Notice2025-21122
Joint Industry Plan; Order Instituting Proceedings To Determine Whether To Approve or Disapprove an Amendment to the National Market System Plan Governing the Consolidated Audit Trail
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
November 26, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
<html>
<head>
<title>Federal Register, Volume 90 Issue 226 (Wednesday, November 26, 2025)</title>
</head>
<body><pre>
[Federal Register Volume 90, Number 226 (Wednesday, November 26, 2025)]
[Notices]
[Pages 54438-54448]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-21122]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-104234; File No. 4-698]
Joint Industry Plan; Order Instituting Proceedings To Determine
Whether To Approve or Disapprove an Amendment to the National Market
System Plan Governing the Consolidated Audit Trail
November 21, 2025.
I. Introduction
On September 5, 2025, the Consolidated Audit Trail, LLC (``CAT
LLC''), on behalf of the following parties to the National Market
System Plan Governing the Consolidated Audit Trail (the ``CAT NMS
Plan'' or ``Plan'') \1\: 24X National Exchange LLC, 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., Financial Industry Regulatory Authority, Inc.
(``FINRA''), Investors Exchange LLC, Long-Term Stock Exchange, Inc.,
MEMX LLC, Miami International Securities Exchange LLC, MIAX Emerald,
LLC, MIAX PEARL, LLC, MIAX Sapphire, 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 National, Inc., and NYSE Texas, Inc. (collectively,
the ``Participants,'' or ``SROs'') filed with the Securities and
Exchange Commission (``SEC'' or ``Commission'') pursuant to Section
11A(a)(3) of the Securities Exchange Act of 1934 (``Act'' or ``Exchange
Act''),\2\ and Rule 608 thereunder,\3\ a proposed amendment to
implement a revised funding model (the ``Proposed Amendment'') for the
consolidated audit trail (the ``CAT'') and to establish a fee schedule
for Participant CAT fees in accordance with the Proposed Amendment.\4\
The Proposed Amendment was published for comment in the Federal
Register on September 17, 2025.\5\
---------------------------------------------------------------------------
\1\ 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.
\2\ 15 U.S.C 78k-1(a)(3).
\3\ 17 CFR 242.608.
\4\ See Letter from Robert Walley, CAT NMS Plan Operating
Committee Chair, to Vanessa Countryman, Secretary, Commission, dated
September 5, 2025.
\5\ See Securities Exchange Act Release No. 103960 (Sept. 12,
2025), 90 FR 44910 (``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-a.htm">https://www.sec.gov/comments/4-698/4-698-a.htm</a>.
---------------------------------------------------------------------------
This order institutes proceedings, under Rule 608(b)(2)(i) of
Regulation NMS,\6\ to determine whether to disapprove the Proposed
Amendment or to approve the Proposed Amendment with any changes or
subject to any conditions the Commission deems necessary or
appropriate.
---------------------------------------------------------------------------
\6\ 17 CFR 242.608(b)(2)(i).
---------------------------------------------------------------------------
II. Background
Under the CAT NMS Plan, the Operating Committee of the Company, of
which each Participant is a member, has the discretion (subject to the
funding principles set forth in the Plan) to establish funding for the
Company to operate the CAT, including establishing fees to be paid by
the Participants and Industry Members.\7\
---------------------------------------------------------------------------
\7\ The CAT NMS Plan defines ``Industry Member'' as ``a member
of a national securities exchange or a member of a national
securities association.'' See CAT NMS Plan, supra note 1, at Section
1.1. See also id. at Section 11.1(b).
---------------------------------------------------------------------------
Under the CAT NMS Plan, CAT fees are to be implemented in
accordance with various funding principles, including an ``allocation
of the Company's related costs among Participants and Industry Members
that is consistent with the Exchange Act taking into account . . .
distinctions in the securities trading operations of Participants and
Industry Members and their relative impact upon the Company resources
and operations'' and the ``avoid[ance of] any disincentives such as
placing an inappropriate burden on competition and reduction in market
quality.'' \8\ The Plan specifies that, in establishing the funding of
the Company, the Operating Committee shall establish ``a tiered fee
structure in which the fees charged to: (1) CAT Reporters \9\ that are
Execution Venues,\10\ including ATSs,\11\ are based upon the level of
market share; (2) Industry Members' non-ATS activities are based upon
message traffic; and (3) the CAT Reporters with the most CAT-related
activity (measured by market share and/or message traffic, as
applicable) are generally comparable (where, for these comparability
purposes, the tiered fee structure takes into consideration
affiliations between or among CAT Reporters, whether Execution Venues
and/or Industry Members).'' \12\
---------------------------------------------------------------------------
\8\ Id. at Section 11.2(b) and (e).
\9\ The CAT NMS Plan defines ``CAT Reporter'' as ``each national
securities exchange, national securities association and Industry
Member that is required to record and report information to the
Central Repository pursuant to SEC Rule 613(c).'' Id. at Section
1.1.
\10\ The CAT NMS Plan defines ``Execution Venue'' as ``a
Participant or an alternative trading system (`ATS') (as defined in
Rule 300 of Regulation ATS) that operates pursuant to Rule 301 of
Regulation ATS (excluding any such ATS that does not execute
orders).'' Id.
\11\ Id.
\12\ CAT NMS Plan, supra note 1, at Section 11.2(c). See id. at
Article XI for additional detail.
---------------------------------------------------------------------------
On March, 13, 2023, the Participants to the CAT NMS Plan, pursuant
to Section 11A of the Exchange Act \13\ and Regulation NMS
thereunder,\14\ filed a proposed amendment to the CAT NMS Plan (the
``2023 Funding Model Amendment'') to implement a revised funding model
(the ``Executed Share Model'') for the CAT and to establish a fee
schedule for Participant CAT fees in accordance with the Executed Share
Model. The 2023 Funding Model Amendment was published for comment in
the Federal Register on March 21, 2023.\15\ On September 6, 2023, the
Commission approved the 2023 Funding Model Amendment (the
[[Page 54439]]
``2023 Funding Model Order'').\16\ On July 25, 2025, the United States
Court of Appeals for the Eleventh Circuit issued an opinion vacating
the 2023 Funding Model Order and remanding the matter to the Commission
for further proceedings consistent with its opinion.\17\ The Court
stayed the effect of its judgment for sixty days from the issuance of
its mandate, which is December 1, 2025.\18\
---------------------------------------------------------------------------
\13\ 15 U.S.C 78k-1.
\14\ 17 CFR 242.608.
\15\ See Securities Exchange Act Release No. 97151 (Mar. 15,
2023), 88 FR 17086. Comments received in response to the 2023
Funding Model Amendment can be found on the Commission's website at
<a href="https://www.sec.gov/comments/4-698/4-698-a.htm">https://www.sec.gov/comments/4-698/4-698-a.htm</a>.
\16\ See Securities Exchange Act Release No. 98290, 88 FR 62628
(Sept. 12, 2023).
\17\ See Am. Sec. Ass'n v. SEC, 147 F.4th 1264 (11th Cir. 2025).
\18\ Id.
---------------------------------------------------------------------------
III. Summary of Proposal \19\
---------------------------------------------------------------------------
\19\ This section summarizes the proposed changes to the CAT NMS
Plan. For a full discussion of the Proposed Amendment, including the
Participants' justifications for the Proposed Amendment, such as
comparability to existing fees, alternatives considered, fee pass-
throughs, treatment of FINRA, cost transparency (including the
Historical CAT Costs prior to 2022) and satisfaction of the Exchange
Act and CAT NMS Plan requirements, see Notice, supra note 5.
---------------------------------------------------------------------------
A. Executed Share Model
As described in more detail in the Notice, CAT LLC proposes to
replace the funding model set forth in Article XI of the CAT NMS Plan
(``Original Funding Model'') with the Executed Share Model.\20\ The
Original Funding Model involved a bifurcated approach, where costs
associated with building and operating the CAT would be borne by (1)
Industry Members (other than alternative trading systems (``ATSs'')
that execute transactions in Eligible Securities (``Execution Venue
ATSs'')) through fixed tiered fees based on message traffic for
Eligible Securities, and (2) Participants and Industry Members that are
Execution Venue ATSs for Eligible Securities through fixed tiered fees
based on market share.\21\ In contrast, the Executed Share Model would
charge fees based on the executed equivalent share volume of
transactions in Eligible Securities rather than based on market share
and message traffic.\22\ In addition, instead of charging fees to
Industry Members, under the Executed Share Model, fees would be charged
to each Industry Member that is a CAT Executing Broker \23\ for the
buyer in a transaction in Eligible Securities (``CAT Executing Broker
for the Buyer'' or ``CEBB'') and each Industry Member that is the CAT
Executing Broker for the seller in a transaction in Eligible Securities
(``CAT Executing Broker for the Seller'' or ``CEBS'').\24\
---------------------------------------------------------------------------
\20\ The Participants state that other than the addition of a
new proposed paragraph (e) to Section 11.3 of the CAT NMS Plan,
which provides that each Participant agrees not to establish a new
fee for passing through its CAT fees, the Proposed Amendment are
identical to the amendments adopted in the 2023 Funding Model Order.
See Notice, supra note 5, at 44910; see also infra Part III.A.3.e.
\21\ See CAT NMS Plan, supra note 1, at Section 11.3(a) and (b).
\22\ See Notice, supra note 5, at 44910. Proposed Section
11.3(a)(i)(B) would describe how ``executed equivalent shares''
would be counted for purposes of calculating CAT Fees: (1) each
executed share for a transaction in NMS stocks would be counted as
one executed equivalent share; (2) each executed contract for a
transaction in Listed Options would be counted using the contract
multiplier applicable to the specific Listed Option in the relevant
transaction; and (3) each executed share for a transaction in OTC
Equity Securities would be considered 0.01 executed equivalent
shares. See id. at 44933.
\23\ The Executed Share Model would define ``CAT Executing
Broker'' in Section 1.1 of the CAT NMS Plan as: (a) with respect to
a transaction in an Eligible Security that is executed on an
exchange, the Industry Member identified as the Industry Member
responsible for the order on the buy-side of the transaction and the
Industry Member responsible for the sell-side of the transaction in
the equity order trade event and option trade event in the CAT Data
submitted to the CAT by the relevant exchange pursuant to the
Participant Technical Specifications; and (b) with respect to a
transaction in an Eligible Security that is executed otherwise than
on an exchange and required to be reported to an equity trade
reporting facility of a registered national securities association,
the Industry Member identified as the executing broker and the
Industry Member identified as the contra-side executing broker in
the TRF/ORF/ADF transaction data event in the CAT Data submitted to
the CAT by FINRA pursuant to the Participant Technical
Specifications; provided, however, in those circumstances where
there is a non-Industry Member identified as the contra-side
executing broker in the TRF/ORF/ADF transaction data event or no
contra-side executing broker is identified in the TRF/ORF/ADF
transaction data event, then the Industry Member identified as the
executing broker in the TRF/ORF/ADF transaction data event would be
treated as CAT Executing Broker for the Buyer and for the Seller.
Id. at 44912.
\24\ See Notice, supra note 5, at 44912.
---------------------------------------------------------------------------
Under the Executed Share Model, CAT LLC proposes to establish two
categories of CAT fees. The first category of CAT fees would be fees
(``CAT Fees'') payable by Participants and Industry Members that are
CAT Executing Brokers for the Buyer and for the Seller with regard to
CAT costs not previously paid by the Participants (``Prospective CAT
Costs'').\25\ The second category of CAT fees would be fees
(``Historical CAT Assessments'') to be payable by Industry Members that
are CAT Executing Brokers for the Buyer and for the Seller with regard
to CAT costs previously paid by the Participants (``Past CAT
Costs'').\26\ Each Historical CAT Assessment will recover an amount of
``Historical CAT Costs,'' which will be Past CAT Costs minus Past CAT
Costs reasonably excluded from Historical CAT Costs by the Operating
Committee.\27\
---------------------------------------------------------------------------
\25\ Id. at 44910; see also proposed Section 11.3(a). The
defined term ``CAT Fees'' applies specifically to CAT fees related
to Prospective CAT Costs. Id.
\26\ See Notice, supra note 5, at 44910; see also proposed
Section 11.3(b).
\27\ See Notice, supra note 5, at 44921; see also proposed
Section 11.3(b)(i)(C).
---------------------------------------------------------------------------
For each category of fees, each CEBB and each CEBS will be required
to pay a CAT fee for each such transaction in Eligible Securities in
the prior month based on CAT Data.\28\ The CEBB's CAT fee or CEBS's CAT
fee (as applicable) for each transaction in Eligible Securities will be
calculated by multiplying the number of executed equivalent shares in
the transaction by one-third and by the reasonably determined Fee
Rate,\29\ as described below.\30\ Participants would incur CAT Fees
only for Prospective CAT Costs and the Participant CAT Fee will be
calculated by multiplying the number of executed equivalent shares in
the transaction by one-third and by the reasonably determined Fee
Rate.\31\ The Participants' one-third share of Historical CAT Costs and
such other additional Past CAT Costs as reasonably determined by the
Operating Committee will be paid by the cancellation of loans made to
the Company on a pro rata basis based on the outstanding loan amounts
due under the loans.\32\
---------------------------------------------------------------------------
\28\ See Notice, supra note 5, at 44919; see also proposed
Section 11.3(a)(iii), proposed Section 11.3(b)(iii).
\29\ See Notice, supra note 5, at 44916-17 for the definition
and description of the calculation of the Fee Rate.
\30\ Id. at 44919; see also proposed Section 11.3(a)(iii),
proposed Section 11.3(b)(iii).
\31\ See Notice, supra note 5, at 44919; see also proposed
Section 11.3(a)(ii).
\32\ See proposed Section 11.3(b)(ii).
---------------------------------------------------------------------------
As Plan Processor, FINRA CAT would be responsible for calculating
the CAT fees and submitting invoices to the CAT Executing Brokers based
on this CAT Data.\33\ All data used to calculate the fees under the
Executed Share Model would be CAT Data, and, therefore, it would be
available through the CAT for calculating CAT fees.\34\
---------------------------------------------------------------------------
\33\ See Notice, supra note 5, at 44913.
\34\ Id.
---------------------------------------------------------------------------
B. Calculation of Fees
1. CAT Budget
Section 11.1(a) of the CAT NMS Plan describes the requirement for
the Operating Committee to approve an operating budget for CAT LLC on
an annual basis. It requires the budget to ``include the projected
costs of the Company, including the costs of developing and operating
the CAT for the upcoming year, and the sources of all revenues to cover
such costs, as well as the funding of any reserve that the Operating
Committee reasonably deems appropriate for prudent operation of the
Company.''
[[Page 54440]]
CAT LLC proposes to amend Section 11.1(a) of the CAT NMS Plan to
require CAT LLC to determine costs for the operating budget for the CAT
in a reasonable manner. CAT LLC proposes to add subparagraph (i) to
Section 11.1(a) of the CAT NMS Plan to list the types of CAT costs to
be included in the budget. Specifically, proposed Section 11.1(a)(i) of
the CAT NMS Plan would state that ``[w]ithout limiting the foregoing,
the reasonably budgeted CAT costs shall include technology (including
cloud hosting services, operating fees, CAIS operating fees, change
request fees and capitalized developed technology costs), legal,
consulting, insurance, professional and administration, and public
relations costs, a reserve, and such other categories as reasonably
determined by the Operating Committee to be included in the budget.''
CAT LLC also proposes to require the inclusion of five
subcategories of technology costs in the budget: (1) cloud hosting
services, (2) operating fees, (3) Customer and Account Information
System (``CAIS'') operating fees, (4) change request fees, and (5)
capitalized developed technology costs.\35\ CAT LLC states that it will
consider the need to provide additional cost disclosure going
forward.\36\
---------------------------------------------------------------------------
\35\ CAT LLC states that breaking out technology costs in this
manner is consistent with how such costs are broken out in the CAT
budgets available on the CAT website. The CAT LLC budgets are
available on the CAT website at <a href="https://www.catnmsplan.com/cat-financial-and-operating-budget">https://www.catnmsplan.com/cat-financial-and-operating-budget</a>. CAT LLC states that it currently
does not propose to require the disclosure of additional
subcategories of cost information, such as a further breakdown of
the category of cloud hosting services into production costs,
including linker costs and storage costs. Additionally, CAT LLC
notes that the CAT NMS Plan requires that detailed cost information
be made available to the Commission upon request, and detailed
information on CAT costs and operations is regularly made available
to the Commission staff and the Advisory Committee on a confidential
basis. See Notice, supra note 5, at 44915.
\36\ Id.
---------------------------------------------------------------------------
CAT LLC proposes to add paragraph (ii) to Section 11.1(a) of the
CAT NMS Plan, which provides that the budget will include an amount
reasonably necessary to allow the Company to maintain a reserve of not
more than 25% of the annual budget.'' In addition, proposed Section
11.1(a)(ii) of the CAT NMS Plan would state that ``[f]or the avoidance
of doubt, the calculation of the amount of the reserve would exclude
the amount of the reserve from the budget.''
CAT LLC proposes to provide additional information as to how budget
surpluses would be treated for purposes of the reserve. Specifically,
proposed subparagraph (ii) of Section 11.1(a) of the CAT NMS Plan would
state that ``[t]o the extent collected CAT fees exceed CAT costs,
including the reserve of 25% of the annual budget, such surplus will be
used to offset future fees.'' In addition, CAT LLC further proposes to
state in proposed Section 11.1(a)(ii) of the CAT NMS Plan that ``[f]or
the avoidance of doubt, the Company will only include an amount for the
reserve in the annual budget if the Company does not have a sufficient
reserve (which shall be up to but not more than 25% of the annual
budget).''
2. CAT Fees Related to Prospective CAT Costs
CAT LLC proposes to describe the timing and method for calculating
the Fee Rate for the CAT Fees related to Prospective CAT Costs in
proposed Section 11.3(a)(i) of the CAT NMS Plan, and to provide
additional detail regarding the Fee Rate in that provision. Proposed
Section 11.3(a)(i) of the CAT NMS Plan would state that CAT Fees
related to Prospective CAT Costs would be calculated twice a year, once
at the beginning of the year and once during the year.
Proposed Section 11.3(a)(i)(A)(I) of the CAT NMS Plan would provide
that at the beginning of each year, the Operating Committee will
calculate the Fee Rate by dividing the reasonably budgeted CAT costs
for the year by the reasonably projected total executed equivalent
share volume of all transactions in Eligible Securities for the year.
Once the Operating Committee has approved such Fee Rate, the
Participants shall be required to file with the Commission pursuant to
Section 19(b) of the Exchange Act CAT Fees to be charged to Industry
Members calculated using such Fee Rate. Participants and Industry
Members will be required to pay CAT Fees calculated using this Fee Rate
once such CAT Fees are in effect with regard to Industry Members in
accordance with Section 19(b) of the Exchange Act.
Proposed Section 11.3(a)(i)(A)(II) of the CAT NMS provides that
during each year, the Operating Committee will calculate a new Fee Rate
by dividing the reasonably budgeted CAT costs for the remainder of the
year by the reasonably projected total executed equivalent share volume
of all transactions in Eligible Securities for the remainder of the
year. Once the Operating Committee has approved the new Fee Rate, the
Participants shall be required to file with the Commission pursuant to
Section 19(b) of the Exchange Act CAT Fees to be charged to Industry
Members calculated using the new Fee Rate. Participants and Industry
Members will be required to pay CAT Fees calculated using this new Fee
Rate once such CAT Fees are in effect with regard to Industry Members
in accordance with Section 19(b) of the Exchange Act.
CAT LLC also proposes to add Section 11.3(a)(i)(A)(III) to the CAT
NMS Plan to state that CAT Fees related to Prospective CAT Costs do not
sunset automatically; such CAT Fees would remain in place until new CAT
Fees are in place with a new Fee Rate. The Executed Share Model is
designed to collect CAT fees continuously to provide uninterrupted
revenue to pay CAT bills.\37\
---------------------------------------------------------------------------
\37\ CAT LLC proposes to add proposed Section 11.3(a)(i)(A)(IV)
to the CAT NMS Plan. This provision would state that ``[f]or the
avoidance of doubt, the first CAT Fee may commence at the beginning
of the year or during the year. If it were to commence during the
year, the CAT Fee would be calculated as described in paragraph (II)
of this Section.''
---------------------------------------------------------------------------
a. Budgeted CAT Costs
The calculation of the Fee Rate for CAT Fees related to Prospective
CAT Costs requires the determination of the budgeted CAT costs for the
year or other relevant period. Proposed Section 11.3(a)(i)(C) of the
CAT NMS Plan would state that the budgeted CAT costs for the year shall
be comprised of all reasonable fees, costs and expenses reasonably
budgeted to be incurred by or for the Company in connection with the
development, implementation and operation of the CAT as set forth in
the annual operating budget approved by the Operating Committee
pursuant to Section 11.1(a) of the CAT NMS Plan, or as adjusted during
the year by the Operating Committee.
b. Projected Total Executed Equivalent Share Volume
The calculation of the Fee Rate for CAT Fees also requires the
determination of the projected total executed equivalent share volume
of transactions in Eligible Securities for each relevant period.
Pursuant to proposed Section 11.3(a)(i)(D) of the CAT NMS Plan, each
year, the Operating Committee would reasonably determine this
projection based on the total executed equivalent share volume of
transactions in Eligible Securities from the prior twelve months. As
set forth in proposed Section 11.3(a)(iii)(B), Participants will be
required to provide a description of the calculation of the projection
in their fee filings pursuant to Section 19(b) of the Exchange Act.
Furthermore, CAT LLC intends to calculate the CAT Fees based on a
reasonable determination of the
[[Page 54441]]
projected total executed equivalent share volume of transactions in
Eligible Securities.
c. Participant CAT Fees for Prospective CAT Costs
CAT LLC proposes to add paragraph (A) to proposed Section
11.3(a)(ii) of the CAT NMS Plan to describe the CAT Fee obligation of
the Participants. Each Participant that is a national securities
exchange will be required to pay the CAT Fee for each transaction in
Eligible Securities executed on the exchange in the prior month based
on CAT Data. Each Participant that is a national securities association
will be required to pay the CAT Fee for each transaction in Eligible
Securities executed otherwise than on an exchange in the prior month
based on CAT Data. The CAT Fee for each transaction in Eligible
Securities will be calculated by multiplying the number of executed
equivalent shares in the transaction by one-third and by the Fee Rate
determined pursuant to paragraph (a)(i) of Section 11.3.
CAT LLC also proposes to include proposed paragraph (B) of proposed
Section 11.3(a)(ii) of the CAT NMS Plan to clarify that Participants
would only be required to pay CAT Fees when Industry Members are
required to pay CAT Fees. Under the Executed Share Model, CAT Fees are
designed to cover 100% of CAT costs by allocating costs between and
among Participants and Industry Members. However, the CAT Fees charged
to Participants are implemented via a different process than CAT Fees
charged to Industry Members. CAT Fees charged to Participants are
implemented via an approval of the CAT Fees by the Operating Committee
in accordance with the requirements of the CAT NMS Plan. In contrast,
CAT Fees charged to Industry Members may only become effective in
accordance with the requirements of Section 19(b) of the Exchange Act.
d. Industry Member CAT Fees for Prospective CAT Costs
CAT LLC proposes to describe the CAT Fees related to Prospective
CAT Costs that would be charged to Industry Members in proposed Section
11.3(a)(iii)(A) of the CAT NMS Plan. Each Industry Member that is the
CEBB in a transaction in Eligible Securities and each Industry Member
that is the CEBS in a transaction in Eligible Securities will be
required to pay a CAT Fee for each such transaction in Eligible
Securities in the prior month based on CAT Data. The CEBB's CAT Fee or
CEBS's CAT Fee (as applicable) for each transaction in Eligible
Securities will be calculated by multiplying the number of executed
equivalent shares in the transaction by one-third and by the Fee Rate
reasonably determined pursuant to paragraph (a)(i) of this Section
11.3.
Proposed Section 11.3(a)(iii)(B) of the CAT NMS Plan would require
the fee filings to be made pursuant to Section 19(b) of the Exchange
Act and Rule 19b-4 thereunder \38\ for Industry Member CAT Fees to
include with regard to the CAT Fee: (A) the Fee Rate; (B) the budget
for the upcoming year (or remainder of the year, as applicable),
including a brief description of each line item in the budget; (C) a
discussion of how the budget is reconciled to the collected fees; and
(D) the projected total executed equivalent share volume of all
transactions in Eligible Securities for the year (or remainder of the
year, as applicable), and a description of the calculation of the
projection. This detail would describe how the Fee Rate is calculated
and explain how the budget used in the calculation is reconciled to the
collected fees.\39\ In addition, in proposed Section 11.3(a)(iii)(B),
CAT LLC proposes to state that the budgeted CAT costs described in the
fee filings must provide sufficient detail to demonstrate that the CAT
budget used in calculating the CAT Fees is reasonable and appropriate.
---------------------------------------------------------------------------
\38\ CAT LLC expects the fee filings required to be made by the
Participants pursuant to Section 19(b) of the Exchange Act with
regard to CAT Fees to be filed pursuant to Section 19(b)(3)(A) of
the Exchange Act and Rule 19b-(f)(2) thereunder. In accordance with
Section 19(b)(3)(A) of the Exchange Act and Rule 19b-4(f)(2)
thereunder, such fee filings would be effective upon filing.
\39\ As a practical matter, the fee filing would provide the
exact fee per executed equivalent share to be paid for the CAT Fees,
by multiplying the Fee Rate by one-third and describing the relevant
number of decimal places for the fee.
---------------------------------------------------------------------------
The collection of CAT Fees from Industry Members is subject to
Section 11.6 of the CAT NMS Plan regarding the Financial Accountability
Milestones.\40\ Accordingly, CAT LLC proposes to state in proposed
paragraph (C) to proposed Section 11.3(a)(iii) that Participants will
not make fee filings pursuant to Section 19(b) of the Exchange Act
regarding CAT Fees until the Financial Accountability Milestone related
to Period 4 described in Section 11.6 of the CAT NMS Plan has been
satisfied.
---------------------------------------------------------------------------
\40\ On May 15, 2020, the Commission adopted amendments to the
CAT NMS Plan designed to increase the Participants' financial
accountability for the timely completion of the CAT (``Financial
Accountability Amendments''). See Securities Exchange Act Release
No. 88890, 85 FR 31322 (May 22, 2020). The Financial Accountability
Amendments added Section 11.6 to the CAT NMS Plan to govern the
recovery from Industry Members of any fees, costs, and expenses
(including legal and consulting fees, costs and expenses) incurred
by or for the Company in connection with the development,
implementation and operation of the CAT from June 22, 2020 until
such time that the Participants have completed Full Implementation
of CAT NMS Plan Requirements (``Post-Amendment Expenses''). Section
11.6 establishes target deadlines for four Financial Accountability
Milestones (Periods 1, 2, 3 and 4) and reduces the amount of fee
recovery available to the Participants if these deadlines are
missed.
---------------------------------------------------------------------------
3. Historical CAT Assessment
CAT LLC proposes to revise Section 11.3(b) of the CAT NMS Plan to
provide that the Operating Committee will establish one or more
Historical CAT Assessments to be payable by Industry Members with
regard to Past CAT Costs.\41\
---------------------------------------------------------------------------
\41\ CAT LLC states that, to date, there has been one Historical
CAT Assessment (``Historical CAT Assessment 1''). See Notice, supra
note 5, at 44920; Securities Exchange Act Release No. 100936 (Sept.
5, 2024), 89 FR 74430 (Sept. 22, 2024) (BOX Exchange LLC filing for
Historical CAT Assessment 1). The Participants state that there may
be one or more Historical CAT Assessments related to CAT costs
incurred prior to the completion of the fourth and final Financial
Accountability Milestone, which CAT LLC states occurred in July
2024. See Notice, supra note 5, at 44920.
---------------------------------------------------------------------------
Proposed paragraph (A) of proposed Section 11.3(b)(i) of the CAT
NMS Plan would state that the Operating Committee will calculate the
Historical Fee Rate for each Historical CAT Assessment by dividing the
Historical CAT Costs for each Historical CAT Assessment by the
reasonably projected total executed equivalent share volume of all
transactions in Eligible Securities for the Historical Recovery Period
for each Historical CAT Assessment. Once the Operating Committee has
approved such Historical Fee Rate, the Participants shall be required
to file with the Commission pursuant to Section 19(b) of the Exchange
Act such Historical CAT Assessment to be charged Industry Members
calculated using such Historical Fee Rate. Industry Members will be
required to pay such Historical CAT Assessment calculated using such
Historical Fee Rate once such Historical CAT Assessment is in effect in
accordance with Section 19(b) of the Exchange Act.
a. Historical CAT Costs
Proposed Section 11.3(b)(i)(C) of the CAT NMS Plan would describe
the Historical CAT Costs for calculating Historical CAT Assessments and
would state that ``[t]he Operating Committee will reasonably determine
the Historical CAT Costs sought to be recovered by each Historical CAT
Assessment, where the Historical CAT Costs will be Past CAT Costs minus
Past CAT Costs reasonably excluded from Historical CAT Costs by the
Operating Committee.''
[[Page 54442]]
CAT LLC proposes to further clarify the amount to be collected by
the Historical CAT Assessments by adding a clarifying statement in
proposed Section 11.3(b)(i)(C) that ``[e]ach Historical CAT Assessment
will seek to recover from CAT Executing Brokers two-thirds of
Historical CAT Costs incurred during the period covered by the
Historical CAT Assessment.'' Each CEBS and CEBB pays one-third, and,
therefore, two-thirds of the Historical CAT Costs would be collected
from CAT Executing Brokers.
b. Historical Recovery Period
Proposed Section 11.3(b)(i)(D)(I) of the CAT NMS Plan would
describe the Historical Recovery Period used in calculating the
Historical Fee Rate. This proposed provision would state that ``[t]he
length of the Historical Recovery Period used in calculating each
Historical Fee Rate will be reasonably established by the Operating
Committee based upon the amount of the Historical CAT Costs to be
recovered by the Historical CAT Assessment.'' This proposed provision,
however, would state that ``no Historical Recovery Period used in
calculating the Historical Fee Rate shall be less than 24 months or
more than five years.'' \42\
---------------------------------------------------------------------------
\42\ CAT LLC states that it used a Historical Recovery Period of
two years for Historical CAT Assessment 1, which has a fee rate of
$0.000013 per executed equivalent share. See Notice, supra note 5,
at 44921; see also Securities Exchange Act Release No. 100936 (Sept.
5, 2024), 89 FR 74430 (Sept. 22, 2024) (BOX Exchange LLC filing for
Historical CAT Assessment 1).
---------------------------------------------------------------------------
Under proposed Section 11.3(b)(i)(D)(II) of the CAT NMS Plan any
Historical CAT Assessment would remain in effect until the relevant
Historical CAT Costs are collected, whether that time is shorter or
longer than the Historical Recovery Period used in calculating the
Historical Fee Rate.
c. Projected Total Executed Equivalent Share Volume
The Historical Fee Rate for a Historical CAT Assessment would be
calculated by using the projected total executed equivalent share
volume of all transactions in Eligible Securities for the Historical
Recovery Period for such Historical CAT Assessment. As set forth in
proposed Section 11.3(b)(i)(E) of the CAT NMS Plan, ``[t]he Operating
Committee shall reasonably determine the projected total executed
equivalent share volume of all transactions in Eligible Securities for
each Historical Recovery Period based on the executed equivalent share
volume of all transactions in Eligible Securities for the prior twelve
months.'' In addition, CAT LLC proposes to allow the Operating
Committee to base its projection on the prior twelve months, but to use
its discretion to analyze the likely volume for the upcoming year. As
set forth in proposed Section 11.3(b)(iii)(B)(II) of the CAT NMS Plan,
Participants will be required to provide a description of the
calculation of the projection in their fee filings pursuant to Section
19(b) of the Exchange Act for Historical CAT Assessments.
d. Past CAT Costs and Participants
Proposed Section 11.3(b)(ii) of the CAT NMS Plan would clarify that
the Participants would not be required to pay the Historical CAT
Assessment as the Participants previously have paid all Past CAT Costs.
In addition, proposed Section 11.3(b)(ii) of the CAT NMS Plan would
state that ``[i]n lieu of a Historical CAT Assessment, the
Participants' one-third share of Historical CAT Costs and such other
additional Past CAT Costs as reasonably determined by the Operating
Committee will be paid by the cancellation of loans made to the Company
on a pro rata basis based on the outstanding loan amounts due under the
loans.'' Furthermore, proposed Section 11.3(b)(ii) of the CAT NMS Plan
would emphasize that ``[t]he Historical CAT Assessments are designed to
recover two-thirds of the Historical CAT Costs.''
e. Historical CAT Assessment for Industry Members
CAT LLC proposes to describe the Historical CAT Assessment charged
to Industry Members in proposed Section 11.3(b)(iii)(A) of the CAT NMS
Plan. Each month in which a Historical CAT Assessment is in effect,
each CEBB and each CEBS shall pay a fee for each transaction in
Eligible Securities executed by the CEBB or CEBS from the prior month
as set forth in CAT Data, where the Historical CAT Assessment for each
transaction will be calculated by multiplying the number of executed
equivalent shares in the transaction by one-third and by the Historical
Fee Rate reasonably determined pursuant to paragraph (b)(i) of this
Section 11.3.
CAT LLC proposes to provide additional details regarding the fee
filings to be filed by the Participants regarding each Historical CAT
Assessment pursuant to Section 19(b) of the Exchange Act in proposed
Section 11.3(b)(iii)(B) of the CAT NMS Plan.\43\ Specifically, CAT LLC
proposes to state that each Participant will be required to file a fee
filing pursuant to Section 19(b) of the Exchange Act to describe each
Historical CAT Assessment.\44\
---------------------------------------------------------------------------
\43\ CAT LLC expects the fee filings required to be made by the
Participants pursuant to Section 19(b) of the Exchange Act with
regard to Historical CAT Assessments to be filed pursuant to Section
19(b)(3)(A) of the Exchange Act. In accordance with Section
19(b)(3)(A) of the Exchange Act, fee filings made pursuant to
Section 19(b)(3)(A) of the Exchange Act would be effective upon
filing.
\44\ See proposed Section 11.3(b)(iii)(B)(I).
---------------------------------------------------------------------------
CAT LLC also proposes to provide additional detail about the
information that Participants would be required to include in their fee
filings to be made pursuant to Section 19(b) of the Exchange and Rule
19b-4(f)(2) for Historical CAT Assessments in proposed paragraph
(b)(iii)(B)(II) of proposed Section 11.3 of the CAT NMS Plan.
Specifically, such filings would be required to include: (A) the
Historical Fee Rate; (B) a brief description of the amount and type of
Historical CAT Costs, including (1) the technology line items of cloud
hosting services, operating fees, CAIS operating fees, change request
fees and capitalized developed technology costs, (2) legal, (3)
consulting, (4) insurance, (5) professional and administration, and (6)
public relations costs; (C) the Historical Recovery Period and the
reasons for its length; and (D) the projected total executed equivalent
share volume of all transactions in Eligible Securities for the
Historical Recovery Period, and a description of the calculation of the
projection.\45\ In addition, CAT LLC proposes to clarify in proposed
Section 11.3(b)(iii)(B)(II) that the Historical CAT Costs described in
the fee filings must provide sufficient detail to demonstrate that such
costs are reasonable and appropriate.
---------------------------------------------------------------------------
\45\ As a practical matter, the fee filing would provide the
exact fee per executed equivalent share to be paid for the
Historical CAT Assessment, by multiplying the Historical Fee Rate by
one-third and describing the relevant number of decimal places for
the fee.
---------------------------------------------------------------------------
The collection of Historical CAT Assessments from Industry Members
is subject to Section 11.6 of the CAT NMS Plan regarding the Financial
Accountability Milestones. Accordingly, CAT LLC proposes to clarify in
proposed Section 11.3(b)(iii)(B)(III) that Participants will not make
CAT fee filings pursuant to Section 19(b) of the Exchange Act regarding
a Historical CAT Assessment until any applicable Financial
Accountability Milestone has been satisfied.
4. Participant Pass-Through Fees
CAT LLC proposes to add a new paragraph (e) to Section 11.3 of the
CAT NMS Plan to state that each Participant agrees not to file with the
SEC a proposed rule change pursuant to
[[Page 54443]]
Section 19(b)(4) and Rule 19b-4 thereunder that would establish a new
fee for passing through to its members the CAT fee charged to such
Participant in accordance with Section 11.3(a). The proposed amendment
does not address whether Industry Members may pass-through their CAT
fees to their customers.
C. CAT Fee Schedule for Participants
To implement the Participant CAT fees, CAT LLC proposes to add a
fee schedule, entitled ``Consolidated Audit Trail Funding Fees,'' to
Appendix B of the CAT NMS Plan. Proposed paragraph (a) of the fee
schedule would describe the CAT Fees to be paid by the Participants
under the Executed Share Model. Specifically, paragraph (a) of the
Participant fee schedule would state that ``[e]ach Participant shall
pay the CAT Fee set forth in Section 11.3(a) of the CAT NMS Plan to
Consolidated Audit Trail, LLC in the manner prescribed by Consolidated
Audit Trail, LLC on a monthly basis based on the Participant's
transactions in Eligible Securities in the prior month.''
IV. Summary of Comments
A. Allocation of Fee Among Participants and Industry Members
Under the Executed Share Model, CAT fees would be allocated one-
third to the applicable Participant, one-third to the CEBS and one-
third to the CEBB of a transaction. Two commenters oppose the proposed
allocation.\46\
---------------------------------------------------------------------------
\46\ See Letter to Vanessa Countryman, Secretary, Commission,
from Stephen John Berger, Managing Director, Global Head of
Government & Regulatory Policy, Citadel Securities, dated October
17, 2025 (``Citadel Letter''), at 6-8. Letter to Vanessa Countryman,
Secretary, Commission, from Steffen N. Johnson, Wilson Sonsini
Goodrich & Rosati, dated October 17, 2025 (``FINRA October 2025
Letter'') at 4 (incorporating by reference FINRA's prior comment
letters concerning the Executed Share Model); Letters to Vanessa
Countryman, Secretary, Commission, from Marcia E. Asquith, Corporate
Secretary, EVP, Board and External Relations, FINRA, dated May 25,
2023 (``FINRA May 2023 Letter''); April 11, 2023 (``FINRA April 2023
Letter''); and June 22, 2022 (``FINRA June 2022 Letter'') (the FINRA
June 2022 Letter was submitted in response to the prior funding
proposal and was attached and incorporated by reference in the FINRA
April 2023 Letter). 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-a.htm">https://www.sec.gov/comments/4-698/4-698-a.htm</a>.
---------------------------------------------------------------------------
One commenter states that once analyzed by the Commission, ``it
will be clear'' that allocating at least two-thirds of CAT system costs
to broker-dealers and their customers in the manner contemplated by the
Proposed Amendment is not fair and equitable under the Exchange
Act.\47\ The commenter states that the Commission must also consider
the economic implications of the ``winners and losers'' in terms of the
proposed allocation of costs, including an undue impact on equities
(versus options), as well as an undue impact on retail investors and
market makers--market participants that will be responsible for a
disproportionate percentage of CAT costs.\48\
---------------------------------------------------------------------------
\47\ Citadel Letter at 8.
\48\ Id. at 6-7.
---------------------------------------------------------------------------
The other commenter states that, while the Proposed Amendment
justified the fairness of the Executed Share Model by stating that CAT
would operate like other fees, such as FINRA's trading activity fee
(``TAF''), Section 31 fees, and the options regulatory fee, the
Proposed Amendment did not support why those other fees should be used
as a model in this context.\49\ For example, the commenter states that
the TAF is designed to recover the costs of FINRA's regulatory
activities, while the CAT fees are intended to align with the costs to
build, operate and administer the CAT.\50\ Further, the commenter
states that the Proposed Amendment insufficiently explains the
connection between the TAF and CAT fees because CAT LLC focuses solely
on their ``superficial connection'' as fees that are transaction-based
fees intended to provide funding for regulatory costs.\51\ The
commenter states that ``CAT LLC's observations superficially focus on
the fact that these fees also use transaction-based metrics (and may be
assessed on members) and neglects other factors relevant to the
analysis including, for example, that these fees are used in
combination with other funding mechanisms and metrics to support an
overall funding framework.'' \52\
---------------------------------------------------------------------------
\49\ See FINRA June 2022 Letter at 4.
\50\ See FINRA April 2023 Letter at 8.
\51\ Id. The commenter also states that ``it is unclear how
assessing on FINRA the largest allocation of the SRO portion of CAT
expenses `provides funding for regulatory costs' in any reasonable
and equitable sense comparable to the TAF. . .'' Id.
\52\ See FINRA May 2023 Letter at 3.
---------------------------------------------------------------------------
This commenter also argues that the Proposed Amendment did not
justify why the proposed allocation by thirds to the Participant, buy-
side and sell-side is equitable in the context of the CAT NMS Plan.\53\
The commenter argues that the Proposed Amendment does not consider
alternatives suggested by commenters on a prior proposed funding
model,\54\ such as a model similar to Section 31 fees and a CAT funding
model based on the ``Cost Recovery Principle'' and the ``Benefits
Received Principle,'' and that the Participants have not ``meaningfully
analyzed'' the suggested alternatives in the Proposed Amendment.\55\
---------------------------------------------------------------------------
\53\ See FINRA June 2022 Letter at 3.
\54\ See Securities Exchange Act Release Nos. 94984 (May 25,
2022), 87 FR 33226 (June 1, 2022); 96394 (Nov. 28, 2022), 87 FR
74183 (Dec. 2, 2022); and Letter from Michael Simon, Chair Emeritus,
CAT NMS Plan Operating Committee, to Vanessa Countryman, Secretary,
Commission (Feb. 15, 2023).
\55\ See FINRA April 2023 Letter at 5.
---------------------------------------------------------------------------
B. Executed Equivalent Shares
a. Executed Equivalent Share Volume
One commenter argues that the Proposed Amendment does not explain
why the use of executed share volume as the basis of the cost
allocation methodology, instead of message traffic, is equitable.\56\
The commenter explains that in prior models, message traffic was the
key proxy for cost generation used to align CAT fees with CAT costs,
but the Executed Share Model would base its cost allocation methodology
entirely on executed share volume.\57\ The commenter states that the
Participants' argument that executed share volume is related to cost
generation is not enough to demonstrate that its use is reasonable and
equitable.\58\ This commenter further states that the Executed Share
Model is inconsistent with the ``cost alignment'' funding principle in
Section 11.2(b) of the CAT NMS Plan, which requires the Participants to
seek to establish an allocation of costs that takes into account
distinctions in the securities trading operations of Participants and
Industry Members and their relative impact upon Company resources and
operations.\59\ The commenter states that ``the Proposal fails to
establish a sufficient nexus between executed share volume and the
technology burdens that generate CAT costs and fails to relate each
reporter group's allocation to the burden that each reporter group
imposes on CAT.'' \60\
---------------------------------------------------------------------------
\56\ See FINRA June 2022 Letter at 3. See also Citadel Letter at
6-7 (noting that the Proposed Amendment allocates CAT costs based on
executed shares, which may particularly impact retail investors
given the amount of retail trading in low-priced NMS stocks).
\57\ See FINRA June 2022 Letter at 3.
\58\ Id. at 4.
\59\ Id. See also FINRA April 2023 Letter at 7-9.
\60\ See FINRA June 2022 Letter at 4.
---------------------------------------------------------------------------
The same commenter expresses concerns regarding CAT LLC's support
for the elimination of the requirement that, when establishing the
funding of the CAT, the Operating Committee must take into account
``distinctions in the securities trading operations of Participants and
Industry Members and their relative impact upon Company resources and
operations.'' \61\ This
[[Page 54444]]
commenter states that the Proposed Amendment ``seeks to amend the core
funding principles to align with an unjustified allocation
methodology.'' \62\ The commenter states that any changes to the
funding principles ``must be well-reasoned and transparent and must
continue to support the achievement of a fair and equitable outcome.''
\63\
---------------------------------------------------------------------------
\61\ See FINRA June 2022 Letter at 4; see also FINRA April 2023
Letter at 7.
\62\ See FINRA June 2022 Letter at 4. The commenter states that
the Executed Share Model instead places the greatest emphasis on the
funding principle relating to the ``ease of billing and other
administrative functions,'' favoring that principle over cost
alignment. Id. at 5.
\63\ Id.; FINRA April 2023 Letter at 8-9.
---------------------------------------------------------------------------
Additionally, the commenter objects to the statement in the
Proposed Amendment that ``trading activity provides a reasonable proxy
for cost burden on the CAT, and therefore is an appropriate metric for
allocating CAT costs among CAT Reporters.'' \64\ The commenter states
that this statement is inconsistent with information that demonstrates
that volume from FINRA trade reporting facilities (``TRFs'') contribute
``a very small percentage of annual CAT compute and storage costs.''
\65\ The commenter states that as a result, it cannot support the
Participants' assertion that trading activity is a reasonable proxy for
cost burden.\66\ The commenter states that the Proposed Amendment
``fails to provide for reasonable fees that are equitably allocated and
not unfairly discriminatory, does not reflect a reasonable approach to
allocating costs amongst the Participants, nor does it transparently or
accurately present information regarding the true sources of cost
burdens on the CAT.'' \67\
---------------------------------------------------------------------------
\64\ See Notice, supra note 5, at 44927.
\65\ See FINRA May 2023 Letter at 2.
\66\ See id. See also FINRA April 2023 Letter at 8.
\67\ See FINRA May 2023 Letter at 4.
---------------------------------------------------------------------------
b. FINRA Allocation
One commenter objects to the proposed allocation of Participant CAT
fees to FINRA.\68\ This commenter objects to the allocation to FINRA of
the total CAT costs to be borne by the Participants, stating that the
Proposed Amendment acknowledges that FINRA would be forced to bear a
disproportionate share of CAT costs.\69\ The commenter states that the
Proposed Amendment does not grapple with the implications of these
costs, particularly given FINRA''s status as a non-profit, member-
funded national securities association.\70\ The commenter also states
that FINRA's allocation would largely be based on transaction volume
reported to the TRF; however, the commenter states that TRF
transactions generate fewer costs for the CAT,\71\ as opposed to
options activity, but that only 25% of total Participant CAT fees would
be assessed for options activity, while the remaining 75% would be
assessed for equities activity.\72\
---------------------------------------------------------------------------
\68\ See FINRA October 2025 Letter; FINRA May 2023 Letter; FINRA
April 2023 Letter; FINRA June 2022 Letter.
\69\ See FINRA October 2025 Letter at 4, 6-7; see also FINRA May
2023 Letter at 2; FINRA April 2023 Letter at 3.
\70\ See FINRA October 2025 Letter at 6-7. See also FINRA April
2023 Letter at 3; FINRA June 2022 Letter at 6. The commenter has
previously stated that FINRA's share was more than double that of
the next highest Participant and $4 million more than all option
exchanges combined. See FINRA April 2023 Letter at 4; see also FINRA
June 2022 Letter at 5.
\71\ See FINRA April 2023 Letter at 8, n.23.
\72\ Id.; FINRA May 2023 Letter at 2.
---------------------------------------------------------------------------
The commenter argues that, unlike the exchange Participants,
transactions are not executed on a FINRA marketplace and FINRA does not
receive commercial revenue for those transactions.\73\ The commenter
explains that FINRA does not currently directly receive fees from its
TRFs for listed stocks that would cover CAT costs, because each FINRA
TRF is operated by an exchange business member that retains the trade
reporting and market data revenues generated by TRFs, subject to
certain payments to FINRA for agreed-upon costs.\74\ Thus, the
commenter states that exchanges have direct revenue streams from the
operation of facilities on which the transactions that are taxed using
the Executed Share Model occur, whereas FINRA generally does not retain
such revenue for over-the-counter transactions in listed
securities.\75\ The commenter also states that FINRA members can report
over-the-counter transactions in listed stocks to the FINRA Alternative
Display Facility, although most transactions are reported to a TRF.\76\
---------------------------------------------------------------------------
\73\ See FINRA April 2023 Letter at 3; FINRA October 2025 Letter
at 12.
\74\ See FINRA October 2025 Letter at 12. See also FINRA April
2023 Letter at 3.
\75\ See FINRA October 2025 Letter at 12. See also FINRA April
2023 Letter at 4.
\76\ Id. FINRA April 2023 Letter 3, n.8.
---------------------------------------------------------------------------
The commenter further states that FINRA cannot necessarily recoup
its costs through regulatory services agreements (``RSAs'') that the
commenter has entered into with various exchanges because these are
voluntary commercial contracts that are not and cannot be reasonably
viewed as a reliable source of sustainable CAT funding sufficient to
replace membership fees at the levels required by the Executed Share
Model.\77\ Additionally, the commenter questions CAT LLC's statement
that the Proposed Amendment ``reflects a reasonable effort to allocate
costs based on the extent to which different CAT Reporters participate
in and benefit from the equities and options markets.'' \78\
Specifically, the commenter asks how CAT LLC's statement explains the
size of FINRA's allocation \79\ and notes that this statement
``conflates the costs to create and operate the CAT with the usage of
CAT data.'' \80\
---------------------------------------------------------------------------
\77\ See FINRA October 2025 Letter at 12. See also FINRA April
2023 Letter at 4.
\78\ Id. FINRA April 2023 Letter at 7.
\79\ Id.
\80\ Id.; see also FINRA June 2022 Letter at 6.
---------------------------------------------------------------------------
This commenter also expresses concern about alleged arbitrary
treatment of FINRA by the other Participants of the CAT NMS Plan.\81\
This commenter believes that FINRA's ``outsized allocation'' \82\ was
because of its limited voting power, only having one out of 25 votes on
the Operating Committee as it does not control, nor is under common
control with, any other Participant.\83\ This commenter states that it
is critical for the Commission to consider the differences among
Participants and the inevitable impact on FINRA members of any cost
allocation to FINRA.\84\
---------------------------------------------------------------------------
\81\ See FINRA April 2023 Letter at 6, n.16.
\82\ See FINRA April 2023 Letter at 7; FINRA June 2022 Letter at
6.
\83\ See FINRA April 2023 Letter at 4, 8. See also FINRA June
2022 Letter at 8.
\84\ See FINRA October 2025 Letter at 15-16.
---------------------------------------------------------------------------
C. Pass-Through Prohibition
Two commenters state that the Proposed Amendment exceeds CAT LLC's
authority and is unlawful, because the Exchange Act and Rule 608 of
Regulation NMS do not empower CAT LLC or the Plan Participants to
restrict fee filings made by other Plan Participants or control how
other Plan Participants internally fund their costs.\85\ One commenter
states that both the text and history of Rule 608's predecessor
establishes that Rule 608's scope of fee authority is limited to joint
fees for NMS plans.\86\ This commenter states that the proposed pass-
through provision would not control CAT LLC fees, but instead purport
to control how a Participant SRO funds its own SRO costs through
separate SRO fees, which could potentially establish a dangerous
[[Page 54445]]
precedent and enable similar overreach in other NMS plans.\87\
---------------------------------------------------------------------------
\85\ See FINRA October 2025 Letter at 2, 7-10; Letter to Vanessa
Countryman, Secretary, Commission, from Patrick Sexton, EVP, General
Counsel, Corporate Secretary, Cboe Exchanges, dated October 31, 2025
(``Cboe Letter'') at 1-2. The Cboe Exchanges include Cboe BYX
Exchange, Inc., Cboe BZX Exchange, Inc., Cboe C2 Exchange, Inc.,
Cboe EDGA Exchange, Inc., Cboe EDGX Exchange, Inc., and Cboe
Exchange, Inc. See Cboe Letter at 1, n.1.
\86\ See FINRA October 2025 Letter at 8-9.
\87\ Id. at 9. This commenter further states that the Plan may
violate FINRA's due process rights and run afoul of the Takings
Clause. Id. at 10.
---------------------------------------------------------------------------
Two commenters object to the language of the Proposed Amendment and
proposed provisions insofar as it states each Participant agrees not to
file with the SEC rule change(s) a new fee for passing through to its
members the CAT fee charged to such Participant.\88\ One commenter
states that while it would contemplate agreeing not to file new fees
for passing through SRO CAT costs under certain conditions, it has not
yet done so and did not agree to do so under the terms of the Proposed
Amendment.\89\ The other commenter states that the Proposed Amendment
is ``factually incorrect'' because it purports to reflect an agreement
by the commenter and each CAT Plan Participant to refrain from
establishing certain fees, which the commenter did not agree to.\90\
---------------------------------------------------------------------------
\88\ See FINRA October 2025 Letter at 10; Cboe Letter at 2.
\89\ See FINRA October 2025 Letter at 10.
\90\ See Cboe Letter at 2.
---------------------------------------------------------------------------
Multiple commenters state that the proposed language that would
prohibit pass-through fees by the Participants would be ineffective in
its stated goal.\91\ Three commenters specifically note that the
provision only purports to prevent a Participant from filing a rule
change with the Commission to establish a ``new fee.'' \92\ One of
these commenters states that this usage of the term ``new fee'' raises
the specter of adding CAT costs to existing fees the SROs already
charge their members to recoup their CAT costs, thus doing indirectly
what they cannot do directly. Another commenter notes that this
theoretical limit on pass-through fees also ignores the reality of
FINRA's funding structure, because the most direct way to allocate
FINRA's designated CAT costs to its members (who ultimately will bear
costs allocated to FINRA) would be to apply cost recovery fees to
members whose activities most directly contribute to FINRA's designated
portion of Participant CAT fees.\93\ Another commenter states that CAT
LLC is ``clearly'' attempting to preserve the ability for SROs to pass
through some of all of their CAT costs to their members in other ways
in direct contravention of the Eleventh Circuit's decision.\94\ This
commenter states that allowing SRO pass-throughs directly conflicts
with the Eleventh Circuit's decision and fundamentally alters the
allocation formula that the Commission is considering.\95\ Another
commenter states that FINRA is responsible for roughly 10% of the
entire CAT budget, and nothing in the Proposed Amendment stops FINRA
from passing on 100% of those costs to its members by increasing its
existing membership fees.\96\ Two commenters state that the Proposed
Amendment is simply an attempt to circumvent the Eleventh Circuit's
opinion vacating the 2023 Funding Model Order, and that the Proposed
Amendment should be disapproved.\97\
---------------------------------------------------------------------------
\91\ See FINRA October 2025 Letter at 10-11; Citadel Letter at
9-10; Letter to Vanessa Countryman, Secretary, Commission, from
Katie Kolchin, CFA, Managing Director, Head of Equity & Options
Market Structure and Joseph Corcoran, Managing Director and
Associate General Counsel, Securities Industry and Financial Markets
Association, dated October 21, 2025 (``SIFMA October 2025 Letter'')
at 2; Letter to Vanessa Countryman, Secretary, Commission, from
Gentry Collins, CEO, AmFree Chamber, dated October 17, 2025
(``AmFree Letter''), at 5.
\92\ See FINRA October 2025 Letter at 10-11; Citadel Letter at
9; SIFMA October 2025 Letter at 2.
\93\ See FINRA October 2025 Letter at 11-12.
\94\ See Citadel Letter at 9.
\95\ See id.
\96\ See AmFree Letter at 5. The commenter states that at
minimum the Proposed Amendment must prohibit FINRA from increasing
its existing membership fees to account for CAT costs. Id. at 6. See
also Citadel Letter at 9 (stating that the Proposed Amendment
provides no explanation as to how FINRA, as a not-for-profit-
organization, will fund its allocation of CAT costs, which amounts
to more than 10% of the entire CAT budget).
\97\ See Citadel Letter at 1; SIFMA Letter at 1-3. See also
Letter to Vanessa Countryman, Secretary, Commission, from
Christopher A. Iacovella, President & Chief Executive Officer,
American Securities Association, dated October 31, 2025 (``ASA
Letter'') at 1-2 (stating that the Proposed Amendment ``mirrors the
unlawful 2023 plan in every essential respect'').
---------------------------------------------------------------------------
D. Other Comments
a. Lack of Industry Input
Commenters state that the Proposed Amendment lacks input from the
industry.\98\ One commenter states that the SROs through the CAT
Operating Committee have for years sought to establish a funding model
for CAT without meaningful industry input, including the Proposed
Amendment which was filed without prior consultation with Industry
Members.\99\ One commenter states that the Commission must conduct a
``complete and comprehensive analysis of every CAT-related cost,''
including an examination of how broker-dealer financial
responsibilities were determined, and produce a public report detailing
the findings of this audit.\100\ Another commenter recommends
engagement of a third-party technology firm to perform an independent
review of the technological design of CAT to identify opportunities to
optimize and reduce costs.\101\
---------------------------------------------------------------------------
\98\ See, e.g., SIFMA October 2025 Letter at 3. See also FINRA
June 2022 Letter at 8, 9 (advocating for a more inclusive
development process that would include input from the industry).
\99\ See SIFMA October 2025 Letter at 3; supra note 17.
\100\ See ASA Letter at 3.
\101\ See Citadel Letter at 13.
---------------------------------------------------------------------------
b. Rule 613 and the CAT NMS Plan
Two commenters state that the Proposed Amendment is unlawful
because the CAT itself is unlawful.\102\ These commenters state that no
federal statute authorizes the creation of CAT and that the lack of
statutory authority to create the CAT means the Commission necessarily
lacks the authority to compel broker-dealers to fund CAT.\103\ One
commenter states that the 2023 Funding Model Order fails to identify
any statutory authority explicitly granting the Commission the power to
create the CAT.\104\ One commenter further asserts that it is unlawful
for the Commission to outsource the funding of the CAT as to
effectively immunize it from congressional appropriations or oversight,
amounting to an ``end-run'' that turns the Appropriations Clause on its
head by permitting an executive branch agency to fund its own
regulatory initiatives through outsourcing taxing authority to the
SROs.\105\
---------------------------------------------------------------------------
\102\ See Citadel Letter at 2; AmFree Letter at 1-2.
\103\ See Citadel Letter at 2; AmFree Letter at 1-2 (stating
that the CAT exceeds the Commission's statutory authority).
\104\ See Citadel Letter at 2. See also AmFree Letter at 1
(stating that the Commission has conceded that Congress has never
provided ``express authorization for CAT,'' and that agencies
require ``clear congressional authorization'' before making ``major
policy decisions'' on matters of vast public significance such as
the ones here).
\105\ See Citadel Letter at 3.
---------------------------------------------------------------------------
Another commenter asserts that the CAT has violated the
constitutional right to privacy for millions of Americans, and asks the
Commission to undertake an analysis as to whether any system that looks
like the current CAT is consistent with existing law, and if so, any
funding mechanism must be consistent with the appropriations clause of
the Constitution and not rely entirely on fees from broker-dealers and
their customers.\106\
---------------------------------------------------------------------------
\106\ See ASA Letter at 2-3.
---------------------------------------------------------------------------
c. Economic Analysis
One commenter states that the Proposed Amendment does not address
concerns regarding the economic analysis used in the 2023 Funding
Amendment Approval, stating that the Participants fail to provide any
updated data that the Commission must obtain and assess to conduct its
analysis,
[[Page 54446]]
including, among other things, the current and future trajectory of the
CAT budget, broker-dealer CAT reporting costs, and the impact of the
proposed funding model.\107\ Another commenter notes that while it is
the Commission's responsibility, independent of the SROs, to weigh the
costs and benefits of the Proposed Amendment and determine its impact
on efficiency, competition, and capital formation, that the Commission
should require the SROs to provide necessary data.\108\ Another
commenter states that the Proposed Amendment does not address how
FINRA's collection and payment of CAT fees will affect efficiency,
competition, and capital formation.\109\
---------------------------------------------------------------------------
\107\ See SIFMA October 2025 Letter at 2.
\108\ See Citadel Letter at 4. This commenter states that in its
review, among other things, the Commission must address the current
CAT budget, the inaccuracy of 2016 cost estimates, updated estimates
of the future trajectory of the CAT budget, broker-dealer reporting
costs, electronic blue sheet costs, and the industry's allocation of
CAT operational costs. Id. at 4-7. In addition, the commenter states
that the Commission must consider the economic implications of the
proposed allocation methodology's undue impact on equities (versus
options), undue impact on retail investors, and undue impact on
market makers. Id. at 6-7.
\109\ See AmFree Letter at 6.
---------------------------------------------------------------------------
d. Rule 608 of Regulation NMS and Rule 19b-4
One commenter states that the Proposed Amendment is unlawful
because it does not include any detail regarding actual CAT costs that
will be allocated to broker-dealers and instead relies on future
filings made by each SRO pursuant to Commission Rule 19b-4.\110\ This
commenter states that this unlawfully circumvents Rule 608 of
Regulation NMS, which states that fee filings relating to an NMS Plan
cannot be filed as immediately effective, and instead must be approved
by the Commission prior to becoming effective.\111\ In addition, the
commenter states that the Commission must assess whether the actual
costs that may be allocated are fair and reasonable because post hoc
review of fee filings is insufficient.\112\
---------------------------------------------------------------------------
\110\ See Citadel Letter at 10.
\111\ Id.
\112\ Id. at 11. The commenter states that historical CAT costs
and the current CAT budget are known right now, and the Commission
must determine whether those costs are reasonable to recoup. Id.
---------------------------------------------------------------------------
e. Alternatives to the Proposed Amendment
Two commenters suggest that the Commission should consider a
``time-limited interim funding solution'' instead of approving the
Proposed Amendment.\113\ Two other commenters state that the Proposed
Amendment should be abandoned in favor of a new CAT funding approach
involving the fee process in Section 31 of the Exchange Act.\114\ One
commenter states that in addition to being required by law, for the
first time there will be meaningful checks and balances as part of the
governance process and the Commission will be incentivized to carefully
oversee the size of the CAT budget and carefully weigh the costs and
benefits of required functionality, while Congress will have a clear
role in order to protect against waste and regulatory overreach.\115\
The other commenter states that this approach would better align
incentives to control costs, address longstanding concerns about
ineffective governance, and subject CAT to the checks and balances of
the appropriations process for the SEC.\116\
---------------------------------------------------------------------------
\113\ See Cboe Letter at 2. Cboe states that in connection with
an interim funding model, that Cboe is open to discussing a
voluntary agreement by all of the SROs not to make rule filings
seeking to pass through their CAT costs for a specified period
(e.g., one year). Cboe Letter at 2.
\114\ See Citadel Letter at 13; SIFMA October 2025 Letter at 4-
5.
\115\ See Citadel Letter at 13.
\116\ See SIFMA October 2025 Letter at 4-5.
---------------------------------------------------------------------------
f. Financial Accountability Milestones
The Participants are not permitted to recoup CAT costs from broker-
dealers and their customers until a series of Financial Accountability
Milestones are met, and one commenter states that the Commission must
independently validate SRO assertions regarding various dates by which
they assert that specific Financial Accountability Milestones were
met.\117\ The commenter states that the SROs assert that ``Full
Implementation of CAT NMS Plan Requirements'' was achieved in July
2024, but that this is in reliance on various exemptive orders issued
by the Commission.\118\ In addition, the commenter states that belated
exemptive relief cannot retroactively bring the SROs into compliance
with an earlier Financial Accountability Milestone, which would mean no
historical fees could be collected.\119\
---------------------------------------------------------------------------
\117\ See Citadel Letter at 11-13. The commenter states that the
Proposed Amendment provides the only opportunity for the Commission
to scrutinize and clearly document SRO compliance with the Financial
Accountability Milestones. Id. at 12.
\118\ Id. at 12.
\119\ Id. at 12-13.
---------------------------------------------------------------------------
g. Comprehensive Review of the CAT
Multiple commenters reference a ``comprehensive review'' of the CAT
that was initiated by the Chairman of the Commission, which includes
consideration of mechanisms to address CAT costs.\120\ One commenter
states that rushing to adopt the Proposed Amendment would front-run the
outcome of the comprehensive CAT review initiated by the Chairman and
prevents a full evaluation of cost allocation in line with the Eleventh
Circuit's decision.\121\ One commenter suggests that the Commission
should allocate its limited resources to implement the call for a
comprehensive review and to chart a new path forward, rather than
becoming embroiled in yet another controversy over the funding of a
``broken system.'' \122\ Another commenter states that the
comprehensive review of the CAT, ``is the only rational path forward to
ending the constant escalation of implementation costs.'' \123\ Other
commenters were positive regarding the comprehensive review.\124\
---------------------------------------------------------------------------
\120\ See Prepared Remarks Before SEC Speaks, Chairman Paul S.
Atkins, May 19, 2025, available at <a href="https://www.sec.gov/newsroom/speeches-statements/atkins-prepared-remarks-sec-speaks-051925">https://www.sec.gov/newsroom/speeches-statements/atkins-prepared-remarks-sec-speaks-051925</a>.
\121\ See FINRA October 2025 Letter at 14.
\122\ See Citadel Letter at 14.
\123\ See ASA Letter at 2.
\124\ See SIFMA October 2025 Letter at 4 (looking forward to
further engagement to reduce CAT costs as well as on other
significant CAT reforms the Commission should consider); AmFree
Letter at 1 (stating that the commenter appreciates a comprehensive
review that examines not only the system's staggering costs, but
also its overbroad scope and onerous requirements); Citadel Letter
at 1 (noting that current Commission leadership ``has rightly
indicated that a new course must be charted'').
---------------------------------------------------------------------------
h. Previously Collected Fees From Broker-Dealers
One commenter states that the Proposed Amendment does not mention
the millions of dollars of extra fees that broker-dealers and their
customers ``were unlawfully compelled to pay to FINRA under the 2023
funding order as an explicit SRO pass-through,'' and that these
unlawful payments must be accounted for in any funding model.\125\
Another commenter states that the Commission should consider
reimbursing broker-dealers for funds they have collectively been forced
to contribute to the CAT, and provides a list of possible mechanisms
for reimbursement including direct reimbursement from a Commission
administered fund, an offset or waiver or other regulatory fees, or
Congressional appropriations.\126\
---------------------------------------------------------------------------
\125\ See Citadel Letter at 10.
\126\ See ASA Letter at 3-4.
---------------------------------------------------------------------------
i. FINRA Constitutionality
One commenter argues that FINRA's regulatory authority over broker-
dealers is unconstitutional, either because FINRA violates the private
non-delegation doctrine as a private entity, or the Appointments Clause
if FINRA is
[[Page 54447]]
considered a government entity.\127\ This commenter states that the
constitutional problems with FINRA require rejecting the Proposed
Amendment for a number of reasons, including that the Proposed
Amendment depends on the authority and involvement of an unlawful
entity, including FINRA's role in the operation of CAT and calculation
of proposed fees, and the probability that at least one court will hold
FINRA to be unlawful.\128\
---------------------------------------------------------------------------
\127\ See AmFree Letter at 2-4.
\128\ Id. at 4-6.
---------------------------------------------------------------------------
V. Proceedings To Determine Whether To Approve or Disapprove the
Proposed Amendment
The Commission is instituting proceedings pursuant to Rule
608(b)(2)(i) of Regulation NMS,\129\ and Rules 700 and 701 of the
Commission's Rules of Practice,\130\ to determine whether to disapprove
the Proposed Amendment or to approve the Proposed Amendment with any
changes or subject to any conditions the Commission deems necessary or
appropriate. The Commission is instituting proceedings to have
sufficient time to consider the complex issues raised by Proposed
Amendment, including comments received. Institution of proceedings does
not indicate that the Commission has reached any conclusions with
respect to any of the issues involved. Rather, the Commission seeks and
encourages interested persons to provide additional comment on the
Proposed Amendment to inform the Commission's analysis.
---------------------------------------------------------------------------
\129\ 17 CFR 242.608(b)(2)(i).
\130\ 17 CFR 201.700; 17 CFR 201.701.
---------------------------------------------------------------------------
Rule 608(b)(2) of Regulation NMS provides that the Commission
``shall approve a national market system plan or proposed amendment to
an effective national market system plan, with such changes or subject
to such conditions as the Commission may deem necessary or appropriate,
if it finds that such plan or amendment is necessary or appropriate in
the public interest, for the protection of investors and the
maintenance of fair and orderly markets, to remove impediments to, and
perfect the mechanisms of, a national market system, or otherwise in
furtherance of the purposes of the Exchange Act.'' \131\ Rule 608(b)(2)
further provides that the Commission shall disapprove a national market
system plan or proposed amendment if it does not make such a
finding.\132\ In the Notice, the Commission sought comment on the
Proposed Amendment, including whether the Proposed Amendment is
consistent with the Exchange Act.\133\ In this order, pursuant to Rule
608(b)(2)(i) of Regulation NMS,\134\ the Commission is providing notice
of the grounds for disapproval under consideration:
---------------------------------------------------------------------------
\131\ 17 CFR 242.608(b)(2).
\132\ Id.
\133\ See Notice, supra note 5.
\134\ 17 CFR 242.608(b)(2)(i).
---------------------------------------------------------------------------
<bullet> Whether, consistent with Rule 608 of Regulation NMS, the
Proposed Amendment is necessary or appropriate in the public interest,
for the protection of investors and the maintenance of fair and orderly
markets, to remove impediments to, and perfect the mechanisms of, a
national market system, or otherwise in furtherance of the purposes of
the Exchange Act;
<bullet> Whether the Participants have demonstrated how the
Proposed Amendment is consistent with Section 6(b)(4) \135\ and Section
15A(b)(5),\136\ of the Exchange Act, which require that the rules of a
national securities exchange ``provide for the equitable allocation of
reasonable dues, fees, and other charges among its members and issuers
and other persons using its facilities'' and that the rules of a
national securities association ``provide for the equitable allocation
of reasonable dues, fees, and other charges among members and issuers
and other persons using any facility or system which the association
operates or controls;''
---------------------------------------------------------------------------
\135\ 15 U.S.C. 78f(b)(4).
\136\ 15 U.S.C. 78o-3(b)(5).
---------------------------------------------------------------------------
<bullet> Whether the Participants have demonstrated how the
Proposed Amendment is consistent with Section 6(b)(5) \137\ and Section
15A(b)(6),\138\ of the Exchange Act, which require that the rules of a
national securities exchange or national securities association
``promote just and equitable principles of trade. . . protect investors
and the public interest; and [to be] not designed to permit unfair
discrimination between customers, issuers, brokers, or dealers;''
---------------------------------------------------------------------------
\137\ 15 U.S.C. 78f(b)(5).
\138\ 15 U.S.C. 78o-3(b)(6).
---------------------------------------------------------------------------
<bullet> Whether the Participants have demonstrated how the
Proposed Amendment is consistent with Section 6(b)(8) \139\ and Section
15A(b)(9) \140\ of the Exchange Act, which require that the rules of a
national securities exchange or national securities association ``do
not impose any burden on competition not necessary or appropriate in
furtherance of the purposes of [the Exchange Act];'' and
---------------------------------------------------------------------------
\139\ 15 U.S.C. 78f(b)(8).
\140\ 15 U.S.C. 78o-3(b)(9).
---------------------------------------------------------------------------
<bullet> Whether, and if so how, the Proposed Amendment would
impact efficiency, competition or capital formation.
Under the Commission's Rules of Practice, the ``burden to
demonstrate that a NMS plan filing is consistent with the Exchange Act
and the rules and regulations issued thereunder. . . is on the plan
participants that filed the NMS plan filing.'' \141\ The description of
the NMS plan filing, its purpose and operation, its effect, and a legal
analysis of its consistency with applicable requirements must all be
sufficiently detailed and specific to support an affirmative Commission
finding.\142\ Any failure of the plan participants that filed the NMS
plan filing to provide such detail and specificity may result in the
Commission not having a sufficient basis to make an affirmative finding
that the NMS plan filing is consistent with the Exchange Act and the
applicable rules and regulations thereunder.\143\
---------------------------------------------------------------------------
\141\ 17 CFR 201.701(b)(3)(ii).
\142\ Id.
\143\ Id.
---------------------------------------------------------------------------
VI. Commission's Solicitation of Comments
The Commission requests that interested persons provide written
submissions of their views, data, and arguments with respect to the
issues identified above, as well as any other concerns they may have
with the Proposed Amendment. In particular, the Commission invites the
written views of interested persons concerning whether the Proposed
Amendment is consistent with the Exchange Act, the rules and
regulations thereunder, or any other provisions of the CAT NMS Plan.
Although there do not appear to be any issues relevant to approval or
disapproval that would be facilitated by an oral presentation of views,
data, and arguments, the Commission will consider, pursuant to Rule
608(b)(2)(i) of Regulation NMS,\144\ any request for an opportunity to
make an oral presentation.\145\
---------------------------------------------------------------------------
\144\ 17 CFR 242.608(b)(2)(i).
\145\ Rule 700(c)(ii) of the Commission's Rules of Practice
provides that ``[t]he Commission, in its sole discretion, may
determine whether any issues relevant to approval or disapproval
would be facilitated by the opportunity for an oral presentation of
views.'' 17 CFR 201.700(c)(ii).
---------------------------------------------------------------------------
Interested persons are invited to submit written data, views, and
arguments regarding whether the proposals should be approved or
disapproved by December 17, 2025. Any person who wishes to file a
rebuttal to any other person's submission must file that rebuttal by
December 31, 2025. Comments may be submitted by any of the following
methods:
[[Page 54448]]
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#7604031a135b15191b1b131802053605131558111900"><span class="__cf_email__" data-cfemail="0371766f662e606c6e6e666d7770437066602d646c75">[email protected]</span></a>. Please include
file number 4-698 [(CAT Funding Model)] 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 [(CAT Funding
Model)]. 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 filing also will be available for
inspection and copying at the Participants' offices. Do not include
personal identifiable information in submissions; you should submit
only information that you wish to make available publicly. We may
redact in part or withhold entirely from publication submitted material
that is obscene or subject to copyright protection. All submissions
should refer to file number 4-698 [(CAT Funding Model)] and should be
submitted on or before December 17, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\146\
---------------------------------------------------------------------------
\146\ 17 CFR 200.30-3(a)(85).
---------------------------------------------------------------------------
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-21122 Filed 11-25-25; 8:45 am]
BILLING CODE 8011-01-P
</pre><script data-cfasync="false" src="/cdn-cgi/scripts/5c5dd728/cloudflare-static/email-decode.min.js"></script></body>
</html>Indexed from Federal Register on November 26, 2025.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.