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Notice2024-23063

Joint Industry Plan; Notice of Filing of Partial Amendment No. 1 to an Amendment to the National Market System Plan Governing the Consolidated Audit Trail Regarding Cost Savings Measures

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Published

October 7, 2024

Issuing agencies

Securities and Exchange Commission

Full Text

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<title>Federal Register, Volume 89 Issue 194 (Monday, October 7, 2024)</title>
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[Federal Register Volume 89, Number 194 (Monday, October 7, 2024)]
[Notices]
[Pages 81120-81128]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-23063]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-101225; File No. 4-698]

Joint Industry Plan; Notice of Filing of Partial Amendment No. 1
to an Amendment to the National Market System Plan Governing the
Consolidated Audit Trail Regarding Cost Savings Measures

October 1, 2024.
On March 27, 2024, and pursuant to Section 11A(a)(3) of the
Securities Exchange Act of 1934 (the ``Exchange Act'') \1\ and Rule 608
of Regulation NMS thereunder,\2\ BOX Exchange LLC, Cboe BYX Exchange,
Inc., Cboe BZX Exchange, Inc., Cboe C2 Exchange, Inc., Cboe EDGA
Exchange, Inc., Cboe EDGX Exchange, Inc., Cboe Exchange, Inc., The
Financial Industry Regulatory Authority, Inc., Investors' Exchange LLC,
Long-Term Stock Exchange, Inc., MEMX LLC, Miami International
Securities Exchange LLC, MIAX Emerald, LLC, MIAX PEARL, LLC, Nasdaq BX,
Inc., Nasdaq GEMX, LLC, Nasdaq ISE, LLC, Nasdaq MRX, LLC, Nasdaq PHLX
LLC, The Nasdaq Stock Market LLC, New York Stock Exchange LLC, NYSE
American LLC, NYSE Arca, Inc., NYSE Chicago, Inc., and NYSE National,
Inc. (``the Participants'') filed with the Securities and Exchange
Commission (the ``Commission'' or the ``SEC'') proposed amendments to
the national market system plan governing the consolidated audit trail
(the ``CAT NMS Plan'') \3\ that were designed to implement certain
costs saving measures (the ``Proposed Cost Savings Amendments'').\4\
The Proposed Cost Savings Amendments were published for comment in the
Federal Register on April 16, 2024.\5\ On July 15, 2024, the Commission
instituted proceedings pursuant to Rule 608(b)(2)(i) of Regulation
NMS,\6\ to determine whether to disapprove the Proposed Cost Savings
Amendments or to approve the Proposed Cost Savings Amendments with any
changes or subject to any conditions the Commission deems necessary or
appropriate after considering public comment (the ``OIP'').\7\
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\1\ 15 U.S.C. 78k-1(a)(3).
\2\ 17 CFR 242.608.
\3\ In July 2012, the Commission adopted Rule 613 of Regulation
NMS, which required the Participants to jointly develop and submit
to the Commission a national market system plan to create,
implement, and maintain a consolidated audit trail (the ``CAT'').
See Securities Exchange Act Release No. 67457 (July 18, 2012), 77 FR
45722 (Aug. 1, 2012 (``Rule 613 Adopting Release''); 17 CFR 242.613.
On November 15, 2016, the Commission approved the CAT NMS Plan. See
Securities Exchange Act Release No. 78318 (Nov. 15, 2016), 81 FR
84696 (Nov. 23, 2016) (``CAT NMS Plan Approval Order''). The CAT NMS
Plan is Exhibit A to the CAT NMS Plan Approval Order. See CAT NMS
Plan Approval Order, at 84943-85034.
\4\ See Letter from Brandon Becker, CAT NMS Plan Operating
Committee Chair, to Vanessa Countryman, Secretary, Commission, dated
March 27, 2024, available at <a href="https://catnmsplan.com/sites/default/files/2024-03/03.27.24-Proposed-CAT-NMS-Plan-Amendment-Cost-Savings-Amendment.pdf">https://catnmsplan.com/sites/default/files/2024-03/03.27.24-Proposed-CAT-NMS-Plan-Amendment-Cost-Savings-Amendment.pdf</a>. MIAX Sapphire, LLC was not a Participant to the CAT
NMS Plan when the Proposal was originally filed, but the
Participants filed an immediately-effective amendment to the CAT NMS
Plan on July 30, 2024 to add MIAX Sapphire, LLC as a Participant.
See Securities Exchange Act Release No. 100631 (July 31, 2024), 89
FR 64011 (Aug. 6, 2024).
\5\ See Securities Exchange Act Release No. 99938 (Apr. 10,
2024), 89 FR 26983 (Apr. 16, 2024) (``Notice''). Comments received
in response to the Notice can be found on the Commission's website
at <a href="https://www.sec.gov/comments/4-698/4-698-d.htm">https://www.sec.gov/comments/4-698/4-698-d.htm</a>.
\6\ 17 CFR 242.608(b)(2)(i).
\7\ See Securities Exchange Act Release No. 100530 (July 15,
2024), 89 FR 58838 (July 19, 2024).
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On September 20, 2024, the Participants submitted a letter to
propose certain revisions to the Proposed Cost Savings Amendments and
to respond to issued discussed in the OIP.\8\ Sections I, II, and III
below, which were substantially prepared by CAT LLC on behalf of the
Participants, contain a description of the revisions to the Proposed
Cost Savings Amendments, additional details regarding the Participants'
calculation of estimated cost savings, and responses prepared by the
Participants to the OIP, respectively. In addition, the Participants
filed Exhibit A, which sets forth the cumulative changes proposed to be
made to the CAT NMS Plan, and Exhibit B, which sets forth the proposed
additional revisions to the changes in the Proposed Cost Savings
Amendments. The Commission is publishing this notice to solicit
comments on the additional revisions to the Proposed Cost Savings
Amendments from interested persons.
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\8\ See Letter from Brandon Becker, CAT NMS Plan Operating
Committee Chair, to Vanessa Countryman, Secretary, Commission, dated
Sept. 20, 2024, available at <a href="https://www.sec.gov/comments/4-698/4698-522995-1501362.pdf">https://www.sec.gov/comments/4-698/4698-522995-1501362.pdf</a>.
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I. Revisions to the Proposed Cost Savings Amendments

CAT LLC was both surprised and disappointed by the Commission's
decision to institute proceedings on the Proposed Cost Savings
Amendments, which will delay or ultimately impede CAT LLC's ability to
achieve more than $20 million in annual cost savings. All commenters
strongly favored the Proposed Cost Savings Amendments.\9\ The
Commission did not receive any comments opposing the proposed
amendments.
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\9\ See Letter from Howard Meyerson, Managing Director, FIF, to
Commission (May 7, 2024); Letter from Ellen Greene, Managing
Director, Equities & Options Market Structure, and Joseph Corcoran,
Managing Director, Associate General Counsel, SIFMA, to Vanessa
Countryman, Secretary, Commission (May 31, 2024); Letter from
Jeffrey S. Davis, Senior Vice President, Principal Deputy General
Counsel, Nasdaq, Inc., to Vanessa Countryman, Secretary, Commission
(July 1, 2024).
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While the Commission does not bear any CAT costs, the Commission's
objective should be to ensure the CAT achieves its regulatory
objectives in an efficient and cost-effective manner. The immense costs
of operating the CAT--estimated at $213 million in 2024--are driven by
the strict requirements in the CAT NMS Plan to process and store record
data volumes in accordance with complex reporting and linkage
requirements, within the narrow timeframes required by the SEC. CAT LLC
and the Plan Processor have put significant effort into reducing CAT
costs that are within their control given these strict requirements,
but many additional cost savings measures require Commission action to
permit their implementation.
After discussions with the Staff, CAT LLC is withdrawing the
proposal to provide an interim CAT-Order-ID on an ``as requested''
basis, as opposed to on a continuous basis, which would have resulted
in approximately $2 million in annual cost savings. With these changes,
CAT LLC strongly urges the Commission to approve the Proposed Cost
Savings Amendments without further delay.

[[Page 81121]]

A. Processing, Storage, and Query Requirements for Options Market Maker
Quotes in Listed Options

The CAT NMS Plan currently contains broad requirements relating to
the processing, storage, and querying of Option Market Maker quotes in
Listed Options.\10\ The Proposed Cost Savings Amendments would save
approximately $20 million annually by changing certain processing,
query, and storage requirements that would otherwise apply to Options
Market Maker quotes in Listed Options.\11\ These changes would
significantly reduce the costs of the CAT with limited regulatory
impact. The vast majority of Options Market Maker quote lifecycles do
not involve any execution or allocation and Participant regulatory
users very rarely access such data. Options Exchanges would continue to
report Options Market Maker quotes in Listed Options in the same manner
they do today, but the Plan Processor would only ingest, perform basic
data validations, and store such data. Unlinked data would remain
accessible to regulators by T+1 at 12:00 p.m. Eastern Time.
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\10\ For a description of these requirements, see OIP at 58839-
40.
\11\ As described in the SRO Letter, only market maker quotes
that are reported to CAT as quote events would be affected by the
proposal. Market maker quotes reported to CAT as order events will
not be impacted by this proposal and will continue to receive all
enrichments and be fully available to regulatory users in DIVER. See
SRO Letter at 7.
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Based on discussions with the Staff, CAT LLC is proposing several
revisions to the Proposed Cost Savings Amendments.
First, CAT LLC proposes to revise the Proposed Cost Savings
Amendments to replace any proposed references to ``Options Market Maker
Quotes in Listed Options,'' which is not a separately defined term in
the CAT NMS Plan, with ``Options Market Maker quotes in Listed
Options''.\12\ Relatedly, to eliminate potential confusion regarding
the intended scope of the proposal, CAT LLC proposes to eliminate the
phrase ``and related Reportable Events''. CAT LLC believes that the
meaning of Options Market Maker quotes in Listed Options is well
understood by CAT Reporters as it has been the basis for CAT reporting
since the inception of the CAT.\13\ Specifically, as described in
Section 5.1 (Market Maker Quotes) of the Plan Participant Technical
Specifications, there are two types of events used to report Options
Market Maker quotes in Listed Options:
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\12\ An ``Options Market Maker'' is ``a broker-dealer registered
with an exchange for the purpose of making markets in options
contracts on the exchange.'' Section 1.1 of the CAT NMS Plan. A
``Listed Option'' is defined as having ``the meaning set forth in
Rule 600(b)(35) of Regulation NMS.'' See id. Rule 600(b)(35) has
since been redesignated as Rule 600(b)(43), which defines a ``Listed
Option'' as ``any option traded on a registered national securities
exchange or automated facility of a national securities
association.'' 17 CFR 242.600(b)(43).
\13\ See Section 6.4(d)(iii) of the CAT NMS Plan (describing
``the reporting obligations of an Options Market Maker with regard
to its quotes in Listed Options''). See also CAT Alert 2020-03,
Options Market Maker Quote Sent Time (June 4, 2020).
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<bullet> Quote Event: Used to report a new quote or a quote
replacement. When a quote is replaced, the Original Quote ID will
identify the quote being replaced, and the Quote ID will provide the
new ID for the updated and replaced quote (or note in the event that
the market maker can only have one quote active at any given time).
<bullet> Quote Cancel: Reported when a quote is canceled.\14\
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\14\ See Section 5.1 of the CAT Reporting Technical
Specifications for Plan Participant v. 10r.21 [sic] (Apr. 15, 2024),
<a href="https://www.catnmsplan.com/sites/default/files/2024-04/04.15.2024-CAT_Reporting_Technical_Specifications_for_Participants_4.1.0-r21.pdf">https://www.catnmsplan.com/sites/default/files/2024-04/04.15.2024-CAT_Reporting_Technical_Specifications_for_Participants_4.1.0-r21.pdf</a>.
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Accordingly, under the proposed amendments, Option Quote (OQ) and
Option Quote Cancel (OQC) events will not be subject to any requirement
to link and create an order lifecycle, and will not undergo any linkage
validation, linkage feedback, or lifecycle enrichment processing.
Relatedly, trades resulting from an Options Market Maker quote are
reported to the CAT by Plan Participants using Option Trade (OT)
events. OT events will continue to be subject to the requirement to
link and create an order lifecycle, and will undergo linkage
validation, linkage feedback, and lifecycle enrichment processing.
However, given the proposal to eliminate linkage requirements related
to OQ and OQC events, when an Options Market Maker quote is on one side
of an OT event, the quote side of the OT event will not be linked to
the Options Market Maker quote via the linkage process; instead, a
single event lifecycle will be created that contains only the quote
side of the OT event. Regulators, however, will be able to readily
identify the Options Market Maker quote executed in an OT event via the
quoteID field on the side of the OT event involving the Options Market
Maker quote. In addition, the side of the OT event that does not
involve an Options Market Maker quote would be linked with the relevant
order and would include the order lifecycle related to such order, and
would be subject to all lifecycle enrichment processing.
Second, CAT LLC proposes to revise the Proposed Cost Savings
Amendments to clarify that the Plan Processor would continue to perform
ingestion validation on Options Market Maker quotes (but would stop
performing linkage validation).\15\
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\15\ For reference, see Appendix B-1 (describing data ingestion
error codes) and Appendix B-3 (describing linkage validation error
codes) of the CAT Reporting Technical Specifications for Plan
Participant v.10r.21 [sic] (Apr. 15, 2024).
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Third, CAT LLC proposes to revise the Proposed Cost Savings
Amendments to provide that, upon request of the SEC or any Participant,
the Plan Processor will provide the business and technical requirements
needed to re-create the eliminated enrichments, as well as the code
required to derive any eliminated data elements from the unlinked data.
As revised, new Section 3.4 of Appendix D would state:

3.4 Requirements for Options Market Maker Quotes in Listed Options

The provisions of this section shall govern the processing and
storage of Options Market Maker quotes in Listed Options and shall
override any conflicting provisions in the CAT NMS Plan, this
Appendix D, or Exchange Act Rule 17a-1.
Options Market Maker quotes in Listed Options must be reported
to the Central Repository as provided under Section 6.4(d)(iii) of
the CAT NMS Plan. This data will undergo ingestion validation only
and such unlinked data will be made available to regulators by T+1
at 12:00 p.m. Eastern Time. Options Market Maker quotes in Listed
Options will not be subject to any requirement to link and create an
order lifecycle, and will not undergo any linkage validation,
linkage feedback, or lifecycle enrichment processing, but will
undergo ingestion validation. Options Market Maker quotes in Listed
Options will be accessible through BDSQL and Direct Read interfaces
only and will not be accessible through the online targeted query
tool.
Upon request of the SEC or any Participant, the Plan Processor
will provide the business and technical requirements needed to re-
create the eliminated enrichments, as well as the code (which is
unique to the Plan Processor's linkage implementation) existing as
of the effective date of this provision used to derive the
eliminated enrichments. The Plan Processor will not maintain the
business and technical requirements and the code following the
effective date of this provision, but it will retain a copy so that
they may be provided to any regulators that might request them in
the future.

In addition, as noted in the Proposed Cost Savings Amendments, CAT
LLC proposes to amend Section 3, Section 6.1, and Section 8.1.1 of
Appendix D of the CAT NMS Plan to include cross-references to new
Section 3.4 of Appendix D. Consistent with the revisions discussed
above, references to ``Options Market Maker Quotes in Listed Options
and related Reportable Events'' in Section 3, Section 6.1, and

[[Page 81122]]

Section 8.1.1 of Appendix D have been revised to ``Options Market Maker
quotes in Listed Options''.

B. Storage for Raw Unprocessed Data and Interim Operational Copies of
CAT Data Older Than 15 Days

The CAT NMS Plan currently requires CAT Data to be ``directly
available and searchable electronically without manual intervention for
at least six years'' and within certain query tool response times.\16\
The Proposed Cost Savings Amendments would save approximately $1
million annually by permitting the Plan Processor to move raw
unprocessed data (i.e., as-submitted data) and interim operational data
older than 15 days to a more cost-effective storage tier that is
optimized for infrequent access. In each case, retrieving such data for
regulators would require some ``manual intervention'' by the Plan
Processor.
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\16\ See Section 6.5(b)(i) and Appendix D, Section 1.4 of the
CAT NMS Plan.
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As described in the Proposed Cost Savings Amendments, when a
regulator queries CAT data, the CAT always provides results to the user
based on the latest, most current version of the data. Accordingly, raw
unprocessed data and interim operational data older than 15 days do not
provide any regulatory value after the final corrected data version is
delivered by T+5 at 8:00 a.m. ET.
Based on discussions with the Staff, CAT LLC proposes to amend the
Proposed Cost Savings Amendments to clarify the scope of affected
data.\17\ In addition, CAT LLC proposes to clarify that the Plan
Processor will restore archived data to an accessible storage tier upon
request to the CAT Help Desk by an authorized regulatory user from the
Participants or a senior officer from the SEC.\18\ Finally, CAT LLC
proposes to clarify that ``Interim Operational Data'' does not include
processed data relating to Options Market Maker quotes in Listed
Options made available to regulators by T+1 at 12:00 p.m. ET. As
revised, new Section 6.3 of Appendix D would state:
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\17\ Exhibit A of the Proposed Cost Savings Amendments
previously referred to ``interim raw unprocessed data''; the text of
Exhibit A has been clarified to refer to ``raw unprocessed data''.
\18\ CAT Data is currently stored in three storage tiers: S3
Frequent Access, S3 Infrequent Access, and S3 Instant Archive
Access. Data files that are either new or that have recently been
read by regulatory users are stored in S3 Frequent Access. If a file
is not read by a regulatory user for 30 days, then it moves to S3
Infrequent Access. Similarly, if a file is not read by a regulatory
user for 90 days, then it moves to S3 Archive Instant Access. The
Plan Processor currently anticipates that archived data would be
restored to the S3 Frequent Access tier. Storage tiers are subject
to change based on future technology developments and product
offerings.
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6.3 Exceptions to Data Availability Requirements

Notwithstanding any other provision of the CAT NMS Plan, this
Appendix D, or Exchange Act Rule 17a-1, the following types of data
may be retained in an archive storage tier. Archived data is not
directly available and searchable electronically without manual
intervention and will not be subject to any query tool performance
requirements until it is restored to an accessible storage tier. The
Plan Processor will restore archived data to an accessible storage
tier upon request to the CAT Help Desk by an authorized regulatory
user from the Participants or a senior officer from the SEC.
<bullet> Raw Unprocessed Data older than 15 days. ``Raw
Unprocessed Data'' means data that has been ingested by the Plan
Processor and made available to regulators prior to 12:00 p.m.
Eastern Time on T+1.
<bullet> Interim Operational Data older than 15 days. ``Interim
Operational Data'' means all processed, validated and unlinked data
made available to regulators by T+1 at 12:00 p.m. ET and all
iterations of processed data made available to regulators between
T+1 and T+5, but excludes the final version of corrected data that
is made available at T+5 at 8:00 a.m. ET. For the avoidance of
doubt, ``Interim Operational Data'' does not include processed data
relating to Options Market Maker quotes in Listed Options made
available to regulators by T+1 at 12:00 p.m. ET.
<bullet> All submission and feedback files older than 15 days.

In addition, as noted in Exhibit A of the Proposed Cost Savings
Amendments, CAT LLC proposes to add the phrase ``subject to the
exceptions in Section 6.3 of Appendix D'' to Section 6.5(b)(i) \19\ and
Section 1.4 of Appendix D.
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\19\ The Proposed Cost Savings Amendments inadvertently referred
to Section 6.5(d)(i); however, Exhibit A of the Proposed Cost
Savings Amendments accurately reflected the addition of the phrase
``subject to the exceptions in Section 6.3 of Appendix D'' to
Section 6.5(b)(i) as intended.
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C. Provision of an Interim CAT-Order-ID on an ``As Requested'' Basis

The CAT NMS Plan currently requires the Plan Processor to provide
an interim CAT- Order-ID by T+1 at 9 p.m. ET, even where no regulatory
need exists.\20\ With respect to this requirement, the Commission has
previously invited the Participants ``to develop alternative solutions
that achieve the regulatory goals of Rule 613 and the CAT NMS Plan in a
more cost- effective manner,'' noting that ``the Commission emphasizes
its willingness to consider such alternative solutions in the form of a
proposed CAT NMS Plan amendment.'' \21\
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\20\ See Exchange Act Release No. 98848 (Nov. 2, 2023), 88 FR
77128 (Nov. 8, 2023) (granting exemptive relief from the requirement
set forth in appendix D, section 6.1 of the CAT NMS Plan that
lifecycle linkages be created by T+1 at noon ET).
\21\ Exchange Act Release No. 95234 (July 8, 2022), 87 FR 42247,
42248 (July 14, 2022).
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CAT LLC originally proposed to provide an interim CAT-Order-ID on
an ``as requested'' basis, which would have saved approximately $2
million annually. This alternative solution would have preserved the
Commission's ability to obtain an interim CAT-Order-ID promptly upon
request, while avoiding the substantial cost of delivering an interim
CAT-Order-ID on a regular ongoing basis even where no regulatory need
exists. CAT LLC would have added a separate line item to its budget to
reflect costs attributable to SEC requests to generate an interim CAT-
Order-ID.
However, after discussions with the Staff, CAT LLC is withdrawing
this proposal. Accordingly, the prior changes to Section 6.1 of
Appendix D relating to this proposal have been eliminated. The
Participants continue to believe that the approximate $2 million in
annual savings associated with the proposal substantially outweigh the
minimal regulatory impact. Subject to further discussions with the
Staff, the Participants will consider whether to re-propose this
proposal in a future cost savings amendment.

II. Additional Details Regarding Calculation of $21 Million in
Estimated Annual Savings

The Commission requested ``additional details and underlying
calculations used to estimate the cost savings as well as information
on the costs to the Plan Processor of implementing each element of each
of the proposed amendments (e.g., some amendments would require coding
changes, which would impose costs).'' \22\
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\22\ OIP at 58847.
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The Proposed Cost Savings Amendments and the SRO Letter include
detailed information regarding how the cost savings estimates were
calculated, which CAT LLC is further supplementing below. As previously
described, all cost savings estimates are based on reasonable
assumptions related to, among other factors, the current state and
costs of CAT operations; current CAT NMS Plan requirements; reporting
by Participants, Industry Members and market data providers; observed
data rates and volumes; current discounts, reservations, and cost
savings plans; and associated cloud fees.\23\ CAT LLC

[[Page 81123]]

believes that the cost savings estimates and assumptions are reasonable
and provide an adequate basis for the Commission to evaluate the costs
and benefits of the Cost Savings Amendments.
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\23\ See Proposed Cost Savings Amendments at 2 n.5.
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One-time implementation costs are expected to be minimal relative
to overall cost savings. Implementation costs may vary based on various
factors, including the details of any requirements in any final
amendment approved by the Commission and any changes in labor costs.
One-time implementation costs will generally consist of Plan Processor
labor costs associated with coding and software development, as well as
any related cloud fees associated with the development, testing and
load testing of the proposed changes. Ongoing operational costs, other
than cloud hosting costs, will not be affected by the proposed
amendments.

1. Processing, Storage, and Query Requirements for Options Market Maker
Quotes in Listed Options: Estimated Annual Savings of $20 Million

The Proposed Cost Savings Amendments would save approximately $20
million annually by changing certain processing, query, and storage
requirements that would otherwise apply to Options Market Maker quotes
in Listed Options.
Processing Requirements. The Plan Processor estimates that
approximately $12 million in savings would be attributable to linkage
processing and data processing reductions, assuming 22 processing days
per month for a total of 264 processing days in a year and based on
data volumes observed in the first half of 2024. Linkage processing
costs would be reduced from approximately $27,000 per day to $0 per
day, resulting in estimated annual linkage processing savings of
$7,128,000 ($27,000/day x 264 days). Data processing costs (i.e., costs
attributable to data ingestion and preparation and publication of data
versions to the relevant regulatory interfaces) would be reduced from
approximately $27,000 per day to $9,000 per day, resulting in estimated
annual data processing savings of $4,752,000 ($18,000/day x 264 days).
In the aggregate, linkage processing and data processing savings would
total $11,880,000, or approximately $12 million, based on data volumes
observed in the first half of 2024. If data volumes continue to
increase as they have historically, the associated costs avoided would
similarly increase.
Storage Requirements. The Plan Processor estimates that
approximately $8 million in savings would be attributable to the
reduction in the storage footprint for Options Market Maker quotes in
Listed Options through the elimination of versioned quote data (i.e.,
T+2 8 a.m. ET, T+5 8 a.m. ET, DIVER and OLA copies). The $8 million in
savings assumes a reduction of the current production storage footprint
of approximately 37.5 petabytes (PB) per month based on data volumes
from the first half of 2024 to approximately 9 PB per month spread
across the S3 Intelligent Tiers (Frequent Access, Infrequent Access,
and Archive Instant Access).\24\
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\24\ Specific to storage cost estimates, S3 Intelligent Tier
storage fees in production are allocated at a ratio of 1 (S3
Frequent Access): 1 (S3 Infrequent Access): 8 (S3 Archive Instant
Access). This ratio describes the current percentage distribution of
data files between storage tiers, which is driven by regulatory
usage. Data files that are either new or that have recently been
read by regulatory users are stored in S3 Frequent Access. If a file
is not read by a regulatory user for 30 days, then it moves to S3
Infrequent Access. Similarly, if a file is not read by a regulatory
user for 90 days, then it moves to S3 Archive Instant Access. Based
on current observed regulatory usage, the Plan Processor's storage
cost model is based on a 1:1:8 ratio across the S3 storage tiers. If
regulatory users begin to read more older data files, then those
files would be moved up to S3 Frequent Access, and the 1:1:8 ratio
between the S3 storage tiers would change. Because each S3 storage
tier has its own cost-per-petabyte of data, any change in the 1:1:8
ratio based on regulatory usage would affect storage costs.
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Query Requirements. As described in the SRO Letter, the Plan
Processor estimates that the continued optimization of Options Market
Maker quotes in Listed Options to make them available via DIVER would
cost approximately $2.8 million per year. This estimate consists of (i)
$2.2 million per year in compute costs for producing the DIVER-specific
hash partition copy of Options Market Maker quotes; \25\ and (ii)
$600,000 per year in storage costs for one year's worth of DIVER-
specific copies of Options Market Maker quotes.\26\ These amounts are
included in the processing and storage estimates described above.
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\25\ The $2.2 million estimate was calculated by multiplying (x)
the cost of DIVER-specific ETL jobs for Options Market Maker quotes,
which is approximately $13,500 per day, by (y) a 65 percent
allocation of compute time toward Options Market Maker quotes for
Participant options data and multiplying that result by (z) 252
trading days in a year.
\26\ The $600,000 estimate was calculated by multiplying (x) the
total storage of DIVER-specific copies, which is 0.0542 petabytes
per day by (y) a 90 percent allocation of storage toward Options
Market Maker quotes based on record volume and multiplying that
result by (z) 252 trading days in a year.
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2. Storage for Raw Unprocessed Data and Interim Operational Copies of
CAT Data Older Than 15 Days: Estimated Annual Savings of $1 Million

The Proposed Cost Savings Amendments would save approximately $1
million annually by permitting the Plan Processor to move raw
unprocessed data (i.e., as-submitted data) and interim operational data
older than 15 days to a more cost-effective storage tier that is
optimized for infrequent access.
The estimated $1 million in reduced storage costs are attributable
to storage pricing for Glacier Deep Archive, currently the lowest
storage tier available on AWS cloud, and are based on data volumes
observed in the first half of 2024.\27\
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\27\ The affected data currently represents approximately 52% of
the daily storage footprint in CAT. Specifically, raw unprocessed
data (i.e., as-submitted data) represents approximately 16% of the
daily storage footprint, and interim operational copies (i.e., T+1
12 p.m. ET, T+1 9 p.m. ET, and associated DIVER copies) represent
approximately 36% of the daily storage footprint.
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CAT LLC reiterates that the affected data provides minimal
regulatory value after the final corrected data version is delivered by
T+5 at 8 a.m. ET. When a regulator queries CAT data, the CAT provides
results to the user based on the latest, most current version of the
data. As required by the CAT NMS Plan, prior to 12:00 p.m. on T+1, raw
unprocessed data (i.e., as-submitted data) that has been ingested by
the Plan Processor must be available to Participants' regulatory staff
and the SEC. Between T+1 and T+5, the CAT query tools will return the
latest iteration of processed data available. Any interim data versions
are ultimately supplanted in all CAT query tools by the final version
of corrected data that is made available at T+5 at 8:00 a.m. ET.
Accordingly, raw unprocessed data and the various iterations of interim
operational data delivered between T+1 and T+5 provide minimal
regulatory value after T+5, and regulators are unlikely to access this
data after T+5. Currently, regulators may access such data ``without
manual intervention'' as required by the CAT NMS Plan via the use of
CAT data management APIs, but after four years of operation, the Plan
Processor has not seen any regulatory usage of this data.
CAT LLC further reiterates that it is not proposing to delete this
data; rather, it is only asking the Commission to allow the Plan
Processor to move this data to a more cost-effective storage tier
requiring some ``manual intervention'' in order to save $1 million
annually. Upon request by the Staff to the CAT Help Desk, archived data
would be

[[Page 81124]]

restored by the Plan Processor to an accessible storage tier, at which
point it would be available and searchable electronically by the Staff
in the same manner it is today.

3. Provision of an Interim CAT-Order-ID on an ``As Requested'' Basis:
Estimated Annual Savings of $2 Million

As noted above, after discussions with the Staff, the proposal to
provide an interim CAT-Order-ID to the Commission on an ``as
requested'' basis has been withdrawn. Accordingly, the $2 million in
annual cost savings associated with this proposal have been eliminated.
The Plan Processor will continue to be required to produce an interim
CAT-Order-ID on a daily basis.

III. Additional Responses to OIP

A. Processing, Query, and Storage Requirements for Options Market Maker
Quotes in Listed Options

Under the Proposed Cost Savings Amendments, Options Market Maker
quotes in Listed Options will no longer be subject to enrichment
processing. The Commission requested, ``in addition to the three
`Eliminated [Enrichments]' discussed in the SRO Letter, . . . more
information on data elements--namely, a list of fields and variables
for various event types in current CAT Data--that would no longer be
directly available, would only be available indirectly (via
notifications or making of requests to the Plan Processor or other
entities), or would be available on a delay relative to today.'' \28\
---------------------------------------------------------------------------

\28\ OIP at 58847. As described in the SRO Letter, the
``Eliminated Enrichments'' are ``(i) derived next event timestamp;
(ii) lifecycle sequence number; and (iii) the CAT Lifecycle ID.''
SRO Letter at 5. See also Proposed Cost Savings Amendments at 4;
Notice at 26985.
---------------------------------------------------------------------------

As previously described, the following data elements will no longer
be available in CAT under the Proposed Cost Savings Amendments:

<bullet> Derived Next Event Timestamp/Derived Next Event Epoch
Timestamp
<bullet> CAT Lifecycle Sequence Number
<bullet> CAT Lifecycle ID (i.e., CAT Order ID and Venue Order ID)
\29\
---------------------------------------------------------------------------

\29\ The CAT Order ID is the lifecycle ID across all CAT
Reporters whereas the Venue Order ID is the lifecycle ID within a
single CAT Reporter. Because option quote events only exist within a
single CAT Reporter, the CAT Order ID and Venue Order ID are
identical for such events.

In addition to the elements previously noted, the Derived Next
Event Type Code will no longer be available under the proposed
amendments.
In addition, the following processing enrichments, which can be
characterized as linkage metadata, will no longer be available:

<bullet> Intra Venue Link Status Code
<bullet> Unlinked Indicator
<bullet> Lifecycle Assembly Date
<bullet> Associated Lifecycles

As reflected in the proposed amendment as revised, upon request of
the SEC or any Participant, the Plan Processor will provide the
existing code required to derive any eliminated data elements from the
unprocessed data.
Finally, the Staff requested information regarding how the ``Top
Indicator'' data element would be affected under the proposed
amendments. Plan Participant events do not represent the top of a
lifecycle. Accordingly, the ``Top Indicator'' is not an enrichment
available on Plan Participant events.

B. Provision of an Interim CAT-Order-ID on an ``As Requested'' Basis

The Commission requested certain additional information regarding
the proposal to provide an interim CAT-Order-ID on an ``as requested''
basis.\30\ As noted above, this proposal has been withdrawn after
discussions with the Staff. Therefore, CAT LLC believes it is no longer
necessary to respond to this portion of the OIP.
---------------------------------------------------------------------------

\30\ OIP at 58847.
---------------------------------------------------------------------------

IV. Solicitation of Comments

The Commission seeks comments on the proposed additional revisions
to the Proposed Cost Savings Amendments. Interested persons are invited
to submit written data, views, and arguments concerning the foregoing,
including whether the proposed additional revisions to the Proposed
Cost Savings Amendments are consistent with the Exchange Act. Comments
may be submitted by any of the following methods:

Electronic Comments

<bullet> Use the Commission's internet comment form (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#582a2d343d753b3735353d362c2b182b3d3b763f372e"><span class="__cf_email__" data-cfemail="94e6e1f8f1b9f7fbf9f9f1fae0e7d4e7f1f7baf3fbe2">[email&#160;protected]</span></a>. Please include
File Number 4-698 on the subject line.

Paper Comments

<bullet> Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to File Number 4-698. This file number
should be included on the subject line if email is used. To help the
Commission process and review your comments more efficiently, please
use only one method. The Commission will post all comments on the
Commission's internet website (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>).
Copies of the submission, all subsequent amendments, all written
statements with respect to the Proposed Cost Savings Amendments that
are filed with the Commission, and all written communications relating
to the Proposed Cost Savings Amendments between the Commission and any
person, other than those that may be withheld from the public in
accordance with the provisions of 5 U.S.C. 552, will be available for
website viewing and printing in the Commission's Public Reference Room,
100 F Street NE, Washington, DC 20549, on official business days
between the hours of 10:00 a.m. and 3:00 p.m. Copies of the filing also
will be available for inspection and copying at the Participants'
offices. All comments received will be posted without change. Persons
submitting comments are cautioned that we do not redact or edit
personal identifying information from comment submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number 4-698 and should be submitted
on or before October 28, 2024.

For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\31\
---------------------------------------------------------------------------

\31\ 17 CFR 200.30-3(a)(85).
---------------------------------------------------------------------------

Sherry R. Haywood,
Assistant Secretary.

Exhibit A

Cumulative Proposed Revisions to CAT NMS Plan

Additions italicized; deletions [bracketed]
* * * * *

Article VI

Functions and Activities of CAT System

* * * * *

Section 6.5. Central Repository.

* * * * *
(b) Retention of Data.
(i) Consistent with Appendix D, Data Retention Requirements, the
Central Repository shall retain the information collected pursuant
to paragraphs (c)(7) and (e)(7) of SEC Rule 613 in a convenient and
usable standard electronic data format that is directly available
and searchable electronically without any manual intervention by the
Plan Processor for a period of not less than six (6) years, subject
to the exceptions in Section 6.3 of Appendix D. Such data when
available to the Participant regulatory staff and the SEC shall be
linked.
(ii) The Plan Processor shall implement and comply with the
records retention policy contemplated by Section 6.1(d)(i) (as such

[[Page 81125]]

policy is reviewed and updated periodically in accordance with
Section 6.1(d)(i)).
* * * * *

Appendix D

* * * * *

1.2 Technical Environments

The architecture must include environments for production,
development, quality assurance testing, disaster recovery, industry-
wide coordinated testing, and individual on-going CAT Reporter
testing. The building and introduction of environments available to
CAT Reporters may be phased in to align with the following agreed
upon implementation milestones:
<bullet> Development environment--the development environment
must be created to build, develop, and maintain enhancements and new
requirements. This environment must be separate from those listed
below.
<bullet> Quality assurance environment--a quality assurance (QA)
environment must be created to allow simulation and testing of all
applications, interfaces, and data integration points contained in
the CAT System.
[cir] The QA environment shall be able to simulate end-to-end
production functionality and perform with the same operational
characteristics, including processing speed, as the production
environment.
[cir] The QA environment shall support varied types of changes,
such as, but not limited to, the following:
<bullet> Application patches;
<bullet> Bug fixes;
<bullet> Operating system upgrades;
<bullet> Introduction of new hardware or software components;
<bullet> New functionality;
<bullet> Network changes;
<bullet> Regression testing of existing functionality;
<bullet> Stress or load testing (simulation of production-level
usage); and
<bullet> Recovery and failover.
[cir] A comprehensive test plan for each build and subsequent
releases must be documented.
<bullet> Production environment--fully operational environment
that supports receipt, ingestion, processing and storage of CAT
Data. Backup/disaster recovery components must be included as part
of the production environment.
<bullet> Industry test environment--
[cir] The Plan Processor must provide an environment supporting
industry testing (test environment) that is functionally equivalent
to the production environment, including:
<bullet> End-to-end functionality (e.g., data validation,
processing, linkage, error identification, correction and reporting
mechanism) from ingestion to output, sized to meet the standards of
the production SLA;
<bullet> Performance metrics that mirror the production
environment; and
<bullet> Management with the same information security policies
applicable to the production environment.
[cir] The industry test environment must also contain
functionality to support industry testing, including:
<bullet> Minimum availability of 24x6;
<bullet> Replica of production data when needed for testing;
<bullet> Data storage sized to meet varying needs, dependent
upon scope and test scenarios; and
<bullet> Support of two versions of code (current and pending).
[cir] The industry test environment must support the following
types of industry testing:
<bullet> Technical upgrades made by the Plan Processor;
<bullet> CAT code releases that impact CAT Reporters;
<bullet> Changes to industry data feeds (e.g., SIP, OPRA, etc.);
<bullet> Industry-wide disaster recovery testing;
<bullet> Individual CAT Reporter and Data Submitter testing of
their upgrades against CAT interfaces and functionality; and
<bullet> Multiple, simultaneous CAT Reporter testing.
[cir] The industry test environment must be a discrete
environment separate from the production environment.
[cir] The Plan Processor must provide the linkage processing of
data submitted during coordinated, scheduled, industry-wide testing.
Results of the linkage processes must be communicated back to
Participants as well as to the Operating Committee.
[cir] Data from industry testing must be saved for three months.
Notwithstanding any other provision of the CAT NMS Plan, this
Appendix D, or Exchange Act Rule 17a-1, such test data (whether
related to the CAT order and transaction system or the customer
account and information system) may be deleted by the Plan Processor
after three months. Operational metrics associated with industry
testing (including but not limited to testing results, firms who
participated, and amount of data reported and linked) must be stored
for the same duration as the CAT production data.
[cir] The Plan Processor must provide support for industry
testing, including testing procedures, coordination of industry
testing, publish notifications, and provide help desk support during
industry testing.
[cir] The Participants and the SEC must have access to industry
test data.
* * * * *

1.4 Data Retention Requirements

The Plan Processor must develop a formal record retention policy
and program for the CAT, to be approved by the Operating Committee,
which will, at a minimum:
<bullet> Contain requirements associated with data retention,
maintenance, destruction, and holds;
<bullet> Comply with applicable SEC record-keeping requirements;
<bullet> Have a record hold program where specific CAT Data can
be archived offline for as long as necessary;
<bullet> Store and retain both raw data submitted by CAT
Reporters and processed data; and
<bullet> Make data directly available and searchable
electronically without manual intervention for at least six years,
subject to the exceptions in Section 6.3 of Appendix D.
* * * * *

3. Reporting and Linkage Requirements

All CAT Data reported to the Central Repository must be
processed and assembled to create the complete lifecycle of each
Reportable Event. Reportable Events must contain data elements
sufficient to ensure the same regulatory coverage currently provided
by existing regulatory reporting systems that have been identified
as candidates for retirement.
Additionally, the Central Repository must be able to:
<bullet> Assign a unique CAT-Reporter-ID to all reports
submitted to the system based on sub-identifiers, (e.g., MPIDs,
ETPID, trading mnemonic) currently used by CAT Reporters in their
order handling and trading processes.
<bullet> Handle duplicate sub-identifiers used by members of
different Participants to be properly associated with each
Participant.
<bullet> Generate and associate one or more Customer-IDs with
all Reportable Events representing new orders received from a
Customer(s) of a CAT Reporter. The Customer-ID(s) will be generated
from a Firm Designated ID provided by the CAT Reporter for each such
event, which will be included on all new order events.
<bullet> Accept time stamps on order events handled
electronically to the finest level of granularity captured by CAT
Reporters. Additionally, the CAT must be able to expand the time
stamp field to accept time stamps to an even finer granularity as
trading systems expand to capture time stamps in ever finer
granularity. The Plan Processor must normalize all processed date/
time CAT Data into a standard time zone/format.
In addition, the data required from CAT Reporters will include
all events and data elements required by the Plan Processor in the
Technical Specifications to build the:
<bullet> Life cycle of an order for defined events within a CAT
Reporter;
<bullet> Life cycle of an order for defined events intra-CAT
Reporter; and
<bullet> State of all orders across all CAT Reporters at any
point in time.
The Plan Processor must use the ``daisy chain approach'' to link
and create the order lifecycle. In the daisy chain approach, a
series of unique order identifiers, assigned to all order events
handled by CAT Reporters are linked together by the Central
Repository and assigned a single CAT-generated CAT-Order-ID that is
associated with each individual order event and used to create the
complete lifecycle of an order.
By using the daisy chain approach the Plan Processor must be
able to link all related order events from all CAT Reporters
involved in the lifecycle of an order. At a minimum, the Central
Repository must be able to create the lifecycle between:
<bullet> All order events handled within an individual CAT
Reporter, including orders routed to internal desks or departments
with different functions (e.g., an internal ATS);
<bullet> Customer orders to ``representative'' orders created in
firm accounts for the purpose of facilitating a customer order
(e.g., linking a customer order handled on a riskless principal
basis to the street-side proprietary order);
<bullet> Orders routed between broker-dealers;
<bullet> Orders routed from broker-dealers to exchanges;
<bullet> Orders sent from an exchange to its routing broker-
dealer;

[[Page 81126]]

<bullet> Executed orders and trade reports;
<bullet> Various legs of option/equity complex orders; and
<bullet> Order events for all equity and option order handling
scenarios that are currently or may potentially be used by CAT
Reporters, including:
[cir] Agency route to another broker-dealer or exchange;
[cir] Riskless principal route to another broker-dealer or
exchange capturing within the lifecycle both the customer leg and
street side principal leg;
[cir] Orders routed from one exchange through a routing broker-
dealer to a second exchange;
[cir] Orders worked through an average price account capturing
both the individual street side execution(s) and the average price
fill to the Customer;
[cir] Orders aggregated with other orders for further routing
and execution capturing both the street side executions for the
aggregated order and the fills to each customer order;
[cir] Complex orders involving one or more options legs and an
equity leg, with a linkage between the option and equity legs;
[cir] Complex orders containing more legs than an exchange's
order management system can accept, causing the original order to be
broken into multiple orders;
[cir] Orders negotiated over the telephone or via a negotiation
system;
[cir] Orders routed on an agency basis to a foreign exchange;
[cir] Execution of customer order via allocation of shares from
a pre-existing principal order;
[cir] Market maker quotes; and
[cir] Complex orders involving two or more options legs.
Additionally, the Central Repository must be able to:
<bullet> Link each order lifecycle back to the originating
Customer;
<bullet> Integrate and appropriately link reports representing
repairs of original submissions that are rejected by the CAT due to
a failure to meet a particular data validation;
<bullet> Integrate into the CAT and appropriately link reports
representing records that are corrected by a CAT Reporter for the
purposes of correcting data errors not identified in the data
validation process;
<bullet> Assign a single CAT-Order-ID to all events contained
within the lifecycle of an order so that regulators can readily
identify all events contained therein; and
<bullet> Process and link Manual Order Events with the remainder
of the associated order lifecycle.
As described in Section 3.4 of Appendix D, Options Market Maker
quotes in Listed Options will be subject to ingestion only and will
not be subject to any linkage requirements.
* * * * *

3.4 Requirements for Options Market Maker Quotes in Listed Options

6.1 Data Processing

CAT order events must be processed within established timeframes
to ensure data can be made available to Participants' regulatory
staff and the SEC in a timely manner. The processing timelines start
on the day the order event is received by the Central Repository for
processing.
Most events must be reported to the CAT by 8:00 a.m. Eastern
Time the Trading Day after the order event occurred (referred to as
transaction date). The processing timeframes below are presented in
this context. All events submitted after T+1 (either reported late
or submitted later because not all of the information was available)
must be processed within these timeframes based on the date they
were received.
The Participants require the following timeframes (Figure A) for
the identification, communication and correction of errors from the
time an order event is received by the processor:
<bullet> Noon Eastern Time T+1 (transaction date + one day)--
Initial data validation, lifecycle linkages and communication of
errors to CAT Reporters;
<bullet> 8:00 a.m. Eastern Time T+3 (transaction date + three
days)--Resubmission of corrected data; and
<bullet> 8:00 a.m. Eastern Time T+5 (transaction date + five
days)--Corrected data available to Participant regulatory staff and
the SEC.
Late submissions or re-submissions (after 8:00 a.m.) may be
considered to be processed that day if it falls within a given time
period after the cutoff. This threshold will be determined by the
Plan Processor and approved by the Operating Committee. In the event
that a significant portion of the data has not been received as
monitored by the Plan Processor, the Plan Processor may decide to
halt processing pending submission of that data.
[GRAPHIC] [TIFF OMITTED] TN07OC24.011

[[Page 81127]]

For the avoidance of doubt, processing and storage of Options
Market Maker quotes in Listed Options shall be governed by Section
3.4 of Appendix D.
* * * * *

6.3 Exceptions to Data Availability Requirements

8.1 Regulator Access

The Plan Processor must provide Participants' regulatory staff
and the SEC with access to all CAT Data for regulatory purposes
only. Participants' regulatory staff and the SEC will access CAT
Data to perform functions, including economic analyses, market
structure analyses, market surveillance, investigations, and
examinations.
The CAT must be able to support, at a minimum, 3,000 regulatory
users within the system. It is estimated that approximately 20% of
all users will use the system on a daily or weekly basis while
approximately 10% of all users will require advanced regulator-user
access, as described below. Furthermore, it is estimated that there
may be approximately 600 concurrent users accessing the CAT at any
given point in time. These users must be able to access and use the
system without an unacceptable decline in system performance.\29\
---------------------------------------------------------------------------

\29\ Specific performance requirements will be included in the
SLA.
---------------------------------------------------------------------------

As stated in Appendix D, Data Security, the Plan Processor must
be able to support an arbitrary number of user roles. Defined roles
must include, at a minimum:
<bullet> Basic regulator users--Individuals with approved access
who plan to use the Central Repository to run basic queries (e.g.,
pulling all trades in a single stock by a specific party).
<bullet> Advanced regulator users--Individuals with approved
access who plan to use the Central Repository to construct and run
their own complex queries.
Regulators will have access to processed CAT Data through two
different methods, an online-targeted query tool and user-defined
direct queries and bulk extracts.
As described in Section 3.4 of Appendix D, Options Market Maker
quotes in Listed Options will be accessible through BDSQL and Direct
Read interfaces only and will not be accessible through the online
targeted query tool.

Exhibit B

Proposed Additional Revisions to Changes in Proposed Cost Savings
Amendment

Additions italicized; deletions [bracketed]

* * * * *

Appendix D

* * * * *

3. Reporting and Linkage Requirements

* * * * *
As described in Section 3.4 of Appendix D, Options Market Maker
[Quotes]quotes in Listed Options [and related Reportable Events]
will be subject to ingestion only and will not be subject to any
linkage requirements.
* * * * *

3.4 Requirements for Options Market Maker Quotes in Listed Options

The provisions of this section shall govern the processing and
storage of Options Market Maker [Quotes]quotes in Listed Options
[and related Reportable Events] and shall override any conflicting
provisions in the CAT NMS Plan, this Appendix D, or Exchange Act
Rule 17a-1.
Options Market Maker [Quotes]quotes in Listed Options must be
reported to the Central Repository as provided under Section
6.4(d)(iii) of the CAT NMS Plan. This data will undergo ingestion
validation only and such unlinked data will be made available to
regulators by T+1 at 12:00 p.m. Eastern Time. Options Market Maker
[Quotes]quotes in Listed Options will not be subject to any
requirement to link and create an order lifecycle, and will not
undergo any linkage validation, linkage feedback, [linkage,] or
lifecycle enrichment processing, but will undergo ingestion
validation. Options Market Maker [Quotes]quotes in Listed Options
will be accessible through BDSQL and Direct Read interfaces only and
will not be accessible through the online targeted query tool.
Upon request of the SEC or any Participant, the Plan Processor
will provide the business and technical requirements needed to re-
create the eliminated enrichments, as well as the code (which is
unique to the Plan Processor's linkage implementation) existing as
of the effective date of this provision used to derive the
eliminated enrichments. The Plan Processor will not maintain the
business and technical requirements and the code following the
effective date of this provision, but it will retain a copy so that
they may be provided to any regulators that might request them in
the future.
* * * * *

6.1 Data Processing

CAT order events must be processed within established timeframes
to ensure data can be made available to Participants' regulatory
staff and the SEC in a timely manner. The processing timelines start
on the day the order event is received by the Central Repository for
processing. Most events must be reported to the CAT by 8:00 a.m.
Eastern Time the Trading Day after the order event occurred
(referred to as transaction date). The processing timeframes below
are presented in this context. All events submitted after T+1
(either reported late or submitted later because not all of the
information was available) must be processed within these timeframes
based on the date they were received.
The Participants require the following timeframes (Figure A) for
the identification, communication and correction of errors from the
time an order event is received by the processor:
<bullet> Noon Eastern Time T+1 (transaction date + one day)--
Initial data validation, lifecycle linkages and communication of
errors to CAT Reporters;
<bullet> 8:00 a.m. Eastern Time T+3 (transaction date + three
days)--Resubmission of corrected data; and
<bullet> 8:00 a.m. Eastern Time T+5 (transaction date + five
days)--Corrected data available to Participant regulatory staff and
the SEC.
Late submissions or re-submissions (after 8:00 a.m.) may be
considered to be processed that day if it falls within a given time
period after the cutoff. This threshold will be determined by the
Plan Processor and approved by the Operating Committee. In the event
that a significant portion of the data has not been received as
monitored by the Plan Processor, the Plan Processor may decide to
halt processing pending submission of that data.

[[Page 81128]]

[GRAPHIC] [TIFF OMITTED] TN07OC24.012

[Where there is an immediate regulatory need (for example, in
the case of a major market event), upon request of a senior officer
of the Division of Trading and Markets, the Division of Enforcement,
or the Division of Examinations to CAT LLC, the Plan Processor shall
be directed to create an interim CAT-Order-ID and make it available
to regulators by T+1 at 9 p.m. ET if the request is received prior
to T+1 at 8 a.m. ET, or generally within 14 hours of receiving the
request if such request was received after T+1 at 8 a.m. ET.]
For the avoidance of doubt, processing and storage of Options
Market Maker [Quotes]quotes in Listed Options [and related
Reportable Events] shall be governed by Section 3.4 of Appendix D.
* * * * *

6.3 Exceptions to Data Availability Requirements

Notwithstanding any other provision of the CAT NMS Plan, this
Appendix D, or Exchange Act Rule 17a-1, the following types of data
may be retained in an archive storage tier[, in which case they will
be made available upon request by Participant regulatory staff or
the SEC to the CAT Help Desk]. Archived data is not directly
available and searchable electronically without manual intervention
and will not be subject to any query tool performance requirements
until it is restored to an accessible storage tier. The Plan
Processor will restore archived data to an accessible storage tier
upon request to the CAT Help Desk by an authorized regulatory user
from the Participants or a senior officer from the SEC.
<bullet> [All raw unprocessed data (i.e., as submitted data) and
interim operational data older than 15 days. Interim operational
data includes all processed, validated and unlinked data made
available to regulators by T+1 at 12:00 p.m. ET, and all iterations
of processed data made available to regulators between T+1 and T+5,
but excludes the final version of corrected data that is made
available at T+5 at 8:00 a.m. ET.]Raw Unprocessed Data older than 15
days. ``Raw Unprocessed Data'' means data that has been ingested by
the Plan Processor and made available to regulators prior to 12:00
p.m. Eastern Time on T+1.
<bullet> Interim Operational Data older than 15 days. ``Interim
Operational Data'' means all processed, validated and unlinked data
made available to regulators by T+1 at 12:00 p.m. ET and all
iterations of processed data made available to regulators between
T+1 and T+5, but excludes the final version of corrected data that
is made available at T+5 at 8:00 a.m. ET. For the avoidance of
doubt, ``Interim Operational Data'' does not include processed data
relating to Options Market Maker quotes in Listed Options made
available to regulators by T+1 at 12:00 p.m. ET.
<bullet> All submission and feedback files older than 15 days.
* * * * *

8.1 Regulator Access

* * * * *
As described in Section 3.4 of Appendix D, Options Market Maker
[Quotes ]quotes in Listed Options [and related Reportable Events]
will be accessible through BDSQL and Direct Read interfaces only and
will not be accessible through the online targeted query tool.

[FR Doc. 2024-23063 Filed 10-4-24; 8:45 am]
BILLING CODE 8011-01-P

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