[Federal Register Volume 88, Number 97 (Friday, May 19, 2023)]
[Notices]
[Pages 32260-32261]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-10781]


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SECURITIES AND EXCHANGE COMMISSION

[SEC File No. 270-616, OMB Control No. 3235-0671]


Extension: Rule 613 of Regulation NMS

Upon Written Request, Copies Available From: Securities and Exchange 
Commission; Office of FOIA Services; 100 F Street NE, Washington, DC 
20549-2736

    Notice is hereby given that pursuant to the Paperwork Reduction Act 
of 1995 (``PRA'') (44 U.S.C. 3501 et seq.), the Securities and Exchange 
Commission (``Commission'') is soliciting comments on the existing 
collection of information provided for in connection with a National 
Market System (NMS) Plan filed with the Commission under Rule 613 (17 
CFR 242.613), under the Securities Exchange Act of 1934 (15 U.S.C. 78a 
et seq.). The Commission plans to submit this existing collection of 
information to the Office of Management and Budget (``OMB'') for 
extension and approval.
    Rule 613 of Regulation NMS (17 CFR part 242) required national 
securities exchanges and national securities associations 
(``Participants'') to jointly submit to the Commission a national 
market system (``NMS'') plan to govern the creation, implementation, 
and maintenance of a consolidated audit trail (``CAT'') and Central 
Repository for the collection of information for NMS securities. On 
February 27, 2015, the Participants submitted the CAT NMS Plan to the 
Commission.\1\ On April 27, 2016, the Commission published a notice 
soliciting comments from the public (``CAT NMS Plan Notice'').\2\ On 
November 15, 2016, the Commission approved the CAT NMS Plan (``CAT NMS 
Plan Order''), including the information collections proposed in the 
CAT NMS Plan Notice, and certain additional information collections.\3\
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    \1\ See Letter from Participants to Brent J. Fields, Secretary, 
Commission, dated February 27, 2015. The Participants filed the CAT 
NMS Plan on September 30, 2014. See Letter from the Participants, to 
Brent J. Fields, Secretary, Commission, dated September 30, 2014. 
The CAT NMS Plan filed on February 27, 2015, was an amendment to and 
replacement of the Initial CAT NMS Plan (the ``Amended and Restated 
CAT NMS Plan''). On December 24, 2015, the Participants submitted an 
Amendment to the Amended and Restated CAT NMS Plan. See Letter from 
Participants to Brent J. Fields, Secretary, Commission, dated 
December 23, 2015 (the ``Amendment''). On February 9, 2016, the 
Participants filed with the Commission an identical, but unmarked, 
version of the Amended and Restated CAT NMS Plan, dated February 27, 
2015, as modified by the Amendment, as well as a copy of the request 
for proposal issued by the Participants to solicit Bids from parties 
interested in serving as the Plan Processor for the consolidated 
audit trail. Unless the context otherwise requires, the ``CAT NMS 
Plan'' shall refer to the Amended and Restated CAT NMS Plan, as 
modified by the Amendment.
    \2\ See Securities Exchange Act Release No. 77724 (April 27, 
2016), 81 FR 30613 (May 17, 2016). The burdens associated with the 
CAT NMS Plan Notice were submitted under OMB number 3235-0671 which 
relates to the NMS Plan required to be filed under Rule 613.
    \3\ See Securities Exchange Act Release No. 79318 (November 15, 
2016), 81 FR 84696 (November 23, 2016), available at https://www.sec.gov/rules/sro/nms/2016/34-79318.pdf (``CAT NMS Plan 
Order'').
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    Since July 2020, the date of the last PRA renewal, the Commission 
believes one additional information collection was completed: a one-
time independent audit of the fees, costs, and expenses incurred by the 
Participants on behalf of CAT NMS, LLC prior to the Effective Date \4\ 
of the Plan; \5\ In addition. certain information collection 
requirements have completed at least the implementation stage, although 
certain ongoing costs remain, including: (1) development of a Central 
Repository tasked with the receipt, consolidation, and retention of 
reported order and execution information submitted by Participants and 
their members; \6\ (2) the requirement that each Participant, and any 
member of such Participant, record and electronically report to the 
Central Repository details for each order and Reportable Event 
documenting the life of an order through the process of original 
receipt or origination, routing, modification, cancellation, and 
execution (in whole or in part) for each NMS security; \7\ (3) the 
requirement that the CAT NMS Plan require the Central Repository to 
collect and retain on a current and continuous basis NBBO information 
for each NMS security, transaction reports reported pursuant to an 
effective transaction reporting plan, and Last Sale Reports reported 
pursuant to the Options Price Reporting Authority Plan; \8\ (4) the 
requirement that the CAT NMS Plan must require that every national 
securities exchange and national securities association develop and 
implement a surveillance system, or enhance existing surveillance 
systems, reasonably designed to make use of the consolidated 
information contained in the consolidated audit trail; \9\ (5) an 
annual requirement that that the CAT LLC financials be (i) in 
compliance with GAAP, (ii) be audited by an independent public 
accounting firm, and (iii) be made publicly available; \10\ and (6) a 
requirement that each Participant conduct background checks for its 
employees and contractors that will use the CAT System.\11\
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    \4\ The ``Effective Date'' is the date the Commission approved 
the CAT NMS Plan, which is November 15, 2016. See id.
    \5\ See CAT NMS Plan Order, supra note 3, at 84940.
    \6\ See 17 CFR 242.613.
    \7\ See 17 CFR 242.613(c)(1), (c)(5), (c)(6), (c)(7).
    \8\ See 17 CFR 242.613(e)(7).
    \9\ See 17 CFR 242.613(f).
    \10\ Id.
    \11\ Id. The Commission believes that these background checks 
are necessary to ensure that only authorized and qualified persons 
are using the CAT System.
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    This Notice addresses both the ongoing information collection 
requirements noted above and the remaining information collection 
requirements noticed in the CAT NMS Plan Notice and certain additional 
information collections of the CAT NMS Plan Order, which are: (1) a 
one-time report from the Participants discussing the feasibility and 
advisability of allowing Industry Members to bulk download the Raw Data 
that it has submitted to the Central Repository; \12\ (2) a one-time 
assessment of the nature and extent of errors in the Customer

[[Page 32261]]

information submitted to the Central Repository and whether the 
correction of certain data fields over others should be prioritized 
from the Participants; \13\ (3) a one-time report on the impact of 
tiered fees on market liquidity, including an analysis of the impact of 
the tiered-fee structure on Industry Members provision of liquidity 
from the Participants; \14\ and (4) an assessment of the projected 
impact of any Material Systems Change on the Maximum Error Rate, prior 
to the implementation of such Material Systems Change from the 
Participants; \15\
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    \12\ Id. at 84941.
    \13\ Id.
    \14\ Id. at 84941-84942.
    \15\ Id. at 84942. The Commission believes that four assessments 
would be filed annually.
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    The Commission believes that the CAT NMS Plan, once fully 
implemented, will improve the quality of the data available to 
regulators in four areas that affect the ultimate effectiveness of core 
regulatory efforts--completeness, accuracy, accessibility and 
timeliness.\16\ The improvements in these data qualities would 
substantially improve regulators' ability to perform analysis and 
reconstruction of market events, and market analysis and research to 
inform policy decisions, as well as perform regulatory activities, in 
particular market surveillance, examinations, investigations, and other 
enforcement functions.
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    \16\ See CAT NMS Plan Order, supra note 3, at 45727 (discussing 
four ``qualities'' of trade and order data that impact the 
effectiveness of core Participant and Commission regulatory efforts: 
accuracy, completeness, accessibility, and timeliness).
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    The Commission estimates that 1375 respondents \17\ will require an 
aggregate total of approximately 4,931,332 hours per year to comply 
with the collection of information. The Commission further estimates 
that the aggregate cost to comply with the collection of information 
will be approximately $328,627,524 per year.
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    \17\ The Commission notes that 25 Participants (the 24 national 
securities exchanges and one national securities association) and 
1,350 broker-dealers subject to information collections requirements 
pursuant to Rule 613 and the CAT NMS Plan.
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    Written comments are invited on: (a) whether the proposed 
collection of information is necessary for the proper performance of 
the functions of the Commission, including whether the information 
shall have practical utility; (b) the accuracy of the Commission's 
estimates of the burden of the proposed collection of information; (c) 
ways to enhance the quality, utility, and clarity of the information 
collected; and (d) ways to minimize the burden of the collection of 
information on respondents, including through the use of automated 
collection techniques or other forms of information technology. 
Consideration will be given to comments and suggestions submitted by 
July 18, 2023.
    An agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information under the PRA unless it 
displays a currently valid OMB control number.
    Please direct your written comments to: David Bottom, Director/
Chief Information Officer, Securities and Exchange Commission, c/o John 
Pezzullo, 100 F Street NE, Washington, DC 20549, or send an email to: 
[email protected].

    Dated: May 16, 2023.
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-10781 Filed 5-18-23; 8:45 am]
BILLING CODE 8011-01-P


