[Federal Register Volume 85, Number 121 (Tuesday, June 23, 2020)]
[Notices]
[Pages 37721-37722]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-13512]
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SECURITIES AND EXCHANGE COMMISSION
[SEC File No. 270-616, OMB Control No. 3235-0671]
Submission for OMB Review; Comment Request
Upon Written Request, Copies Available From: Securities and Exchange
Commission, Office of FOIA Services, 100 F Street NE, Washington, DC
20549-2736.
Extension:
Rule 613 of Regulation NMS
Notice is hereby given that pursuant to the Paperwork Reduction Act
of 1995 (``PRA'') (44 U.S.C. 3501 et seq.), the Securities and Exchange
Commission (``Commission'') has submitted to the Office of Management
and Budget (``OMB'') a request for approval of extension of the
previously approved collection of information provided for in
connection with a National Market System (NMS) Plan filed with the
Commission under Rule 613 (17 CFR 242.613), under the Securities
Exchange Act of 1934 (15 U.S.C. 78a et seq.).
Rule 613 of Regulation NMS (17 CFR part 242) required national
securities exchanges and national securities associations
(``Participants'') to jointly submit to the Commission a national
market system (``NMS'') plan to govern the creation, implementation,
and maintenance of a consolidated audit trail (``CAT'') and Central
Repository for the collection of information for NMS securities. On
February 27, 2015, the Participants submitted the CAT NMS Plan to the
Commission.\1\ On April 27, 2016, the Commission published a notice
soliciting comments from the public (``CAT NMS Plan Notice'').\2\ On
November 15, 2016, the Commission approved the CAT NMS Plan (``CAT NMS
Plan Order''), including the information collections proposed in the
CAT NMS Plan Notice and certain additional information collections.\3\
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\1\ See Letter from Participants to Brent J. Fields, Secretary,
Commission, dated February 27, 2015. The Participants filed the CAT
NMS Plan on September 30, 2014. See Letter from the Participants, to
Brent J. Fields, Secretary, Commission, dated September 30, 2014.
The CAT NMS Plan filed on February 27, 2015, was an amendment to and
replacement of the Initial CAT NMS Plan (the ``Amended and Restated
CAT NMS Plan''). On December 24, 2015, the Participants submitted an
Amendment to the Amended and Restated CAT NMS Plan. See Letter from
Participants to Brent J. Fields, Secretary, Commission, dated
December 23, 2015 (the ``Amendment''). On February 9, 2016, the
Participants filed with the Commission an identical, but unmarked,
version of the Amended and Restated CAT NMS Plan, dated February 27,
2015, as modified by the Amendment, as well as a copy of the request
for proposal issued by the Participants to solicit Bids from parties
interested in serving as the Plan Processor for the consolidated
audit trail. Unless the context otherwise requires, the ``CAT NMS
Plan'' shall refer to the Amended and Restated CAT NMS Plan, as
modified by the Amendment.
\2\ See Securities Exchange Act Release No. 77724 (April 27,
2016), 81 FR 30613 (May 17, 2016). The burdens associated with the
CAT NMS Plan Notice were submitted under OMB number 3235-0671 which
relates to the NMS Plan required to be filed under Rule 613.
\3\ See Securities Exchange Act Release No. 79318 (November 15,
2016), 81 FR 84696 (November 23, 2016), available at https://www.sec.gov/rules/sro/nms/2016/34-79318.pdf (``CAT NMS Plan
Order'').
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Since November 15, 2016, the Commission believes that three
information collection requirements have been completed, specifically:
(1) A document outlining how the Participants could incorporate into
the consolidated audit trail information regarding certain products
that are not NMS securities; \4\ (2) a one-time assessment of the clock
synchronization standards in the Plan before reporting begins for
Industry Members, which assessment shall take into account the
diversity of CAT Reporters and systems; \5\ and (3) a one-time report
that discusses the Participants' assessment of implementing coordinated
surveillance.\6\
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\4\ See 17 CFR 242.613(i). See also ``One-Time Written
Assessments,'' Consolidated Audit Trail, LLC at: https://www.catnmsplan.com/one-time-written-assessments/index.html.
\5\ See CAT NMS Plan Order, supra note 3, at 84940.
\6\ Id. at 84940-84941.
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This Notice addresses the remaining information collection
requirements noticed in the CAT NMS Plan Notice and certain additional
information collection requirements of the CAT NMS Plan Order, which
are: (1) Development of a Central Repository tasked with the receipt,
consolidation, and retention of reported order and execution
information submitted by Participants and their members; \7\ (2) the
requirement that each Participant, and any member of such Participant,
record and electronically report to the Central Repository details for
each order and Reportable Event documenting the life of an order
through the process of original receipt or origination, routing,
modification, cancellation, and execution (in whole or in part) for
each NMS security; \8\ (3) the requirement that the CAT NMS Plan
require the Central Repository to collect and retain on a current and
continuous basis NBBO information for each NMS security, transaction
reports reported pursuant to an effective transaction reporting plan,
and Last Sale Reports reported pursuant to the Options Price Reporting
Authority Plan; \9\ (4) the requirement that the CAT NMS Plan must
require that every national securities exchange and national securities
association develop and implement a surveillance system, or enhance
existing surveillance systems, reasonably designed to make use of the
consolidated information contained in the consolidated audit trail;
\10\ (5) a one-time independent audit of the fees, costs, and expenses
incurred by the Participants on behalf of CAT NMS, LLC prior to the
Effective Date \11\ of the Plan; \12\ (6) a one-time report from
[[Page 37722]]
the Participants discussing the feasibility and advisability of
allowing Industry Members to bulk download the Raw Data that it has
submitted to the Central Repository; \13\ (7) a one-time assessment of
the nature and extent of errors in the Customer information submitted
to the Central Repository and whether the correction of certain data
fields over others should be prioritized from the Participants; \14\
(8) a one-time report on the impact of tiered fees on market liquidity,
including an analysis of the impact of the tiered-fee structure on
Industry Members provision of liquidity from the Participants; \15\ (9)
an assessment of the projected impact of any Material Systems Change on
the Maximum Error Rate, prior to the implementation of such Material
Systems Change from the Participants; \16\ (10) an annual requirement
that that the CAT LLC financials be (i) in compliance with GAAP, (ii)
be audited by an independent public accounting firm, and (iii) be made
publicly available; \17\ (11) a requirement that each Participant
conduct background checks for its employees and contractors that will
use the CAT System.\18\
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\7\ See 17 CFR 242.613.
\8\ See 17 CFR 242.613(c)(1), (c)(5), (c)(6), (c)(7).
\9\ See 17 CFR 242.613(e)(7).
\10\ See 17 CFR 242.613(f).
\11\ The ``Effective Date'' is the date the Commission approved
the CAT NMS Plan, which is November 15, 2016. See id.
\12\ See CAT NMS Plan Order, supra note 3, at 84940.
\13\ Id. at 84941.
\14\ Id.
\15\ Id. at 84941-84942.
\16\ Id. at 84942. The Commission believes that four assessments
would be filed annually.
\17\ Id.
\18\ Id. The Commission believes that these background checks
are necessary to ensure that only authorized and qualified persons
are using the CAT System.
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The Commission believes that the CAT NMS Plan, once fully
implemented, will improve the quality of the data available to
regulators in four areas that affect the ultimate effectiveness of core
regulatory efforts--completeness, accuracy, accessibility and
timeliness.\19\ The improvements in these data qualities would
substantially improve regulators' ability to perform analysis and
reconstruction of market events, and market analysis and research to
inform policy decisions, as well as perform regulatory activities, in
particular market surveillance, examinations, investigations, and other
enforcement functions.
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\19\ See CAT NMS Plan Order, supra note 3, at 45727 (discussing
four ``qualities'' of trade and order data that impact the
effectiveness of core Participant and Commission regulatory efforts:
accuracy, completeness, accessibility, and timeliness).
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The Commission estimates that 1524 respondents \20\ will require an
aggregate total of approximately 7,572,610 hours per year to comply
with the collection of information. The Commission further estimates
that the aggregate cost to comply with the collection of information
will be approximately $463,322,593 per year.
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\20\ The Commission notes that 24 Participants (the 23 national
securities exchanges and one national securities association) and
1,500 broker-dealers subject to information collections requirements
pursuant to Rule 613 and the CAT NMS Plan.
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An agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information under the PRA unless it
displays a currently valid OMB control number.
The public may view background documentation for this information
collection at the following website: www.reginfo.gov. Find this
particular information collection by selecting ``Currently under 30-day
Review--Open for Public Comments'' or by using the search function.
Written comments and recommendations for the proposed information
collection should be sent within 30 days of publication of this notice
to (i) www.reginfo.gov/public/do/PRAMain and (ii) David Bottom,
Director/Chief Information Officer, Securities and Exchange Commission,
c/o Cynthia Roscoe, 100 F Street NE, Washington, DC 20549, or by
sending an email to: [email protected].
Dated: June 18, 2020.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-13512 Filed 6-22-20; 8:45 am]
BILLING CODE 8011-01-P