’’).262


lotter on DSK11XQN23PROD with NOTICES1
Federal Register / Vol. 90, No. 5 / Wednesday, January 8, 2025 / Notices 1579 

263See FINRA Letter, at 9–10. 

264See 17 CFR 240.10c–1a(j)(3). 

265Rule 10c–1a Adopting Release, 88 FR 75689. 

266Rule 10c–1a Adopting Release, 88 FR 75689. 

267Rule 10c–1a Adopting Release, 88 FR 75689. 

268See EquiLend Letter 1, at 1. 

269EquiLend Letter 1, at 6. 

270See FINRA Letter, at 15 (citing Rule 10c–1a 

Adopting Release, 88 FR 75655). 

271See Rule 10c–1a Adopting Release, 88 FR 

75655. 

272See 17 CFR 240.10c–1a(a)(2); Rule 10c–1a 

Adopting Release, 88 FR 75655. 

273Rule 10c–1a Adopting Release, 88 FR 75655. 

274As originally proposed in the Notice, this 

provision was included as proposed Rule 

6530(d)(4). See supra Part II.C. 

275 ISLA Letter 1, at 3; ISLA Americas Letter 1, 

at 15; ISLA Americas Letter 2, at 9; ICI Letter, at 

8. 

276 ICI Letter, at 8; ISLA Americas Letter 1, at 15; 

ISLA Americas Letter 2, at 9. 

277 ICI Letter, at 8; ISLA Letter 1, at 3; ISLA 

Americas Letter 1, at 15. 

278 ISLA Letter 1, at 3. 

279FIF Letter, at 8–9. 

280See ISLA Letter 1, at 3. 

281 ISLA Americas Letter 1, at 15. See ISLA 

Americas Letter 2, at 9. 

282 ICI Letter, at 8. 

283 ISLA Letter 1, at 13. 

In response, FINRA listed these 

comments as examples of issues not 

related to determinations that FINRA 

has made regarding the proposed 

reporting requirements or dissemination 

provisions of SLATE but instead are 

addressed in the Rule 10c–1a Adopting 

Release.263 As discussed above, in this 

Part, Rule 10c–1a(j) defines the terms 

‘‘reportable security,’’ which in part sets 

the scope of Rule 10c–1a(a). 

Accordingly, a security is a ‘‘reportable 

security’’ under Rule 10c–1a if it is a 

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 

Rule 613 of the Exchange Act and the 

CAT NMS Plan, TRACE, or RTRS, or 

any reporting system that replaces one 

of these systems.264 With respect to the 

cross-border application of Rule 10c–1a, 

the Commission stated that, section 

10(c) of the Exchange Act, by its terms, 

requires reporting when, directly or 

indirectly, a person has ‘‘effect[ed], 

accept[ed], or facilitate[d]’’ a transaction 

involving the loan or borrowing of 

securities.265 Based on that language, 

the Commission concluded in the Rule 

10c–1a Adopting Release that the 

relevant domestic conduct that triggers 

the Commission’s regulatory authority 

under section 10(c) is conduct within 

the U.S. that comprises (in whole or in 

part) effecting, accepting, or facilitating 

of a borrowing or lending transaction.266

The Commission further stated that, 

because Rule 10c–1a is intended to be 

co-extensive with the regulatory scope 

of section 10(c), it is of the view that 

Rule 10c–1a’s reporting requirements 

will generally be triggered whenever a 

covered person effects, accepts, or 

facilitates (in whole or in part) in the 

U.S. a lending or borrowing 

transaction.267

E. Compliance With Reporting 

Obligations 

One commenter stated that the 

proposed rule change, as originally 

proposed in the Notice, differs from 

Rule 10c–1a because the proposed rule 

change would allow third-party service 

providers, who may not be registered in 

any capacity with the Commission, to 

provide the same service as a Reporting 

Agent ‘‘without the oversight or 

regulatory responsibility of a Reporting 

Agent,’’ whereas Rule 10c–1a 

‘‘specifically allows for Covered Persons 

to use the services of a Reporting Agent 

only.’’ 268 The commenter stated that 

‘‘the permissible activities’’ of these 

third-party service providers ‘‘demands 

further clarification and an express set 

of qualification criteria that 

distinguishes such permissible activities 

from those that are inherent’’ with 

respect to Reporting Agents and 

Covered Persons to avoid providing ‘‘a 

back door’’ through which the thirdparty service providers ‘‘can escape SEC 

and FINRA oversight and liability’’ as a 

Reporting Agent.269

In response, FINRA stated that 

nothing in the Proposal modifies the 

parameters the Commission set forth 

regarding the use of a ‘‘reporting agent,’’ 

which is a defined term under Rule 

10c–1a(j), for purposes of reporting loan 

information pursuant to Rule 10c–1a. 

FINRA stated that, while the 

Commission established the role of a 

reporting agent (in the Rule 10c–1a 

Adopting Release), it did not preclude 

firms from using other types of third 

parties to facilitate reporting (albeit that 

covered persons may not rely on such 

other parties in the same manner 

reserved for reporting agents under Rule 

10c–1a).270

The Commission agrees with FINRA 

that the Proposal does not, and cannot, 

modify Rule 10c–1a’s definition of 

‘‘reporting agent.’’ In adopting the 

definition of ‘‘reporting agent’’ under 

Rule 10c–1a, the Commission stated that 

the definition strikes a balance between 

increasing participation and 

competition in the marketplace for such 

services, while applying the definition 

only to entities over which the 

Commission has direct oversight.271 The 

ability to use a Reporting Agent does not 

prevent Covered Persons from 

contracting privately with third-party 

vendors to assist in reporting. The use 

of other third-party vendors that are not 

Reporting Agents would not relieve a 

Covered Person of its obligation to 

report Rule 10c–1a information to 

FINRA, as reliance on a Reporting Agent 

would.272 Allowing clearing agencies, as 

well as brokers or dealers, to act as 

reporting agents under Rule 10c–1a 

should help facilitate low-cost service 

providers, introduce more competition, 

and not unduly restrict the market for 

Reporting Agent services to only brokers 

or dealers.273

Commenters on the proposed rule 

change addressed Rule 6530(c)(3),274

which requires, among other things, 

that, if a Covered Person makes a good 

faith determination that it has a 

reporting obligation under Rule 10c–1a 

and the Rule 6500 Series, the Covered 

Person or Reporting Agent, as 

applicable, must report the Covered 

Securities Loan as provided in proposed 

Rule 6530, and if a Reportable Security 

is not entered into the SLATE system, 

the Covered Person or Reporting Agent, 

as applicable, must promptly notify and 

provide FINRA Operations, in the form 

and manner required by FINRA, the 

information specified in Rule 

6530(a)(2)(A) and (B), along with such 

other information as FINRA deems 

necessary to enter the Reportable 

Security for reporting through 

SLATE.275 Commenters stated that 

requiring a Covered Person or Reporting 

Agent to notify FINRA to add securities 

to SLATE would be burdensome,276

inefficient,277 open to manual error,278

and duplicative and unnecessary.279

One commenter stated that this is a 

highly manual process that could ‘‘lead 

to a time-lag when setting up new static 

data that does not already exist within 

the SLATE system.’’ 280 One commenter 

recommended that the notification 

requirement be revised or removed, and 

stated that it is ‘‘not an appropriate 

delegation of duties’’ to require a 

Covered Person to notify FINRA 

Operations of Reportable Securities not 

included in the SLATE system.281 One 

commenter stated that FINRA should 

have primary responsibility for adding 

Reportable Securities to the SLATE 

system and not impose this obligation 

on Covered Persons.282 One commenter 

requested clarification on if the Covered 

Person could be subject to ‘‘liability’’ for 

failing to notify FINRA about Reportable 

Securities not entered into SLATE.283

Another commenter stated that FINRA 

should consider the example of the 

CAT, where, the commenter stated, 

‘‘there is no separate process for an 


lotter on DSK11XQN23PROD with NOTICES1
1580 Federal Register / Vol. 90, No. 5 / Wednesday, January 8, 2025 / Notices 

284See FIF Letter, at 8–9. 

285See FINRA Letter, at 15. 

286FINRA Letter, at 15–16. 

287FINRA Letter, at 16. 

288FINRA Letter, at 16. 

289SIFMA and SIFMA AMG Letter, at 5. 

290See Rule 10c–1a Adopting Release, 88 FR 

75667 n.365. In adopting Rule 10c–1a, the 

Commission stated that there may be costs for 

reporting entities associated with determining 

whether a loan is a covered securities loan, 

including whether a particular security is a 

reportable security. Rule 10c–1a Adopting Release, 

88 FR 75718 n.974. 

291Notice, 89 FR 38210. 

292See Rule 10c–1a Adopting Release, 88 FR 

75667 n.365. 

293See Notice, 89 FR 38210. 

294 ISLA Americas Letter 1, at 10. 

295SIFMA AMG Letter 2, at 7. 

296Partial Amendment No. 1, 89 FR 92229 n.21. 

297See ISLA Americas Letter 2, at 5; SIFMA and 

SIFMA AMG Letter, at 3. 

298See 17 CFR 240.10c–1a(a), (b). 

299See, e.g., FINRA Rule 6730(f). 

300See Rule 10c–1a Adopting Release, 88 FR 

75683. 

301 ISLA Letter 1, at 2. 

302 ISLA Letter 1, at 14. 

303 ISLA Letter 1, at 13. 

304FINRA Letter, at 4 n.18. 

305Notice, 89 FR 38206. 

industry member to request that a 

symbol be added to CAT.’’ 284

In response, FINRA stated that, under 

Rule 10c–1a, it is the covered person’s 

(or, where applicable, a reporting 

agent’s) responsibility to ensure that it 

submits required reports in compliance 

with applicable rules; Rule 10c–1a does 

not assign to an RNSA the responsibility 

to identify all reportable securities.285

FINRA stated that, as FINRA typically 

does with its other over-the-counter 

facilities, FINRA intends to create a 

SLATE security list that it will make 

available to Covered Persons and other 

SLATE participants (leveraging 

reference data from the CAT NMS list, 

TRACE, and the MSRB).286 FINRA 

stated, however, that a Covered Person 

remains obligated to determine whether 

a securities loan transaction that it has 

engaged in is reportable under Rule 

10c–1a, regardless of whether the 

security appears on FINRA’s SLATE 

security list.287 FINRA stated that, for 

this reason, proposed Rule 6530(c)(3), as 

modified by Partial Amendment No. 1, 

requires that, if a Covered Person makes 

a good faith determination that it has a 

reporting obligation under Rule 10c–1a 

with respect to a securities loan, and the 

Reportable Security is not already 

entered into the SLATE system, the 

Covered Person (or its Reporting Agent) 

must promptly notify FINRA and work 

with FINRA Operations to enter the 

Reportable Security into the SLATE 

system.288 One commenter on Partial 

Amendment No. 1 stated that FINRA 

should publish a SLATE securities list 

daily based on a consolidated feed of 

TRACE, RTRS, and CAT eligible 

securities.289

FINRA’s decision to require Covered 

Persons or Reporting Agents, as 

applicable, to promptly notify and 

provide FINRA Operations with a 

Reportable Security that is not entered 

into the SLATE system is reasonable.290

In proposing Rule 6530(c)(3), FINRA 

stated that the requirement would 

enable FINRA to set the security up in 

its systems and facilitate reporting of the 

Covered Securities Loan to SLATE, as 

required by Rule 10c–1a and proposed 

Rule 6530.291 The proposed requirement 

to add Reportable Securities to the 

SLATE system is reasonably designed to 

facilitate the collection of loan 

information consistent with Rule 10c– 

1a.292

Some commenters addressed the 

statement in the Notice that ‘‘the 

member must nonetheless take 

reasonable steps to ensure that the 

Reporting Agent is in fact complying 

with the securities lending reporting 

requirements of SEA Rule 10c–1a and 

proposed FINRA Rule 6530 on its 

behalf.’’ 293 One commenter stated that 

such a requirement deviates from Rule 

10c–1a and could impact ‘‘the very 

point of engaging a reporting agent’’ 

because it ‘‘shift[s] reporting compliance 

(outside of a written agreement and 

timely access to data) back to the 

covered person creating a reconciliation 

loop that will be time consuming, costly 

and operationally intensive.’’ 294

Another commenter stated that the costs 

of increased reliance on Reporting 

Agents for compliance purposes would 

be compounded by the proposed 

requirement that Covered Persons 

ensure that Reporting Agents file timely, 

accurate, and complete data.295

In response, Partial Amendment No. 1 

removed from the proposed rule change 

the requirement that a Covered Person 

take reasonable steps to ensure that the 

Reporting Agent is in fact complying 

with the securities lending reporting 

requirements of Rule 10c–1a. In doing 

so, FINRA stated that, in its oversight of 

member compliance with Rule 10c–1a, 

in addition to reviewing whether 

members have complied with the 

requirements of Rule 10c–1a(a)(2) with 

respect to the use of Reporting Agents, 

FINRA also will review the timeliness 

and accuracy of SLATE reports 

submitted by Reporting Agents in light 

of a Reporting Agent’s obligations under 

Rule 10c–1a(b) and the underlying 

requirements of Rule 10c–1a. FINRA 

stated that, after gaining experience 

with the SLATE program, FINRA will 

reevaluate whether any additional 

measures are appropriate.296 Any such 

efforts would be subject to a separate 

proposed rule change filed with the 

Commission and subject to notice and 

comment. Some commenters supported 

Partial Amendment No. 1’s removal of 

this originally proposed requirement.297

The Proposal, which is consistent with 

Rule 10c–1a 298 and similar 

requirements in rules concerning other 

FINRA trade reporting systems,299 is 

reasonably designed to facilitate the 

oversight of compliance with Rule 10c– 

1a, given FINRA’s expertise in 

administering other FINRA trade 

reporting systems.300

F. Participation in SLATE 

One commenter requested that FINRA 

confirm its enforcement rules for nonU.S. firms for incorrect reporting.301

This commenter requested clarity on 

FINRA’s proposed enforcement policy 

on non-FINRA members, specifically as 

it related to compliance for reporting to 

the SLATE system and violations or 

failures to pay SLATE reporting fees.302

The commenter also asked, from a 

cybersecurity perspective, what 

processes, policies, or procedures 

FINRA members have in place and 

whether the proposed requirement in 

Rule 6520(a)(2)(C) regarding the 

maintenance of the physical security of 

the equipment located on the premises 

of the SLATE Participant would apply 

to both domestic and non-U.S. trading 

parties.303

In response to comments regarding 

incorrect reporting, FINRA stated that it 

will review the timeliness and accuracy 

of reports to the SLATE system in light 

of the requirements under Rule 10c– 

1a(b) and the underlying requirements 

of Rule 10c–1a. FINRA also stated that, 

after gaining experience with the SLATE 

program, FINRA will reevaluate 

whether any additional measures are 

appropriate.304 Any such efforts would 

be subject to a separate proposed rule 

change filed with the Commission and 

subject to notice and comment. Further, 

in the Notice, FINRA stated that it may 

validate and reject submissions to 

SLATE that FINRA believes are 

noncompliant or otherwise inconsistent 

with Rule 10c–1a or with the form and 

manner specified by FINRA for the data 

(as provided in FINRA rules, guidance, 

and technical documents and 

specifications), and may exclude any 

such information from disseminated 

SLATE data. FINRA stated that it may 

also block or reject any activity to the 

extent such activity puts the normal 

functioning of the SLATE system at 

risk.305


lotter on DSK11XQN23PROD with NOTICES1
Federal Register / Vol. 90, No. 5 / Wednesday, January 8, 2025 / Notices 1581 

306See Rule 10c–1a(a). 

307Cybersecurity, FINRA (last visited December 

16, 2024), https://www.finra.org/rules-guidance/ 

key-topics/cybersecurity#rules. In adopting Rule 

10c–1a, the Commission stated that the rule collects 

sensitive information and that the costs of a data 

breach could be substantial. See Rule 10c–1a 

Adopting Release, 88 FR 75721 n.1011. While 

Reporting Agents that are not FINRA members (e.g., 

registered clearing agencies and certain brokers or 

dealers) are not subject to these cybersecurityrelated FINRA rules, they nevertheless may be 

subject, as applicable, to existing Commission rules 

designed to address cybersecurity-related concerns, 

such as Regulation SCI, which has provisions 

requiring, among other things, that policies and 

procedures be in place to help ensure the 

robustness and resiliency of market technology 

systems, see 17 CFR 242.1001(a)(1), or Regulation 

S–P, which has provisions requiring policies and 

procedures aimed at protecting customer records or 

information and customer report information, see 

17 CFR 248.30. 

308See Rule 10c–1a Adopting Release, 88 FR 

75687. 

309See Notice, 89 FR 38212. 

310See SIFMA Letter, at 7; ISLA Americas Letter 

1, at 16. 

311SIFMA Letter, at 7. See SIFMA AMG Letter 2, 

at 5. 

312SIFMA Letter, at 7. See ICI Letter, at 9; SIFMA 

AMG Letter 2, at 5; Hagerty Letter, at 3. 

313See SIFMA Letter, at 7; ISLA Americas Letter 

1, at 16; MFA Letter, at 5–6. 

314See SIFMA Letter, at 6–7. 

315SIFMA Letter, at 7. See MFA Letter, at 7; 

SIFMA AMG Letter 2, at 5. 

316See FINRA Letter, at 14. 

317FINRA Letter, at 13 (citing 17 CFR 240.10c– 

1a(g)(5)). 

318FINRA Letter, at 14 (citing Rule 10c–1a 

Adopting Release, 88 FR 75684). 

319FINRA Letter, at 14. 

320See Partial Amendment No. 1, 89 FR 92232. 

321See ISLA Americas Letter 2, at 6; SIFMA and 

SIFMA AMG Letter, at 3. 

322See ISLA Americas Letter 2, at 6. 

323See Rule 10c–1a Adopting Release, 88 FR 

75726. See also Rule 10c–1a Adopting Release, 88 

FR 75707 n.849. 

Incorrect reporting can result in a 

violation of Rule 10c–1a.306 The 

Proposal, which contains security- and 

confidentiality-related provisions that 

supplement existing FINRA 

cybersecurity-related rules for certain 

SLATE Participants,307 is reasonably 

designed to address cybersecurity 

concerns regarding the SLATE system. 

The proposed requirement for a SLATE 

Participant to maintain the physical 

security of the equipment located on its 

premises to prevent unauthorized entry 

of information into SLATE is reasonably 

designed to help prevent risk to the 

SLATE system that could hamper access 

to information regarding securities loans 

or compromise the integrity of the data 

reported to and disseminated by SLATE. 

The Proposal is consistent with the 

requirement in Rule 10c–1a(h)(4) that 

FINRA establish, maintain, and enforce 

reasonably designed written policies 

and procedures to maintain the security 

and confidentiality of the confidential 

information required to be reported to it. 

It also is reasonably designed to address 

the risk that disclosure of certain loan 

information would identify market 

participants or reveal information about 

the internal operations of market 

participants.308 The Proposal is 

reasonably designed to facilitate and 

enforce the integrity of the collected 

data that is designed to improve 

transparency and efficiency in the 

securities lending market consistent 

with Rule 10c–1a. 

G. Dissemination of Loan Information 

Under the proposed rule change, as 

originally proposed in the Notice, 

FINRA would have disseminated, by the 

morning of the next business day, 

aggregate loan transaction activity, 

including information broken down into 

several subcategories (e.g., by borrower 

type or whether a loan is an open or 

term loan).309 Some commenters 

addressed the granularity of the 

aggregated data that FINRA would 

disseminate pursuant to the proposed 

rule change, as originally proposed in 

the Notice. Two commenters stated that, 

in Rule 10c–1a, the Commission had 

afforded FINRA deference as to the 

manner in which aggregate information 

is compiled and presented publicly.310

One commenter stated that such 

‘‘deference is limited to the manner in 

which aggregate data at the level of the 

entire dataset of reported coved 

securities loans is reported,’’ without 

permitting FINRA to break down the 

dataset into smaller published subsets, 

or ‘‘slices,’’ based on specific criteria.311

Some commenters also stated such 

granular data (e.g., data broken down by 

borrower type) raises significant 

concerns that sensitive, proprietary 

trading strategy information may be 

disclosed.312 Commenters stated their 

concerns that the publication of more 

granular aggregated data potentially 

could allow market participants to 

‘‘extrapolate’’ or ‘‘back into’’ individual 

loan amounts on a T+1 basis.313 One 

commenter stated that the proposed rule 

change’s breakdown for aggregate 

transaction activity and distribution of 

loan rates should have been included in 

the proposing release for Rule 10c–1a 

and subjected to a cost-benefit analysis 

and formal rulemaking notice and 

comment period.314 The commenter 

recommended that FINRA ‘‘reevaluate 

its proposed structure and instead 

propose a revised, less granular 

structure.’’ 315

In response, Partial Amendment No. 1 

removed the subcategories of volume 

data from the aggregate loan transaction 

activity to be disseminated until 

experience is gained with the impact of 

disseminating volume data.316 In 

particular, Partial Amendment No. 1 

removed paragraphs (c)(1)(A) through 

(E) and amended proposed Rule 

6540(c)(1) to provide that FINRA will 

disseminate 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. In 

the FINRA Letter, FINRA stated that 

Rule 10c–1a requires an RNSA to 

disseminate ‘‘information pertaining to 

the aggregate transaction activity and 

distribution of loan rates for each 

reportable security.’’ 317 FINRA stated 

that the Commission did not specify the 

precise manner in which aggregate 

transaction activity or the distribution of 

loan rates would be compiled and 

disseminated by an RNSA, thereby 

providing FINRA with discretion as to 

the formulation of the data (so long as 

the ‘‘aggregate transaction activity’’ 

represented the absolute value of loan 

transactions).318 FINRA stated that, in 

determining what aggregate data is 

appropriate for public dissemination, it 

remains very sensitive to concerns 

regarding potential information 

leakage.319

Further, in response to comments, 

FINRA stated that this change is 

appropriate and that FINRA would 

revisit the possibility of enhancing the 

aggregate loan transaction activity in the 

future, after gaining experience with the 

impact of disseminating volume data 

and analyzing what additional 

information could be useful (while 

continuing to be sensitive to potential 

information leakage concerns).320

FINRA stated that any future 

amendments to the dissemination 

provisions would be subject to a 

separate proposed rule change filed 

with the Commission and subject to 

notice and comment. Some commenters 

supported Partial Amendment No. 1’s 

removal of the subcategories of volume 

data from the aggregate loan transaction 

activity to be publicly disseminated,321

one of whom supported FINRA’s 

decision to revisit SLATE’s 

dissemination provisions.322 The 

Proposal is reasonably designed to 

facilitate access to data that market 

participants can use to mitigate 

information asymmetries while taking 

account of commenter concerns 

regarding data security and 

confidentiality. The Proposal also is 

consistent with the requirements for the 

publication of data in Rule 10c–1a(g) 

and the broader transparency goals of 

Rule 10c–1a.323


lotter on DSK11XQN23PROD with NOTICES1
1582 Federal Register / Vol. 90, No. 5 / Wednesday, January 8, 2025 / Notices 

324See SIFMA and SIFMA AMG Letter, at 4. 

325SIFMA and SIFMA AMG Letter, at 4. 

326See, e.g., Rule 10c–1a Adopting Release, 88 FR 

75707. 

327See Rule 10c–1a Adopting Release, 88 FR 

75662 n.288. 

328See, e.g., ISLA Letter 1, at 10; ISLA Americas 

Letter 1, at 16; ICI Letter, at 9; SIFMA AMG Letter 

2, at 5. 

329 ISLA Americas Letter 1, at 16. 

330 ISLA Letter 1, at 10. See ICI Letter, at 9. 

331MFA Letter, at 6. 

332 ISLA Americas Letter 1, at 16. 

333FINRA stated that it will not have insight into 

all of the relevant loan details necessary to generate 

the statistics described in proposed Rule 6540(c) 

with respect to modifications to loans for which 

reporting was not required pursuant to Rule 10c– 

1a(c) at the time the loan was agreed to or last 

modified (i.e., modifications reported to SLATE 

pursuant to Rule 10c–1a(d)(2)). FINRA stated that, 

therefore, the daily loan statistics that FINRA will 

publish will only reflect modifications to Covered 

Securities Loans that were previously reported to 

SLATE. 

334FINRA Letter, at 14 n.52. This proposed de 

minimis provision is intended to address potential 

information leakage in circumstances where there 

are multiple reported events associated with the 

same loan on a given day. Partial Amendment No. 

1, 89 FR 92233 n.49. 

335See ISLA Americas Letter 2, at 6; SIFMA and 

SIFMA AMG Letter, at 7. 

336SIFMA and SIFMA AMG Letter, at 7. 

337SIFMA and SIFMA AMG Letter, at 7. 

338See ISLA Americas Letter 2, at 6. 

339See Rule 10c–1a Adopting Release, 88 FR 

75726. See also Rule 10c–1a Adopting Release, 88 

FR 75687–88, 75707 n.849. 

340See, e.g., Form Letter A; Form Letter D. 

341See, e.g., Form Letter A; Form Letter D. 

342Letter from Jennifer (May 15, 2024). 

The Proposal is reasonably tailored to 

help ensure that the absolute value of 

transactions is disseminated such that 

net position changes should not be 

discernable in the data. This should 

help to address commenter concerns 

regarding potential exposure of 

proprietary information while still 

providing volume transparency to 

market participants. The Proposal is 

reasonably designed to facilitate the 

dissemination of loan information 

consistent with Rule 10c–1a. 

One commenter on Partial 

Amendment No. 1 stated that the 

Commission and FINRA should require 

that unsettled loans be excluded from 

any public dissemination of individual 

loan transaction data pursuant to 

proposed Rule 6540(a) and (b) and from 

any daily loan statistics published 

pursuant to proposed Rule 6540(c).324

The commenter stated that it does not 

see the value to the market in 

publishing data regarding unsettled 

loans and that including unsettled loans 

in publicly disseminated loan 

information ‘‘would be misleading and 

cause investor confusion.’’ 325 The 

Commission disagrees that the inclusion 

of unsettled loans (that are Covered 

Securities Loans) in data disseminated 

pursuant to proposed Rule 6540 would 

be misleading and cause investor 

confusion, as the commenter suggested 

and instead believes that the omission 

of this data would be inconsistent with 

Rule 10c–1a’s broader transparency 

goals.326 For instance, the dissemination 

of data regarding unsettled loans that 

are Covered Securities Loans would 

provide information regarding the 

material terms of securities loans that 

have been agreed to.327 FINRA’s 

decision to disseminate, pursuant to 

proposed Rule 6540, data regarding 

unsettled loans that are Covered 

Securities Loans is consistent with Rule 

10c–1a(g), which applies to ‘‘covered 

securities loans,’’ generally, without 

distinguishing those that are unsettled. 

Some commenters stated that the de 

minimis loan transaction activity 

threshold, as originally proposed in the 

Notice, was set too low.328 One 

commenter stated that the threshold of 

three loans is too low, ‘‘especially when 

viewed in conjunction with the 

possibility that FINRA will publish 

granular volume buckets.’’ 329

Commenters stated that FINRA should 

consider whether the application of the 

threshold ‘‘should be mandatory and 

not an optional exclusion for 

confidentiality reasons.’’ 330 Another 

commenter stated that the discretionary 

authority to exclude de minimis loan 

transaction activity would ‘‘have no 

mitigating effect whatsoever’’ on the 

consequences of publicly disclosing 

sensitive, granular loan information.331

One commenter requested clarification 

as to whether FINRA ‘‘will’’ or ‘‘may’’ 

omit de minimis loan transaction 

activity.332

In response, Partial Amendment No. 1 

modified proposed Rule 6540.01 to 

clarify that FINRA’s application of the 

de minimis threshold will be nondiscretionary and to provide that FINRA 

will not include aggregate volume 

information for a security unless there 

were reports submitted to SLATE on the 

prior business day for at least 10 distinct 

Covered Securities Loans in the 

Reportable Security (represented by 

different FINRA-assigned unique loan 

identifiers).333 In the FINRA Letter, 

FINRA stated that the de minimis 

exclusion was not intended to provide 

FINRA with discretion on a case-by-case 

basis as to whether to omit volume 

information that met the de minimis 

criteria.334 Some commenters supported 

Partial Amendment No. 1’s increase to 

the de minimis threshold and 

clarification that application of the de 

minimis threshold is nondiscretionary.335 One commenter stated 

that FINRA should consider further 

whether 10 distinct Covered Securities 

Loans may still be too low of a 

threshold.336 The commenter stated, 

without providing any support for its 

suggested figure, that a higher threshold 

of 25 distinct Covered Securities Loans 

would be more appropriate to address 

concerns that sophisticated market 

participants could use the aggregated 

volume information to extrapolate 

sensitive information by pairing the 

aggregate transaction activity data with 

data on individual loan transactions.337

Another commenter, however, stated 

that the threshold of 10 distinct Covered 

Securities Loans—in addition to the 

provision’s use of the phrase ‘‘will not 

include’’ to clarify that the application 

of the de minimis threshold is nondiscretionary—will facilitate the 

prevention of information leakage and 

enhance the integrity of securities loan 

reporting.338 The Commission agrees 

with this comment and that the 

Proposal’s de minimis threshold of 10 

distinct Covered Securities Loans is 

reasonable. The threshold of 10 distinct 

Covered Securities Loans will facilitate 

the prevention of information leakage 

and is less likely than the commenter’s 

suggested threshold of 25 distinct 

Covered Securities Loans to reduce the 

transparency value of the disseminated 

information. The Proposal is consistent 

with the publication of data 

requirements of Rule 10c–1a(g), the data 

protection requirements in Rule 10c– 

1a(h)(4), and the broader transparency 

goals of Rule 10c–1a.339

H. Other Provisions 

1. Emergency Authority 

Some commenters stated that the 

proposed suspension of the reporting or 

dissemination of certain Covered 

Securities Loans or Data Elements for 

periods deemed necessary by FINRA, as 

discussed above in Part II.F, would 

undermine the transparency that the 

proposed FINRA Rule 6500 Series aims 

to promote.340 These commenters stated 

that the proposed suspension ‘‘would 

inadvertently create an information 

asymmetry, thus disadvantaging end 

borrowers and beneficial owners who 

rely on this data for making prudent 

investment decisions’’ and ‘‘strongly 

advocate[d] for stringent guidelines 

governing the suspension of reporting 

requirements to avoid undermining 

these goals.’’ 341 Another commenter 

‘‘strongly advocate[d] for . . . the 

publication of the reasons and 

timeframe for suspension to avoid 

undermining [the proposed rule’s] 

goals.’’ 342


lotter on DSK11XQN23PROD with NOTICES1
Federal Register / Vol. 90, No. 5 / Wednesday, January 8, 2025 / Notices 1583 

343FINRA Letter, at 13. 

344FINRA Letter, at 13. 

345See, e.g., FINRA Rule 6770 (Emergency 

Authority); Securities Exchange Act Release No. 

60726 (September 28, 2009), 74 FR 50991 (October 

2, 2009), at 50996. 

346See Notice, 89 FR 38206. See, e.g., ISLA Letter 

1, at 12; Associations Collective Letter, at 3; MFA 

Letter, at 2 n.7; Robinhood Letter, at 3 n.14; 

EquiLend Letter 1, at 7; SIFMA AMG Letter 1, at 

2. 

347See Associations Collective Letter, at 3; ICI 

Letter, at 9; ISLA Americas Letter, at 5. 

348See SIFMA Letter, at 7–8; SIFMA AMG Letter 

1, at 2; EquiLend Letter 1, at 7. 

349 ISLA Americas Letter, at 11. 

350See Securities Exchange Act Release No. 

101697 (Nov. 21, 2024), 89 FR 93750 (Nov. 27, 

2024) (‘‘SLATE Fee Filing’’). With respect to 

reporting, proposed FINRA Rule 7720 sets forth fees 

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

Covered Securities Loan reporting; (3) Loan 

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

reporting cancellations, corrections, or deletions. 

These reporting fees would be paid by SLATE 

Participants. See SLATE Fee Filing, 89 FR 93751. 

With respect to data products, proposed FINRA 

Rule 7720 sets forth fees for: (1) SLATE Loan-Level 

Data and Daily Loan Statistics, which refers to the 

data described in proposed FINRA Rule 6540(a)–(c); 

and (2) Historic SLATE Data, which refers to 

SLATE Loan-Level Data and Daily Loan Statistics 

from the beginning of SLATE data reporting 

through the end of the most recent calendar year. 

See SLATE Fee Filing, 89 FR 93751. These data 

product fees would be paid by any person or 

organization subscribing to receive from FINRA 

downloadable files of SLATE data for commercial 

purposes. See SLATE Fee Filing, 89 FR 93751. 

Pursuant to proposed FINRA Rule 6540.02, which 

is part of the Proposal, FINRA would display (i.e., 

make viewable) SLATE data free of charge on its 

website for personal, non-commercial uses. See 

SLATE Fee Filing, 89 FR 93751. Additional detail 

regarding FINRA’s proposed SLATE reporting fees 

and SLATE data product fees, as well as FINRA’s 

related cost and revenue estimates, can be found in 

the SLATE Fee Filing. 

351SLATE Fee Filing, 89 FR 93753. FINRA stated 

in the SLATE Fee Filing that it 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 data product subscription interest. See SLATE 

Fee Filing, 89 FR 93753. And FINRA stated that, to 

the extent it 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 to revise the proposed 

SLATE fees. See SLATE Fee Filing, 89 FR 93753. 

352See SLATE Fee Filing, 89 FR 93750. 

Comments received in response to the SLATE Fee 

Filing can be found on the Commission’s website 

at https://www.sec.gov/comments/sr-finra-2024- 

020/srfinra2024020.htm. 

353See, e.g., ICI Letter, at 9–10; ISLA Letter 1, at 

12, 14; Letter from David Schwartz, Executive 

Director, Center for the Study of Financial Market 

Evolution (May 28, 2024) (‘‘CSFME Letter’’), at 2– 

3. See also ISLA Americas Letter 2, at 9. 

354 ICI Letter, at 9–10. 

355 ISLA Letter 1, at 12, 14. 

356CSFME Letter, at 2–3. 

357As stated elsewhere herein, the Commission 

has found that the Proposal, by implementing Rule 

10c–1a, would help protect investors and promote 

just and equitable principles of trade, consistent 

with Section 15A(b)(6) of the Exchange Act. See, 

e.g., supra Part III. 

In response, FINRA stated that it does 

not believe that the proposed provision, 

which would provide FINRA with 

limited, emergency authority regarding 

the suspension of the reporting or 

dissemination of certain Covered 

Securities Loans or Data Elements, 

would reduce the transparency intended 

to be provided under Rule 10c–1a. 

FINRA stated that, should the proposed 

emergency authority be used, any such 

action would be taken only as market 

conditions warrant and only in 

consultation with the SEC.343 FINRA 

stated that it has similar authority in 

connection with other transaction 

reporting facilities that it operates, and 

that it believes that such emergency 

authority is appropriate to maintain fair 

and orderly markets.344 This emergency 

authority is consistent with existing 

FINRA rules governing other 

transparency regimes.345 The 

Commission agrees that the proposed 

Emergency Authority provision of 

SLATE is reasonably designed to 

maintain fair and orderly markets as 

market conditions may warrant. Such 

authority, pursuant to proposed Rule 

6550, could be exercised only in 

consultation with the Commission, 

which should help to ensure that the 

emergency authority is used in a 

manner consistent with the 

requirements and goals of Rule 10c–1a. 

I. Costs and RNSA Fees 

Commenters stated that FINRA has 

yet to publish information about its 

contemplated Covered Securities Loan 

reporting fees and securities loan data 

products and associated fees, and 

requested that FINRA provide such 

information.346 Commenters stated that 

market participants and the Commission 

cannot adequately assess the costs and 

benefits of the Proposal without 

knowing what reporting fees FINRA 

plans to charge.347 Commenters also 

requested time to consider FINRA’s 

contemplated SLATE reporting fees and 

data product fees.348 One commenter 

recommended in the absence of a 

proposed fee schedule ‘‘that any final 

rule promulgated by FINRA be 

conditional upon publication of 

proposed costs and public 

comment.’’ 349

On November 20, 2024, FINRA filed 

this proposed rule change with the 

Commission. Specifically, pursuant to 

Section 19(b)(1) of the Exchange Act 

and Rule 19b–4 thereunder, FINRA filed 

a proposed rule change to set forth in 

new FINRA Rule 7720 securities loan 

reporting fees and securities loan data 

products with associated fees.350 FINRA 

designated the SLATE Fee Filing as 

‘‘establishing or changing a due, fee or 

other charge’’ under Section 

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

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

effective upon filing with the 

Commission. In addition, within the 

SLATE Fee Filing, FINRA estimates the 

costs it expects, at this juncture, to incur 

to build and operate SLATE, as well as 

the revenues it expects to receive from 

its proposed fees.351 To solicit 

comments on the proposed rule change 

from interested persons, the 

Commission published notice of the 

SLATE Fee Filing on its website on 

November 21, 2024, and publication of 

that notice in the Federal Register 

occurred on November 27, 2024, with a 

21-day comment period beginning on 

the date of Federal Register publication 

and expiring on December 18, 2024.352

The SLATE Fee Filing is responsive to 

commenters seeking the ability and time 

to understand what fees FINRA 

proposes to charge in connection with 

SLATE reporting and public 

dissemination of SLATE data, and what 

costs FINRA expects to incur, at this 

juncture, to build and operate SLATE. 

Commenters on the Proposal also 

expressed views on how FINRA should 

allocate, via SLATE fees, the SLATE 

costs that it incurs.353 One commenter 

recommended that the Commission 

ensure FINRA imposes ‘‘the costs of 

building and operating the reporting 

system equally on lenders and 

borrowers, instead of solely on 

lenders.’’ 354 Similarly, another 

commenter stated that the SLATE fees 

should ‘‘be borne by market participants 

more broadly’’ rather than solely by 

Covered Persons submitting data.355

One commenter expressed concern 

regarding the ‘‘disproportionate 

allocation of compliance costs’’ to 

lenders and urged FINRA to exempt 

lenders (including lenders who may 

pool their data) from any fees associated 

with accessing SLATE data for 

commercial purposes to ensure 

equitable access to industry widedata.356

That FINRA will incur costs to build 

and maintain SLATE and proposes to 

pass them to market participants 

through SLATE fees is consistent with 

Rule 10c–1a and what the Commission 

stated when adopting the rule, and also 

consistent with the Exchange Act.357

Rule 10c–1a requires Covered Persons to 

report to an RNSA the required data 

elements set forth in the rule for 

Covered Securities loans, and requires 

the RNSA to make reported data 

publicly available. In the Adopting 

Release, the Commission stated that 

Rule 10c–1a will impose costs on an 


lotter on DSK11XQN23PROD with NOTICES1
1584 Federal Register / Vol. 90, No. 5 / Wednesday, January 8, 2025 / Notices 

358See Rule 10c–1a Adopting Release, 88 FR 

75693. The Commission also understands that 

lenders may pass on their reporting costs to their 

customers. See Rule 10c–1a Adopting Release, 88 

FR 75693. In addition, a commenter has stated that 

it is more than likely that lending agents will pass 

on any fees that they bear. See ISLA Americas 

Letter 2, at 9. The Commission believes, however, 

that investors will ultimately benefit from the 

improved transparency provided by SLATE, as a 

result of enhanced price discovery and an improved 

ability to determine the extent to which their 

broker-dealers and lending agents are obtaining 

terms consistent with market conditions for loans 

with similar characteristics. See supra notes 79–90 

and accompanying text. 

359See, e.g., ISLA Americas Letter 2, at 9 (urging 

the Commission and FINRA to ensure that the cost 

structure related to the reporting of covered 

securities loans is equitable, and expressing an 

intention to submit comments with respect to the 

SLATE Fee Filing in a separate letter); CSFME 

Letter at 2–3 (urging that lenders be exempt from 

fees for SLATE data products to ensure equitable 

access to data). 

360See 15 U.S.C. 78o–3(b)(5). 

361See 15 U.S.C. 78s(b)(3)(C), 78s(b)(2)(B). The 

proposed SLATE reporting fees would not be 

implemented before January 2, 2026, and the 

proposed SLATE data product fees would not be 

implemented before April 2, 2026. See SLATE Fee 

Filing, 89 FR 93753–54 (stating that implementation 

of SLATE reporting fees and data product fees will 

correspond with Rule 10c–1a’s compliance dates for 

the commencement of reporting to SLATE and 

SLATE data dissemination, respectively); Rule 10c– 

1a Adopting Release, 88 FR 75691 (setting forth 

Rule 10c–1a’s compliance schedule). Should the 

Commission determine to suspend and institute 

proceedings on the SLATE Fee Filing, those 

proceedings would conclude before the January 2, 

2026, implementation date for SLATE reporting 

fees. See 15 U.S.C. 78s(b)(3)(C), 78s(b)(2)(B). 

362See, e.g., ISLA Letter 1, at 1–2; SIFMA AMG 

Letter 1, at 2; Associations Collective Letter, at 3; 

SIFMA AMG Letter 2, at 2, 8. 

363See SIFMA AMG Letter 1, at 2; SIFMA Letter, 

at 7–8. 

364Associations Collective Letter, at 3. 

365See, e.g., Form Letter C. 

366See, e.g., Form Letter C. 

367See Rule 10c–1a Adopting Release, 88 FR 

75691 (requiring that the proposed FINRA rules are 

effective no later than 12 months after the effective 

date of final Rule 10c–1a, and that covered persons 

must start reporting Rule 10c–1a information to an 

RNSA starting on the first business day 24 months 

after the effective date of final Rule 10c–1a). 

368S3 Partners Letter, at 5. 

369S3 Partners Letter, at 5. 

370See, e.g., Rule 10c–1a Adopting Release, 88 

75667 n.365. 

371See Robinhood Letter, at 3 (referencing Nat’l 

Assoc. Priv. Fund Mgr. v. SEC, No. 23–60626 (5th 

Cir.)). 

372See Hagerty Letter, at 3. 

RSNA, and that the RNSA may pass on 

these costs by imposing fees on entities 

that provide Rule 10c–1a information to 

the RNSA and/or consumers of the Rule 

10c–1a data.358 This is what FINRA, the 

lone RNSA, has proposed to do in the 

SLATE Fee Filing. The proposed SLATE 

reporting fees would be paid by SLATE 

Participants under the SLATE Fee 

Filing, the effect of which may be that 

SLATE reporting fees are paid primarily 

by, and related SLATE costs borne by, 

Covered Person lenders and lending 

agents, i.e., entities that will provide 

Rule 10c–1a information to FINRA. And 

the proposed SLATE data product fees 

would be paid by, and related SLATE 

costs borne by, any person or 

organization subscribing to receive from 

FINRA downloadable files of SLATE 

data for commercial purposes, i.e., 

consumers of the Rule 10c–1a data. 

To the extent commenters express 

views on what SLATE fees FINRA 

should charge or how FINRA should 

allocate SLATE fees,359 these comments 

are relevant to the Slate Fee Filing and 

not to this Proposal. Pursuant to the 

Section 19(b)(3)(A) and Rule 19b-4 

procedures applicable to the SLATE Fee 

Filing, the Commission will separately 

consider whether the proposed fees set 

forth in the SLATE Fee Filing are 

consistent with Section 15A of the 

Exchange Act, and in particular Section 

15A(b)(5),360 which requires that 

FINRA’s 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 which FINRA operates 

or controls. If it appears to the 

Commission that it is necessary or 

appropriate in the public interest, for 

the protection of investors, and 

otherwise in furtherance of the purposes 

of the Act, the Commission summarily 

may temporarily suspend the SLATE 

Fee Filing and institute proceedings to 

determine whether the SLATE Fee 

Filing should be approved or 

disapproved.361

J. Other Issues Raised by Commenters 

Regarding the Proposal 

1. Comment Period Extension 

Commenters on the proposed rule 

change, as originally proposed in the 

Notice, stated that the length of the 

comment period for FINRA’s proposed 

rule change was too short, requesting 

that the comment period be 

extended.362 Commenters stated that a 

longer comment period was necessary to 

consider certain aspects of the proposed 

rule change, as originally proposed in 

the Notice.363 One commenter stated 

that, given that the proposed rule 

change, as originally proposed in the 

Notice, included requirements beyond 

those of Rule 10c–1a, ‘‘it is especially 

important for the Commission to ensure 

it takes the time necessary to closely 

review FINRA’s proposed rules and 

obtain fulsome public feedback.’’ 364

As discussed above, in Part I, the 

Commission extended until August 5, 

2024, the time period within which to 

approve the proposed rule change, 

disapprove the proposed rule change, or 

institute proceedings to determine 

whether to disapprove the proposed 

rule change. On August 5, 2024, the 

Commission instituted proceedings to 

determine whether to approve or 

disapprove the proposed rule change, 

and allow for additional analysis of, and 

input from commenters with respect to, 

the scope and implementation of the 

proposed rules. On October 28, 2024, 

the Commission designated January 2, 

2025, as the date by which the 

Commission shall either approve or 

disapprove the proposed rule change. 

Following the Commission’s 

publication of its Notice of Designation 

of a Longer Period for Commission 

Action on a Proposed Rule Change to 

Adopt the FINRA Rule 6500 Series, 

some commenters submitted comments 

stating their concerns about—what 

commenters called—a 45-day ‘‘delay’’ in 

implementing SLATE. Some 

commenters opposed the Commission’s 

designation of a longer period within 

which to take action on FINRA’s 

proposed rule change.365 Some 

commenters called the extension 

‘‘unacceptable’’ or stated that the delay 

in the implementation of the FINRA 

rules could undermine the stability and 

transparency of the financial system and 

weaken investor confidence.366 The 

Commission’s publication of its Notice 

of Designation of a Longer Period for 

Commission Action on a Proposed Rule 

Change to Adopt the FINRA Rule 6500 

Series did not delay the implementation 

of SLATE. Pursuant to Rule 10c–1a, the 

date for the Proposal to be effective is 

no later than 12 months after the 

effective date of Rule 10c–1a, which is 

January 2, 2025.367

2. SLATE Compliance Period(s) 

One commenter recommended that 

FINRA provide SLATE Participants 

with six months of user acceptance 

testing.368 The commenter stated that 

such testing ‘‘will be a critical 

component of the development 

lifecycle—reducing risk and increasing 

the quality of submissions.’’ 369 Whether 

FINRA decides to provide for such 

testing, taking account of the applicable 

Rule 10c–1a compliance periods, is 

within FINRA’s discretion to structure 

its systems and processes as it sees 

fit.370

A commenter stated that the 

Commission should pause the Rule 10c– 

1a compliance dates until the legal 

challenge regarding Rule 10c–1a is 

resolved.371 Another commenter stated 

that the SEC and FINRA should ‘‘avoid 

pursuing’’ the Proposal until the legal 

challenge is adjudicated.372 In general, 

the filing of a legal challenge to an 

agency rule does not itself alter the 


lotter on DSK11XQN23PROD with NOTICES1
Federal Register / Vol. 90, No. 5 / Wednesday, January 8, 2025 / Notices 1585 

373See SIFMA and SIFMA AMG Letter, at 2. The 

commenter suggested that the Commission ‘‘allow[ ] 

FINRA to consent to additional time for 

Commission consideration of the SLATE proposal 

under Section 19(b)(2)(B)(ii) of the Exchange Act.’’ 

SIFMA and SIFMA AMG Letter, at 2. 

374See, e.g., ISLA Americas Letter 1, at 13–14, 17; 

ISLA Americas Letter 2, at 4, 8; FIF Letter, at 3– 

4. See also FIF Letter, at 6, 8. FINRA has included 

on its website additional information regarding 

SLATE, including the Participation Specification 

for Securities Lending and Transparency Engine 

(SLATETM). See Securities Lending and 

Transparency Engine, FINRA (last visited December 

19, 2024), https://www.finra.org/filing-reporting/ 

slate. Some commenters stated that reporting the 

data elements in proposed Rule 6530(a)(2)(I) and (J) 

will not always enable Covered Persons to provide 

a complete depiction of the specific fee arrangement 

used for certain reported covered securities loans 

within the limited space of the SLATE field for the 

rebate rate or lending fee. See SIFMA and SIFMA 

AMG Letter, at 4–5; ISLA Americas Letter 2, 6–7. 

The structuring of particular data fields within a 

SLATE report is discussed in the SLATE Participant 

Reporting Specifications, which were not filed or 

required to be filed with the Commission as part of 

the Proposal. 

375See FINRA Letter, at 11–12. 

376 15 U.S.C. 78s(b)(6). 

377 15 U.S.C. 78s(b)(5) (providing that the 

Commission ‘‘shall consult with and consider the 

views of the Secretary of the Treasury prior to 

approving a proposed rule filed by a registered 

securities association that primarily concerns 

conduct related to transactions in government 

securities, except where the Commission 

determines that an emergency exists requiring 

expeditious or summary action and publishes its 

reasons therefor’’). 

378 15 U.S.C. 78s(b)(2). 

379 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f). 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 will institute proceedings to determine 

whether the proposed rule change should be 

approved or disapproved. 

5Copies 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 the 

Exchange. 

compliance date(s) set forth in the rule. 

Accordingly, the challenge to Rule 10c– 

1a does not change the compliance 

date(s) set forth therein or the need for 

affected parties to comply with Rule 

10c–1a. 

Another commenter stated that the 

Commission should work with FINRA 

to afford FINRA an appropriate amount 

of additional time to address the 

feedback FINRA may receive on Partial 

Amendment No. 1, such as by allowing 

FINRA to consent to additional time for 

Commission consideration of the 

Proposal.373 As discussed above, in 

Parts I and III.J.1, January 2, 2025, is the 

date by which the Commission shall 

either approve or disapprove the 

Proposal and is the compliance date 

under Rule 10c–1a for the Proposal to be 

effective. The commenter’s suggestion to 

allow additional time for the Proposal to 

be considered would extend 

consideration of the Proposal beyond, 

and therefore would be inconsistent 

with, the Rule 10c–1a compliance date 

for the Proposal to be effective. 

K. Issues Outside the Scope of the

Proposal

The Commission received comments 

on the Draft SLATE Participant 

Reporting Specifications.374 The SLATE 

Participant Reporting Specifications 

were not filed or required to be filed 

with the Commission as part of the 

Proposal. These issues are outside the 

scope of the Proposal, which, as 

discussed above in Parts III.A through 

III.J, is consistent with Section 15A(b)(6)

of the Exchange Act. FINRA responded

to comments regarding the Technical

Specifications for SLATE Reporting in

the FINRA Letter.375

L. Consultation With the Treasury

Department

Pursuant to Section 19(b)(6) of the 

Act,376 the Commission has considered 

the sufficiency and appropriateness of 

existing laws and rules applicable to 

government securities brokers, 

government securities dealers, and their 

associated persons in approving the 

proposed rule change. Pursuant to 

Section 19(b)(5) of the Act,377 the 

Commission consulted with and 

considered the views of the Treasury 

Department in determining whether to 

approve the proposed rule change. The 

Treasury Department did not object to 

the proposed rule change. 

IV. Conclusion

It is therefore ordered, pursuant to

Section 19(b)(2) of the Act,378 that the 

proposed rule change (SR–FINRA– 

2024–007), as modified by Partial 

Amendment No. 1, be, and hereby is, 

approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.379

J. Matthew DeLesDernier,

Deputy Secretary. 

[FR Doc. 2025–00179 Filed 1–7–25; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–102080; File No. SR–Phlx– 

2024–75] 

Self-Regulatory Organizations; Nasdaq 

PHLX LLC; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Amend the Definitions 

of ‘‘Class’’ and ‘‘Series’’ To Harmonize 

Terms With Affiliated Exchanges 

January 2, 2025. 

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 December 

20, 2024, Nasdaq PHLX LLC 

(‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Item I below, 

which Item has been substantially 

prepared by the Exchange. The 

Exchange has designated this proposal 

for immediate effectiveness pursuant to 

Section 19(b)(3)(A) of the Act 3 and Rule 

19b–4(f) thereunder.4 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 

Options 1, Section 1, Applicability, 

Definitions and References, to amend 

the definitions of ‘‘class’’ and ‘‘series.’’ 

The proposed rule change, including 

the Exchange’s statement of the purpose 

of, and statutory basis for, the proposed 

rule change, is available on the 

Exchange’s website at https://

listingcenter.nasdaq.com/rulebook/ 

phlx/rulefilings and on the 

Commission’s website at https://

www.sec.gov/rules-regulations/selfregulatory-organization-rulemaking/ 

national-securities-exchanges?file_

number=SR-Phlx-2024-75. 

II. 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.5

Comments may be submitted 

electronically by using the 

Commission’s internet comment form 

(https://www.sec.gov/rules-regulations/ 

self-regulatory-organizationrulemaking/national-securitiesexchanges?file_number=SR-Phlx-2024- 

75) or by sending an email to ruleVerDate Sep<11>2014 17:50 Jan 07, 2025 Jkt 265001 PO 00000 Frm 00152 Fmt 4703 Sfmt 4703 E:\FR\FM\08JAN1.SGM 08JAN1

lotter on DSK11XQN23PROD with NOTICES1