SIFMA - Securities Industry and Financial Markets Association Inc.

06/18/2026 | Press release | Archived content

Proposed Rule Change to Adopt FINRA Rule 4321 and Amend FINRA Rule 4560

Summary

SIFMA 1 provided comments to the U.S. Securities and Exchange Commission (SEC) in response to the filing by the Financial Industry Regulatory Authority, Inc. (FINRA) to amend FINRA Rule 4560 (Short-Interest Reporting) and to adopt FINRA Rule 4321 (Allocations of Fail to Deliver Positions). 2

Excerpt

The Proposal is closely related to separate, ongoing Commission initiatives to require reporting and dissemination of gross settled short position information and related short activity information, as well as of securities lending activity. Specifically, in October 2023, the Commission adopted Rule 13f-2 (Short Position and Short Activity Reporting by Institutional Investment Managers) and Rule 10c-1a (Reporting of Securities Loans) to increase regulatory and public transparency of short sale and securities lending information. As discussed below, the Commission subsequently delayed the compliance dates for these rules until 2028 and is considering amending each of these rules. 3 Given the uncertain status of Rules 13f-2 and 10c-1a (including the possibility of forthcoming material amendments), and the potential for duplicative reporting and dissemination of short position-related information under FINRA and Commission rules, it is difficult for SIFMA and other public commenters to analyze how these separate regimes will overlap with each other. 4

FINRA also has not demonstrated that the purported transparency benefits of the Proposal would outweigh the significant costs and operational burdens it would place on reporting firms. Cutting the short interest reporting due date in half, to one business day after the reporting settlement date, would require reporting firms to essentially double their work - and they would be required to do so more frequently under the proposed weekly reporting requirement. The Proposal does not adequately address or seek to balance these competing issues. Similarly, FINRA has not demonstrated that implementing a reporting regime requiring clearing firms to submit monthly reports of allocations of fails to deliver under new Rule 4321 is necessary because FINRA did not provide any information regarding the frequency or number of requests it currently makes to clearing firms regarding such allocations.
For these reasons, if FINRA does not withdraw the Proposal so that the Commission can take a holistic approach to FINRA's and the Commission's short position-related information
reporting and dissemination regimes, we urge the Commission to disapprove it.
SIFMA - Securities Industry and Financial Markets Association Inc. published this content on June 18, 2026, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on June 22, 2026 at 16:53 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]