Sep. 10, 2024
I am a household investor writing to express my strong general support for the proposed FINRA Rule 6500 Series concerning the Securities Lending and Transparency Engine (SLATE), which mandates the reporting of securities loans and the dissemination of loan information to the public. While MFA has encouraged FINRA to limit its proposed rules to what is mandated by the final SEC Securities Lending Rule, I believe broader transparency measures are necessary and beneficial for the market and investors. Transparency is essential for market integrity. Short sellers (Hedge funds and the banks supporting them) manipulate prices to their advantage by circumventing rules. When these large banking entities fail, it is the taxpayer who is left footing the bill... through bail outs. But who is there to protect individual investors??? The practices of these entities pose systemic risks to the market and therefore DO NOT help with price discovery. Rather, they have methods for ensuring prices are NOT discovered. We see this time and again with so called 'glitches' in reporting and control over our ability to purchase shares when it suits them (yahoo, We Bull, etc.) Detailed reporting helps alleviate the information disadvantage faced by various market participants, improves price discovery, and reduces costs associated with monitoring market conditions. This transparency fosters a competitive and equitable trading environment where all participants can make informed decisions. Publishing and tracking detailed information levels the playing field for the 'little guy'. Transparency mitigates systemic risk by providing critical information to market participants and aids in the assessment of liquidity and counterparty risk associated with securities loans. This level of detail helps protect all investors by ensuring they are adequately informed about the terms of securities loans and the parties involved, thus promoting a fair and orderly market. I have significant concerns regarding the provisions that allow FINRA, in consultation with the SEC, to suspend the reporting or dissemination of certain Covered Securities Loans or Data Elements for periods deemed necessary. Use of this provision would undermine the very transparency that Rule 6500 aims to promote. The suspension of reporting would inadvertently create an information asymmetry, disadvantaging end borrowers and beneficial owners who rely on this data for making prudent investment decisions. It is vital that any discretion to suspend reporting be exercised sparingly and with full justification that does not provide yet another escape route for hedge funds to continue destroying companies and markets for their own gain. The requirement to report comprehensive data elements such as the legal name of the security issuer, LEI, security symbols (CUSIP, ISIN, FIGI), transaction dates and times, settlement dates, loan amounts, and details concerning collateral underscores the importance of detailed reporting in maintaining a fair and orderly market... and will expose synthetic shares being used by hedge funds to control price action. These measures enhance the capacity of all market participants to make informed decisions, thereby fostering a competitive and equitable trading environment. In conclusion, while I broadly support the implementation of FINRA Rule 6500 Series for its potential to enhance market fairness and protect investors through improved transparency, I strongly advocate for stringent guidelines governing the suspension of reporting requirements to avoid undermining these goals. Sincerely, A household investor -- Jane Plumberg Protecting Wealth KC 913-709-5286