Notice2026-01610
Order Granting Exemptive Relief, Pursuant to Section 36(a)(1) of the Securities Exchange Act of 1934 (“Exchange Act”) and Rule 608(e) of Regulation NMS Thereunder, Relating to the Reporting of Responses to Requests for Quotes and Other Solicitation Responses Provided in a Standard Electronic Format, as Required by Section 6.4(d) of the National Market System Plan Governing the Consolidated Audit Trail
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Published
January 27, 2026
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 91 Issue 17 (Tuesday, January 27, 2026)</title>
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[Federal Register Volume 91, Number 17 (Tuesday, January 27, 2026)]
[Notices]
[Pages 3572-3574]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-01610]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-104662]
Order Granting Exemptive Relief, Pursuant to Section 36(a)(1) of
the Securities Exchange Act of 1934 (``Exchange Act'') and Rule 608(e)
of Regulation NMS Thereunder, Relating to the Reporting of Responses to
Requests for Quotes and Other Solicitation Responses Provided in a
Standard Electronic Format, as Required by Section 6.4(d) of the
National Market System Plan Governing the Consolidated Audit Trail
January 23, 2026.
I. Introduction
On July 18, 2012, the Securities and Exchange Commission (the
``Commission'' or the ``SEC'') adopted Rule 613 of Regulation NMS,
which required the national securities exchanges and national
securities associations (the ``Participants'') \1\ to
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jointly develop and submit to the Commission a national market system
plan to create, implement, and maintain the consolidated audit trail
(``CAT'').\2\ The goal of Rule 613 was to create a modernized audit
trail system that would provide regulators with timely access to a
comprehensive set of trading data, thus enabling regulators to more
efficiently and effectively analyze and reconstruct market events,
monitor market behavior, conduct market analysis to support regulatory
decisions, and perform surveillance, investigation, and enforcement
activities. On November 15, 2016, the Commission approved the national
market system plan required by Rule 613 (``the CAT NMS Plan'').\3\
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\1\ The current Participants to the CAT NMS Plan are 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., 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.
\2\ See Securities Exchange Act Release No. 67457 (July 18,
2012), 77 FR 45722 (Aug. 1, 2012); 17 CFR 242.613.
\3\ See Securities Exchange Act Release No. 79318, 81 FR 84696
(Nov. 23, 2016) (``CAT NMS Plan Approval Order''). Unless otherwise
noted, capitalized terms are used as defined in the CAT NMS Plan.
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On May 20, 2024, in response to a request from the Participants,\4\
the Commission granted temporary exemptive relief, pursuant to its
authority under section 36(a)(1) of the Exchange Act,\5\ and Rule
608(e) of Regulation NMS under the Exchange Act,\6\ from certain
reporting requirements in section 6.4(d) of the CAT NMS Plan \7\
relating to the reporting of bids and/or offers made in response to a
request for quote (``RFQ'') or other form of solicitation response
provided in standard electronic format (e.g., FIX) that is not
``immediately actionable'' (i.e., further action is required by the
responder providing the quote in order to execute or cause a trade to
be executed) (``NIA Electronic RFQ Responses'').\8\ Pursuant to the
Prior Order, this temporary conditional exemptive relief has an
expiration date of July 31, 2026.\9\
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\4\ See letter from the Participants to Vanessa Countryman,
Secretary, Commission, dated Feb. 13, 2024 (the ``2024 Exemption
Request''), available at: <a href="https://catnmsplan.com/sites/default/files/2024-02/02.13.24-Exemption-Request-Responses-to-Electronic-RFQs.pdf">https://catnmsplan.com/sites/default/files/2024-02/02.13.24-Exemption-Request-Responses-to-Electronic-RFQs.pdf</a>.
\5\ 15 U.S.C. 78mm(a)(1).
\6\ 17 CFR 242.608(e).
\7\ Section 6.4(d) of the CAT NMS Plan describes the type of
information that the Participants must require Industry Members to
report to the CAT and when such information must be reported.
\8\ See Securities Exchange Act Release No. 34-100181, 89 FR
45715 (May 23, 2024) (``Prior Order'').
\9\ The Prior Order stated that, as a condition to relief, the
Participants must provide the Commission a written implementation
plan on the reporting of NIA Electronic RFQ Responses by July 31,
2025, and that this implementation plan for the reporting of NIA
Electronic RFQ Responses must: (1) identify workflows to facilitate
the reporting of NIA Electronic RFQ Responses; and (2) provide or
reference published technical specifications to allow for the
reporting of NIA Electronic RFQ Responses by Industry Members. Id.
at 45716-17. The exemptive relief granted by this Order does not
include any conditions.
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For the reasons set forth below, this Order grants the Participants
exemptive relief consistent with that previously granted by the
Commission relating to the reporting of NIA Electronic RFQ Reponses in
the Prior Order, except without the conditions previously imposed and
without an expiration date.
II. Discussion and Exemptive Relief
Section 36(a)(1) of the Exchange Act grants the Commission the
authority, with certain limitations, to ``conditionally or
unconditionally exempt any person, security, or transaction . . . from
any provision or provisions of [the Exchange Act] or of any rule or
regulation thereunder, to the extent that such exemption is necessary
or appropriate in the public interest, and is consistent with the
protection of investors.'' \10\ Under Rule 608(e) of Regulation NMS,
the Commission may ``exempt from [Rule 608], either unconditionally or
on specified terms and conditions, any self-regulatory organization,
member thereof, or specified security, if the Commission determines
that such exemption is consistent with the public interest, the
protection of investors, the maintenance of fair and orderly markets
and the removal of impediments to, and perfection of the mechanism of,
a national market system.'' \11\
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\10\ 15 U.S.C. 78mm(a)(1).
\11\ 17 CFR 242.608(e).
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After careful consideration, the Commission has determined to grant
exemptive relief consistent with that previously granted by the
Commission relating to the reporting of NIA Electronic RFQ Reponses but
without conditions or time limits. Industry members and Participants
have continued to devote and expend substantial resources toward the
ongoing development of CAT. The implementation of electronic recording
and reporting of NIA Electronic RFQ Responses has proven to be
particularly challenging. Compliance requires both the sender and
receiver of the information to determine how to report information to
the CAT, and this information is not currently captured in a format
designed to be reported to the CAT. Additionally, the Commission
received comment letters stating that exemptive relief is ``necessary''
for electronic responses to RFQs that cannot be executed by the party
that receives the RFQ response,\12\ and cautioning that the requirement
to report RFQ responses that are not actionable would ``involve costly
manual processes.'' \13\ Also, some Industry Members maintain that the
reporting of NIA Electronic RFQ Responses is not required by Rule 613
or the CAT NMS Plan.\14\
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\12\ See letter to Vanessa Countryman, Secretary, Commission,
from Howard Meyerson, Managing Director, Financial Information
Forum, dated Sept. 9, 2024, at 2, available at: <a href="https://www.sec.gov/comments/4-698/4698-518035-1490942.pdf">https://www.sec.gov/comments/4-698/4698-518035-1490942.pdf</a>.
\13\ See letter to Vanessa Countryman, Secretary, Commission,
from Howard Meyerson, Managing Director, Financial Information
Forum, dated Dec. 6, 2024, at 3, available at: <a href="https://www.sec.gov/comments/4-698/4698-558515-1603022.pdf">https://www.sec.gov/comments/4-698/4698-558515-1603022.pdf</a>. See also Letter to Paul S.
Atkins, Chairman, Securities and Exchange Commission, from Joseph
Corcoran, Managing Director and Associate General Counsel and Gerald
O'Hara, Vice President and Assistant General Counsel, Securities
Industry and Financial Markets Association (``SIFMA''), dated June
6, 2025, available at: <a href="https://www.sec.gov/comments/4-698/4698-610487-1785814.pdf">https://www.sec.gov/comments/4-698/4698-610487-1785814.pdf</a> (stating that the SEC should review all of its
orders granting temporary exemptive relief from CAT reporting
requirements with a view to making them permanent); letter to Paul
S. Atkins, Chairman, Securities and Exchange Commission, from Joanna
Mallers, Secretary, FIA Principal Traders Group, dated June 26,
2025, available at: <a href="https://www.sec.gov/comments/4-853/4853-618547-1815754.pdf">https://www.sec.gov/comments/4-853/4853-618547-1815754.pdf</a> (stating that the Commission should codify its orders
granting temporary exemptive relief for certain CAT requirements
that are unreasonable or burdensome).
\14\ See, e.g., letter to Vanessa Countryman, Secretary,
Securities and Exchange Commission, from Joseph Corcoran, Managing
Director and Associate General Counsel and Ellen Greene, Managing
Director, Equities & Options Market Structure, SIFMA, and Howard
Meyerson, Managing Director, FIF, dated July 31, 2023, available at:
<a href="https://www.sec.gov/comments/4-698/4698-238359-498762.pdf">https://www.sec.gov/comments/4-698/4698-238359-498762.pdf</a>; letter to
Vanessa Countryman, Secretary, Securities and Exchange Commission,
from Howard Meyerson, Managing Director, Financial Information
Forum, dated June 1, 2023, available at <a href="https://fif.com/index.php/working-groups/category/271-comment-letters?download=2730:fif-letter-to-the-sec-on-cat-reporting-for-non-executable-rfq-responses&start=60&view=category">https://fif.com/index.php/working-groups/category/271-comment-letters?download=2730:fif-letter-to-the-sec-on-cat-reporting-for-non-executable-rfq-responses&start=60&view=category</a>.
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After further evaluation and in light of the implementation
challenges, the Commission has determined that relief from Section
6.4(d) of the CAT NMS Plan for the recording and reporting of NIA
Electronic RFQ Responses is appropriate because the regulatory value of
this information does not justify the difficulty and costs associated
with collecting and reporting such information. In addition, regulators
will still have insight into the RFQ process, because any follow-up
order activity subsequent to the transmission of NIA
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Electronic RFQ Responses that results in an execution, will be reported
to the CAT.
As provided in the Prior Order, the NIA Electronic RFQ Responses
that are subject to this exemptive relief: (1) are those that satisfy
the definition of an ``order'' as defined in Rule 613(j)(8) and the CAT
NMS Plan; \15\ (2) do not include RFQ responses that were required to
be reported commencing in Phase 2c and Phase 2d; \16\ and (3) do not
include activity that is subject to section 6.3(g) of the CAT NMS
Plan.\17\
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\15\ The CAT NMS Plan defines ``order,'' by reference to Rule
613(j)(8), to include ``[a]ny order received by a member of a
national securities exchange or national securities association from
any person; (b) any order originated by a member of a national
securities exchange or national securities association; or (c) any
bid or offer.'' Section 1.1. of the CAT NMS Plan; 17 CFR
242.613(j)(8).
\16\ See 2024 Exemption Request, at 3-4. As explained by the
Participants, in April 2020 the Commission granted conditional
exemptive relief to allow for the implementation of phased Industry
Member reporting to the CAT across five phases, and this exemptive
relief did not specifically address NIA Electronic RFQ Responses.
Id.; Securities Exchange Release No. 88702 (Apr. 20, 2020), 85 FR
23075 (Apr. 24, 2020) (``Phased Reporting Exemption''). Pursuant to
the Phased Reporting Exemption, any bid or offer in response to a
request for quote or other form of solicitation response provided in
standard electronic format (e.g., FIX) that required no further
action by the responder providing the quote in order to execute or
cause a trade to be executed was reportable in Phase 2c for equities
and in Phase 2d for options. See Phased Reporting Exemption at
23079; see also 2024 Exemption Request, at 3-4.
\17\ See 2024 Exemption Request, at 4-5; Section 6.3(g) of the
CAT NMS Plan (``Verbal Activity, Floor, and Upstairs Activity'').
Section 6.3(g) of the CAT NMS Plan identifies certain categories of
data that shall not be reportable to the Central Repository: (i)
until July 31, 2030, floor broker verbal announcements of firm
orders on an exchange that are otherwise reported as systematized
orders; (ii) until July 31, 2030, market maker verbal announcements
of firm quotes on an exchange trading floor; (iii) telephone
discussions between an Industry Member and a client that may involve
firm bid and offer communications; and (iv) unstructured electronic
and verbal communications that are not currently captured by
Industry Member order management or execution systems (e.g.,
electronic chats, text messages). See also Securities Exchange Act
Release No. 103275 (June 16, 2025), 90 FR 26337 (June 20, 2025)
(``Order Approving an Amendment to the National Market System Plan
Governing the Consolidated Audit Trail, as Modified by the
Commission, Regarding the Reporting of Certain Verbal Activity,
Floor and Upstairs Activity''). With respect to activity subject to
section 6.3(g) of the CAT NMS Plan, to the extent that NIA
Electronic RFQ Responses are unstructured electronic communications
that are not currently captured by Industry Member order management
or execution systems, section 6.3(g)(iv) of the CAT NMS Plan already
makes such messages not reportable to the CAT and thus exemptive
relief is not necessary.
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Based on the foregoing, pursuant to section 36(a)(1) of the
Exchange Act, it is appropriate in the public interest and is
consistent with the protection of investors, and, pursuant to Rule
608(e), it is consistent with the public interest, the protection of
investors, the maintenance of fair and orderly markets and the removal
of impediments to, and the perfection of, the mechanisms of a national
market system, to grant exemptive relief from the requirement in
section 6.4(d) of the CAT NMS Plan for the recording and reporting of
NIA Electronic RFQ Responses.\18\ This exemptive relief is intended to
mirror the relief granted in the Prior Order, except without the
conditions previously imposed and without an expiration date. When this
Order takes effect, the relief granted therein will supersede the
relief granted in the Prior Order.
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\18\ To the extent that the Participants are availing themselves
of exemptive relief from a CAT NMS Plan requirement, such
requirement shall not be included in the requirements for the
Financial Accountability Milestones. See CAT NMS Plan, at section
1.1 (``Financial Accountability Milestone'' definition).
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IV. Conclusion
As discussed above, it is appropriate to grant exemptive relief
that exempts each Participant from the requirement in section 6.4(d) of
the CAT NMS Plan for each Participant, through its Compliance Rule, to
require its Industry Members to record and electronically report to the
Central Repository NIA Electronic RFQ Responses.
Accordingly, it is hereby ordered, pursuant to section 36(a)(1) of
the Exchange Act,\19\ and Rule 608(e) of the Exchange Act \20\ that the
Participants are granted an exemption from the requirement in section
6.4(d) of the CAT NMS Plan that requires each Participant, through its
Compliance Rule, to require its Industry Members to record and
electronically report to the Central Repository bids and/or offers made
in response to a request for quote or other form of solicitation
response provided in standard electronic format (e.g., FIX) that is not
``immediately actionable'' (i.e., further action is required by the
responder providing the quote in order to execute or cause a trade to
be executed).
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\19\ 15 U.S.C. 78mm(a)(1).
\20\ 17 CFR 242.608(e).
By the Commission.
Stephanie J. Fouse,
Assistant Secretary.
[FR Doc. 2026-01610 Filed 1-26-26; 8:45 am]
BILLING CODE 8011-01-P
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