26 Jan 2022

SBAI Response to SEC on Securities Lending

SBAI provides comments on the SEC’s proposed rule to increase transparency and efficiency of the securities lending market.

SEC Proposes Rule to Provide Transparency in the Securities Lending Market (18 November 2021)

We, at the SBAI, agree with the SEC’s assessment of the important role of the securities lending market and support its objective to increase transparency in this area. Our letter raises the following key positions that we view as important when developing rules in the area of disclosure of securities loans.

  • Single-sided reporting: We agree that lenders (or their agents) are required to report, but not the borrowers of securities.
  • Reporting window: End of day reporting on T+1 basis is more suitable and accurate than the proposed 15-minute reporting window, and consistent with approaches in other jurisdictions.
  • Scope: Data collection should be limited to the so-called “wholesale” segment, where the actual lending takes place, not the “retail segment”.
  • Implementation: We support a phased approach before the rules are finalised, starting with equity securities lending transactions, and an evaluation of a further expansion of the framework at a later point in time.
  • Cross-border application: We encourage further clarification of the cross-border application of the rules.