
[Federal Register Volume 88, Number 172 (Thursday, September 7, 2023)]
[Notices]
[Pages 61630-61641]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-19311]


=======================================================================
-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-98271; File No. 4-757]


Amended Order Directing the Exchanges and the Financial Industry 
Regulatory Authority, Inc., To File a National Market System Plan 
Regarding Consolidated Equity Market Data

September 1, 2023.
    Notice is hereby given that, pursuant to section 11A(a)(3)(B) of 
the Securities Exchange Act of 1934 (``Act''),\1\ the Securities and 
Exchange Commission (``Commission'') orders the Cboe BYX Exchange, Inc. 
(``Cboe BYX''); Cboe BZX Exchange, Inc. (``Cboe BZX''); Cboe EDGA 
Exchange, Inc. (``Cboe EDGA''); Cboe EDGX Exchange, Inc. (``Cboe 
EDGX''); Cboe Exchange, Inc. (``Cboe''); Investors Exchange LLC; Long 
Term Stock Exchange, Inc.; MEMX LLC; MIAX PEARL, LLC; Nasdaq BX, Inc. 
(``Nasdaq BX''); Nasdaq ISE, LLC (``Nasdaq ISE''); Nasdaq PHLX LLC 
(``Nasdaq PHLX''); Nasdaq Stock Market LLC (``Nasdaq''); New York Stock 
Exchange LLC (``NYSE''); NYSE American LLC (``NYSE American''); NYSE 
Arca, Inc. (``NYSE Arca''); NYSE Chicago, Inc. (``NYSE Chicago''); NYSE 
National, Inc. (``NYSE National''); and Financial Industry Regulatory 
Authority, Inc. (each a ``Participant'' or a ``Self-Regulatory 
Organization'' (``SRO'') and, collectively, the ``Participants'' or the 
``SROs'') to act jointly in developing and filing with the Commission a 
proposed new single national market system plan (``Revised New 
Consolidated Data Plan'') regarding consolidated equity market data. 
The Revised New Consolidated Data Plan shall be filed with the 
Commission pursuant to Rule 608 of Regulation NMS \2\ no later than 
October 23, 2023.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78k-1(a)(3)(B).
    \2\ 17 CFR 242.608.

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

[[Page 61631]]

I. Background

    On May 6, 2020, the Commission issued an order (``Governance 
Order'') directing the SROs to submit a new national market system plan 
(``NMS plan'') regarding consolidated equity market data to replace the 
three NMS plans (``Equity Data Plans'') \3\ that govern the public 
dissemination of real-time consolidated market data for national market 
system stocks (``NMS stocks'').\4\ The Governance Order, which 
explained the Commission's justification for action, directed that the 
new NMS plan include specified provisions designed to, among other 
things, address concerns identified by the Commission and the public 
with respect to the governance of the Equity Data Plans.\5\
---------------------------------------------------------------------------

    \3\ The three Equity Data Plans that currently govern the 
collection, consolidation, processing, and dissemination of 
consolidated equity market data via the exclusive securities 
information processors (``SIPs'') are: (1) the Consolidated Tape 
Association Plan; (2) the Consolidated Quotation Plan; and (3) the 
Joint Self-Regulatory Organization Plan Governing the Collection, 
Consolidation, and Dissemination of Quotation and Transaction 
Information for Nasdaq-Listed Securities Traded on Exchanges on an 
Unlisted Trading Privileges Basis.
    \4\ See Order Directing the Exchanges and the Financial Industry 
Regulatory Authority to Submit a New National Market System Plan 
Regarding Consolidated Equity Market Data, Securities Exchange Act 
Release No. 88827 (May 6, 2020), 85 FR 28702 (May 13, 2020) (File 
No. 4-757).
    \5\ See Governance Order, supra note 4, 85 FR at 28729-31. 
Nasdaq, Nasdaq BX, Nasdaq PHLX, NYSE, NYSE American, NYSE Arca, NYSE 
Chicago, NYSE National, Cboe BYX, Cboe BZX, Cboe EDGA, Cboe EDGX, 
and Cboe filed petitions with the U.S. Court of Appeals for the 
District of Columbia Circuit (``D.C. Circuit'') for review of the 
Governance Order. These petitions were dismissed. See The Nasdaq 
Stock Market, et al. vs. SEC, 1 F.4th 34 (D.C. Cir. 2021). Nasdaq, 
Nasdaq BX, and Nasdaq PHLX also filed a motion with the Commission 
to stay the effect of the Governance Order while their petition was 
pending before the D.C. Circuit, and the Commission denied this 
motion. See Order Denying Stay, Securities Exchange Act Release No. 
89066 (June 12, 2020), 85 FR 36921 (June 18, 2020) (File No. 4-757).
---------------------------------------------------------------------------

    On August 11, 2020, the SROs filed a proposed NMS plan pursuant to 
the Governance Order, and the Commission published notice of the 
proposed plan (``CT Plan'') for comment in the Federal Register on 
October 13, 2020.\6\ After instituting proceedings with respect to the 
proposed CT Plan,\7\ the Commission ultimately approved, as modified, 
the CT Plan on August 6, 2021.\8\
---------------------------------------------------------------------------

    \6\ See Joint Industry Plan; Notice of Filing of a National 
Market System Plan Regarding Consolidated Equity Market Data, 
Securities Exchange Act Release No. 90096 (Oct. 6, 2020), 85 FR 
64565 (Oct. 13, 2020) (File No. 4-757) (``CT Plan Notice'').
    \7\ See Order Instituting Proceedings to Determine Whether to 
Approve or Disapprove a National Market System Plan Regarding 
Consolidated Equity Market Data, Securities Exchange Act Release No. 
90885 (Jan. 11, 2021), 86 FR 4142 (Jan. 15, 2021) (File No. 4-757).
    \8\ See Joint Industry Plan; Order Approving, as Modified, a 
National Market System Plan Regarding Consolidated Equity Market 
Data, Securities Exchange Act Release No. 92586 (Aug. 6, 2021), 86 
FR 44142 (Aug. 11, 2021) (File No. 4-757) (``CT Plan Approval 
Order'').
---------------------------------------------------------------------------

    A group of SROs associated with Nasdaq, the NYSE, and Cboe 
petitioned the D.C. Circuit for review of the Commission's action, 
challenging three aspects of the Governance Order and the CT Plan 
Approval Order: (1) the inclusion of non-SRO representatives as voting 
members of the CT Plan's operating committee; (2) the grouping of SROs 
by corporate affiliation for voting; and (3) the requirement that the 
CT Plan's administrator be independent of any SRO that sells its own 
proprietary equity market data.\9\
---------------------------------------------------------------------------

    \9\ See The Nasdaq Stock Market LLC, et al. v. Securities and 
Exchange Commission, 38 F.4th 1126, 1131 (D.C. Cir. 2022) (``Nasdaq 
v. SEC''). The petitioning exchanges were Nasdaq, Nasdaq BX, Nasdaq 
PHLX, NYSE, NYSE American, NYSE Arca, NYSE Chicago, NYSE National, 
Cboe BYX, Cboe BZX, Cboe EDGA, Cboe EDGX, and Cboe. The petitioning 
exchanges also filed a motion with the Commission seeking a stay of 
the effect of CT Plan Approval Order pending final resolution of 
their petitions before the D.C. Circuit, which the Commission 
denied. See Order Denying Stay, Securities Exchange Release No. 
93051 (Sept. 17, 2021), 86 FR 52933 (Sept. 23, 2021) (File No. 4-
757). The petitioning exchanges also filed for and, on Oct. 13, 
2021, received a stay of the CT Plan Approval Order from the D.C. 
Circuit. See Nasdaq v. SEC, 38 F.4th at 1135.
---------------------------------------------------------------------------

    On July 5, 2022, the D.C. Circuit granted the exchanges' petition 
with respect to the inclusion of non-SRO voting members on the CT Plan 
operating committee, but denied the petition with respect to the other 
challenged aspects of the Governance Order and the CT Plan Approval 
Order, upholding the Commission's actions with respect to requiring 
voting by SRO group and requiring an independent administrator.\10\ The 
court vacated the CT Plan Approval Order in full, but ``sever[ed] only 
those parts of the Governance Order directing [the SROs] to include 
non-SRO representation in its proposed plan, leaving the remainder in 
place.'' \11\
---------------------------------------------------------------------------

    \10\ See Nasdaq v. SEC, 38 F.4th at 1131.
    \11\ Id. at 1145.
---------------------------------------------------------------------------

    In light of the court's decision, the Commission now directs the 
SROs to file a Revised New Consolidated Data Plan, consistent with the 
provisions described below in this Amended Order. With the exception of 
the topics addressed in this Amended Order, the Commission finds that 
those provisions of the CT Plan approved in 2021 that were not 
challenged, as well as those that were challenged but found by the 
court to be permissible, continue to be appropriate. And, given the 
limited topics addressed by this Amended Order, the Commission believes 
that the SROs should be able to rely on a substantial portion of the 
proposed CT Plan previously filed pursuant to the Governance Order. As 
a result, the Commission believes that the SROs should be able to file 
a proposed Revised New Consolidated Data Plan within 45 days after 
publication of this Amended Order in the Federal Register.

II. Discussion

    In accordance with the D.C. Circuit's ruling, the Commission is 
modifying the Governance Order to remove the provisions regarding the 
participation of non-SRO representatives as members of the operating 
committee of the Revised New Consolidated Data Plan and to make 
conforming changes. Additionally, the Commission is including further 
requirements that are appropriate to ensure that the Amended Order is 
consistent with the court's ruling.\12\ Finally, based on its 
reconsideration of the public comments received regarding the CT 
Plan,\13\ the Commission is requiring the SROs to include certain 
additional requirements for the Revised New Consolidated Data Plan.
---------------------------------------------------------------------------

    \12\ The Commission has also added MIAX PEARL, LLC to the list 
of the SROs to which this Amended Order is addressed. Since the 
Governance Order was issued in May 2020, see Governance Order, supra 
note 4, MIAX PEARL, LLC became a national securities exchange that 
trades equity securities. See Order Approving a Proposed Rule 
Change, as Modified by Amendment No. 1, to Establish Rules Governing 
the Trading of Equity Securities, Securities Exchange Act Release 
No. 89563 (Aug. 14, 2020), 85 FR 51510 (Aug. 20, 2020) (File No. SR-
PEARL-2020-03).
    \13\ The comment letters submitted in response to the NMS plan 
previously proposed by the SROs are available at: https://www.sec.gov/comments/4-757/4-757.htm.
---------------------------------------------------------------------------

A. Modifications in Response to the D.C. Circuit's Ruling

    First, the Commission is modifying the voting provision of the 
Governance Order.\14\ The Governance Order provided that action by the 
operating committee of the new NMS plan would require an ``augmented 
majority vote'' that reflected the inclusion of non-SRO voting 
representatives on the operating committee of the new NMS plan.\15\ The 
``augmented majority vote'' would have required that all actions under 
the terms of the new NMS plan, except the

[[Page 61632]]

selection of Non-SRO Members and decisions to enter into an SRO-only 
executive session, would be required to be authorized by a two-thirds 
vote of the new NMS plan's operating committee, provided that this 
included a majority vote of the SRO members of the operating 
committee.\16\ In light of the D.C. Circuit's ruling, there will no 
longer be non-SRO members on the operating committee and the Commission 
is modifying the voting provisions of the Governance Order to require 
that action by the operating committee would require a two-thirds 
majority of the votes allocated to the SROs. For the same reasons as 
stated in the Governance Order,\17\ the Commission believes that the 
requirement for a two-thirds majority strikes an appropriate balance 
between ensuring that plan action has broad support among members of 
the operating committee while also preventing a single SRO group or 
unaffiliated SRO from vetoing plan action. Moreover, requiring a two-
thirds, rather than a simple, majority of SRO votes, in conjunction 
with allocating votes by exchange group,\18\ prevents a small number of 
SRO groups from dictating plan action without further support from 
other SRO members. It is therefore consistent with the Commission's 
rationale that the exchange-group voting provisions would address the 
``disproportionate influence that the exchange groups have on the 
governance of the Equity Data Plans.'' \19\
---------------------------------------------------------------------------

    \14\ As stated by the D.C. Circuit, the ``augmented majority 
vote'' provision of the Governance Order, absent revision, would 
require, in light of the court's ruling regarding non-SRO 
participants on the operating committee, ``both a two-thirds 
majority and a simple majority vote of approval by the SROs alone.'' 
Nasdaq v. SEC, 38 F.4th at 1144 (emphasis in original).
    \15\ See Governance Order, supra note 4, 85 FR at 28720-22, 
28730.
    \16\ See id.
    \17\ See id. at 28722.
    \18\ The Governance Order provided that each exchange group and 
unaffiliated SRO shall have only one vote on the operating committee 
of the new NMS plan, with a second vote allocated to an exchange 
group or unaffiliated SRO whose market center(s) have consolidated 
equity market share of more than 15 percent during four of the six 
calendar months preceding a vote of the operating committee. See id. 
at 28714, 27829-30; see also Nasdaq v. SEC, 38 F.4th at 1139-42, 
1145 (upholding provisions of the Governance Order that require the 
new NMS Plan to allocate votes by exchange group).
    \19\ See Governance Order, supra note 4, 85 FR at 28714.
---------------------------------------------------------------------------

    Second, because non-SRO representatives will no longer be required 
to be included as voting members of the operating committee of the 
Revised New Consolidated Data Plan, the Commission is modifying the 
Governance Order's requirements to provide that the Revised New 
Consolidated Data Plan must provide for participation by non-SROs in 
the operation of the plan as members of an advisory committee. This is 
consistent with the current practice of the existing Equity Data Plans 
under Regulation NMS.\20\ And the Commission finds that this 
modification is appropriate for the reasons discussed in the Regulation 
NMS Adopting Release regarding non-SRO advisory committees.\21\ The 
Commission believes that the Revised New Consolidated Data Plan should 
provide for at least the same non-SRO involvement as the existing 
Equity Data Plans. But, for the same reasons stated in the Governance 
Order,\22\ the composition of the advisory committee of the Revised New 
Consolidated Data Plan should reflect the same categories of market 
participants that, under the Governance Order, would have been the non-
SRO voting representatives on the Operating Committee,\23\ rather than 
the current composition of the non-SRO advisory committees of the 
Equity Data Plans.\24\ The Commission continues to believe, as 
explained in the Governance Order,\25\ that an operating committee that 
is exposed to views from this selection of non-SRO market participants 
``will reflect a more diverse set of perspectives from a range of 
market participants, including significant subscribers of SIP core data 
products.'' \26\
---------------------------------------------------------------------------

    \20\ See, e.g., Regulation NMS, Securities Exchange Act Release 
No. 51808 (June 9, 2005), 70 FR 37495, 37610 (June 29, 2005) (File 
No. S7-10-04) (``Regulation NMS Adopting Release'').
    \21\ See id. at 37561.
    \22\ See Governance Order, supra note 4, 85 FR at 28717-18.
    \23\ See id. at 28717-18, 28730.
    \24\ The Commission has stated that creation of the advisory 
committees for the Equity Data Plans was ``a useful first step 
toward improving the responsiveness of Plan participants and the 
efficiency of Plan operations and that it would ``continue to 
monitor and evaluate Plan developments to determine whether any 
further action is warranted.'' Id. at 28722 (citing Regulation NMS 
Adopting Release, supra note 20, 70 FR at 37561). In the Governance 
Order, after considering recent developments in the equity markets, 
the Commission determined to, among other things, provide for 
representation of a different set of non-SRO representatives in the 
operation of the Equity Data Plans. See id. at 28717-18.
    \25\ See id. at 28717-18 (discussing the categories of non-SRO 
representatives).
    \26\ Id. at 28715.
---------------------------------------------------------------------------

    And third, because non-SRO members will no longer be required to be 
included as voting members of the operating committee of the Revised 
New Consolidated Data Plan, the Commission is modifying the provision 
of the Governance Order regarding the use of executive session to refer 
to the exclusion of members of the advisory committee rather than of 
Non-SRO Voting Representatives, and to delete an example of an 
appropriate topic for executive session that anticipated that Non-SRO 
Voting Representatives would be members of the operating committee.\27\ 
Additionally, because it will be important for non-SRO advisory 
committee members to have transparency into operating committee 
discussions as intended under the NMS plans, the Commission is 
requiring that the Revised New Consolidated Data Plan limit the use of 
executive sessions to identified circumstances in which it is 
appropriate to exclude members of the advisory committee. Finally, the 
SRO participants in the plan are obligated to comply with the terms of 
the Revised New Consolidated Data Plan.\28\ Separately, we note that 
Commission staff would be able to attend executive sessions of the 
operating committee and thereby would have an opportunity to observe 
the use of executive session.
---------------------------------------------------------------------------

    \27\ The Governance Order stated that executive session would be 
permitted for ``discussions regarding matters that exclusively 
affect the SROs with respect to the Commission's oversight of the 
New Consolidated Data Plan (including attorney-client communications 
relating to such matters).'' Id. at 28726-27, 28730 (emphasis 
added).
    \28\ See Rule 608(c) of Regulation NMS, 17 CFR 242.608(c).
---------------------------------------------------------------------------

B. Further Requirements for the Revised New Consolidated Data Plan

    Based on its reconsideration of the comments received regarding the 
CT Plan that was previously filed by the SROs,\29\ the Commission is 
also adding certain requirements for the Revised New Consolidated Data 
Plan. Specifically, the Revised New Consolidated Plan must include: (1) 
a date certain by which the Revised New Consolidated Data Plan will 
become fully effective, together with a prescribed timeline specifying 
the actions or steps necessary to fully implement the Revised New 
Consolidated Data Plan and the dates by which these actions and steps 
must be completed, as well as a requirement for providing periodic 
progress reports ; (2) a requirement that all persons who attend 
operating committee meetings on behalf of an SRO (whether or not they 
are voting representatives) be subject to the plan's conflicts-of-
interest and confidentiality provisions or policies; (3) specified 
provisions regarding the sharing of protected information; and (4) 
specified provisions regarding the use of subcommittees.
---------------------------------------------------------------------------

    \29\ See supra note 13.
---------------------------------------------------------------------------

1. Implementation
    The SROs shall include in their proposed plan a date certain by 
which the Revised New Consolidated Data Plan will become fully 
effective, together with a prescribed timeline specifying the actions 
or steps necessary to fully implement the proposed plan

[[Page 61633]]

and the dates by which these actions and steps will be completed. The 
proposed CT Plan filed by the SROs contained no deadline or timeline 
for implementation, providing only that the plan would become operative 
on the first day of the month that is at least 90 days after a series 
of actions (which lacked their own deadlines) had taken place.\30\ And, 
in response to the notice of the proposed CT Plan, the Commission 
received a number of comments calling for the Commission to modify the 
CT Plan to establish specified timeframes for actions necessary to 
render the CT Plan effective or operative.\31\ These commenters stated 
that the absence of specified timeframes and deadlines in the CT Plan 
would cause the SROs to unduly delay its implementation.\32\ A number 
of commenters also supported the Commission's imposing a one-year 
deadline for the CT Plan to become fully operational.\33\
---------------------------------------------------------------------------

    \30\ See CT Plan Notice, supra note 6, 85 FR at 64566.
    \31\ See, e.g., Letter from Ellen Greene, Managing Director, 
Equity and Options Market Structure, SIFMA (Nov. 12, 2020) (``SIFMA 
Letter I''), at 3; Letter from Ellen Greene, Managing Director, 
Equity and Options Market Structure, SIFMA (Feb. 18, 2021) (``SIFMA 
Letter II''), at 2; Letter from Michael Blasi, SVP, Enterprise 
Infrastructure, and Krista Ryan, VP, Associate General Counsel, 
Fidelity Investments (Nov. 12, 2020) (``Fidelity Letter''), at 2-3; 
Letter from John Ramsay, Chief Market Policy Officer, IEX (Nov. 13, 
2020) (``IEX Letter''), at 1-2; Letter from Rich Steiner, Head of 
Client Advocacy and Market Innovation, RBC Capital Markets (Nov. 12, 
2020) (``RBC Letter''), at 4; Letter from Thomas M. Merritt, Deputy 
General Counsel, Virtu Financial, Inc. (Nov. 11, 2020) (``Virtu 
Letter''), at 2; Letter from Jeffrey T. Brown, Senior Vice 
President, Legislative and Regulatory Affairs, Charles Schwab & Co., 
Inc. (Nov. 12, 2020) (``Schwab Letter I''), at 2; Letter from 
Jeffrey T. Brown, Senior Vice President, Legislative and Regulatory 
Affairs, Charles Schwab & Co., Inc. (Feb. 11, 2021) (``Schwab Letter 
II''), at 5; Letter from Joe Wald, Managing Director, Co-Head of 
Electronic Trading, and Ray Ross, Managing Director, Co-Head of 
Electronic Trading, BMO Capital Markets Group (Nov. 18, 2020) (``BMO 
Letter I''), at 2-3; Letter from Joe Wald, Managing Director, Co-
Head of Electronic Trading, and Ray Ross, Managing Director, Co-Head 
of Electronic Trading, BMO Capital Markets Group (Feb. 19, 2021) 
(``BMO Letter II''), at 2; Letter from Anders Franzon, General 
Counsel, MEMX (Feb. 5, 2021) (``MEMX Letter''), at 2-3; Letter from 
Hubert De Jesus, Managing Director, Global Head of Market Structure 
and Electronic Trading, and Samantha DeZur, Director, Global Public 
Policy, BlackRock (Feb. 5, 2021) (``BlackRock Letter II''), at 2; 
Letter from Jennifer W. Han, Managing Director & Counsel, Regulatory 
Affairs, Managed Funds Association (Nov. 18, 2020) (``MFA Letter''), 
at 4-5.
    \32\ See, e.g., IEX Letter, supra note 31, at 1; MFA Letter, 
supra note 31, at 5; BMO Letter I, supra note 31, at 2; BMO Letter 
II, supra note 31, at 2; Fidelity Letter, supra note 31, at 3; 
Letter from Dorothy Donohue, Deputy General Counsel, Securities 
Regulation, Investment Company Institute (Nov. 12, 2020) (``ICI 
Letter I''), at 6-7; Letter from Dorothy Donohue, Deputy General 
Counsel, Securities Regulation, Investment Company Institute (Feb. 
5, 2021) (``ICI Letter II''), at 2; RBC Letter, supra note 31, at 3; 
Letter from Kelvin To, Founder and President, Data Boiler 
Technologies, LLC (Nov. 12, 2020) (``Data Boiler Letter I''), at 20.
    \33\ See SIFMA Letter I, supra note 31, at 3; SIFMA Letter II, 
supra note 31, at 2; Fidelity Letter, supra note 31, at 4; IEX 
Letter, supra note 31, at 2; RBC Letter, supra note 31, at 4; Virtu 
Letter, supra note 31, at 2; Schwab Letter I, supra note 31, at 2; 
Schwab Letter II, supra note 31, at 5; BMO Letter I, supra note 31, 
at 2; MEMX Letter, supra note 31, at 2-3; BlackRock Letter II, supra 
note 31, at 2.
---------------------------------------------------------------------------

    Other commenters argued that there is no reasonable way for the 
Commission to impose deadlines on any part of the process.\34\ One 
commenter stated that the Commission was ``vastly underestimating'' the 
amount of time needed to implement the new CT Plan, particularly given 
the Commission's requirements with respect to an Administrator and a 
new fee schedule.\35\ One commenter argued that any deadline the 
Commission set would be ``inherently arbitrary'' and would do nothing 
to move the project forward, cautioning that, ``rushing to complete an 
inherently complex project may result in costly errors.'' \36\ Another 
commenter discussed the complexity and uncertainty of determining fees, 
selecting an independent administrator through a request-for-proposal 
(``RFP'') process, and negotiating new contracts with processors, data 
vendors and subscribers.\37\ This commenter stated that because the RFP 
process is ``so specialized and idiosyncratic,'' there is ``no way to 
reasonably impose time limits on any part of that process, let alone a 
time limit for the entire process overall.'' \38\
---------------------------------------------------------------------------

    \34\ See Letter from Joan C. Conley, Senior Vice President and 
Corporate Secretary, Nasdaq, at 10 (Nov. 12, 2020) (``Nasdaq Letter 
I); Letter from Erika Moore, Vice President and Corporate Secretary, 
Nasdaq, at 2 (Feb. 5, 2021) (``Nasdaq Letter II''); Letter from 
Elizabeth K. King, Chief Regulatory Officer, ICE, General Counsel 
and Corporate Secretary, NYSE, at 33 (Nov. 16, 2020) (``NYSE Letter 
I''); Letter from Patrick Sexton, EVP, General Counsel & Corporate 
Secretary, Cboe Global Markets, Inc., at 5 (Nov. 12, 2020) (``Cboe 
Letter'').
    \35\ Cboe Letter, supra note 34, at 6.
    \36\ Nasdaq Letter I, supra note 34, at 11.
    \37\ See NYSE Letter I, supra note 34, at 33-35. This commenter 
further states that the 90-day period between the finalization of 
earlier actions and the operational date is ``prudent'' and is the 
current industry standard for announcing the implementation of 
changes to market data plans. See id. at 35-36.
    \38\ Id. at 35. This commenter stated that OPRA's process to 
select a processor took two years even though OPRA ultimately 
decided to retain the same processor and cited the CAT NMS Plan for 
the risk that a selected administrator might be unable to perform 
the necessary functions, requiring that the RFP process be repeated. 
See id.
---------------------------------------------------------------------------

    The Commission believes that requiring the SROs to include in the 
Revised New Consolidated Data Plan a date certain by which the plan 
will be fully implemented, together with a prescribed timeline 
specifying the actions or steps necessary to fully implement the 
Revised New Consolidated Data Plan and the dates by which these actions 
and steps must be completed, will facilitate implementation of the plan 
by providing clear direction to the operating committee of the Revised 
New Consolidated Data Plan and greater certainty for other industry 
participants.\39\ The Commission further believes that requiring a date 
certain for implementation and a prescribed timeline is important 
because implementation of the Revised New Consolidated Data Plan is 
critical to reducing existing redundancies, inefficiencies, and 
inconsistencies in the current Equity Data Plans and to modernizing 
plan governance,\40\ and because the Commission agrees with comments 
that the absence of specified deadlines would likely cause undue delay 
in implementing the new plan.\41\ While the Commission recognizes the 
challenges associated with identifying and completing the actions or 
steps necessary for implementation of the Revised New Consolidated Data 
Plan, the Commission also believes that the SROs that will be the plan 
participants have the relevant expertise and experience--both with 
respect to operating NMS plans generally and with respect to the 
dissemination of equity market data specifically--to establish 
deadlines for fully implementing the Revised New Consolidated Data Plan 
within a reasonable, specified length of time.
---------------------------------------------------------------------------

    \39\ See, e.g., CT Plan Approval Order, supra note 8, 86 FR at 
44147, 44207 (specifying deadlines for the completion of 
intermediate steps and for the full implementation of the CT Plan), 
vacated on other grounds, Nasdaq v. SEC, 38 F.4th 1126.
    \40\ See, e.g., Governance Order, supra note 4, 85 FR at 28703-
05, 28711.
    \41\ See, e.g., IEX Letter, supra note 31, at 1; MFA Letter, 
supra note 31, at 5; BMO Letter I, supra note 31, at 2; BMO Letter 
II, supra note 31, at 2; Fidelity Letter, supra note 31, at 3; ICI 
Letter I, supra note 32, at 6-7; ICI Letter II, supra note 32, at 2; 
RBC Letter, supra note 31, at 3.
---------------------------------------------------------------------------

    In particular, the Commission found in the Governance Order that 
the SROs could provide ``unique insight in formulating the terms and 
conditions of the New Consolidated Data Plan,'' \42\ even as it also 
highlighted the inherent conflicts of interest faced by SROs in the 
operation of the existing plans.\43\ The Commission disagrees with the 
comments that there is no reasonable way to impose deadlines on any 
part of the process to implement the Revised New Consolidated Data 
Plan,\44\ and

[[Page 61634]]

instead believes--consistent with the views of other market 
participants,\45\ including market participants that have experience 
with the operation of the current Equity Data Plans \46\--that the SROs 
should be able to draw from their experience in operating the existing 
Equity Data Plans, including supervising or serving as the 
administrators of the Equity Data Plans, to complete the specific 
actions or steps needed to implement the Revised New Consolidated Data 
Plan within a specified timeframe. Moreover, the proposed plan filed by 
the SROs will be published for comment, providing any interested 
persons, including users of consolidated equity market data, with the 
opportunity to comment on, among other things, the proposed timeline.
---------------------------------------------------------------------------

    \42\ Governance Order, supra note 4, 85 FR at 28711.
    \43\ See, e.g., id. at 28713.
    \44\ See Nasdaq Letter I, supra note 34, at 10; Nasdaq Letter 
II, supra note 34, at 2; NYSE Letter I, supra note 34, at 33; Cboe 
Letter, supra note 34, at 5.
    \45\ See supra notes 31-33 and accompanying text.
    \46\ See IEX Letter, supra note 31, at 2; MEMX Letter, supra 
note 31, at 2-3.
---------------------------------------------------------------------------

    Finally, the Revised New Consolidated Data Plan shall include a 
requirement that the operating committee of the Revised New 
Consolidated Data Plan provide written progress reports to the 
Commission, and to make these reports publicly available on the Revised 
New Consolidated Data Plan's website,\47\ beginning three months after 
the formation of the operating committee and continuing every three 
months until the Revised New Consolidated Data Plan has been fully 
implemented.\48\ These reports would be required to address the actions 
undertaken and provide a detailed description of the progress made 
toward completing each of the identified actions or steps with respect 
to implementation of the Revised New Consolidated Data Plan.\49\ The 
Commission shares commenters' views that periodic reports would provide 
transparency with respect to the progress made to satisfy the 
requirements of the plan, which would benefit not only the Commission 
but also interested market participants.\50\ The requirement to provide 
progress reports in writing to the Commission every three months and to 
make them publicly available on the Revised New Consolidated Plan's 
website is designed to help ensure that affected market participants 
are informed about the status of the actions or steps that are taken to 
implement the Revised New Consolidated Data Plan. Providing periodic 
updates to the Commission should also facilitate the operating 
committee's progress in completing the interim steps towards satisfying 
the longer-range requirements.
---------------------------------------------------------------------------

    \47\ See 17 CFR 242.608(a)(8)(i).
    \48\ See, e.g., CT Plan Approval Order, supra note 8, 86 FR at 
44149, 44207 (requiring that the operating committee of the CT Plan 
provide quarterly written progress reports), vacated on other 
grounds, Nasdaq v. SEC, 38 F.4th 1126.
    \49\ For each action or step in progress during a given three-
month period, the progress report generally should include: (1) the 
date by which the action or step is scheduled to be completed; (2) 
the currently targeted completion date; and (3) a description of (a) 
the current status of the action or step, (b) any difference between 
the scheduled completion date and the currently targeted completion 
date, including the basis for making the adjustment on any other 
action or step, and (c) any other factual indicators that 
demonstrate the current level of completion with respect to the 
action or step.
    \50\ See Fidelity Letter, supra note 31, at 3; IEX Letter, supra 
note 31, at 2; BMO Letter I, supra note 31, at 3; BMO Letter II, 
supra note 31, at 2; ICI Letter I, supra note 32, at 7. While one of 
these commenters urged the Commission to provide financial 
incentives to the SROs either through fines or through not allowing 
the SROs to collect SIP fees for some period of time, see id. at 7, 
the Commission believes that the required progress reports and the 
involvement of the operating committee should be sufficient to 
ensure timely implementation of the Revised New Consolidated Data 
Plan.
---------------------------------------------------------------------------

    The Commission believes that the required frequency of the progress 
reports--one report every three months--should be sufficient to 
identify in a timely manner any notable delays in completing the 
specified interim actions or steps needed to satisfy the deadlines to 
be established for Revised New Consolidated Data Plan implementation 
without imposing unnecessary burdens on efforts to implement the plan. 
The Commission believes that this requirement should not be overly 
burdensome to the operating committee or distract from its performance 
of the specified actions required by the Revised New Consolidated Data 
Plan because the progress reports would essentially reflect the 
analysis the operating committee would need to undertake in any event 
for its diligent oversight of the implementation process.
2. Application of the Conflicts-of-Interest and Confidentiality 
Provisions or Policies to All SRO Personnel Who Attend Plan Meetings
    The Revised New Consolidated Data Plan shall require that any 
persons designated by an SRO to attend meetings of the operating 
committee or any subcommittee will be subject to the same conflicts-of-
interest and confidentiality provisions or policies that apply to 
voting SRO representatives.
    Contemporaneously with issuing the Governance Order, the Commission 
issued two sets of orders approving, as modified, proposed amendments 
to the conflicts-of-interest policies of the Existing Data Plans 
(``Conflicts of Interest Policy Approval Orders''),\51\ and proposed 
amendments to the confidentiality policies of the Existing Data Plans 
(``Confidentiality Policy Approval Orders'').\52\ The Governance Order 
provided that the SROs must include in the new NMS plan (a) 
``provisions designed to address conflicts of interest . . . as 
outlined in the Conflicts of Interest Policy Approval Orders'' \53\; 
and (b) ``provisions designed to protect confidential and proprietary 
information from misuse as outlined in the Confidentiality Policy 
Approval Orders.'' \54\
---------------------------------------------------------------------------

    \51\ See Securities Exchange Act Release No. 88823 (May 6, 
2020), 85 FR 28046 (May 12, 2020) (File No. SR-CTA/CQ-2019-01) 
(approving, as modified, proposed amendments to the conflicts-of-
interest policies of the CTA/CQ Plans); Securities Exchange Act 
Release No. 88824 (May 6, 2020), 85 FR 28119 (May 12, 2020) (File 
No. S7-24-89) (approving, as modified, proposed amendments to the 
conflicts-of-interest policy of the UTP Plan).
    \52\ See Securities Exchange Act Release No. 88825 (May 6, 
2020), 85 FR 28090 (May 12, 2020) (File No. SR-CTA/CQ-2019-04) 
(approving, as modified, proposed amendments to the confidentiality 
policies of the CTA/CQ Plans) (``CTA/CQ Confidentiality Order''); 
Securities Exchange Act Release No. 88826 (May 6, 2020), 85 FR 28069 
(May 12, 2020) (File No. S7-24-89) (approving, as modified, proposed 
amendments to the confidentiality policy of the UTP Plan) (``UTP 
Confidentiality Order'').
    \53\ See Governance Order, supra note 4, 85 FR at 28730.
    \54\ Id.
---------------------------------------------------------------------------

    In the proposed CT Plan, the SROs proposed that each SRO member of 
a CT Plan would be able to designate a ``Member Observer,'' meaning 
``any individual, other than a Voting Representative, that a Member, in 
its sole discretion, determines is necessary in connection with such 
[SRO's] compliance with its obligations under Rule 608(c) of Regulation 
NMS to attend Operating Committee and subcommittee meetings.'' \55\
---------------------------------------------------------------------------

    \55\ See CT Plan Notice, supra note 6, 85 FR at 64576 (emphasis 
added).
---------------------------------------------------------------------------

    In response to the proposed CT Plan, several commenters supported 
extending the conflicts-of-interest policy to include Member 
Observers.\56\ Specifically, these commenters recommended that all 
observers be subject to the conflicts of interest policy and procedures 
of the CT Plan.\57\ In contrast, one commenter objected to the 
application of the conflicts of interest policy to Member Observers, 
stating that most Member Observers are employees of the SRO charged 
with that SRO's compliance obligations under Rule

[[Page 61635]]

608(c), and as such are already included in the conflict-of-interest 
disclosures of the SRO.\58\ The commenter further argued that the 
identity and affiliation of a Member Observer would be disclosed in 
meeting minutes and that reasonable questions regarding the Member 
Observer's affiliation could be addressed at the operating committee 
meeting.\59\
---------------------------------------------------------------------------

    \56\ See RBC Letter, supra note 31; ICI Letter I, supra note 32; 
Fidelity Letter, supra note 31.
    \57\ See RBC Letter, supra note 31, at 8-9; ICI Letter I, supra 
note 32, at 5; Fidelity Letter, supra note 31, at 5.
    \58\ See Nasdaq Letter I, supra note 34, at 27.
    \59\ See id.
---------------------------------------------------------------------------

    The Commission believes that the provisions or policies of the 
Revised New Consolidated Data Plan regarding disclosures of potential 
conflicts of interest, as well as recusals, should apply to any person, 
including a ``Member Observer'' or the equivalent, who attends any 
meetings of the operating committee or any of its subcommittees on 
behalf of an SRO, because the potential conflicts of interests that 
apply to an SRO would apply equally to such a person.\60\ The 
Commission does not agree with the view that all relevant information 
regarding such a person would necessarily be included in the 
disclosures of the related SRO, because, for example, the SRO 
disclosures under the proposed CT Plan would have required only the 
names of the voting representative and any alternate voting 
representative designated by the SRO.
---------------------------------------------------------------------------

    \60\ See, e.g., CT Plan Approval Order, supra note 8, 86 FR at 
44180-82, 44222 (modifying the proposed CT Plan to apply the 
provisions regarding disclosure of conflicts of interest and 
recusals to ``Member Observers''), vacated on other grounds, Nasdaq 
v. SEC, 38 F.4th 1126.
---------------------------------------------------------------------------

    Additionally, all persons who attend meetings of the Revised New 
Consolidated Data Plan on behalf of an SRO may have access to 
competitively sensitive and commercially valuable information related 
to the plan. Thus, a ``Member Observer'' or other exchange 
representative who is responsible for and has a financial interest 
(including compensation) in an exchange's proprietary market data 
products would have an inherent conflict of interest.\61\ For these 
reasons, the Commission believes that the conflicts of interest and 
recusals provisions and policies of the Revised New Consolidated Data 
Plan should explicitly apply to Member Observers or other persons who 
attend any meetings of the new plan on behalf of an SRO. In particular, 
this requirement is appropriate because it will prohibit an SRO from 
appointing as a voting representative, ``Member Observer,'' or other 
role with respect to the Revised New Consolidated Data Plan a person 
who is responsible for or involved with the procurement for, or 
development, modeling, pricing, licensing, or sale of, proprietary data 
products offered to customers of the Revised New Consolidated Data 
Plan's feeds if that person has a financial interest (including 
compensation) that is tied directly to the SRO's market data business 
or the procurement of market data, and if that compensation would cause 
a reasonable objective observer to expect the compensation to affect 
the impartiality of the representative.\62\
---------------------------------------------------------------------------

    \61\ See CT Plan Approval Order, supra note 8, 86 FR at 44181, 
vacated on other grounds, Nasdaq v. SEC, 38 F.4th. 1126.
    \62\ See CT Plan Approval Order, supra note 8, 86 FR at 44181-
82, vacated on other grounds, Nasdaq v. SEC, 38 F.4th. 1126.
---------------------------------------------------------------------------

    Finally, while the Commission, as it did in the Governance 
Order,\63\ is requiring the SROs to include in the Revised New 
Consolidated Data Plan provisions designed to address conflicts of 
interest as outlined in the Conflicts of Interest Policy Approval 
Orders,\64\ the Commission is also, based on its experience with the 
operations of the Equity Data Plans, requiring that the Revised New 
Consolidated Data Plan incorporate a modified version of one of those 
provisions. The Conflicts of Interest Policy Approval Orders contain 
the following requirement:
---------------------------------------------------------------------------

    \63\ See Governance Order, supra note 4, 85 FR at 28730.
    \64\ See Conflicts of Interest Policy Approval Orders, supra 
note 51.

    A Disclosing Party may not appoint as its representative a 
person that is responsible for or involved with the development, 
modeling, pricing, licensing, or sale of proprietary data products 
offered to customers of a securities information processor if the 
person has a financial interest (including compensation) that is 
tied directly to the exchange's proprietary data business and if 
that compensation would cause a reasonable objective observer to 
expect the compensation to affect the impartiality of the 
representative.\65\
---------------------------------------------------------------------------

    \65\ See Conflicts of Interest Policy Approval Orders, supra 
note 51, 85 FR at 28056-57, 85 FR at 28129.

    The Commission believes that the term ``licensing'' with respect to 
proprietary data products should explicitly include all functions 
related to monitoring or ensuring a subscriber's compliance with the 
terms of the license contained in its data subscription agreement, 
including the auditing of subscriber data usage and payment. The 
Commission believes that persons who are involved with regulatory 
compliance, auditing, or similar responsibilities with respect to 
subscriber data usage and payment for exchange proprietary data 
products are subject to the same conflicts of interest as persons who 
directly market to, or negotiate licensing or subscription agreements 
with, subscribers of proprietary data products. Therefore, the 
Commission is requiring that the Revised New Consolidated Data Plan 
contain a provision that a person subject to the new plan's disclosure 
and recusal provisions may not appoint as its representative a person 
that is responsible for or involved with the development, modeling, 
pricing, licensing (including all functions related to monitoring or 
ensuring a subscriber's compliance with the terms of the license 
contained in its data subscription agreement and all functions relating 
to the auditing of subscriber data usage and payment), or sale of 
proprietary data products offered to customers of a securities 
information processor if the person has a financial interest (including 
compensation) that is tied directly to the exchange's proprietary data 
business and if that compensation would cause a reasonable objective 
observer to expect the compensation to affect the impartiality of the 
representative.
3. Sharing of Protected Information
    As noted above,\66\ in the Governance Order, the Commission 
required the SROs to submit an NMS plan that included ``provisions 
designed to protect confidential and proprietary information from 
misuse as outlined in the Confidentiality Policy Approval Orders.'' 
\67\
---------------------------------------------------------------------------

    \66\ See supra note 54 and accompanying text.
    \67\ See Governance Order, supra note 4, 85 FR at 28730.
---------------------------------------------------------------------------

    In response to the proposed CT Plan, some commenters opposed 
language in the required confidentiality policy that they said limited 
a Covered Person's ability to disclose to others, including agents, 
Restricted Information and Highly Confidential Information.\68\ 
Generally, these commenters stated that the restriction was broad and 
would impede the ability of the plan administrator and processors to 
perform tasks--such as hiring independent auditors and outside counsel 
to perform administrative functions--necessary for an SRO to comply 
with its obligations pursuant to Rule 608.\69\ For example,

[[Page 61636]]

these commenters argued that for the administrator to provide services 
to the CT Plan, such as audited financial statements, the administrator 
must be able to provide Restricted Information and Highly Confidential 
Information to an independent auditor, but would be restricted from 
doing so under the CT Plan's confidentiality policy.\70\ One commenter 
argued that the policies are impermissibly vague.\71\ Another commenter 
recommended that the Commission eliminate or substantially modify the 
prohibition on providing confidential information to agents.\72\
---------------------------------------------------------------------------

    \68\ See NYSE Letter I, supra note 34, at 15, 23; Nasdaq Letter 
I, supra note 34, at 4-6. The terms Covered Person, Restricted 
Information, Highly Confidential Information, and Confidential 
Information were defined in the confidentiality policies approved 
for the Existing Data Plans, as modified, in the Confidentiality 
Policy Approval Orders. See supra note 52.
    \69\ See NYSE Letter I, supra note 34, at 23-24; Letter from 
Elizabeth K. King, Chief Regulatory Officer, ICE, General Counsel 
and Corporate Secretary, NYSE, at 5 (Feb. 4, 2021) (``NYSE Letter 
II''); Nasdaq Letter I, supra note 34, at 5-6; Cboe Letter, supra 
note 34, at 8 (stating that policy could be read to prohibit the 
sharing of certain types of confidential information with outside 
legal counsel, auditors, or other service providers that have a need 
to access that information).
    \70\ See NYSE Letter I, supra note 34, at 23-24. See also Nasdaq 
Letter I, supra note 34, at 6 (stating that its auditors have 
expressed concerns about whether the policy is consistent with 
professional obligations that require them to subject their work to 
peer review and that may therefore require making Restricted or 
Highly Confidential Information available to persons who are not 
Covered Persons).
    \71\ See Cboe Letter, supra note 34, at 7-8 (arguing that the 
policies would limit access to certain confidential information to 
the particular individual who is representing an SRO and would 
further limit the ability of an individual SRO representative to 
share information and consult with other employees of the SRO that 
is the actual plan participant).
    \72\ See NYSE Letter I, supra note 34, at 24; NYSE Letter II, 
supra note 69, at 5.
---------------------------------------------------------------------------

    After considering these comments, the Commission believes that it 
is appropriate for the Revised New Consolidated Data Plan to provide 
for additional sharing of protected information in certain 
circumstances beyond those specifically provided for in the 
Confidentiality Policy Approval Orders, as discussed below.\73\
---------------------------------------------------------------------------

    \73\ See Confidentiality Policy Approval Orders, supra note 54.
---------------------------------------------------------------------------

(a) Restricted Information
    As discussed above, commenters on the CT Plan raised concerns that 
the confidentiality policy improperly limits the plan administrator's 
and processors' ability to share Restricted Information with others, 
including agents, impeding the ability of an agent to perform its 
specific services to the plan. The Commission has reconsidered these 
commenters' concerns and believes that it is appropriate to permit such 
disclosure when the operating committee of the Revised New Consolidated 
Data Plan, consistent with the purposes and goals of the plan, 
determines that it is appropriate to do so, because there may be 
instances in which Restricted Information would be required to be 
disclosed to a Covered Person or third party in the service of the 
plan.\74\ Accordingly, the Revised New Consolidated Data Plan shall 
provide that the operating committee may authorize the disclosure of 
specified Restricted Information to identified Covered Persons or third 
parties, if it determines that doing so is in furtherance of the 
interests of the plan. Further, the Revised New Consolidated Data Plan 
shall provide that such authorization will be granted on a case-by-case 
basis, unless the operating committee grants standing approval to allow 
disclosure of specified recurring information to identified Covered 
Persons. This requirement is appropriate because it is responsive to 
comments about the appropriate limits regarding such information and 
promotes efficiency by allowing for the disclosure of Restricted 
Information to identified Covered Persons on an ongoing basis, where 
appropriate, without having to continually seek operating committee 
approval.
---------------------------------------------------------------------------

    \74\ The requirements discussed in this section regarding 
Restricted Information are consistent with the modifications the 
Commission made to the confidentiality policy of the CT Plan. See CT 
Plan Approval Order, supra note 8, 86 FR at 44185, 44223-24, vacated 
on other grounds, Nasdaq v. SEC, 38 F.4th. 1126.
---------------------------------------------------------------------------

    Finally, the Revised New Consolidated Data Plan shall require that 
Covered Persons and third parties that receive or have access to 
Restricted Information pursuant to authorization from the operating 
committee must segregate the information, retain it in confidence, and 
use it only in a manner consistent with the terms of the 
confidentiality policy. The Commission continues to believe that 
``Restricted Information, including personally identifiable 
information, customer-specific financial information, and audit 
information, is highly sensitive to such a degree that its possession 
and use should be tightly controlled.'' \75\ This requirement is 
appropriate because limiting access to and the use of Restricted 
Information will reduce the risk that highly sensitive customer and 
personally identifiable information is misused.
---------------------------------------------------------------------------

    \75\ CTA/CQ Confidentiality Order, supra note 52, 85 FR at 
28099; UTP Confidentiality Order, supra note 52, 85 FR at 28077.
---------------------------------------------------------------------------

(b) Highly Confidential Information
    As noted above, some commenters stated that the Confidentiality 
Policy would preclude SROs from fulfilling their obligations under the 
securities laws. Specifically, commenters argued that the SROs--not the 
individual voting representatives--have responsibilities under the Act 
and rules of the Commission and must be able to determine what 
information is available to individuals within an SRO in order to 
satisfy the SRO's regulatory obligations.\76\ Another commenter stated 
that under the proposed confidentiality policy an SRO's senior 
management would not be able to access information that may be 
necessary to make informed decisions related to the CT Plan if that 
information is determined to be Highly Confidential Information or 
Confidential Information.\77\ This commenter stated that, for example, 
an SRO's senior management would be denied access to privileged 
information, which is classified as Highly Confidential Information, 
and therefore prevented from participating in decisions regarding legal 
strategy and litigation involving the CT Plan or regulatory 
interactions with the Commission.\78\ Thus, these commenters stated 
that the Commission may not approve an NMS plan that prohibits SROs' 
senior management from having access to information that may be 
necessary to their informed decision-making related to regulatory 
obligations.\79\
---------------------------------------------------------------------------

    \76\ See NYSE Letter I, supra note 34, at 16-17; NYSE Letter II, 
supra note 69, at 4-5; Nasdaq Letter I, supra note 34, at 3.
    \77\ See NYSE Letter I, supra note 34, at 17.
    \78\ See id. at 17.
    \79\ See id.; NYSE Letter II, supra note 69, at 5; see also 
Nasdaq Letter I, supra note 34, at 3.
---------------------------------------------------------------------------

    In response to commenters' concerns regarding the provisions 
governing disclosure of Highly Confidential Information, the Commission 
stated in the CT Plan Approval Order that the proposed language of the 
CT Plan was too general to provide a meaningful limitation on the 
sharing of commercially sensitive information or to provide useful 
guidance regarding what disclosures would be permissible, and the 
Commission continues to believe that the Revised New Consolidated Data 
Plan must clearly specify the instances in which Highly Confidential 
Information is permitted to be shared.\80\ The Commission believes that 
a general prohibition on sharing, paired with specific instances of 
permissible sharing, which are discussed below, would establish clear 
and limited circumstances for appropriate permitted disclosure of 
Highly Confidential Information.
---------------------------------------------------------------------------

    \80\ See CT Plan Approval Order, supra note 8, 86 FR at 44186, 
vacated on other grounds, Nasdaq v. SEC, 38 F.4th. 1126. The 
requirements discussed in this section regarding Highly Confidential 
Information are consistent with the modifications the Commission 
made to the confidentiality policy of the CT Plan. See id. at 44186-
87, 44223-24.
---------------------------------------------------------------------------

    In addition to disclosures that are required by applicable law,\81\ 
the

[[Page 61637]]

Commission believes that SRO voting representatives on the operating 
committee of the Revised New Consolidated Data Plan should be permitted 
to share Highly Confidential Information with officers or agents of 
their SRO under certain circumstances. Specifically, SRO voting 
representatives should be able to share certain types of Highly 
Confidential Information with officers of their SRO who have direct or 
supervisory responsibility for the SRO's participation in the Revised 
New Consolidated Data Plan, or with agents for the SRO supporting the 
SRO's participation, provided that such information may not be used in 
the procurement for, or development, modeling, pricing, licensing, or 
sale of, proprietary data products. This requirement is appropriate 
because it recognizes that certain officers and agents of an SRO may 
require relevant plan information in order to comply with regulatory 
obligations. However, the Commission remains ``concerned about the 
possibility of a Participant exchange obtaining commercially valuable 
data and information through its affiliates and employees that have 
responsibilities to the Plans, and then using that information and/or 
sharing it with employees or affiliates of the Participant exchange to 
benefit the exchange's proprietary data businesses.'' \82\ In 
particular, because Highly Confidential Information contains highly 
sensitive and entity-specific information,\83\ the Commission believes 
that both access to and use of such information should be limited to 
reduce the likelihood that Highly Confidential Plan Information will be 
used to promote the commercial interests of an SRO participant. 
Therefore, the Commission believes that access to Highly Confidential 
Information should be limited to officers of an SRO who have a direct 
or supervisory responsibility for the SRO's participation in the plan, 
or with agents for the SRO that support the SRO's participation in the 
plan, and that the information shared must not be used in the 
procurement for, or development, modeling, pricing, licensing, or sale 
of, proprietary data products.
---------------------------------------------------------------------------

    \81\ As defined in the proposed CT Plan in Article I, Section 
1.1(e), ``Applicable Law'' would mean ``all applicable provisions of 
(a) constitutions, treaties, statutes, laws (including the common 
law), rules, regulations, decrees, ordinances, codes, proclamations, 
declarations or orders of any Governmental Authority; (b) any 
consents or approvals of any Governmental Authority; and (c) any 
orders, decisions, advisory or interpretative opinions, injunctions, 
judgments, awards, decrees of, or agreements with, any Governmental 
Authority.'' CT Plan Notice, supra note 6, 85 FR at 64575.
    \82\ CTA/CQ Confidentiality Order, supra note 52, 85 FR at 
28093; UTP Confidentiality Order, supra note 52, 85 FR at 28071.
    \83\ See, e.g., CTA/CQ Confidentiality Order, supra note 52, 85 
FR at 28098; UTP Confidentiality Order, supra note 52, 85 FR at 
28077.
---------------------------------------------------------------------------

    Additionally, the Commission believes that it is appropriate to 
identify the types of Highly Confidential Information permitted to be 
disclosed by the SRO voting representative as: (i) the plan's contract 
negotiations with the Processor(s) or Administrator; (ii) 
communications with, and work product of, counsel to the plan; and 
(iii) information concerning personnel matters that affect the 
employees of the SRO or of the plan. The Commission believes that an 
SRO voting representative should be permitted to share the contract 
negotiations with the processor(s) or administrator because the SRO 
will directly interact with the processor(s) and administrator pursuant 
to such contracts and would need to know the terms and conditions to 
ensure that it complies with the requirements of the plan. Similarly, 
the Commission believes that SRO voting representatives should be 
permitted to share communications and work product of counsel to the 
plan with officers of their SRO because counsel would be representing 
the SROs, and SRO officers who have a direct or supervisory 
responsibility for the SRO's participation in the plan would need to be 
informed in order to provide relevant information to counsel or to make 
decisions related to plan matters. The Commission further believes that 
information regarding personnel matters that affect the employees of an 
SRO should be permitted to be shared with officers of that SRO and for 
information regarding personnel matters that affect the employees of 
the plan to be shared with officers of all of the SROs, because the 
SROs are responsible for the oversight of their own employees, and they 
will collectively be responsible for the operations of the plan, 
including oversight of plan employees.\84\ Therefore, officers of an 
SRO responsible for compliance with the terms of the Revised New 
Consolidated Data Plan and Rule 608 would need to be aware of the 
personnel information described above.
---------------------------------------------------------------------------

    \84\ For example, if the operating committee of the plan became 
aware that the employee of an SRO had improperly disclosed or made 
use of customer-specific financial information, the Commission 
believes that the voting representative of that SRO should be 
permitted to inform officers of that SRO of the relevant facts. 
Similarly, if the operating committee became aware that a plan 
employee had engaged in similar conduct, the Commission believes 
that the officers of all the SROs should be permitted to be informed 
of the relevant facts.
---------------------------------------------------------------------------

    The Commission, however, does not believe that SRO voting 
representatives should be permitted to share with officers or agents of 
their SRO information concerning customers or the intellectual property 
of other SROs or customers. The Commission does not believe that SRO 
officers or agents require detailed audit information regarding 
individual customers' use of and payment for consolidated data--highly 
sensitive information that may be commercially valuable--to comply with 
the provisions of the Revised New Consolidated Data Plan or with their 
regulatory obligations under the plan. In addition, the Commission 
believes that such aggregated information about usage of and payment 
for consolidated market data (for example, information about the number 
of users, amount of usage, and fees received for individual 
consolidated data products) should not be shared because, while it 
would not disclose the usage and payment of individual users, it would 
contain valuable information about demand for and profitability of 
consolidated data products, which could be used to market competing 
proprietary market data products to individual subscribers. Further, as 
the Commission has stated, personally identifiable information, 
customer-specific financial information, and audit information is 
highly sensitive to such a degree that its possession and use should be 
tightly controlled.\85\ Additionally, the Commission does not believe 
that officers or agents of an SRO would require information concerning 
the intellectual property of another SRO to fulfill its obligations 
under the plan. SROs are in competition with each other, and sharing 
such information would not be in furtherance of the purposes of the 
Revised New Consolidated Data Plan.
---------------------------------------------------------------------------

    \85\ See, e.g., CTA/CQ Confidentiality Order, supra note 52, 85 
FR at 28099; UTP Confidentiality Order, supra note 52, 85 FR at 
28077.
---------------------------------------------------------------------------

    The Commission also believes that Covered Persons who receive or 
have access to Highly Confidential Information as described above 
should be required to segregate the information, retain it in 
confidence, and use it only in a manner consistent with the terms of 
the confidentiality provisions or policies of the Revised New 
Consolidated Data Plan. The Commission believes that these requirements 
would help to ensure that Highly Confidential Information is not made 
available to persons who are not authorized to have access to the 
information and that Highly Confidential Information that has been 
shared in a permissible manner is not misused (such as in the 
development or

[[Page 61638]]

marketing of an SRO's proprietary market data products).
    Further, the Commission believes that an SRO voting representative 
who discloses Highly Confidential Information as described above should 
be required to maintain a log documenting each instance of such 
disclosure, including the information shared, the persons receiving the 
information, and the date the information was shared. The Commission 
believes that the requirement to log the sharing of Highly Confidential 
Information would provide greater transparency and accountability 
regarding the sharing of this information because the log would assist 
compliance personnel at the SRO in ensuring that the SRO is complying 
with the terms of the plan that limit the sharing of Highly 
Confidential Information.\86\
---------------------------------------------------------------------------

    \86\ Under Rule 608(c), 17 CFR 242.608(c), an SRO is required to 
comply with the terms of NMS plans of which it is a participant. 
Additionally, as a record of the SRO under Rule 17a-1, 17 CFR 
240.17a-1, the log would also be available to the Commission and its 
staff in the context of an examination or investigation of, for 
example, the SRO's compliance with the terms of the Revised New 
Consolidated Data Plan.
---------------------------------------------------------------------------

    The Commission similarly believes that the Revised New Consolidated 
Data Plan should allow the operating committee of the plan to authorize 
the disclosure of specified Highly Confidential Information to 
identified third parties that are acting as agents of the plan. The 
Commission believes that this provision is appropriate because certain 
agents of the plan may at times require protected information to make 
informed decisions regarding the plan and to assist a SRO's compliance 
with its regulatory obligations. The Commission believes that such 
authorization should be permitted only on a case-by-case basis, unless 
the operating committee grants standing approval to allow disclosure of 
specified recurring information to identified third parties. The 
Commission further believes that the Revised New Consolidated Data Plan 
should require that third parties that receive or have access to Highly 
Confidential Information segregate the information, retain it in 
confidence, and use it only in a manner consistent with the terms of 
the confidentiality provisions or policies.\87\ The Commission believes 
that these requirements are appropriate because they are designed to 
ensure that the disclosed information is properly protected and not 
misused and because they would promote an efficient process by allowing 
for the ongoing disclosure of Highly Confidential Information to an 
identified agent without having to continually seek operating committee 
approval.
---------------------------------------------------------------------------

    \87\ For example, the operating committee, when granting access 
to Highly Confidential Information to a third party (other than the 
Commission), could accomplish this by requiring the recipient to 
sign an agreement to abide by these requirements for storage and 
restrictions on use.
---------------------------------------------------------------------------

(c) Confidential Information
    One commenter on the proposed CT Plan stated that the 
confidentiality policy would imply that ``Confidential Information 
cannot be shared at all, or at a minimum, casts substantial doubt on 
what can be shared.'' \88\ The commenter stated that the proposed 
provision impedes the functioning of the national market system and 
asked the Commission to eliminate or substantially modify the 
restriction and solicit comment.\89\
---------------------------------------------------------------------------

    \88\ NYSE Letter I, supra note 34, at 24.
    \89\ See id.
---------------------------------------------------------------------------

    In response to this commenter's concern and consistent with the 
discussion above, as well as the CT Plan Approval Order,\90\ the 
Commission continues to believe that the Revised New Consolidated Data 
Plan should permit Covered Persons to disclose Confidential Information 
only to other persons who need to receive that information to fulfill 
their responsibilities pursuant to the Revised New Consolidated Data 
Plan, including oversight of the plan.\91\ The Commission believes that 
this requirement is appropriate because, consistent with the current 
practices of the Equity Data Plans, financial information necessary for 
the leadership of an SRO to make decisions regarding the SRO's 
participation in the Revised New Consolidated Data Plan--namely, 
information regarding plan expenses and revenues--would be designated 
as Confidential and thus permitted to be shared. Consistent with other 
confidentiality provision requirements discussed above, the Commission 
also believes that the Revised New Consolidated Data Plan should be 
required to ensure that recipients of Confidential Information 
segregate the information, retain it in confidence, and use it only in 
a manner consistent with the terms of the confidentiality provisions or 
policies of the Revised New Consolidated Data Plan.
---------------------------------------------------------------------------

    \90\ See CT Plan Approval Order, supra note 8, 86 FR at 44188.
    \91\ The requirements discussed in this section regarding 
Confidential Information are consistent with the modifications the 
Commission made to the confidentiality policy of the CT Plan. See CT 
Plan Approval Order, supra note 8, 86 FR at 44188, 44223-24, vacated 
on other grounds, Nasdaq v. SEC, 38 F.4th 1126.
---------------------------------------------------------------------------

    Consistent with the CT Plan Approval Order, the Commission 
continues to believe that the operating committee should also be 
permitted to authorize the sharing of Confidential Information.\92\ The 
Commission believes that such authorization should be permitted only on 
a case-by-case basis, unless the operating committee of the Revised New 
Consolidated Data Plan grants standing approval to allow disclosure of 
specified recurring information to identified Covered Persons. These 
requirements are appropriate because expressly including these 
requirements for handling Confidential Information would provide 
additional safeguards regarding disclosure of Confidential Information 
and help to guard against misuse of this information for commercial or 
other purposes.
---------------------------------------------------------------------------

    \92\ See CT Plan Approval Order, supra note 8, 86 FR at 44188.
---------------------------------------------------------------------------

4. Use of Subcommittees
    One commenter on the CT Plan stated that the activities of 
subcommittees under the CT Plan would lack transparency and 
accountability.\93\ The Commission continues to believe that, as it 
stated in the CT Plan Approval Order, ``the activities of the CT Plan's 
Operating Committee's subcommittees, if any, should be transparent to 
the Operating Committee,'' \94\ and that transparency ``should help to 
ensure that the subcommittee furthers the objectives of'' the Revised 
New Consolidated Data Plan.\95\ The Commission believes that this 
transparency would both facilitate a meaningful role for members of the 
advisory committee and support Commission oversight of the Revised New 
Consolidated Data Plan's operations.
---------------------------------------------------------------------------

    \93\ See RBC Letter, supra note 31, at 8.
    \94\ CT Plan Approval Order, supra note 8, 86 FR at 44177, 
vacated on other grounds, Nasdaq v. SEC, 38 F.4th 1126.
    \95\ Id.
---------------------------------------------------------------------------

    Therefore, the Revised New Consolidated Data Plan shall require 
that all subcommittees prepare minutes of all meetings and make those 
minutes available to all members of the operating committee and the 
advisory committee.\96\ The Commission believes that this requirement 
would provide for transparency and accountability to members of both 
the operating committee and the advisory committee regarding the 
operation of subcommittees. In addition, for each meeting of a legal 
subcommittee, the Commission believes that the plan

[[Page 61639]]

should require that the minutes include (i) attendance at the meeting; 
(ii) the subject matter of each item discussed; (iii) sufficient non-
privileged information to identify the rationale for referring the 
matter to the legal subcommittee, and (iv) the privilege or privileges 
claimed with respect to that item. The Commission believes that 
including in the minutes of legal subcommittee meetings these elements 
of information--similar to those required for privilege logs--would 
provide for transparency and accountability to members of both the 
operating committee and the advisory committee regarding the use of the 
legal subcommittee, while including features designed to help preserve, 
to the extent appropriate, the SROs' attorney-client privilege with 
respect to discussions at legal subcommittee meetings by making the 
information required to be included in the minutes consistent with what 
might be required to be contained in a privilege log.
---------------------------------------------------------------------------

    \96\ See, e.g., id. at 8 (calling for the CT Plan to keep 
minutes and distribute them to the Operating Committee of the CT 
Plan to increase transparency and accountability).
---------------------------------------------------------------------------

    The Commission also believes that the Revised New Consolidated Data 
Plan's use of subcommittees should not be permitted to undermine the 
role of the independent administrator. Therefore, the Commission is 
requiring that the terms of the Revised New Consolidated Data Plan 
exclude from the functions that may be delegated to a subcommittee 
those administrative functions to be performed by the independent 
administrator. The functions delegated to the independent 
administrator--particularly those that involve administering vendor and 
subscriber contracts, performing audits, or assessing fees--necessarily 
involve access to sensitive information of significant commercial or 
competitive value and therefore raise heightened concerns about 
conflicts of interest. These functions should therefore be retained by 
the independent administrator, which will be subject to enhanced 
isolation from those conflicts of interest--namely, the requirement 
that the independent administrator be independent of any SRO that sells 
its own proprietary equity market data.\97\
---------------------------------------------------------------------------

    \97\ The Commission continues to believe, as it stated in the CT 
Plan Approval Order, that the independence requirement ``separate[s] 
the independent Administrator from an exchange's commercial 
interests and allow[s] it to focus on the regulatory objectives of 
section 11A of the Act.'' CT Plan Approval Order, supra note 8, 86 
FR at 44196 (quoting Governance Order, supra note 4, 85 FR at 
28723), vacated on other grounds,Nasdaq v. SEC, 38 F.4th 1126.
---------------------------------------------------------------------------

III. The Revised New Consolidated Data Plan

    The Commission hereby orders the Participants in the Equity Data 
Plans to jointly develop and file with the Commission, as an NMS plan 
pursuant to Rule 608(a) of Regulation NMS,\98\ a single Revised New 
Consolidated Data Plan that replaces the three current Equity Data 
Plans and that includes, at a minimum, the terms and conditions set 
forth below:
---------------------------------------------------------------------------

    \98\ 17 CFR 242.608(a). The Revised New Consolidated Data Plan, 
or any amendment thereto, must comply with the requirements of Rule 
608 of Regulation NMS, including the requirement in Rule 608(a) to 
include an analysis of the impact on competition. Id.
---------------------------------------------------------------------------

     The Revised New Consolidated Data Plan shall provide for 
the orderly transition of functions and responsibilities from the three 
existing Equity Data Plans and shall provide that dissemination of, and 
fees for, SIP data will continue to be governed by the provisions of 
the Equity Data Plans until the Revised New Consolidated Data Plan is 
ready to assume responsibility for the dissemination of SIP data and 
fees of the Revised New Consolidated Data Plan have become effective.
     The Revised New Consolidated Data Plan shall provide a 
date certain by which it will be fully implemented and shall include a 
timeline specifying the actions or steps necessary to implement the 
Revised New Consolidated Data Plan, including the dates by which these 
actions and steps will be completed.\99\
---------------------------------------------------------------------------

    \99\ The Commission has added this new requirement for the 
Revised New Consolidated Data Plan based on its reconsideration of 
the comments received regarding the CT Plan that was previously 
filed by the SROs. The Commission's rationale for this new 
requirement is discussed above in Section II.B.1.
---------------------------------------------------------------------------

     The operating committee of the Revised New Consolidated 
Data Plan shall--beginning three months after the formation of the 
operating committee and continuing every three months until the Revised 
New Consolidated Data Plan has been fully implemented--provide written 
progress reports to the Commission every three months regarding the 
actions undertaken and provide a detailed description of the progress 
made toward completing each of the identified actions or steps required 
to fully implement the Revised New Consolidated Data Plan and shall 
make these reports publicly available on the Revised New Consolidated 
Plan's website.\100\
---------------------------------------------------------------------------

    \100\ The Commission has modified this requirement for the 
Revised New Consolidated Data Plan based on its reconsideration of 
the comments received regarding the CT Plan that was previously 
filed by the SROs. The Commission's rationale for this amended 
requirement is discussed above in Section II.B.1.
---------------------------------------------------------------------------

     The Revised New Consolidated Data Plan shall provide that 
each exchange group and unaffiliated SRO will be entitled to name a 
member of the operating committee who will be authorized to cast one 
vote on all operating committee matters pertaining to the operation and 
administration of the Revised New Consolidated Data Plan, provided that 
a member representing an exchange group or an unaffiliated SRO whose 
market center(s) have consolidated equity market share of more than 15 
percent during four of the six calendar months preceding a vote of the 
operating committee will be authorized to cast two votes, and provided 
that a member representing an exchange that has ceased operations as an 
equity trading venue, or has yet to commence operation as an equity 
trading venue, will not be permitted to cast a vote on Revised New 
Consolidated Data Plan matters.
     The Revised New Consolidated Data Plan shall include 
provisions to address circumstances in which a member is unable to 
attend an operating committee meeting or to cast a vote on a matter.
     The Revised New Consolidated Data Plan shall provide that 
all actions under the terms of the Revised New Consolidated Data Plan, 
except the selection of Advisory Committee members and the decision to 
enter into an executive session, will be required to be authorized by a 
two-thirds majority of the votes allocated to the operating committee.
     The Revised New Consolidated Data Plan shall provide for a 
non-voting Advisory Committee to be selected by majority vote of the 
operating committee. The Advisory Committee shall consist of 
individuals representing each of the following categories: an 
institutional investor, a broker-dealer with a predominantly retail 
investor customer base, a broker-dealer with a predominantly 
institutional investor customer base, a securities market data vendor, 
an issuer of NMS stock, and a person who represents the interests of 
retail investors (``retail representative''), provided that the 
representatives of the securities market data vendor and the issuer are 
not permitted to be affiliated or associated with an SRO, a broker-
dealer, or an investment adviser with third-party clients. The retail 
representative shall have experience working with or on behalf of 
retail investors and have the requisite background and professional 
experience to understand the interests of retail investors, the work of 
the operating committee of the Revised New Consolidated Data Plan, and 
the role of market data in the U.S. equity market. The retail 
representative shall not be affiliated with an SRO or a broker-dealer.

[[Page 61640]]

     The Revised New Consolidated Data Plan shall provide that 
the responsibilities of the operating committee will include:
    [cir] Proposing amendments to the Revised New Consolidated Data 
Plan or implementing other policies and procedures as necessary to 
ensure prompt, accurate, reliable, and fair collection, processing, 
distribution, and publication of information with respect to quotations 
for and transactions in NMS stocks and the fairness and usefulness of 
the form and content of that information;
    [cir] Selecting, overseeing, specifying the role and 
responsibilities of, and evaluating the performance of, an independent 
plan administrator, plan processors, an auditor, and other professional 
service providers, provided that any expenditures for professional 
services that are paid for from Revised New Consolidated Data Plan 
revenues must be for activities consistent with the terms of the 
Revised New Consolidated Data Plan and must be authorized by the 
operating committee;
    [cir] Developing and maintaining fair and reasonable fees and 
consistent terms for the distribution, transmission, and aggregation of 
core data;
    [cir] Reviewing the performance of the plan processors; and 
ensuring the public reporting of plan processors' performance and other 
metrics and information about the plan processors;
    [cir] Assessing the marketplace for equity market data products and 
ensuring that SIP data offerings are priced in a manner that is fair 
and reasonable, and designed to ensure the widespread availability of 
SIP data to investors and market participants; and
    [cir] Designing a fair and reasonable revenue allocation formula 
for allocating plan revenues to be applied by the independent plan 
administrator, and overseeing, reviewing and revising that formula as 
needed.
     The Revised New Consolidated Data Plan shall provide that 
the independent plan administrator will not be owned or controlled by a 
corporate entity that, either directly or via another subsidiary, 
offers for sale its own proprietary market data product for NMS stocks.
     The Revised New Consolidated Data Plan shall include 
provisions designed to address the conflicts of interest of members as 
outlined in the Conflicts of Interest Policy Approval Orders.\101\ 
These disclosure and recusal provisions shall apply to any person 
designated by an SRO to attend meetings of the operating committee or 
any of its subcommittees, and they shall include a provision that a 
person subject to the disclosure and recusal provisions may not appoint 
as its representative a person that is responsible for or involved with 
the development, modeling, pricing, licensing (including all functions 
related to monitoring or ensuring a subscriber's compliance with the 
terms of the license contained in its data subscription agreement and 
all functions relating to the auditing of subscriber data usage and 
payment), or sale of proprietary data products offered to customers of 
a securities information processor if the person has a financial 
interest (including compensation) that is tied directly to the 
exchange's proprietary data business and if that financial interest 
would cause a reasonable objective observer to expect the compensation 
to affect the impartiality of the representative.\102\
---------------------------------------------------------------------------

    \101\ The term ``Conflicts of Interest Policy Approval Orders'' 
refers to Securities Exchange Act Releases Nos. 88823 (May 6, 2020), 
85 FR 28046 (May 12, 2020) (File No. SR-CTA/CQ-2019-01); and 88824 
(May 6, 2020), 85 FR 28119 (May 12, 2020) (File No. S7-24-89). See 
Governance Order, supra note 4, 85 FR at 28725 & n.326.
    \102\ The Commission has modified this requirement for the 
Revised New Consolidated Data Plan based on its reconsideration of 
the comments received regarding the CT Plan that was previously 
filed by the SROs and on its experience with the operations of the 
Equity Data Plans. The Commission's rationale for the amendments to 
this requirement is discussed above in Section II.B.2.
---------------------------------------------------------------------------

     The Revised New Consolidated Data Plan shall include 
provisions designed to protect confidential and proprietary information 
from misuse as outlined in the Confidentiality Policy Approval 
Orders,\103\ with the following requirements: \104\
---------------------------------------------------------------------------

    \103\ The term ``Confidentiality Policy Approval Orders'' refers 
to Securities Exchange Act Release Nos. 88825 (May 6, 2020), 85 FR 
28090 (May 12, 2020) (File No. SR-CTA/CQ-2019-04); and 88826 (May 6, 
2020), 85 FR 28069 (May 12, 2020) (File No. S7-24-89). See 
Governance Order, supra note 4, 85 FR at 28726 & n.340.
    \104\ The Commission has modified this requirement for the 
Revised New Consolidated Data Plan based on its reconsideration of 
the comments received regarding the CT Plan that was previously 
filed by the SROs. The Commission's rationale for the amendments to 
this requirement is discussed above in Section II.B.3.
---------------------------------------------------------------------------

    [cir] These provisions shall apply to any person designated by an 
SRO to attend meetings of the operating committee or any of its 
subcommittees.
    [cir] The Revised New Consolidated Data Plan shall provide that the 
operating committee may authorize the disclosure of specified 
Restricted Information to identified Covered Persons or third parties, 
if it determines that doing so is in furtherance of the interests of 
the plan, and that such authorization shall be granted on a case-by-
case basis, unless the operating committee grants standing approval to 
allow disclosure of specified recurring information to identified 
Covered Persons.
    [cir] The Revised New Consolidated Data Plan shall provide that 
Covered Persons and third parties that receive or have access to 
Restricted Information pursuant to authorization by the operating 
committee must segregate the information, retain it in confidence, and 
use it only in a manner consistent with the terms of the plan's 
confidentiality provisions and policies.
    [cir] The Revised New Consolidated Data Plan shall permit SRO 
voting representatives on the operating committee to share the only 
following types of Highly Confidential Information, and only with 
officers of their SRO who have direct or supervisory responsibility for 
the SRO's participation in the new plan, or with agents for the SRO 
that support the SRO's participation in the plan, provided that such 
information may not be used in the procurement for, or development, 
modeling, pricing, licensing, or sale of, proprietary equity market 
data products: (i) the plan's contract negotiations with the 
Processor(s) or Administrator; (ii) communications with, and work 
product of, counsel to the plan; and (iii) information concerning 
personnel matters that affect the employees of the SRO.
    [cir] The Revised New Consolidated Data Plan shall provide that an 
SRO voting representative that discloses Highly Confidential 
Information shall maintain a log documenting each instance of such 
disclosure, including the information shared, the persons receiving the 
information, and the date the information was shared. The Revised New 
Consolidated Data Plan shall require that that Covered Persons who 
receive or have access to Highly Confidential Information must 
segregate the information, retain it in confidence, and use it only in 
a manner consistent with the terms of the plan's confidentiality 
provisions and policies.
    [cir] The Revised New Consolidated Data Plan shall provide that 
Covered Persons may disclose Confidential Information only to other 
persons who need to receive such information to fulfill their 
responsibilities pursuant to the plan, including oversight of the plan.
    [cir] The Revised New Consolidated Plan shall provide that the 
operating committee may authorize the disclosure of confidential 
information and that such authorization shall be made on a case-by-case 
basis, unless the operating committee grants standing approval to

[[Page 61641]]

allow disclosure of specified recurring information to identified 
Covered Persons.
    [cir] The Revised New Consolidated Data Plan shall provide that 
recipients of Confidential Information must segregate the information, 
retain it in confidence, and use it only in a manner consistent with 
the terms of the plan's confidentiality provisions and policies.
     The Revised New Consolidated Data Plan shall identify the 
circumstances in which members may meet in executive session and shall 
confine executive sessions to circumstances in which it is appropriate 
to exclude members of the Advisory Committee.
     The Revised New Consolidated Data Plan shall provide that 
requests to enter into an executive session must be included on a 
written agenda, along with a clearly stated rationale for each matter 
to be discussed, and that each such request must be approved by a 
majority vote of the operating committee.
     The Revised New Consolidated Data Plan shall require that 
all subcommittees prepare minutes of all meetings and make those 
minutes available to all members of the operating committee and the 
advisory committee, and, with respect to any legal subcommittee, the 
Revised New Consolidated Data Plan shall require that the minutes 
include (i) attendance at the meeting; (ii) the subject matter of each 
item discussed; (iii) sufficient non-privileged information to identify 
the rationale for referring the matter to the legal subcommittee, and 
(iv) the privilege or privileges claimed with respect to that 
item.\105\
---------------------------------------------------------------------------

    \105\ The Commission has added this new requirement for the 
Revised New Consolidated Data Plan based on its reconsideration of 
the comments received regarding the CT Plan that was previously 
filed by the SROs. The Commission's rationale for this new 
requirement is discussed above in Section II.B.4.
---------------------------------------------------------------------------

     The Revised New Consolidated Data Plan shall exclude from 
the functions that may be delegated to a subcommittee of the operating 
committee those administrative functions to be performed by the 
independent Administrator.\106\
---------------------------------------------------------------------------

    \106\ The Commission has added this new requirement for the 
Revised New Consolidated Data Plan based on its reconsideration of 
the comments received regarding the CT Plan that was previously 
filed by the SROs. The Commission's rationale for this new 
requirement is discussed above in Section II.B.4.
---------------------------------------------------------------------------

     To the extent that those provisions are in furtherance of 
the purposes of the Revised New Consolidated Data Plan as expressed in 
this Amended Order and not inconsistent with any other regulatory 
requirements, the Revised New Consolidated Data Plan shall adopt and 
include all other provisions of the Equity Data Plans necessary for the 
operation and oversight of the SIPs under the Revised New Consolidated 
Data Plan, and the Revised New Consolidated Data Plan should, to the 
extent possible, attempt to harmonize and combine existing provisions 
in the Equity Data Plans that relate to the Equity Data Plans' separate 
processors.
* * * * *
    IT IS HEREBY ORDERED, pursuant to section 11A(a)(3)(B) of the 
Act,\107\ that the Participants act jointly in developing and filing 
with the Commission, as an NMS plan pursuant to Rule 608(a) of 
Regulation NMS,\108\ a Revised New Consolidated Data Plan, as described 
above. The Participants are ordered to file the Revised New 
Consolidated Data Plan with the Commission no later than October 23, 
2023.
---------------------------------------------------------------------------

    \107\ 15 U.S.C. 78k-1(a)(3)(B).
    \108\ 17 CFR 242.608(a).

    By the Commission.
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-19311 Filed 9-6-23; 8:45 am]
BILLING CODE 8011-01-P


