The following Letter Type D, or variations thereof, was submitted by individuals or entities.

Letter Type D:

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. 

The Managed Funds Association (MFA), representing more than 180 member fund managers, including traditional hedge funds, credit funds, and crossover funds, has voiced significant concerns regarding the proposed rules. 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. 

Contrary to MFA’s contention that the required transparency under the Securities Lending Rule could harm investors and market liquidity by disclosing individual transaction details, I argue that transparency is essential for market integrity. 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. 

MFA also warns that publishing detailed information could deter market participation and degrade market quality by exposing short sellers’ identities and strategies. However, I believe that such 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. 

The SEC's Adopting Release for SEA Rule 10c-1a emphasized that increased transparency in the securities lending market would help alleviate the information disadvantage faced by various market participants, improve price discovery, and reduce costs associated with market condition monitoring. It is vital that any discretion to suspend reporting be exercised sparingly and with full justification to ensure that the benefits outlined by the SEC are realized and not diminished. 

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. 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,