MFA submitted a comment letter to the U.S. Securities and Exchange Commission (SEC) regarding the proposed reporting of securities loans and proposed rule 10c-1. In the letter, MFA emphasizes the need for coherence between the Proposed Securities Lending Rules and the Proposed Short Sale Reporting Rules.
MFA, while supporting transparency goals, raises concerns about the potential duplication of reporting, inclusion of short positions as stock loans, and the costs incurred by beneficial owners due to real-time reporting. MFA’s recommendations include narrowing the definition of “securities loan” to exclude short positions, adjusting reporting details to protect proprietary information, revising reporting timing, limiting the scope initially to U.S. exchange-listed equities, clarifying extraterritoriality limitations, and allowing beneficial owners to determine the reporting party. Additionally, MFA proposes withholding public reporting during the rule’s implementation phase and imposing confidentiality obligations on FINRA, the designated repository for reported data.
Furthermore, MFA calls for a balanced cost-benefit analysis, urging the SEC to consider both advantages and disadvantages of its decisions and to respond to significant public comments.