FINRA proposes amendments to Rule 6500 Series
18 November 2024 US
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The Financial Industry Regulatory Authority (FINRA) has proposed a number of amendments to Rule 6500 Series, Securities Lending and Transparency Engine (SLATE).
The proposed rule, which the authority is yet to approve or disapprove, will face amendments following concerns from commenters.
FINRA is proposing to amend the original proposal to delete the supplementary material regarding the reporting of intraday loans (Supplementary Material .01 (Intraday Loan Modifications)).
In addition, the amendments also include alterations to the rule on changes to the parties to a loan, including in the context of reallocating omnibus loans (Supplementary Material .02 (Changes to the Parties to a Covered Securities)).
As originally proposed, Rule 6530.01 provided that, if a covered securities loan is modified multiple times throughout the day, a covered person must report each loan modification as set forth in proposed Rule 6530(b).
In Partial Amendment No. 1, FINRA is proposing to amend the original proposal to delete both Supplementary Material .01 and .02.
FINRA is also proposing to delete the proposed modifier and indicator requirements.
As originally proposed, covered persons would have been required to append specific modifiers and indicators when reporting initial covered securities loans and loan modifications to SLATE.
Further, FINRA wishes to delete the requirements in proposed Rule 6530(a)(2)(Y) and proposed Rule 6530(b)(2)(I), which state that covered persons must report the modifiers and indicators as required by either the Rule 6500 Series or the SLATE participant specification.
FINRA believes it is appropriate, at this time, to delete these aspects of the original proposal to facilitate the achievement of the initial SLATE reporting requirements in a timely manner.
The Partial Amendment No. 1 will also cover changes to reporting agent supervision, loan transaction activity and rate distribute data, as well as de minimis loan transaction activity.
In October, the authority filed a notice of designation of longer period for commission action on proceedings to determine an order to institute proceedings to determine whether to approve or disapprove a proposed rule change to adopt the FINRA Rule 6500 Series.
The new date by which the commission shall either approve or disapprove FINRA Rule 6500 Series SLATE will be 2 January 2025.
The proposed rule, which the authority is yet to approve or disapprove, will face amendments following concerns from commenters.
FINRA is proposing to amend the original proposal to delete the supplementary material regarding the reporting of intraday loans (Supplementary Material .01 (Intraday Loan Modifications)).
In addition, the amendments also include alterations to the rule on changes to the parties to a loan, including in the context of reallocating omnibus loans (Supplementary Material .02 (Changes to the Parties to a Covered Securities)).
As originally proposed, Rule 6530.01 provided that, if a covered securities loan is modified multiple times throughout the day, a covered person must report each loan modification as set forth in proposed Rule 6530(b).
In Partial Amendment No. 1, FINRA is proposing to amend the original proposal to delete both Supplementary Material .01 and .02.
FINRA is also proposing to delete the proposed modifier and indicator requirements.
As originally proposed, covered persons would have been required to append specific modifiers and indicators when reporting initial covered securities loans and loan modifications to SLATE.
Further, FINRA wishes to delete the requirements in proposed Rule 6530(a)(2)(Y) and proposed Rule 6530(b)(2)(I), which state that covered persons must report the modifiers and indicators as required by either the Rule 6500 Series or the SLATE participant specification.
FINRA believes it is appropriate, at this time, to delete these aspects of the original proposal to facilitate the achievement of the initial SLATE reporting requirements in a timely manner.
The Partial Amendment No. 1 will also cover changes to reporting agent supervision, loan transaction activity and rate distribute data, as well as de minimis loan transaction activity.
In October, the authority filed a notice of designation of longer period for commission action on proceedings to determine an order to institute proceedings to determine whether to approve or disapprove a proposed rule change to adopt the FINRA Rule 6500 Series.
The new date by which the commission shall either approve or disapprove FINRA Rule 6500 Series SLATE will be 2 January 2025.
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