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January 11, 2022

Better Markets Urges SEC to Finalize Rule Ensuring Greater Transparency in the Securities Lending Market

Tuesday, January 11, 2022
Contact: Doug Walker at 202-618-6430 or

WASHINGTON, D.C.—Legal Director and Securities Specialist Stephen Hall issued the following statement on the filing of Better Markets’ Comment Letter to the Securities and Exchange Commission in response to the agency’s proposal to require the reporting and public dissemination of key data about securities lending transactions:

“The SEC’s proposed rule is not only good public policy, itis mandatory public policy—a statutory requirement from Congress. The securities lending market plays a critical role in the financial markets and it can even impact the broader stability of the financial system, as we saw when AIG’s securities lending activities were an important factor in its own near-collapse. And yet, despite its size and importance, the securities lending market remains remarkably opaque.  That means market participants lack current information about market conditions, loan terms, and pricing.  In addition, regulators cannot effectively monitor the markets for possible abuses or the buildup of systemic risks.

“The SEC’s proposal will go a long way toward eliminating this information deficit.  However, we urge the SEC to strengthen the rule by requiring reporting on the use of the collateral posted in connection with lending transactions; by shortening the deadlines for reporting and publicly disseminating the data; and by making sure that functionally equivalent transactions, such as repurchase agreements, do not evade application of the reporting rule by virtue of their labels.  Above all, we stress the need for the SEC not to dilute the rule in response to unfounded claims that it will prove too costly or burdensome for those subject to the requirements.

“This proposal is just one of a number of market structure reforms that we expect the SEC under Chair Gary Gensler to be pursuing to make our markets more efficient, more fair, and less likely to contribute to instability.  We support this important step along the way.”


Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies—including many in finance—to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit

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