[Federal Register Volume 87, Number 105 (Wednesday, June 1, 2022)]
[Notices]
[Pages 33226-33250]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-11675]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-94984; File No. 4-698]


Joint Industry Plan; Notice of Filing of Amendment to the 
National Market System Plan Governing the Consolidated Audit Trail

May 25, 2022.

I. Introduction

    On May 13, 2022, the Operating Committee for 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\ BOX Exchange LLC; Cboe BYX Exchange, 
Inc., Cboe BZX Exchange, Inc., Cboe EDGA Exchange, Inc., Cboe EDGX 
Exchange, Inc., Cboe C2 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, Nasdaq BX, Inc., 
Nasdaq GEMX, LLC, Nasdaq ISE, LLC, Nasdaq MRX, LLC, Nasdaq PHLX LLC, 
The NASDAQ Stock Market LLC, New York Stock Exchange LLC, NYSE American 
LLC, NYSE Arca, Inc., NYSE Chicago, Inc., and NYSE National, Inc. 
(collectively, the ``Participants,'' ``self-regulatory organizations,'' 
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 (``Exchange Act''),\2\ and Rule 608 thereunder,\3\ 
a proposed amendment to the CAT NMS Plan to implement a revised funding 
model (``Executed Share Model'') for the consolidated audit trail 
(``CAT'') and to establish a fee schedule for Participant CAT fees in 
accordance with the Executed Share Model.\4\ Exhibit A, attached 
hereto, contains proposed revisions to Articles I and XI of the CAT NMS 
Plan as well as proposed Appendix B to the Plan containing the fee 
schedule setting forth the CAT fees to be paid by the Participants. In 
addition, the Operating Committee provided an example of how the 
Executed Share Model would operate for illustrative purposes only, as 
attached hereto as Exhibit B. The example is provided in two charts 
that, according to the Participants, set forth illustrative CAT fees 
for each Participant, Industry Member that is the clearing member for 
the seller in the transaction, and Industry Member that is the clearing 
member for the buyer in the transaction. The Commission is publishing 
this notice to solicit comments from interested persons on the 
amendment.\5\
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    \1\ The CAT NMS Plan is a national market system plan approved 
by the Commission pursuant to Section 11A of the Exchange Act and 
the rules and regulations thereunder. See Securities Exchange Act 
Release No. 79318 (November 15, 2016), 81 FR 84696 (November 23, 
2016).
    \2\ 15 U.S.C 78k-1(a)(3).
    \3\ 17 CFR 242.608.
    \4\ See Letter from Michael Simon, CAT NMS Plan Operating 
Committee Chair, to Vanessa Countryman, Secretary, Commission, dated 
May 13, 2022 (``Transmittal Letter'').
    \5\ 17 CFR 242.608.
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II. Description of the Plan

    Set forth in this Section II is the statement of the purpose and 
summary of the amendment, along with information required by Rule 
608(a) under the Exchange Act,\6\ substantially as prepared and 
submitted by the Participants to the Commission.\7\
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    \6\ See 17 CFR 242.608(a).
    \7\ See Transmittal Letter, supra note 4. Unless otherwise 
defined herein, capitalized terms used herein are defined as set 
forth in the CAT NMS Plan.
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A. Description of the Amendments to the CAT NMS Plan

    The Operating Committee proposes to replace the funding model set 
forth in Article XI of the CAT NMS Plan (the ``Original Funding 
Model'') with the Executed Share Model. The Original Funding Model 
involves 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. 
The Operating Committee proposes to amend the CAT NMS Plan to adopt the 
Executed Share Model. The Executed Share Model would impose fees on CAT 
Reporters based on the executed equivalent share volume of transactions 
in Eligible Securities rather than based on market share and message 
traffic. The Operating Committee also proposes to adopt a fee schedule 
to establish the CAT fees applicable to Participants based on the 
Executed Share Model. The Participants separately intend to file rule 
filings under Section 19(b) to establish the CAT fees applicable to 
Industry Members based on the Executed Share Model set forth in the CAT 
NMS Plan.
1. Description of the Executed Share Model
    The Operating Committee proposes to amend the CAT NMS Plan to 
describe the Executed Share Model. Under the Executed Share Model, the 
Operating Committee would establish a fee structure in which the fees 
charged to Participants and Industry Members are based on the executed 
equivalent share volume of transactions in Eligible Securities using 
CAT Data.\8\
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    \8\ The use of CAT Data in the Executed Share Model is discussed 
in more detail in Section A.5.k below.
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    For each transaction in Eligible Securities based on CAT Data, the 
Industry Member that is the clearing member for the seller in the 
transaction (``Clearing Broker for the Seller'' or ``CBS''), the 
Industry Member that is the clearing member for the buyer in the 
transaction (``Clearing Broker for the Buyer'' or ``CBB''), and the 
applicable Participant for the transaction each would pay a fee 
calculated by multiplying the number of executed equivalent shares in 
the transaction and the applicable Fee Rate (as defined below) and 
dividing the product by three. The applicable Participant for the 
transaction would be the national securities exchange on which the 
transaction was executed, or FINRA for each transaction executed 
otherwise than on an exchange. Accordingly, for each transaction, the 
Clearing Broker for the Buyer would pay one-third of the fee 
obligation, the Clearing Broker for the Seller would pay one-third of 
the fee obligation, and the relevant Participant for the transaction 
would pay the remaining one-third of the fee obligation.
    Both Participants and Industry Members would be required to pay CAT 
fees with regard to CAT costs not previously paid by the Participants 
(``Prospective CAT Costs''). These are the ongoing budgeted costs for 
the CAT after the CAT fees become operative. The Fee Rate for the CAT 
fees related to Prospective CAT Costs would be calculated by dividing 
the budgeted CAT costs for the relevant period (as determined by the 
Operating Committee) by the projected total executed equivalent share 
volume of all

[[Page 33227]]

transactions in Eligible Securities for the relevant period based on 
CAT Data. The Fee Rate for these CAT fees would be the same for the 
calculation of fees for Participants, CBBs and CBSs.
    Industry Members also would be required to pay CAT fees with regard 
to certain CAT costs previously paid by the Participants (``Past CAT 
Costs'').\9\ To date, Participants have paid for all costs of the CAT 
incurred. Accordingly, Participants would not be required to pay a CAT 
fee related to Past CAT Costs. However, Participants would remain 
responsible for one-third of Past CAT Costs, and would remain 
responsible for 100% of certain other CAT costs incurred in the past 
(as discussed in more detail below) which are excluded from Past CAT 
Costs. The Fee Rate for the CAT fees related to Past CAT Costs would be 
calculated by dividing the Past CAT Costs for the relevant period (as 
determined by the Operating Committee) by the projected total executed 
equivalent share volume of all transactions in Eligible Securities for 
the relevant period based on CAT Data.
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    \9\ Past CAT Costs are discussed in more detail in Section A.3.b 
below.
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2. Participant CAT Fees
    The proposed fee schedule in Exhibit B [sic] \10\ to the CAT NMS 
Plan, entitled Consolidated Audit Trail Funding Fees for Participants, 
would establish the CAT fees to be paid by Participants. These CAT fees 
are designed to operate in accordance with the Executed Share Model as 
described in proposed Article XI of the CAT NMS Plan. Accordingly, for 
each transaction in Eligible Securities based on CAT Data, the 
applicable Participant for the transaction would pay a fee calculated 
by multiplying the number of executed equivalent shares in the 
transaction and the applicable Fee Rate and dividing the product by 
three. The applicable Participant for the transaction would be the 
national securities exchange on which the transaction was executed, or 
FINRA for each transaction executed otherwise than on an exchange. The 
proposed fee schedule provides additional detail as to how the 
Participant fees would be calculated.
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    \10\ The Commission notes that Appendix B contains the proposed 
Consolidated Audit Trail Funding Fees for Participants. Exhibit B 
sets forth an illustrative example of CAT fees calculated under the 
Executed Share Model.
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    Because the Participants have paid all CAT costs to date, the 
Participants would not make any additional payments to the CAT with 
regard to CAT costs incurred in the past. The Participants would only 
pay CAT fees on a going forward basis with regard to new CAT costs. 
Accordingly, the proposed fee schedule describes these forward-looking 
CAT fees for Participants.\11\
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    \11\ In contrast, as discussed in more detail below, the 
Participants would propose to implement CAT fees for Industry 
Members to reimburse the Participants for certain Past CAT Costs as 
well as to pay for a share of ongoing CAT costs.
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a. Calculation of Fee Rate
    The Operating Committee would set the Fee Rate used in determining 
the CAT fees at the beginning of each year. The Fee Rate would be 
calculated by dividing the CAT costs budgeted for the upcoming year by 
the projected total executed equivalent share volume of all 
transactions in Eligible Securities for the year. The Operating 
Committee may, but is not required to, adjust the Fee Rate once during 
the year to seek to more closely coordinate the CAT fees with any 
adjustments to the budgeted or actual CAT costs or to volume 
projections during the year. The Operating Committee may only adjust 
the Fee Rate once during the year to avoid changing the Fee Rate too 
frequently for CAT Reporters.
    Once the Operating Committee has established a Fee Rate, it will 
remain in effect until the Operating Committee adjusts the Fee Rate 
during the year or adopts a new Fee Rate for the next year. The 
proposal does not contemplate that any Fee Rate would automatically 
terminate. This approach would avoid periods in which no CAT fees are 
collected, as such a cessation in the collection of CAT fees would 
adversely affect the ability of the CAT to fund its operations and, 
therefore, would have a significant negative effect on the CAT's 
ability to fulfill its regulatory purpose. This approach also 
recognizes the practical timing issues of ensuring that the Operating 
Committee has the appropriate CAT budget and CAT Data to calculate the 
CAT fees.
    Once any Fee Rate has been established by a majority vote of the 
Operating Committee in accordance with the Executed Share Model set 
forth in the CAT NMS Plan, each Participant would be required to pay 
the applicable CAT fee calculated in accordance with the proposed fee 
schedule in the CAT NMS Plan. The Operating Committee does not plan to 
submit an amendment to the CAT NMS Plan each time that the Fee Rate is 
established or adjusted.\12\
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    \12\ In contrast, the Participants will file a fee filing 
pursuant to Section 19(b) and Rule 19b-4 thereunder with regard to 
Fee Rate changes applicable to Industry Members.
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    The Operating Committee would announce the Fee Rate at the 
beginning of the year, and any adjustment to the Fee Rate during the 
year via a CAT alert.\13\ In addition, the Operating Committee would 
provide the Fee Rate and any adjustments, as well as the budget and 
projection information, on a dedicated web page on the CAT NMS Plan 
website to make it readily accessible to CAT Reporters.
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    \13\ Participants do not intend to file a new separate amendment 
to the CAT NMS Plan for Participants each time a new Fee Rate is 
approved by the Operating Committee.
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i. Budgeted CAT Costs
    The calculation of the Fee Rate requires the determination of the 
budgeted CAT costs for the upcoming year. The budgeted CAT costs for 
the upcoming year would be the costs set forth in the annual operating 
budget for the Company \14\ required pursuant to Section 11.1(a) of the 
CAT NMS Plan. Section 11.1(a) states that ``[o]n an annual basis the 
Operating Committee shall approve an operating budget for the Company. 
The budget shall 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 revenue 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.'' Using budgeted CAT 
costs, rather than CAT costs already incurred, allows the Company to 
collect fees prior to when bills become payable.
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    \14\ As defined in the CAT NMS Plan, the Company is the 
Consolidated Audit Trail, LLC.
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    The CAT costs budgeted for the year would be comprised of all fees, 
costs and expenses estimated to be incurred by or for the Company in 
connection with the development, implementation and operation of the 
CAT during the year. These CAT costs would include, but not be limited 
to, Plan Processor costs, insurance costs, third-party support costs 
and an operational reserve. Plan Processor costs would consist of the 
Plan Processor's ongoing costs, including development costs. This 
amount would be based upon the fees due to the Plan Processor pursuant 
to the Company's agreement with the Plan Processor. Insurance costs 
would include cyber insurance and director liability insurance. Third-
party support costs would include legal fees, consulting fees, vendor 
fees and audit fees. In addition, the Operating Committee aims to 
accumulate the necessary funds to establish an operating reserve for 
the Company through the CAT fees charged to CAT Reporters. As set forth 
in Section 11.1(a) of the CAT NMS Plan, the Operating Committee may 
include in the budget

[[Page 33228]]

``funding of any reserve that the Operating Committee reasonably deems 
appropriate for prudent operation of the Company.'' \15\ As required by 
Section 11.1(c) of the CAT NMS Plan, any surpluses collected will be 
treated as an operational reserve to offset future fees and will not be 
distributed to the Participants as profits.\16\
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    \15\ Although the Operating Committee may determine at its 
discretion that a different level of reserves is appropriate in the 
future, the Operating Committee proposes to include in the budget 
for purposes of determining CAT fees an operational reserve 
comprised of three months of ongoing CAT costs, such as Plan 
Processor costs, third party support costs and insurance costs.
    \16\ CAT NMS Plan Approval Order at 84792.
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    To address potential changes related to the CAT during the year, 
the Operating Committee may adjust the budgeted CAT costs for the year 
as it reasonably deems appropriate for the prudent operation of the 
Company. For example, the Operating Committee may determine that an 
adjustment to the budget is necessary if actual costs during the year 
are more or less than the budget, or if unanticipated expenditures are 
necessary. To the extent that the Operating Committee adjusts the 
budgeted CAT costs during the year and determines to adjust the Fee 
Rate, the adjusted budgeted CAT costs would be used in calculating the 
new Fee Rate for the remaining months of the year.
    The Operating Committee has determined to publicly provide the 
annual operating budget for the Company as well as any updates to the 
budget that occur during the year. This publicly available budget 
information describes in detail the budget for the Company. For 
example, among other things, the budget provides specific budgeted 
technology costs (including cloud hosting services, operating fees, 
Customer and Account Information System (``CAIS'') operating fees and 
change request fees) and general and administrative costs (including 
legal, consulting, insurance, professional and administration, and 
public relations). The Company provides such budget information on a 
dedicated web page on the CAT NMS Plan website to make it readily 
accessible for CAT Reporters and others.\17\
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    \17\ The CAT budget, as of April 6, 2022, is currently available 
on the CAT website at https://www.catnmsplan.com/cat-financial-and-operating-budget.
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ii. Projected Total Executed Equivalent Share Volume
    The calculation of the Fee Rate also requires the determination of 
the projected total executed equivalent share volume of transactions in 
Eligible Securities for the year. Each year, the Operating Committee 
would determine this projection based on the total executed equivalent 
share volume of transactions in Eligible Securities from the prior six 
months.\18\ The projection for the year would be calculated by doubling 
the total executed equivalent share volume from the prior six months. 
The Operating Committee determined that the use of the data from the 
prior six months provides an appropriate balance between using data 
from a period that is sufficiently long to avoid short term 
fluctuations while providing data close in time to the upcoming year. 
During the year, the Operating Committee will monitor actual total 
executed equivalent share volume on a regular basis to determine 
whether the projected volume is deviating from the actual volume.
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    \18\ For example, although the six month look back will depend 
on the circumstances of the filing, one example of such a six month 
look back would be the use of CAT Data from July through December 
2022 for a fee filing in January 2023.
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    To address potential deviations of the projections from actual 
transactions during the year, the projected total executed equivalent 
share volume for transactions in Eligible Securities may be adjusted as 
the Operating Committee reasonably deems appropriate for the prudent 
operation of the Company. Any adjusted projection would be based on the 
total executed equivalent share volume of transactions in Eligible 
Securities from the six months prior to the date of the determination 
of the new projection.\19\ To the extent that the Operating Committee 
adjusts this projection during the year and determines to adjust the 
Fee Rate, the adjusted projection would be used in calculating the new 
Fee Rate for the remaining months of the year.
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    \19\ For example, although the six month look back will depend 
on the circumstances of the filing, one example of such a six month 
look back for a July 2023 filing of an adjusted Fee Rate would be 
the use of CAT Data from the prior January through June.
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    The Operating Committee will publicly provide the projected total 
executed equivalent share volume for transactions in Eligible 
Securities as well as any adjustment to the projections that occurs 
during the year. The Company would include such projection information 
on a dedicated web page on the CAT NMS Plan website to make it readily 
accessible for CAT Reporters and others.
b. Transactions in Eligible Securities
    Under the Executed Share Model, a CAT fee would be imposed with 
regard to each transaction in Eligible Securities as reported in CAT 
Data. As set forth in Section 1.1 of the CAT NMS Plan, ``Eligible 
Securities'' are defined to include all NMS Securities and all OTC 
Equity Securities. Section 1.1 of the CAT NMS Plan, in turn, defines an 
``NMS Security'' as ``any security or class of securities for which 
transaction reports are collected, processed, and made available 
pursuant to an effective transaction reporting plan, or an effective 
national market system plan for reporting transactions in Listed 
Options.'' In addition, Section 1.1 of the CAT NMS Plan defines an 
``OTC Equity Security'' as ``any equity security, other than an NMS 
Security, subject to prompt last sale reporting rules of a registered 
national securities association and reported to one of such 
association's equity trade reporting facilities.'' A CAT fee would be 
imposed with regard to each transaction in Eligible Securities 
regardless of whether the trade is executed on an exchange or otherwise 
than on an exchange.
    The Executed Share Model uses the concept of executed equivalent 
shares as the transactions subject to a CAT fee involve NMS Stocks, 
Listed Options and OTC Equity Securities, each of which have different 
trading characteristics.
    NMS Stocks. Under the Executed Share Model, each executed share for 
a transaction in NMS Stocks will be counted as one executed equivalent 
share.
    Listed Options. Recognizing that Listed Options trade in contracts 
rather than shares, each executed contract for a transaction in Listed 
Options will be counted using the contract multiplier applicable to the 
specific Listed Option in the relevant transaction. Typically, a Listed 
Option contract represents 100 shares; however, it may also represent 
another designated number of shares.
    OTC Equity Securities. Similarly, in recognition of the different 
trading characteristics of OTC Equity Securities as compared to NMS 
Stocks, the Executed Share Model would discount the share volume of OTC 
Equity Securities when calculating the CAT fees. Many OTC Equity 
Securities are priced at less than one dollar--and a significant number 
are priced at less than one penny--per share and low-priced shares tend 
to trade in larger quantities. Accordingly, a disproportionately large 
number of shares are involved in transactions involving OTC Equity 
Securities versus NMS Stocks.\20\ Because the Executed

[[Page 33229]]

Share Model would calculate CAT fees based on executed share volume, 
CAT Reporters trading OTC Equity Securities would likely be subject to 
higher fees than their market activity may warrant. To address this 
potential concern, the Executed Share Model would count each executed 
share for a transaction in OTC Equity Securities as 0.01 executed 
equivalent shares.
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    \20\ For example, based on data from 2021, (1) the average price 
per executed share of OTC Equity Securities was $0.072 and the 
average price per executed share for NMS Stocks was $49.51; and (2) 
the average trade size for OTC Equity Securities was 63,474 and the 
average trade size for NMS Stocks was 166 shares. Trades in OTC 
Equity Securities accounted for 77% of the number of all equity 
shares traded, but only 0.51% of the notional value of all equity 
shares traded.
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    The discount to 1% was selected based on a reasoned analysis of a 
variety of different metrics for comparing the markets for OTC Equity 
Securities and NMS Stocks, rather than a simple calculation. For 
example, using 2021 data, the Operating Committee calculated the 
following metrics: (1) The ratio of total notional dollar value traded 
for OTC Equity Securities to OTC Equity Securities and NMS Stocks was 
0.051%; (2) the ratio of total trades in OTC Equity Securities to total 
trades in OTC Equity Securities and NMS Stocks was 0.90%; and (3) the 
ratio of average share price per trade of OTC Equities to average share 
price per trade for OTC Equity Securities and NMS Stocks was 0.065%. In 
recognition of the fact that these calculations involve averages and 
for ease of application, the Operating Committee determined to round 
these metrics to 1%.
c. Monthly Fees
    Participants would be required to pay monthly fees in accordance 
with the proposed fee schedule. A Participant's fee for each month 
would be calculated based on the Participant's transactions in Eligible 
Securities from the prior month. The CAT fees for each Participant will 
be calculated by the Plan Processor using the transaction data for such 
Participant as set forth in the CAT Data. Specifically, each 
Participant would pay a fee for each month, where the fee would be 
calculated by multiplying the Participant's transactions in Eligible 
Securities from the prior month by the Fee Rate determined by the 
Operating Committee for that period and dividing the product by three. 
The Operating Committee proposes to require the commencement of the 
payment of the Participant CAT fees in the first month after the 
conclusion of the period covered by the Financial Accountability 
Milestones,\21\ subject to SEC approval of this Plan amendment and the 
CAT fees becoming effective for both Participants and Industry Members.
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    \21\ See Securities Exchange Act Rel. No. 88890 (May 15, 2020), 
85 FR 31322 (May 22, 2020) (``Financial Accountability Milestone 
Release'').
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d. Collection of Fees
    Pursuant to Section 11.4 of the CAT NMS Plan, the Operating 
Committee proposes to establish a system for the collection of CAT fees 
from Participants and Industry Members. As set forth in Section 11.4 of 
the CAT NMS Plan, each Participant would be required to pay its CAT 
fees authorized under the CAT NMS Plan as required by Section 3.7(b) of 
the CAT NMS Plan.\22\ Section 3.7(b) of the CAT NMS Plan provides the 
following:
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    \22\ Participants would be responsible for a fee each month in 
which they are a CAT Reporter. If a Participant ceases to the meet 
the definition of a CAT Reporter during a month, the Participant 
will still be responsible for CAT fees associated with its 
transactions during that month.
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    Each Participant shall pay all fees or other amounts required to be 
paid under this Agreement within thirty (30) days after receipt of an 
invoice or other notice indicating payment is due (unless a longer 
payment period is otherwise indicated) (the ``Payment Date''). The 
Participant shall pay interest on the outstanding balance from the 
Payment Date until such fee or amount is paid at a per annum rate equal 
to the lesser of: (i) The Prime Rate plus 300 basis points; or (ii) the 
maximum rate permitted by applicable law. If any such remaining 
outstanding balance is not paid within thirty (30) days after the 
Payment Date, the Participants shall file an amendment to this 
Agreement requesting the termination of the participation in the 
Company of such Participant, and its right to any Company Interest, 
with the SEC. Such amendment shall be effective only when it is 
approved by the SEC in accordance with SEC Rule 608 or otherwise 
becomes effective pursuant to SEC Rule 608.
3. Implementation of Industry Member CAT Fees
    Both Participants and Industry Members would be obligated to pay 
CAT fees under the Executed Share Model as described in proposed 
Article XI of the CAT NMS Plan. The Operating Committee has voted to 
charge CBBs and CBSs fees related to CAT costs in accordance with the 
Executed Share Model as described in proposed Article XI of the CAT NMS 
Plan. To implement CAT fees applicable to Industry Members, Section 
11.1(b) of the CAT NMS Plan requires that the Participants ``file with 
the SEC under Section 19(b) of the Exchange Act any such fees on 
Industry Members that the Operating Committee approves, and such fees 
shall be labeled as `Consolidated Audit Trail Funding Fees.' '' 
Accordingly, each Participant would submit a fee filing pursuant to 
Section 19(b) of the Exchange Act to propose to add a section entitled 
``Consolidated Audit Trail Funding Fees'' to its fee schedule, and to 
describe the CAT fees applicable to Industry Members in that section, 
including the applicable Fee Rate. To implement any new Fee Rates or 
adjustments thereto for Industry Members during the year, each 
Participant would submit a fee filing under Section 19(b) of the 
Exchange Act. Participants plan to submit fee filings for two 
categories of Industry Member CAT fees: CAT fees related to Prospective 
CAT Costs and CAT fees related to Past CAT Costs.\23\ Although the 
proposed Industry Member CAT fees will be described in detail in the 
Participant fee filings pursuant to Section 19(b) of the Exchange Act, 
the following summarizes these fees.
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    \23\ The Participants anticipate providing advance notice of Fee 
Rate changes prior to implementing such changes in the Fee Rate. 
Such notice would provide additional transparency regarding the Fee 
Rate and would assist in planning to implement a new Fee Rate.
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a. Industry Member Prospective CAT Fees
    Under the Executed Share Model, CBBs and CBSs would be required to 
pay CAT fees related to Prospective CAT Costs. These are the ongoing 
budgeted costs for the CAT after the implementation of the CAT fees. 
For each transaction in Eligible Securities, the CBB would pay one-
third of the fee obligation, the CBS would pay one-third of the fee 
obligation, and the relevant Participant for the transaction would pay 
the remaining one-third of the fee obligation. To implement the CAT 
fees applicable to CBBs and CBSs related to Prospective CAT Costs, the 
Participants would file fee filings under Section 19(b) of the Exchange 
Act. The fee filings would require each CBB and each CBS to pay a fee 
for each transaction they clear in Eligible Securities from the prior 
month, where the fee for each transaction will be calculated by 
multiplying the number of executed equivalent shares in the transaction 
by one-third and by the Fee Rate approved by the Operating Committee of 
the CAT NMS Plan for the relevant time period. CBBs and CBSs would be 
required to pay CAT fees related to Prospective CAT Costs calculated 
using the same Fee Rate, including any adjustments to the Fee Rate, 
that is applicable to the Participant CAT fees as described above. In 
addition, like with the calculation of the Participant CAT fee, the CAT 
fees for

[[Page 33230]]

each CBB and CBS would be calculated by the Plan Processor using the 
transaction data for such Industry Members as set forth in the CAT 
Data.
b. Industry Member CAT Fees for Past CAT Costs
    The Operating Committee also has determined to collect CAT fees 
from Industry Members to recover certain Past CAT Costs. The Industry 
Member CAT fees for Past CAT Costs would be calculated in accordance 
with the Executed Share Model as set forth in proposed Article XI of 
the CAT NMS Plan. The Fee Rate for the CAT fees related to Past CAT 
Costs would be calculated by dividing the Past CAT Costs for the 
relevant period (as determined by the Operating Committee) by the 
projected total executed equivalent share volume of all transactions in 
Eligible Securities for the relevant period based on CAT Data. To 
implement the CAT fees related to Past CAT Costs applicable to CBBs and 
CBSs, the Participants would file a fee filing or fee filings under 
Section 19(b) of the Exchange Act. The fee filing(s) would require each 
CBB and each CBS to pay a fee for each transaction in Eligible 
Securities from the prior month, where the fee for each transaction 
would be calculated by multiplying the number of executed equivalent 
shares in the transaction by one-third and by the Fee Rate approved by 
the Operating Committee of the CAT NMS Plan. CBBs and CBSs would be 
responsible for any CAT fee related to Past CAT Costs in addition to 
any CAT fee related to Prospective CAT Costs.
i. Participant Responsibility for Past CAT Costs
    Because the Participants have paid all CAT costs to date, the 
Participants would not make any additional payments to the CAT with 
regard to CAT costs incurred prior to the effectiveness of the CAT fees 
via CAT fees; only Industry Members would be required to pay CAT fees 
related to such costs. Proposed Section 11.3(a)(iv) would clarify the 
Participant's responsibility with regard to CAT costs incurred prior to 
the effectiveness of the CAT fees by stating that ``[n]otwithstanding 
anything to contrary, Participants will not be required to a pay a CAT 
fee related to CAT costs previously paid by the Participants in a 
manner determined by the Operating Committee (`Past CAT Costs').'' 
However, Participants would remain responsible for the one-third of 
Past CAT Costs allocated to Participants under the Executed Share 
Model, as well as 100% of certain other past CAT Costs (as discussed in 
more detail below).
    The CAT fees related to included Past CAT Costs would recoup two-
thirds of the included Past CAT Costs; the Participants have paid for 
and would not be reimbursed for the remaining one-third of the included 
Past CAT Costs. The CAT fees related to included Past CAT Costs paid by 
the Industry Members would be used to reimburse the Participants for 
the two-thirds of included Past CAT Costs allocated to Industry 
Members. The CAT fees for the included Past CAT Costs collected from 
Industry Members will be allocated to Participants for repayment of the 
outstanding loan notes of the Participants to the Company on a pro rata 
basis; such fees would not be allocated to Participants based on the 
executed equivalent share volume of transactions in Eligible 
Securities.
ii. Past CAT Costs
    The Fee Rate for CAT fees related to Past CAT Costs would be 
calculated based on actual past costs incurred by the CAT (except for 
certain costs that the Operating Committee has determined to exclude 
from the calculation), rather than budgeted costs. The CAT fees related 
to Past CAT Costs would be designed to collect from Industry Members 
certain costs paid by the Participants prior to the effectiveness of 
the CAT fees pursuant to the Executed Share Model.
    The Past CAT Costs would include a portion of certain costs 
incurred prior to January 1, 2022 as well as costs incurred after 
January 1, 2022 but prior to the effectiveness of the CAT fees pursuant 
to the Executed Share Model. With regard to costs incurred prior to 
January 1, 2022, the Participants would remain responsible for 100% of 
$48,874,937 of Excluded Costs and certain costs related to the 
conclusion of the relationship with the Initial Plan Processor. The 
Excluded Costs are all CAT costs incurred from November 15, 2017 
through November 15, 2018 due to the delay in the start of reporting to 
the CAT. With these costs excluded, the CAT costs prior to January 1, 
2022 are $337,688,610. Under the Executed Share Model, Industry Members 
would be responsible for two-thirds of these CAT costs. Specifically, 
one-third of these costs ($112,562,870) would be paid by CBBs, and one-
third ($112,562,870) would be paid by CBSs, for a total of 
$225,125,740. The remaining one-third ($112,562,870) has previously 
been paid by the Participants, and the Participants would remain 
responsible for that third of the costs. These costs are set forth in 
detail in the audited financial statements for the Company and its 
predecessor CAT NMS, LLC, which are available on the CAT website.
    CBBs and CBSs similarly would pay CAT fees related to CAT costs 
incurred after January 1, 2022 but prior to the implementation of the 
CAT fees pursuant to the Executed Share Model. Budgeted CAT costs for 
2022 are currently available on the CAT website; actual CAT costs for 
2022 will be available in audited financial statements for the Company 
after year end.
iii. Fee Calculation and Obligation
    The CAT fees related to Past CAT Costs would be calculated based on 
current transactions, not transactions that occurred in the past when 
the costs were incurred, and collected from current Industry Members, 
not Industry Members active in the past when the costs were incurred. 
For example, if the CAT fee were in place for June 2022, each CBB and 
CBS with transactions in Eligible Securities in May 2022 would pay a 
CAT fee related to Past CAT Costs calculated by multiplying the 
executed equivalent share volume of the transactions they cleared in 
May 2022 by the applicable Fee Rate (calculated based on Past CAT Costs 
and current projected total equivalent share volume) and by one-third.
    The Operating Committee believes that it is appropriate to collect 
fees from current Industry Members based on current activity because 
current market participants are the beneficiaries of the regulatory 
value provided by the CAT to the securities markets.\24\ In addition, 
the approach recognizes the practical difficulties of imposing fees 
retroactively on Industry Members' market activity from the past, 
sometimes years in the past. For example, the practical difficulties 
may include the following: (1) Some Industry Members may no longer be 
in business; (2) it may be difficult to accurately establish the 
transactions for the past years; and (3) retroactive fees could not 
have been taken into consideration by market participants when they 
decided to enter into the transactions in the past.
---------------------------------------------------------------------------

    \24\ The SEC has emphasized that the CAT provides a benefit to 
all market participants. See generally Securities Exchange Act Rel. 
No. 67457 (Jul. 18, 2012), 77 FR 45722 (Aug. 1, 2012) (``Rule 613 
Adopting Release'').
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4. Example of Application of the Executed Share Model
    The Operating Committee has prepared an example of how the Executed 
Share Model would operate for illustrative purposes only. Specifically, 
the Operating Committee has prepared an example of CAT fees

[[Page 33231]]

calculated under the Executed Share Model based on the projected annual 
CAT costs for 2022 and actual total executed equivalent share volume of 
transactions in Eligible Securities in 2021. Set forth in Exhibit B to 
this letter is a chart setting forth illustrative CAT fees for each 
Participant, CBS and CBB for this period. Note Exhibit B only provides 
an illustrative example of how the Executed Share Model would operate; 
the calculation of actual fees will differ from this example in various 
ways. For example, the Participants have paid or will have paid some or 
all of these costs up to the time of any SEC approval of the Executed 
Share Model, and, as a result, Participants would not be obligated to 
pay CAT fees related to 2022 CAT costs to the extent the Participants 
have already paid such costs. In addition, the illustrative example 
calculates the fee rate using the total executed equivalent share 
transactions in Eligible Securities for 2021, rather than the projected 
volume for 2022 based on the previous six months. Furthermore, the CAT 
Reporters' monthly CAT fee is not based on the CAT Reporters' 
transactions from the prior month; instead, it is calculated by using 
each CAT Reporter's transactions in 2021 and dividing the result by 
twelve.
5. Advantages of the Executed Share Model
    The Executed Share Model provides a variety of advantages as 
discussed in more detail below. The Executed Share Model is similar to 
existing funding approaches employed by the SEC and the Participants. 
The Executed Share Model is also straightforward to understand and to 
administer; it provides for predictable fees for CAT Reporters; and it 
provides equal or equivalent treatment of different trading venues and 
products. By recognizing the importance of each of the three primary 
participants in a transaction, the Executed Share Model requires 
equitable contributions to the cost of the CAT by both Participants and 
Industry Members.
a. Comparable to Existing Fee Precedent
    The Executed Share Model would operate in a manner similar to other 
funding models employed by the SEC and the Participants, including the 
SEC's Section 31 fees, FINRA's trading activity fee (``FINRA TAF'') and 
the options regulatory fee (``ORF'') utilized by options exchanges. The 
SEC previously has determined that the Participants' sales value fees 
related to Section 31, the FINRA TAF and the ORF are consistent with 
the Exchange Act.
i. Section 31 Fees
    Pursuant to Section 31 of the Exchange Act, a national securities 
exchange must pay the Commission a fee based on the aggregate dollar 
amount of sales of securities transacted on the exchange, and a 
national securities association must pay the Commission a fee based on 
the aggregate dollar amount of sales of securities transacted by or 
through any member of the association otherwise than on a national 
securities exchange (collectively, ``covered sales''). The SEC 
calculates the amount of Section 31 fees due from each exchange or 
FINRA by multiplying the aggregate dollar amount of its covered sales 
by the fee rate set by the Commission in a procedure set forth in 
Section 31(j) of the Exchange Act. These fees are designed to recover 
the costs related to the government's supervision and regulation of the 
securities markets and securities professionals. Section 31 requires 
the SEC to make annual and, in some cases, mid-year adjustments to the 
fee rate. These adjustments are necessary to make the SEC's total 
collection of transaction fees in a given year as close as possible to 
the amount of the regular appropriation to the Commission by Congress 
for that fiscal year.
    To recover the costs of their Section 31 fee obligations, each of 
the national securities exchanges and FINRA have adopted, and the SEC 
has approved, rules assessing a regulatory transaction fee on their 
members, the amount of which is set in accordance with Section 31.\25\ 
Broker-dealers, in turn, often impose fees on their customers that 
provide the funds to pay the fees owed to the exchanges and FINRA.
---------------------------------------------------------------------------

    \25\ See, e.g., Section 3 of Schedule A of FINRA's By-Laws.
---------------------------------------------------------------------------

    Like the well-known, longstanding and accepted Section 31-related 
fee model, the Executed Share Model would use a predetermined fee rate 
for the calculation of the fees, seek to recover designated regulatory 
costs (as CAT provides a solely regulatory function), and allow for the 
adjustment of the fee rate during the year to seek to match regulatory 
costs with fees collected. The Executed Share Model, however, would 
impose fees based on executed equivalent share volume rather than the 
sales values of certain transactions. Despite the different calculation 
metric, the Executed Share Model is similar to a model well known, long 
accepted and justified under the Exchange Act the purpose of which is 
also to cover costs associated with the regulation of securities 
markets and securities professionals.
ii. FINRA Trading Activity Fee
    The transaction-based fees charged under the Executed Share Model 
also would be similar to FINRA's transaction-based trading activity 
fee,\26\ which was modeled on the Commission's Section 31 fee.\27\ 
Although the FINRA TAF is designed to cover a subset of the costs of 
FINRA services (e.g., costs to FINRA of the supervision and regulation 
of members, including performing examinations, financial monitoring, 
and policy, rulemaking, interpretive, and enforcement activities) 
rather than all of FINRA's costs like the CAT, the transaction-based 
calculation of the FINRA TAF and the proposed CAT fees are similar. 
With the FINRA TAF, FINRA members on the sell-side of a transaction are 
required to pay a per share fee for each sale of covered securities, 
which includes exchange registered securities, equity securities traded 
otherwise than on an exchange, security futures, TRACE-Eligible 
Securities and municipal securities, subject to certain exceptions. In 
approving the FINRA TAF, the SEC stated that the implementation of the 
FINRA TAF ``is consistent with section 15A(b)(5) of the Act, in that 
the proposal is reasonably designed to recover NASD costs related to 
regulation and oversight of its members.'' \28\ The SEC further stated 
that ``[t]he Commission recognizes the difficulties inherent in 
restructuring the NASD's regulatory fees, and believes that the NASD 
has done so in a manner that is fair and reasonable.'' \29\ The CAT 
fees calculated under the Executed Share Model would be similar to the 
FINRA TAF in that they would be transaction-based fees intended to 
provide funding for regulatory costs.
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    \26\ Section 1 of Schedule A of FINRA's By-Laws.
    \27\ See Securities Exchange Act Rel. No. 46416 (Aug. 23, 2002), 
67 FR 55901 (Aug. 30, 2002).
    \28\ Securities Exchange Act Rel. No. 47946 (May 30, 2003), 68 
FR 34021, 34023 (June 6, 2003) (``TAF Release'').
    \29\ Id.
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iii. Options Regulatory Fee
    The fees charged under the Executed Share Model also would be 
similar to the ORF charged by the options exchanges.\30\ The ORF is a 
per contract fee charged by an options exchange for certain options 
transactions to options members of the relevant exchange. The ORF is 
collected indirectly from exchange members through their clearing firms 
by the Options Clearing Corporation on behalf of the Exchange. Revenue 
generated from the ORF is

[[Page 33232]]

designed to recover a material portion of an options exchange's 
regulatory costs related to the supervision and regulation of its 
members' options business, including performing routine surveillance, 
investigations, examinations and financial monitoring as well as 
policy, rulemaking, interpretive, and enforcement activities. Exchange 
members generally pass-through the ORF to their customers in the same 
manner that firms pass-through to their customers the fees charged by 
self-regulatory organizations (``SROs'') to help the SROs meet their 
obligations under Section 31 of the Exchange Act.\31\ The CAT fees 
calculated under the Executed Share Model would be similar to the ORF 
in that they would be transaction-based fees intended to provide 
funding for regulatory costs.
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    \30\ See, e.g., Cboe Fee Schedule, MIAX Fee Schedule, and NYSE 
Arca Fee Schedule.
    \31\ See, e.g., Securities Exchange Act Rel. No. 58817 (Oct. 20, 
2008), 73 FR 63744, 63745 (Oct. 27, 2008).
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b. Fee Metric: Transaction Volume
    The Operating Committee proposes to use the executed equivalent 
share volume of transactions in Eligible Securities as the means for 
allocating CAT costs among Participants and Industry Members. The use 
of executed equivalent share volume would replace the use of message 
traffic for allocating costs among Industry Members and the use of 
market share for allocating costs among Participants as set forth in 
the Original Funding Model. The use of executed equivalent share volume 
is a reasonable and equitable method for allocating costs for a variety 
of reasons, and the Operating Committee believes it improves upon the 
use of message traffic.
    The proposed use of CAT-reported message traffic as set forth in 
the Original Funding Model raised a variety of issues for allocating 
CAT costs. First, based on a subsequent study of cost drivers for the 
CAT, it was determined that message traffic may be a factor in the CAT 
costs, but it is not the primary factor. CAT costs are dominated by 
technology costs, and the predominant technology costs are data 
processing (e.g., linker) and storage costs.\32\ The data processing 
and storage costs are related to the level of message traffic, but such 
costs also relate to other factors. The data processing and storage 
costs also are directly related to the complexity of the reporting 
requirements for the market activity. For example, in light of the 
complexity of market activity, the CAT's order reporting and linkage 
scenarios document is over 600 pages in length, addressing more than 
170 scenarios. The processing and storage of such a large number of 
complex reporting scenarios requires very complex algorithms, which, in 
turn, lead to significant data processing and storage costs. The data 
processing and storage costs also are driven by the stringent 
performance, timelines and operational requirements for processing CAT 
Data. For example, the CAT NMS Plan requires that CAT order events be 
processed within established timeframes to ensure data can be made 
available to Participants' regulatory staff and the SEC in a timely 
manner. Accordingly, a CAT Reporter's message traffic may be a factor, 
but not a primary factor, in terms of the costs of the CAT.
---------------------------------------------------------------------------

    \32\ For a detailed discussion of cost drivers of the CAT, see 
CAT LLC Webinar, CAT Costs (Sept. 21, 2021), https://www.catnmsplan.com/events/cat-costs-september-21-2021.
---------------------------------------------------------------------------

    Second, in general, Industry Member revenue, including revenue 
derived from fees Industry Members charge their clients, is often 
driven by transactions. Because message traffic is separate from 
whether or not a transaction occurs, fees based on message traffic may 
not correlate with common revenue or fee models. As a result, CAT fees 
based on message traffic could impose an outsized adverse financial 
impact on certain Industry Members.
    Third, imposing CAT fees on each CAT Reporter based on its message 
traffic may have an adverse effect on competition, liquidity or other 
aspects of market structure, and may increase model complexity. For 
example, the number of messages for any given order, whether or not 
ultimately executed, could vary depending on how a given order is 
processed, leading to a lack of predictability on the applicable cost 
to process any given order or executions for broker-dealers or non-
broker-dealer customers.\33\ As one example, discussed in the context 
of the previously proposed funding models, market makers in Eligible 
Securities may have very high levels of message traffic due to their 
quoting obligations. Such high levels of message traffic may lead to 
outsized fees for market makers in comparison to their transaction 
activity, thereby placing an excessive financial burden on market 
makers. This, in turn, may lead to a decrease in the number of market 
makers, resulting in a decrease in liquidity and a reduction in market 
quality. To address this effect on market makers, the Operating 
Committee proposed to discount the fees that market makers would need 
to pay. However, such a discount adds complexity to the message traffic 
approach, as the model must determine when a discount is necessary and 
how much the discount should be.
---------------------------------------------------------------------------

    \33\ The predictability of fees is discussed further below in 
Section A.3.f.
---------------------------------------------------------------------------

    The use of executed equivalent share volume to allocate CAT costs 
addresses each of these concerns. As discussed in more detail below, 
the fees are not divorced from transactions, the traditional source of 
revenue for Industry Members; fees based on executed equivalent share 
volume would not adversely impact certain market participants to the 
detriment of the markets, and the model is simple to understand and 
implement. Moreover, in addition to these benefits, the executed 
equivalent share volume is related to, but not precisely linked to, the 
CAT Reporter's burden on the CAT. In light of the many inter-related 
cost drivers of the CAT (e.g., storage, message traffic, processing), 
determining the precise cost burden imposed by each individual CAT 
Reporter on the CAT is not feasible. Accordingly, the Operating 
Committee has determined 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. This conclusion is 
consistent with the SEC's prior recognition of the use of transaction 
volume in setting regulatory fees. For example, in approving the FINRA 
TAF, the SEC recognized that transaction volume was closely enough 
connected to FINRA's regulatory responsibilities to satisfy the 
statutory standard in the Exchange Act.\34\
---------------------------------------------------------------------------

    \34\ TAF Release at 34024.
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c. One-Third/One-Third/One-Third Allocation Between CBS, CBB and 
Participant
    Under the Executed Share Model, the CBS, the CBB and the relevant 
Participant each pay one-third of the fee obligation for each 
transaction. The proposed allocation recognizes the three primary roles 
in each transaction: The buyer, the seller and the market regulator, 
and assigns an equal one-third share of the fee per transaction to each 
of these three roles. The Exchange Act itself recognizes the importance 
of these three roles in a transaction by imposing registration and 
other regulatory obligations on the broker-dealers and regulator 
involved in a transaction.\35\ This allocation is similar to the 
approach taken with the FINRA TAF, ORF and Section 31 fees, and 
recognizes the role of the market regulator and the

[[Page 33233]]

buyer in the transaction as well as the seller.
---------------------------------------------------------------------------

    \35\ See Sections 6, 15 and 15A of the Exchange Act.
---------------------------------------------------------------------------

    The proposed allocation of one-third of the CAT costs to the 
Participants also addresses feedback expressed by some commenters on 
prior fee filings about the amount allocated to Participants versus 
Industry Members.\36\ In the prior fee proposals, Execution Venues, 
which included Participants and certain ATSs, would have paid 25% of 
the CAT costs. As a result, Participants would have paid 25% or less of 
the CAT costs, and commenters questioned whether the Participant 
allocation was too small. Under the Executed Share Model, CBBs, as a 
group, would be responsible for paying for one-third of the CAT costs; 
CBSs, as a group, would be responsible for paying one-third of the CAT 
costs; and Participants, as a group, would be responsible for paying 
one-third of the CAT costs. The proposed one-third allocation to 
Participants with the Executed Share Model substantially increases the 
Participant allocation and substantially reduces the Industry Member 
allocation from prior proposals.\37\
---------------------------------------------------------------------------

    \36\ See Securities Exchange Act Rel. No. 92451 (July 20, 2021), 
86 FR 40114, 40123-26 (July 26, 2021) (``Proceedings Order'').
    \37\ Not only does the Executed Share Model increase the 
contribution of Participants as a group in comparison to prior 
proposed models, but it also changes the contributions of each 
Participant, depending upon the types and amount of securities 
traded on each market or over-the-counter. For example, as described 
in Exhibit B, FINRA's contribution likely would increase under the 
Executed Share Model in comparison to prior models given FINRA's 
responsibility for securities traded in the over-the-counter market.
---------------------------------------------------------------------------

d. Clearing Firms
    The Executed Share Model would impose the proposed CAT fees on the 
clearing members for transactions in Eligible Securities. The Operating 
Committee determined to charge clearing members (that is, the CBBs and 
CBSs), rather than all Industry Members, as it is a process that is 
currently used in other contexts. For example, the ORF is collected 
indirectly from exchange members through their clearing firms by the 
Options Clearing Corporation on behalf of the exchanges. Although 
charging clearing firms reduces administrative issues, the Operating 
Committee recognizes that imposing this obligation solely on clearing 
members may impose an excessive financial burden on such firms. 
Accordingly, CBBs and CBSs may, but are not required to, pass-through 
the CAT fees to their clients, who may, in turn, pass the fees to their 
clients until they are imposed ultimately on the account that executed 
the transaction. This process would operate in a manner similar to the 
manner in which Industry Members pass-through other fees imposed to 
cover regulatory costs to their customers, for example, the fees 
charged by SROs to help the SROs meet their obligation under Section 31 
of the Exchange Act or the ORF charged by the options exchanges.
e. Straightforward Approach
    Another advantage of the Executed Share Model is that the approach 
is simple, straightforward and easy to understand. Using the 
predetermined Fee Rate, Participants, CBBs and CBSs would calculate 
their fees by multiplying the number of executed equivalent shares in 
their transactions in Eligible Securities by the Fee Rate and one-
third. Both values necessary for the calculation are readily available. 
The Fee Rates (including initial and adjusted Fee Rates) would be 
announced by the Operating Committee, and Participants, CBBs and CBSs 
have easy access to their transaction data. Moreover, the two 
adjustments--one for Listed Options and one for OTC Equity Securities--
are similarly straightforward calculations. The Executed Share Model 
does not include other complexities, such as tiered fees, minimum or 
maximum fees, excluded types of Eligible Securities or excluded 
transactions in Eligible Securities.
f. Predictable Fees
    The Executed Share Model also provides CAT Reporters with 
predictable CAT fees. Because the Fee Rate is established in advance, 
Participants, CBBs and CBSs can calculate the CAT fee that applies to 
each transaction when it occurs. Accordingly, CAT Reporters with a CAT 
fee obligation are able to easily estimate and validate their 
applicable fees based on their own trading data. In addition, to the 
extent any CAT fees are passed on to customers, such customers also can 
calculate the applicable CAT fee for each transaction.
    The predictability of CAT fees under the Executed Share Model 
addresses feedback raised by commenters regarding the lack of fee 
predictability present in prior fee filings.\38\ For example, with 
potential message traffic models,\39\ CAT Reporters would not know the 
actual per message rate until after the end of the relevant reporting 
period for which they were assessed the fee and also could not 
determine in advance the number of messages that may be associated with 
a given order or the total number of messages, thereby making it 
difficult for a CAT Reporter to predict a CAT fee related to its market 
activity. In addition, this lack of predictability related to message-
based fees also could complicate efforts by Industry Members to 
estimate, explain and directly pass message-based fees back to 
customers, particularly if no trade has occurred.
---------------------------------------------------------------------------

    \38\ See Proceedings Order at 40122.
    \39\ Potential message traffic models, including the 2018 Fee 
Proposal and 2021 Fee Proposals, and the message traffic only model 
are discussed below.
---------------------------------------------------------------------------

g. Administrative Ease
    The Executed Share Model also would allow for ease of billing and 
other administrative functions.\40\ As discussed above, the Executed 
Share Model relies upon a basic calculation using a predetermined Fee 
Rate, thereby making the fee determination a straightforward process. 
In addition, the CAT fees will be collected in a manner similar to the 
collection process that Industry Members are already accustomed, 
thereby further reducing the administrative burden on the industry.
---------------------------------------------------------------------------

    \40\ Section 11.2(d) of the CAT NMS Plan.
---------------------------------------------------------------------------

h. Equal Treatment of Trading Venues
    The Executed Share Model also has the benefit of treating 
transactions in Eligible Securities equally regardless of the trading 
venue. The Fee Rate would be the same regardless of whether a trade was 
executed on an exchange or in the OTC market, or how the trade 
ultimately occurred more generally (e.g., in a manner that generated 
more message traffic). As a result, it would not favor or unfairly 
burden any one type of trading venue or method.
i. Equitable Treatment of Different Eligible Securities
    The Executed Share Model also recognizes and addresses the 
different trading characteristics of different types of securities. 
Recognizing that Listed Options trade in contracts rather than shares, 
the Executed Share Model would count executed equivalent share volume 
differently for Listed Options. Specifically, each executed contract 
for a transaction in Listed Options would be counted based on the 
multiplier applicable to the specific Listed Option contract in the 
relevant transaction (e.g., 100 executed equivalent shares or such 
other applicable equivalency). Similarly, in recognition of the 
different trading characteristics of OTC Equity Securities as compared 
to NMS Stocks, the Executed Share Model would discount the share volume 
of OTC Equity Securities when calculating the

[[Page 33234]]

CAT fees. Specifically, each executed share for a transaction in OTC 
Equity Securities would be counted as 0.01 executed equivalent shares. 
As a result, the Executed Share Model would not favor or unfairly 
burden any one type of product or product type.
j. Contributions by Both Industry Members and Participants
    The Executed Share Model would require both Participants and 
Industry Members to contribute to the funding of the CAT by paying a 
CAT fee. To date, the Participants have paid the full cost of the 
creation, implementation and maintenance of the CAT since 2012, pending 
Commission approval of a fee program. The continued funding of the CAT 
solely by the Participants was and is not contemplated by the CAT NMS 
Plan, nor is it a financially sustainable approach. As noted by the 
SEC, the CAT ``substantially enhance[s] the ability of the SROs and the 
Commission to oversee today's securities markets,'' \41\ thereby 
benefiting all market participants. The Executed Share Model would 
require both Participants and Industry Members to contribute to the 
cost of the CAT, as contemplated by Rule 613 and the CAT NMS Plan.
---------------------------------------------------------------------------

    \41\ Rule 613 Adopting Release at 45726.
---------------------------------------------------------------------------

    Rule 613(a)(1)(vii)(D) specifically contemplates Industry Members 
contributing to the payment of CAT costs. Specifically, this provision 
requires the CAT NMS Plan to address ``[h]ow the plan sponsors propose 
to fund the creation, implementation, and maintenance of the 
consolidated audit trail, including the proposed allocation of such 
estimated costs among the plan sponsors, and between the plan sponsors 
and members of the plan sponsors.'' In approving Rule 613, the SEC 
noted that ``although the plan sponsors likely would initially incur 
the costs to establish and fund the central repository directly, they 
may seek to recover some or all of these costs from their members.'' 
\42\
---------------------------------------------------------------------------

    \42\ Id. at 45795.
---------------------------------------------------------------------------

    In addition, as approved by the SEC, the CAT NMS Plan specifically 
contemplates CAT fees to be paid by both Industry Members and 
Participants. Section 11.1(b) of the CAT NMS Plan states that ``the 
Operating Committee shall have discretion to establish funding for the 
Company, including: (i) Establishing fees that the Participants shall 
pay; and (ii) establishing fees for Industry Members that shall be 
implemented by the Participants.'' \43\ The Commission stated in 
approving the CAT NMS Plan the following:
---------------------------------------------------------------------------

    \43\ See also Sections 11.1(c), 11.2(c), and 11.3(a) and (b) of 
the CAT NMS Plan.

    The Commission believes that the proposed funding model reflects 
a reasonable exercise of the Participants' funding authority to 
recover the Participants' costs related to the CAT. The CAT is a 
regulatory facility jointly owned by the Participants and, as noted 
above, the Exchange Act specifically permits the Participants to 
charge members fees to fund their self-regulatory obligations. The 
Commission further believes that the proposed funding model is 
designed to impose fees reasonably related to the Participants' 
self-regulatory obligations because the fees would be directly 
associated with the costs of establishing and maintaining the CAT, 
and not unrelated SRO services.\44\
---------------------------------------------------------------------------

    \44\ CAT NMS Plan Approval Order at 84794.

    Likewise, the Commission stated that ``the Participants are 
permitted to recoup their regulatory costs under the Exchange Act 
through the collection of fees from their members, as long as such fees 
are reasonable, equitably allocated and not unfairly discriminatory, 
and otherwise are consistent with Exchange Act standards,'' \45\ and 
noted that ``Rule 613(a)(1)(vii)(D) requires the Participants to 
discuss in the CAT NMS Plan how they propose to fund the creation, 
implementation and maintenance of the CAT, including the proposed 
allocation of estimated costs among the Participants, and between the 
Participants and Industry Members.'' \46\
---------------------------------------------------------------------------

    \45\ Id. at 84795.
    \46\ Id. at 84797 (emphasis added).
---------------------------------------------------------------------------

    In its amendments to the CAT NMS Plan regarding financial 
accountability, the SEC reaffirmed the ability for the Participants to 
charge Industry Members a CAT fee. Specifically, the SEC noted that the 
amendments were not intended to change the basic funding structure for 
the CAT, which may include fees established by the Operating Committee, 
and implemented by the Participants, to recover from Industry Members 
the costs and expenses incurred by the Participants in connection with 
the development and implementation of the CAT.\47\
---------------------------------------------------------------------------

    \47\ Financial Accountability Milestone Release at 31329.
---------------------------------------------------------------------------

k. Use of CAT Data
    CAT Data would be used to calculate the CAT fees under the Executed 
Share Model. CAT Data would be used to identify each transaction in 
Eligible Securities for which a CAT fee would be collected. 
Specifically, CAT fees will be charged with regard to trades reported 
to CAT by FINRA via the Alternative Trading Facility (``ADF''), Over-
the-Counter Reporting Facility (``ORF'') and the Trade Reporting 
Facilities (``TRF'') and by the exchanges. In addition, the same 
transaction data in the CAT Data would be used in the calculation of 
the projected total executed equivalent share volume for the Fee Rate. 
Furthermore, the transaction data in the CAT Data provides the identity 
of the relevant clearing broker for each trade. This data would be used 
to identify the CBB and CBS for each trade for purposes of the CAT 
fees. Using CAT Data for the CAT fee calculations provides 
administrative efficiency, as the data will be accessible via the CAT. 
In addition, the transaction data would be the same transaction data 
used by the Participants in calculating their fee obligations with 
regard to Section 31 of the Exchange Act.
l. Six Month Look Back
    The calculation of the Fee Rate also requires the determination of 
the projected total executed equivalent share volume of transactions in 
Eligible Securities for the year. The Operating Committee proposes to 
determine this projection based on the total executed equivalent share 
volume of transactions in Eligible Securities from the prior six 
months. The Operating Committee determined that the use of the data 
from the prior six months provides an appropriate balance between using 
data from a period that is sufficiently long to avoid short term 
fluctuations while providing data close in time to the calculation of 
the Fee Rate. Moreover, given that the Executed Share Model 
contemplates setting the Fee Rate at the beginning of the year, and 
allows for an adjustment of the Fee Rate during the year, the 
projections may be based on different sets of six months, thereby 
ensuring that the projections are not always based on certain months of 
the year that may exhibit different trading patterns from other times 
of the year.
m. Cost Discipline Mechanisms
    The reasonableness of the Executed Share Model and the fees 
calculated under the Executed Share Model are supported by key cost 
discipline mechanisms for the CAT--a cost-based funding structure, cost 
transparency, cost management efforts and oversight. Together, these 
mechanisms help ensure the ongoing reasonableness of the CAT's costs 
and the level of fees assessed to support those costs.
    First, the CAT NMS Plan requires that the Company operate on a 
``break-even'' basis, with fees imposed to cover costs and an 
appropriate reserve. Any surpluses would be treated as an operational 
reserve to offset future fees and would not be distributed to the

[[Page 33235]]

Participants as profits.\48\ To ensure that the Participants' operation 
of the CAT will not contribute to the funding of their other 
operations, Section 11.1(c) of the CAT NMS Plan specifically states 
that ``[a]ny surplus of the Company's revenues over its expenses shall 
be treated as an operational reserve to offset future fees.'' In 
addition, as set forth in Article VIII of the CAT NMS Plan, the Company 
``intends to operate in a manner such that it qualifies as a `business 
league' within the meaning of Section 501(c)(6) of the [Internal 
Revenue] Code.'' To qualify as a business league, an organization must 
``not [be] organized for profit and no part of the net earnings of [the 
organization can] inure[ ] to the benefit of any private shareholder or 
individual.'' \49\ As the SEC stated when approving the CAT NMS Plan, 
``the Commission believes that the Company's application for Section 
501(c)(6) business league status addresses issues raised by commenters 
about the Plan's proposed allocation of profit and loss by mitigating 
concerns that the Company's earnings could be used to benefit 
individual Participants.'' \50\ The Internal Revenue Service has 
determined that the Company is exempt from federal income tax under 
Section 501(c)(6) of the Internal Revenue Code.
---------------------------------------------------------------------------

    \48\ CAT NMS Plan Approval Order at 84792.
    \49\ 26 U.S.C. 501(c)(6).
    \50\ CAT NMS Plan Approval Order at 84793.
---------------------------------------------------------------------------

    Second, the CAT's commitment to reasonable funding in support of 
its regulatory obligations is further reinforced by the transparency it 
has committed to provide on an ongoing basis regarding its financial 
performance. The Company currently makes detailed financial information 
about the CAT publicly available. Section 9.2(a) of the CAT NMS Plan 
requires the Operating Committee to maintain a system of accounting 
established and administered in accordance with GAAP and requires ``all 
financial statements or information that may be supplied to the 
Participants shall be prepared in accordance with GAAP (except that 
unaudited statements shall be subject to year-end adjustments and need 
not include footnotes).'' Section 9.2(a) of the CAT NMS Plan also 
requires the Company to prepare and provide to each Participant ``as 
soon as practicable after the end of each Fiscal Year, a balance sheet, 
income statement, statement of cash flows and statement of changes in 
equity for, or as of the end of, such year, audited by an independent 
public accounting firm.'' The CAT NMS Plan requires that this audited 
balance sheet, income statement, statement of cash flows and statement 
of changes in equity be made publicly available. Among other things, 
these financial statements provide operating expenses, including 
technology, legal, consulting, insurance, professional and 
administration and public relations costs. The Company also maintains a 
dedicated web page on the CAT NMS Plan website that consolidates its 
annual financial statements in a public and readily accessible 
place.\51\
---------------------------------------------------------------------------

    \51\ See CAT Audited Financial Statements, https://www.catnmsplan.com/audited-financial-statements.
---------------------------------------------------------------------------

    In addition, the Company publicly provides the annual operating 
budget for the Company as well as periodically provides updates to the 
budget that occur during the year. The Company includes such budget 
information on a dedicated web page on the CAT NMS Plan website to make 
it readily accessible, like the CAT financial statements.
    The Operating Committee also has held webinars providing additional 
detail about CAT costs and about potential alternative funding models 
for the CAT.\52\ In addition, the Operating Committee plans to offer 
additional webinars on cost and funding for the industry as appropriate 
going forward. Collectively, these reports and other efforts provide 
extensive and comprehensive information regarding the CAT's operations 
with respect to its budgets, revenues, costs, and financial reserves, 
among other information.
---------------------------------------------------------------------------

    \52\ See, e.g., CAT LLC Webinar CAT Costs (Sept. 21, 2021), 
https://www.catnmsplan.com/events/cat-costs-september-21-2021; CAT 
LLC Webinar, CAT Funding (Sept. 22, 2021), https://www.catnmsplan.com/events/cat-funding-september-22-2021; and CAT LLC 
Webinar, CAT Funding (Apr. 6, 2022).
---------------------------------------------------------------------------

    Third, the Operating Committee regularly engages in and oversees 
efforts to reduce CAT costs responsibly while appropriately funding its 
regulatory obligations. The Operating Committee's efforts to manage its 
expenses responsibly include oversight of the CAT's annual budget, 
including technology and other expenditures and initiatives. This 
oversight is informed by key CAT working groups, such as the Technology 
Working Group, Regulatory Working Group and Interpretive Working Group, 
each of which brings varied expertise to issues of responsible cost 
management. In particular, the Operating Committee currently utilizes a 
Cost Management Working Group to analyze opportunities to manage CAT 
costs responsibly. In addition, the Plan Processor regularly reviews 
options to lower compute and storage needs and works with CAT 
technology providers to provide services in a cost-effective manner. 
These collective efforts have led to a variety of technological changes 
to reduce costs.
    Fourth, the CAT's funding and operations are subject to the 
oversight of the Commission. The CAT is extensively supervised by the 
Commission, including regular and continuous attendance at Operating 
Committee, Subcommittee and working group meetings. In addition, CAT 
fees as well as cost management efforts that require an amendment of 
the CAT NMS Plan are subject to review by the Commission's Division of 
Trading and Markets, as well as public comment.
6. Alternative Models Considered
    The Operating Committee has determined to propose the Executed 
Share Model to fund the CAT for the reasons discussed above. In 
reaching this conclusion, the Operating Committee considered the 
advantages and disadvantages of a variety of possible alternative 
funding and cost allocation models for the CAT in detail. After 
analyzing the various alternatives and considering comments on the 
previously proposed models, the Operating Committee determined that, 
although various funding models may be reasonable and appropriate, the 
Executed Share Model provides a variety of advantages in comparison to 
the alternatives, and satisfies the requirements of the Exchange Act, 
including providing for an equitable allocation of reasonable fees 
among CAT Reporters, not being designed to permit unfair discrimination 
among CAT Reporters and not imposing any burden on competition not 
necessary or appropriate in furtherance of the purposes of the Exchange 
Act.
a. 2018 Fee Proposal
    The Operating Committee previously filed a fee proposal in line 
with the CAT NMS Plan--the 2018 Fee Proposal.\53\ Under that model, the 
Operating Committee, among other things, proposed a 75%-25% allocation 
of CAT costs between Execution Venues (which included Participants and 
Execution Venue ATSs) and Industry Members (other than Execution Venue 
ATSs), and required Execution Venues to pay fees based on market share, 
and Industry

[[Page 33236]]

Members (other than Execution Venue ATSs) to pay fees based on CAT 
message traffic.\54\
---------------------------------------------------------------------------

    \53\ For a description of the 2018 Fee Proposal, see Securities 
Exchange Act Rel. No. 82451 (Jan. 5, 2018), 83 FR 1399 (Jan. 11, 
2018) (``2018 Fee Proposal Release''). The Participants later 
withdrew this proposed amendment. Securities Exchange Act Rel. No. 
82892 (Mar. 16, 2018), 83 FR 12633 (Mar. 22, 2018).
    \54\ In developing the 2018 Fee Proposal, the Operating 
Committee considered many variations of different aspects of that 
model. For example, the Operating Committee evaluated different cost 
allocations between Industry Members (other than Execution Venue 
ATSs) and Execution Venues, including 80%-20%, 75%-25%, 70%-30% and 
65%-35% allocations, and different cost allocations between Equity 
and Options Execution Venues. The Operating Committee also 
considered different discounts for equities and options market 
makers, different numbers of tiers of Industry Members and Execution 
Venues, different fee levels for each tier, and other aspects of the 
model.
---------------------------------------------------------------------------

    Each Industry Member (other than Execution Venue ATSs) would be 
placed into one of seven tiers of fixed fees, based on CAT message 
traffic in Eligible Securities. Options Market Maker and equity market 
maker quotes would be discounted when calculating message traffic.
    The Operating Committee determined to allocate 67% of Execution 
Venue costs recovered to Equity Execution Venues and 33% to Options 
Execution Venues. Each Equity Execution Venue would be placed in one of 
four tiers of fixed fees based on market share, and each Options 
Execution Venue would be placed in one of two tiers of fixed fees based 
on market share. Equity Execution Venue market share would be 
determined by calculating each Equity Execution Venue's proportion of 
the total volume of NMS Stock and OTC Equity shares reported by all 
Equity Execution Venues during the relevant time period. For purposes 
of calculating market share, the OTC Equity Securities market share of 
Execution Venue ATSs trading OTC Equity Securities as well as the 
market share of the FINRA OTC reporting facility would be discounted. 
Similarly, market share for Options Execution Venues would be 
determined by calculating each Options Execution Venue's proportion of 
the total volume of Listed Options contracts reported by all Options 
Execution Venues during the relevant time period.
    The 2018 Fee Proposal was a very complex model with many 
interrelated parts, including allocation percentages, discounts for 
certain market behavior, and multiple tiered fees, and the complexity 
raised concerns from the Commission regarding its use as the CAT 
funding model. In addition, in response to the proposal, the industry 
provided a number of other comments related to the proposal, including 
comments regarding the proposed allocation of CAT costs between 
Participants and Industry Members, and the ability of certain market 
segments to afford the proposed CAT fee.\55\
---------------------------------------------------------------------------

    \55\ For a discussion of comments made regarding the Original 
Funding Model and the 2018 Fee Proposal, see generally 2018 Fee 
Proposal Release.
---------------------------------------------------------------------------

b. 2021 Fee Proposal
    In response to the comments on the 2018 Fee Proposal, the Operating 
Committee determined to revise various aspects of the proposed model, 
thereby developing the 2021 Fee Proposal.\56\ The 2021 Fee Proposal 
would have continued to require many of the same elements as the 2018 
model, including the bifurcated funding approach, and the use of market 
share and message traffic for allocating costs, as required by the 
current CAT NMS Plan. The 2021 Fee Proposal, however, proposed to 
revise the model in certain ways, including (1) dividing the CAT costs 
between Participants and Industry Members, rather than between 
Execution Venues and Industry Members (other than Execution Venue 
ATSs); (2) eliminating the use of tiers in calculating CAT fees for 
Participants and Industry Members; (3) adopting certain minimum and 
maximum CAT fees for Industry Members and Participants; (4) revising 
the allocation between Equity Execution Venues and Options to be 60%-
40%; and (5) excluding, rather than discounting, market share in OTC 
Equity Shares from the calculation of market share for FINRA.
---------------------------------------------------------------------------

    \56\ Securities Exchange Act Rel. No. 91555 (Apr. 14, 2021), 86 
FR 21050 (Apr. 21, 2021).
---------------------------------------------------------------------------

    Although the revisions of the 2021 Fee Proposal addressed certain 
comments on the prior 2018 Fee Proposal, commenters continued to raise 
issues regarding the proposal. For example, commenters provided 
feedback regarding the 75%-25% cost allocation between Industry Members 
and Participants, the 60%-40% cost allocation between Equity 
Participants and Options Participants, the use of market share and 
message traffic for allocating costs among Participants and Industry 
Members, respectively, and the proposed minimum and maximum fees. 
Noting these and other issues, the SEC determined to institute 
proceedings to determine whether to disapprove the 2021 Fee Proposal or 
to approve the proposal with any changes or subject to any conditions 
the SEC deemed necessary or appropriate after considering public 
comment.\57\ Ultimately, the Operating Committee determined to withdraw 
the 2021 Fee Proposal.\58\
---------------------------------------------------------------------------

    \57\ Securities Exchange Act Rel. No. 92451 (July 20, 2021), 86 
FR 40114 (July 26, 2021). See also Securities Exchange Act Rel. No. 
93227 (Oct. 1, 2021), 86 FR 55900 (Oct. 7, 2021).
    \58\ Letter to Vanessa Countryman, Secretary, SEC from Mike 
Simon, Chair, CAT NMS Plan Operating Committee re: File Number 4-
698--Withdrawal of Amendment to the National Market System Plan 
Governing the Consolidated Audit Trail (Dec. 8, 2021).
---------------------------------------------------------------------------

c. Revenue Funding Model
    The Operating Committee also considered a model in which all CAT 
Reporters, including both Industry Members and Participants, would pay 
fees based solely on revenue. The concept underlying this proposal is 
that CAT costs would be borne by CAT Reporters based on their ability 
to pay. Under this model, Industry Member revenue would be calculated 
based on revenue reported in FOCUS reports, and Participant revenue 
would be calculated based on revenue information in Form 1 amendments 
and other publicly reported figures.
    The Operating Committee did not select this model for various 
reasons. Under this approach, Participants as a group would only pay 
approximately 4% of the total CAT costs. Given their role as SROs and 
their use of the CAT, the Operating Committee did not believe that such 
a small allocation of the CAT costs to the Participants was 
appropriate. Using revenue also raised a variety of practical issues. 
For example, questions were raised as to what revenue was appropriate 
to include in the calculation of revenue for Industry Members. The 
gross revenue set forth on FOCUS reports was proposed, as it was 
similar to an existing FINRA regulatory fee.\59\ However, questions 
were raised as to whether revenue unrelated to NMS Securities or OTC 
Equity Securities, or otherwise unrelated to the CAT, should be 
included for calculation of the CAT fee. Eliminating revenue unrelated 
to CAT-related activity would have been difficult or impossible. In 
addition, the lack of a uniform approach to calculating revenue for the 
Participants could raise inequities in the collection of a CAT fee.
---------------------------------------------------------------------------

    \59\ See paragraphs (c) and (d) of Section 1 of Schedule A of 
FINRA's By-Laws regarding FINRA's annual Gross Income Assessment.
---------------------------------------------------------------------------

    To address the issues regarding the 96%-4% allocation and the 
calculation of the Participant revenue in the straight revenue model 
described above, the Operating Committee considered an alternative 
version of the revenue model in which the CAT costs would be allocated 
between Industry Members and Participants based on a set percentage 
(e.g., 75%-25%) and the Industry Member allocation would be allocated 
among Industry Members

[[Page 33237]]

based on revenue and the Participant allocation would be allocated 
among Participants based on market share. However, this alternative 
revenue model failed to address the issues regarding the appropriate 
revenue calculations for Industry Members.
d. Message Traffic Only Model
    The Operating Committee considered a funding model in which CAT 
costs were allocated across all CAT Reporters--both Industry Members 
and Participants--based on message traffic in the CAT. Specifically, 
the Operating Committee considered eliminating the concepts of a 
Participant allocation and an Industry Member allocation entirely, and 
treating Participants and Industry Members the same under the model. 
The use of message traffic, however, raised issues regarding the 
predictability of fees. It also introduced complexity to the model, as 
discounts were necessary for certain types of activity to avoid fees 
that may adversely impact market making activity and other market 
activity.
e. Alternative Allocation for Executed Share Model
    The Operating Committee also discussed an alternative funding model 
that would calculate fees in a manner similar to the Executed Share 
Model, but would allocate the fee to one Industry Member, the CBS, 
rather than allocating one-third of the fees each to the CBS, the CBB 
and the applicable Participant. This allocation would more closely 
parallel the existing Section 31 fee allocation structure that is 
already in place. This alternative allocation for the Executed Share 
Model would eliminate complexity from the fee process, including the 
process of allocating fees among Industry Members and Participants that 
are likely to be passed through to the ultimate investors, and would 
provide for a more transparent funding process for investors. Instead 
of using this approach, the Operating Committee determined to allocate 
costs among the main participants in a transaction and allow those 
participants to determine whether and how to recover the costs.
f. Sales Value Model
    The Operating Committee also considered a funding model in which 
fees would be calculated based on transaction sales values, similar to 
the method used in the Section 31/sales value fee programs. Under this 
model, the per sales value fee rate would be calculated by dividing the 
annual CAT budget by the projected annual total industry transaction 
sales values. The fee would be calculated by multiplying the sales 
value fee rate by a given trade's sales value. The CBB, the CBS and the 
relevant Participant would each be assessed one-third of the fee, or, 
in the alternative, the CBS would be assessed two-thirds of the fee and 
the relevant Participants would be assessed one-third of the fee. The 
same rate would apply to all transactions equally, regardless of the 
type of product in the trade (i.e., NMS Stocks, Listed Options or OTC 
Equity Securities). Based on an analysis of 2021 data, the Operating 
Committee observed that the sales value model could potentially impose 
a disproportionate share of the CAT costs on Participants and Industry 
Members trading NMS Stocks versus Listed Options. In comparison, also 
based on an analysis of 2021 data, the Operating Committee observed 
that the Executed Share Model would impose an equitable allocation of 
fees among Participants and Industry Members trading NMS Stocks and 
Listed Options, as well as OTC Equity Securities.
g. Other Models
    The Operating Committee also considered other possible funding 
models. For example, the Participants considered allocating the CAT 
costs equally among each of the Participants, and then permitting each 
Participant to charge its own members as it deems appropriate. The 
Operating Committee determined that such an approach raised a variety 
of issues, including the likely inconsistency of the ensuing charges, 
potential for lack of transparency, and the impracticality of multiple 
SROs submitting invoices for CAT charges. The Operating Committee also 
discussed the advantages and disadvantages of various alternative 
models during the development of the CAT NMS Plan, such as a cost 
allocation based on a strict pro-rata distribution, regardless of the 
type or size of the CAT Reporters.\60\ The Operating Committee believes 
that the Executed Share Model provides advantages over each of these 
previously considered models and provides an equitable allocation of 
reasonable fees among CAT Reporters.
---------------------------------------------------------------------------

    \60\ For a discussion of alternatives considered in the drafting 
of the CAT NMS Plan, see Appendix C of the CAT NMS Plan at C-88-C-
89.
---------------------------------------------------------------------------

7. Proposed Amendments to CAT NMS Plan for the Executed Share Model
    To implement the Executed Share Model and to impose the associated 
CAT fees on the Participants, the Operating Committee proposes to the 
amend CAT NMS Plan. The following discusses the proposed amendments to 
the CAT NMS Plan, including the addition of a Participant CAT fee 
schedule, entitled ``Consolidated Audit Trail Funding Fees,'' to 
Exhibit B [sic] of the CAT NMS Plan.
a. Definition of Execution Venue
    Section 1.1 of the CAT NMS Plan defines the term ``Execution 
Venue'' to mean ``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).'' Currently, the term ``Execution Venue'' is 
used in Section 11.2 and 11.3 of the CAT NMS Plan to describe how CAT 
costs would be allocated among CAT Reporters under the Original Funding 
Model. The Original Funding Model would have imposed fees based on 
market share to CAT Reporters that are Execution Venues, including 
ATSs, and fees based on message traffic for Industry Members' non-ATS 
activities. In contrast, the Executed Share Model would impose fees 
based on the executed equivalent shares of transactions in Eligible 
Securities for three categories of CAT Reporters: Participants, CBBs 
and CBSs. Accordingly, as the concept for an ``Execution Venue'' would 
not be relevant for the Executed Share Model, the Operating Committee 
proposes to delete this term and its definition from Section 1.1 of the 
CAT NMS Plan.
b. Use of Executed Equivalent Shares for CAT Fees
    The Original Funding Model set forth in the CAT NMS Plan requires 
Participants and Execution Venue ATSs to pay CAT fees based on market 
share and Industry Members (other than Execution Venue ATSs) to pay CAT 
fees based on message traffic. The CAT NMS Plan also describes how the 
market share based fee would be calculated for Participants and other 
Execution Venue ATSs and how the message traffic-based fee would be 
calculated for Industry Members (other than Execution Venue ATSs). The 
Operating Committee proposes to amend the CAT NMS Plan to require each 
of the Participants, CBBs and CBSs to pay a CAT fee based on the number 
of executed equivalent shares in a transaction in Eligible Securities, 
rather than based on market share and message traffic. Accordingly, the 
Operating Committee proposes to amend Section 11.2(b) and (c) and 
Section 11.3(a) and (b) of the CAT NMS Plan to reflect the proposed use 
of the number of executed equivalent shares in

[[Page 33238]]

transactions in Eligible Securities in calculating CAT Fees.
    Section 11.2(b) of the CAT NMS Plan states that ``In establishing 
the funding of the Company, the Operating Committee shall seek . . . 
(b) to establish an allocation of the Company's related costs among 
Participants and Industry Members that is consistent with the Exchange 
Act, taking into account the timeline for implementation of the CAT and 
distinctions in the securities trading operations of Participants and 
Industry Members and their relative impact upon Company resources and 
operations.'' The Operating Committee proposes to delete the 
requirement to take into account ``distinctions in the securities 
trading operations of Participants and Industry Members and their 
relative impact upon Company resources and operations.'' This 
requirement related to using message traffic and market share in the 
calculation of CAT fees, as message traffic and market share were 
metrics related to the impact of a CAT Reporter on the Company's 
resources and operations. With the proposed move to the use of the 
executed equivalent shares metric instead of message traffic and market 
share, the requirement is no longer relevant.
    Section 11.2(c) of the CAT NMS Plan states that ``[i]n establishing 
the funding of the Company, the Operating Committee shall seek . . . 
(c) to establish a tiered fee structure in which the fees charged to: 
(i) CAT Reporters that are Execution Venues, including ATSs, are based 
upon the level of market share; (ii) Industry Members' non-ATS 
activities are based upon message traffic.'' The Operating Committee 
proposes to delete subparagraphs (i) and (ii) and replace these 
subparagraphs with the requirement that the fee structure in which the 
fees charged to ``Participants and Industry Members are based upon the 
executed equivalent share volume of transactions in Eligible 
Securities.'' \61\
---------------------------------------------------------------------------

    \61\ As discussed in the next section, the Operating Committee 
also proposes to delete the reference to a ``tiered'' fee structure.
---------------------------------------------------------------------------

    Section 11.3(a) of the CAT NMS Plan provides additional detail 
regarding the market share based fees to be paid by Participants and 
Execution Venue ATSs under the Original Funding Model. Specifically, 
Section 11.3(a) of the CAT NMS Plan states:
    (a) The Operating Committee will establish fixed fees to be payable 
by Execution Venues as provided in this Section 11.3(a):
    (i) Each Execution Venue that: (A) Executes transactions; or (B) in 
the case of a national securities association, has trades reported by 
its members to its trade reporting facility or facilities for reporting 
transactions effected otherwise than on an exchange, in NMS Stocks or 
OTC Equity Securities will pay a fixed fee depending on the market 
share of that Execution Venue in NMS Stocks and OTC Equity Securities, 
with the Operating Committee establishing at least two and no more than 
five tiers of fixed fees, based on an Execution Venue's NMS Stocks and 
OTC Equity Securities market share. For these purposes, market share 
for Execution Venues that execute transactions will be calculated by 
share volume, and market share for a national securities association 
that has trades reported by its members to its trade reporting facility 
or facilities for reporting transactions effected otherwise than on an 
exchange in NMS Stocks or OTC Equity Securities will be calculated 
based on share volume of trades reported, provided, however, that the 
share volume reported to such national securities association by an 
Execution Venue shall not be included in the calculation of such 
national security association's market share.
    (ii) Each Execution Venue that executes transactions in Listed 
Options will pay a fixed fee depending on the Listed Options market 
share of that Execution Venue, with the Operating Committee 
establishing at least two and no more than five tiers of fixed fees, 
based on an Execution Venue's Listed Options market share. For these 
purposes, market share will be calculated by contract volume.
    The Operating Committee proposes to delete Section 11.3(a) of the 
CAT NMS Plan and replace this paragraph with a description of the fees 
to be paid by each Participant under the Executed Share Model. 
Specifically, proposed Section 11.3(a)(i) of the CAT NMS Plan would 
state that ``[e]ach Participant that is a national securities exchange 
will be required to pay a fee for each transaction in Eligible 
Securities executed on the exchange based on CAT Data. Each Participant 
that is a national securities association will be required to pay a fee 
for each transaction in Eligible Securities executed otherwise than on 
an exchange based on CAT Data.'' Proposed Section 11.3(a)(ii) of the 
CAT NMS Plan would state that ``[t]he 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 
applicable fee rate for the relevant period.''
    The Operating Committee proposes to add proposed Section 
11.3(a)(iii), which would require Participants ``to pay a CAT fee with 
regard to CAT costs not previously paid by the Participants 
(``Prospective CAT Costs'').'' Proposed Section 11.3(a)(iii) would 
describe how the Fee Rate would be calculated for these CAT fees. 
Specifically, proposed Section 11.3(a)(iii) would state that ``[t]he 
Fee Rate for the CAT fees related to Prospective CAT Costs will be 
calculated by dividing the budgeted CAT costs for the relevant period 
(as determined by the Operating Committee) by the projected total 
executed equivalent share volume of all transactions in Eligible 
Securities for the relevant period based on CAT Data.'' The Operating 
Committee would utilize budgeted costs in calculating the proposed 
forward-looking fees.
    The Operating Committee also proposes to add Section 11.3(a)(iv) to 
describe Participants' obligations under the funding model with regard 
to CAT costs previously paid by Participants. Specifically, proposed 
Section 11.3(a)(iv) would state that ``[n]otwithstanding anything to 
contrary, Participants will not be required to a pay a CAT fee related 
to CAT costs previously paid by the Participants in a manner determined 
by the Operating Committee (`Past CAT Costs').'' Accordingly, under 
those circumstances, Industry Members would be required to pay two-
thirds of such Past CAT Costs in accordance with the Executed Share 
Model. The Participants would remain responsible for the other one-
third of the Past CAT Costs, but such one-third of the Past CAT Costs 
has already been paid in a manner determined by the Operating 
Committee; that one-third of Past CAT Costs would not be paid pursuant 
to the Executed Share Model. The two-thirds of the Past CAT Costs to be 
collected from Industry Members would be allocated to the Participants 
for repayment of the outstanding loan notes of the Participants to the 
Company on a pro rata basis.
    Section 11.3(b) of the CAT NMS Plan provides additional detail 
regarding the message traffic-based CAT fees to be paid by Industry 
Members (other than Execution Venue ATSs). Specifically, Section 
11.3(b) of the CAT NMS Plan states:
    The Operating Committee will establish fixed fees to be payable by 
Industry Members, based on the message traffic generated by such 
Industry Member, with the Operating Committee establishing at least 
five and no more than nine tiers of fixed fees, based on message 
traffic. For the avoidance of doubt, the fixed fees payable by Industry 
Members pursuant

[[Page 33239]]

to this paragraph shall, in addition to any other applicable message 
traffic, include message traffic generated by: (i) An ATS that does not 
execute orders that is sponsored by such Industry Member; and (ii) 
routing orders to and from any ATS sponsored by such Industry Member.
    The Operating Committee proposes to delete Section 11.3(b) of the 
CAT NMS Plan and replace this paragraph with a description of the fees 
to be paid by CBBs and CBSs under the Executed Share Model as follows:
    The Operating Committee will establish fees to be payable by 
Industry Members as follows:
    (i) Each Industry Member that is the clearing firm for the buyer in 
a transaction in Eligible Securities (``Clearing Broker for the Buyer'' 
or ``CBB'') will be required to pay a fee for each such transaction in 
Eligible Securities based on CAT Data. The CBB's fee for each 
transaction Eligible Securities will be calculated by multiplying the 
number of executed equivalent shares in the transaction by one-third 
and by the Fee Rate.
    (ii) Each Industry Member that is the clearing firm for the seller 
in a transaction in Eligible Securities (``Clearing Broker for the 
Seller'' or ``CBS'') will be required to pay a fee for each transaction 
in Eligible Securities based on CAT Data. The CBS's 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 the Fee Rate.
    The Operating Committee proposes to add proposed Section 
11.3(b)(iii) to the CAT NMS Plan to further describe the fee 
obligations of CBBs and CBSs with regard to Past CAT Costs. 
Specifically, proposed Section 11.3(b)(iii) would state that ``CBBs and 
CBSs will be required to pay CAT fees related to Past CAT Costs. The 
Fee Rate for the CAT fees related to Past CAT Costs will be calculated 
by dividing the Past CAT Costs for the relevant period (as determined 
by the Operating Committee) by the projected total executed equivalent 
share volume of all transactions in Eligible Securities for the 
relevant period based on CAT Data.'' As discussed in detail above, the 
Operating Committee would utilize actual CAT costs in calculating these 
CAT fees.
    The Operating Committee also proposes to add proposed Section 
11.3(b)(iv) to the CAT NMS Plan to further describe the fee obligations 
of CBBs and CBSs with regard to Prospective CAT Costs. Specifically, 
proposed Section 11.3(b)(iv) would state that ``CBBs and CBSs will be 
required to pay CAT fees related to Prospective CAT Costs. The Fee Rate 
for the CAT fees related to Prospective CAT Costs will be the same as 
set forth in paragraph (a)(iv) above.'' Accordingly, the Participants, 
CBBs and CBSs would pay the same Fee Rate for CAT fees related to 
Prospective CAT Costs.
c. Elimination of Tiered Fees
    The Operating Committee proposes to eliminate the use of tiered 
fees for the Executed Share Model. Instead, under the Executed Share 
Model, each Participant, CBB or CBS would pay a fee based solely on its 
transactions in Eligible Securities. The Operating Committee therefore 
proposes to amend Sections 11.1(d), 11.2(c), 11.3(a) and 11.3(b) of the 
CAT NMS Plan to eliminate tiered fees and related concepts.
    By removing the concept of fee tiering for both Industry Members 
and Participants, the Executed Share Model addresses various comments 
regarding the use of tiering.\62\ Utilizing a tiered fee structure, by 
its nature, would create certain inequities among the CAT fees paid by 
CAT Reporters. For example, two CAT Reporters with comparable executed 
equivalent share volume may pay notably different fees if one falls in 
a higher tier and the other falls within a lower tier. Correspondingly, 
a tiered fee structure generally reduces fees for CAT Reporters with 
higher executed share volume in one tier, while increasing fees for 
Industry Members with lower executed share volume in the same tier, as 
compared to a non-tiered fee. Furthermore, CAT Reporters in lower tiers 
potentially pay more than they would without the use of tiers. While 
tiering appropriately exists in various other self-regulatory fee 
programs, in response to feedback on the 2018 and 2021 Fee Proposals, 
the Operating Committee is proposing to eliminate the tiering concept, 
rendering past comments about a tiered model moot.
---------------------------------------------------------------------------

    \62\ For a discussion of comments on prior fee models, see, 
e.g., Securities Exchange Act Rel. No. 80167 (June 30, 2017), 82 FR 
31656, 31664 (July 7, 2017).
---------------------------------------------------------------------------

    By charging each Participant, CBB and CBS a CAT fee directly based 
on its own executed equivalent share volume, rather than charging a 
tiered fee, the Executed Share Model would result in a CAT fee being 
tied more directly to the CAT Reporter's executed share volume. In 
contrast, with a tiered fee, CAT Reporters with different levels of 
executed equivalent share volume that are placed in the same tier would 
all pay the same CAT fee, thereby limiting the correlation between a 
CAT Reporter's activity and its CAT fee.
    The proposed non-tiering approach is simpler and more objective to 
administer than the tiering approach. With a tiering approach, the 
number of tiers for Participants, CBBs and CBSs, the boundaries for 
each tier and the fees assigned to each tier must be established. In 
the absence of clear groupings of CAT Reporters, selecting the number 
of, boundaries for, and the fees associated with each tier would be 
subject to some level of subjectivity. Furthermore, the establishment 
of tiers would need to be continually reassessed based on changes in 
the executed equivalent share volume of transactions in Eligible 
Securities, thereby requiring regular subjective assessments. 
Accordingly, the removal of tiering from the funding model eliminates a 
variety of subjective analyses and judgments from the model and 
simplifies the determination of CAT fees.
    Section 11.1(d) of the CAT NMS Plan states that ``[c]onsistent with 
this Article XI, the Operating Committee shall adopt policies, 
procedures, and practices regarding the budget and budgeting process, 
assignment of tiers, resolution of disputes, billing and collection of 
fees, and other related matters.'' With the elimination of tiered fees, 
the reference to the ``assignment of tiers'' would no longer be 
relevant for the Executed Share Model. Therefore, the Operating 
Committee proposes to delete the reference to ``assignment of tiers'' 
from Section 11.1(d).
    Section 11.1(d) of the CAT NMS Plan also states that:
    For the avoidance of doubt, as part of its regular review of fees 
for the CAT, the Operating Committee shall have the right to change the 
tier assigned to any particular Person in accordance with fee schedules 
previously filed with the Commission that are reasonable, equitable and 
not unfairly discriminatory and subject to public notice and comment, 
pursuant to this Article XI. Any such changes will be effective upon 
reasonable notice to such Person.
    As noted above, unlike the Original Funding Model, the Executed 
Share Model would not utilize tiered fees. Accordingly, these two 
sentences would not be applicable to the Executed Share Model. 
Therefore, the Operating Committee proposes to delete these two 
sentences from Section 11.1(d) of the CAT NMS Plan.
    The Operating Committee proposes to delete the reference to 
``tiered'' fees from Section 11.2(c) of the CAT NMS Plan. Section 
11.2(c) of the CAT NMS Plan states that ``[i]n establishing the

[[Page 33240]]

funding of the Company, the Operating Committee shall seek: . . . (c) 
to establish a tiered fee structure . . .'' The Participants propose to 
delete the word ``tiered'' from this provision as the CAT fees would 
not be tiered under the Executed Share Model.
    The Operating Committee also proposes to delete paragraph (iii) of 
Section 11.2(c) of the CAT NMS Plan. Paragraph (iii) of Section 11.2(c) 
of the CAT NMS Plan states that the Operating Committee shall seek to 
establish a tiered fee structure in which fees charged to:

The CAT Reporters with the most CAT-related activity (measured by 
market share and/or message traffic, as applicable) be 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).

    Under the Original Funding Model, the comparability provision was 
an important factor in determining the tiers for Industry Members and 
Execution Venues. In determining the tiers, the Operating Committee 
sought to establish comparable fees among the CAT Reporters with the 
most Reportable Events.\63\ Under the Executed Share Model, however, 
the comparability provision is no longer necessary, as a tiered fee 
structure would not be used for Industry Members or Participants.
---------------------------------------------------------------------------

    \63\ See, e.g., Securities Exchange Act Rel. No. 82451 (Jan. 5, 
2018), 83 FR 1399, 1406-07 (Jan. 11, 2018).
---------------------------------------------------------------------------

    As discussed above, the Operating Committee proposes to replace the 
language in Sections 11.3(a) and (b) of the CAT NMS Plan with language 
implementing the Executed Share Model. These proposed changes would 
remove the references to tiers in Sections 11.3(a)(i) and (ii) and 
11.3(b) of the CAT NMS Plan, along with the other proposed changes. 
Specifically, Section 11.3(a)(i) of the CAT NMS Plan states that the 
Operating Committee, when establishing fees for Execution Venues for 
NMS Stocks and OTC Equity Securities, will establish ``at least two and 
no more than five tiers of fixed fees, based on an Execution Venue's 
NMS Stocks and OTC Equity Securities market share.'' Similarly, Section 
11.3(a)(ii) of the CAT NMS Plan states that the Operating Committee, 
when establishing fees for Execution Venues that execute transactions 
in Listed Options, will establish ``at least two and no more than five 
tiers of fixed fees, based on an Execution Venue's Listed Options 
market share.'' Section 11.3(b) of the CAT NMS Plan states that the 
Operating Committee, when establishing fees to be payable by Industry 
Members, will establish ``at least five and no more than nine tiers of 
fixed fees, based on message traffic.'' The Operating Committee 
proposes to delete each of these references to tiers from the CAT NMS 
Plan.
d. No Fixed Fees
    As discussed above, the Operating Committee proposes to replace the 
language in Sections 11.3(a) and (b) of the CAT NMS Plan with language 
implementing the Executed Share Model. These proposed changes also 
would remove the references to ``fixed fees'' in Sections 11.3(a), 
11.3(a)(i) and 11.3(a)(ii) and replaced them with references to 
``fees.'' Under the Executed Share Model, the CAT fees to be paid by 
Participants, CBBs and CBSs will vary in accordance with their executed 
equivalent share volume of transactions in Eligible Securities, 
although the Fee Rate will be fixed for a relevant period. Therefore, 
the concept of a fixed fee--that is, a fee that does not vary depending 
on circumstances--is not relevant under the Executed Share Model.
e. Proposed CAT Fee Schedule for Participants
    To implement the Participant CAT fees, the Operating Committee 
proposes to add a fee schedule, entitled ``Consolidated Audit Trail 
Funding Fees,'' to Exhibit B [sic] of the CAT NMS Plan. Proposed 
paragraph (a) of the fee schedule would describe the CAT fee to be paid 
by the Participants under the Executed Share Model. Specifically, 
paragraph (a)(1) of the fee schedule would state that ``[e]ach 
Participant that is a national securities exchange shall pay a fee for 
each transaction in Eligible Securities executed on the exchange based 
on CAT Data, where the fee for each transaction will be calculated by 
multiplying the number of executed equivalent shares in the transaction 
by one-third and by the Fee Rate.'' Paragraph (a)(2) of the fee 
schedule would state that ``[e]ach Participant that is a national 
securities association shall pay a fee for each transaction in Eligible 
Securities executed otherwise than on exchange based on CAT Data, where 
the fee for each transaction will be calculated by multiplying the 
number of executed equivalent shares in the transaction by one-third 
and by the Fee Rate.''
    Proposed paragraph (b) of the fee schedule would describe how and 
when the Operating Committee would set the Fee Rate. Proposed paragraph 
(b)(1) of the fee schedule would state that ``[t]he Operating Committee 
will calculate the Fee Rate at the beginning of each year by dividing 
the budgeted CAT costs for the year by the projected total executed 
equivalent share volume of all transactions in Eligible Securities for 
the year. After setting the Fee Rate at the beginning of the year, the 
Fee Rate may be adjusted once during the year, if necessary, due to 
changes in the budgeted or actual costs or projected or actual total 
executed equivalent share volume during the year.''
    Proposed paragraph (b)(2) of the fee schedule would describe the 
method for counting executed equivalent shares in a transaction in 
Eligible Securities. Specifically, proposed paragraph (b)(2)(i) would 
state that ``each executed share for a transaction in NMS Stocks will 
be counted as one executed equivalent share.'' Proposed paragraph 
(b)(2)(ii) of the fee schedule would state that ``each executed 
contract for a transaction in Listed Options will be counted based on 
the multiplier applicable to the specific Listed Option (i.e., 100 
executed equivalent shares or such other applicable multiplier).'' 
Proposed paragraph (b)(2)(iii) of the fee schedule would state that 
``each executed share for a transaction in OTC Equity Securities shall 
be counted as 0.01 executed equivalent share.''
    Proposed paragraph (b)(3) of the fee schedule would describe the 
budgeted CAT costs and adjustments to the budgeted CAT costs to be used 
in calculating the Fee Rate. Proposed paragraph (b)(3) of the fee 
schedule would state that ``[t]he budgeted CAT costs for the year shall 
be comprised of all fees, costs and expenses 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.''
    Proposed paragraph (b)(4) of the fee schedule would describe the 
projected total executed equivalent share volume of transactions in 
Eligible Securities to be used in calculating the Fee Rate as well as 
any adjustments to such projections. Proposed paragraph (b)(4) of the 
fee schedule would state that ``[t]he Operating Committee shall 
determine the projected total executed equivalent share volume of all 
transactions in Eligible Securities for each relevant period based on 
the executed equivalent share volume of all transactions in Eligible 
Securities for the prior six months.''
    Proposed paragraph (c) of the fee schedule would describe the 
payment of

[[Page 33241]]

the CAT fees by Participants. Proposed paragraph (c) would state that 
``[e]ach Participant shall pay the CAT fee set forth in paragraph (a) 
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 the prior month.''
8. Satisfaction of Exchange Act and CAT NMS Plan Requirements
    The Executed Share Model offers a variety of benefits and satisfies 
the funding principles and other requirements of the CAT NMS Plan, as 
proposed to be revised herein, as well as the applicable requirements 
of the Exchange Act.
a. Funding Principle: Section 11.2(a) of the CAT NMS Plan
    The Executed Share Model satisfies the funding principles set forth 
in Section 11.2(a) of the CAT NMS Plan, as proposed to be modified 
herein. Section 11.2(a) requires the Operating Committee, in 
establishing the funding of the Company, to seek ``to create 
transparent, predictable revenue streams for the Company that are 
aligned with the anticipated costs to build, operate and administer the 
CAT and the other costs of the Company.''
    First, by adopting a CAT-specific fee tied directly to CAT costs, 
the Operating Committee would be fully transparent regarding the costs 
of the CAT and how those costs would be allocated among CAT Reporters. 
The CAT fees would be designed solely to cover CAT costs, and no other 
regulatory costs. In contrast, charging a general regulatory fee, which 
might otherwise be used to cover CAT costs as well as other regulatory 
costs, would be less transparent than the selected approach of charging 
a fee designated to cover CAT-related costs only. Such a general 
regulatory fee could cover a variety of regulatory costs without 
differentiating those costs related to the CAT.
    Second, the Executed Share Model would provide a predictable 
revenue stream for the Company. The Executed Share Model is designed to 
collect the annual CAT costs each year, thereby providing for a 
predictable revenue stream. In addition, to address the possibility of 
some variability in the collected CAT fees, an unexpected increase in 
costs or variations from the budgeted costs or projected executed 
equivalent share volume of transactions in Eligible Securities, the CAT 
costs covered by the Executed Share Model would include an operational 
reserve. The operational reserve could be used in the event that the 
total CAT fees collected differ from the actual CAT costs. Moreover, 
the Executed Share Model includes a method for adjusting the 
calculation of the Fee Rate during the year if there are changes in the 
projected total volume of transactions in Eligible Securities or the 
CAT costs.
    Third, as discussed above, the Executed Share Model provides for a 
revenue stream for the Company that is aligned with the anticipated 
costs to build, operate and administer the CAT and the other costs of 
the Company. The total CAT fees to be collected from CAT Reporters are 
designed to cover the CAT costs. Any surpluses collected would be 
treated as an operational reserve to offset future fees and would not 
be distributed to the Participants as profits.\64\
---------------------------------------------------------------------------

    \64\ CAT NMS Plan Approval Order at 84792.
---------------------------------------------------------------------------

b. Funding Principle: Section 11.2(b) of the CAT NMS Plan
    The Executed Share Model satisfies the funding principle set forth 
in Section 11.2(b) of the CAT NMS Plan, as proposed to be amended 
herein, which would require the Operating Committee to seek ``to 
establish an allocation of the Company's related costs among 
Participants and Industry Members that is consistent with the Exchange 
Act, taking into account the timeline for implementation of the CAT.'' 
As described in more detail below, the Executed Share Model establishes 
an allocation of Company's related costs among Participants and 
Industry Members that is consistent with the Exchange Act. In addition, 
as described in more detail below, the Executed Share Model provides 
for an equitable allocation of reasonable dues, is not unfairly 
discriminatory and does not impose a burden on competition that is not 
necessary or appropriate in furtherance of the Exchange Act. In 
addition, the Executed Share Model takes into account the timeline for 
implementation of the CAT. The CAT fees are designed to cover the CAT 
costs for each relevant period.
c. Funding Principle: Section 11.2(c) of the CAT NMS Plan
    The Executed Share Model satisfies the funding principle set forth 
in Section 11.2(c) of the CAT NMS Plan, as proposed to be modified 
herein. Section 11.2(c), as proposed to be modified herein, requires 
the Operating Committee to seek ``to establish a fee structure in which 
the fees charged to Participants and Industry Members are based upon 
the executed equivalent share volume of transactions in Eligible 
Securities.'' The Executed Share Model requires Participants and 
Industry Members to pay a fee based upon the executed equivalent share 
volume of transactions in Eligible Securities.
d. Funding Principle: Section 11.2(d) of the CAT NMS Plan
    The Executed Share Model satisfies the funding principle set forth 
in Section 11.2(d) of the CAT NMS Plan, which requires the Operating 
Committee to seek ``to provide for ease of billing and other 
administrative functions.'' The Executed Share Model satisfies this 
principle in several ways. The Executed Share Model is modeled after 
the existing Section 31-related fee programs, with which the 
Participants and Industry Members have a longstanding familiarity. The 
Executed Share Model relies upon a basic calculation using a 
predetermined Fee Rate along with an Industry Member or Participant's 
own information regarding its executed equivalent share volume, thereby 
making the fee determination a straightforward process.
    Furthermore, the Executed Share Model provides CAT Reporters with 
predictable CAT fees. Because the Fee Rate is established in advance 
for a relevant time period, Participants, CBBs and CBSs know the CAT 
fee that applies to each transaction when it occurs. Accordingly, 
Participants, CBBs and CBSs are able to easily estimate and validate 
their applicable fees based on their own trading data. In addition, to 
the extent any CAT fees are passed on to customers, the customers, too, 
can calculate the applicable CAT fee for each transaction.
e. Funding Principle: Section 11.2(e) of the CAT NMS Plan
    The Executed Share Model satisfies the funding principle set forth 
in Section 11.2(e) of the CAT NMS Plan, which requires the Operating 
Committee to seek ``to avoid any disincentives such as placing an 
inappropriate burden on competition and a reduction in market 
quality.'' The Executed Share Model would operate in a manner similar 
to the funding models employed by the SEC and the Participants related 
to Section 31 of the Exchange Act, the FINRA TAF and the ORF. These 
fees are long-standing, and have been approved by the Commission as 
satisfying the requirements under the Exchange Act, including not 
imposing a burden on the competition that is not necessary or 
appropriate under the Exchange Act. In addition, the Executed Share 
Model avoids potentially burdensome fees for market makers or other 
market participants based on message traffic. Furthermore, the

[[Page 33242]]

Executed Share Model addresses the specific trading characteristics of 
Listed Options and OTC Equity Securities to avoid adverse effects of 
the trading of those instruments. For example, the Executed Share Model 
also includes the discounting of transactions involving OTC Equity 
Shares which, given the volume of shares typically involved in such 
securities transactions, otherwise may result in disproportionate fees 
to market participants transaction these securities.
    The Executed Share Model also would not unfairly burden FINRA or 
any of the exchanges. The Executed Share Model is designed to be 
neutral as to the manner of execution and place of execution. The CAT 
fees would be the same regardless of whether the transaction is 
executed on an exchange or in the over-the-counter market. All 
Participants are SROs that have the same regulatory responsibilities 
under the Exchange Act. Their usage of CAT Data will be for the same 
regulatory purposes. By treating each Participant the same, the CAT 
fees would not become a competitive issue by and among the 
Participants.
    The Executed Share Model also would not unfairly burden CBBs and 
CBSs. The Operating Committee determined to charge CBBs and CBSs, 
rather than Industry Members buyers and sellers more generally, because 
such a fee collection model is currently used and well-known in the 
securities markets. For example, SRO members regularly rely on their 
clearing firms to assist with the payment of SRO fees. As a result, the 
CAT fees could be paid by Industry Members without requiring 
significant and potentially costly changes. In addition, this approach 
would limit the number of Industry Members charged a CAT fee to a few 
hundred, rather than a few thousand, thereby limiting the costs for 
collecting the fees. Moreover, the CBBs and CBSs would be permitted, 
but not required, to pass their CAT fees through to their customers, 
who, in turn, could pass their CAT fees to their customers, until the 
fee is imposed on the ultimate participant in the transaction. With 
such a pass through, the CBBs and CBSs would not ultimately incur the 
cost of all CAT fees related to the transactions that they clear.
f. Funding Principle: Section 11.2(f) of the CAT NMS Plan
    The Executed Share Model satisfies the funding principle set forth 
in Section 11.2(f) of the CAT NMS Plan, which requires the Operating 
Committee to seek ``to build financial stability to support the Company 
as a going concern.'' The Operating Committee believes that the 
Executed Share Model is structured to collect sufficient funds to pay 
for the cost of the CAT going forward. In addition, the Executed Share 
Model would collect an operational reserve for the CAT. This 
operational reserve is intended to address potential shortfalls in 
collected CAT fees versus actual CAT costs. Moreover, the Executed 
Share Model includes a method for adjusting the calculation of the Fee 
Rate during the year if there are changes in the projected total volume 
of transactions in Eligible Securities or the CAT costs.
g. Section 11.1(c) of the CAT NMS Plan
    The Executed Share Model would satisfy the requirements in Section 
11.1(c) of the CAT NMS Plan. Section 11.1(c) of the CAT NMS Plan states 
that ``[t]o fund the development and implementation of the CAT, the 
Company shall time the imposition and collection of all fees on 
Participants and Industry Members in a manner reasonably related to the 
timing when the Company expects to incur such development and 
implementation costs.'' The CAT fees are designed to cover the CAT 
costs for a relevant period. As such, on a going forward basis, they 
are designed to be imposed close in time to when costs are incurred.
    Section 11.1(c) of the CAT NMS Plan also requires that ``[a]ny 
surplus of the Company's resources over its expenses shall be treated 
as an operational reserve to offset future fees.'' The Company would 
operate on a ``break-even'' basis, with fees imposed to cover costs and 
an appropriate reserve. Any surpluses would not be distributed to the 
Participants as profits.\65\ In addition, as set forth in Article VIII 
of the CAT NMS Plan, the Company ``intends to operate in a manner such 
that it qualifies as a `business league' within the meaning of Section 
501(c)(6) of the [Internal Revenue] Code.'' To qualify as a business 
league, an organization must ``not [be] organized for profit and no 
part of the net earnings of [the organization can] inure[ ] to the 
benefit of any private shareholder or individual.'' \66\ As the SEC 
stated when approving the CAT NMS Plan, ``the Commission believes that 
the Company's application for Section 501(c)(6) business league status 
addresses issues raised by commenters about the Plan's proposed 
allocation of profit and loss by mitigating concerns that the Company's 
earnings could be used to benefit individual Participants.'' \67\ The 
Internal Revenue Service has determined that the Company is exempt from 
federal income tax under Section 501(c)(6) of the Internal Revenue 
Code.
---------------------------------------------------------------------------

    \65\ Id.
    \66\ 26 U.S.C. 501(c)(6).
    \67\ CAT NMS Plan Approval Order at 84793.
---------------------------------------------------------------------------

h. Equitable Allocation of Reasonable Fees
    The proposed CAT fees provide for the ``equitable allocation of 
reasonable dues, fees, and other charges among its members and issuers 
and other persons using its facilities necessary or appropriate in 
furtherance of the purposes of this chapter,'' \68\ as required by the 
Exchange Act. The Operating Committee believes that the CAT fees 
equitably allocate CAT costs between and among Participants and 
Industry Members, as discussed in detailed above. For the reasons 
discussed above, the Operating Committee believes that the allocation 
of one-third of the CAT costs each to Participants, CBBs and CBSs in 
the Executed Share Model as well as the use of the total equivalent 
share volume of transactions in Eligible Securities for allocating 
costs provide for an equitable allocation of CAT costs among CAT 
Reporters.
---------------------------------------------------------------------------

    \68\ Sections 6(b)(4) and 15A(b)(5) of the Exchange Act.
---------------------------------------------------------------------------

    The Operating Committee also believes that the Executed Share Model 
would provide for reasonable fees. The transaction-based fees 
contemplated by the Executed Share Model are a reasonable fee 
structure. The SROs have a long history of charging transaction-based 
fees, as transactions are the intended economic goal of the securities 
markets. In addition to the transaction-based regulatory fees discussed 
above (e.g., the SROs' Section 31-related fees, the FINRA TAF and the 
ORF), the SROs charge a variety of other types of transaction fees to 
fund their operations.\69\ Indeed, each of the SROs collect 
transaction-based fees from their members.\70\ In each case, the 
transaction-based fees charged by SROs have been subject to the fee 
filing process and found to satisfy the requirements of the Exchange 
Act. Not only is the type of fee reasonable, but the level of the fee 
is reasonable as well. Although the exact Fee Rate to be paid for any 
particular period will be determined at a later date, the illustrative 
example provides a per-transaction Fee Rate that is not

[[Page 33243]]

excessive in comparison to existing transaction fee rates.
---------------------------------------------------------------------------

    \69\ The SEC has noted that SRO transaction fees account for a 
significant portion of SRO revenue. Securities Exchange Act Rel. No. 
50700 (Nov. 18, 2004); 69 FR 71256, 71271 (Dec. 8, 2004).
    \70\ See, e.g., NYSE Price List; Nasdaq Price List.
---------------------------------------------------------------------------

i. No Unfair Discrimination
    The Executed Share Model is ``not designed to permit unfair 
discrimination between customers, issuers, brokers, or dealers,'' \71\ 
as required by the Exchange Act. In addition, the Executed Share Model 
does not unfairly discriminate between Industry Members and 
Participants, among Industry Members or among Participants. Both 
Participants and Industry Members would contribute to the cost of the 
CAT; Participants alone would no longer be required to shoulder the 
burden without the contribution of Industry Members. In addition, both 
Participants and Industry Members would pay a fee based on the total 
equivalent share volume of their transactions in Eligible Securities; 
the type of metric would not vary based on whether the CAT Reporter is 
an Industry Member or Participant.
---------------------------------------------------------------------------

    \71\ Sections 6(b)(5) and 15A(b)(6) of the Exchange Act.
---------------------------------------------------------------------------

    Furthermore, the Fee Rate would be the same regardless of the type 
of venue a trade was executed on, or how the trade ultimately occurred 
more generally (e.g., in a manner that generated more message traffic). 
In addition, the Executed Share Model recognizes the different trading 
characteristics of Listed Options and OTC Equity Securities as compared 
to NMS Stocks. The Executed Share Model recognizes that Listed Option 
trade in contracts rather than shares, and, therefore, counts the 
executed equivalent shares for Listed Options accordingly. Similarly, 
in recognition of the different trading characteristics of OTC Equity 
Securities as compared to NMS Stocks, the Executed Share Model would 
discount the share volume of OTC Equity Securities when calculating the 
CAT fees. Furthermore, although the fee would be charged to the CBB and 
the CBS, the CBB and CBS may pass through the fee to their clients. 
Therefore, CBBs and CBSs would not need to bear all the CAT costs for 
Industry Members. As a result, the Executed Share Model would not favor 
or unfairly burden any one type of trading venue, product or product 
type.
    With the elimination of tiers, fees for Industry Members and 
Participants are directly related to their executed equivalent share 
volume of their transactions. With tiers, the relationship between a 
CAT Reporter's share volume and the CAT fee would not have been as 
direct.
j. No Burden on Competition
    The Executed Share Model does ``not impose any burden on 
competition not necessary or appropriate in furtherance of the purposes 
of this chapter,'' \72\ as required by the Exchange Act. Moreover, the 
Operating Committee believes that the proposed fee schedule fairly and 
equitably allocates costs among CAT Reporters. The Executed Share Model 
would operate in a manner similar to the funding model employed by the 
SEC and the Participants related to Section 31 of the Exchange Act as 
well as the FINRA TAF \73\ and the ORF rules, and these long-standing 
fees to cover regulatory costs have been approved by the Commission as 
satisfying the requirements under the Exchange Act, including not 
imposing a burden on the competition that is not necessary or 
appropriate under the Exchange Act. Furthermore, the Executed Share 
Model does not impose a burden on competition for reasons set forth 
above in Section A.8.e above.
---------------------------------------------------------------------------

    \72\ Sections 6(b)(8) and 15A(b)(9) of the Exchange Act.
    \73\ Although the FINRA TAF is designed to cover a subset of the 
costs of FINRA services (e.g., costs to FINRA of the supervision and 
regulation of members, including performing examinations, financial 
monitoring, and policy, rulemaking, interpretive, and enforcement 
activities) rather than all of FINRA's costs like the CAT, the 
transaction-based calculation of the FINRA TAF and the proposed CAT 
fees are similar.
---------------------------------------------------------------------------

B. Governing or Constituent Documents

    Not applicable.

C. Implementation of Amendment

    The Participants are filing this proposed amendment pursuant to 
Rule 608(b)(1) of Regulation NMS under the Exchange Act.\74\
---------------------------------------------------------------------------

    \74\ 17 CFR 242.608(b)(1).
---------------------------------------------------------------------------

D. Development and Implementation Phases

    The Participants expect to implement the proposed Participant CAT 
fees upon approval by the SEC, provided, however, that the Participant 
CAT fees would not be collected unless the Industry Member CAT fees for 
the same time period are effective at that time.

E. Analysis of Impact on Competition

    The Operating Committee does not believe that the proposed 
amendment would result in any burden on competition that is not 
necessary or appropriate in furtherance of the purposes of the Exchange 
Act. The Operating Committee notes that the proposed amendment 
implements provisions of the CAT NMS Plan approved by the Commission, 
subject to proposed revisions to the CAT NMS Plan described above, and 
is designed to assist the Participants in meeting their regulatory 
obligations pursuant to the Plan. Because all Participants are subject 
to the Executed Share Model set forth in the proposed amendment, this 
is not a competitive filing that raises competition issues between and 
among the Participants. Furthermore, for the reasons discussed above, 
including in Sections A.8.e and A.8.j above, the Operating Committee 
does not believe that the Executed Share Model would result in any 
burden on competition that is not necessary or appropriate in 
furtherance of the purpose of the Exchange Act.

F. Written Understanding or Agreements Relating to Interpretation of, 
or Participation in, Plan

    Not applicable.

G. Approval by Plan Sponsors in Accordance With Plan

    Section 12.3 of the CAT NMS Plan states that, subject to certain 
exceptions, the CAT NMS Plan may be amended from time to time only by a 
written amendment, authorized by the affirmative vote of not less than 
two-thirds of all of the Participants, that has been approved by the 
SEC pursuant to Rule 608 of Regulation NMS under the Exchange Act or 
has otherwise become effective under Rule 608 of Regulation NMS under 
the Exchange Act. In addition, Section 4.3(a)(vi) of the Plan requires 
the Operating Committee, by Majority Vote, to authorize action to 
determine the appropriate funding-related policies, procedures and 
practices-consistent with Article XI. The Operating Committee has 
satisfied both of these requirements. In addition, the Executed Share 
Model was discussed and voted on during a general session of the 
Operating Committee.

H. Description of Operation of Facility Contemplated by the Proposed 
Amendment

    Not applicable.

I. Terms and Conditions of Access

    Not applicable.

J. Method of Determination and Imposition, and Amount of, Fees and 
Charges

    Section A of this letter describes in detail how the Participants 
developed the Executed Share Model for the CAT.

K. Method and Frequency of Processor Evaluation

    Not applicable.

[[Page 33244]]

L. Dispute Resolution

    Section 11.5 of the CAT NMS Plan addresses the resolution of 
disputes regarding CAT fees charged to Participants and Industry 
Members. Specifically, Section 11.5 of the CAT NMS Plan states that

[d]isputes with respect to fees the Company charges Participants 
pursuant to Article XI of the CAT NMS Plan shall be determined by 
the Operating Committee or a Subcommittee designated by the 
Operating Committee. Decisions by the Operating Committee or such 
designated Subcommittee on such matters shall be binding on 
Participants, without prejudice to the rights of any Participant to 
seek redress from the SEC pursuant to Rule 608 of Regulation NMS 
under the Exchange Act or in any other appropriate forum.

    In addition, the Participants adopted rules to establish the 
procedures for resolving potential disputes related to CAT fees charged 
to Industry Members.\75\
---------------------------------------------------------------------------

    \75\ See Securities Exchange Act Rel. No. 81500 (Aug. 30, 2017), 
82 FR 42143 (Sept. 6, 2017).
---------------------------------------------------------------------------

III. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the amendment is 
consistent with the Exchange Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number 4-698 on the subject line.

Paper Comments

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

All submissions should refer to File Number 4-698. This file number 
should be included on the subject line if email is used. To help the 
Commission process and review your comments more efficiently, please 
use only one method. The Commission will post all comments on the 
Commission's internet website (http://www.sec.gov/rules/sro.shtml). 
Copies of the submission, all subsequent amendments, all written 
statements with respect to the proposed plan amendment that are filed 
with the Commission, and all written communications relating to the 
amendment between the Commission and any person, other than those that 
may be withheld from the public in accordance with the provisions of 5 
U.S.C. 552, will be available for website viewing and printing in the 
Commission's Public Reference Room, 100 F Street NE, Washington, DC 
20549, on official business days between the hours of 10:00 a.m. and 
3:00 p.m. Copies of such filing also will be available for inspection 
and copying at the Participants' offices. All comments received will be 
posted without change. Persons submitting comments are cautioned that 
we do not redact or edit personal identifying information from comment 
submissions. You should submit only information that you wish to make 
available publicly. All submissions should refer to File Number 4-698 
and should be submitted on or before June 22, 2022.
---------------------------------------------------------------------------

    \76\ 17 CFR 200.30-3(a)(85).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\76\
J. Matthew DeLesDernier,
Assistant Secretary.

Exhibit A

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

Article I

Definitions

* * * * *
    [``Execution Venue'' means 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).]
* * * * *

Article XI

Funding of the Company

    Section 11.1. Funding Authority.
    (a) On an annual basis the Operating Committee shall approve an 
operating budget for the Company. The budget shall 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.
    (b) Subject to Section 11.2, the Operating Committee shall have 
discretion to establish funding for the Company, including: (i) 
Establishing fees that the Participants shall pay; and (ii) 
establishing fees for Industry Members that shall be implemented by 
Participants. The Participants shall file with the SEC under Section 
19(b) of the Exchange Act any such fees on Industry Members that the 
Operating Committee approves, and such fees shall be labeled as 
``Consolidated Audit Trail Funding Fees.''
    (c) To fund the development and implementation of the CAT, the 
Company shall time the imposition and collection of all fees on 
Participants and Industry Members in a manner reasonably related to the 
timing when the Company expects to incur such development and 
implementation costs. In determining fees on Participants and Industry 
Members the Operating Committee shall take into account fees, costs and 
expenses (including legal and consulting fees and expenses) incurred by 
the Participants on behalf of the Company prior to the Effective Date 
in connection with the creation and implementation of the CAT, and such 
fees, costs and expenses shall be fairly and reasonably shared among 
the Participants and Industry Members. Any surplus of the Company's 
revenues over its expenses shall be treated as an operational reserve 
to offset future fees.
    (d) Consistent with this Article XI, the Operating Committee shall 
adopt policies, procedures, and practices regarding the budget and 
budgeting process, [assignment of tiers,] resolution of disputes, 
billing and collection of fees, and other related matters. [For the 
avoidance of doubt, as part of its regular review of fees for the CAT, 
the Operating Committee shall have the right to change the tier 
assigned to any particular Person in accordance with fee schedules 
previously filed with the Commission that are reasonable, equitable and 
not unfairly discriminatory and subject to public notice and comment, 
pursuant to this Article XI. Any such changes will be effective upon 
reasonable notice to such Person.]
    Section 11.2. Funding Principles. In establishing the funding of 
the Company, the Operating Committee shall seek:
    (a) To create transparent, predictable revenue streams for the 
Company that are aligned with the anticipated costs to build, operate 
and administer the CAT and the other costs of the Company;
    (b) to establish an allocation of the Company's related costs among 
Participants and Industry Members that is consistent with the Exchange 
Act, taking into account the timeline for implementation of the CAT 
[and distinctions in the securities trading operations of Participants 
and Industry Members and their relative impact upon Company resources 
and operations];

[[Page 33245]]

    (c) to establish a [tiered] fee structure in which the fees charged 
to [: (i)] Participants and [CAT Reporters that are Execution Venues, 
including ATSs, are based upon the level of market share; (ii)] 
Industry Members[' non-ATS activities] are based upon the executed 
equivalent share volume of transactions in Eligible Securities [message 
traffic; and (iii) 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)].
    (d) to provide for ease of billing and other administrative 
functions;
    (e) to avoid any disincentives such as placing an inappropriate 
burden on competition and a reduction in market quality; and
    (f) to build financial stability to support the Company as a going 
concern.
    Section 11.3. Recovery.
    (a) The Operating Committee will establish [fixed] fees to be 
payable by Participants [Execution Venues] as follows [provided in this 
Section 11.3(a)]:
    (i) Each Participant that is a national securities exchange will be 
required to pay a fee for each transaction in Eligible Securities 
executed on the exchange based on CAT Data. Each Participant that is a 
national securities association will be required to pay a fee for each 
transaction in Eligible Securities executed otherwise than on an 
exchange based on CAT Data.
    (ii) The 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 applicable fee rate for the 
relevant period (``Fee Rate'').
    (iii) Participants will be required to pay a CAT fee with regard to 
CAT costs not previously paid by the Participants (``Prospective CAT 
Costs''). The Fee Rate for the CAT fees related to Prospective CAT 
Costs will be calculated by dividing the budgeted CAT costs for the 
relevant period (as determined by the Operating Committee) by the 
projected total executed equivalent share volume of all transactions in 
Eligible Securities for the relevant period based on CAT Data.
    (iv) Notwithstanding anything to contrary, Participants will not be 
required to a pay a CAT fee related to CAT costs previously paid by the 
Participants in a manner determined by the Operating Committee (``Past 
CAT Costs'').
    [(i) Each Execution Venue that: (A) Executes transactions; or (B) 
in the case of a national securities association, has trades reported 
by its members to its trade reporting facility or facilities for 
reporting transactions effected otherwise than on an exchange, in NMS 
Stocks or OTC Equity Securities will pay a fixed fee depending on the 
market share of that Execution Venue in NMS Stocks and OTC Equity 
Securities, with the Operating Committee establishing at least two and 
no more than five tiers of fixed fees, based on an Execution Venue's 
NMS Stocks and OTC Equity Securities market share. For these purposes, 
market share for Execution Venues that execute transactions will be 
calculated by share volume, and market share for a national securities 
association that has trades reported by its members to its trade 
reporting facility or facilities for reporting transactions effected 
otherwise than on an exchange in NMS Stocks or OTC Equity Securities 
will be calculated based on share volume of trades reported, provided, 
however, that the share volume reported to such national securities 
association by an Execution Venue shall not be included in the 
calculation of such national security association's market share.]
    [(ii) Each Execution Venue that executes transactions in Listed 
Options will pay a fixed fee depending on the Listed Options market 
share of that Execution Venue, with the Operating Committee 
establishing at least two and no more than five tiers of fixed fees, 
based on an Execution Venue's Listed Options market share. For these 
purposes, market share will be calculated by contract volume.]
    (b) The Operating Committee will establish [fixed] fees to be 
payable by Industry Members as follows:
    (i) Each Industry Member that is the clearing firm for the buyer in 
a transaction in Eligible Securities (``Clearing Broker for the Buyer'' 
or ``CBB'') will be required to pay a fee for each such transaction in 
Eligible Securities based on CAT Data. The CBB's 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.
    (ii) Each Industry Member that is the clearing firm for the seller 
in a transaction in Eligible Securities (``Clearing Broker for the 
Seller'' or ``CBS'') will be required to pay a fee for each transaction 
in Eligible Securities based on CAT Data. The CBS's 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. [, based on the message traffic generated by 
such Industry Member, with the Operating Committee establishing at 
least five and no more than nine tiers of fixed fees, based on message 
traffic. For the avoidance of doubt, the fixed fees payable by Industry 
Members pursuant to this paragraph shall, in addition to any other 
applicable message traffic, include message traffic generated by: (i) 
an ATS that does not execute orders that is sponsored by such Industry 
Member; and (ii) routing orders to and from any ATS sponsored by such 
Industry Member.]
    (iii) CBBs and CBSs will be required to pay CAT fees related to 
Past CAT Costs. The Fee Rate for the CAT fees related to Past CAT Costs 
will be calculated by dividing the Past CAT Costs for the relevant 
period (as determined by the Operating Committee) by the projected 
total executed equivalent share volume of all transactions in Eligible 
Securities for the relevant period based on CAT Data.
    (iv) CBBs and CBSs will be required to pay CAT fees related to 
Prospective CAT Costs. The Fee Rate for the CAT fees related to 
Prospective CAT Costs will be the same as set forth in paragraph 
(a)(iv) above.
    (c) The Operating Committee may establish any other fees ancillary 
to the operation of the CAT that it reasonably determines appropriate, 
including fees: (i) for the late or inaccurate reporting of information 
to the CAT; (ii) for correcting submitted information; and (iii) based 
on access and use of the CAT for regulatory and oversight purposes (and 
not including any reporting obligations).
    (d) The Company shall make publicly available a schedule of 
effective fees and charges adopted pursuant to this Agreement as in 
effect from time to time. The Operating Committee shall review such fee 
schedule on at least an annual basis and shall make any changes to such 
fee schedule that it deems appropriate. The Operating Committee is 
authorized to review such fee schedule on a more regular basis, but 
shall not make any changes on more than a semiannual basis unless, 
pursuant to a Supermajority Vote, the Operating Committee concludes 
that such change is necessary for the adequate funding of the Company.
* * * * *

[[Page 33246]]

Appendix B

Fee Schedule

Consolidated Audit Trail Funding Fees for Participants

(a) CAT Fee
    (1) Each Participant that is a national securities exchange shall 
pay a fee for each transaction in Eligible Securities executed on the 
exchange based on CAT Data, where the fee for each transaction will be 
calculated by multiplying the number of executed equivalent shares in 
the transaction by one-third and by the Fee Rate.
    (2) Each Participant that is a national securities association 
shall pay a fee for each transaction in Eligible Securities executed 
otherwise than on exchange based on CAT Data, where the fee for each 
transaction will be calculated by multiplying the number of executed 
equivalent shares in the transaction by one-third and by the Fee Rate.
(b) Fee Rate
    (1) The Operating Committee will calculate the Fee Rate at the 
beginning of each year by dividing the budgeted CAT costs for the year 
by the projected total executed equivalent share volume of all 
transactions in Eligible Securities for the year. After setting the Fee 
Rate at the beginning of each year, the Fee Rate may be adjusted once 
during the year, if necessary, due to changes in the budgeted or actual 
costs or projected or actual total executed equivalent share volume 
during the year.
    (2) For purposes of calculating the fees, executed equivalent 
shares in a transaction in Eligible Securities will be counted as 
follows:
    (i) each executed share for a transaction in NMS Stocks will be 
counted as one executed equivalent share;
    (ii) each executed contract for a transaction in Listed Options 
will be counted based on the multiplier applicable to the specific 
Listed Option (i.e., 100 executed equivalent shares or such other 
applicable multiplier); and
    (iii) each executed share for a transaction in OTC Equity 
Securities shall be counted as 0.01 executed equivalent share.
    (3) Budgeted CAT Costs. The budgeted CAT costs for the year shall 
be comprised of all fees, costs and expenses 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.
    (4) Projected Total Executed Equivalent Share Volume of 
Transactions in Eligible Securities. The Operating Committee shall 
determine the projected total executed equivalent share volume of all 
transactions in Eligible Securities for each relevant period based on 
the executed equivalent share volume of all transactions in Eligible 
Securities for the prior six months.
    (c) Fee Payments/Collection. Each Participant shall pay the CAT fee 
set forth in paragraph (a) 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 the prior month.
* * * * *

Exhibit B

    The following sets forth an illustrative example of calculated 
under the Executed Share Model based on the budgeted annual CAT Costs 
for 2022 and the actual total executed equivalent share volume of 
transactions in Eligible Securities in 2021. Note Exhibit B only 
provides an illustrative example of how the Executed Share Model would 
operate; the calculation of actual fees will differ from this example 
in various ways. For example, the Participants have paid or will have 
paid some or all of these costs up to the time of any SEC approval of 
the Executed Share Model, and, as a result, Participants would not be 
obligated to pay CAT fees related to 2022 CAT costs to the extent the 
Participants have already paid such costs. In addition, the 
illustrative example calculates the fee rate using the total executed 
equivalent share transactions in Eligible Securities for 2021, rather 
than the projected volume for 2022 based on the previous six months. 
Furthermore, the CAT Reporters' monthly CAT fee is not based on the CAT 
Reporters' transactions from the prior month; instead, it is calculated 
by using each CAT Reporter's transactions in 2021 and dividing the 
result by twelve.

CAT Fee Example for Illustrative Purposes Only

    Budgeted CAT Costs for 2022: $165,841,447.00.
    Total Executed Equivalent Share Volume of Transactions in Eligible 
Securities for 2021: 3,963,697,612,395.
    Fee Rate: $0.0000418401 per executed equivalent share.

                                              Participant CAT Fees
----------------------------------------------------------------------------------------------------------------
                                                              Executed
                                                          equivalent share
                                                             volume of
                      Participant                         transactions in     Annual CAT fee    Monthly CAT fee
                                                              eligible             \77\
                                                           securities for
                                                                2021
----------------------------------------------------------------------------------------------------------------
1......................................................     46,400,250,500        $647,130.15         $53,927.51
2......................................................    204,330,644,337       2,849,737.21         237,478.10
3......................................................     40,241,451,971         561,235.26          46,769.61
4......................................................     37,837,901,411         527,713.68          43,976.14
5......................................................    239,781,829,838       3,344,164.09         278,680.34
6......................................................    149,570,501,700       2,086,014.19         173,834.52
7......................................................     36,318,789,800         506,527.09          42,210.59
8......................................................  1,361,484,729,008      18,988,212.50       1,582,351.04
9......................................................     64,139,149,375         894,529.16          74,544.10
10.....................................................     51,910,120,400         723,974.63          60,331.22
11.....................................................     55,784,034,310         778,002.92          64,833.58
12.....................................................     38,683,005,800         539,500.09          44,958.34
13.....................................................    531,025,057,170       7,406,044.60         617,170.38
14.....................................................     30,117,744,430         420,043.00          35,003.58
15.....................................................    135,340,379,281       1,887,551.01         157,295.92
16.....................................................     62,342,194,800         869,467.59          72,455.63
17.....................................................     39,349,215,400         548,791.51          45,732.63
18.....................................................     14,998,526,300         209,179.87          17,431.66

[[Page 33247]]

 
19.....................................................    277,173,161,059       3,865,649.59         322,137.47
20.....................................................    345,397,838,631       4,817,158.37         401,429.86
21.....................................................     90,011,105,331       1,255,357.45         104,613.12
22.....................................................     30,979,556,597         432,062.43          36,005.20
23.....................................................      5,507,340,998          76,809.21           6,400.77
24.....................................................          5,581,710              77.85               6.49
25.....................................................     74,967,502,238       1,045,548.90          87,129.08
----------------------------------------------------------------------------------------------------------------

     
---------------------------------------------------------------------------

    \77\ Under the Executed Share Model, Participants, CBBs and CBSs 
will pay a monthly fee based on actual executed equivalent share 
volume for the prior calendar month. The annual CAT fee is provided 
here for informational purposes only.

                                          Industry Member CAT Fees \78\
----------------------------------------------------------------------------------------------------------------
                                                              Executed
                                                          equivalent share
                                                             volume of
                      CBBs & CBSs                         transactions in     Annual CAT fee    Monthly CAT fee
                                                              eligible
                                                           securities for
                                                                2021
----------------------------------------------------------------------------------------------------------------
1......................................................    859,841,671,740     $11,991,949.69        $999,329.14
2......................................................    778,256,091,356      10,854,100.47         904,508.37
3......................................................    740,559,440,045      10,328,356.76         860,696.40
4......................................................    536,740,052,223       7,485,749.89         623,812.49
5......................................................    467,988,393,675       6,526,891.47         543,907.62
6......................................................    380,556,173,472       5,307,500.95         442,291.75
7......................................................    350,408,314,337       4,887,037.94         407,253.16
8......................................................    316,955,750,074       4,420,485.23         368,373.77
9......................................................    312,687,014,481       4,360,950.47         363,412.54
10.....................................................    291,608,017,108       4,066,968.12         338,914.01
11.....................................................    285,766,444,467       3,985,497.49         332,124.79
12.....................................................    257,779,680,900       3,595,174.63         299,597.89
13.....................................................    220,269,528,700       3,072,031.97         256,002.66
14.....................................................    145,075,274,359       2,023,320.63         168,610.05
15.....................................................    141,826,246,034       1,978,007.42         164,833.95
16.....................................................    139,111,829,825       1,940,150.28         161,679.19
17.....................................................    126,903,666,123       1,769,886.75         147,490.56
18.....................................................    117,993,448,569       1,645,618.66         137,134.89
19.....................................................    109,530,158,500       1,527,583.73         127,298.64
20.....................................................    108,170,149,680       1,508,616.10         125,718.01
21.....................................................     94,948,734,900       1,324,221.06         110,351.76
22.....................................................     80,808,074,508       1,127,005.58          93,917.13
23.....................................................     77,877,312,671       1,086,131.14          90,510.93
24.....................................................     71,627,190,900         998,962.60          83,246.88
25.....................................................     65,979,744,166         920,199.38          76,683.28
26.....................................................     62,476,795,435         871,344.82          72,612.07
27.....................................................     59,962,856,615         836,283.68          69,690.31
28.....................................................     53,277,619,100         743,046.71          61,920.56
29.....................................................     48,251,539,722         672,949.52          56,079.13
30.....................................................     43,794,466,264         610,788.07          50,899.01
31.....................................................     40,818,110,970         569,277.75          47,439.81
32.....................................................     39,413,060,847         549,681.95          45,806.83
33.....................................................     25,642,997,831         357,635.07          29,802.92
34.....................................................     24,274,017,616         338,542.32          28,211.86
35.....................................................     24,265,127,300         338,418.33          28,201.53
36.....................................................     23,768,492,482         331,491.92          27,624.33
37.....................................................     20,802,708,100         290,129.03          24,177.42
38.....................................................     20,019,521,644         279,206.17          23,267.18
39.....................................................     18,035,978,054         251,542.29          20,961.86
40.....................................................     16,828,270,736         234,698.76          19,558.23
41.....................................................     16,627,104,316         231,893.16          19,324.43
42.....................................................     16,270,456,203         226,919.09          18,909.92
43.....................................................     15,560,896,419         217,023.08          18,085.26
44.....................................................     15,340,132,696         213,944.15          17,828.68
45.....................................................     14,357,387,825         200,238.11          16,686.51
46.....................................................     13,794,427,204         192,386.67          16,032.22

[[Page 33248]]

 
47.....................................................     10,844,249,411         151,241.44          12,603.45
48.....................................................     10,345,612,840         144,287.11          12,023.93
49.....................................................     10,047,142,100         140,124.43          11,677.04
50.....................................................      9,676,729,440         134,958.40          11,246.53
51.....................................................      9,525,189,150         132,844.91          11,070.41
52.....................................................      9,497,695,858         132,461.47          11,038.46
53.....................................................      9,141,959,858         127,500.13          10,625.01
54.....................................................      9,111,887,600         127,080.72          10,590.06
55.....................................................      8,246,296,500         115,008.58           9,584.05
56.....................................................      7,409,804,367         103,342.28           8,611.86
57.....................................................      5,943,333,522          82,889.86           6,907.49
58.....................................................      5,537,962,838          77,236.28           6,436.36
59.....................................................      4,969,306,436          69,305.40           5,775.45
60.....................................................      4,858,930,658          67,766.02           5,647.17
61.....................................................      4,724,287,600          65,888.20           5,490.68
62.....................................................      4,688,574,389          65,390.12           5,449.18
63.....................................................      4,619,665,921          64,429.07           5,369.09
64.....................................................      4,586,579,797          63,967.63           5,330.64
65.....................................................      4,552,355,173          63,490.31           5,290.86
66.....................................................      4,530,370,991          63,183.70           5,265.31
67.....................................................      4,432,887,822          61,824.14           5,152.01
68.....................................................      4,188,226,789          58,411.92           4,867.66
69.....................................................      4,095,928,162          57,124.66           4,760.39
70.....................................................      3,615,599,600          50,425.67           4,202.14
71.....................................................      3,411,736,434          47,582.45           3,965.20
72.....................................................      3,411,224,100          47,575.30           3,964.61
73.....................................................      3,290,953,800          45,897.93           3,824.83
74.....................................................      3,199,333,714          44,620.13           3,718.34
75.....................................................      2,924,604,582          40,788.57           3,399.05
76.....................................................      2,888,374,000          40,283.27           3,356.94
77.....................................................      2,839,512,902          39,601.82           3,300.15
78.....................................................      2,659,506,700          37,091.33           3,090.94
79.....................................................      2,537,489,086          35,389.59           2,949.13
80.....................................................      2,459,185,612          34,297.51           2,858.13
81.....................................................      2,395,884,300          33,414.67           2,784.56
82.....................................................      2,336,005,686          32,579.56           2,714.96
83.....................................................      2,328,536,077          32,475.38           2,706.28
84.....................................................      2,006,993,344          27,990.92           2,332.58
85.....................................................      1,991,341,100          27,772.63           2,314.39
86.....................................................      1,926,691,600          26,870.98           2,239.25
87.....................................................      1,818,491,446          25,361.95           2,113.50
88.....................................................      1,807,513,774          25,208.84           2,100.74
89.....................................................      1,798,384,897          25,081.53           2,090.13
90.....................................................      1,499,870,900          20,918.24           1,743.19
91.....................................................      1,407,921,581          19,635.85           1,636.32
92.....................................................      1,343,940,690          18,743.53           1,561.96
93.....................................................      1,292,476,485          18,025.78           1,502.15
94.....................................................      1,263,050,400          17,615.38           1,467.95
95.....................................................      1,259,148,848          17,560.97           1,463.41
96.....................................................      1,239,077,200          17,281.03           1,440.09
97.....................................................      1,229,508,300          17,147.58           1,428.96
98.....................................................      1,192,809,266          16,635.75           1,386.31
99.....................................................      1,161,692,310          16,201.77           1,350.15
100....................................................      1,103,718,859          15,393.23           1,282.77
101....................................................      1,036,854,477          14,460.69           1,205.06
102....................................................        903,767,212          12,604.57           1,050.38
103....................................................        764,853,800          10,667.18             888.93
104....................................................        749,409,514          10,451.79             870.98
105....................................................        736,464,500          10,271.25             855.94
106....................................................        579,536,030           8,082.61             673.55
107....................................................        574,150,273           8,007.50             667.29
108....................................................        554,402,371           7,732.08             644.34
109....................................................        528,767,825           7,374.56             614.55
110....................................................        475,219,998           6,627.75             552.31
111....................................................        439,220,400           6,125.67             510.47
112....................................................        403,544,995           5,628.12             469.01
113....................................................        389,096,923           5,426.62             452.22
114....................................................        352,562,888           4,917.09             409.76

[[Page 33249]]

 
115....................................................        324,569,237           4,526.67             377.22
116....................................................        287,942,268           4,015.84             334.65
117....................................................        279,648,356           3,900.17             325.01
118....................................................        268,773,558           3,748.50             312.38
119....................................................        242,088,969           3,376.34             281.36
120....................................................        240,735,871           3,357.47             279.79
121....................................................        227,696,800           3,175.62             264.63
122....................................................        223,889,862           3,122.52             260.21
123....................................................        219,207,411           3,057.22             254.77
124....................................................        215,960,600           3,011.94             250.99
125....................................................        208,506,846           2,907.98             242.33
126....................................................        177,727,500           2,478.71             206.56
127....................................................        175,224,523           2,443.80             203.65
128....................................................        156,286,900           2,179.69             181.64
129....................................................        150,735,418           2,102.26             175.19
130....................................................        148,742,902           2,074.47             172.87
131....................................................        119,952,427           1,672.94             139.41
132....................................................        118,614,304           1,654.28             137.86
133....................................................         95,597,569           1,333.27             111.11
134....................................................         85,976,961           1,199.09              99.92
135....................................................         81,558,800           1,137.48              94.79
136....................................................         73,755,556           1,028.65              85.72
137....................................................         73,265,165           1,021.81              85.15
138....................................................         70,050,100             976.97              81.41
139....................................................         57,611,957             803.50              66.96
140....................................................         50,604,392             705.76              58.81
141....................................................         42,751,230             596.24              49.69
142....................................................         41,893,367             584.27              48.69
143....................................................         36,371,376             507.26              42.27
144....................................................         34,981,349             487.87              40.66
145....................................................         34,223,462             477.30              39.78
146....................................................         32,885,122             458.64              38.22
147....................................................         32,396,791             451.83              37.65
148....................................................         28,510,532             397.63              33.14
149....................................................         23,936,450             333.83              27.82
150....................................................         23,569,357             328.71              27.39
151....................................................         20,131,196             280.76              23.40
152....................................................         19,520,773             272.25              22.69
153....................................................         14,373,735             200.47              16.71
154....................................................         14,322,926             199.76              16.65
155....................................................         12,213,708             170.34              14.20
156....................................................          6,548,894              91.34               7.61
157....................................................          6,017,900              83.93               6.99
158....................................................          3,678,840              51.31               4.28
159....................................................          3,035,249              42.33               3.53
160....................................................          2,036,500              28.40               2.37
161....................................................          1,670,000              23.29               1.94
162....................................................          1,498,709              20.90               1.74
163....................................................          1,106,266              15.43               1.29
164....................................................          1,085,833              15.14               1.26
165....................................................            656,400               9.15               0.76
166....................................................            456,577               6.37               0.53
167....................................................            355,000               4.95               0.41
168....................................................            205,844               2.87               0.24
169....................................................            189,206               2.64               0.22
170....................................................            100,000               1.39               0.12
171....................................................             78,367               1.09               0.09
172....................................................             50,000               0.70               0.06
173....................................................             49,658               0.69               0.06
174....................................................             19,500               0.27               0.02
175....................................................             10,000               0.14               0.01
176....................................................              4,200               0.06               0.00
177....................................................              2,200               0.03               0.00
178....................................................              1,379               0.02               0.00
179....................................................                300               0.00               0.00
180....................................................                225               0.00               0.00
181....................................................                125               0.00               0.00
182....................................................                 18               0.00               0.00

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    \78\ The Operating Committee recognizes that an Industry 
Member's knowledge of its own fees in the illustrative example would 
be helpful in analyzing the Executed Share Model. Accordingly, if a 
CBB or CBS is interested in learning which anonymized CBB or CBS in 
the illustrative example represents its volume and fees, the CBB or 
CBS may contact the FINRA CAT Helpdesk by email at 
[email protected]. Industry Members other than CBBs and CBSs will 
not be charged a fee under the Executed Share Model; however, CBBs 
and CBSs may choose to pass-through CAT fees to such Industry 
Members. Therefore, if an Industry Member other than a CBB or CBS is 
interested in learning its associated volume in the illustrative 
example and potential fee (assuming the CBB or CBS passes the fee 
through), the Industry Member may also contact the FINRA Helpdesk by 
email at [email protected]. Accordingly, subject to verification of 
the identity of the requesting party as an authorized representative 
of the relevant Industry Member, the Helpdesk will provide the 
authorized representative of the CBB or CBS with the number of the 
applicable anonymized CBB or CBS in Exhibit B. or the authorized 
representative of the Industry Member other than the CBB or CBS with 
its associated volume and potential pass-through fee from the 
illustrative example.

[FR Doc. 2022-11675 Filed 5-31-22; 8:45 am]
BILLING CODE 8011-01-P


