May 15, 2024
To Whom It May Concern, I am a household investor, writing to express my overall support for the proposed FINRA Rule 6500 Series concerning the Securities Lending and Transparency Engine (SLATE). It mandates the reporting of securities loans and the dissemination of loan information to the public. Currently, information regarding securities lending is opaque, creating an information disadvantage faced by various market participants. Price discovery is hindered, and potential cost savings related to market condition monitoring are unrealized. Increasing transparency will mitigate systemic risk by providing market participants with information to assess the liquidity and counterparty risk associated with securities loans. It will also aid in the protection of investors by ensuring they are appropriately informed about the terms of securities loans and the parties involved. The requirement to report comprehensive data elements will contribute to a fair and orderly market. Such data elements include: Legal name of the security issuer LEI, security symbols (CUSIP, ISIN, FIGI) Transaction dates and times Settlement dates Loan amounts Details concerning collateral Such reporting enhances the capacity of all market participants to make informed decisions, thereby fostering a competitive and equitable trading environment. The SEC's Adopting Release for SEA Rule 10c-1a emphasized the need to address these issues. FINRA Rule 6500 Series concerning the Securities Lending and Transparency Engine (SLATE) addresses them. However, I have significant concerns regarding the provisions that allow FINRA, in consultation with the SEC, to suspend the reporting or dissemination of certain Covered Securities Loans or Data Elements for periods deemed necessary. This provision undermines the transparency that Rule 6500 aims to promote. The suspension of reporting would inadvertently create an information asymmetry, disadvantaging end borrowers and beneficial owners who rely on this data for making prudent investment decisions. It is vital that any suspension of reporting be exercised sparingly to ensure that the benefits outlined by the SEC are realized and not diminished. A full, detailed, and transparent justification for suspension must be required to be made to the public immediately (no delay) upon suspension of reporting, along with the expected period of time for the suspension. While I broadly support the implementation of FINRA Rule 6500 Series for its potential to enhance market fairness and protect investors through improved transparency, I strongly advocate for stringent guidelines governing the suspension of reporting and the publication of the reasons and timeframe for suspension to avoid undermining these goals. Sincerely, Jennifer Johnson, Champaign, IL