CISO Global Inc. has submitted a no-action request to the U.S. Securities and Exchange Commission (SEC), seeking regulatory clarity for a proposed Investor-Consent Share Loan Program aimed at giving shareholders more control over how their shares are used in securities lending. The proposed framework is designed to ensure that investors explicitly approve whether their shares can be lent out an activity commonly associated with facilitating short selling. While securities lending plays a legitimate role in financial markets, CISO Global emphasized that investors should have a clear and informed choice before their holdings are used in such transactions.
The filing follows the company’s review of market data, including short-volume activity and fails-to-deliver reports from late 2025. Although the company noted that such data has limitations and does not inherently indicate wrongdoing, it believes the findings highlight the need for greater transparency and shareholder involvement. CISO Global clarified that it is not accusing any specific market participants of misconduct. Instead, the initiative focuses on strengthening investor rights and improving clarity around how shares are utilized within existing market structures.
The request was submitted on behalf of the company by Investor Choice Advocates Network (ICAN), with support from legal counsel. The filing asks SEC staff to confirm that they would not recommend enforcement action under Rule 17Ad-20 if CISO implements and discloses its proposed consent-based framework.
Under the proposed model, shareholders would need to actively opt in before their shares are made available for lending. Investors would also retain the ability to withdraw consent at any time, subject to standard settlement and recall procedures. Importantly, the program is designed to function within existing brokerage and clearing systems, without altering infrastructure such as DTC or NSCC processes.
CEO David Jemmett said the initiative is rooted in the principle of informed consent, emphasizing that shareholders should have the right to decide how their assets are used. Similarly, ICAN President Nick Morgan described the proposal as a straightforward effort to enhance investor voice while remaining aligned with current regulatory frameworks.
CISO Global believes the initiative supports broader goals of market transparency, investor protection, and responsible governance. However, the company acknowledged that there is no guarantee the SEC will grant the requested relief, and any response would reflect staff interpretation rather than formal regulatory approval. If accepted, the proposal could mark a notable shift in how shareholder consent is handled in securities lending, potentially influencing broader market practices around investor rights and transparency.
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