The SEC & FINRA are finalizing a reporting system intended to bring new transparency to securities lending.
(Last year, the SEC approved Rule 10c-1a, intended to bring new transparency to securities lending transactions via reporting and dissemination requirements. Earlier this year, the Financial Industry Regulatory Authority (FINRA) proposed a new facility allowing covered securities loan transactions to be reported to the self-regulatory organization (SRO) for U.S. broker-dealers. The proposed system, the Securities Lending and Transparency Engine (SLATE) would be governed by FINRA Rule 6500 Series, which would be consistent with Rule 10c-1a. The SLATE effort needs approval from the SEC, which postponed a decision earlier this month to allow for a more thorough review of the proposal. If the SEC approves SLATE, securities firms would be required to report covered securities loan information to SLATE beginning Jan. 2, 2026, according to FINRA. The SRO has suggested that user acceptance test dates might begin in July 2025. Regulatory technology provider EquiLend has been actively involved in industry dialogues about the proposal. Multiple officials at EquiLend took questions from FTF News about SLATE.)
Q: Given the new delay, what does EquiLend think securities firms should do? Forge ahead or put securities lending reforms on hold?
Kevin McNulty
A: From Kevin McNulty, head of regtech solutions at EquiLend: The delay puts firms and service providers in a very tricky position.
The delay is in relation to the SEC’s decision to approve or disapprove FINRA’s SLATE rules, but the timetable for implementation of 10c-1a reporting by firms has not changed.
The challenge for all (including service providers) is that until the SEC makes their decision, it is not clear exactly what the detailed reporting requirements will be, and the time to implement a solution is growing shorter.
At EquiLend, we have created a design for a reporting solution that factors in the proposed SLATE requirements and will be ready to adapt to this should the requirements change.
We continue to work with clients to confirm our solution will meet their needs, and firms that are considering using a service provider should engage with them sooner rather than later.
For firms that are looking to develop their own reporting solution we would recommend they prepare specifications based upon the proposed FINRA rules and ensure that they have enough tech resources lined up to get the work done in time for testing with FINRA in Q3 of 2026.
Q: What have firms been doing to improve their sec lending infrastructures? Or have they been waiting for the regulators before they change their systems?
Mike Norwood
A: From Mike Norwood, head of trading solutions at EquiLend: Firms have been updating and upgrading their technological infrastructure and procedures since we first heard about SFTR. [The E.U. adopted the Securities Financing Transactions Regulation in 2015.]
This initial push by regulators to have data digitized and available for reporting forced more electronic processes into place. CSDR [Central Securities Depositories Regulation] drove that forward again.
T1 has gone smoothly as a result of firms recognizing the evolution of regulation and market structure and having taken steps to bring themselves in line. This should make future changes easier to accommodate as well.
From Gabi Mantle, global head of post trade solutions at EquiLend: Personally, I have not seen significant infrastructure changes, but I have seen significant investment in technology and the adoption of automated solutions such as Recalls.
What I would say is that the regulatory pressures have helped firms secure budgets to improve outdated, manual, risky processes. We first saw this with SFTR and saw another iteration with CSDR when clients needed a prematching solution, something that had never been seen as a high priority in securities lending.
Now, with T+1, time is of the essence, and we’ve seen a 49 percent increase in the number of our clients using products such as automated recalls to streamline and modernize processes.
Q: Has the T+1 push shined new light on the challenges of securities lending? Is that a good or bad thing?
Gabi Mantle
A: From Gabi Mantle: In the U.S. and Canada, streamlining the recalls process was the top priority for our client base and sits firmly within securities lending, and the fact that vendors focused on providing robust solutions to automate and improve the recalls process actually held securities lending in a strong position.
The fact that both the U.K. and E.U. T+1 taskforces have specific securities lending workstreams highlights the fact that direct consideration needs to be given.
So far, this has been very positive for us, with recommendations for increased automation to help cope with the move to T+1 in the U.K. and E.U.
From Mike Norwood: I do think a lot of analysis and effort went into evaluating T1 readiness. I’m not convinced it highlighted any new challenges, but it did force firms to consider whether or not their securities lending infrastructure could support more real-time activity.
We’ve always known our industry was reliant on many batch processes to drive daily activity — holdings, sell notifications, we still use prior day prices — but T1 puts pressures on timelines that would tax previously sufficient procedures.
This is certainly a good thing. Removing dependencies on batch jobs that refresh data once or twice a day and pushing participants to get closer to real-time data makes the industry more resilient as well as more efficient.
The good news is I think that participants have done a great job of responding, and as a result, the implementation has gone pretty smoothly.
Given the heightened volatility during the end of July/beginning of August, it’s great that we have seen elevated trade counts and no issues.
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