SEC Further Delays Securities Lending and Short Position Reporting Compliance

On December 3, 2025, the Securities and Exchange Commission (SEC) issued an exemptive order extending the compliance dates for two rules:

1. Rule 10c-1a (Reporting of Securities Loans)
2. Rule 13f-2 (Short Position and Short Activity Reporting)

The extension effectively pauses implementation for two years. While the extension provides relief to market participants facing imminent compliance deadlines, the lengthy delay signals potential uncertainty regarding the ultimate fate of these highly controversial rules.

The genesis of the delay lies in a legal challenge brought by industry groups arguing that the SEC failed to adequately consider the cumulative economic effect of adopting multiple major market structure rules simultaneously. The 5th Circuit Court of Appeals agreed, remanding the rules to the SEC with instructions to perform a more robust cumulative economic analysis, which the SEC cited in its order.

Rather than proceeding with the original timeline while conducting this analysis, the SEC has opted to stay the compliance dates entirely to avoid imposing "sunk costs" on the industry should the rules be further modified or vacated.

Revised Compliance Timeline

Rule 13f-2 (Short Interest Reporting)

• Start of data tracking: Jan. 2, 2028 (was Jan. 2, 2026)
• First Form SHO due: Feb. 14, 2028 (was Jan. 2026)

Rule 10c-1a (Securities Lending Reporting)

• Reporting to FINRA begins: Sept. 28, 2028 (was Sept. 28, 2026)
• Public data release: Mar. 29, 2029 (was Mar. 29, 2027)

Dissent Signals Policy Disagreement

The order was not without its detractors. Commissioner Crenshaw issued a strongly worded dissenting statement, characterizing the two-year delay as excessive and potentially a strategic retreat from the agency's transparency mandate. Crenshaw argued that the economic analysis required by the 5th Circuit “should not take two years.” She expressed concern that the extension amounts to a “repeal by extension,” suggesting that the delay may be a precursor to watering down or abandoning the rules entirely under a shifting political or regulatory landscape.

Key Takeaways

• Immediate Reprieve: Impacted persons can pause immediate implementation efforts for Form SHO and Rule 10c-1a reporting systems and reallocate resources elsewhere.
• Watch the Docket: The “cumulative economic analysis” required by the court may open the door for the SEC to reopen the comment period or propose modifications to the rules. Impacted persons should remain engaged with trade associations to monitor potential changes to the substantive requirements of the rules.
• Regulatory Uncertainty: The length of the delay does introduce political risk. Depending on the outcome of future elections and changes in SEC leadership, these rules could be revisited or repealed before the new compliance dates arrive.
• What About FINRA?: The fate of FINRA’s SLATE rules which would implement Rule 10c-1a’s reporting and dissemination requirements remains uncertain. FINRA has already incurred sunk costs in developing the reporting and dissemination framework and it’s unclear whether it will seek to re-coup those costs in the interim.