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On October 13, 2023, the SEC adopted new Rule 10c-1 under the Securities Exchange Act of 1934 that will require covered persons to report certain information about securities loans to FINRA.  The rule is broadly defined to include “customer loans used to facilitate short positions”, so that lending to facilitate customer short positions will often now qualify as securities loans subject to public disclosure under Rule 10c-1.  This data will be published on a transaction-by-transaction basis no later than the morning of the next business day after the loan is entered into.  Transaction-by-transaction information regarding the size of a specific loan will be published 20 business days after the loan is entered into, which will be tied back to the information already publicly disclosed using a unique loan transaction identifier.

Although reporting to FINRA will most often be done by broker-dealers, many of AIMA’s manager members will be impacted.  Specifically, managers that engage in frequent short selling activity may face commercial harm due to the amount of transaction-level information that may be gleaned from the disclosed data.

Please join AIMA and Schulte Roth & Zabel for a discussion into Rule 10c-1, its impact on managers, their strategies and markets generally.

Speakers:

• Kelly Koscuiszka, Partner, Schulte Roth & Zabel
• Bill Barbera, Partner, Schulte Roth & Zabel
• Daniel Austin, Head of US Markets Policy and Regulation, AIMA