Canadian Rewrite and the Impact of SEC 10c-1a on Securities Lending

SEC10c-1a is still topical and it is still unclear as to whether it will be delayed or even potentially re-proposed. FINRA submitted a letter requesting the delay of SEC 10c-1a with the reporting of securities lending activity to be extended to September 28, 2026, and the dissemination thereof to 6 months after that. It is important to note that this has not yet been approved, but recent market sentiment suggests that this might well be the outcome. Hopefully the market will get some certainty soon.

There is also a pending verdict on a lawsuit against the SEC for rules 10c-1a and 13f-2. Whilst they were adopted on the same day, one rule goes to great lengths to protect proprietary information, short sale information and the identity of the firms, while the other rules promote the transparency thereof.

The official go-live date is still January 2, 2026, which leaves very little time left for implementation teams to execute and deliver. We will continue to monitor the situation and work with clients to help facilitate their SEC 10c-1a reporting requirements.

In other news, Cappitech continues to work with our Canadian Rewrite clients for the go-live in July. The integrations are going well but there were some differing views across the industry on the interpretation of reporting obligation logic from a provincial perspective which we had to consider. We’ve offered customization logic which allows clients to select their preferred interpretation to ensure that their respective compliance teams are satisfied. The consequences are that there will be different logic applied across the industry, so we’ll remain agile and in the event that market best practice is confirmed and a change is required by some of our clients, we’ll help to facilitate that.

The go-live date in July is fast approaching but we’re on track, and following the success of our other recent go-lives, we’re setting up a ‘Go-Live HQ’ at our offices in Raleigh, NC. The in-person ‘go-live’ has served us well where we collaborate in-person and in real-time to ensure a smooth transition to the updated regulation.