Jun. 12, 2024
I am writing to express my concerns regarding the recent delay by FINRA in the decision to adopt the new FINRA Rule 6500 Series, also known as the Securities Lending and Transparency Engine (SLATE). This rule, intended to mandate the reporting of securities loans and the public dissemination of loan information, was initially published for comment on May 7, 2024. The deadline for a decision on this rule was set for June 21, 2024. However, instead of providing a definitive decision, FINRA has decided to postpone the ruling until August 5, 2024. As someone keenly interested in market transparency, particularly in the context of securities lending and short selling, I believe the adoption of this rule is crucial. The proposed rule is aimed at shedding light on the sources of lent shares, which is particularly relevant for stocks like GameStop. The lack of transparency in the securities lending market has long been a point of concern, and the implementation of the SLATE rule could provide much-needed insight into these activities. However, I am also aware that FINRA, in consultation with the SEC, retains the discretion to suspend the reporting or dissemination of certain Covered Securities Loans or specific Data Elements as deemed necessary. While I understand the need for flexibility in regulatory measures, it is imperative that such suspensions do not undermine the primary goal of the rule – to enhance market transparency. I urge the SEC to work closely with FINRA to ensure that the final decision on the SLATE rule prioritizes the interests of market transparency and investor protection. Delays and potential suspensions should be carefully considered and minimized to avoid perpetuating the opacity that currently exists in the securities lending market. Thank you for your attention to this matter. I look forward to a resolution that promotes greater transparency and fairness in the market. Sincerely, Micahol