Thursday, June 20, 2024

SEC Extends SLATE Review Period Due to Industry Concerns

Many Believe FINRA Exceeded its Mandate

Author: David Schwartz J.D. CPA

The SEC extended the review period for FINRA's proposed SLATE rules, designed to implement securities lending reporting under Rule 10c-1a. Industry participants voiced concerns that the proposed rules exceed the SEC mandate by requiring additional data elements not explicitly outlined in the regulation. These elements, such as expected settlement dates, fee details, and various modifiers, could potentially expose sensitive financial information and proprietary trading strategies. Additionally, concerns were raised about the reintroduction of intraday reporting and the lack of transparency in the rulemaking process. Overall, the industry calls for a more measured approach that balances regulatory requirements with the need to protect confidential information.

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Tuesday, April 16, 2024

Loan Recalls & the T+1 Countdown: Can Securities Lenders Adapt?

Time is Running out for Lenders to Prepare for T+1 and N-PX Loan Recall Wrinkles

Author: David Schwartz J.D. CPA

The T+1 settlement cycle and new proxy voting disclosure requirements present unprecedented challenges for the securities lending industry. The clock is ticking, and lenders failing to adapt swiftly risk significant operational and financial disruptions. Technology, communication, and collaboration are crucial for successful recall processes in a rapidly evolving landscape.  

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Categories: All, Commentary, Cross-Post


Monday, November 6, 2023

Predictive AI in Securities Finance: Step One

How to Develop an Efficient, Legally-defensible Machine Learning Infrastructure

Author: Ed Blount

On April 2nd, 2026, an effusion of data from a daily trove of U.S. regulatory filings will create resources to drive many new use cases for artificial intelligence in capital markets. A clear opportunity exists in securities finance, where practitioners have repeatedly stated that major IT investments will be needed to comply with the many new regulatory mandates. “Black box” AI platforms may seem a ready solution but can also create nightmares for client reviews and lawsuits.

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Wednesday, October 25, 2023

New Money Fund Reforms: Safer and More Resilient Cash Collateral Pools?

More liquidity, transparency, and safety for institutional investors?

Author: David Schwartz J.D. CPA

The Securities and Exchange Commission (SEC) recently adopted final rules on money market (2a-7) fund reforms. These reforms are designed to make money market funds more resilient and liquid, potentially making them safer and more attractive vehicles for mutual funds to use as collateral pools for their securities lending programs.

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Friday, October 13, 2023

SEC Adopts Long Awaited Securities Lending Disclosure Rule

Persuasive Public Comment Helps Mold the Final Rule

Author: David Schwartz J.D. CPA

The Securities and Exchange Commission (SEC) has adopted a new rule, rule 10c-1, to increase transparency in the securities lending market. The rule requires certain persons to report information about securities loans to a registered national securities association (RNSA). The RNSA will then make certain information publicly available. Published in December of 2021, the proposal received considerable public comment, requiring the Commission to extend the initial 30-day comment period twice, once due to a technical problem receiving comments, and then again to consider whether there would be any effects of proposed Rule 13f–2 that the Commission should consider in connection with proposed Rule 10c–1. Throughout the final release, the Commission notes where persuasive public comment informed the ultimate text of the rule.

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