The Securities and Exchange Commission has proposed rule changes designed to increase transparency of securities lending and borrowing transactions.
Under proposed Exchange Act Rule 10c-1, the US securities markets regulator will require lenders to report the terms of a securities lending transaction to a registered national securities association such as the Financial Industry Regulatory Authority.
This registered national securities association will then make the terms of this lending transaction available to the public.
This step, the SEC claims, will be important to ensure that market participants, the public and regulators have access to timely and comprehensive information about the market for securities lending.
Lenders will be required to complete this trade reporting obligation to a registered national securities association within 15 minutes. Also, they will be required at the end of each trading day to report the number of shares they have lent in each security and the number of shares available to borrow.
Commenting on the proposed rule changes, SEC chair Gary Gensler says: “Securities lending and borrowing is an important part of our market structure. Currently though the securities lending market is opaque.
