Last month , the Fifth Circuit ordered a review of Securities Lending and Short Sale Rules for economic impact but both “remand without vacatur”, meaning they will still be enforced by the SEC.
In more detail, the court ruled:
- Actual Ruling: The court remanded (not vacated) the rules for inadequate cumulative economic analysis, while upholding them against most other challenges.
- Specific Holdings: The court rejected arguments about statutory authority, comment periods, extraterritorial application, and system choice, while finding only one significant flaw. This is in favor of the SEC and its regulatory authority over these matters, going against the argument that the SEC was overstepping its mandate.
- Practical Impact: This decision captures Judge Wilson's reasoning, the specific legal standards applied, and the practical implications for both regulators and industry participants. It reflects the court's emphasis on procedural rigor rather than substantive rejection of the SEC's regulatory goals.
Although the ruling calls for additional economic analysis, SEC 10c-1a has already been delayed to Sep 2026. This emphasizes the need to stay diligent and be prepared for the regulation. Pirum and S&P Market Intelligence Cappitech are here to help industry participants with our combined solution for reporting Securities Lending Transaction in the U.S. The 10c-1a solution leverages the success and experience we have from our existing SFTR solution.
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