North American regulators are reshaping securities lending markets, creating new opportunities for banks, broker-dealers, asset managers, and investors while introducing new operational requirements that firms must navigate carefully. 

Recent developments  in the U.S. and Canada expand both who can participate in securities lending markets and what collateral can be used to support transactions. These changes are increasing flexibility across securities finance markets while placing greater emphasis on collateral management, liquidity management, and operational transparency. 

This article examines some significant securities lending rule changes introduced in the United States and Canada in 2026, and what they mean for market participants seeking to scale securities lending activity and mobilize collateral more efficiently.

Key takeaways

• In 2026, U.S. and Canadian regulators introduced major reforms expanding both collateral flexibility and market participation in securities lending.
• The SEC revised guidance under Rule 15c3-3, allowing broker-dealers to use eligible equity collateral in securities lending transactions for the first time in decades.
• CIRO’s reforms, effective April 27, 2026, codify fully paid lending in Canada, allowing retail investors to participate in securities lending at scale.
• These changes expand the supply of lendable securities and eligible collateral, but also introduce new operational demands around consent, disclosure, and risk management.
• Firms operating across fragmented systems risk being unable to capitalize on these opportunities without a unified, technology-driven view of inventory, collateral, and risk.

What changed in securities lending regulation in 2026? 
Historically, securities lending regulation has operated within strict constraints. Regulators have generally favored cash collateral due to its liquidity and ease of valuation, while participation has largely been limited to institutional investors because of operational complexity and investor protection concerns. 

Recent securities lending rule changes are beginning to alter that landscape. 

During the first half of 2026, regulators in both the United States and Canada introduced reforms that expand both collateral flexibility and market participation. 

Specifically: 

• In the United States, the Securities and Exchange Commission revised guidance under Rule 15c3-3, allowing broker-dealers to use equity collateral in securities lending transactions for the first time in 54 years. 
• In Canada, the Canadian Investment Regulatory Organization (CIRO) introduced reforms to fully paid lending, enabling retail participation in securities lending at scale. 

Together, these reforms increase flexibility on both sides of the market. U.S. changes expand the range of eligible collateral, while Canadian reforms increase the supply of lendable securities.

U.S. securities lending regulation: Equity collateral under Rule 15c3-3 
One of the most significant developments in securities lending regulation in the U.S. in 2026 is the SEC’s revised guidance permitting eligible equity collateral in certain securities lending transactions. 

The revised guidance allows broker-dealers to pledge eligible equity collateral when borrowing equity securities from qualified institutional lenders. 

By anchoring eligibility to highly liquid, large-cap securities, the SEC has introduced greater flexibility while maintaining a prudent risk management framework. 

The change reflects broader pressures around liquidity management and collateral management. Post-crisis capital requirements, leverage constraints, and recent market volatility have increased the cost of balance sheet utilization, prompting firms to seek more efficient approaches to collateral optimization. 

Within that context, equity collateral securities lending provides broker-dealers with meaningful new flexibility. Firms can make better use of existing inventory, reduce reliance on cash collateral, improve funding efficiency, and support more effective market intermediation.

Canada securities lending regulation: CIRO and fully paid lending reform 
Canada has introduced equally significant changes. 

Effective April 27, 2026, CIRO securities lending reforms clarified previous restrictions on whether client securities could participate in lending programs.

Under the revised framework, investment dealers may now include fully paid client securities and excess margin securities in lending arrangements, provided appropriate client consent, disclosure, segregation, and risk management requirements are met. 

Canada reforms allow individual investors to participate in securities lending markets at scale for the first time, expanding participation beyond traditional institutional lenders. 

Historically, restrictions reflected concerns around investor protection, operational complexity, and counterparty risk. The revised framework formalizes how securities lending can occur while maintaining safeguards designed to protect client assets. 

The most immediate impact is on market supply. 

By enabling retail securities lending, the reforms significantly expand the pool of lendable securities while creating new revenue opportunities for investment dealers, banks, wealth managers, and investors themselves. 

However, these opportunities also create new operational demands. Firms must manage client onboarding, consent collection, reporting, fee transparency, and compliance processes at scale while maintaining accuracy and oversight.  

Opportunities and challenges for securities lending markets 
Capturing these opportunities is not straightforward. 

Many banks and broker-dealers continue to operate across fragmented technology environments and inventory sources shaped by decades of organizational silos. Equities, fixed income, financing activities, and collateral management functions are frequently supported by separate systems and workflows. 

As a result, collateral available in one area of the organization may not be visible elsewhere. Lending activity may be disconnected from client inventory. Risk may be measured at a desk level rather than across the enterprise. 

As securities lending markets evolve, these limitations become increasingly problematic. 

Expanded participation introduces new operational complexity. Without greater integration, firms may gain access to new collateral sources and new lending opportunities while lacking the operational capability to deploy them efficiently. 

The outlook for securities lending readiness   
Success in the next phase of securities lending market development requires firms to move beyond siloed workflows and establish a unified view of inventory, collateral, financing, and risk. 

With a unified view, sourcing, funding, collateral management, and client participation become part of a single optimization process. 

This requires technology capable of: 

• Providing a consolidated view across collateral, inventory, financing, and risk; 
• Connecting investors supplying securities with market participants seeking to borrow them; 
• Supporting house, institutional and retail securities lending workflows; 
• Delivering transparent reporting across all participants; 
• Enabling efficient liquidity transparency across the organization. 

Solutions to scale 
As securities lending volumes grow, both client and trading infrastructure need to be scaled within a single operational framework. 

TS Imagine’s LoanSmart platform is designed specifically to support modern securities lending workflows. 

LoanSmart enables institutions to manage their full securities lending lifecycle through a single platform. The solution supports securities borrowing and lending, repo activity, collateral optimization, inventory management, pricing, and post-trade operations while helping firms automate key workflows and reduce operational complexity. 

By providing a consolidated view of inventory, financing activity, lending and risk, LoanSmart helps firms respond more effectively to changing market conditions and evolving regulatory requirements. Its integrated securities lending capabilities are particularly relevant as firms seek to capitalize on expanded equity collateral usage in the U.S. and growing securities lending participation in Canada. 

Institutions seeking to benefit from these regulatory developments will increasingly require integrated securities finance technology that supports transparency, operational efficiency, and scalable growth. 

FAQs: Securities lending regulation and market changes

What is securities lending?
Securities lending is the temporary transfer of securities from one party to another in exchange for collateral and a lending fee. It is commonly used to facilitate short selling, market-making, and settlement activity. 

What changed in U.S. securities lending regulation in 2026?
The SEC revised guidance under Rule 15c3-3 to allow eligible equity collateral in certain securities lending transactions, reducing reliance on cash collateral and providing greater flexibility for broker-dealers. 

What is equity collateral in securities lending?
Equity collateral refers to eligible stocks or exchange-traded funds that can be pledged as collateral in a securities lending transaction. The SEC’s 2026 guidance expanded the use of equity collateral for qualified transactions involving broker-dealers. 

What is fully paid lending in Canada?
Fully paid lending allows investors to lend securities they fully own. CIRO’s 2026 reforms enable fully paid lending at scale while maintaining investor protection safeguards. 

What role does CIRO play in securities lending?
CIRO is Canada’s national self-regulatory organization overseeing investment dealers and market integrity. Its 2026 securities lending reforms expanded retail participation by updating rules governing fully paid lending programs. 

Can retail investors participate in securities lending?
Yes. Following the 2026 Canadian reforms, retail investors can participate in securities lending through fully paid lending programs, subject to consent, disclosure, and operational safeguards. 

How do these regulatory changes affect securities lending markets?
The reforms increase both collateral flexibility in the United States and the supply of lendable securities in Canada. While this creates new opportunities for market participants, it also increases the need for integrated technology and operational efficiency.  

How does securities finance technology support securities lending?
Securities finance technology helps firms manage inventory, collateral, financing activity, risk, and reporting through a unified platform. As securities lending markets become more complex, integrated technology can improve operational efficiency, transparency, and scalability. 

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