Proposed Rule 6540

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• SEC Approved FINRA Rules: 2nd January 2025


• Dissemination of Loan Information


• Proposed Rule 6540

Proposed Rule 6540

Status: SEC APPROVED RULES 2.1.25 Last Updated: 02 Jan 2025

Proposed Rule 6540 (Dissemination of Loan Information) would provide for the public dissemination of securities loan data reported to SLATE and information pertaining to the aggregate loan transaction activity and distribution of loan rates for each Reportable Security.

The publicly available data would include:

(1) next day (T+1) loan-level data dissemination for Initial Covered Securities Loans and Loan Modifications (except for the loan amount);

(2) T+20 dissemination of the loan amount for Initial Covered Securities Loans and Loan Modifications; and

(3) daily loan statistics (i.e., aggregate loan activity and distribution of loan rates).

Partial Amendment No. 1 removed the subcategories of volume data from the aggregate loan transaction activity to be disseminated until experience is gained with the impact of disseminating volume data.

In particular, Partial Amendment No. 1 removed paragraphs (c)(1)(A) through (E) and amended proposed Rule 6540(c)(1) to provide that FINRA will disseminate the aggregate volume of securities subject to an Initial Covered Securities Loan or Modification to the amount of Reportable Securities loaned, reported on the prior business day.

In the FINRA Letter, FINRA stated that Rule 10c-1a requires an RNSA to disseminate “information pertaining to the aggregate transaction activity and distribution of loan rates for each reportable security. FINRA stated that the Commission did not specify the precise manner in which aggregate transaction activity or the distribution of loan rates would be compiled and disseminated by an RNSA, thereby providing FINRA with discretion as to the formulation of the data (so long as the “aggregate transaction activity” represented the absolute value of loan transactions). FINRA stated that, in determining what aggregate data is appropriate for public dissemination, it remains very sensitive to concerns regarding potential information leakage.

FINRA stated that this change is appropriate and that FINRA would revisit the possibility of enhancing the aggregate loan transaction activity in the future, after gaining experience with the impact of disseminating volume data and analysing what additional information could be useful (while continuing to be sensitive to potential information leakage concerns).

FINRA stated that any future amendments to the dissemination provisions would be subject to a separate proposed rule change filed with the Commission and subject to notice and comment.