Notice2025-14459
Order Granting Temporary Exemptive Relief, Pursuant to Section 36(a)(1) of the Securities Exchange Act of 1934, From Certain Aspects of Rule 10c-1a
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Published
July 31, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 145 (Thursday, July 31, 2025)</title>
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[Federal Register Volume 90, Number 145 (Thursday, July 31, 2025)]
[Notices]
[Pages 36087-36088]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-14459]
[[Page 36087]]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-103560]
Order Granting Temporary Exemptive Relief, Pursuant to Section
36(a)(1) of the Securities Exchange Act of 1934, From Certain Aspects
of Rule 10c-1a
July 28, 2025.
I. Introduction
On October 13, 2023, the Securities and Exchange Commission
(``Commission'') adopted Rule 10c-1a under the Securities Exchange Act
of 1934 (``Exchange Act'').\1\ Rule 10c-1a requires, among other
things, that any covered person who agrees to a covered securities loan
on behalf of itself or another person must report, within certain time
periods, certain information to a registered national securities
association (``RNSA'') or rely on a reporting agent to fulfill its
reporting obligations under certain conditions.\2\ Rule 10c-1a also
requires that an RNSA implement rules regarding the format and manner
of its collection of Rule 10c-1a information,\3\ make publicly
available certain data pertaining to reported securities loans,\4\ and
comply with certain data retention and availability requirements.\5\
The effective date for Rule 10c-1a was January 2, 2024.\6\ The
Financial Industry Regulatory Authority, Inc. (``FINRA'') is currently
the only RNSA. The Rule 10c-1a Adopting Release established (1) May 1,
2024, as the date by which FINRA must propose rules pursuant to final
Rule 10c-1a(f); (2) January 2, 2025, as the date by which the proposed
FINRA rules must be effective; (3) January 2, 2026, as the date by
which covered persons must report Rule 10c-1a information to FINRA
(``reporting date''); and (4) April 2, 2026, as the date by which FINRA
must publicly report Rule 10c-1a information pursuant to Rules 10c-
1a(g) and (h)(3) (``dissemination date'').\7\
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\1\ Reporting of Securities Loans, Exchange Act Release No. 34-
98737 (Oct. 13, 2023), 88 FR 75644 (Nov. 3, 2023) (``Rule 10c-1a
Adopting Release'').
\2\ See 17 CFR 240.10c-1a(a).
\3\ See 17 CFR 240.10c-1a(f).
\4\ See 17 CFR 240.10c-1a(g).
\5\ See 17 CFR 240.10c-1a(h).
\6\ See Rule 10c-1a Adopting Release, 88 FR at 75644.
\7\ See Rule 10c-1a Adopting Release, 88 FR at 75690-91 (stating
that the ``compliance dates require that: (1) an RNSA propose rules
pursuant to final Rule 10c-1a(f) within four months of the effective
date of final Rule 10c-1a; (2) the proposed RNSA rules are effective
no later than 12 months after the effective date of final Rule 10c-
1a; (3) covered persons report Rule 10c-1a information to an RNSA
starting on the first business day 24 months after the effective
date of final Rule 10c-1a . . . ; and (4) RNSAs publicly report Rule
10c-1a information pursuant to final Rules 10c-1a(g) and (h)(3)
within 90 calendar days of the reporting date for covered persons to
report Rule 10c-1a information to an RNSA'').
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On May 1, 2024, FINRA filed with the Commission, pursuant to
Section 19(b)(1) of the Exchange Act,\8\ and Rule 19b-4 thereunder,\9\
a proposed rule change to adopt the new FINRA Rule 6500 Series
(Securities Lending and Transparency Engine (SLATE<SUP>TM</SUP>))
(``SLATE'') to (1) require reporting of securities loans; and (2)
provide for the public dissemination of loan information.\10\ On
January 2, 2025, the Commission issued an order, pursuant to Section
19(b)(2) of the Exchange Act,\11\ approving the proposed rule change,
as modified by a partial amendment FINRA filed on November 14, 2024
(``Partial Amendment No. 1'').\12\ On April 29, 2025, FINRA requested
an extension of Rule 10c-1a's two remaining compliance dates, which
concern the reporting date and the dissemination date.\13\ As discussed
below, in Part II, FINRA requested that the reporting date (established
in the Rule 10c-1a Adopting Release as January 2, 2026) be extended to
September 28, 2026, and that the dissemination date (established in the
Rule 10c-1a Adopting Release as April 2, 2026) be extended to March 29,
2027.
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\8\ 15 U.S.C. 78s(b)(1).
\9\ 17 CFR 240.19b-4.
\10\ See Exchange Act Release No. 34-100046 (May 1, 2024), 89 FR
38203 (May 7, 2024) (Notice of Filing of a Proposed Rule Change To
Adopt the FINRA Rule 6500 Series (Securities Lending and
Transparency Engine (SLATE\TM\))).
\11\ 15 U.S.C. 78s(b)(2).
\12\ See Exchange Act Release No. 34-102093 (Jan. 2, 2025), 90
FR 1563 (Jan. 8, 2025) (Order Approving a Proposed Rule Change, as
Modified by Partial Amendment No. 1, To Adopt the FINRA Rule 6500
Series (Securities Lending and Transparency Engine
(SLATE<SUP>TM</SUP>))). On November 15, 2024, the Commission
published notice of Partial Amendment No. 1. See Exchange Act
Release No. 34-101645 (Nov. 15, 2024), 89 FR 92228 (Nov. 21, 2024).
\13\ Letter from Marcia E. Asquith, Corporate Secretary and EVP,
Board and External Relations, FINRA (Apr. 29, 2025) (``FINRA
Letter''), available at <a href="https://www.finra.org/sites/default/files/2025-04/sea-rule-10c-1a-extension-request-letter-042925.pdf">https://www.finra.org/sites/default/files/2025-04/sea-rule-10c-1a-extension-request-letter-042925.pdf</a>.
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II. Discussion and Exemptive Relief
In its request, FINRA stated that the Rule 10c-1a compliance
efforts require building the technology infrastructure, launching
SLATE, providing user acceptance testing opportunities and
incorporating any participant feedback from testing, developing the
documents and processes necessary to onboard covered persons and other
participants (i.e., reporting agents and other third parties), and
implementing processes for facility support and training additional
staff by the current reporting date of January 2, 2026.\14\ Following
the commencement of reporting, FINRA must then disseminate securities
lending data within three months of the reporting date.\15\
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\14\ See FINRA Letter, at 3-4.
\15\ See FINRA Letter, at 3.
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FINRA also stated that it has been working diligently towards the
compliance dates for Rule 10c-1a but that FINRA and impacted market
participants share concerns regarding the challenges and risks
presented by the current compliance schedule for reporting Rule 10c-1a
information.\16\ FINRA stated that, since the Commission's issuance of
an order approving the FINRA Rule 6500 Series, it has been in regular
contact with market participants and industry organizations regarding
firms' questions around implementation and compliance efforts.\17\
FINRA also stated that the requested reporting date extension would
allow sufficient time for FINRA and market participants to take
necessary steps for compliance in an effective and orderly manner.\18\
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\16\ See FINRA Letter, at 3-4.
\17\ See FINRA Letter, at 3.
\18\ See FINRA Letter, at 4-5.
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Additionally, FINRA stated that the requested dissemination date
extension would provide FINRA with sufficient time to review the
reported data and work with market participants on reporting accuracy
and consistency to facilitate the dissemination of accurate individual
and aggregate covered securities loan information and loan rate
statistics to the public.\19\ Based on its experience with reporting
and dissemination regimes, FINRA stated that it expects that, at the
beginning of the new reporting requirement, there will be more
reporting challenges, potentially resulting in inaccuracies and
inconsistencies, particularly because SLATE will be a new facility and
some participants will have no (or limited) prior experience with
reporting to FINRA facilities.\20\ FINRA stated that this increases the
importance of adequate time to review the data, assess its quality,
identify participants with reporting inconsistencies or other issues,
provide additional clarification, if needed, and work with participants
until reporting accuracy stabilizes.\21\
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\19\ See FINRA Letter, at 5.
\20\ See FINRA Letter, at 4.
\21\ See FINRA Letter, at 4.
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After considering FINRA's request, the Commission is providing a
temporary exemption to Rule 10c-1a, pursuant to Section 36(a) of the
Exchange Act, until September 28, 2026,
[[Page 36088]]
with respect to the reporting date, and March 29, 2027, with respect to
the dissemination date, to facilitate the accuracy of securities loan
data that will be made available to the public. Section 36(a) of the
Exchange Act authorizes the Commission to exempt, conditionally or
unconditionally, any person, security, or transaction, or any class or
classes of persons, securities, or transactions, from any provision or
provisions of the Exchange Act, or of any rule or regulation
thereunder, to the extent that such exemption is necessary or
appropriate in the public interest, and is consistent with the
protection of investors.\22\ The Commission finds this temporary
exemption to be necessary in the public interest and consistent with
the protection of investors because it will help to facilitate an
effective and orderly implementation of the applicable requirements of
Rule 10c-1a that are designed to increase transparency in the
securities lending market through improvements to the
comprehensiveness, breadth, accuracy, and accessibility of securities
lending data.\23\
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\22\ 15 U.S.C. 78mm.
\23\ See Rule 10c-1a Adopting Release, 88 FR at 75706. See also
Rule 10c-1a Adopting Release, 88 FR at 75665.
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Although a temporary exemption from compliance with Rule 10c-1a
reporting and data dissemination will delay the benefits of the rule,
providing additional time for industry participants required to report
Rule 10c-1a information and for FINRA to disseminate specified data
would facilitate the realization of the rule's benefits, including
those related to investor protection. These benefits could otherwise be
hampered by the reporting or dissemination of inaccurate securities
loan information if a temporary exemption were not granted. The
additional time provided by a temporary exemption strikes an
appropriate balance between promoting the reporting and dissemination
of securities loan information and ensuring such information provided
by industry participants is accurate. The public availability of
accurate securities loan data will result in benefits in the form of
better decision-making by investors, beneficial owners and other market
participants, reduced costs of business for broker-dealers, improved
performance and reduced costs for lending programs, and improved market
stability and price discovery both in the securities lending market and
the market for the underlying security.\24\ Additionally, the
availability of accurate securities loan data will help protect against
potential unfair pricing of securities loans by broker-dealers and
protect broker-dealers' customers against potential instabilities, as
well as help to ensure that entities engaging in certain securities
lending transactions are authorized to do so and are in compliance with
applicable regulations.\25\
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\24\ See Rule 10c-1a Adopting Release, 88 FR at 75711.
\25\ See Rule 10c-1a Adopting Release, 88 FR at 75716.
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III. Conclusion
Accordingly, it is hereby ordered, pursuant to Section 36(a) of the
Exchange Act, that the Commission grants the temporary exemptive
relief, as set forth in this Order, from compliance with Rule 10c-1a
regarding the reporting date until September 28, 2026, and from
compliance with Rules 10c-1a(g) and (h)(3) regarding the dissemination
date until March 29, 2027.
By the Commission.
Date: July 28, 2025.
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-14459 Filed 7-30-25; 8:45 am]
BILLING CODE 8011-01-P
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</html>Indexed from Federal Register on July 31, 2025.
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