FINRA’s Proposed Changes to Rule 6500 Series Aim to Simplify SLATE Reporting
FINRA has issued a set of proposed amendments to Rule 6500 Series, which governs the Securities Lending and Transparency Engine (SLATE). These changes are designed to address feedback from market participants and to make the reporting process more manageable, while also expediting the implementation of the SLATE system.
Highlights of the Proposed Amendments
Key updates in Partial Amendment No. 1 include removing specific reporting requirements that were initially part of the rule proposal:
Elimination of Intraday Loan Reporting Requirements: Supplementary Material .01, which required reporting every time a covered securities loan was modified throughout the day, is proposed to be deleted. This change aims to simplify how intraday modifications are reported.
Revisions Related to Loan Party Changes: Supplementary Material .02, which dealt with changes to loan parties and the reallocation of omnibus loans, is also slated for removal. This should make reporting requirements clearer and less complex.
Removal of Modifiers and Indicators
FINRA is also proposing to eliminate the need for covered persons to use specific modifiers and indicators when reporting loans and modifications. Previously, these reporting elements were mandated under Rule 6530(a)(2)(Y) and Rule 6530(b)(2)(I). By scrapping these requirements, FINRA seeks to streamline the reporting process and reduce the compliance burden on participants.
Purpose and Timing
The rationale for these amendments is to ensure that SLATE reporting can be implemented efficiently, without imposing unnecessary hurdles. FINRA is focused on simplifying initial requirements to facilitate a smoother transition for participants.
Additionally, the amendment covers updates to reporting agent supervision, loan transaction activity, and data distribution, including handling minimal loan transactions.
Next Steps
The SEC has set a new deadline of January 2, 2025, to either approve or disapprove the revised Rule 6500 Series. FINRA’s adjustments reflect its ongoing effort to balance regulatory oversight with practical, achievable compliance standards for market participants.
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