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ASA Sends Letter on SEC’s Securities Lending Proposal




DALLAS – The American Securities Association (ASA) today sent a letter to the Securities and Exchange Commission (SEC) expressing some concerns regarding the Commission’s securities lending proposal that would create compliance and implementation challenges while failing to level the playing field for all investors.

“Today, investors, especially retail investors, have no idea what the cost to borrow a security in the market is at any given time. The SEC and the public need transparency into what a loan costs, in addition to knowing what it actually cost,” ASA CEO Chris Iacovella wrote in the letter. “Securities lending is one of the last markets in which a few actors benefit from unequal information advantages, and we applaud the SEC for addressing this issue.”

“As a general matter, the ASA supports the Proposal. However, as drafted the Proposal would create several compliance and implementation challenges for broker-dealers and other market participants,” Iacovella wrote. “The ASA has some concerns that the Proposal will not achieve its objective of leveling the securities lending market playing field for all investors.”

In the letter, ASA outlined how compliance costs will fall disproportionately on mid-size and smaller entities, how the proposed 15-minute reporting requirement is impractical and would not benefit investors, and why the proposed non-public disclosures regarding borrower identity will be vulnerable to cyberattack.

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ASA’s regional financial services companies work in communities across the country to create jobs, grow the economy, and increase prosperity for all Americans. The ASA exclusively represents the capital market and private client interests of its members and seeks to promote free market principles making it easier to access financial advice and capital. ASA members help Americans save for retirement, provide Main Street businesses with capital to grow, and advise hardworking Americans how to create and preserve wealth. For the latest updates follow @AmerSecurities and learn more at http://americansecurities.org/.