Statement on Extension of Compliance Dates for Securities Lending Reporting and Short Position and Short Activity Reporting
Recently I expressed my concern about “Repeal by Extension”—the concept of using compliance date extensions that are long in duration to indefinitely delay the compliance dates of final rules.[1] I am disappointed that this pattern continues today with the issuance of an exemptive order[2] that provides a two-year compliance date extension for two rules aimed at increasing transparency in the securities lending and short sale markets: Rule 10c-1a (Securities Lending Reporting) [3] and Rule 13f-2 (Short Position and Short Activity Reporting) (collectively, the “Rules”).[4] The Commission adopted both of these Rules in 2023 under rulemaking authority granted by Congress through the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank”),[5] the well-known legislative response to the wreckage generated by the 2008 financial crisis.
Let me briefly explain how we got here. Trade groups challenged the Rules on various grounds, and, on August 25, 2025, the Fifth Circuit largely rejected the arguments they raised.[6] It did, however, agree with one argument and remanded the Rules to the Commission, without vacating them, to allow the Commission “to analyze [the Rules’] cumulative economic impact and respond[] to further comments in view of that analysis.”[7] The Court determined that “there is at least a serious possibility that the agency will be able to substantiate its decision given an opportunity to do so.”[8]
It should not take two years to complete a narrow revision of the Rules’ economic analyses consistent with the Court’s request. This could be done expeditiously and concisely. However, rather than following the Court’s narrow directive, the Commission not so subtly signals that no one should even bother with implementation; the Rules will be changing.[9]
The right (and legal) thing to do would be to implement the Rules, which are already effective since the Fifth Circuit declined to vacate them. If extra time is truly necessary to allow registrants more runway to prepare for the Rules in light of the Court’s decision, this could be accomplished by a short compliance date extension.[10] Any future modifications should be addressed separately, as required by statute, through notice-and-comment rulemaking.
Under the guise of compliance date extensions, we are attempting to camouflage a new willingness to repeatedly bend the rules until they break—eroding the rule of law.
[1]See Commissioner Caroline Crenshaw, Repeal By Extension: Statement on Yet Another Extension of the Form PF Compliance Date (Sept. 17, 2025) available at https://www.sec.gov/newsroom/speeches-statements/crenshaw-091725-repeal-extension-statement-yet-another-extension-form-pf-compliance-date.
[2]See Order Granting Temporary Exemptive Relief, Pursuant to Sections 13(f)(3) and 36(a)(1) of the Securities Exchange Act of 1934 from Compliance with Rule 13f-2 and Form SHO, and Pursuant to Section 36(a)(1) of the Securities Exchange Act of 1934 from Certain Aspects of Rule 10c-1a, Release Number 34-104303 (Dec. 3, 2025) (the “Order”).
[3]See Reporting of Securities Loans, Release No. 34-98737, 88 FR 75644 (Nov. 3, 2023). Rule 10c-1a requires, among other things, that any covered person who agrees to a covered securities loan on behalf of itself or another person must provide, within certain time periods, certain information to a registered national securities association (“RNSA”). FINRA is the only currently existing RNSA.
[4]See Short Position and Short Activity Reporting by Institutional Investment Managers, Release No. 34-98738, 88 FR 75100 (Nov. 1, 2023). Rule 13f-2 requires institutional investment managers that meet or exceed certain specified thresholds to report on Form SHO certain short position and short activity data for equity securities.
[5] Pub. L. 111–203, 124 Stat. 1376.
[6]See Nat’l Ass’n of Priv. Fund Managers v. SEC, 151 F.4th 252, 258-69 (5th Cir. 2025).
[7]See id. at 269-73.
[8]See id. at 273 (cleaned up).
[9] This is evident in the Order’s statement that, in addition to allowing time to respond to the Court’s opinion, the exemption is necessary to allow the Commission time to “take any further appropriate actions, which may include amendments to the Rules.” See Order at 4.
[10] Unlike the prior “temporary” compliance date extensions issued for these Rules, which acknowledged that the exemptions would delay the benefits of the Rules, today’s second round of extensions make no mention of the benefits that will be forgone while the Rules are stalled. For example, with respect to Rule 10c-1a, the prior exemption stated that the public availability of accurate securities loan data will result in (1) protections against potentially unfair pricing of securities loans by broker-dealers and protect broker-dealers’ customers against potential instabilities, (2) better decision-making by investors, beneficial owners and other market participants, (3) reduced costs of business for broker-dealers, (4) improved performance and reduced costs for lending programs, and (5) improved market stability and price discovery both in the securities lending market and the market for the underlying security. See Prior Securities Lending Exemptive Order at 5-6. Nevertheless, today we are delaying the realization of the Rules’ benefits yet again, and we are possibly embarking down a path to further diminish those benefits by amending the Rules before their anticipated benefits are ever realized.
Last Reviewed or Updated: Dec. 4, 2025