Jun. 12, 2024
Sir/Madam, I hope this letter finds you well. I am writing to you as a concerned investor who has been closely following the proposed new FINRA Rule 6500 Series, known as the Securities Lending and Transparency Engine (SLATE). This initiative aims to require the reporting of securities loans and provide for the public dissemination of loan information. The importance of this rule cannot be overstated, as it has significant implications for market transparency and investor confidence. The proposed rule change was published for comment on May 7, 2024, with a decision initially expected by June 21, 2024. However, I recently learned that the decision has been postponed until August 5, 2024. While I understand the need for thorough deliberation, the delay is causing considerable unease among investors like myself. One pressing concern is the opacity surrounding the sources of lent shares used for short-selling, particularly in stocks like GameStop. The proposed rule is designed to shed light on this area, offering more transparency and public dissemination of critical information. However, the provision allowing FINRA, in consultation with the SEC, to suspend the reporting or dissemination of certain Covered Securities Loans or specific Data Elements raises significant alarm. Such measures, if implemented, could undermine the very objective of enhancing market transparency. If the rule is approved, the Initial Covered Securities Loan reports will include non-confidential data elements such as the legal name of the security issuer, security symbol, loan date, expected settlement date, loan amount, type of collateral, and whether the borrower is a broker, dealer, or other entity. This information is crucial for maintaining a transparent and fair market environment. Furthermore, the proposed rule outlines requirements for reporting securities loan modifications, including unique identifiers assigned by FINRA, the date and time of the modification, expected settlement dates, and detailed data elements for each modification. These reporting requirements are essential for accurate and timely information dissemination. As an investor, I urge FINRA to prioritize the approval and implementation of Rule 6500 Series without further delay. Transparency in securities lending is vital for the integrity of our financial markets. I trust that FINRA will take the necessary steps to ensure that this rule is enacted promptly and without provisions that could compromise its effectiveness. Thank you for your attention to this matter. I look forward to a positive resolution that enhances market transparency and protects the interests of all investors. Sincerely, Vivek Wilson A concerned Retail Investor