`[Federal Register Volume 89, Number 230 (Friday, November 29, 2024)]
[Notices]
[Pages 94924-94983]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-27644]



[[Page 94923]]

Vol. 89

Friday,

No. 230

November 29, 2024

Part III





Securities and Exchange Commission





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Joint Industry Plan; Order Approving, as Modified, a National Market 
System Plan Regarding Consolidated Equity Market Data; Notice

  Federal Register / Vol. 89 , No. 230 / Friday, November 29, 2024 / 
Notices  

[[Page 94924]]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-101672; File No. 4-757]


Joint Industry Plan; Order Approving, as Modified, a National 
Market System Plan Regarding Consolidated Equity Market Data

November 20, 2024.

I. Introduction

    On October 23, 2023, 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., 
Investors Exchange LLC (``IEX''), Long Term Stock Exchange, Inc. 
(``LTSE''), MEMX LLC (``MEMX''), MIAX PEARL, LLC (``MIAX PEARL''), 
Nasdaq BX, Inc. (``Nasdaq BX''), Nasdaq ISE, LLC (``Nasdaq ISE''), 
Nasdaq PHLX LLC (``Nasdaq PHLX''), Nasdaq Stock Market LLC, New York 
Stock Exchange LLC, NYSE American LLC (``NYSE American''), NYSE Arca, 
Inc. (``NYSE Arca''), NYSE Chicago, Inc. (``NYSE Chicago''), NYSE 
National, Inc. (``NYSE National''), and the Financial Industry 
Regulatory Authority, Inc. (``FINRA'') (collectively, ``SROs'') \1\ 
filed with the Securities and Exchange Commission (``Commission''), 
pursuant to section 11A of the Securities Exchange Act of 1934 
(``Exchange Act'') \2\ and Rule 608 of Regulation National Market 
System (``Regulation NMS'') thereunder,\3\ a proposed new single 
national market system plan governing the public dissemination of real-
time consolidated equity market data for national market system stocks 
(the ``Proposed CT Plan''). The Proposed CT Plan was published for 
comment in the Federal Register on January 25, 2024.\4\
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    \1\ For purposes of this order, the exchange group consisting of 
Cboe BYX, Cboe BZX, Cboe EDGA, Cboe EDGX, and Cboe Exchange, Inc., 
will be referred to collectively as ``Cboe''; the exchange group 
consisting of Nasdaq BX, Nasdaq ISE, Nasdaq PHLX, and Nasdaq Stock 
Market LLC will be referred to collectively as ``Nasdaq''; and the 
exchange group consisting of the New York Stock Exchange LLC, NYSE 
American, NYSE Arca, NYSE Chicago, and NYSE National will be 
referred to collectively as ``NYSE.''
    \2\ 15 U.S.C. 78k-1.
    \3\ 17 CFR 242.608.
    \4\ See Joint Industry Plan; Notice of Filing of a National 
Market System Plan Regarding Consolidated Equity Market Data, 
Securities Exchange Act Release No. 99403 (Jan. 19, 2024), 89 FR 
5002 (Jan. 25, 2024) (``Notice''). Comments received in response to 
the Notice can be found on the Commission's website at: https://www.sec.gov/comments/4-757/4-757.htm.
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    On April 23, 2024, the Commission instituted proceedings pursuant 
to Rule 608(b)(2)(i) of Regulation NMS \5\ to determine whether to 
approve or disapprove the Proposed CT Plan or to approve the Proposed 
CT Plan with such changes or subject to such conditions as the 
Commission may deem necessary or appropriate, if it finds that such 
plan or amendment is necessary or appropriate in the public interest, 
for the protection of investors and the maintenance of fair and orderly 
markets, to remove impediments to, and perfect the mechanisms of, a 
national market system, or otherwise in furtherance of the purposes of 
the Exchange Act.\6\ On July 11, 2024, pursuant to Rule 608(b)(2)(i) of 
Regulation NMS,\7\ the Commission extended the period within which to 
conclude proceedings regarding the Proposed CT Plan to September 21, 
2024.\8\ On September 20, 2024, pursuant to Rule 608(b)(2)(ii) of 
Regulation NMS,\9\ the Commission further extended the period within 
which to conclude proceedings regarding the Proposed CT Plan to 
November 20, 2024.\10\
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    \5\ 17 CFR 242.608(b)(2)(i).
    \6\ See Joint Industry Plan; 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. 100017 (Apr. 23, 2024), 89 FR 33412 (Apr. 29, 2024) 
(``OIP''). Comments received in response to the OIP can be found on 
the Commission's website at: https://www.sec.gov/comments/4-757/4-757.htm.
    \7\ 17 CFR 242.608(b)(2)(i).
    \8\ See Joint Industry Plan; Notice of Designation of a Longer 
Period for Commission Action on a Proposed National Market System 
Plan Regarding Consolidated Equity Market Data, Securities Exchange 
Act Release No. 100500 (July 11, 2024), 89 FR 58235 (July 17, 2024).
    \9\ 17 CFR 242.608(b)(2)(ii).
    \10\ See Joint Industry Plan; Notice of Designation of a Longer 
Period for Commission Action on a Proposed National Market System 
Plan Regarding Consolidated Equity Market Data, Securities Exchange 
Act Release No. 101125 (Sept. 20, 2024), 89 FR 78950 (Sept. 26, 
2024).
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    This order approves the Proposed CT Plan with certain modifications 
that the Commission has determined are appropriate, which are described 
in detail below. As discussed throughout this order, the Commission 
finds that the Proposed CT Plan, as modified, is appropriate in the 
public interest, for the protection of investors and the maintenance of 
fair and orderly markets, to remove impediments to, and perfect the 
mechanism of a national market system, or is otherwise in furtherance 
of the purposes of the Exchange Act. A copy of the Proposed CT Plan, 
marked to reflect the modifications the Commission has made, is 
Attachment A to this order.

II. Discussion and Commission Findings

A. Background

    On May 6, 2020, the Commission ordered the SROs to act jointly in 
developing and filing with the Commission a proposed new national 
market system plan to govern the public dissemination of real-time, 
consolidated equity market data for NMS stocks to replace the existing 
equity data plans.\11\ The Commission sought to address with the 
Governance Order, among other things, the inherent conflicts of 
interest between the SROs' role in collecting and disseminating 
consolidated equity market data and their interests in selling 
proprietary data products. As the Commission stated in the Governance 
Order, since the adoption of Regulation NMS in 2005,
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    \11\ 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) (``Governance Order''). The three NMS plans that 
currently govern the collection, consolidation, processing, and 
dissemination of equity market data for NMS stocks and oversee the 
securities information processors (``SIPs'') for equity market data 
for NMS stocks are (1) the Consolidated Tape Association Plan (``CTA 
Plan''), (2) the Consolidated Quotation Plan (``CQ 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 (``UTP Plan'') 
(collectively, the ``Equity Data Plans''). See id. at 28703, n.34.

developments in technology and changes in the equities markets have 
heightened an inherent conflict of interest between the 
Participants' collective responsibilities in overseeing the Equity 
Data Plans and their individual interests in maximizing the 
viability of proprietary data products that they sell to market 
participants. This conflict of interest, combined with the 
concentration of voting power in the Equity Data Plans among a few 
large ``exchange groups''--multiple exchanges operating under one 
corporate umbrella--has contributed to significant concerns 
regarding whether the consolidated feeds meet the purposes for them 
set out by Congress and by the Commission in adopting the national 
market system. Additionally, the Commission believes that the 
continued existence of three separate NMS plans for equity market 
data creates inefficiencies and unnecessarily burdens ongoing 
improvements in the provision of equity market data to market 
participants. Addressing the issues with the current governance 
structure of the Equity Data Plans . . . is a key step in responding 
to broader concerns about the consolidated data feeds.\12\
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    \12\ Governance Order, supra note 11, 85 FR at 28702.

    Moreover, as stated in the Governance Order, ``[t]he Commission 
believes that

[[Page 94925]]

the demutualization of the exchanges and the proliferation of 
proprietary exchange data products have heightened the conflicts 
between the SROs' business interests in proprietary data offerings and 
their obligations as SROs under the national market system to ensure 
prompt, accurate, reliable, and fair dissemination of core data through 
the jointly administered Equity Data Plans.'' \13\
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    \13\ Id. at 28704.
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    Thus, the Commission determined that the current governance 
structure of the existing Equity Data Plans is ``inadequate to respond 
to changes in the market and in the ownership of exchanges, and to the 
evolving needs of investors and other market participants,'' \14\ and 
the Commission ordered the SROs to develop and file with the Commission 
a proposed new NMS plan regarding equity market data with a set of 
specified governance provisions designed to address the issues 
identified by the Commission,\15\ and to ensure, consistent with the 
Exchange Act, the ``prompt, accurate, reliable, and fair collection, 
processing, distribution, and publication of information with respect 
to quotations for and transactions in such securities and the fairness 
and usefulness of the form and content of such information.'' \16\
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    \14\ Id. at 28702.
    \15\ See id. at 28729-31.
    \16\ 15 U.S.C. 78k-1(c)(1)(B).
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    On August 11, 2020, the SROs \17\ filed a proposed new NMS plan 
pursuant to the Governance Order, and notice of the proposed plan was 
published for comment in the Federal Register on October 13, 2020.\18\ 
After instituting proceedings with respect to the new NMS plan proposed 
by the SROs, the Commission ultimately approved, as modified, the new 
NMS plan on August 6, 2021 (``2021 CT Plan'').\19\
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    \17\ MIAX PEARL was not among the SROs filing that proposed plan 
because it did not become national securities exchange for trading 
equity securities until after that filing was made. 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).
    \18\ 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).
    \19\ 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) (``2021 Approval Order'').
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    Nasdaq, NYSE, and Cboe then petitioned the U.S. Court of Appeals 
for the District of Columbia Circuit (``D.C. Circuit'') for review of 
the Commission's action, challenging three aspects of the Governance 
Order and the 2021 Approval Order: (1) the inclusion of non-SRO 
representatives as voting members of the 2021 CT Plan's operating 
committee; (2) the grouping of SROs by corporate affiliation for 
voting; and (3) the requirement that the 2021 CT Plan's administrator 
be independent of any SRO that sells its own proprietary equity market 
data.\20\
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    \20\ 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 petitioners were Nasdaq, NYSE, and Cboe. The 
petitioners also filed a motion with the Commission seeking a stay 
of the effect of the 2021 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 petitioners also filed for and, on October 13, 2021, 
received a stay of the 2021 Approval Order from the D.C. Circuit. 
See Nasdaq v. SEC, 38 F.4th at 1135.
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    On July 5, 2022, the D.C. Circuit granted the exchanges' petition 
with respect to the inclusion of non-SRO voting members on the new NMS 
plan operating committee, but denied the petition with respect to the 
other challenged aspects of the Governance Order and the 2021 Approval 
Order, including upholding the Commission's actions with respect to 
requiring voting by SRO group and requiring an independent 
administrator.\21\ The court vacated the 2021 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.'' \22\
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    \21\ See Nasdaq v. SEC, supra note 20, 38 F.4th at 1131.
    \22\ Id. at 1145.
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    On September 1, 2023, in light of the court's decision, the 
Commission issued an amended order directing the SROs to file a new NMS 
plan regarding consolidated equity market data,\23\ and the SROs filed 
the Proposed CT Plan pursuant to that Amended Governance Order.\24\
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    \23\ Amended Order Directing the Exchanges and the Financial 
Industry Regulatory Authority, Inc., to File a National Market 
System Plan Regarding Consolidated Equity Market Data, Securities 
Exchange Act Release No. 98271 (Sept. 1, 2023), 88 FR 61630, 61631 
(Sept. 7, 2023) (File No. 4-757) (``Amended Governance Order'').
    \24\ See Notice, supra note 4, 89 FR at 5003.
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    Below, this order separately addresses each of the provisions of 
the Proposed CT Plan, discussing the comments received and explaining 
the modifications, if any, that the Commission is making.

B. The Provisions of the Proposed CT Plan

1. Recitals
    Paragraph (a) of the Recitals states the procedural history of the 
Proposed CT Plan. Paragraph (a) of the Recitals also establishes that 
the Proposed CT Plan is filed with the Commission in response to the 
Commission's Amended Governance Order.\25\
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    \25\ See Paragraph (a) of the Recitals of the Proposed CT Plan.
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    Paragraph (b) of the Recitals states that, as the Members have 
already formed the Company \26\ as a limited liability company pursuant 
to the Delaware Limited Liability Company Act \27\ by filing a 
certificate of formation with the Delaware Secretary of State, the 
Proposed CT Plan will become effective on the date (the ``Effective 
Date'') when approved by the Commission pursuant to Rule 608 of 
Regulation NMS as an NMS plan governing the public dissemination of 
real-time consolidated market data for Eligible Securities.\28\
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    \26\ For purposes of this order, all capitalized terms not 
otherwise defined in this order shall have the same meaning as in 
the Proposed CT Plan.
    \27\ See Article I, Section 1.1(21) of the Proposed CT Plan (as 
approved) (defining ``Delaware Act'' as ``the Delaware Limited 
Liability Company Act, Title 6, Chapter 18, Sec. Sec.  18-101, et 
seq., and any successor statute, as amended'').
    \28\ See Paragraph (b) of the Recitals of the Proposed CT Plan. 
Upon approval by the Commission, the Proposed CT Plan will be an 
``effective national market system plan'' within the meaning of Rule 
600(b)(34) of Regulation NMS, 17 CFR 242.600(b)(34), and an 
``effective transaction reporting plan,'' within the meaning of Rule 
600(b)(35) of Regulation NMS, 17 CFR 242.600(b)(35).
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    Paragraph (c) of the Recitals sets forth the SROs' statement of 
their regulatory obligations to the Proposed CT Plan. Specifically, 
paragraph (c) states that, in performing their obligations and duties 
under the Proposed CT Plan, the Members are performing and discharging 
functions and responsibilities related to the operation of the national 
market system for and on behalf of the Members in their capacities as 
self-regulatory organizations, as required under section 11A of the 
Exchange Act, and pursuant to Rule 603(b) of Regulation NMS thereunder. 
Paragraph (c) of the Recitals further provides that the Proposed CT 
Plan and the operations of the Company shall be subject to ongoing 
oversight by the Commission.\29\ Finally this paragraph of the Recitals 
sets forth that no provision of the Proposed CT Plan shall be construed 
to limit or diminish the obligations and duties of the Members as self-
regulatory

[[Page 94926]]

organizations under the federal securities laws and the regulations 
thereunder.\30\
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    \29\ See Paragraph (c) of the Recitals of the Proposed CT Plan.
    \30\ See Paragraph (b) of the Recitals of the Proposed CT Plan. 
The ``Members'' of the Agreement, as defined in the first paragraph 
of the Agreement, are the SROs identified in Exhibit A to the 
Agreement.
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    The Commission is making a non-substantive modification to 
paragraph (b) to add the defined term ``Plan'' at the end of the phrase 
``an NMS plan governing the public dissemination of real-time 
consolidated market data for Eligible Securities.'' This modification 
is appropriate because the Proposed CT Plan contains numerous 
references to the ``plan,'' which term had not been defined. Apart from 
this modification, the Recitals are substantively similar to 
corresponding recitals of the 2021 CT Plan approved by the Commission 
\31\ and were not required to be modified by the Amended Governance 
Order. The Commission received no comments addressing paragraphs (a), 
(b), and (c) of the Recitals of the Proposed CT Plan, and the 
Commission is approving the Recitals as modified.
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    \31\ See 2021 Approval Order, supra note 19, 86 FR at 44143-49 
(approving Paragraph (a) of the Recitals of the 2021 CT Plan, as 
proposed, Paragraph (b) of the Recitals of the 2021 CT Plan, as 
modified, and Paragraph (g) of the Recitals of the 2021 CT Plan as 
modified).
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2. Definitions
    Article I of the Proposed CT Plan sets forth the defined terms used 
throughout, as well as provisions for interpreting, the Proposed CT 
Plan and its Exhibits.\32\
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    \32\ See Article I, Sections 1.1 and 1.2 of the Proposed CT 
Plan.
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(a) Section 1.1 Definitions
    While the Commission received no comments on the proposed 
definitions, it is, as explained below, making certain modifications to 
the proposed definitions.
    The Commission is modifying the definition of ``Administrator'' to 
delete text that incompletely duplicates part of the provisions of 
Article VI, Section 6.2 of the Proposed CT Plan as modified and instead 
refer directly to Article VI of the Proposed CT Plan. Specifically, the 
Commission is revising the definition to read, `` `Administrator' means 
the Person selected by the Company to perform the administrative 
functions under Article VI of this Agreement.'' This modification is 
appropriate to avoid potential ambiguity between the terms of the 
definition as proposed and the provisions of Article VI as modified by 
the Commission, in particular the text of Section 6.2 of the Agreement 
regarding the independence of the Administrator, as modified by the 
Commission.\33\
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    \33\ See infra Section II.B.7(b).
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    The Commission is modifying Section 1.1 to add a new paragraph (2) 
to define the term ``Advisory Committee'' to mean ``the committee 
formed in accordance with Section 4.7 of this Agreement.'' \34\ This 
modification is appropriate because the term ``Advisory Committee'' is 
used throughout the Proposed CT Plan but was undefined. The Commission 
is further modifying Section 1.1 to renumber the following paragraphs 
of Section 1.1 accordingly.
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    \34\ See Section 1.1(2) of the Proposed CT Plan (as approved). 
The Commission has also renumbered the paragraphs of Section 1.1 to 
reflect this addition.
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    The Commission is modifying the definitions of ``Company Identified 
Party,'' ``Covered Persons,'' ``Executive Session,'' and ``Party to a 
Proceeding'' to delete the acronym ``SRO'' from the term ``SRO Voting 
Representative.'' These modifications are appropriate because the 
defined term proposed in the Proposed CT Plan is ``Voting 
Representative'' rather than ``SRO Voting Representative.'' \35\
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    \35\ See Article I, Section 1.1(83) of the Proposed CT Plan (as 
approved) (defining ``Voting Representative'').
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    The Commission is modifying the definition of ``Agent'' to insert, 
immediately after the words ``the Administrator,'' the words ``the 
Interim Administrator(s).'' The Commission is also modifying the 
definition of ``Covered Persons'' to insert in two places immediately 
following the words ``the Administrator,'' the words ``the Interim 
Administrator(s).'' \36\ These modifications are appropriate because, 
as discussed below in Section II.B.7 of this order, the Commission is 
modifying the Proposed CT Plan to permit the appointment by the 
Operating Committee of one or more Interim Administrator(s), and these 
insertions are needed to conform to that modification.
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    \36\ As modified, Section 1.1(14) provides that the term 
``Covered Persons'' means ``representatives of the Members 
(including the Voting Representative, alternate Voting 
Representative, and Member Observers), members of the Advisory 
Committee, SRO Applicants, SRO Applicant Observers, the 
Administrator, the Interim Administrator(s), and the Processors; 
Affiliates, employees, and Agents of the Operating Committee, a 
Member, the Administrator, the Interim Administrator(s), and the 
Processors; and any third parties invited to attend meetings of the 
Operating Committee or subcommittees. Covered Persons do not include 
staff of the SEC.''
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    The Commission is modifying the definition of ``Highly Confidential 
Information'' to specify that ``Highly Confidential Information'' shall 
also include the Company's contract negotiations with the Interim 
Administrator(s).\37\ This modification is appropriate because the 
Company's contract negotiations with the Interim Administrator(s) would 
raise confidentiality concerns similar to those of the Company's 
contract negotiations with the Administrator, which require 
classification as Highly Confidential Information under the 
confidentiality provisions of the Proposed CT Plan. The Commission is 
further modifying the definition of ``Highly Confidential Information'' 
\38\ to delete the word ``applicable'' and insert, immediately after 
the words ``privilege or immunity'' the words ``recognized under 
Applicable Law.'' This modification is appropriate to place clear 
limits around the circumstances in which sharing of information with 
Advisory Committee members will be restricted under the Confidentiality 
Policy by requiring that the ``privilege or immunity'' under which 
information may be designated as Highly Confidential Information must 
be a ``privilege or immunity recognized under Applicable Law,'' which 
is a term defined in Section 1.1 of the Proposed CT Plan.\39\
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    \37\ To effect this modification, the Commission is inserting, 
immediately after ``Administrator'' the words ``or Interim 
Administrator(s).'' See Section 1.1(35) of the Proposed CT Plan (as 
approved).
    \38\ See Article I, Section 1.1(35) of the Proposed CT Plan (as 
approved).
    \39\ See infra Section II.B.5(l) (discussing the Confidentiality 
Policy set forth in Article IV, Section 4.12 of and Exhibit C to the 
Proposed CT Plan).
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    The Commission is modifying the definition of ``Operative Date'' to 
insert, immediately after ``Exchange Act,'' the words ``and the rules 
and regulations thereunder.'' This modification is appropriate to help 
ensure that this provision more broadly encompasses all of the laws and 
regulations governing the regulatory functions to be performed by the 
Members through the Proposed CT Plan. The proposed and approved 
definition of ``Operative Date'' also differs from that approved by the 
Commission in the 2021 CT Plan \40\ in that it specifies the two major 
conditions required to be fulfilled before the Proposed CT Plan has 
been fully implemented. This change is appropriate because it ties the 
definition of Operative Date to the accomplishment of key milestones.
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    \40\ See 2021 Approval Order, supra note 19, 86 FR at 44207.
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    Except as described above (and with respect to the removal of 
provisions regarding non-SRO representatives, as required by the 
Amended Governance Order \41\), the definitions in Section 1.1

[[Page 94927]]

are identical to the corresponding definitions in the 2021 CT Plan 
approved by the Commission,\42\ and were not required to be modified by 
the Amended Governance Order. The Commission received no comments on 
Article I, Section 1.1 of the Proposed CT Plan, and the Commission is 
approving Article I, Section 1.1 of the Proposed CT Plan as modified.
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    \41\ See Amended Governance Order, supra note 23, 88 FR at 61631 
(``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.'').
    \42\ See 2021 Approval Order, supra note 19, 86 FR at 44149-50, 
44207-10.
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(b) Section 1.2 Interpretation
    Section 1.2 of the Proposed CT Plan provides rules for the 
interpretation of terms used in the Proposed CT Plan. This provision is 
identical to the corresponding plan provisions of the 2021 CT Plan 
approved by the Commission \43\ and was not required to be modified by 
the Amended Governance Order. The Commission received no comments 
addressing Section 1.2, and the Commission is approving Section 1.2 as 
proposed.
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    \43\ See 2021 Approval Order, supra note 19, 86 FR at 44210.
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3. Organization
    Article II of the Proposed CT Plan sets forth provisions governing 
the organization of the Company. The SROs have organized the Proposed 
CT Plan in the form of a Delaware limited liability company pursuant to 
a limited liability company agreement, entitled the Limited Liability 
Company Agreement (``Agreement'') of CT Plan LLC (``Company'').\44\ The 
Members of the Company will be the national securities exchanges for 
equities and FINRA,\45\ each of which will be a ``Participant'' of the 
Proposed CT Plan as an effective NMS plan for the dissemination of 
consolidated equity market data.
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    \44\ See Article II, Section 2.1 of the Proposed CT Plan.
    \45\ See Article III, Section 3.1 of the Proposed CT Plan. The 
names and addresses of each Member are set forth in Exhibit A to the 
Proposed CT Plan.
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    The Proposed CT Plan states that the purposes of the Company are to 
engage in the following activities on behalf of the Members: (i) the 
collection, consolidation, and dissemination of Transaction Reports, 
Quotation Information, and such other information concerning Eligible 
Securities as the Members shall agree as provided therein; (ii) 
contracting for the distribution of such information; (iii) contracting 
for and maintaining facilities to support any activities permitted in 
the Agreement and guidelines adopted thereunder, including the 
operation and administration of the System; \46\ (iv) providing for 
those other matters set forth in the Agreement and in all guidelines 
adopted thereunder; (v) operating the System to comply with Applicable 
Laws; and (vi) engaging in any other business or activity that now or 
thereafter may be necessary, incidental, proper, advisable, or 
convenient to accomplish any of the foregoing purposes and that is not 
prohibited by the Delaware Act, the Exchange Act, or other Applicable 
Law.\47\ The Agreement itself, including its appendices, constitutes 
the Proposed CT Plan. Under the Proposed CT Plan, the governing body of 
the Company would be the Operating Committee.\48\
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    \46\ Section 1.1(75) of Article I of the Proposed CT Plan 
defines the term ``System'' as ``all data processing equipment, 
software, communications facilities, and other technology and 
facilities, utilized by the Company or the Processors in connection 
with the collection, consolidation, and dissemination of Transaction 
Reports, Quotation Information, and other information concerning 
Eligible Securities.''
    \47\ See Article II, Section 2.4 of the Proposed CT Plan.
    \48\ See Article IV, Section 4.1(a) of the Proposed CT Plan.
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    Article II of the Proposed CT Plan is identical to the 
corresponding plan provisions of the 2021 CT Plan approved by the 
Commission \49\ and was not required to be modified by the Amended 
Governance Order. The Commission received no comments addressing 
Article II of the Proposed CT Plan, and the Commission is approving 
Article II of the Proposed CT Plan as proposed for the same reasons 
stated in the 2021 Approval Order.\50\
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    \49\ See 2021 Approval Order, supra note 19, 86 FR at 44150-52.
    \50\ Id.
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4. Membership
    Article III of the Proposed CT Plan sets forth provisions relating 
to membership in the Company. Pursuant to Article III, Section 3.2(a) 
of the Proposed CT Plan, any national securities association or 
national securities exchange whose market, facilities, or members, as 
applicable, trades Eligible Securities \51\ may become a Member by (i) 
providing written notice to the Company; (ii) executing a joinder to 
the Agreement; (iii) paying a Membership Fee to the Company as 
determined pursuant to Section 3.2(b) (``Membership Fee''); and (iv) 
executing a joinder to any other agreements to which all of the other 
Members have been made party in connection with being a Member.\52\ 
Membership Fees paid will be added to the general revenues of the 
Company.\53\
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    \51\ See Article I, Section 1.1(23) of the Proposed CT Plan (as 
approved) (defining ``Eligible Security'' as ``(i) any equity 
security, as defined in Section 3(a)(11) of the Exchange Act, or 
(ii) a security that trades like an equity security, in each case 
that is listed on a national securities exchange'').
    \52\ See Article III, Section 3.2(a) of the Proposed CT Plan.
    \53\ See Article III, Section 3.2(a) of the Proposed CT Plan.
---------------------------------------------------------------------------

    Article III, Section 3.2 of the Proposed CT Plan specifies that the 
factors that will be considered in determining a Membership Fee are: 
(1) the portion of costs previously paid by the Company (or by the 
Members prior to the formation of the Company) for the development, 
expansion and maintenance of the System which, under generally accepted 
accounting principles (``GAAP''), would have been treated as capital 
expenditures and would have been amortized over the five years 
preceding the admission of the new member; and (2) an assessment of 
costs incurred and to be incurred by the Company for modifying the 
System or any part thereof to accommodate the new member, which costs 
are not otherwise required to be paid or reimbursed by the new 
Member.\54\ The Proposed CT Plan prohibits a Member's transfer of its 
Membership Interest in the Company, except in connection with the 
withdrawal of a Member from the Company, as discussed below.\55\
---------------------------------------------------------------------------

    \54\ See Article III, Section 3.2(b) of the Proposed CT Plan. 
The Proposed CT Plan provides that Participants of the CQ Plan, CTA 
Plan, and UTP Plan are not required to pay the Membership Fee. See 
Article III, Section 3.2(c) of the Proposed CT Plan.
    \55\ See Article III, Section 3.3 of the Proposed CT Plan.
---------------------------------------------------------------------------

    Pursuant to Article III, Section 3.4, any Member may voluntarily 
withdraw from the Company by: (i) providing not less than 30 days' 
prior written notice of such withdrawal to the Company, (ii) causing 
the Company to file with the Commission an amendment to effectuate the 
withdrawal,\56\ and (iii) transferring such Member's Membership 
Interest to the Company.\57\ If a Member ceases to be a registered 
national securities association or registered national securities 
exchange, that Member automatically withdraws from the Company.\58\ 
Section 3.4 further provides that after withdrawal from Membership, the 
Member will remain liable for any obligations arising prior to 
withdrawal.\59\ A withdrawing Member

[[Page 94928]]

is entitled to receive a portion of the Net Distributable Operating 
Income attributable to the period prior to the Member's withdrawal.\60\
---------------------------------------------------------------------------

    \56\ See Article III, Section 3.4(a) of the Proposed CT Plan.
    \57\ See Article III, Section 3.4(a) of the Proposed CT Plan.
    \58\ See Article III, Section 3.4(b) of the Proposed CT Plan.
    \59\ See Article III, Section 3.4(d)(i) of the Proposed CT Plan.
    \60\ See Article III, Section 3.4(d)(ii) of the Proposed CT 
Plan.
---------------------------------------------------------------------------

    Pursuant to proposed Sections 3.4(d)(iii) and (iv), a Member that 
has withdrawn from the Company will no longer have the right to have 
its Transaction Reports, Quotation Information, or other information 
disseminated over the System, and the Capital Account of that Member 
will not be allocated profits and losses of the Company.
    Article III, Section 3.5 of the Proposed CT Plan provides that a 
Member's bankruptcy under Section 18-304 of the Delaware Act shall not 
itself cause a withdrawal of such Member from the Company, so long as 
such Member continues to be a national securities association or 
national securities exchange. As proposed, Section 3.6 provides that, 
following the Operative Date, each Member will be required to comply 
with the provisions of the Proposed CT Plan and enforce compliance with 
the Proposed CT Plan by its members.\61\
---------------------------------------------------------------------------

    \61\ See Article III, Section 3.6 of the Proposed CT Plan.
---------------------------------------------------------------------------

    Article III of the Proposed CT Plan also sets forth the obligations 
and liabilities of the Members. Article III, Section 3.7 provides that 
Members will not be required to contribute capital or make loans to the 
Company, nor will Members have any liability for the debts and 
liabilities of the Company.\62\ This section also states that it is the 
intent of the Members that no distribution to any Member pursuant to 
the Company Agreement will be considered a return of money or other 
property paid or distributed in violation of the Delaware Act, and that 
any such payment will be considered a compromise within the meaning of 
Delaware Act, and the Member receiving any payment will not be required 
to return any payment to any person, provided that a Member will be 
required to return any payment made due to a clear accounting or 
similar error or as otherwise provided in Section 3.7(b).\63\ In 
addition, Article III of the Proposed CT Plan provides that no Member, 
unless authorized by the Operating Committee, has the authority to 
represent the Company or to make any expenditure on behalf of the 
Company; provided, however, that the Tax Matters Partner may represent, 
act for, sign for or bind the Company as permitted under Sections 10.2 
and 10.3 of the Agreement.\64\ Finally, Section 3.7(e) provides that no 
Member owes any duty (fiduciary or otherwise) to the Company or to any 
other Member other than the duties expressly set forth in the 
Agreement.\65\
---------------------------------------------------------------------------

    \62\ See Article III, Section 3.7(a)-(b) of the Proposed CT 
Plan. However, in the event that the Processors or the Administrator 
have not been paid pursuant to the terms of the Processor Services 
Agreements and Administrative Services Agreement, the Proposed CT 
Plan requires each Member to return to the Company its pro rata 
share of any moneys distributed to it by the Company until an 
aggregated amount equal to the amount owed has been recontributed to 
the Company. The Company will pay the amount(s) owed. See Article 
III, Section 3.7(b) of the Proposed CT Plan.
    \63\ See Article III, Section 3.7(c) of the Proposed CT Plan. 
The Proposed CT Plan further provides that if any court of competent 
jurisdiction holds that any Member is obligated to make any such 
payment, such obligation shall be the obligation of such Member and 
not of the Operating Committee. See id.
    \64\ See Article III, Section 3.7(d) of the Proposed CT Plan.
    \65\ See Article III, Section 3.7(e) of the Proposed CT Plan.
---------------------------------------------------------------------------

    The Commission is modifying Section 3.6 to replace the ``Operative 
Date'' with ``Effective Date'' as that term is defined in the Recitals. 
This change is appropriate because the Effective Date of the Agreement 
is the date it is approved by the Commission, whereas the Operative 
Date is defined as the date that Members conduct, through the Company, 
the Processor and Administrator functions related to the public 
dissemination of real-time consolidated equity market data and the 
Equity Data Plans cease their operations. This modification will 
facilitate the implementation of the Proposed CT Plan as, pursuant to 
Article XIV of the approved plan, the obligation of each Member to 
comply with the provisions of the Agreement and enforce compliance by 
its members shall begin when the Agreement is approved.
    Aside from the modification to Section 3.6, Article III is, with 
immaterial differences, identical to the corresponding provisions of 
the 2021 CT Plan approved by the Commission \66\ and was not required 
to be modified by the Amended Governance Order. The Commission received 
no comments on Article III of the Proposed CT Plan, and the Commission 
is approving Article III of the Proposed CT Plan as modified for the 
same reasons stated in the 2021 Approval Order.\67\
---------------------------------------------------------------------------

    \66\ See 2021 Approval Order, supra note 19, 86 FR at 44152-54, 
44211-12. With respect to proposed Article III of the Proposed CT 
Plan, the differences between the language of the 2021 CT Plan 
approved by the Commission in the 2021 Approval Order and that of 
the Proposed CT Plan as proposed are the substitution of the word 
``will'' for the word ``are'' in Section 3.2(c) as proposed and the 
paragraph numbering in Section 3.4(d) as proposed.
    \67\ Id.
---------------------------------------------------------------------------

5. Management of the Company
    Article IV of the Proposed CT Plan establishes the overall 
governance structure for the management of the Company.
(a) Operating Committee
    As an initial matter, Section 4.1 of the Proposed CT Plan has a 
typographical error in that the subsections are numbered in Section 4.1 
as (f), (g), and (h), rather than (a), (b), and (c). Accordingly, the 
Commission is modifying the Proposed CT Plan to correct this 
typographical error, and, for ease of reading, all further references 
to Section 4.1 will be to the paragraphs as renumbered. These 
modifications are appropriate because they would alleviate confusion on 
those referencing the Proposed CT Plan.
    Article IV, Section 4.1(a) provides that the Company be managed by 
the Operating Committee.\68\ Article IV, Section 4.1(a) also provides 
that the Operating Committee has the authority to take actions it deems 
necessary to accomplish the purposes of the Company, including: (1) 
proposing amendments or implementing policies and procedures; \69\ (2) 
selecting, overseeing, specifying the role and responsibilities of, and 
evaluating the performance of the Administrator, the Processor, an 
auditor, and any other professional service providers; \70\ (3) 
developing fair and reasonable fees and consistent terms for 
Transaction Reports and Quotation Information; \71\ (4) reviewing the 
performance of the Processors and ensuring public reporting of the 
Processors' performance and other metrics and information about the 
processors; \72\ (5) assessing the marketplace for equity data products 
and ensuring that the CT Feeds are priced in a manner that is fair and 
reasonable, and designed to ensure the

[[Page 94929]]

widespread availability of CT Feeds data to investors and market 
participants; \73\ (6) designing a fair and reasonable formula to be 
applied by the Administrator for allocating plan revenues, and 
overseeing, reviewing, and revising the formula as needed; \74\ (7) 
interpreting the Agreement and its provisions; \75\ and (8) carrying 
out other specific responsibilities provided for in the Agreement.\76\
---------------------------------------------------------------------------

    \68\ See Article IV, Section 4.1(a) of the Proposed CT Plan. 
This paragraph further provides that unless otherwise expressly 
provided to the contrary in this Agreement, no Member shall have 
authority to act for, or to assume any obligation or responsibility 
on behalf of, the Company, without the prior approval of the 
Operating Committee. See id.
    \69\ See Article IV, Section 4.1(a)(i) of the Proposed CT Plan.
    \70\ See Article IV, Section 4.1(a)(ii) of the Proposed CT Plan.
    \71\ See Article IV, Section 4.1(a)(iii) of the Proposed CT Plan 
(providing that that the Operating Committee has the authority to 
take actions it deems necessary to accomplish the purposes of the 
Company, including ``developing and maintaining fair and reasonable 
Fees and consistent terms for the distribution, transmission, and 
aggregation of Transaction Reports and Quotation Information in 
Eligible Securities''). See id.
    \72\ See Article IV, Section 4.1(a)(iv) of the Proposed CT Plan.
    \73\ See Article IV, Section 4.1(a)(v) of the Proposed CT Plan.
    \74\ See Article IV, Section 4.1(a)(vi) of the Proposed CT Plan.
    \75\ See Article IV, Section 4.1(a)(vii) of the Proposed CT 
Plan.
    \76\ See Article IV, Section 4.1(a)(viii) of the Proposed CT 
Plan.
---------------------------------------------------------------------------

    Section 4.1(b) proposes to permit the Operating Committee to 
delegate all or part of its administrative functions under the Proposed 
CT Plan, excluding those administrative functions to be performed by 
the Administrator pursuant to Section 6.1, to (1) a subcommittee; (2) 
one or more of the Members; or (3) any other Persons (including the 
Administrator),\77\ provided that a delegation would not convey the 
authority to take action on behalf of the Proposed CT Plan.\78\ And 
Section 4.1(c) provides that neither the Company nor the Operating 
Committee will have authority over any Member's proprietary systems or 
the collection and dissemination of quotation or transaction 
information in Eligible Securities in any Member's Market, or, in the 
case of FINRA, from FINRA Participants. Section 4.1 as proposed and 
approved differs from the corresponding provision of the 2021 CT Plan 
approved by the Commission in two ways. First, in lieu of the term 
``core data'' in Section 4.1(a)(iii) of the 2021 CT Plan, the Proposed 
CT Plan uses the phrase ``Transaction Reports and Quotation Information 
in Eligible Securities.'' Second, Section 4.1(b) as proposed and 
approved removes a reference to Non-SRO Voting Representatives, which 
is consistent with the Amended Governance Order.\79\
---------------------------------------------------------------------------

    \77\ The limitations on the Operating Committee's authority to 
delegate those administrative functions to be performed by the 
Administrator pursuant to Section 6.1, to (1) a subcommittee; (2) 
one or more of the Members; or (3) any other Persons (including the 
Administrator) under Section 4.1(b) of the Proposed CT Plan apply 
equally with respect to those administrative functions to be 
performed by the Interim Administrator(s) appointed pursuant to 
Section 6.5 of the Proposed CT Plan.
    \78\ See Article IV, Section 4.1(b) of the Proposed CT Plan.
    \79\ See Amended Governance Order, supra note 23, 88 FR at 61631 
(``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.'').
---------------------------------------------------------------------------

    One commenter states that the Commission should ``encourage the 
Revised CT Plan to consider'' whether current policies of the Equity 
Data Plans, ``such as those surrounding non-display use reporting and 
professional versus non-professional designations, are necessary or 
merely add unnecessary complexity and confusion.'' \80\ The commenter 
states that a ``benefit of transparent, simple, fee schedules and 
policies governing consolidated equity market data is that they [would] 
also likely reduce the scope of services that the Plan Administrator 
would need to provide to the Revised CT Plan, thereby reducing Plan 
costs.'' \81\ Another commenter states that the policies for the 
Proposed CT Plan ``must be improved'' from those of the Equity Data 
Plans.\82\ This commenter states that ``there must be greater 
transparency in the various stages of the workstreams and alternative 
views considered'' and that the ``seemingly rent-seeking behavior that 
has plagued the Existing Plans must be addressed, and every aspect 
surrounding the governance and administration of Consolidated Data must 
be reimagined.'' \83\ Another commenter suggests that, in developing 
policies, consideration should be given to ``invit[ing] potential RFP 
respondents to present their thoughts on issues and potential solutions 
for the new plan.'' \84\
---------------------------------------------------------------------------

    \80\ Letter from Krista Ryan, SVP, Deputy General Counsel and 
Holly Grotnik, Head of Consolidated Data Services, Fidelity 
Investments, at 5 (Feb. 26, 2024) (``Fidelity Letter'') at 5.
    \81\ Id.
    \82\ Letter from Stan Sater, Legal Counsel, Polygon.io, Inc. 
(Feb. 26, 2024) (``Polygon Letter''), at 1.
    \83\ Id. at 2.
    \84\ Letter from Thomas Jordan, President, Jordan & Jordan, at 2 
(June 12, 2024) (``Jordan Letter'').
---------------------------------------------------------------------------

    With respect to the comments addressing the policies to be 
developed for the Proposed CT Plan, including comments suggesting that 
such policies should improve upon those of the Equity Data Plans with 
respect to their complexity, effectiveness, and transparency,\85\ and 
for the participants to the Proposed CT Plan to consider whether such 
policies are necessary,\86\ these comments provide insufficient detail 
with respect to the measures or specific plan language that, in the 
commenters' views, would be necessary to address the commenters' 
concerns. Additionally, the requirements of the Proposed CT Plan, as 
proposed and approved, provide appropriate guidelines for the 
development and implementation of such policies. For example, the 
Proposed CT Plan, as proposed and approved, requires that the Operating 
Committee implement ``policies and procedures as necessary to ensure 
prompt, accurate, reliable, and fair collection, processing, 
distribution, and publication of information with respect to 
Transaction Reports and Quotation Information in Eligible Securities 
and the fairness and usefulness of the form and content of that 
information.'' \87\ Moreover, any plan policies or operational 
interpretations adopted by the Operating Committee must be consistent 
with the terms of the Plan.
---------------------------------------------------------------------------

    \85\ See Fidelity Letter, supra note 80, at 5; Polygon Letter, 
supra note 82, at 1.
    \86\ See Fidelity Letter supra note 80, at 5.
    \87\ Article IV, Section 4.1(a)(1) of the Proposed CT Plan (as 
approved).
---------------------------------------------------------------------------

    With respect to the concerns based on the commenters' experience 
with the Equity Data Plans as it relates to equity market data or plan 
policies in general,\88\ these commenters provide insufficient detail 
with respect to the measures that, in the commenters' views, are 
necessary to address the expressed concerns. Regarding the plan 
policies to be developed, the Proposed CT Plan includes specified 
provisions designed to, among other things, address the governance 
concerns identified by the Commission with respect to the governance of 
the Equity Data Plans.\89\ Implementing the governance reforms in the 
Proposed CT Plan, as approved in this order, is a key step in 
responding to broader concerns about whether the Equity Data Plans 
continue to serve their regulatory purpose.\90\ These changes, 
including, as approved in this order, a reallocation of

[[Page 94930]]

voting power,\91\ broader representation from members of the Advisory 
Committee,\92\ as well as the appointment of an Administrator meeting 
the independence requirements of Section 6.2 of the Proposed CT 
Plan,\93\ should, when combined into a single new NMS plan, 
significantly enhance the governance of the Proposed CT Plan.\94\ They 
should also facilitate enhanced decision-making and innovation in the 
provision of equity market data, including with respect to the 
development of plan-related policies. Additionally, replacing the 
Equity Data Plans' two current administrators with the single 
independent Administrator upon full implementation of the Proposed CT 
Plan should improve upon the policies of the Equity Data Plans by 
facilitating both uniform plan policies and the uniform application of 
those policies. Moreover, the Proposed CT Plan will provide for a 
broader set of Advisory Committee members than the Equity Data Plans 
do, and the Advisory Committee will have the opportunity to provide 
input from a broader selection of market participants on any proposed 
policies prior to the adoption of those policies by the Operating 
Committee.\95\ Accordingly, the Commission is not modifying the 
Proposed CT Plan in response to these comments.
---------------------------------------------------------------------------

    \88\ See Fidelity Letter, supra note 80, at 5; Polygon Letter, 
supra note 82, at 1-2.
    \89\ See Amended Governance Order, supra note 23, 88 FR at 
61631. In the Governance Order, ``[t]he Commission sought to address 
. . . , among other things, the inherent conflicts of interest 
between the self-regulatory organizations' role in collecting and 
disseminating consolidated equity market data and their interests in 
selling proprietary data products.'' See 2021 Approval Order, supra 
note 19, 86 FR at 44142. See also Governance Order, supra note 11 
(``[T]he Commission believes that the demutualization of the 
exchanges and the proliferation of proprietary exchange data 
products have heightened the conflicts between the SROs' business 
interests in proprietary data offerings and their obligations as 
SROs under the national market system to ensure prompt, accurate, 
reliable, and fair dissemination of core data through the jointly 
administered Equity Data Plans. And these conflicts bear on the 
exchanges' incentives to meaningfully improve the provision of core 
data.'') (citations omitted)).
    \90\ See Governance Order, supra note 11, 85 FR at 28705 (citing 
to Securities Exchange Act Release No. 87906 (Jan. 8, 2020), 85 FR 
2164, 2173 (Jan. 14, 2020) (File No. 4-757).
    \91\ See Article IV, Section 4.3 (establishing requirements for 
action of the Operating Committee of the Proposed CT Plan).
    \92\ See Article IV, Section 4.7 of the Proposed CT Plan 
(governing, among other things, the formation, composition, 
function, and rights of the Advisory Committee of the Proposed CT 
Plan).
    \93\ See Article VI, Section 6.2 of the Proposed CT Plan 
(governing independence requirements for the Administrator of the 
Proposed CT Plan).
    \94\ As the Commission stated in the Governance Order, changes 
to the governance structure of the SIPs are appropriate to create a 
governance structure that will reduce obstacles to ongoing 
improvement of the consolidated market data feeds in ways that the 
current governance structure of the Equity Data Plans has not; and 
making these governance changes will facilitate decision-making 
regarding operational changes. See Governance Order, supra note 11, 
85 FR at 28707.
    \95\ See, e.g., Article IV, Sections 4.1 and 4.7 of the Proposed 
CT Plan.
---------------------------------------------------------------------------

    As discussed above, Section 4.1 of Article IV of the Proposed CT 
Plan is substantively similar to the corresponding provision of the 
2021 CT Plan approved by the Commission,\96\ and, other than for the 
removal of provisions regarding non-SRO representatives, which is 
consistent with the Amended Governance Order,\97\ Section 4.1 was not 
required to be modified by the Amended Governance Order. For the same 
reasons stated in the 2021 Approval Order (apart from those pertaining 
to the participation of non-SRO representatives as members of the 
operating committee of the 2021 CT Plan, which is not included in the 
Proposed CT Plan),\98\ the Commission is approving Section 4.1 of 
Article IV of the Proposed CT Plan as proposed.
---------------------------------------------------------------------------

    \96\ See 2021 Approval Order, supra note 19, 86 FR at 44156-63.
    \97\ See Amended Governance Order, supra note 23, 88 FR at 61631 
(stating that ``[i]n 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'').
    \98\ See 2021 Approval Order, supra note 19, 86 FR at 44156-63.
---------------------------------------------------------------------------

(b) Composition and Selection of Operating Committee
    Article IV, Section 4.2 governs the composition and selection of 
the Operating Committee members. Article IV, Section 4.2(a) provides 
that each SRO group \99\ and each non-affiliated SRO \100\ will 
designate a Voting Representative to serve on the Operating Committee 
and vote on its behalf.\101\ Article IV, Section 4.2(b) of the Proposed 
CT Plan provides that entities that have not yet been registered with 
the Commission as national securities exchanges may appoint, subject to 
Section 4.4(i), an individual to attend regularly scheduled Operating 
Committee meetings (an ``SRO Applicant Observer'').\102\ Paragraph (b) 
of Section 4.2 further provides that if the SRO Applicant's Form 1 
petition or Section 19(b)(1) filing is withdrawn, returned, or is 
otherwise not actively pending with the Commission for any reason, then 
the SRO Applicant will no longer be eligible to have an SRO Applicant 
Observer attend Operating Committee meetings. Article IV, Section 
4.2(c) of the Proposed CT Plan provides that in the event that a non-
affiliated SRO, or that all national securities exchanges in an SRO 
group, cease operations as a market (or have not commenced operation of 
a market), those entities will not be permitted to appoint a Voting 
Representative. Such a non-affiliated SRO or SRO group will, however, 
be permitted to attend meetings of the Operating Committee as an 
observer, except for Executive Sessions.\103\ If such a non-affiliated 
SRO or SRO group does not commence operations within six months of 
first attending an Operating Committee meeting as a non-operational 
exchange(s), it will no longer be permitted to attend Operating 
Committee meetings until it resumes operations as a market.\104\
---------------------------------------------------------------------------

    \99\ For example, New York Stock Exchange LLC, NYSE American, 
NYSE Arca, NYSE Chicago, and NYSE National would be one SRO group 
for purposes of the Proposed CT Plan and would select one individual 
to represent the SRO group on the Operating Committee.
    \100\ Currently, the non-affiliated SROs are FINRA, IEX, LTSE, 
MEMX, and MIAX PEARL.
    \101\ See Article IV, Section 4.2(a) of the Proposed CT Plan. 
Section 4.2(a) further provides that each SRO group and each non-
affiliated SRO may designate an alternate individual or individuals 
who shall be authorized to vote on behalf of such SRO group or such 
non-affiliated SRO, respectively, in the absence of the designated 
SRO Voting Representative. See id.
    \102\ See Article IV, Section 4.2(b) of the Proposed CT Plan. 
This section further provides that each SRO Applicant may designate 
an alternate individual or individuals who shall be authorized to 
act as the SRO Applicant Observer on behalf of the SRO Applicant in 
the absence of the designated SRO Applicant Observer. See id.
    \103\ See Article IV, Section 4.2(c) of the Proposed CT Plan.
    \104\ See Article IV, Section 4.2(c) of the Proposed CT Plan.
---------------------------------------------------------------------------

    The text of Section 4.2 of the Proposed CT Plan is substantively 
similar to the corresponding provision of the 2021 CT Plan approved by 
the Commission, except for the following differences, which are 
consistent with the requirements of the Amended Governance Order: \105\ 
(1) the removal of all provisions regarding the participation of non-
SRO representatives as members of the operating committee (``Non-SRO 
Voting Representatives''), consistent with requirements of the Amended 
Governance Order; (2) the replacement of references to ``SRO Voting 
Representatives'' with references to ``Voting Representatives'' which, 
as discussed above, conforms to the defined term; and (3) the 
renumbering of paragraphs in proposed Section 4.2 to conform the 
section with the foregoing deletions. The Commission received no 
comments on Section 4.2 of the Proposed CT Plan. The Commission is 
approving Section 4.2 as proposed for the reasons stated in the 2021 
Approval Order (apart from those pertaining to the participation of 
non-SRO representatives as members of the operating committee of the 
2021 CT Plan, which is not included in the Proposed CT Plan).
---------------------------------------------------------------------------

    \105\ See Amended Governance Order, supra note 23, 88 FR at 
61631.
---------------------------------------------------------------------------

(c) Action of Operating Committee
    Article IV, Section 4.3 of the Proposed CT Plan sets forth the 
voting allocation and voting structure for actions of the Operating 
Committee.
(i) Allocation of Votes
    Consistent with the requirements of the Amended Governance 
Order,\106\ Article IV, Section 4.3(a) of the Proposed CT Plan provides 
that each

[[Page 94931]]

Voting Representative will have one vote to cast on behalf of the SRO 
group or non-affiliated SRO that he or she represents, with a second 
vote provided if the SRO group or non-affiliated SRO has a market 
center or centers that trade more than 15 percent of consolidated 
equity market share \107\ for four of the six calendar months preceding 
a vote of the Operating Committee.\108\ Commenters addressed the 
allocation of votes in the Proposed CT Plan.\109\
---------------------------------------------------------------------------

    \106\ See Amended Governance Order, supra note 23, 88 FR at 
61639.
    \107\ See Article IV, Section 4.3(a) of the Proposed CT Plan. 
Section 4.3(a) further provides that, for purposes of Section 
4.3(a), ``consolidated equity market share'' means the average daily 
dollar equity trading volume of Eligible Securities of an SRO group 
or non-affiliated SRO as a percentage of the average daily dollar 
equity trading volume of all of the SRO groups and non-affiliated 
SROs, as reported under this Agreement or under the CQ, CTA, and UTP 
Plans. See id.
    \108\ See Article IV, Section 4.3(a) of the Proposed CT Plan. 
Article IV, Section 4.3(a) of the Proposed CT Plan states that FINRA 
shall not be considered to operate a market center within the 
meaning of this Section 4.3(a) solely by virtue of facilitating 
quoting on the FINRA Alternative Display Facility or reporting on 
behalf of FINRA participants of transactions effected otherwise than 
on an exchange.
    \109\ See Letter from Patrick Sexton, EVP, General Counsel & 
Corporate Secretary, Cboe Global Markets, Inc. (Jan. 26, 2024) 
(``Cboe Letter I''); Fidelity Letter, supra note 80; Letter from 
Sarah Bessin, Deputy General Counsel, Securities Regulation and Nhan 
Nguyen, Associate General Counsel, Securities Regulation, Investment 
Company Institute (Feb. 26, 2024) (``ICI Letter''); Letter from 
Adrian Griffiths, Head of Market Structure, MEMX LLC (Feb. 26, 2024) 
(``MEMX Letter''); Letter from Erika Moore, Vice President and 
Corporate Secretary, Nasdaq, Inc. (Feb. 26, 2024) (``Nasdaq 
Letter''); Letter from Hope Jarkowski, General Counsel, NYSE Group, 
Inc. (Feb. 26, 2024) (``NYSE Letter''); Letter from Ellen Greene, 
managing Director, Equities & Options Market Structure and Joseph 
Corcoran, Managing Directors, Associate General Counsel, Securities 
Industry and Financial Markets Association (Feb. 26, 2024) (``SIFMA 
Letter''); Letter from Patrick Sexton, EVP, General Counsel & 
Corporate Secretary, Cboe Global Markets, Inc. (May 20, 2024) 
(``Cboe Letter II''); Jordan Letter, supra note 84; Letter from 
Adrian Griffiths, Head of Market Structure, MEMX, John Ramsay, Chief 
Market Policy Officer, IEX, Christopher Solgan, VP, Senior Counsel, 
MIAX Pearl, and Alanna Barton, Director and Senior Counsel, Markets 
and Regulation, LTSE (Aug. 16, 2024) (``MEMX-IEX-MIAX Pearl-LTSE 
Letter''); Letter from Patrick Sexton, EVP, General Counsel & 
Corporate Secretary, Cboe Global Markets, Inc. (Sept. 18, 2024) 
(``Cboe Letter III'').
---------------------------------------------------------------------------

(A) The Allocation of Votes by SRO Group and Trading Volume
    Several commenters support approving the allocation of votes as 
proposed.\110\ One commenter agrees with the Proposed CT Plan provision 
that the voting power on the Operating Committee should be limited to 
one vote per exchange group, with the ability to obtain a second vote 
if the exchange group maintains a consolidated market share of at least 
fifteen percent for at least four of the six calendar months preceding 
a vote of the Operating Committee.\111\ One commenter states that it 
supports the allocation of votes as proposed because it would reduce 
the ``concentration of voting authority that is currently held by a 
minority of Participant organizations that control several votes 
today.'' \112\
---------------------------------------------------------------------------

    \110\ See Fidelity Letter, supra note 80, at 3; MEMX Letter, 
supra note 109, at 2; ICI Letter, supra note 109, at 1-2; SIFMA 
Letter, supra note 109, at 2; MEMX-IEX-MIAX Pearl-LTSE Letter, supra 
note 109, at 1-5.
    \111\ See Fidelity Letter, supra note 80, at 3.
    \112\ MEMX Letter, supra note 109, at 2, 10.
---------------------------------------------------------------------------

    Conversely, certain commenters state that, while the Commission 
stated in the 2021 Approval Order that its voting framework was 
designed to reflect the importance of those SROs that oversee trading 
activity that generates a significant amount of equity market data, the 
15-percent consolidated equity market share necessary for a second vote 
is not rationally related to the Commission's goal.\113\ Specifically, 
these commenters state that the Proposed CT Plan's voting framework 
violates the Exchange Act and is arbitrary and capricious under the 
Administrative Procedure Act (``APA'').\114\
---------------------------------------------------------------------------

    \113\ See Cboe Letter I, supra note 109, at 2-5; Cboe Letter II, 
supra note 109, at 2, 3-6; Nasdaq Letter, supra note 109, at 2-5; 
NYSE Letter, supra note 109, at 5-7.
    \114\ See Cboe Letter I, supra note 109, at 3-6; Nasdaq Letter, 
supra note 109, at 2; NYSE Letter, supra note 109, at 7.
---------------------------------------------------------------------------

    One commenter states that the proposed allocation of voting power 
is ``illogical and violative of the APA'' because it (1) ``lacks a 
rational basis'' and ``any rational connection'' to this commenter's 
consolidated equity market share, (2) treats the commenter's SRO group 
the same as dissimilarly situated non-affiliated exchanges, while 
treating the commenter's SRO group differently from other similarly 
situated SRO groups, and (3) unjustifiably equates this commenter's 
significance to the market to that of the much smaller, non-affiliated 
exchanges, thus yielding results that are ``antithetical'' and 
inconsistent with the Commission's statement that voting should reflect 
the ``significance within the national market system of those exchanges 
that, in their roles as SROs, oversee trading activity that generates a 
significant amount of equity market data.'' \115\
---------------------------------------------------------------------------

    \115\ Cboe Letter I, supra note 109, at 2, 3-4; see also Cboe 
Letter II, supra note 109, at 3-6; Cboe Letter III, supra note 109, 
at 7-8.
---------------------------------------------------------------------------

    This commenter further states that consolidated market share 
statistics for 2023 and year-to-date (``YTD'') 2024 support its 
argument against allocating to its SRO group the same single vote 
allocated to each of the unaffiliated SROs.\116\ Specifically, the 
commenter states that for YTD August 2024, the consolidated equity 
market share of its SRO group is more than four times that of two 
unaffiliated SROs, almost ten times more than a third unaffiliated SRO, 
and approaching more than 2600 times more volume than a fourth 
unaffiliated SRO.\117\ This commenter further states that for YTD 
August 2024, the combined consolidated equity market share of these 
four non-affiliated exchanges was little more than 50% of the 
consolidated equity market share alone of this commenter's SRO 
group.\118\ The commenter states that, by allocating the non-affiliated 
exchanges four total votes and the commenter's SRO group one vote, the 
Commission has effectively given the non-affiliated exchanges eight 
times more voting power for their market share relative to the 
commenter's, which the commenter states is unsupported by reasoned 
analysis.\119\
---------------------------------------------------------------------------

    \116\ See Cboe Letter II, supra note 109, at 3.
    \117\ See Cboe Letter III, supra note 109, at 7.
    \118\ See Cboe Letter II, supra note 109, at 3.
    \119\ See id. at 4; Cboe Letter III, supra note 109, at 8.
---------------------------------------------------------------------------

    One commenter states that the Commission should consider more than 
just trading market share when considering the significance of 
exchanges and SRO groups to the national market structure, saying that 
it would not be reasonable for the Commission to conclude that an 
exchange group that operates one or more listing exchanges, attracts 
significant quoting and trading activity, generates a substantial 
portion of equity market data, and commands more than 10% of the 
trading market share is no longer ``significant'' enough to warrant a 
second vote (and have the same voting power as an exchange with zero 
percent market share).\120\
---------------------------------------------------------------------------

    \120\ See NYSE Letter, supra note 109, at 6.
---------------------------------------------------------------------------

    Another commenter states that consideration should be given to 
comments favoring a ``more market oriented'' approach to the allocation 
of votes under the Proposed CT Plan because, as proposed, the voting 
mechanism seems ``somewhat arbitrary,'' with one SRO group and much 
smaller unaffiliated SROs having equivalent voting power.\121\ This 
commenter states that, based on average daily volume for the first week 
of June 2024, one SRO group executed over 1400 times the volume of one 
of the unaffiliated SROs.\122\ This commenter

[[Page 94932]]

questions whether it is appropriate for the basis for an equity market 
data voting structure to differ from that of other regulations and 
states that Section 31 fees, the Trading Activity Fee (``TAF'') and 
Consolidated Audit Trail (``CAT'') fees are, for example, all based on 
either notional amount of sales multiplied by a fixed assessment fee or 
total number of round turn transactions multiplied by a fixed fee or 
number of shares executed or even an income assessment based on gross 
revenue.\123\
---------------------------------------------------------------------------

    \121\ Jordan Letter, supra note 84, at 2.
    \122\ See id. This commenter further states that approval of the 
Proposed CT Plan, including its proposed voting structure, would 
likely lead to litigation with consequent delays to the 
implementation of the Proposed CT Plan. See id.
    \123\ See id.
---------------------------------------------------------------------------

    The Commission disagrees that the allocation of the same voting 
power to a single SRO and to a group of several SROs--even if an SRO 
group operates one or more listing exchanges, attracts significant 
quoting and trading activity, generates a substantial portion of equity 
market data, and commands more than 10% of the trading market share--is 
without rational basis or inconsistent with the APA. As the Commission 
stated in the Governance Order:

Congress charged the Commission with ensuring the ``prompt, 
accurate, reliable, and fair collection, processing, distribution, 
and publication of information with respect to quotations for and 
transactions in such securities and the fairness and usefulness of 
the form and content of such information.'' In furtherance of this 
responsibility, the Commission seeks through its rules and 
regulations to help ensure that certain ``core data'' is widely 
available for reasonable fees. The Commission has recognized that 
investors must have this core data ``to participate in the U.S. 
equity markets.'' And the purpose of the Equity Data Plans, adopted 
pursuant to Regulation NMS, is to facilitate the collection and 
dissemination of core data so that the public has ready access to a 
``comprehensive, accurate, and reliable source of information for 
the prices and volume of any NMS stock at any time during the 
trading day.'' \124\
---------------------------------------------------------------------------

    \124\ Governance Order, supra note 11, 85 FR at 28705 (citations 
omitted).

However, as the Commission also stated, ``exchange consolidation has 
altered the relative voting power of SROs such that exchange groups 
under common management now have greater voting power with respect to 
plan governance. Exchanges that historically had only one vote on NMS 
plans have now been consolidated into exchange groups that can control 
blocks of four or five votes.'' \125\ Thus, as the Commission explained 
in the Governance Order, ``the current governance structure [of the 
Equity Data Plans] provides voting power based on each exchange license 
and thereby concentrates voting power in a small number of exchange 
group stakeholders, which also have inherent conflicts of interest with 
respect to the operation of the Plans,'' \126\ that these conflicts 
have ``perpetuated disincentives for the Equity Data Plans to make 
improvements to the SIP data products'' \127\ and ``contributed to 
significant concerns regarding whether the consolidated feeds meet the 
purposes for them set out by Congress and by the Commission in adopting 
the national market system,'' \128\ and that ``modernizing plan 
governance by reallocating votes by exchange group should help to 
ensure the 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.'' \129\
---------------------------------------------------------------------------

    \125\ Id. at 28712.
    \126\ Id. at 28713.
    \127\ Id.
    \128\ Id. at 28702.
    \129\ Id. at 28713.
---------------------------------------------------------------------------

    Moreover, in ruling on the petition challenging the 2021 Approval 
Order, the D.C. Circuit confirmed that the allocation of votes in the 
CT Plan by exchange group is consistent with Section 11A of the 
Exchange Act and Rule 608 of Regulation NMS.\130\ Inherent in that 
structure--which was included in both the Governance Order and the 
Amended Governance Order--is the provision of the same voting power to 
some SRO groups with larger market share and exchanges with smaller 
trading volume. And, at most, the largest SRO groups would have only 
twice the voting power of the smallest unaffiliated exchange. By 
implication, in upholding these provisions, the Court concluded that 
these features were rational.\131\ Moreover, although commenters have 
opposed granting similar voting power to SRO groups and non-affiliated 
SROs with significantly different trading volumes,\132\ the existing 
system for allocating votes in the Equity Data Plans, which is favored 
by these commenters, allocates voting power without any consideration 
of trading volume. The existing system also provides the large SRO 
groups disproportionate influence over the Equity Data Plans through 
casting the vote of multiple consolidated SROs as a unified block.\133\ 
Addressing this allocation of disproportionate voting power to SRO 
groups with conflicts of interest--not simply favoring non-affiliated 
SRO groups or denying the SRO groups a majority of voting power \134\--
remains the Commission's purpose in allocating votes among SROs in the 
Amended Governance Order.
---------------------------------------------------------------------------

    \130\ See Nasdaq v. SEC, supra note 20, 38 F.4th at 1138-42.
    \131\ See id. at 1139-42 (addressing the petitioners' arguments 
that the Commission's decision to ``limit SRO votes according to an 
SRO's corporate affiliation with another SRO'' was arbitrary, 
capricious, and contrary to section 11A of the Exchange Act); see 
also infra notes 189-197 and accompanying text.
    \132\ See supra notes 116-120, 122, 123 and accompanying text.
    \133\ See Governance Order, supra note 11, 85 FR at 28713 
(citing the ``disproportionate influence affiliated exchange groups 
currently exercise in Plan matters by voting as a block,'' as well 
as the ``need to rebalance voting power in Plan governance'' to 
address this concern).
    \134\ See Cboe Letter II, supra note 109, at 2.
---------------------------------------------------------------------------

    Finally, while one commenter also questions whether it is 
appropriate for the voting structure of the Proposed CT Plan to differ 
from other regulations--such as the allocation of Section 31 fees, the 
TAF, and CAT fees--the voting scheme required by the Amended Governance 
Order is designed to address issues specific to the Equity Data Plans: 
the concentration of voting power in a small number of exchange group 
stakeholders with inherent conflicts of interest with respect to the 
operation of the Equity Data Plans, which has perpetuated disincentives 
for the Equity Data Plans to make improvements to the SIP data 
products.\135\ Moreover, if the Commission allocated voting power on 
the Proposed CT Plan purely by trading volume, similar to the fees 
cited by the commenter, the result would be an even greater 
concentration of voting power than currently exists in the Equity Data 
Plans, perpetuating the existing disincentives to improve the SIP data 
products.
---------------------------------------------------------------------------

    \135\ See Governance Order, supra note 11, 85 FR at 28713; 
Amended Governance Order, supra note 23, 88 FR at 61632. See also 
Nasdaq v. SEC, supra note 20, 38 F.4th at 1140-41 (finding that the 
Commission had justified its ``differing treatment of SROs for 
voting'' in the 2021 Approval Order).
---------------------------------------------------------------------------

(B) Market Changes Since 2020
    Several commenters also state that, because of changes that have 
taken place in the markets since the Commission set the 15-percent 
threshold in the Governance Order, that threshold is no longer 
supportable and should be reconsidered. One commenter states that the 
15-percent threshold for obtaining a second vote has become ``stale'' 
since the Commission first proposed it in 2020.\136\ This commenter 
states that, since the Commission justified the 15-percent threshold in 
the Governance Order, there has been a proliferation of non-affiliated 
exchanges, with three independent exchanges having launched (LTSE, 
MEMX, and MIAX PEARL), BOX

[[Page 94933]]

Exchange LLC having received approval of its registration as an 
exchange, and that three other entities have announced plans to launch 
new exchanges.\137\
---------------------------------------------------------------------------

    \136\ NYSE Letter, supra note 109, at 2.
    \137\ See id. at 5.
---------------------------------------------------------------------------

    This commenter further states that the Commission's concerns in 
2020 and 2021 about exchange consolidation were unfounded when 
rejecting a 10% threshold.\138\ This commenter states that the 
Commission justified the 15-percent threshold in 2020 as reflecting 
``the significance within the national market system of those exchanges 
that, in their roles as SROs, oversee trading activity that generates a 
significant amount of equity market data,'' and by pointing to the 
market shares of the three SRO groups at that time, which the commenter 
says were all ``comfortably above'' the 15-percent threshold but have 
since declined.\139\
---------------------------------------------------------------------------

    \138\ See id. See also Nasdaq Letter, supra note 109, at 4 
(stating that, as new exchanges have entered the market over the 
past three years, the trend of liquidity moving toward non-exchange 
venues has continued).
    \139\ NYSE Letter, supra note 109, at 5 (quoting the 2021 
Approval Order, supra note 19, 86 FR at 44164).
---------------------------------------------------------------------------

    The commenter states that the Commission ``clearly did not foresee 
this turn of events,'' and that, ``[b]y the Commission's own reasoning, 
if the Proposed Plan does not allocate a second vote to the SRO Groups 
that oversee the vast majority of on-exchange quoting, trading, and 
related market data creation, then the voting threshold is incorrectly 
set.'' \140\ The commenter states that, given the increasing 
fragmentation of the market and decline of SRO-group market share, an 
exchange group that manages to achieve 14, or 12, or even 10 percent 
market share should qualify for a second vote,\141\ and observes that, 
``while the four independent exchanges have collectively managed to 
achieve almost 8 percent market share, none of them individually has 
had a market share of more than 4 percent, and one of them has 
essentially zero percent.'' \142\
---------------------------------------------------------------------------

    \140\ Id. at 6.
    \141\ See id.
    \142\ Id.
---------------------------------------------------------------------------

    Another commenter also states that the Commission based its 
analysis on the erroneous assumption that the largest exchange groups 
would have a market share ranging from 17 percent to 22 percent \143\--
with the 15-percent threshold well below that range--and that data show 
the actual range to be approximately 4 points below that, between 13 
and 18 percent, with the threshold in the middle of that range, a 
downward trend that is likely to endure.\144\ According to this 
commenter, the 15-percent threshold is therefore ``not fit for 
purpose'' because it is too high to differentiate between exchanges 
that oversee trading activity that generates a significant amount of 
equity market data and those that do not.\145\ This commenter further 
states that the Commission must examine the relevant data and 
articulate a satisfactory explanation for its action including a 
rational connection between the facts found and the choice made.\146\ 
The commenter states that the data does not support the proposed voting 
scheme.\147\
---------------------------------------------------------------------------

    \143\ See Nasdaq Letter, supra note 109, at 3 (citing Governance 
Order, supra note 11, 85 FR at 28714).
    \144\ See id. at 4.
    \145\ Id.
    \146\ See id.
    \147\ See id. at 4-5.
---------------------------------------------------------------------------

    Some commenters that support the proposed voting allocation state 
that ``relative market share trends are fluid and subject to constant 
change,'' and therefore are not relevant to the proper effectuation of 
the SROs' shared regulatory responsibilities in the Proposed CT Plan's 
voting framework.\148\
---------------------------------------------------------------------------

    \148\ MEMX-IEX-MIAX Pearl-LTSE Letter, supra note 109, at 5.
---------------------------------------------------------------------------

    The Commission agrees with commenters that stated that relative 
market share trends are by their nature fluid and subject to constant 
change and that the court's ruling did not suggest that a transitory 
change in market share between competitors is relevant to the question 
of how to properly effectuate the SROs' shared regulatory 
responsibilities in the Proposed CT Plan's voting framework, or that 
that proposed voting structure is now, after its long procedural 
history, inconsistent with the Exchange Act.\149\
---------------------------------------------------------------------------

    \149\ See id. at 3-4.
---------------------------------------------------------------------------

    Additionally, while the commenters opposing the voting allocation 
of the Proposed CT Plan \150\ state that there has been a proliferation 
of non-affiliated exchanges and a decline in SRO-group market share, 
and that the 15-percent threshold is now inconsistent with the 
Commission's observation in the Governance Order that the consolidated 
equity market share of the largest exchange groups was ``already well 
above 10 percent and continues to range from 17 percent to 22 
percent,'' \151\ and the Commission's statement that the threshold 
``reflects the significance within the national market system of those 
exchanges that, in their roles as SROs, oversee trading activity that 
generates a significant amount of equity market data,'' \152\ the 
Commission did not define ``significant'' to mean that each of the 
three SRO groups would, in perpetuity, receive a second vote on the new 
NMS plan's Operating Committee. That two SRO groups, as opposed to all 
three, would receive a second vote under the current distribution of 
trading volume, does not invalidate the Commission's decision to permit 
a second vote only for those unaffiliated SROs or SRO groups with at 
least a 15-percent market share.
---------------------------------------------------------------------------

    \150\ See Cboe Letter I, supra note 109, at 2-6; Cboe Letter II, 
supra note 109, at 2-8; Cboe Letter III, supra note 109, at 2-4; 
NYSE Letter, supra note 109, at 1-7; Nasdaq Letter, supra note 109, 
at 1-5.
    \151\ See Governance Order, supra note 11, 85 FR at 28714.
    \152\ See Cboe Letter I, supra note 109, at 3 (quoting 2021 
Approval Order, supra note 19, 86 FR at 44164); see also Cboe Letter 
II, supra note 109, at 4-5; Cboe Letter III, supra note 109, at 5, 
8; NYSE Letter, supra note 109, at 2; Nasdaq Letter, supra note 109, 
at 1-2 (citing 2021 Approval Order, supra note 19, 86 FR at 44164).
---------------------------------------------------------------------------

    Moreover, the Commission specifically rejected a lower threshold in 
the Governance Order precisely because adopting a lower threshold would 
have created the expectation that SRO groups would receive a third vote 
at a higher level of market share:

Setting the threshold for a second vote at 10 percent consolidated 
equity market share would create the expectation that exchange 
groups should receive a third vote at the same interval threshold 
above 10 percent (e.g., 20 percent). However, the Commission is not 
permitting the exchange groups, regardless of their consolidated 
equity market share, to have a third vote as this would lead to a 
continuing concentration of voting power.\153\
---------------------------------------------------------------------------

    \153\ Governance Order, supra note 11, 85 FR at 28714.

And, in fact, the alternative voting framework proposed by one of the 
SRO groups, and discussed in detail below,\154\ would do precisely 
that: lower the threshold for a second vote such that certain SRO 
groups would receive a third vote, increasing the concentration of 
voting power on the Operating Committee in the SRO groups.
---------------------------------------------------------------------------

    \154\ See infra Section II.B.5(c)(i)(D).
---------------------------------------------------------------------------

    The Commission, in issuing the Governance Order, also agreed with a 
``commenter's assertion that the two-vote cap would serve to deter 
actions, such as establishing a new exchange or further consolidation 
of existing exchanges into groups, taken for the sole purpose of 
gaining additional voting power on the operating committee.'' \155\ The 
Commission remains concerned that, as it stated in the Governance 
Order, a lower market-share threshold ``may be too easy to achieve 
through consolidation, which would result in too low a threshold for 
obtaining an additional vote and could lead to a

[[Page 94934]]

continuing concentration of voting power.'' \156\
---------------------------------------------------------------------------

    \155\ Id.
    \156\ Governance Order, supra note 11, 85 FR at 28714.
---------------------------------------------------------------------------

    And although commenters state that further growth in the number of 
equities exchanges and further dispersion of trading volume across 
venues counter the Commission's concerns about exchange consolidation--
and that, by the Commission's own reasoning, the threshold for a second 
vote was incorrectly set because it would now fail to assign a second 
vote to one of the three SRO groups--the ability of an SRO group or 
unaffiliated SRO to cross the threshold over time, in either direction, 
is entirely consistent with the voting scheme's express purpose. That 
purpose, as the Commission stated in the Governance Order, is ``to 
rebalance voting power in Plan governance to address the 
disproportionate influence of affiliated exchange groups.'' \157\ 
Indeed, that an SRO group's market share has crossed the threshold for 
a second vote since 2020 demonstrates that the threshold selected by 
the Commission was set at a level that would, over time, continue to 
distinguish the very largest SRO groups and non-affiliated SROs--which 
will receive two votes on the Operating Committee--from the other SRO 
groups and non-affiliated exchanges--which would receive one vote. 
Thus, an analysis of the relevant data--the current distribution of 
equity trading volume across the exchanges and exchange groups, as well 
as the future distribution of voting power on the Operating Committee 
of the Proposed CT Plan--supports the Proposed CT Plan's allocation of 
a second vote on the Operating Committee only to SRO groups or non-
affiliated SROs with at least a 15-percent share of equities trading 
volume.
---------------------------------------------------------------------------

    \157\ Id. at 28713.
---------------------------------------------------------------------------

(C) Commission Rulemaking
    One commenter states that a proposed Commission rulemaking would 
affect the distribution of trading volume in a way that would undercut 
the rationale behind the 15-percent threshold for a second vote. This 
commenter states that the Commission's October 2023 proposal regarding 
volume-based exchange transaction pricing for NMS stocks would drive 
trading volumes away from exchanges to off-exchange venues where 
volume-based pricing would still be available.\158\ The commenter 
states that the Commission's proposed changes to on- and off-exchange 
minimum pricing increments and exchange access fees \159\ are likely to 
further impact the distribution of trading across on- and off-exchange 
venues, as well as the market shares of individual exchanges and SRO 
groups.\160\
---------------------------------------------------------------------------

    \158\ See NYSE Letter, supra note 109, at 6 (citing Volume-Based 
Exchange Transaction Pricing for NMS Stocks, Securities Exchange Act 
Release No. 98766 (Oct. 18, 2023), 88 FR 76282 (Nov. 6, 2023) (File 
No. S7-18-23) (Proposed Rule)).
    \159\ See Regulation NMS: Minimum Pricing Increments, Access 
Fees, and Transparency of Better Priced Orders, Securities Exchange 
Act Release No. 101070 (Sept. 18, 2024), 89 FR 81620 (Oct. 8, 2024) 
(File No. S7-30-22) (Final Rules) (``Regulation NMS Amendments'').
    \160\ See NYSE Letter, supra note 109, at 6-7.
---------------------------------------------------------------------------

    The Commission does not agree that a potential future change in the 
distribution of trading in the equities markets, including from the 
Commission's recently adopted amendments to Regulation NMS,\161\ would 
merit changing the volume threshold for a second vote on the Proposed 
CT Plan's Operating Committee. And if rules adopted by the Commission 
were to significantly change the distribution of on- versus off-
exchange trading, then the Commission could consider whether the 
threshold should be revisited, whether by proposed plan amendment or 
Commission rulemaking. For example, if the commenter were correct that 
Commission rulemaking would move significant trading volume off 
exchange, then lowering the threshold might be appropriate. However, 
the only recent rule amendments with expected distributional effects on 
order flow are the recently adopted Regulation NMS Amendments.\162\ 
However, far from sending order flow off exchange, the net effect of 
the rules is expected to be additional order flow on the exchanges, 
potentially increasing the overall market share of the exchanges.\163\ 
Directionally this effect would be opposite to the commenter's position 
and does not support its rational for lowering the threshold.
---------------------------------------------------------------------------

    \161\ See Regulation NMS Amendments, supra note 159.
    \162\ See id.
    \163\ See id., 89 FR at 81760.
---------------------------------------------------------------------------

    Changes in the distribution of trading may occur for many reasons 
in the future.\164\ And that one SRO group has experienced a decline in 
market share crossing the 15-percent threshold does not undermine the 
rationale in initially setting that threshold. Indeed, the Commission 
considered such a possibility at the time the 15-percent threshold was 
set,\165\ and this eventuality is consistent with the Commission's 
purpose in selecting the 15-percent threshold, which was to rebalance 
voting power to address the disproportionate influence of affiliated 
exchange groups.\166\
---------------------------------------------------------------------------

    \164\ See Notice of Proposed 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. 87906 (Jan. 8, 2020), 85 FR 
2164, 2176 (Jan. 14, 2020) (File No. 4-757) (``While exchange group 
market share has remained relatively steady over the past several 
years, competition for order flow among the exchanges and the 
registration of new national securities exchanges that trade 
equities may lead to more significant changes in market share.'') 
(citation omitted).
    \165\ See Governance Order, supra note 11, 85 FR at 28714 
(``[U]sing a look-back period of at least four of the six calendar 
months preceding a vote of the operating committee for determining 
whether an exchange group or an unaffiliated exchange has met the 
threshold for a second vote would allow the voting structure of the 
New Consolidated Data Plan to adapt over time to potential 
fluctuations in trading volume among exchanges, while avoiding 
frequent changes in vote allocations resulting from short-term 
changes in trading activity.'').
    \166\ See Governance Order, supra note 11, 85 FR at 28713.
---------------------------------------------------------------------------

(D) Alternative Proposed Voting Framework
    One commenter suggests,\167\ and another commenter supports,\168\ 
modifying the Proposed CT Plan to provide for a three-tiered voting 
framework in which SRO groups and non-affiliated SROs would receive 
either one, two, or three votes based on their consolidated equity 
market share. Pursuant to the commenter's suggestion, all SRO groups or 
unaffiliated SROs would receive at least one vote; SRO groups or 
unaffiliated SROs with between 5 and 15-percent consolidated equity 
market share would receive two votes; and those with more than 15-
percent consolidated equity market share would receive three 
votes.\169\ This commenter suggests that the Proposed CT Plan require a 
two-thirds majority vote for Plan action and that the calculation of 
consolidated equity market share in the Proposed CT Plan \170\ be 
modified by removing 50 percent of the transaction volume reported by 
the Transaction Reporting Facilities (``TRFs'') \171\ because, 
according to the commenter, the TRFs contribute ``only trades, while 
exchanges contribute both trades and quotes, and any calculation of 
consolidated equity market share should

[[Page 94935]]

recognize this distinction.'' \172\ Another commenter states that 
including the TRF volume is an error, and while it would remove the TRF 
volume from the calculation of consolidated equity market share 
altogether, it supports the other commenter's suggestion of removing 50 
percent of transaction volume on the TRFs as a reasonable 
compromise.\173\
---------------------------------------------------------------------------

    \167\ See Cboe Letter I, supra note 109, at 6-11; Cboe Letter 
II, supra note 109, at 4.
    \168\ See Nasdaq Letter, supra note 109, at 5.
    \169\ See Cboe Letter I, supra note 109, at 3, 6-11.
    \170\ See Article IV, Section 4.3 of the Proposed CT Plan.
    \171\ See Cboe Letter I, supra note 109, at 3, 6-11. This 
commenter further states that its suggested voting allocation would 
support, as proposed, the Proposed CT Plan's provision that an 
exchange would be eligible to vote on the Proposed CT Plan's 
operating committee only if it operates a trading venue. See id.
    \172\ Cboe Letter I, supra note 109, at 3.
    \173\ See Nasdaq Letter, supra note 109, at 5.
---------------------------------------------------------------------------

    Another commenter states that the Commission should consider more 
than just trading market share when evaluating the significance of the 
SRO or SRO group in the trading ecosystem because, according to the 
commenter, it would not be reasonable to conclude that an exchange 
group that generates a substantial portion of equity market data and 
commands more than 10 percent of the trading market share is no longer 
significant enough to warrant a second vote.\174\
---------------------------------------------------------------------------

    \174\ See NYSE Letter, supra note 109, at 6.
---------------------------------------------------------------------------

    As discussed above and in the Governance Order,\175\ one reason 
that the Commission selected the 15-percent threshold for a second vote 
was to avoid creating the expectation that SRO groups should receive a 
third vote at a higher market share (e.g., 20 percent), which would 
perpetuate the ability of two exchange groups to command a majority of 
votes, which would perpetuate the status quo.\176\ The Proposed CT 
Plan's vote allocation should not be designed to perpetuate the 
concentration of voting power among SRO groups or provide incentives 
for further exchange-group consolidation. Therefore, an individual SRO 
group should not receive a third vote on the Proposed CT Plan's 
Operating Committee, regardless of trading volume.
---------------------------------------------------------------------------

    \175\ See supra notes 153-156 and accompanying text; Governance 
Order, supra note 11, 85 FR at 28714.
    \176\ Governance Order, supra note 11, 85 FR at 28714.
---------------------------------------------------------------------------

    The Commission disagrees with commenters suggesting that the 
calculation of ``consolidated equity market share'' should be modified 
to remove some or all TRF volume from that calculation, because, as the 
Commission stated in the Governance Order, the threshold for a second 
vote on the Operating Committee is designed to reflect ``the importance 
to the national market system of those exchanges that, in their roles 
as SROs, therefore oversee trading activity that generates a 
significant amount of equity market data,'' \177\ and removing from the 
calculation some or all of the trading volume that occurs off exchange 
would serve to exaggerate the share of trading activity that occurs on 
any given exchange. Further, the Proposed CT Plan's inclusion of TRF 
volume is not an ``error,'' as characterized by a commenter,\178\ as 
the vote allocation scheme and underlying calculation in the Proposed 
CT Plan are consistent with the requirements of both the Governance 
Order and the Amended Governance Order.\179\
---------------------------------------------------------------------------

    \177\ Id.
    \178\ See supra note 173 and accompanying text.
    \179\ See Governance Order, supra note 11, 85 FR at 28712 
(``[T]he term `consolidated equity market share' means the average 
daily dollar equity trading volume of an exchange group or 
unaffiliated SRO as a percentage of the average daily dollar equity 
trading volume of all of the SROs, as reported by the Equity Data 
Plans or the New Consolidated Data Plan.'' (emphasis added; citation 
omitted)); Amended Governance Order, supra note 23, 88 FR at 61639 
(providing that the threshold for a second vote on the Operating 
Committee is ``consolidated equity market share of more than 15 
percent during four of the previous six months preceding a vote of 
the operating committee'').
---------------------------------------------------------------------------

(E) The Effect of the D.C. Circuit's Ruling
    Some commenters state that while the D.C. Circuit held that the 
Commission could not allocate votes to non-SRO market participants, the 
Commission should not ``relitigate'' the allocation of votes to SRO 
groups because the court already found that the arguments opposing the 
voting allocation in the Proposed CT Plan were without merit.\180\ 
These commenters state that ``the court's ruling is clear: the 
Commission is free to consider the policy objectives it identified in 
allocating votes, and the mandated allocation of votes among SROs was 
proper.'' \181\ Thus, these commenters state that the proposed 
allocation of votes, including the 15-percent threshold for a second 
vote, is consistent with the Exchange Act and request that the 
Commission approve the Proposed CT Plan without change to the proposed 
voting structure.\182\
---------------------------------------------------------------------------

    \180\ MEMX-IEX-MIAX Pearl-LTSE Letter, supra note 109, at 2-4.
    \181\ Id. at 3.
    \182\ Id. at 5.
---------------------------------------------------------------------------

    In response, another commenter states that ``the D.C. Circuit did 
not consider whether the 15% voting threshold was consistent either 
with the Exchange Act or the . . . APA . . . because that issue was 
never presented to the Court.'' \183\ This commenter states that the 
Commission is not precluded from considering this commenter's 
alternative voting framework.\184\ The commenter further states that 
the D.C. Circuit ruled only on the three issues raised by the 
petitioning exchanges,\185\ and did not rule that any of the other 
mandates in the Governance Order were proper.\186\ Moreover, this 
commenter states, because the D.C. Circuit vacated the 2021 Approval 
Order in its entirety, this had the procedural effect of ``sending the 
SEC and the SROs back to the drawing board on how to structure voting 
under the Plan.'' \187\ Finally, this commenter states that the 
Commission ``did not limit the scope of the issues that could be raised 
by commenters,'' and instead broadly sought comment on the Proposed CT 
Plan.\188\
---------------------------------------------------------------------------

    \183\ Cboe Letter III, supra note 109, at 2.
    \184\ See id. at 3. See also supra Section II.B.5(c)(i)(D) 
(discussing the commenter's suggested alternative voting framework).
    \185\ See supra note 20 and accompanying text.
    \186\ See Cboe Letter III, supra note 109, at 3.
    \187\ Id. at 3.
    \188\ Id. at 3-4.
---------------------------------------------------------------------------

    The Commission agrees that the D.C. Circuit's ruling does not 
preclude consideration of comments on any aspect of the Proposed CT 
Plan or the Amended Governance Order, including the voting framework 
for the Proposed CT Plan. The Commission disagrees, however, that the 
D.C. Circuit's decision did not address or uphold the allocation of 
votes to SROs in the Governance Order. The precise allocation of votes 
to SROs in the Governance Order and the 2021 Approval Order--which is 
identical to that required by the Amended Governance Order \189\--was 
upheld by the court.\190\ In challenging the 2021 Approval Order, the 
SRO groups \191\ contended that ``the Commission's use of SRO Groups 
departs from the Commission's past practice of treating affiliated SROs 
as distinct legal entities in other regulatory settings and subjects 
affiliated SROs to less favorable treatment as compared to unaffiliated 
SROs.'' \192\ The petitioning SROs argued that the Commission's ``bare 
assertion that its arbitrary 15% threshold for a second `SRO Group' 
vote reflects the significance of those SROs' contributions to the 
national market system is . . . insufficient because it fails to 
justify affording the same number of votes to SRO groups that exceed 
the 15-percent threshold no matter their market share or the number of 
SROs in the group.'' \193\ They argued that the Commission 
``arbitrarily selected a 15% threshold for acquiring a second vote 
solely to dilute the

[[Page 94936]]

affiliated SROs' voting power,'' \194\ and that there could be no 
``justifiable reason for treating an SRO group with 14% market share 
differently from an otherwise identical SRO group with 15% market 
share.'' \195\ The court, however, found the petitioners' arguments 
about the allocation of votes to SROs and SRO groups to be ``without 
merit.'' \196\ Further, the D.C. Circuit did not qualify in any way its 
judgment upholding the voting allocation scheme in the Governance 
Order. Thus, the court's decision did not cast any doubt on the 
Commission's reasoning in the Governance Order, and in fact left the 
allocation of votes to SROs unchanged. The Commission has considered 
the comments regarding the voting scheme, including alternatives 
suggested by commenters. However, as discussed above, the voting 
allocation in the Governance Order remains appropriate.\197\
---------------------------------------------------------------------------

    \189\ See Amended Governance Order, supra note 23, 88 FR at 
61639.
    \190\ See Nasdaq v. SEC, supra note 20; see also Cboe Letter I, 
supra note 109; Cboe Letter II supra note 109; Cboe Letter III, 
supra note 109; Nasdaq Letter, supra note 109, NYSE Letter, supra 
note 109.
    \191\ See supra note 190 and accompanying text.
    \192\ Nasdaq v. SEC, supra note 20, 38 F.4th at 1140.
    \193\ Nasdaq v. SEC, supra note 20, Reply Brief for Petitioners, 
2022 WL 225906 at *24.
    \194\ Nasdaq v. SEC, supra note 20, Opening Brief for 
Petitioners, 2022 WL 225907 at *16.
    \195\ Id., 2022 WL 225907 at *52-53.
    \196\ Id.
    \197\ Commenters' statements about other commenters' underlying 
interests or motivations do not affect the Commission's analysis. 
See, e.g., Cboe Letter III, supra note 109, at 6; MEMX-IEX-MIAX 
Pearl-LTSE Letter, supra note 109, at 4.
---------------------------------------------------------------------------

(F) SRO Revisions to Section 4.3
    Section 4.3(a) of Article IV of the Proposed CT Plan differs from 
the corresponding provision of the 2021 CT Plan approved by the 
Commission in three respects. First, and consistent with the Amended 
Governance Order, proposed Section 4.3(a) omits provisions regarding 
the participation of non-SRO representatives as members of the 
Operating Committee and modifies the voting provisions to conform with 
modifications required by the Amended Governance Order.\198\ Second, as 
proposed, Section 4.3(a), specifies that the average daily dollar 
equity trading volume used in the calculation of consolidated equity 
market share for purposes of establishing the SRO voting allocation 
pursuant to that section shall be that as reported under the Proposed 
CT Plan, or under the CQ, CTA, and UTP Plans, rather than as solely as 
reported under the CT Plan. The textual addition to Section 4.3(a) is 
appropriate because the average daily dollar equity trading volume of 
the Equity Data Plans, as proposed, would inform the initial allocation 
of SRO votes pursuant to this section. Thereafter, and for all 
subsequent allocation of SRO votes, it is the Proposed CT Plan's 
average daily dollar equity trading volume--and not that of the Equity 
Data Plans--that will be required to form the basis of that 
calculation. Finally, proposed Section 4.3(a) differs from the 
corresponding provision of the 2021 CT Plan in that the provision adds 
``quoting on the FINRA Alternative Display Facility'' to the non-
exhaustive list of activities that shall not cause FINRA to be 
considered to operate a market center within the meaning of Section 
4.3. This change to proposed Section 4.3(a) makes clear that quoting 
activity outside the Proposed CT Plan, such as that on the FINRA 
Alternative Display Facility, will not figure into calculation for 
allocating SRO votes pursuant to Section 4.3(a) of the Proposed CT 
Plan.
---------------------------------------------------------------------------

    \198\ See Amended Governance Order, supra note 23, at 61631-32.
---------------------------------------------------------------------------

    For the reasons discussed above, the Commission is approving 
Article IV, Section 4.3(a) of the Proposed CT Plan as proposed.
(ii) Operating Committee Actions and Voting
    Article IV, Section 4.3(b) of the Proposed CT Plan provides that 
(with the limited exceptions listed in Section 4.3(c)) all actions of 
the Operating Committee will require the affirmative vote of not less 
than two-thirds of all votes on the Operating Committee, allocated in 
the manner provided for in Section 4.3(a).
    As proposed, Section 4.3(c) provides that, notwithstanding the 
provisions of Section 4.3(b) the following Operating Committee actions 
that would require a majority vote of the Operating Committee: (1) the 
selection of the Advisory Committee; \199\ (2) the decision to enter 
into Executive Session; \200\ (3) the decision to discuss a matter in a 
legal subcommittee pursuant to Section 4.8(d) of the Proposed CT Plan; 
\201\ and (4) decisions concerning the operation of the Company as an 
LLC.\202\
---------------------------------------------------------------------------

    \199\ See Article IV, Section 4.7 of the Proposed CT Plan 
(providing for, among other things, the formation, composition, and 
function of the Advisory Committee).
    \200\ See Article IV, Section 4.3(c)(ii) of the Proposed CT Plan 
(providing that the decision to enter into Executive Session will be 
subject to a majority vote of the Operating Committee).
    \201\ See Article IV, Section 4.3(c)(iii) of the Proposed CT 
Plan (providing that the decision to discuss a matter in a legal 
subcommittee pursuant to Section 4.8(d) of the Proposed CT Plan will 
require only a majority vote of the Operating Committee).
    \202\ See Article IV, Section 4.3(c)(iv) of the Proposed CT Plan 
(providing that decisions concerning the operation of the Company as 
an LLC as specified in Section 10.3 and Section 11.2 of the Proposed 
CT Plan will require a majority vote of the Operating Committee). 
See also Article X, Section 10.3 of the Proposed CT Plan (providing 
that any compromise or settlement of any tax audit or litigation 
affecting members, as well as any material proposed inaction or 
election to be taken by the Partnership Representative, require a 
majority vote of Members); and Article XI, Section 11.2 of the 
Proposed CT Plan (providing that the distribution of proceeds from 
the liquidation of the Company to Members is subject to a majority 
vote of the Members).
---------------------------------------------------------------------------

    In the OIP, the Commission solicited comment on, among other 
things, whether there were additional actions of the Proposed CT Plan 
that should not be subject to the two-thirds voting requirement in 
Section 4.3(b) of the Proposed CT Plan.\203\ The Commission received 
several comments addressing the two-thirds voting requirement in 
Section 4.3(b) of the Proposed CT Plan. One commenter states that the 
Proposed CT Plan should be modified to provide that a simple--rather 
than two-thirds--majority vote would be required for most actions of 
the Operating Committee, including those relating to implementation of 
the Proposed CT Plan, such as selection of the independent 
administrator, or filing of required fee amendments.\204\ This 
potential modification, the commenter states, would streamline the 
Proposed CT Plan's decision-making process and reduce the risk of the 
delay in implementing the Proposed CT Plan.\205\ This commenter states 
that the proposed two-thirds voting requirement is likely to be 
unworkable in practice, leading to gridlock, inaction, and delays in 
implementation.\206\ This commenter states that another option would be 
to require different voting thresholds depending on the subject matter 
under consideration, adding that the commenter would not be opposed to 
requiring a two-thirds supermajority for more significant Proposed CT 
Plan amendments that are subject to a unanimous vote under the Equity 
Data Plans.\207\
---------------------------------------------------------------------------

    \203\ See OIP, supra note 6, 89 FR at 33413.
    \204\ See MEMX Letter, supra note 109, at 12.
    \205\ See id.
    \206\ See id.
    \207\ See id.
---------------------------------------------------------------------------

    One commenter opposes the proposed two-thirds rather than simple 
majority-vote threshold, stating that it is, in conjunction with the 
allocation of voting by SRO group, ``a compromise, rather than striking 
an appropriate balance in the divergence between private rights and 
social costs,'' that will ``cause stagnation rather than encourage 
innovation,'' and that the Operating Committee will ``continue to be a 
bureaucracy with countless arguments among SROs and with the Advisory 
Committee, while market participants continue to suffer from ever 
higher market data and connectivity costs.'' \208\
---------------------------------------------------------------------------

    \208\ Letter from Kelvin To, Founder and President, Data Boiler 
Technologies, LLC, (Feb. 26, 2024) (``Data Boiler Letter''), at 2, 
4.

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

[[Page 94937]]

    The Commission agrees that certain additional actions by the 
Operating Committee should be subject to a majority vote pursuant to 
Section 4.3(c), beyond those proposed, in order to facilitate efficient 
operation of the Operating Committee and the Proposed CT Plan. 
Specifically, the Commission is modifying Section 4.3(c) to permit the 
election of the Chair and other Officers of the Plan by majority vote 
of the Operating Committee, rather than by the proposed two-thirds 
majority.\209\ This modification is appropriate because requiring a 
two-thirds majority vote of the Operating Committee, as proposed, could 
provide opportunities for a minority of the votes allocated on the 
Operating Committee to obstruct a purely administrative action 
necessary for the day-to-day operations of the Proposed CT Plan.\210\ 
Thus, modifying this section to require a majority vote of the 
Operating Committee to elect the Chair and Officers of the Proposed CT 
Plan is appropriate because it will reduce the likelihood of 
unnecessary delays in the administration and implementation of the 
Proposed CT Plan.
---------------------------------------------------------------------------

    \209\ To effect this modification, the Commission is inserting, 
under Section 4.3(c)(i), the words ``the election of the Chair and 
other Officers of the Plan;'' and renumbering proposed Section 
4.3(c)(i)-(iv) as Section 4.3(c)(ii-v) accordingly. See Article IV, 
Section 4.3 of the Proposed CT Plan (as approved).
    \210\ With respect to the Equity Data Plans, unless otherwise 
specified, a majority vote of the Participants entitled to vote is 
required to constitute the action of the Operating Committees, 
including the election of a Chair. See Exhibit A, Article V, Section 
2, and Article IV(a) of the CTA Plan; Article IV.C-D of the UTP 
Plan.
---------------------------------------------------------------------------

    Further expanding the list of actions that can be taken by a 
majority vote of the Operating Committee is not warranted. While 
commenters raise concerns about potential gridlock, stagnation, or 
inefficiency, as the Commission stated in the Amended Governance Order:

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, prevents a 
small number of SRO groups from dictating plan action without 
further support from other SRO members.\211\
---------------------------------------------------------------------------

    \211\ Amended Governance Order, supra note 23, 88 FR at 61632.

    Section 4.3(b) differs from the corresponding provision in 2021 CT 
Plan approved by the Commission in that it conforms to the requirements 
of the Amended Governance Order by: (1) removing provisions regarding 
the participation of non-SRO representatives as members of the 
Operating Committee, and (2) modifying voting provisions to provide 
that all actions by the Operating Committee shall require a two-thirds 
majority vote of the votes allocated to the Operating Committee, except 
for the actions specified in Section 4.3(c).\212\ Section 4.3(c) 
differs from the corresponding provision in the 2021 CT Plan in that it 
conforms to requirements of the Amended Governance Order by removing 
provisions relating to the participation of non-SROs representatives as 
members of the Operating Committee and by requiring a majority vote of 
the Operating Committee for the selection of members of the Advisory 
Committee pursuant to Section 4.7. Separately, Section 4.3(c) adds to 
the actions requiring only a majority vote of the Operating Committee: 
(1) the election of the Chair and Officers of the Plan, as modified by 
the Commission, as well as (2) the decision to discuss a matter in a 
legal subcommittee pursuant to Section 4.8(d) of the Proposed CT 
Plan,\213\ which, as discussed above, is consistent with the Amended 
Governance Order.
---------------------------------------------------------------------------

    \212\ See id. at 61639-41.
    \213\ See id.
---------------------------------------------------------------------------

    For the reasons discussed above, the Commission is approving 
Sections 4.3(b) as proposed and Section 4.3(c) as renumbered and 
modified.
(d) Meetings of the Operating Committee
    Article IV, Section 4.4 of the Proposed CT Plan addresses meetings 
of the Operating Committee. Sections 4.4(a) through 4.4(f) contain 
general provisions regarding Operating Committee meetings, and Section 
4.4(g) contains provisions specific to meetings in Executive Session.
    Sections 4.4(a) through 4.4(f) are identical to the corresponding 
provisions of the 2021 CT Plan approved by the Commission,\214\ with 
the following exceptions, all of which are consistent with the 
requirements of the Amended Governance Order.\215\ First, as proposed, 
Section 4.4(a) adds a reference to ``Advisory Committee members'' \216\ 
and corrects a cross-reference to reflect the numbering of paragraphs 
in the Proposed CT Plan. Second, proposed Section 4.4(c) deletes 
language regarding quorum requirements of Voting Representatives, 
consistent with the requirements of the Amended Governance Order.\217\ 
And third, for the same reason as explained above--that the replaced 
term is the defined term--proposed Section 4.4(e) replaces reference to 
``SRO Voting Representatives'' with reference to ``Voting 
Representatives.'' \218\ The Commission is, however, modifying the text 
of Section 4.4(e)(ii) to replace the reference to ``Section 4.3'' in 
the first sentence of paragraph (ii) of Section 4.4(e) with a reference 
to ``Section 4.3(c),'' to conform this provision to the Commission's 
modifications to Section 4.3(c)(i) regarding the election of the Chair 
and other officers of the Proposed CT Plan.\219\ Separately, the 
Commission is modifying Section 4.4(e) to replace the term ``Operative 
Date'' with the term ``Effective Date'' as that term is defined in the 
Recitals. This change is appropriate because the Effective Date of the 
Agreement is the date it is approved by the Commission, whereas the 
Operative Date, as defined, does not occur until the date that Members 
conduct, through the Company, the Processor and Administrator functions 
related to the public dissemination of real-time consolidated equity 
market data and the Equity Data Plans cease their operations. As 
proposed, Section 4.4(e) states that the Chair of the Operating 
Committee shall be elected beginning with the first quarterly meeting 
of the Operating Committee following the Operative Date. The 
modification will, consistent with the role and functions of the Chair 
as outlined in Section 4.4(e), facilitate the implementation of the 
Proposed CT Plan, as the Chair will be able to be elected following the 
Effective Date and will be able to enter into contracts on behalf of 
the Company.
---------------------------------------------------------------------------

    \214\ See 2021 Approval Order, supra note 19, 86 FR at 44166-68, 
44213-14.
    \215\ See Amended Governance Order, supra note 23, 88 FR at 
61639-41.
    \216\ See id. at 61632 (stating that ``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'').
    \217\ See id.
    \218\ See Article I, Section 1.1(84) of the Proposed CT Plan (as 
approved) (defining the term ``Voting Representative'').
    \219\ See supra note 209 and accompanying text.
---------------------------------------------------------------------------

    The Commission received no comments on Section 4.4(a)-(d) and (f) 
of the Proposed CT Plan, and for the foregoing reasons, as well as for 
the reasons stated with respect to the corresponding provisions in the 
2021 Approval Order,\220\ the Commission is approving Section 4.4(a)-
(d), and (f) of

[[Page 94938]]

the Proposed CT Plan as proposed, and Section 4.4(e) as modified.\221\
---------------------------------------------------------------------------

    \220\ See 2021 Approval Order, supra note 19, 86 FR at 44166-68.
    \221\ See id. at 44166-72.
---------------------------------------------------------------------------

    Article IV, Section 4.4(g) of the Proposed CT Plan provides that, 
notwithstanding any other provision of the Proposed CT Plan, the Voting 
Representatives, Member Observers, SEC staff, and other persons as 
deemed appropriate by a majority vote of the Voting Representatives may 
meet in an Executive Session of the Operating Committee to discuss an 
item of business for which it is appropriate to exclude the Advisory 
Committee. A request to meet in Executive Session must be included on 
the written agenda for an Operating Committee meeting, along with a 
clearly stated rationale as to why that item would be appropriate for 
discussion in Executive Session.\222\ A majority vote of the Voting 
Representatives would be required to create an Executive Session.\223\ 
The Voting Representatives would be permitted to discuss only the topic 
for which the Executive Session was created and would disband upon 
fully discussing the topic.\224\
---------------------------------------------------------------------------

    \222\ See Article IV, Section 4.4(g) of the Proposed CT Plan.
    \223\ See id.
    \224\ See Article IV, Section 4.4(g) of the Proposed CT Plan.
---------------------------------------------------------------------------

    Article IV, Section 4.4(g)(i) of the Proposed CT Plan also provides 
that topics discussed in Executive Session ``should'' be limited to the 
following: (1) any topic that requires discussion of Highly 
Confidential Information; (2) Vendor or Subscriber Audit Findings; (3) 
litigation matters; (4) responses to regulators with respect to 
inquiries, examinations, or findings; and (5) other discrete matters 
approved by the Operating Committee.\225\ Section 4.4(g)(ii) states 
that the mere fact that a topic is controversial or a matter of dispute 
does not, by itself, make a topic appropriate for Executive 
Session.\226\ This section further provides that the minutes for an 
Executive Session must include the reason for including any item in an 
Executive Session.\227\ Section 4.4(g)(iii) provides that requests to 
discuss a topic in Executive Session must be included on the written 
agenda for the Operating Committee meeting, along with the clearly 
stated rationale for each topic as to why such discussion is 
appropriate for Executive Session.\228\ This section further provides 
that the rationale may be that the topic to be discussed falls within 
the list of topics that may be discussed pursuant to paragraph 
4.4(g)(i).\229\
---------------------------------------------------------------------------

    \225\ See Article IV, Section 4.4(g)(i)(A)-(E) of the Proposed 
CT Plan.
    \226\ See Article IV, Section 4.4(g)(ii) of the Proposed CT 
Plan.
    \227\ See id.
    \228\ See Article IV, Section 4.4(g)(iii) of the Proposed CT 
Plan.
    \229\ See id.
---------------------------------------------------------------------------

    The Commission received one comment on Section 4.4(g). 
Specifically, one commenter suggests that the Proposed CT Plan should 
be modified to: (1) use non-discretionary, rather than permissive 
language, with respect to the scope of potential items that could be 
discussed in Executive Session and (2) preclude discussions regarding 
contract negotiations with the plan processors or the plan 
administrator in Executive Session.\230\ This commenter states that 
``similar policy rationales for narrowly tailoring the use of Executive 
Sessions or other exclusive meeting forums apply where non-SROs are 
Advisory Committee members'' rather than voting non-SRO members, as 
provided in the 2021 CT Plan.\231\
---------------------------------------------------------------------------

    \230\ See ICI Letter, supra note 109, at 3, n.11.
    \231\ Id. See also Section 4.4(g)(i) of the 2021 CT Plan; 2021 
Approval Order, supra note 19, 86 FR at 44214.
---------------------------------------------------------------------------

    The Commission agrees with the commenter that the Proposed CT Plan 
should provide clear boundaries with respect to the scope of potential 
topics permitted to be discussed in an Executive Session.\232\ Thus, 
for the same reasons discussed in the 2021 Approval Order,\233\ the 
Commission is modifying Article IV, Section 4.4(g)(i) of the Proposed 
CT Plan to require that the items for discussion in an Executive 
Session ``shall be'' limited to the topics enumerated in subsections 
4.4(g)(i)(A)-(E) of the Proposed CT Plan.\234\
---------------------------------------------------------------------------

    \232\ See 2021 Approval Order, supra note 19, 86 FR at 44170 
(stating that ``the topics that may be discussed in Executive 
Session should be specifically enumerated in the CT Plan to provide 
transparent and clear boundaries'').
    \233\ See id. (modifying Article IV, Section 4.4(g)(i) of the 
2021 CT Plan to require that the items for discussion in an 
Executive Session ``shall be'' limited to the topics enumerated in 
subsections 4.4(g)(i)(A)-(E) of that plan).
    \234\ To effect this change, the Commission is modifying 
proposed Section 4.4(g)(i) of the Proposed CT Plan to delete the 
word ``should'' and replace it with ``shall.'' The Commission is 
also making a conforming change to proposed Section 4.4(g)(i) of the 
Proposed CT Plan to remove the word ``as'' that appears after 
``topics'' in that subsection.
---------------------------------------------------------------------------

    As the Commission stated in the 2021 Approval Order, ``not every 
topic that may be appropriate for Executive Session can be foreseen, 
and . . . some provision must therefore be made in the CT Plan for 
unanticipated topics suitable for Executive Session.'' \235\ The 
language in Section 4.4(g)(i)(E) that permits the SROs to meet in 
Executive Session to discuss ``[o]ther discrete matters approved by the 
Operating Committee'' provides the necessary flexibility for 
unanticipated topics to be addressed without altering the list of 
permissible topics for Executive Session into a non-exclusive list of 
suggestions.
---------------------------------------------------------------------------

    \235\ 2021 Approval Order, supra note 19, 86 FR at 44171.
---------------------------------------------------------------------------

    The Commission does not agree with the commenter's suggestion that 
the Proposed CT Plan provide that ``discussions regarding contract 
negotiations with the Processors or Administrator'' do not qualify for 
discussion in Executive Session.\236\ While the Commission specifically 
added this language to the plan it approved in the 2021 Approval 
Order,\237\ that was in the context of an Operating Committee that 
included Non-SRO Voting Representatives as full members, and the 
Commission did not believe that it was appropriate for any members of 
the Operating Committee to be excluded from such discussions by holding 
the discussions in an SRO-only Executive Session.\238\ In the Proposed 
CT Plan, however, the Operating Committee will not include any non-SRO 
representatives,\239\ and it is therefore appropriate, and consistent 
with the Amended Governance Order, for the Operating Committee to meet 
in Executive Session to discuss ``[a]ny topic that requires discussion 
of Highly Confidential Information,'' which, by definition, includes 
discussion concerning contract negotiations with the Processors or the 
Administrator.
---------------------------------------------------------------------------

    \236\ ICI Letter, supra note 109, at 3.
    \237\ See 2021 Approval Order, supra note 19, 86 FR at 44170-71.
    \238\ See id.
    \239\ See Amended Governance Order, supra note 23, 88 FR at 
61639-41.
---------------------------------------------------------------------------

    Section 4.4(g) of the Proposed CT Plan differs from the 
corresponding provision of the 2021 CT Plan approved by the Commission 
\240\ in several respects. First, this section conforms to requirements 
of the Amended Governance Order by removing provisions governing the 
participation of non-SROs as members of the Operating Committee, and, 
relatedly, by using the terms ``Voting Representatives'' rather than 
``SRO Voting Representatives,'' and ``Advisory Committee'' rather than 
``Non-SRO Voting Representatives.'' Separately, Section 4.4(g)(i) 
differs in that it (1) removes, as a topic not permitted for discussion 
within an Executive Session, discussions regarding contract 
negotiations with the Processor or the Administrator for the reasons 
discussed, and (2) removes a provision addressing voting requirements 
for actions requiring a vote in Executive Session,

[[Page 94939]]

which reduces redundancy because such requirements are set forth in 
Section 4.3(a). The modification made by the Commission to Section 
4.4(g)(i) (to replace ``should'' with ``shall'') is appropriate because 
it conforms this provision with the corresponding provision of the 2021 
CT Plan approved by the Commission.\241\ For the foregoing reasons, as 
well as those stated in the 2021 Approval Order with respect to the 
corresponding provisions of the 2021 CT Plan, (apart from those 
pertaining to the participation of non-SROs representatives as members 
of the operating committee of the 2021 CT Plan, which is not included 
in the Proposed CT Plan),\242\ the Commission is approving Section 
4.4(g) as modified.
---------------------------------------------------------------------------

    \240\ See 2021 Approval Order, supra note 19, 86 FR at 44168-71.
    \241\ See id. at 44170.
    \242\ See id. at 44168-71.
---------------------------------------------------------------------------

(e) Certain Transactions
    Article IV, Section 4.5 of the Proposed CT Plan states that the 
Company is not prohibited from employing or dealing with persons in 
which an SRO or any of its affiliates has a connection or a direct or 
indirect interest. Specifically, the section provides that the fact 
that a Member or any of its Affiliates is directly or indirectly 
interested in or connected with any person employed by the Company to 
render or perform a service, or from which or to whom the Company may 
buy or sell any property, shall not prohibit the Company from employing 
or dealing with such person.
    Section 4.5 is identical to the corresponding provision of the 2021 
CT Plan approved by the Commission,\243\ and was not required to be 
modified by the Amended Governance Order. The Commission received no 
comment on Section 4.5 of the Proposed CT Plan, and for the same 
reasons stated in the 2021 Approval Order,\244\ the Commission is 
approving Section 4.5 of the Proposed CT Plan as proposed.
---------------------------------------------------------------------------

    \243\ See id.
    \244\ See id.
---------------------------------------------------------------------------

(f) Company Opportunities
    Article IV, Section 4.6(a) of the Proposed CT Plan provides that 
each Member, its Affiliates, and each of its respective equity holders, 
controlling persons, and employees may have business interests and 
engage in business activities in addition to those relating to the 
Company.\245\ Section 4.6(b) provides that Members are permitted to 
have, and may presently or in the future have, investments or other 
business relationships with persons engaged in the business of the 
Company other than through the Company, and that Members have and may 
develop strategic relationships with businesses that are and may be 
competitive or complementary with the Company.\246\ Section 4.6(b) 
further provides that none of the SROs shall be obligated to recommend 
or take any action that prefers the interest of the Company or any 
other Member over its own interests, prohibited from pursing and 
engaging in other activities, nor obligated to inform or present to the 
Company any opportunity, relationship, or investment.\247\ Finally, 
this section states that Members will not acquire or be entitled to any 
interest or participation in any other business as a result of the 
participation therein of any of the other Members, and that the 
involvement of another Member in any other business does not constitute 
a conflict of interest by such person with respect to the Company. This 
provision defines investments or other business relationships with 
persons engaged in the business of the Company other than through the 
Proposed CT Plan as ``Other Business.'' \248\ Separately, Exhibit B 
(``Disclosures'') of the Proposed CT Plan provides a list of questions 
and instructions tailored to elicit responses that disclose potential 
conflicts of interest.
---------------------------------------------------------------------------

    \245\ See Article IV, Section 4.6(a). This Section further 
provides that neither the Company nor any Member shall have any 
rights by virtue of this Agreement in any business ventures of any 
such Person. See id.
    \246\ See Article IV, Section 4.6(b) of the Proposed CT Plan.
    \247\ See id.
    \248\ See id.
---------------------------------------------------------------------------

    Section 4.6 is identical to the corresponding provision of the 2021 
CT Plan approved by the Commission,\249\ and was not required to be 
modified by the Amended Governance Order. The Commission received no 
comment on Section 4.6 of the Proposed CT Plan, and, for the same 
reasons stated in the 2021 Approval Order,\250\ the Commission is 
approving Section 4.6 of the Proposed CT Plan as proposed.
---------------------------------------------------------------------------

    \249\ See 2021 Approval Order, supra note 19, 86 FR at 44173-74.
    \250\ See id.
---------------------------------------------------------------------------

(g) Advisory Committee
    Article IV, Section 4.7 of the Proposed CT Plan governs the 
formation, composition, and function of the Advisory Committee to the 
Proposed CT Plan. Section 4.7(a) provides that, notwithstanding any 
other provision of the Proposed CT Plan, an Advisory Committee to the 
Proposed CT Plan shall be formed and shall function in accordance with 
the provisions set forth in that section.\251\ Section 4.7(b) governs 
the composition of the Advisory Committee. Specifically, this section 
provides that the members of the Advisory Committee will be selected by 
the Operating Committee for two-year terms as follows: (1) by 
affirmative vote of a majority of the Members entitled to vote, the 
Operating Committee will select at least one representative from each 
of the following categories to be members of the Advisory Committee: 
(A) an institutional investor; (B) a broker-dealer with a predominantly 
retail investor customer base; (C) a broker-dealer with a predominantly 
institutional investor customer base; (D) a securities market data 
vendor that is not affiliated or associated with a Member, broker-
dealer, or investment adviser with third-party clients; (E) an issuer 
of NMS stock that is not affiliated or associated with a Member, 
broker-dealer, or investment adviser with third-party clients; and (F) 
a Retail Representative.\252\ Section 4.7(b)(i) further addresses 
Advisory Committee selections and provides that the Operating Committee 
will not be permitted to select any person employed by or affiliated 
with any Member or its affiliates or facilities.\253\ Section 
4.7(b)(ii) governs Member selections and provides that each Member will 
have the right to select one member of the Advisory Committee, 
provided, however, that a Member will not be permitted to select any 
person employed by or affiliated with any Member or its affiliates or 
facilities.
---------------------------------------------------------------------------

    \251\ See Article IV, Section 4.7(a) of the Proposed CT Plan.
    \252\ See Article IV, Section 4.7(b)(i) of the Proposed CT Plan.
    \253\ See Article IV, Section 4.7(b)(ii) of the Proposed CT 
Plan.
---------------------------------------------------------------------------

    Section 4.7(c), as proposed, sets forth the function of the 
Advisory Committee. Specifically, Section 4.7(c) provides that members 
of the Advisory Committee will have the right to submit their views to 
the Operating Committee on Plan matters, prior to a decision by the 
Operating Committee on such matters.\254\ This section further provides 
that such matters will include, but not be limited to, any new or 
modified product, fee, contract, or pilot program that is offered or 
used pursuant to the Plan.\255\ Finally, Section 4.7(d), as proposed, 
clarifies that members of the Advisory Committee are not Members of the 
Company.\256\
---------------------------------------------------------------------------

    \254\ See Article IV, Section 4.7(c) of the Proposed CT Plan.
    \255\ See id.
    \256\ See Article IV, Section 4.7(d) of the Proposed CT Plan.
---------------------------------------------------------------------------

    One commenter supports provisions addressing the composition and 
attendance at Operating Committee and subcommittee meetings by members 
of

[[Page 94940]]

the Advisory Committee, stating that this feature of the Proposed CT 
Plan is essential to providing non-SRO market participants with the 
transparency needed to continue to provide their views to the Operating 
Committee and participate in plan governance.\257\
---------------------------------------------------------------------------

    \257\ See ICI Letter, supra note 109, at 2.
---------------------------------------------------------------------------

    As required by the Amended Governance Order, the Proposed CT Plan 
provides for participation by non-SROs in the operation of the Proposed 
CT Plan as members of an advisory committee.\258\ Further, the 
provisions of Section 4.4(a) (permitting attendance by Advisory 
Committee members at meetings of the Operating Committee, except for 
Executive Sessions), Section 4.4(b) (requiring the provision of 
subcommittee minutes to members of the Advisory Committee), and Section 
4.8(c) (permitting attendance by Advisory Committee members at 
subcommittee meetings, other than a legal subcommittee) provide 
transparency in the operations of the Proposed CT Plan, as supported by 
the commenter.
---------------------------------------------------------------------------

    \258\ See Amended Governance Order, supra note 23, 88 FR at 
61632, 61639.
---------------------------------------------------------------------------

    The Commission is, however, modifying proposed Section 4.7 to 
further conform provisions regarding the composition and selection of 
members of the Advisory Committee with the requirements of the Amended 
Governance Order. First, the Commission is modifying Section 4.7(b) to 
require that selection of members of the Advisory Committee shall be by 
majority vote of the Operating Committee,\259\ as required by the 
Amended Governance Order,\260\ rather than ``[b]y affirmative vote of a 
majority of the Members entitled to vote,'' as proposed. The 
modification is appropriate to conform the Proposed CT Plan to the 
requirements of the Amended Governance Order, which requires that votes 
on the Operating Committee shall be allocated by SRO Group or Non-
Affiliated SRO rather than by individual SROs. To effect this 
modification the Commission, is deleting, from paragraph (b)(i) of 
proposed Section 4.7 the following text: ``Members of the Advisory 
Committee shall be selected for two-year terms as follows: (i) 
Operating Committee Selections. By affirmative vote of a majority of 
the Members entitled to vote.'' \261\ The Commission is further 
modifying Section 4.7(b), as renumbered, to insert, in its first 
sentence, the words ``by majority vote,'' and is moving the phrase 
``Members of the Advisory Committee shall be selected for two-year 
terms'' to a new Section 4.7(c).\262\
---------------------------------------------------------------------------

    \259\ See Article IV Section 4.3(c)(ii) of the Proposed CT Plan 
(as approved).
    \260\ See Amended Governance Order, supra note 23, 88 FR at 
61639 (``The Revised New Consolidated Data Plan shall provide for a 
non-voting Advisory Committee to be selected by majority vote of the 
operating committee.'').
    \261\ The Commission is further modifying Section 4.7(b)(i) to 
(1) remove, from its first sentence, the comma and spacing after 
``vote,'' as well as the ``t'' that immediately follows, and (2) 
substitute, for the stricken ``t,'' a capital ``T.'' See Article IV, 
Section 4.3(c)(ii) of the Proposed CT Plan (as approved).
    \262\ Accordingly, the Commission is renumbering proposed 
Sections 4.7(c) and (d) as Section 4.7(d) and (e), respectively.
---------------------------------------------------------------------------

    Further, the Commission is modifying the Proposed CT Plan by 
deleting Section 4.7(b)(ii) in its entirety. Section 4.7(b)(ii) would 
have provided each SRO with the ability to appoint a person to serve on 
the Advisory Committee. That provision, however, is inconsistent with 
the requirement of the Amended Governance Order:

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.\263\
---------------------------------------------------------------------------

    \263\ Amended Governance Order, supra note 23, 88 FR at 61639.

The Amended Governance Order thus requires that members of the Advisory 
Committee be selected by a majority vote of the Operating Committee and 
lists the categories of persons who shall constitute the Advisory 
Committee to allow for participation by non-SROs in the operation of 
the new NMS plan.\264\ The modification to delete Section 4.7(b)(ii) of 
the Proposed CT Plan is appropriate because, as discussed above, that 
provision is inconsistent with requirements of the Amended Governance 
Order.\265\ Permitting each of the SROs that are ``Members'' of the 
Proposed CT Plan to appoint its own member to the Advisory Committee 
would create an Advisory Committee numerically dominated by the chosen 
representatives of individual SROs, rather than one reflecting the 
broader industry perspectives provided by the six required categories 
specified by the Amended Governance Order.
---------------------------------------------------------------------------

    \264\ See id.
    \265\ See id.
---------------------------------------------------------------------------

    For the foregoing reasons, the Commission is approving Section 4.7 
of the Proposed CT Plan as modified.
(h) Subcommittees
    Section 4.8 of Article IV of the Proposed CT Plan governs the 
Operating Committee's discretion to create and disband subcommittees, 
as well as the selection of subcommittee chairs, permissible attendees 
at subcommittee meetings, minutes of subcommittee meetings, and special 
provisions applicable to meetings of a legal subcommittee.
(i) Selection of Subcommittee Chairs
    Paragraph (a) of Section 4.8 permits the Operating Committee to 
create and disband subcommittees and to determine the duties, 
responsibilities, powers, and composition of any of its 
subcommittees.\266\ This paragraph also requires that subcommittee 
chairs be selected by the Operating Committee from Voting 
Representatives.\267\ Furthermore, this paragraph provides that the 
Operating Committee may not delegate to a subcommittee the 
administrative functions to be performed by the Administrator of the 
Proposed CT Plan.\268\
---------------------------------------------------------------------------

    \266\ See Article IV, Section 4.8(a) of the Proposed CT Plan.
    \267\ See id.
    \268\ See id.
---------------------------------------------------------------------------

    One commenter supports the provision of the Proposed CT Plan 
precluding subcommittees from carrying out administrative functions of 
the independent administrator.\269\
---------------------------------------------------------------------------

    \269\ See ICI Letter, supra note 109, at 2.
---------------------------------------------------------------------------

    Article IV, Section 4.8(a) is consistent with requirements of the 
Amended Governance Order \270\ and differs from the corresponding 
provision of the 2021 CT Plan approved by the Commission \271\ in that, 
consistent with requirements of the Amended Governance Order, it (1) 
removes all references to ``SRO Voting Representatives,'' (2) replaces 
the term ``SRO Voting Representatives'' with Voting Representatives, 
and (3) prohibits the Operating Committee from delegating to a 
subcommittee the administrative functions to be performed by the 
Administrator.\272\ For the foregoing reasons, as well as those in the 
2021 Approval Order (apart from those pertaining to the participation 
of

[[Page 94941]]

non-SRO representatives as members of the operating committee of the 
2021 CT Plan, which is not included in the Proposed CT Plan),\273\ the 
Commission is approving Section 4.8(a) as proposed.
---------------------------------------------------------------------------

    \270\ See Amended Governance Order, supra note 23, 88 FR at 
61641.
    \271\ See 2021 Approval Order, supra note 19, 86 FR at 44214.
    \272\ See Amended Governance Order, supra note 23, 88 FR at 
61631, 61641.
    \273\ See 2021 Approval Order, supra note 18, 86 FR 44174.
---------------------------------------------------------------------------

(ii) Transparency of Subcommittee Meetings
    Paragraph (b) of Section 4.8 provides that, except that as provided 
for minutes of the legal subcommittee in Section 4.8(d), the Secretary 
or designee will prepare minutes of all subcommittee minutes and that 
such minutes will be made available to the Operating Committee and 
members of the Advisory Committee.\274\
---------------------------------------------------------------------------

    \274\ See Article IV, Section 4.8(b) of the Proposed CT Plan.
---------------------------------------------------------------------------

    One commenter supports the provisions of the Proposed CT Plan 
addressing the preparation and distribution of all meeting 
minutes.\275\
---------------------------------------------------------------------------

    \275\ See ICI Letter, supra note 109, at 2.
---------------------------------------------------------------------------

    Section 4.8(b) differs from the corresponding provision of the 2021 
CT Plan approved by the Commission in that it conforms this provision 
with requirements of the Amended Governance Order regarding 
transparency of subcommittee meetings.\276\ Accordingly, the Commission 
is approving Section 4.8(b) as proposed.
---------------------------------------------------------------------------

    \276\ See Amended Governance Order, supra note 23, 88 FR at 
61638, 61641.
---------------------------------------------------------------------------

(iii) Permissible Attendees of Subcommittee Meetings
    Paragraph (c) of Section 4.8 of the Proposed CT Plan states that 
Voting Representatives, the Advisory Committee, Member Observers, SEC 
staff, and other persons as deemed appropriate by the Operating 
Committee may attend subcommittee meetings.\277\
---------------------------------------------------------------------------

    \277\ See Article IV, Section 4.8(c) of the Proposed CT Plan.
---------------------------------------------------------------------------

    Section 4.8(c) is consistent with requirements of the Amended 
Governance Order \278\ and substantively similar to the corresponding 
provision of the 2021 CT Plan approved by the Commission,\279\ other 
than for replacing the term ``Non-SRO Voting Representatives'' with 
``the Advisory Committee,'' consistent with requirements in the Amended 
Governance Order.\280\ The Commission received no comments on Section 
4.8(c), and, for the same reasons as stated in the 2021 Approval Order 
(apart from those pertaining to participation of non-SRO 
representatives as member of the operating committee of the 2021 CT 
Plan, which is not part of the Proposed CT Plan),\281\ the Commission 
is approving Section 4.8(c) as proposed.
---------------------------------------------------------------------------

    \278\ See Amended Governance Order, supra note 23, 88 FR at 
61631, 61638-39.
    \279\ See 2021 Approval Order, supra note 19, 86 FR at 44175, 
44214.
    \280\ See Amended Governance Order, supra note 23, 88 FR at 
61631-32.
    \281\ See 2021 Approval Order, supra note 19, 86 FR at 44175, 
44214.
---------------------------------------------------------------------------

(iv) Legal Subcommittee
    Article IV, Section 4.8(d) provides that Voting Representatives, 
Member Observers, and other persons as deemed appropriate by majority 
vote of the Voting Representatives may meet in a subcommittee to 
discuss an item that exclusively affects the Members with respect to 
the following: (1) litigation matters or responses to regulators with 
respect to inquiries, examinations, or findings; and (2) other discrete 
legal matters approved by the Operating Committee.\282\ Section 4.8(d) 
further provides that the Secretary will prepare the minutes of legal 
subcommittee meetings, and that such minutes will include the 
following: (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.\283\ This paragraph further provides that such minutes 
will be made available only to the Voting Representatives, Member 
Observers, and other persons deemed appropriate by a majority vote of 
the Operating Committee.\284\
---------------------------------------------------------------------------

    \282\ See Article IV, Section 4.8(d) of the Proposed CT Plan.
    \283\ See id.
    \284\ See id.
---------------------------------------------------------------------------

    One commenter supports the provisions of the Proposed CT Plan 
addressing the preparation and distribution of all meeting 
minutes.\285\ This commenter also states that the Commission should 
reincorporate provisions of the 2021 CT Plan approved by the Commission 
that were intended to promote the role of non-SROs, including expanding 
the scope of information required to justify referral of a matter to a 
legal subcommittee.\286\ This commenter states that similar policy 
rationales for narrowly tailoring the use of Executive Sessions or 
other exclusive meetings apply when non-SROs are Advisory Committee 
members.\287\
---------------------------------------------------------------------------

    \285\ See ICI Letter, supra note 109, at 2, n.6.
    \286\ See id. at 3, 4.
    \287\ See id. at 3, n.11.
---------------------------------------------------------------------------

    The provisions of proposed Section 4.8(d) sufficiently limit the 
matters that may be discussed in a legal subcommittee meeting of the 
Proposed CT Plan. Proposed Section 4.8(d) specifically requires that a 
matter referred to the legal subcommittee be limited to ``an item that 
exclusively affects the Members'' in two circumstances: (1) litigation 
matters or responses to regulators with respect to inquiries, 
examinations, or findings; and (2) other discrete legal matters 
approved by the Operating Committee.\288\ Moreover, referral to the 
legal subcommittee must be approved by a majority vote of the Operating 
Committee. The SROs have a right to consult with legal counsel with 
respect to such items, and permitting non-SROs to attend discussions 
regarding those items might cause a waiver of the SROs' attorney-client 
privilege.
---------------------------------------------------------------------------

    \288\ See Section 4.8(d) of the Proposed CT Plan.
---------------------------------------------------------------------------

    Moreover, the provisions of proposed Section 4.8(d) provide 
sufficient accountability regarding the use by the SROs of the legal 
subcommittee. Minutes of legal subcommittee meetings will be required, 
and those minutes must, for each matter discussed, identify the 
privilege claimed and include sufficient non-privileged information to 
identify the reason the matter was referred to the legal subcommittee. 
These minutes, like all CT Plan documents, will be available to the 
Commission and its staff,\289\ which will provide accountability 
regarding use of the legal subcommittee, while preserving, to the 
extent appropriate, the SROs' attorney-client privilege with respect to 
discussions at legal subcommittee meetings.
---------------------------------------------------------------------------

    \289\ See Section 4.10 of the Proposed CT Plan (Commission 
Access to Information and Records).
---------------------------------------------------------------------------

    Therefore, the provisions of proposed Section 4.8(d) are consistent 
with the requirements of the Amended Governance Order.\290\ Moreover, 
other than for differences to conform to requirements of the Amended 
Governance Order, including (1) the omission of references to Non-SRO 
Voting Representatives,\291\ which are no longer part of the Proposed 
CT Plan, (2) the use of the term ``Voting Representative'' rather than 
``SRO Voting Representative,'' \292\ as well as (3) the addition of 
specific requirements regarding the content, preparation, and 
distribution of subcommittee minutes,\293\ the provisions of Section 
4.8(d) are substantively similar to the corresponding provisions of the 
2021 CT Plan approved by the

[[Page 94942]]

Commission.\294\ For the foregoing reasons, as well as those in the 
2021 Approval Order (apart from those pertaining to the participation 
of non-SRO representatives as members of the operating committee of the 
2021 CT Plan, which is not included in the Proposed CT Plan),\295\ the 
Commission is approving Section 4.8(d) as proposed.
---------------------------------------------------------------------------

    \290\ See Amended Governance Order, supra note 23, 88 FR at 
61638-39.
    \291\ See id. at 61631.
    \292\ See id.
    \293\ See id. at 61641.
    \294\ See 2021 Approval Order, supra note 19, 86 FR at 44175-77.
    \295\ See 2021 Approval Order, supra note 19, 86 FR at 44175-77.
---------------------------------------------------------------------------

(i) Officers
    Section 4.9 of Article IV of the Proposed CT Plan governs the 
selection of CT Plan Officers. Paragraph (a) of Section 4.9 provides 
that, other than the Chair, the Operating Committee may, from time to 
time, designate and appoint one or more persons as Officers of the 
Company.\296\ This paragraph further provides that other than the 
Chair, no such officer need be a Voting Representative.\297\ Pursuant 
to this paragraph, any officer so designated will have such authority 
and perform such duties as the Operating Committee may, from time to 
time, delegate to them, and that any such delegation may be revoked at 
any time by the Operating Committee.\298\ Paragraph (a) of Section 4.9 
further provides that the Operating Committee may assign titles to 
particular Officers, and that each Officer will hold office until a 
successor is designated, or until the Officer's death, resignation, or 
removal, as provided in the Proposed CT Plan.\299\ This paragraph 
further provides that an individual may hold any number of offices, and 
that Officers shall not be entitled to receive salary or other 
compensation, unless approved by the Operating Committee.\300\ This 
section further provides that any Officer may resign at any time, that 
such resignation must be made in writing, and that it shall take effect 
at the time specified in the notice, or if no time be specified, at the 
time of its receipt by the Operating Committee.\301\ Pursuant to this 
section, the acceptance of a resignation will not be necessary to make 
it effective.\302\ Finally, this section provides that any officer may 
be removed at any time by a majority vote of the Members.\303\
---------------------------------------------------------------------------

    \296\ See Article IV, Section 4.9(a) of the Proposed CT Plan.
    \297\ See id.
    \298\ See id.
    \299\ See id.
    \300\ See id.
    \301\ See Article IV, Section 4.9(b) of the Proposed CT Plan.
    \302\ See id.
    \303\ See Article IV, Section 4.9(c) of the Proposed CT Plan.
---------------------------------------------------------------------------

    The Commission is modifying Section 4.9 to provide that a majority 
vote of the Operating Committee, rather than of its Members, shall be 
required to remove any Officer. To effect this modification, the 
Commission is therefore deleting, from proposed Section 4.9(c), the 
word ``Members,'' and substituting the words ``Operating Committee.'' 
This modification is appropriate to make the provision consistent with 
the requirements of Section 4.3(a) of the Proposed CT Plan, which 
governs the allocation of votes to the Members of the Proposed CT Plan. 
As required by the Amended Governance Order, Section 4.3 allocates 
votes to SRO Groups and Non-Affiliated SROs--not to each individual SRO 
that is a Member of the Proposed CT Plan.\304\
---------------------------------------------------------------------------

    \304\ See Article IV, Section 4.3(a) of the Proposed CT Plan.
---------------------------------------------------------------------------

    Other than as modified by the Commission to conform to Amended 
Governance Order requirements regarding action of the Operating 
Committee,\305\ as discussed above, Section 4.9 is, other than for 
immaterial differences,\306\ substantively similar to the corresponding 
provision of the 2021 CT Plan approved by the Commission.\307\ The 
Commission received no comments addressing Section 4.9 of the Proposed 
CT Plan, and, for the reasons discussed above, as well as for the 
reasons stated in the 2021 Approval Order (apart from those pertaining 
to the participation of non-SRO representatives as members of the 
operating committee of the 2021 CT Plan, which is not included in the 
Proposed CT Plan),\308\ the Commission is approving Section 4.9 of the 
Proposed CT Plan as modified.
---------------------------------------------------------------------------

    \305\ See Amended Governance Order, supra note 23, 88 FR at 
61631.
    \306\ Article IV, Section 4.9 of the Proposed CT Plan 
corresponds to Article IV, Section 4.8 of the 2021 CT Plan. See 2021 
Approval Order, supra note 19, 86 FR at 44215.
    \307\ See 2021 Approval Order, supra note 19, 86 FR at 44178.
    \308\ See id.
---------------------------------------------------------------------------

(j) Commission Access to Information and Records
    Section 4.10 of Article IV of the Proposed CT Plan provides that 
``[n]othing in this Agreement shall be interpreted to limit or impede 
the rights of the Commission or SEC staff to access information and 
records of the Company or any of the Members (including their 
employees) pursuant to U.S. federal securities laws and the rules and 
regulations promulgated thereunder.'' \309\ This provision is identical 
to the corresponding provision of the 2021 CT Plan approved by the 
Commission,\310\ and was not required to be modified by the Amended 
Governance Order. The Commission received no comments addressing this 
provision, and the Commission is approving Section 4.10 of the Proposed 
CT Plan as proposed.
---------------------------------------------------------------------------

    \309\ See Article IV, Section 4.10 of the Proposed CT Plan.
    \310\ See 2021 Approval Order, supra note 19, at 86 FR at 44178.
---------------------------------------------------------------------------

(k) Disclosure of Potential Conflicts of Interest; Recusal
    Article IV, Section 4.11 of the Proposed CT Plan sets forth the 
disclosure requirements with respect to conflicts of interest, and the 
provisions for recusal, as approved by the Commission \311\ with 
certain modified requirements as set forth in the Amended Governance 
Order.\312\
---------------------------------------------------------------------------

    \311\ See Securities Exchange Act Release Nos. 88823 (May 6, 
2020), 85 FR 28046 (May 12, 2020); 88824 (May 6, 2020), 85 FR 28119 
(May 12, 2020) (collectively, the ``Conflicts of Interest Approval 
Orders''). In the Governance Order, as well as in the Amended 
Governance Order, the Commission ordered the SROs to incorporate 
into the new NMS plan provisions consistent with the Conflicts of 
Interest Approval Orders. See Governance Order, supra note 11, 85 FR 
at 28726; Amended Governance Order, supra note 23, 88 FR at 61633-
34, 61640.
    \312\ See Amended Governance Order, supra note 23, 88 FR at 
61634-35, 61640.
---------------------------------------------------------------------------

(i) Disclosure Requirements
    Section 4.11 of Article IV provides that the Members (including any 
Member Observers), the Processors, the Administrator, and each service 
provider or subcontractor (each a ``Disclosing Party'') engaged in 
Company business (including the audit of Subscribers' data usage) that 
has access to Restricted \313\ or Highly Confidential Information \314\ 
(``Disclosing Parties''), as defined in the Plan,\315\ shall complete a 
prescribed questionnaire and be subject to the disclosure requirements 
as described in Section 4.11(c) and Exhibit B to the Plan to disclose 
all material facts necessary to identify potential conflicts of 
interest.\316\ Exhibit B to the Proposed CT Plan provides a list of 
questions and instructions tailored to elicit responses that disclose 
potential conflicts of interest.\317\ Section 4.11(a) also states that 
the Operating Committee, a Member, Processors, or Administrator

[[Page 94943]]

may not use a service provider or subcontractor on Company business 
unless that service provider or subcontractor has agreed in writing to 
provide the disclosures required by this section and has submitted 
completed disclosures to the Administrator prior to starting work.\318\
---------------------------------------------------------------------------

    \313\ See Article I, Section 1.1(64) of the Proposed CT Plan 
(defining ``Restricted Information'').
    \314\ See Article I, Section 1.1(34) of the Proposed CT Plan 
(defining ``Highly Confidential Information'').
    \315\ See supra notes 313-314 and accompanying text.
    \316\ See Article IV, Section 4.11(a) of the Proposed CT Plan.
    \317\ See Article IV, Section 4.11(c) of and Exhibit B to the 
Proposed CT Plan.
    \318\ See Article IV, Section 4.11(a) of the Proposed CT Plan.
---------------------------------------------------------------------------

    Section 4.11(a) further provides that if state laws, rules, or 
regulations, or applicable professional ethics rules or standards of 
conduct, would act to restrict or prohibit a Disclosing Party from 
making any particular required disclosure, a Disclosing Party must 
refer to such law, rule, regulation, or professional ethics rule or 
standard and include in response to that disclosure the basis for its 
inability to provide a complete response, and further, that this would 
not relieve the Disclosing Party from disclosing any information it is 
not restricted from providing.\319\
---------------------------------------------------------------------------

    \319\ See id.
---------------------------------------------------------------------------

    Section 4.11(a) also describes circumstances in which a potential 
conflict of interest may exist,\320\ provides for required updates of 
disclosures,\321\ provides for public dissemination of 
disclosures,\322\ and provides that Disclosing Parties that are not 
Members or members of the Advisory Committee to comply with the 
required disclosure and recusal provisions in their respective 
agreements with the Company, a Member, the Administrator, or the 
Processors.\323\
---------------------------------------------------------------------------

    \320\ See Article IV, Section 4.11(a)(i) of the Proposed CT 
Plan.
    \321\ See Article IV, Section 4.11(a)(ii) of the Proposed CT 
Plan.
    \322\ See Article IV, Section 4.11(a)(iii) of the Proposed CT 
Plan.
    \323\ See Article IV, Section 4.11(a)(iv) of the Proposed CT 
Plan.
---------------------------------------------------------------------------

    Section 4.11(a) differs substantively from the corresponding 
provision of the 2021 CT Plan approved by the Commission only in that, 
consistent with the Amended Governance Order,\324\ the term ``Non-SRO 
Voting Representatives'' has been struck where it appeared and has been 
replaced by ``members of the Advisory Committee'' in Section 
4.11(a)(iv). The Commission is modifying proposed Section 4.11(a) to 
add ``members of the Advisory Committee'' to the first sentence of this 
section, which defines ``Disclosing Parties.'' It is appropriate that 
members of the Advisory Committee be included in the definition, given 
that they are replacing the Non-SRO Voting Representatives, will have 
access to Restricted or Highly Confidential Information, and are 
referenced in Section 4.11(a)(iv) as a Disclosing Party, they should be 
subject to the requirements of Section 4.11, including disclosing all 
material facts necessary to identify potential conflicts of interest 
and be recused consistent with Section 4.11(b) (discussed below). 
Additionally Exhibit B (the disclosure questionnaire) differs 
substantively from the corresponding portion of the 2021 CT Plan 
approved by the Commission \325\ only in that, consistent with the 
Amended Governance Order,\326\ it replaces references to Non-SRO Voting 
Representatives with references to members of the Advisory Committee. 
The Commission received no comments on Section 4.11(a) of the Proposed 
CT Plan, and for the foregoing reasons, the Commission is approving 
Section 4.11(a) as modified and Exhibit B as proposed.
---------------------------------------------------------------------------

    \324\ See Amended Governance Order, supra note 23, 88 FR at 
61631-32.
    \325\ See 2021 Approval Order, supra note 19, 86 FR at 44178-82, 
44221-22.
    \326\ See Amended Governance Order, supra note 23, 88 FR at 
61631-32.
---------------------------------------------------------------------------

(ii) Recusal
    Article IV, Section 4.11(b) of the Proposed CT Plan discusses 
recusals and expressly prohibits a Member from appointing as its Voting 
Representative, alternate Voting Representative, or a Member Observer a 
person that is responsible for or involved with procurement for, or 
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 market data product offered to 
customers of the CT Feeds,\327\ if the person has a financial interest 
(including compensation) that is tied directly to the Disclosing 
Party'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.\328\ 
Section 4.11(b) further requires recusal of a Disclosing Party 
(including its representative(s), employees, and agents) from 
participating in Company activities if it has not submitted the 
required disclosure form, or the Operating Committee votes that the 
Disclosing Party's disclosure form is materially deficient. Pursuant to 
this paragraph (ii), such recusal will be in effect until the 
Disclosing Party submits a sufficiently complete disclosure form to the 
Administrator.\329\ Section 4.11(b)(iii) provides that a Disclosing 
Party, including its representatives(s), and its Affiliates and their 
representatives(s), is recused from voting on matters in which it or 
its Affiliate is seeking a position or contract with the Company or has 
a position or contract with the Company and whose performance is being 
evaluated by the Company.\330\ Section 4.11(b)(iv) requires that all 
recusals, including a person's determination of whether to voluntarily 
recuse himself or herself, be reflected in the meeting minutes.\331\
---------------------------------------------------------------------------

    \327\ See Article I, Sections 1.16-1.18 of the Proposed CT Plan 
(as approved).
    \328\ See Article IV, Section 4.11(b)(i) of the Proposed CT 
Plan.
    \329\ See Article IV, Section 4.11(b)(ii) of the Proposed CT 
Plan.
    \330\ See Article IV, Section 4.11(b)(iii) of the Proposed CT 
Plan.
    \331\ See Article IV, Section 4.11(b)(iv) of the Proposed CT 
Plan.
---------------------------------------------------------------------------

    One commenter supports the provision of the Proposed CT Plan that 
prohibits an SRO from appointing a representative that is involved with 
licensing of proprietary data products.\332\ This commenter also 
supports the Proposed CT Plan's inclusion of provisions applying the 
conflicts-of-interest policies to any SRO-designated person, including 
a member observer, that attends operating committee and subcommittee 
meetings as proposed under this section.\333\
---------------------------------------------------------------------------

    \332\ See ICI Letter, supra note 109, at 2, n.6.
    \333\ See id.
---------------------------------------------------------------------------

    Proposed Section 4.11(b) differs substantively from the 
corresponding provision of the 2021 CT Plan approved by the Commission 
\334\ only in that it includes language specified by the Commission in 
the Amended Governance Order.\335\ Accordingly, the Commission is 
approving Section 4.11(b) as proposed.
---------------------------------------------------------------------------

    \334\ See 2021 Approval Order, supra note 19, 86 FR at 44178-82, 
44215.
    \335\ See Amended Governance Order, supra note 23, 88 FR at 
61635, 61640 (requiring that the term ``licensing'' include ``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'').
---------------------------------------------------------------------------

(iii) Required Disclosures
    Article IV, Section 4.11(c) of the Proposed CT Plan provides that, 
as part of the disclosure regime, the Members, the Processors, the 
Administrator, members of the Advisory Committee, and service providers 
and subcontractors must respond to questions that are tailored to 
elicit responses that disclose the potential conflicts of interest as 
set forth in Exhibit B.

[[Page 94944]]

    Proposed Section 4.11(c) differs substantively from the 
corresponding 2021 CT Plan provision approved by the Commission \336\ 
only in that, consistent with the Amended Governance Order,\337\ it 
replaces a reference to ``Non-Voting SRO Representatives'' with a 
reference to ``members of the Advisory Committee.'' The Commission 
received no comments addressing Section 4.11(c) of the Proposed CT 
Plan, and the Commission is approving Section 4.11(c) as proposed.
---------------------------------------------------------------------------

    \336\ See 2021 Approval Order, supra note 19, 86 FR at 44181-82, 
44215.
    \337\ See Amended Governance Order, supra note 23, 88 FR at 
61631-32.
---------------------------------------------------------------------------

(l) Confidentiality Policy
    Article IV, Section 4.12 provides that all Covered Persons are 
subject to the Confidentiality Policy set forth in Exhibit C to the 
Proposed CT Plan.\338\ This Section further provides that the Company 
will arrange for Covered Persons that are not Voting Representatives, 
Member Observers, or members of the Advisory Committee to comply with 
the Confidentiality Policy under their respective agreements with 
either the Company, a Member, the Administrator, or the 
Processors.\339\
---------------------------------------------------------------------------

    \338\ See Article IV, Section 4.12 of the Proposed CT Plan. See 
also Section 1.1(3) of the Proposed CT Plan (defining ``Covered 
Persons'').
    \339\ See Article IV, Section 4.12 of the Proposed CT Plan.
---------------------------------------------------------------------------

    This provision is identical to the corresponding provision of the 
2021 CT Plan approved by the Commission,\340\ and it was not required 
to be modified by the Amended Governance Order. The Commission received 
no comments addressing Section 4.12 of the Proposed CT Plan, and the 
Commission is approving Section 4.12 of the Proposed CT Plan as 
proposed.
---------------------------------------------------------------------------

    \340\ See 2021 Approval Order, supra note 19, 86 FR at 44182-90.
---------------------------------------------------------------------------

    Exhibit C to the Proposed CT Plan constitutes the Confidentiality 
Policy and describes the purpose and scope of the policy, including, 
among other things, the procedures regarding the custodian of and 
designations for all documents, as well as the procedures concerning 
Restricted Information, Highly Confidential Information, and 
Confidential Information.
    The Commission received no comments on Exhibit C.
    Paragraph (a) of the Confidentiality Policy lays out the purpose 
and scope of the policy. Paragraph (a) is unchanged from the 
corresponding provision of the 2021 CT Plan approved by the 
Commission,\341\ and it was not required to be modified by the Amended 
Governance Order. The Commission is approving paragraph (a) of Exhibit 
C as proposed.
---------------------------------------------------------------------------

    \341\ See id. at 44182-89, 44222-24.
---------------------------------------------------------------------------

    Paragraph (b) of the Confidentiality Policy lays out the procedures 
for treatment and disclosure of Restricted Information, Highly 
Confidential Information, and Confidential Information. Paragraph 
(b)(i) is identical to the corresponding 2021 CT Plan provisions 
approved by the Commission,\342\ and it was not required to be modified 
by the Amended Governance Order. The Commission is approving paragraph 
(b)(i) of the Exhibit C as proposed.
---------------------------------------------------------------------------

    \342\ See id.
---------------------------------------------------------------------------

    Paragraph (b)(ii) of Exhibit C sets forth the procedures concerning 
Restricted Information. While paragraph (b)(ii) was not required to be 
modified by the Amended Governance Order, this paragraph has been 
reorganized from the corresponding provisions of the 2021 CT Plan 
approved by the Commission,\343\ and the substance of the provisions 
has not changed. The Commission is, however, making one modification to 
this paragraph. In paragraph (b)(ii)(A)(2), where the policy states 
that any authorization to disclose Restricted Information must identify 
the Covered Persons or third party authorized to receive information, 
the Commission is modifying this sentence to specify that the 
Restricted Information to be disclosed must also be specified: ``Any 
authorization to disclose Restricted Information must specify the 
information to be disclosed and identify the Covered Persons or third 
party authorized to receive the Restricted Information. . . .'' This 
modification is appropriate, as it is designed to help ensure that the 
Restricted Information is tightly controlled and that only the 
Restricted Information specified is permitted to be disclosed. 
Accordingly, the Commission is approving paragraph (b)(ii) of Exhibit C 
as modified.
---------------------------------------------------------------------------

    \343\ See id.
---------------------------------------------------------------------------

    Paragraph (b)(iii) of Exhibit C sets forth the procedures 
concerning Highly Confidential Information. While paragraph (b)(iii) 
was not required to be modified by the Amended Governance Order, this 
paragraph has been reorganized from the corresponding provisions of the 
2021 CT Plan approved by the Commission,\344\ and the substance of the 
provisions has changed in only three respects.
---------------------------------------------------------------------------

    \344\ See id.
---------------------------------------------------------------------------

    First, for the reasons explained above, references to a ``Non-SRO 
Voting Representative'' have been replaced by references to ``a member 
of the Advisory Committee.'' \345\ Second, proposed paragraph 
(b)(iii)(A)(2) would permit Voting Representatives to share certain 
Highly Confidential Information with ``officers and employees'' of a 
Member who have direct or supervisory responsibility for the Member's 
participation in the plan, rather than with only ``officers'' as in the 
2021 CT Plan. The addition of ``employees'' to the list of persons who 
may receive certain Highly Confidential Information is appropriate 
because disclosure would still be limited to those with direct or 
supervisory responsibility for the Member's participation in the plan 
and because not all persons with such responsibilities may formally be 
``officers'' of a Member.
---------------------------------------------------------------------------

    \345\ See Amended Governance Order, supra note 23, 88 FR at 
61631-32.
---------------------------------------------------------------------------

    And third, proposed paragraph (b)(iii)(A)(1) would permit 
disclosures of Highly Confidential Information in specified 
circumstances ``or as otherwise required by law (such as those required 
to receive the information to ensure the Member complies with its 
regulatory obligations).'' In the 2021 Approval Order, the Commission 
specifically removed identical quoted language in response to 
commenters' concern that it was too broad and their request for greater 
clarity. Consequently, the Commission in the 2021 CT Plan separately 
permitted the disclosure of Highly Confidential Information ``as 
required by Applicable Law'' because it provided greater specificity as 
to when Highly Confidential Information could be disclosed, consistent 
with the defined term.\346\ Moreover, paragraph (b)(iii)(A)(2) of the 
Proposed CT Plan would permit a Voting Representative to share Highly 
Confidential Information with ``officers or employees of a Member who 
have direct or supervisory responsibility for the Member's 
participation in the Plan, or with agents for the Member supporting the 
Member's participation in the Plan,'' which would thereby facilitate 
the Member's ability to meet its regulatory obligations with respect to 
the operations of the Proposed CT Plan. Accordingly, it is appropriate 
to modify paragraph (b)(iii)(A)(1) of Exhibit C to delete the phrase 
``or as otherwise required by law (such as those required to receive 
the information to ensure the Member complies with its regulatory 
obligations).''
---------------------------------------------------------------------------

    \346\ See 2021 Approval Order, supra note 19, 86 FR at 44186; 
see also Paragraph (b)(iii)(A)(4) of Exhibit C.
---------------------------------------------------------------------------

    The Commission is also modifying paragraph (b)(iii) to make the 
following

[[Page 94945]]

typographical corrections. In paragraph (b)(iii)(A)(1), the Commission 
is correcting a cross-reference to read ``Section 4.8(d)'' instead of 
``Section 4.7(c).'' In paragraph (b)(iii)(A)(2), the Commission is 
correcting two references to ``SRO Voting Representatives'' to read 
``Voting Representatives'' because that is the defined term in the 
Proposed CT Plan,\347\ and the Commission is also correcting a 
reference to ``Restricted Information'' to read ``Highly Confidential 
Information'' because the paragraph in fact relates to procedures 
concerning Highly Confidential Information. In paragraph 
(b)(iii)(A)(5), which discusses disclosures to third parties, the 
Commission is striking two references to ``Covered Persons'' because 
the paragraph discusses disclosure to identified third parties that are 
acting as Agents, rather than to Covered Persons. There are two 
paragraphs numbered (b)(iii)(A)(5), and the Commission is renumbering 
the second of those paragraphs as paragraph (b)(iii)(A)(6). The 
Commission is also correcting a reference to ``SRO Voting 
Representatives'' in paragraph (b)(iii)(B) to read ``Voting 
Representative'' because other references to SRO Voting Representatives 
in the Proposed CT Plan have been removed and replaced with references 
to Voting Representatives to conform to the Amended Governance 
Order.\348\ These modifications are appropriate because they would 
alleviate confusion on those referencing the Proposed CT Plan by 
correcting typographical errors. For the reasons discussed above, the 
Commission is approving paragraph (b)(iii) of Exhibit C as modified.
---------------------------------------------------------------------------

    \347\ See supra Section II.B.2.
    \348\ See id.
---------------------------------------------------------------------------

    Paragraph (b)(iv) of Exhibit C to the Proposed CT Plan governs 
procedures concerning Confidential Information. With one exception, 
paragraph (b)(iv) as proposed is identical to the corresponding 
provisions of the 2021 CT Plan approved by the Commission,\349\ and it 
was not required to be modified by the Amended Governance Order. That 
exception is that the word ``only'' was removed from the corresponding 
provision in the 2021 CT Plan that stated, ``Additionally, a Covered 
Person may disclose Confidential Information only to other persons who 
need to receive such information to fulfill their responsibilities to 
the Plan, including oversight of the Plan.'' (Emphasis added.) Although 
the Commission added the word ``only'' to this sentence in the 2021 
Approval Order,\350\ the general provision of paragraph (a)(iii) of 
Exhibit C--which provides that ``Covered Persons may not disclose 
Restricted, Highly Confidential, or Confidential information except as 
consistent with this Policy and directed by the Operating Committee''--
sufficiently limits the authorization provided by paragraph (b)(iv)(A) 
without adding the word ``only'' in the sentence described above. The 
Commission is, however, modifying the last phrase of paragraph 
(b)(iv)(A), ``or as may be otherwise required by law,'' to read, ``or 
as may be otherwise required by Applicable Law.'' The modification is 
appropriate because it uses a term specifically defined in the Proposed 
CT Plan, thus adding clarity to the application of the phrase, and 
because the modification will make paragraph (b)(iv)(A) consistent with 
paragraph (b)(iii)(A)(4) as proposed, which also uses the term 
``Applicable Law.''
---------------------------------------------------------------------------

    \349\ See 2021 Approval Order, supra note 19, 86 FR at 44182-89, 
44222-24.
    \350\ See id. at 44188, 44223.
---------------------------------------------------------------------------

    For the reasons discussed above, the Commission is approving 
paragraph (b)(iv) of Exhibit C as modified.
6. The Processors; Information; Indemnification
    Article V of the Proposed CT Plan sets forth the provisions related 
to the Processors.
(a) General Functions of the Processors
    Pursuant to Article V, Section 5.1, the Company, under the 
direction of the Operating Committee, shall be required to enter into 
agreements with the Processors obligating the Processors to perform 
certain processing functions on behalf of the Company (the ``Processor 
Services Agreements'').\351\ The Proposed CT Plan specifies that, among 
other things, the Company shall require the Processors to collect from 
the Members, and consolidate and disseminate to Vendors and 
Subscribers, Transaction Reports and Quotation Information in Eligible 
Securities in a manner designed to ensure the prompt, accurate, and 
reliable collection, processing, and dissemination of information with 
respect to all Eligible Securities in a fair and non-discriminatory 
manner.\352\
---------------------------------------------------------------------------

    \351\ See Article V, Section 5.1 of the Proposed CT Plan.
    \352\ See id.
---------------------------------------------------------------------------

    Proposed Section 5.1 is identical to the corresponding provision of 
the 2021 CT Plan approved by the Commission,\353\ and was not required 
to be modified by the Amended Governance Order. The Commission received 
no comments addressing this provision, and the Commission is approving 
Section 5.1 as proposed.
---------------------------------------------------------------------------

    \353\ See 2021 Approval Order, supra note 19, 86 FR at 44190-91, 
44215.
---------------------------------------------------------------------------

(b) Evaluation of the Processors
    Article V, Section 5.2 of the Proposed CT Plan requires that the 
Processors' performance of their functions under the Processor Services 
Agreements shall be subject to review at any time as determined by an 
affirmative vote of the Operating Committee, provided, however, that a 
review will be conducted at least once every two calendar years but not 
more than once each calendar year unless the Processors have materially 
defaulted under the Processor Services Agreement and the default has 
not been cured within the applicable cure period established in the 
Processor Services Agreement, in which case such limitations will not 
apply.\354\ This section further provides that the Operating Committee 
may review the Processors at staggered intervals.\355\
---------------------------------------------------------------------------

    \354\ See Article V, Section 5.2 of the Proposed CT Plan.
    \355\ See id.
---------------------------------------------------------------------------

    Proposed Section 5.2 is identical to the corresponding provision of 
the 2021 CT Plan approved by the Commission,\356\ and was not required 
to be modified by the Amended Governance Order. The Commission received 
no comments addressing this provision, and the Commission is approving 
Section 5.2 as proposed.
---------------------------------------------------------------------------

    \356\ See 2021 Approval Order, supra note 19, 86 FR at 44191-92, 
44215.
---------------------------------------------------------------------------

(c) Process for Selecting New Processors
    Article V, Section 5.3 of the Proposed CT Plan requires that the 
Operating Committee, by an affirmative vote pursuant to Section 4.3 of 
the Proposed CT Plan,\357\ establish procedures for selecting a new 
Processor (the ``Processor Selection Procedures'').\358\ The Proposed 
CT Plan requires that the Processor Selection Procedures be established 
no later than upon the termination or withdrawal of a Processor or the 
expiration of a Processor Services Agreement with a Processor.\359\ The 
Processor Selection Procedures are required to set forth, at a minimum: 
(i) the minimum technical and operational requirements to be fulfilled 
by the Processor; (ii) the criteria for selecting the Processor; (iii) 
the entities (other than Voting Representatives) that are eligible to 
comment on the selection of the Processor; and (iv) the entity that 
will:

[[Page 94946]]

(A) draft the Operating Committee's request for proposal for a new 
Processor; (B) assist the Operating Committee in evaluating bids for 
the new Processor; and (C) otherwise provide assistance and guidance to 
the Operating Committee in the selection process.\360\ The Operating 
Committee, as part of the process of establishing the Processor 
Selection Procedures, is permitted to solicit and consider the timely 
comment of any entity affected by the operation of the Proposed CT 
Plan.\361\
---------------------------------------------------------------------------

    \357\ See Article V, Section 5.3(a) of the Proposed CT Plan.
    \358\ See id.
    \359\ See id.
    \360\ See Article V, Section 5.3(b)(i)(A)-(C) of the Proposed CT 
Plan.
    \361\ See Article V, Section 5.3(a) of the Proposed CT Plan.
---------------------------------------------------------------------------

    Section 5.3 provides that the Operating Committee does not need to 
establish Processor Selection Procedures ``if the Operating Committee 
initially selects the CQ Plan and CTA Plan's processor and the UTP 
Plan's processor to provide the same services to the Company that are 
currently provided under the CQ Plan, CTA Plan, and UTP Plan.'' \362\ 
In the Transmittal Letter, the SROs state that, because the focus of 
the Amended Governance Order is the selection of a new independent 
Administrator rather than new Processors, the SROs believe it is 
reasonable for the Operating Committee to have the option of continuing 
with the current processors without having to go through an extensive 
procedure for selecting the processors.\363\ The SROs state that this 
option would also allow for quicker implementation of the plan by 
allowing the Operating Committee to focus on the selection of the new 
Administrator.\364\
---------------------------------------------------------------------------

    \362\ Id.
    \363\ See Letter from James P. Dombach, Davis Wright Tremaine 
LLP, to Vanessa Countryman, Secretary, Commission, at 2 (Oct. 23, 
2023) (``Transmittal Letter'').
    \364\ See Transmittal Letter, supra note 363, at 2.
---------------------------------------------------------------------------

    With respect to Section 5.3(a), one commenter states that it 
supports the proposal to provide the Operating Committee with the 
option of selecting an existing NMS plan processor to serve as 
processor for the Proposed CT Plan, provided that selection of the 
current processor is for the sole purpose of expediting transition to 
the competing consolidator model, and that such processor be fully 
retired at the end of the transition period.\365\ Another commenter 
agrees that it is reasonable for the Operating Committee to have the 
option to continue with the current processors.\366\ This commenter 
states its ``expectation'' that the Commission and the SROs ``will 
promptly take the requisite steps necessary to transition to a 
competitive decentralized consolidation model for consolidated market 
data such that the role of a CT Plan Processor is time-limited, 
mitigating the need to create new procedures for Plan Processor 
selection.'' \367\
---------------------------------------------------------------------------

    \365\ See Letter from Christina Qi, Chief Executive Officer, 
Luca Lin, Chief Technology Officer, Zach Banks, Engineering 
Director, Databento Inc., at 1-2 (Mar. 15, 2024) (``Databento 
Letter'').
    \366\ See Fidelity Letter, supra note 80, at 6.
    \367\ Id.
---------------------------------------------------------------------------

    The establishment of Processor Selection Procedures is appropriate, 
as proposed, because the existing exclusive SIP model will continue to 
operate during the transition to the competing consolidator model, and 
the proposed Selection Procedures are reasonably designed to help 
ensure that the Operating Committee establishes a process that governs 
the selection of a new Processor for the Proposed CT Plan through a 
fair, transparent, and competitive process. The Commission agrees with 
the commenter, that it is reasonable to provide the Operating Committee 
with the option of initially selecting the current processors to 
provide the same services under the Proposed CT Plan without having to 
establish procedures for their selection, as proposed in Section 
5.3(a).\368\ Providing the Operating Committee with this option should 
facilitate implementation of the Proposed CT Plan as the Operating 
Committee would not have to immediately undertake the extensive process 
for selecting and onboarding a new Processor, and may instead focus on 
the selection of the new Administrator and other key governance reforms 
necessary under the Proposed CT Plan.
---------------------------------------------------------------------------

    \368\ See Article V, Section 5.3 of the Proposed CT Plan.
---------------------------------------------------------------------------

    Other than as discussed above, Section 5.3 of the Proposed CT Plan 
is substantively similar to the corresponding provisions of the 2021 CT 
Plan approved by the Commission.\369\ For the reasons discussed above, 
the Commission is approving Article V, Section 5.3 as proposed.
---------------------------------------------------------------------------

    \369\ See 2021 Approval Order, supra note 19, 86 FR at 44192, 
44216.
---------------------------------------------------------------------------

(d) Transmission of Information to Processors by Members
    Article V, Section 5.4 of the Proposed CT Plan sets forth the 
manner in which each Member is responsible for promptly collecting and 
transmitting to the Processors accurate Quotation Information and 
Transaction Reports as set forth in the Processor Services 
Agreements.\370\ In particular, this section requires Members to 
include the following elements in their Quotation Information: (i) 
identification of the Eligible Security, using the listing market's 
symbol; (ii) the price bid and offered, together with size; (iii) for 
FINRA, the FINRA Participant along with the FINRA Participant's market 
participant identification or Member from which the quotation emanates; 
(iv) appropriate timestamps; (v) identification of quotations that are 
not firm; and (vi) through appropriate codes and messages, withdrawals 
and similar matters.\371\ In the case of a national securities 
exchange, the Quotation Information must include the reporting 
Participant's matching engine publication timestamp.\372\ In the case 
of FINRA, the Quotation Information must include the quotation 
publication timestamp that FINRA's bidding or offering member reports 
to FINRA's quotation facility in accordance with FINRA rules.\373\
---------------------------------------------------------------------------

    \370\ See Article V, Section 5.4 of the Proposed CT Plan.
    \371\ See Article V, Section 5.4(a)(ii)(A)-(F) of the Proposed 
CT Plan.
    \372\ See Article V, Section 5.4(a)(iii)(A) of the Proposed CT 
Plan.
    \373\ See Article V, Section 5.4(a)(iii)(B) of the Proposed CT 
Plan. In addition, proposed Section 5.4(a)(iii)(B) provides that if 
FINRA's quotation facility provides a proprietary feed of its 
quotation information, then the quotation facility will also furnish 
the Processors with the time of the quotation as published on the 
quotation facility's proprietary feed. FINRA shall convert any 
quotation times reported to it to nanoseconds and shall furnish such 
times to the Processors in nanoseconds since Epoch. See Article V, 
Section 5.4(a)(iii)(B) of the Proposed CT Plan.
---------------------------------------------------------------------------

    In addition, Section 5.4 requires Members to report the following 
elements to in their Transaction Reports to the Processor as set forth 
in the Processor Services Agreement: (i) identification of the Eligible 
Security, using the listing market's symbol; (ii) the number of shares 
in the transaction; (iii) the price at which the shares were purchased 
or sold; (iv) the buy/sell/cross indicator; (v) appropriate timestamps; 
(vi) the market of execution; and (vii) through appropriate codes and 
messages, late or out-of-sequence trades, corrections, and similar 
matters.\374\
---------------------------------------------------------------------------

    \374\ See Article V, Section 5.4(b)(i)-(ii) of the Proposed CT 
Plan; Notice, supra note 4, 89 FR at 5015.
---------------------------------------------------------------------------

    Each Member must also (a) transmit Transaction Reports to the 
Processors as soon as practicable, but not later than ten seconds, 
after the time of execution, (b) establish and maintain collection and 
reporting procedures and facilities reasonably designed to comply with 
this requirement, and (c) designate as ``late'' any last sale price not 
collected and reported as described above or as to which the Member has 
knowledge that the time interval after the time of

[[Page 94947]]

execution is significantly greater than the time period referred to 
above.\375\ This section provides that Members will seek to reduce the 
time period for reporting last sale prices to the Processors as 
conditions warrant.\376\
---------------------------------------------------------------------------

    \375\ See Article V, Section 5.4(b)(iv) of the Proposed CT Plan; 
Notice, supra note 4, 89 FR at 5015.
    \376\ See id.
---------------------------------------------------------------------------

    Section 5.4(c) of the Proposed CT Plan sets forth the symbols that 
shall be used to denote the applicable Member.\377\
---------------------------------------------------------------------------

    \377\ See Article V, Section 5.4(c) of the Proposed CT Plan.
---------------------------------------------------------------------------

    Section 5.4 excludes the following types of transactions from being 
required to be reported to the Processors: (i) transactions that are 
part of a primary distribution by an issuer or of a registered 
secondary distribution or of an unregistered secondary distribution; 
(ii) transactions made in reliance on Section 4(a)(2) of the Securities 
Act of 1933; (iii) transactions in which the buyer and the seller have 
agreed to trade at a price unrelated to the current market for the 
security (e.g., to enable the seller to make a gift); (iv) the 
acquisition of securities by a broker-dealer as principal in 
anticipation of making an immediate exchange distribution or exchange 
offering on an exchange; (v) purchases of securities pursuant to a 
tender offer; (vi) purchases or sales of securities effected upon the 
exercise of an option pursuant to the terms thereof or the exercise of 
any other right to acquire securities at a pre-established 
consideration unrelated to the current market; and (vii) transfers of 
securities that are expressly excluded from trade reporting under FINRA 
rules.\378\
---------------------------------------------------------------------------

    \378\ See Article V, Section 5.4(b)(v)(A)-(G) of the Proposed CT 
Plan (as adopted).
---------------------------------------------------------------------------

    Furthermore, Section 5.4(d) provides that each Member agrees, 
severally and not jointly, to indemnify and hold harmless and defend 
the Company, each other Member, the Processors, the Administrator, the 
Operating Committee, and each of their respective directors, officers, 
employees, agents, and Affiliates (each, a ``Member Indemnified 
Party'') from and against any and all loss, liability, claim, damage, 
and expense whatsoever incurred or threatened against such Member 
Indemnified Party as a result of a system error or disruption at such 
Member's Market affecting any Transaction Reports, Quotation 
Information, or other information reported to the Processors by such 
Member and disseminated by the Processors to Vendors and Subscribers. 
This section further provides that this indemnity shall be in addition 
to any liability that the indemnifying Member may otherwise have.\379\
---------------------------------------------------------------------------

    \379\ See Article V, Section 5.4(d)(i) of the Proposed CT Plan 
(as adopted). Section 5.4(d)(ii) of the Proposed CT Plan specifies 
the procedures for addressing claims by a Member Indemnified Party.
---------------------------------------------------------------------------

    The provisions of Section 5.4 relating to each Member's obligations 
to collect and transmit to the Processors accurate and reliable 
Quotation Information and Transaction Reports are reasonably designed 
to facilitate the collection and dissemination of consolidated equity 
market data for NMS stocks for the beneficial use of investors and the 
market.\380\ Section 5.4 differs substantively from the corresponding 
provisions of the 2021 CT Plan approved by the Commission in that it 
(1) replaces the term ``Participant'' with ``Member,'' which difference 
is appropriate to correspond with the definitions in the Proposed CT 
Plan, and (2) updates, in Section 5.4(c), the symbols used to denote 
the applicable Member, which difference is appropriate to help ensure 
the accuracy of this information. The Commission received no comments 
addressing this provision, which was not required to be modified by the 
Amended Governance Order, and the Commission is approving Section 5.4, 
as renumbered and proposed.
---------------------------------------------------------------------------

    \380\ See 2021 Approval Order, supra note 19, 86 FR at 44193.
---------------------------------------------------------------------------

(e) Operational Issues
    Article V, Section 5.5 of the Proposed CT Plan requires each Member 
to be responsible for collecting and validating quotes and last sale 
reports within its own system prior to transmitting this data to the 
Processors.\381\ This section also requires each Member to promptly 
notify the Processors whenever a level of trading activity or unusual 
market conditions prevent such Member from collecting and transmitting 
Transaction Reports or Quotation Information to the Processor, or where 
a trading halt or suspension in an Eligible Security is in effect in 
its market.\382\ This provision further requires the Member to resume 
collecting and transmitting Transaction Reports and Quotation 
Information to the Processors as soon as the condition or event is 
terminated.\383\ In the event of a system malfunction that prevents a 
Member or its members from transmitting Transaction Reports or 
Quotation Information to the Processors, the Member is required to 
promptly notify the Processors of such event or condition.\384\ Upon 
receiving such a notification, Section 5.5 of the Proposed CT Plan 
requires the Processors to take appropriate action, including either 
closing the quotation or purging the system of the affected 
quotations.\385\
---------------------------------------------------------------------------

    \381\ See Article V, Section 5.5(a) of the Proposed CT Plan. 
Section 5.5(b) of the Proposed CT Plan provides that each Member may 
utilize a dedicated Member line into the Processors to transmit 
Transaction Reports and Quotation Information to the Processors.
    \382\ See Article V, Section 5.5(c) of the Proposed CT Plan.
    \383\ See id.
    \384\ See id.
    \385\ See id.
---------------------------------------------------------------------------

    Section 5.5 is identical to the corresponding provision of the 2021 
CT Plan approved by the Commission \386\ and was not required to be 
modified by the Amended Governance Order. The Commission received no 
comments addressing Section 5.5 of the Proposed CT Plan, and the 
Commission is approving Section 5.5 as proposed.
---------------------------------------------------------------------------

    \386\ See 2021 Approval Order, supra note 19, 86 FR at 44194.
---------------------------------------------------------------------------

7. The Administrator
    Article VI of the Proposed CT Plan sets forth provisions relating 
to the Administrator.
(a) General Functions of the Administrator
    Pursuant to Article VI, Section 6.1, the Company, under the 
direction of the Operating Committee, will be required to enter into an 
agreement with the Administrator (the ``Administrative Services 
Agreement'') obligating the Administrator to perform certain 
administrative functions on behalf of the Company, including: 
recordkeeping; administering vendor and subscriber contracts; 
administering fees, including billing, collection, and auditing of 
vendors and subscribers; administering distributions; tax functions of 
the Company; the preparation of the Company's audited financial 
reports; and support of Company governance.\387\
---------------------------------------------------------------------------

    \387\ See Article VI, Section 6.1 of the Proposed CT Plan.
---------------------------------------------------------------------------

    Section 6.1 of the Proposed CT Plan is identical to the 
corresponding provision of the 2021 CT Plan approved by the Commission, 
except that the provision now includes ``support of Company 
governance'' among the Administrator's functions.\388\ Including this 
additional function for the Administrator is reasonable given the 
extensive responsibilities of the Administrator for supporting the 
operations of the plan. This section was not required to be modified by 
the Amended Governance Order. The Commission received no comments 
addressing Section 6.1, and for the reasons discussed above, the

[[Page 94948]]

Commission is approving Section 6.1 as proposed.
---------------------------------------------------------------------------

    \388\ See 2021 Approval Order, supra note 19, 86 FR at 44194-95.
---------------------------------------------------------------------------

(b) Independence of the Administrator
    Article VI, Section 6.2 of the Proposed CT Plan requires that the 
Administrator selected by the Operating Committee may not be owned or 
controlled by a corporate entity that, either directly or via another 
subsidiary, offers for sale its own proprietary market data 
products.\389\ Section 6.2 of the Proposed CT Plan is identical to the 
corresponding provision of the 2021 CT Plan approved by the Commission 
\390\ and is consistent with the requirements of the Amended Governance 
Order.\391\
---------------------------------------------------------------------------

    \389\ See Article VI, Section 6.2 of the Proposed CT Plan.
    \390\ See 2021 Approval Order, supra note 19, 86 FR at 44194-99, 
44217.
    \391\ See Amended Governance Order, supra note 23, 88 FR at 
61640.
---------------------------------------------------------------------------

    One commenter supports having an independent administrator, stating 
that an independent administrator with a unique balance of experience 
and expertise, but without conflict, will be the single most important 
factor for the successful transition to a unified consolidated 
tape.\392\ Another commenter states that the Proposed CT Plan should 
not only exclude SROs from serving as Administrator, but also data 
vendors that sell proprietary market data products or consolidate 
proprietary market data for sale as their own product.\393\ According 
to this commenter, vendors may provide users with an alternative to 
consolidated equity market data offered under the Proposed CT 
Plan,\394\ compromising the independence of such a vendor.\395\ The 
commenter recommends that, Section 6.2 of the Proposed CT Plan should 
be modified to read as follows: The Administrator may not be owned or 
controlled by a corporate entity that, either directly or via another 
subsidiary, offers for sale its own proprietary market data products or 
that of single or multiple Participants.\396\
---------------------------------------------------------------------------

    \392\ See Letter from Mark Schaedel, CEO, DataBP, LLC, at 3-4 
(Feb.23.2024) (``dataBP Letter'').
    \393\ See Nasdaq Letter, supra note 109, at 7.
    \394\ See id.
    \395\ See id.
    \396\ See id. (emphasis in original).
---------------------------------------------------------------------------

    The Commission addressed a similar comment in the 2021 Approval 
Order, and, as it stated in that order, the Commission did not mandate 
in the Governance Order that non-SRO data vendors serve as the new 
independent Administrator.\397\ Nor are such entities the only viable 
alternative Administrator.\398\ The Commission chose to address one 
substantial, inherent conflict of interest when it decided that any 
plan Administrator cannot be owned or controlled by a corporate entity 
that offers for sale its own proprietary equity market data 
products.\399\ The Proposed CT Plan, as proposed and approved, under 
the direction of the Operating Committee, can exercise discretion in 
the selection of the new Administrator, including ensuring that any 
potential conflict of interest does not compromise the independence of 
the selected Administrator.\400\ Furthermore, the Operating Committee 
of the Proposed CT Plan would not have any incentive to choose as the 
Administrator a non-SRO entity that would face a financial conflict of 
interest and act as a direct competitor to the SROs' proprietary data 
business.\401\ The D.C. Circuit upheld the rationality of this 
reasoning.\402\ And, for these same reasons, the Commission again 
declines to modify the restrictions on entities that can serve as 
Administrator in the manner suggested by the commenter.
---------------------------------------------------------------------------

    \397\ See 2021 Approval Order, supra note 19, 86 FR at 44197.
    \398\ See id.
    \399\ See id.
    \400\ See Article IV, Section 4.1(a)(i) of the Proposed CT Plan 
(providing, in part, that ``the Operating Committee shall have full 
and complete discretion to manage and control the business and 
affairs of the Company, to make all decisions affecting the business 
and affairs of the Company, and to take all such actions as it deems 
necessary or appropriate to accomplish the purposes of the Company, 
including . . . selecting, overseeing, specifying the role and 
responsibilities of, and evaluating the performance of, the 
Administrator''). See also 2021 Approval Order, supra note 19, 86 FR 
at 44197.
    \401\ See 2021 Approval Order, supra note 19, 86 FR at 44197.
    \402\ See Nasdaq v. SEC, supra note 20, 38 F.4th at 1143 
(``Although petitioners contend that non-SRO data vendors face `the 
exact same conflict' as SROs selling competing data products, the 
conflict is not the same because, as the Commission notes, the SROs 
have `sufficient voting power' and `incentive' to ensure that any 
non-SRO chosen to serve as administrator `would [not] face a 
financial conflict of interest and act as a direct competitor to the 
SROs' proprietary data business.' '' (quoting 2021 Approval Order, 
supra note 19, 86 FR at 44197) (internal citations omitted).
---------------------------------------------------------------------------

    Another commenter states that the scope of the independence 
requirement might be too narrow.\403\ This commenter states that one or 
more exchange groups could seek to establish a new ``independent'' 
administrator by spinning off or selling to a new corporate entity the 
administrator functions, even though all of the employees of such a new 
entity would remain the same or nearly the same after the spin-off or 
sale.\404\
---------------------------------------------------------------------------

    \403\ See SIFMA Letter, supra note 109, at 5. The commenter 
states that such a scenario could call into question the 
independence of the new Administrator. See id.
    \404\ See id.
---------------------------------------------------------------------------

    With respect to this concern, an Administrator of the Proposed CT 
Plan would not be ``independent'' of a disqualified entity if its 
employees were also employees of that disqualified entity. Because the 
Administrator and its employees would have access to ``sensitive 
information of significant commercial or competitive value,'' \405\ 
those employees would have a conflict of interest if simultaneously 
employed by an entity that offers for sale its own proprietary data 
products, which would defeat the purpose of the independence 
requirements in the Proposed CT Plan for the Administrator, as well as 
the limitations on sharing information under the Confidentiality 
Policy.\406\ Therefore, it is appropriate to further protect against 
the potential for misuse of sensitive information by modifying Section 
6.2 to add an additional requirement: ``The Administrator may not 
employ any person who is also employed by a corporate entity that, 
either directly or via a subsidiary, offers for sale its own PDP.'' 
More generally, as discussed above,\407\ the Operating Committee can 
also exercise discretion in the selection of the new Administrator to 
ensure that any potential conflict of interest does not compromise the 
independence of the selected Administrator, and on an ongoing basis, 
the Administrator will be required to disclose all material facts 
necessary to identify potential conflicts of interest.\408\
---------------------------------------------------------------------------

    \405\ Amended Governance Order, supra note 23, 88 FR at 61639.
    \406\ See supra Section II.B.5(l) (discussing Confidentiality 
Policy of the Proposed CT Plan).
    \407\ See supra note 400 and accompanying text.
    \408\ See supra notes 313-316 and accompanying text.
---------------------------------------------------------------------------

    Other than as modified by the Commission, Section 6.2 of the 
Proposed CT Plan is identical to the corresponding provision of the 
2021 CT Plan approved by the Commission \409\ and was not required to 
be modified by the Amended Governance Order. For the foregoing reasons, 
the Commission is approving Article V, Section 6.2 as modified.
---------------------------------------------------------------------------

    \409\ See 2021 Approval Order, supra note 19, 86 FR at 44217.
---------------------------------------------------------------------------

(c) Evaluation of the Administrator
    Article VI, Section 6.3 of the Proposed CT Plan sets forth the 
provisions for the evaluation of an Administrator.\410\ Section 6.3 is 
identical to the corresponding 2021 CT Plan provisions approved by the 
Commission \411\ and was not required to be modified by the

[[Page 94949]]

Amended Governance Order. The Commission received no comments 
addressing Section 6.3 of the Proposed CT Plan, and the Commission is 
approving Article VI, Section 6.3 as proposed.
---------------------------------------------------------------------------

    \410\ See Article VI, Section 6.3 of the Proposed CT Plan.
    \411\ See 2021 Approval Order, supra note 19, 86 FR at 44198.
---------------------------------------------------------------------------

(d) Process for Selecting New Administrator
    Article VI, Section 6.4 of the Proposed CT Plan sets forth the 
provisions for the selection of an Administrator.\412\ Section 6.4 of 
the Proposed CT Plan is identical to the corresponding provision of the 
2021 CT Plan approved by the Commission \413\ and was not required to 
be modified by the Amended Governance Order. The Commission received no 
comments addressing this provision, and the Commission is approving 
Section 6.4 as proposed.
---------------------------------------------------------------------------

    \412\ See Article VI, Section 6.4 of the Proposed CT Plan.
    \413\ See 2021 Approval Order, supra note 19, 86 FR at 44198-99, 
44217.
---------------------------------------------------------------------------

(e) Interim Administrator(s)
    One commenter states that the Commission should modify the Proposed 
CT Plan to allow the Operating Committee to appoint one of the current 
administrators of the Equity Data Plans as interim Administrator until 
such time as the Operating Committee selects and onboards a new 
independent Administrator that meets the requirements for an 
independent administrator under the Amended Governance Order.\414\ The 
commenter states that appointment of such an interim Administrator 
would allow the Plan to become operative while the Operating Committee 
works towards full implementation of all required Plan elements.\415\ 
This commenter states that selection and onboarding of an independent 
Administrator would, according to the proposed schedule, account for 
the majority of the 30-month implementation period.\416\ The commenter 
is also concerned that the selection and onboarding of a new 
Administrator is a potential source of delay, as the process is not 
fully within the control of the Operating Committee. Thus, the 
commenter states that there is no need for the implementation of other 
governance reforms to be tied to the new Administrator.\417\ Another 
commenter states that selecting an interim administrator, as 
suggested,\418\ is a good idea because, once selected, this interim 
administrator could start developing plan policies that are not 
dependent on the independent administrator, possibly drawing on the 
expertise of members of the Market Data Administration subcommittee of 
the Equity Data Plans.\419\ This commenter states that the goal should 
be to implement the plan at the earliest possible time, and that 
appointing an interim administrator would advance that objective.\420\
---------------------------------------------------------------------------

    \414\ See MEMX Letter, supra note 109, at 4, 7-9.
    \415\ See id.
    \416\ See id. at 6-8.
    \417\ See id. at 8.
    \418\ See id. at 5-7.
    \419\ See Jordan Letter, supra note 84, at 2.
    \420\ See id. at 1-2.
---------------------------------------------------------------------------

    The Commission agrees with commenters \421\ that timely 
implementation of the Proposed CT Plan is important and that the 
Proposed CT Plan should provide for an option, such as that suggested 
by a commenter,\422\ by which key governance reforms, such as those 
governing the allocation of SRO votes for action by the Operating 
Committee, could be implemented before the proposed 30 months. Interim 
Administrator(s) that are already familiar with, and have vast 
experience in, the operation of the Equity Data Plans could assist in 
having the Proposed CT Plan become operative prior to the selection and 
onboarding of an independent Administrator that the SROs have 
acknowledged would be a lengthy process.\423\ Although commenters have 
suggested the appointment of a single interim administrator, the 
ability of the Operating Committee to pick either or both of the 
current administrators of the Equity Data Plans as Interim 
Administrator(s) may facilitate the timely achievement of the date by 
which the Proposed CT Plan will become operative.\424\ The flexibility 
to employ either or both of the current administrators of the Equity 
Data Plans would permit the Operating Committee, if it so chooses, to 
postpone the work involved in transitioning from one administrator to 
another until such time as a permanent, independent Administrator has 
been selected and thus to postpone this effort until closer to the 
Operative Date.
---------------------------------------------------------------------------

    \421\ See MEMX Letter, supra note 109, at 5-7; Jordan Letter, 
supra note 84, at 2; dataBP Letter, supra note 392, at 3-4.
    \422\ See supra note 422 and accompanying text.
    \423\ See Notice, supra note 4, 89 FR at 5027-29 (Exhibit F to 
the Proposed CT Plan); see also infra section II.B.15(a) (discussing 
the implementation timeline for the Proposed CT Plan).
    \424\ See Article I, Section 1.1(56) of the Proposed CT Plan (as 
modified; defining the term ``Operative Date'' as ``the date that 
(i) the Members conduct, through the Company, the Processor and 
Administrator functions related to the public dissemination of real-
time consolidated equity market data for Eligible Securities 
required by the Commission to be performed by the Members under the 
Exchange Act and the rules and regulations thereunder and (ii) the 
CQ Plan, CTA Plan, and UTP Plan cease their operations'').
---------------------------------------------------------------------------

    Therefore, the Commission is modifying the Proposed CT Plan, to 
provide, in new Section 6.5, that the Operating Committee may select 
one or more of the current administrators of the CTA Plan, CQ Plan, and 
UTP Plan to perform the general functions of the Administrator under 
Section 6.1 of the Proposed CT Plan on an interim basis during the 
implementation of the Plan, consistent with the timeline set forth in 
Article XIV of this Agreement (``Interim Administrator(s)''), 
notwithstanding the provisions with respect to the independence of the 
Administrator (Section 6.2) and the selection process of the 
Administrator (Section 6.4). This modification is appropriate to 
enhance efficiencies associated with the completion of actions 
necessary for a timely implementation of the Proposed CT Plan.\425\
---------------------------------------------------------------------------

    \425\ See 15 U.S.C. 78k-1(c)(1)(B) (to ensure the ``prompt, 
accurate, reliable, and fair collection, processing, distribution, 
and publication of information with respect to quotations for and 
transactions in such securities and the fairness and usefulness of 
the form and content of such information.'').
---------------------------------------------------------------------------

8. Regulatory Matters
    Article VII of the Proposed CT Plan sets forth provisions governing 
regulatory matters.
(a) Regulatory and Operational Halts
    Section 7.1 of Article VII addresses regulatory and operational 
halts, and it is unchanged from the corresponding provision of the 2021 
CT Plan approved by the Commission,\426\ with one exception. That 
exception is the addition of new paragraph 7.1(c)(ii)(D), which would 
permit notice of a regulatory halt to be disseminated by ``a 
notification via an alternate Processor, if available.''
---------------------------------------------------------------------------

    \426\ See 2021 Approval Order, supra note 19, 86 FR at 44199-
200, 44217-18.
---------------------------------------------------------------------------

    One commenter states that the only acceptable backup for a 
processor should be an automated regulatory halt message notification 
by an alternate Processor, as proposed in paragraph (D) of Section 
7.1(c)(ii), and that, for this reason, paragraphs (A)-(C) of Section 
7.1(c)(ii) should be deleted.\427\ This commenter further states that 
the current two processors should serve as backups for each other in 
the same manner that the NYSE and Nasdaq serve as backups for each 
other for Trade Reporting Facility and closing auctions purposes. The 
commenter also states that if the Proposed CT Plan were to move to a 
single processor prior to future implementation of competing 
consolidators, the plan should address

[[Page 94950]]

the single point of failure that would exist.\428\
---------------------------------------------------------------------------

    \427\ See SIFMA Letter, supra note 109, at 4-5.
    \428\ See id. at 5.
---------------------------------------------------------------------------

    While the proposal to disseminate Regulatory Halt notices through 
an alternate Processor in the event another Processor is unable to 
disseminate the notices is reasonable, the Commission does not share 
the commenter's view that this should be the only permitted backup, to 
the exclusion of all other alternatives in proposed paragraph 
7.2(c)(ii) \429\--namely, notification via a proprietary data product, 
a posting on a publicly available Member website, or system status 
messages--absent a representation from the SROs that such an alternate 
Processor backup functionality has been developed and tested. Absent 
such a representation, modifying Section 7.1 as the commenter proposes 
would create uncertainty with respect to compliance with requirements 
under this section, as well the potential for unnecessary delays in the 
implementation of the Proposed CT Plan. For the foregoing reasons, the 
Commission is approving Section 7.1 of the Proposed CT Plan as 
proposed.
---------------------------------------------------------------------------

    \429\ See id. at 4-5.
---------------------------------------------------------------------------

(b) Hours of Operation of the System
    Section 7.2 of Article VII of the Proposed CT Plan governs the 
hours of operation during which time Quotation Information and 
Transaction Reports must be entered by Members and will be disseminated 
by the Processor.\430\
---------------------------------------------------------------------------

    \430\ See Article VII, Section 7.2 of the Proposed CT Plan.
---------------------------------------------------------------------------

    Section 7.2 of the Proposed CT Plan differs from the corresponding 
provision of the 2021 CT Plan approved by the Commission in two 
respects. First, Section 7.2(a) clarifies that, during Regular Hours, 
Transaction Reports shall be entered by Members pursuant to that 
section ``for executions that occur from 9:30 a.m. until 4:00:00 p.m. 
ET'' rather than ``between 9:30 a.m. and 4:00:10 p.m. ET.'' Second, 
Section 7.2(b)(i) adds a parenthetical to the provision that, outside 
of Regular Hours, reports for transactions in Eligible Securities 
executed from 4:00 a.m. up to 9:30:00 a.m. ET ``(or as otherwise 
designated by a Member as an execution occurring outside of Regular 
Trading Hours)'' must be designated with a certain indicator to denote 
their execution outside normal market hours.\431\ These differences are 
appropriate to provide greater specificity with respect to the 
information to be submitted pursuant to Section 7.2. The Commission is 
modifying proposed Section 7.2 to replace the reference to ``Section 
7.3'' in paragraph (b)(iv) with ``Section 7.2.'' This modification is 
appropriate to correct a typographical error because the reference in 
paragraph (b)(iv) of Section 7.2 is to ``this Section,'' which in this 
context is Section 7.2 rather than Section 7.3, and because the 
Proposed CT Plan does not contain a section numbered ``7.3.'' The 
Commission received no comments addressing this provision. For the 
reasons discussed above, the Commission is approving Section 7.2 of the 
Proposed CT Plan as modified.
---------------------------------------------------------------------------

    \431\ See Article VII, Section 7.2(b)(i) of the Proposed CT 
Plan. Relatedly, Article VII, Section 7.2(b)(i) of the 2021 CT Plan 
read as follows: ``Members that execute transactions in Eligible 
Securities outside of Regular Trading Hours, shall report such 
transactions as follows: (i) transactions in Eligible Securities 
executed between 4:00 a.m. and 9:29:59 a.m. ET and between 4:00:01 
p.m. and 8:00 p.m. ET, shall be designated with an appropriate 
indicator to denote their execution outside normal market hours.'' 
See 2021 Approval Order, supra note 19, 86 FR at 44218.
---------------------------------------------------------------------------

9. Capital Contributions; Capital Accounts
    Article VIII of the Proposed CT Plan sets forth the provisions 
related to the establishment and maintenance of capital accounts for 
the Members, additional capital contributions to the Company, and the 
distribution of revenues of the Company to the Members. Specifically, 
Article VIII, Section 8.1 of the Proposed CT Plan requires a separate 
capital account to be established by the Company and maintained by the 
Administrator for each Member.\432\ In addition, the Proposed CT Plan 
specifies the formula for crediting and debiting a Member's capital 
account.\433\
---------------------------------------------------------------------------

    \432\ See Article VIII, Section 8.1(a) of the Proposed CT Plan.
    \433\ See id.
---------------------------------------------------------------------------

    Section 8.1(b) of the Proposed CT Plan further provides that the 
fair market value of contributed, distributed, or revalued property 
shall be agreed to by the Operating Committee or, if there is no such 
agreement, by an appraisal.\434\
---------------------------------------------------------------------------

    \434\ See Article VIII, Section 8.1(b) of the Proposed CT Plan. 
Additionally, Section 8.1(c) of the Proposed CT Plan provides that 
the provisions of Section 8.1 and other provisions of this Agreement 
relating to the maintenance of Capital Accounts are intended to 
comply with be interpreted and applied in a manner consistent with 
such Treasury Regulations. See id.
---------------------------------------------------------------------------

    Section 8.2 of the Proposed CT Plan specifies that no Member will 
be obligated or permitted to make any additional contribution to the 
capital of the Company except with the approval of the Operating 
Committee.\435\
---------------------------------------------------------------------------

    \435\ See Article VIII, Section 8.2 of the Proposed CT Plan.
---------------------------------------------------------------------------

    Section 8.3 of the Proposed CT Plan requires the distributions of 
revenues of the Company to the Members at the times and in the 
aggregate amounts set forth in Exhibit D to the Proposed CT Plan.\436\
---------------------------------------------------------------------------

    \436\ See Article VIII, Section 8.3 of the Proposed CT Plan 
(providing, in part, that ``[e]xcept as set forth in this Section 
8.3 and Section 11.2, and subject to the provisions of Section 13.1, 
Distributions shall be made to the Members at the times and in the 
aggregate amounts set forth in Exhibit D. Notwithstanding any 
provisions to the contrary contained in this Agreement, the Company 
shall not make a Distribution to a Member on account of its interest 
in the Company if such Distribution would violate Section 18-607 of 
the Delaware Act or other Applicable Law'').
---------------------------------------------------------------------------

    Article VIII of the Proposed CT Plan differs from the corresponding 
provision of the 2021 CT Plan approved by the Commission \437\ in that 
it provides that the capital accounts will be established by the 
Company and maintained by the Administrator, whereas in the 
corresponding provision of the 2021 CT Plan it was the Company that 
both established and maintained such accounts.\438\
---------------------------------------------------------------------------

    \437\ See 2021 Approval Order, supra note 19, 86 FR at 44200, 
44218-19.
    \438\ See id. at 44200, 44218.
---------------------------------------------------------------------------

    The Commission received no comments on Article VIII of the Proposed 
CT Plan. The function of administering the capital accounts is 
reasonably within the scope of the general functions of the 
Administrator under Section 6.1 of the Proposed CT Plan.\439\ For this 
reason, and as the other provisions in Article VIII are substantively 
similar to the corresponding provisions of the 2021 CT Plan approved by 
the Commission \440\ and were not required to be modified by the 
Amended Governance order, the Commission is approving Article VIII of 
the Proposed CT Plan as proposed.
---------------------------------------------------------------------------

    \439\ See Article VI, Section 6.1 of the Proposed CT Plan 
(providing, in part, that ``the Administrator shall perform 
administrative functions on behalf of the Company including 
recordkeeping; administering Vendor and Subscriber contracts; 
administering Fees, including billing, collection, and auditing of 
Vendors and Subscribers; administering Distributions; tax functions 
of the Company; and the preparation of the Company's audited 
financial reports; and support of Company governance'').
    \440\ See 2021 Approval Order, supra note 19, 86 FR at 44200, 
44218-19.
---------------------------------------------------------------------------

10. Allocations
    Article IX of the Proposed CT Plan sets forth the provisions 
related to the allocation of profits and losses of the Company to 
Members. Pursuant to Article XI, Section 9.1, the profits and losses of 
the Company must be determined for each fiscal year in a manner 
consistent with GAAP.\441\ Article IX, Section 9.2 provides that

[[Page 94951]]

profits and losses of the Company must be allocated among the Members 
in accordance with Exhibit D of the Proposed CT Plan.\442\ Section 9.2 
also specifies the procedures for certain allocation events in 
accordance with federal tax code regulations.\443\
---------------------------------------------------------------------------

    \441\ See Article IX, Section 9.1 of the Proposed CT Plan.
    \442\ See Article IX, Section 9.2(a) of the Proposed CT Plan.
    \443\ See Article IX, Section 9.2(b)-(d) of the Proposed CT 
Plan.
---------------------------------------------------------------------------

    Exhibit D of the Proposed CT Plan outlines the methodology for 
revenue sharing among Members.
    Paragraphs (b), (c), and (e) through (i) of Exhibit D set forth the 
definitions used for determining the revenue sharing among Members, 
including ``Security Income Allocation,'' \444\ ``Volume Percentage,'' 
\445\ ``Trading Share,'' \446\ ``Trade Rating,'' \447\ ``Quoting 
Share,'' \448\ ``Quote Rating,'' \449\ and ``Quote Credits.'' \450\
---------------------------------------------------------------------------

    \444\ See Paragraph (b) of Exhibit D to the Proposed CT Plan.
    \445\ See Paragraph (c) of Exhibit D to the Proposed CT Plan.
    \446\ See Paragraph (e) of Exhibit D to the Proposed CT Plan.
    \447\ See Paragraph (f) of Exhibit D to the Proposed CT Plan.
    \448\ See Paragraph (g) of Exhibit D to the Proposed CT Plan.
    \449\ See Paragraph (h) of Exhibit D to the Proposed CT Plan.
    \450\ See Paragraph (i) of Exhibit D to the Proposed CT Plan.
---------------------------------------------------------------------------

    Paragraph (d) of Exhibit D specifies a cap on the Net Distributable 
Operating Income of the Proposed CT Plan.\451\
---------------------------------------------------------------------------

    \451\ See Paragraph (d) of Exhibit D to the Proposed CT Plan.
---------------------------------------------------------------------------

    Paragraph (j) of Exhibit D specifies the formula for determining 
the Net Distributable Operating Income for any calendar year.\452\
---------------------------------------------------------------------------

    \452\ See Paragraph (j) of Exhibit D to the Proposed CT Plan.
---------------------------------------------------------------------------

    Paragraph (k) of Exhibit D specifies that once a new Member 
implements a Processor-approved electronic interface with the 
Processors, the Member will become eligible to receive revenue.\453\
---------------------------------------------------------------------------

    \453\ See Paragraph (k) of Exhibit D to the Proposed CT Plan.
---------------------------------------------------------------------------

    Paragraph (l) of Exhibit D specifies the Company will cause the 
Administrator to provide Members with written estimates of each 
Member's quarterly Net Distributable Operating Income within 45 
calendar days of the end of the quarter.\454\
---------------------------------------------------------------------------

    \454\ See Paragraph (l) of Exhibit D to the Proposed CT Plan.
---------------------------------------------------------------------------

    Paragraph (m) of Exhibit D specifies that the Company will cause 
the Administrator to submit to the Members a quarterly itemized 
statement setting forth the basis upon which Net Distributable 
Operating Income was calculated.\455\
---------------------------------------------------------------------------

    \455\ See Paragraph (m) of Exhibit D to the Proposed CT Plan.
---------------------------------------------------------------------------

    One commenter suggests modifying the definition of ``Net 
Distributable Operating Income'' under paragraph (j) of Exhibit D to 
remove a 6.25% allocation to FINRA.\456\ This commenter states that the 
proposed FINRA set-aside is a ``historical artifact'' and 
``inconsistent with the overall scheme of revenue distribution,'' which 
the commenter states bases revenue sharing on the contribution of each 
participant to market transparency.\457\ The commenter states that 
``payments to FINRA, like that of all participants, should be based on 
the principle of contribution to the market,'' and that the 6.25% 
adjustment should be removed from the calculation.\458\
---------------------------------------------------------------------------

    \456\ See Nasdaq Letter, supra note 109, at 2, 6.
    \457\ Id. at 6.
    \458\ Id.
---------------------------------------------------------------------------

    In response to the commenter, another commenter opposes removal of 
the 6.25% FINRA set-aside from the calculation of ``Net Distributable 
Operating Income'' under paragraph (j) of Exhibit D.\459\ This 
commenter states that because both the inclusion of OTC Equity Data and 
the associated 6.25% revenue allocation were in the 2021 CT Plan 
approved by the Commission, and these provisions were not challenged in 
the subsequent litigation, the Amended Governance Order requires that 
these provisions remain in the Proposed CT Plan.\460\ This commenter 
further states that the Market Data Infrastructure Rules (``MDI 
Rules'') \461\ will ultimately resolve the treatment of OTC Equity Data 
under the Proposed CT Plan,\462\ in part because the final MDI Rules 
will require FINRA to identify and build alternative means for 
distributing OTC Equity Data to investors.\463\ The commenter states 
that, until the MDI Rules are implemented, the most efficient way to 
provide investors with this important information is to include OTC 
Equity data together with NMS stock data under the applicable NMS 
Plan.\464\ Finally, the commenter states that the 6.25% revenue 
allocation is an integral part of the overall revenue allocation 
formula and reflects the Commission-approved determination that such 
revenue is appropriate, and accordingly recommends that the Commission 
retain it in Exhibit D.\465\
---------------------------------------------------------------------------

    \459\ See Letter from Marcia E. Asquith, Corporate Secretary, 
EVP, Board and External Relations, Financial Industry Regulatory 
Authority, Inc., dated May 20, 2024 (``FINRA Letter'') at 2-4.
    \460\ See id. at 3.
    \461\ The ``MDI Rules'' as used in this order, and as relevant 
to this order, are Rules 600, 603, and 614 of Regulation NMS. 17 CFR 
242.600, 242.603, 242.614. See also Securities Exchange Act Release 
No. 90610 (Dec. 9, 2020), 86 FR 18596 (Apr. 9, 2021) (File No. S7-
03-20) (``MDI Rules Release''); Securities Exchange Act Release No. 
90610A (May 24, 2021), 86 FR 29195 (June 1, 2021) (File No. S7-03-
20) (technical correction to MDI Rules Release). Several exchanges 
filed petitions for review challenging the MDI Rules in the D.C. 
Circuit, which were denied on May 24, 2022. See The Nasdaq Stock 
Market LLC, et al. v. SEC, No. 21-1100 (D.C. Cir. May 24, 2022).
    \462\ See id.
    \463\ See id.
    \464\ See id.
    \465\ See id. at 2, 4.
---------------------------------------------------------------------------

    As stated in the Amended Governance Order, the provisions of the 
2021 Approval Order that were not challenged--including the 6.25% set-
aside for FINRA--continue to be appropriate for the Proposed CT 
Plan.\466\ Separately, the Commission agrees that the provisions of the 
Commission's MDI Rules will resolve this issue,\467\ and that when the 
Proposed CT Plan becomes the effective NMS plan for dissemination of 
equity market data under the MDI Rules, the Proposed CT Plan will no 
longer include OTC data within the definition of ``core data,'' and no 
revenue allocation of plan revenues for OTC data will be necessary or 
appropriate.\468\ Moreover, because the provisions of the Proposed CT 
Plan related to the allocation of profits and losses of the Company to 
the Members, including those relating to the 6.25% revenue allocation 
to FINRA, are consistent with the corresponding provision of the 2021 
CT Plan,\469\ it is not necessary to modify the Proposed CT Plan as 
suggested by the commenter.
---------------------------------------------------------------------------

    \466\ See Amended Governance Order, supra note 23, 88 FR at 
61631. See also 2021 Approval Order, supra note 19, 86 FR at 44201-
202.
    \467\ See 2021 Approval Order, supra note 19, 86 FR at 44201 
(citing Market Data Infrastructure, Securities Exchange Act Release 
No. 90610 (Dec. 9, 2020), 86 FR 18596 (File No. S7-03-20) (Final 
Rule)).
    \468\ See id.
    \469\ See 2021 Approval Order, supra note 19, 86 FR at 44224.
---------------------------------------------------------------------------

    Separately, one commenter disagrees with the provisions in Exhibit 
D relating to revenue sharing, stating that the ``entirety of Exhibit D 
revenue sharing scheme is nothing more than SROs meeting behind closed 
doors in dividing the cake of SIPs/CC revenue.'' \470\ This commenter 
states that costs should be minimized because ``putting data in motion 
from one place to another incurs no costs.'' \471\ According to this 
commenter, quote and trade distribution should be rewarded differently, 
and suggests adopting a format paralleling that of the music 
industry.\472\
---------------------------------------------------------------------------

    \470\ Data Boiler Letter, supra note 208, at 5.
    \471\ Id.
    \472\ See id.

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

[[Page 94952]]

    In response to the comment that the proposed revenue sharing 
arrangement is unjustified, and the suggestion that the format for 
quote and trade distribution should parallel that of the music 
industry,\473\ it is unclear from the comment how revenue sharing in 
one industry may be applicable to the Proposed CT Plan. Furthermore, 
the SROs as operators of the SIPs are well suited to determine how the 
revenues are distributed among the SROs.\474\
---------------------------------------------------------------------------

    \473\ See id.
    \474\ See Governance Order, supra note 11, 85 FR at 28728.
---------------------------------------------------------------------------

    The provisions of the Proposed CT Plan related to the allocation of 
profits and losses of the Company to the Members are identical to those 
of the 2021 CT Plan approved by the Commission,\475\ and are consistent 
with the requirements of the Amended Governance Order.\476\ For the 
reasons discussed above, the Commission is approving Article IX as 
proposed.
---------------------------------------------------------------------------

    \475\ See 2021 Approval Order, supra note 19, 86 FR at 44200-02, 
44224-25.
    \476\ See id. at 44224.
---------------------------------------------------------------------------

11. Records and Accounting; Reports
    Article X of the Proposed CT Plan sets forth the Company's 
obligations and policies related to accounting and tax matters. Article 
X, Section 10.1 of the Proposed CT Plan specifies that the Operating 
Committee shall determine all matters concerning accounting procedures 
of the Company and maintain an accounting system that enables the 
Company to produce accounting records and information substantially 
consistent with GAAP.\477\ Article X, Section 10.2 of the Proposed CT 
Plan specifies that the Company is intended to be treated as a 
partnership for federal, state, and local income tax purposes.\478\ 
Pursuant to this section, all tax returns are required to be prepared 
in a manner consistent with the Distributions made in accordance with 
Exhibit D to the Proposed CT Plan.\479\ Article X, Section 10.3 of the 
Proposed CT Plan sets forth provisions regarding the functions and 
duties of an entity appointed as the ``Partnership Representative'' of 
the Company as required by the federal tax code.\480\ The Partnership 
Representative is required to use reasonable efforts to notify each 
Member of all significant matters that may come to its attention and to 
forward to each Member copies of all significant written communications 
it receives in such capacity.\481\ The Partnership Representative must 
also consult with the Members before taking any material actions with 
respect to tax matters and must not compromise or settle any tax audit 
or litigation affecting the Members without the approval of a majority 
of Members.\482\
---------------------------------------------------------------------------

    \477\ See Article X, Section 10.1(a) of the Proposed CT Plan.
    \478\ See Article X, Section 10.2(a) of the Proposed CT Plan.
    \479\ See Article X, Section 10.2(b) of the Proposed CT Plan.
    \480\ See Article X, Section 10.3(a) of the Proposed CT Plan.
    \481\ See Article X, Section 10.3(b) of the Proposed CT Plan.
    \482\ See Article X, Section 10.3(c) of the Proposed CT Plan.
---------------------------------------------------------------------------

    Sections 10.1-10.3 are identical to the corresponding provisions of 
the 2021 CT Plan approved by the Commission,\483\ and was not required 
to be modified by the Amended Governance Order. The Commission received 
no comments addressing Article X, and the Commission is approving the 
provisions of Article X as proposed.
---------------------------------------------------------------------------

    \483\ See 2021 Approval Order, supra note 19, 86 FR at 44202.
---------------------------------------------------------------------------

12. Dissolution and Termination
(a) Dissolution of the Company
    Article XI, Section 11.1 of the Proposed CT Plan specifies the 
events that would trigger the dissolution of the Company, including: 
(i) unanimous written consent of the Members to dissolve the Company; 
(ii) the sale or other disposition of all or substantially all the 
Company's assets outside the ordinary course of business; (iii) an 
event which makes it unlawful or impossible for the Company business to 
be continued; (iv) the withdrawal of one or more Members such that 
there is only one remaining Member; or (v) the entry of a decree of 
judicial dissolution under Section 18-802 of the Delaware Act.\484\
---------------------------------------------------------------------------

    \484\ See Article XI, Section 11.1 of the Proposed CT Plan.
---------------------------------------------------------------------------

    Section 11.1 of the Proposed CT Plan is identical to the 
corresponding one in the 2021 CT Plan approved by the Commission \485\ 
and was not required to be modified by the Amended Governance Order. 
The Commission received no comments addressing Section 11.1, and the 
Commission is approving this provision of the Proposed CT Plan as 
proposed.
---------------------------------------------------------------------------

    \485\ See 2021 Approval Order, supra note 19, 86 FR at 44202.
---------------------------------------------------------------------------

(b) Liquidation and Distribution
    Article XI, Section 11.2 of the Proposed CT Plan sets forth the 
procedures for the liquidation and distribution of assets following the 
dissolution of the Company. Specifically, Section 11.2 requires the 
Members to appoint a liquidating trustee to wind up the affairs of the 
Company by (i) selling its assets in an orderly manner (so as to avoid 
the loss normally associated with forced sales), and (ii) applying and 
distributing the proceeds of such sale, together with other funds held 
by the Company: (a) first, to the payment of all debts and liabilities 
of the Company; (b) second, to the establishments of any reserves 
reasonably necessary to provide for any contingent recourse liabilities 
and obligations; (c) third, to the Members in accordance with Exhibit D 
of the Proposed CT Plan; and (d) fourth, to the Members as determined 
by a majority of Members.\486\
---------------------------------------------------------------------------

    \486\ See Article XI, Section 11.2 of the Proposed CT Plan.
---------------------------------------------------------------------------

    Section 11.2 of the Proposed CT Plan is identical to the 
corresponding provision in the 2021 CT Plan approved by the Commission 
\487\ and was not required to be modified by the Amended Governance 
Order. The Commission received no comments addressing Section 11.2, and 
the Commission is approving Article XI, Section 11.2 of the Proposed CT 
Plan as proposed.
---------------------------------------------------------------------------

    \487\ See 2021 Approval Order, supra note 19, 86 FR at 44202-03.
---------------------------------------------------------------------------

(c) Termination
    Article XI, Section 11.3 of the Proposed CT Plan sets forth 
termination procedures following the dissolution of the Company. 
Specifically, Section 11.3 provides that each Member will receive a 
statement prepared by the independent accountants retained on behalf of 
the Company that shall set forth (i) the assets and liabilities of the 
Company as of the date of the final distribution of Company's assets 
under Section 11.2 of the Proposed CT Plan and (ii) the net profit or 
net loss for the fiscal period ending on such date, and upon completion 
of the dissolution, winding up, liquidation, and distribution of the 
liquidation proceeds, the Company will terminate.\488\ Section 11.3 is 
identical to the corresponding provision in the 2021 CT Plan approved 
by the Commission \489\ and was not required to be modified by the 
Amended Governance Order. The Commission received no comments 
addressing this provision, and the Commission is approving Article XI, 
Section 11.3 as proposed.
---------------------------------------------------------------------------

    \488\ See Article XI, Section 11.3 of the Proposed CT Plan.
    \489\ See 2021 Approval Order, supra note 19, 86 FR at 44203.
---------------------------------------------------------------------------

13. Exculpation and Indemnification
(a) Exculpation and Indemnification
    Article XII, Sections 12.1 and 12.2 of the Proposed CT Plan provide 
broad liability, exculpation, and

[[Page 94953]]

indemnification protections for SROs and Voting Representatives. 
Specifically, Section 12.1 provides that the liability of each Member 
and each individual currently or formerly serving as an SRO Voting 
Representative (each, an ``Exculpated Party'') will be limited to the 
maximum extent permitted by applicable law or as otherwise expressly 
provided in the Proposed CT Plan ``for any loss suffered in connection 
with a breach of any fiduciary duty, errors in judgment or other acts 
or omissions by such Exculpated Party.'' Section 12.2 provides 
indemnification to current or former SROs and Voting Representatives 
(``Company Indemnified Party'') for losses from being a Party to a 
Proceeding.
    The Commission is making a modification to Section 12.1 to delete 
``SRO'' from the term ``SRO Voting Representative,'' as used in this 
section. This modification is appropriate because the defined term in 
the Proposed CT Plan is ``Voting Representative,'' and not ``SRO Voting 
Representative.'' \490\ Aside from the one modification to Section 
12.1, the provisions in Sections 12.1 and 12.2. are identical to the 
corresponding provisions in the 2021 CT Plan approved by the 
Commission,\491\ and were not required to be modified by the Amended 
Governance Order. The Commission received no comments addressing 
Sections 12.1 and 12.2 of the Proposed CT Plan, and the Commission is 
approving Sections 12.1 of the Proposed CT Plan as modified, and 12.2 
of the Proposed CT Plan as proposed.
---------------------------------------------------------------------------

    \490\ See Article I, Section 1.1(84) of the Proposed CT Plan 
(defining ``Voting Representative'').
    \491\ See 2021 Approval Order, supra note 19, 86 FR at 44203-04.
---------------------------------------------------------------------------

(b) Advance Payment
    Article XII, Section 12.3 of the Proposed CT Plan provides for the 
payment of reasonable expenses incurred by a Company Indemnified Party 
who is a named defendant or respondent to a Proceeding, except that 
such Company Indemnified Party must repay such amount if it is 
ultimately determined that he or she is not entitled to 
indemnification.\492\ This provision is identical to the corresponding 
provision in the 2021 CT Plan approved by the Commission,\493\ and was 
not required to be modified by the Amended Governance Order. The 
Commission received no comments on this provision, and the Commission 
is approving Section 12.3 of the Proposed CT Plan as proposed.
---------------------------------------------------------------------------

    \492\ See Article XII, Section 12.3 of the Proposed CT Plan.
    \493\ See 2021 Approval Order, supra note 19, 86 FR at 44204-05.
---------------------------------------------------------------------------

(c) Appearance as a Witness
    Article XII, Section 12.4 of the Proposed CT Plan provides for the 
payment or reimbursement of reasonable out-of-pocket expenses incurred 
by a Company Indemnified Party in connection with appearance as a 
witness or other participation in a Proceeding at a time when the 
Company Indemnified Party is not a named defendant or respondent in the 
Proceeding.\494\ This provision is identical to the corresponding 
provision in the 2021 CT Plan approved by the Commission,\495\ and was 
not required to be modified by the Amended Governance Order. The 
Commission received no comments on this provision, and the Commission 
is approving Section 12.4 as proposed.
---------------------------------------------------------------------------

    \494\ See Article XII, Section 12.4 of the Proposed CT Plan.
    \495\ See 2021 Approval Order, supra note 19, 86 FR at 44205.
---------------------------------------------------------------------------

(d) Nonexclusivity of Rights
    Article XII, Section 12.5 of the Proposed CT Plan provides that the 
right to indemnification and the advancement and payment of expenses 
conferred in Article XII shall not be exclusive of any other right a 
Company Indemnified Person may have or hereafter acquire.\496\ This 
provision is identical to the corresponding provision in the 2021 CT 
Plan approved by the Commission,\497\ and was not required to be 
modified by the Amended Governance Order. The Commission received no 
comments on Section 12.5, and the Commission is approving this 
provision as proposed.
---------------------------------------------------------------------------

    \496\ See Article XII, Section 12.5 of the Proposed CT Plan.
    \497\ See 2021 Approval Order, supra note 19, 86 FR at 44205.
---------------------------------------------------------------------------

14. Miscellaneous Provisions
    Article XIII of the Proposed CT Plan sets forth miscellaneous 
provisions governing the Proposed CT Plan.
(a) Expenses
    Section 13.1 of the Proposed CT Plan governs the payment of 
expenses by the Proposed CT Plan and requires that all such expenses be 
paid before any allocations may be made to the Members.\498\ Section 
13.1 further provides that Members will be responsible for reserves for 
contingent liabilities and that each Member shall be responsible for 
the costs of any technical enhancements ``made at its request and 
solely for its use,'' unless another Member subsequently makes use of 
the enhancement.\499\ This provision is identical to the corresponding 
provision in the 2021 CT Plan approved by the Commission,\500\ and was 
not required to be modified by the Amended Governance Order. The 
Commission received no comments on Section 13.1, and the Commission is 
approving Section 13.1 of the Proposed CT Plan as proposed.
---------------------------------------------------------------------------

    \498\ See Article XIII, Section 13.1 of the Proposed CT Plan.
    \499\ See id.
    \500\ See 2021 Approval Order, supra note 19, 86 FR at 44205.
---------------------------------------------------------------------------

(b) Entire Agreement
    Section 13.2 provides that the Proposed CT Plan will supersede the 
existing Equity Data Plans and all other prior agreements with respect 
to consolidated equity market data. The provision is identical to the 
corresponding provision in the 2021 CT Plan approved by the 
Commission,\501\ and was not required to be modified by the Amended 
Governance Order. The Commission received no comments on Section 13.2, 
and the Commission is approving Section 13.2 of the Proposed CT Plan as 
proposed.
---------------------------------------------------------------------------

    \501\ See id.
---------------------------------------------------------------------------

(c) Notices and Addresses
    Section 13.3 of the Proposed CT Plan provides that all 
communications must be written and sets forth the permissible methods 
of delivery.\502\ This provision is identical to the corresponding 
provision in the 2021 CT Plan approved by the Commission,\503\ and was 
not required to be modified by the Amended Governance Order. The 
Commission received no comments on Section 13.3, and Commission is 
approving Section 13.3 of the Proposed CT Plan as proposed.
---------------------------------------------------------------------------

    \502\ See Article XIII, Section 13.3 of the Proposed CT Plan. As 
proposed, Section 13.3 also states the effective dates for 
communications under this section. See id.
    \503\ See 2021 Approval Order, supra note 19, 86 FR at 44206.
---------------------------------------------------------------------------

(d) Governing Law
    Section 13.4 of the Proposed CT Plan provides that Delaware law 
will be the governing law for the Proposed CT Plan. Specifically, the 
Proposed CT Plan states that the Agreement will be ``governed by and 
construed in accordance with the Delaware Act and internal laws and 
decisions of the State of Delaware, without regard to the conflicts of 
laws principles thereof'' but will also be subject to ``any applicable 
provisions of the Exchange Act and any

[[Page 94954]]

rules and regulations promulgated thereunder.'' \504\
---------------------------------------------------------------------------

    \504\ See Article XIII, Section 13.4 of the Proposed CT Plan.
---------------------------------------------------------------------------

    Section 13.4 of the Proposed CT Plan is identical to the 
corresponding provision in the 2021 CT Plan approved by the 
Commission,\505\ and was not required to be modified by the Amended 
Governance Order. The Commission received no comments addressing 
Section 13.4, and the Commission is approving Section 13.4 of the 
Proposed CT Plan as proposed.
---------------------------------------------------------------------------

    \505\ See 2021 Approval Order, supra note 19, 86 FR at 44206.
---------------------------------------------------------------------------

(e) Amendments
    Section 13.5 of the Proposed CT Plan governs amendments to the 
Proposed CT Plan. Paragraph (a) of Section 13.5 states that the 
Proposed CT Plan may be modified when authorized by the Operating 
Committee pursuant to Section 4.3, subject to the requirements of 
section 11A of the Exchange Act and Rule 608 of Regulation NMS.
    Paragraph (b) of Section 13.5 sets forth the process for 
Ministerial Amendments, in which the Chair of the Operating Committee 
may modify the Proposed CT Plan by filing an amendment with the 
Commission unilaterally, so long as the required 48-hours advance 
written notice is provided to the Operating Committee. Paragraph (c) of 
Section 13.5 defines the term, ``Ministerial Amendment'' to include, 
among other things, an amendment to the Proposed CT Plan pertaining to 
``incorporating a change (A) that a Governmental Authority requires 
relating to the governance or operation of an LLC, (B) that requires 
conforming language to the text of this Agreement, and (C) whose 
conforming language to the text of this Agreement has been approved by 
the affirmative vote of the Operating Committee pursuant to Section 4.3 
or upon approval by a majority of Members pursuant to Section 13.5(b), 
as applicable.'' \506\
---------------------------------------------------------------------------

    \506\ See Article XIII, Section 13.5(c)(v) of the Proposed CT 
Plan (emphasis added).
---------------------------------------------------------------------------

    The Commission is modifying paragraph (v) of Section 13.5(c) to 
delete the language that reads, ``or upon approval by a majority of the 
Members pursuant to Section 13.5(b), as applicable.'' \507\ This 
modification is appropriate because the language is textually unclear. 
Moreover, the Commission's modification is appropriate to conform this 
provision with Section 4.3 of the Proposed CT Plan governing action by 
the Operating Committee, which provides for voting by SRO group or Non-
Affiliated SRO, rather than by the ``Members'' of the Plan (which would 
be each of the individual SROs), as proposed.\508\ And this would be 
the case whether the action in question requires the affirmative vote 
of two-thirds, or a simple majority of the votes allocated to the 
Operating Committee.\509\ As modified, Section 13.5 of the Proposed CT 
Plan is identical to the corresponding provision in the 2021 CT Plan 
approved by the Commission,\510\ and was not required to be modified by 
the Amended Governance Order. The Commission received no comments on 
this provision, and the Commission is approving Section 13.5 of the 
Proposed CT Plan as modified.
---------------------------------------------------------------------------

    \507\ See id. In the 2021 Approval Order, the Commission 
modified renumbered paragraph (v) of Section 13.5(c) of the plan to 
delete substantively similar language. See 2021 Approval Order, 
supra note 19, 86 FR at 44206.
    \508\ See Article XIII, Section 13.5(c)(v) of the Proposed CT 
Plan.
    \509\ See Article IV, Section 4.3 of the Proposed CT Plan.
    \510\ See 2021 Approval Order, supra note 19, 86 FR at 44206.
---------------------------------------------------------------------------

(f) Successors
    Section 13.6 of the Proposed CT Plan provides that the Proposed CT 
Plan shall bind and inure ``to the benefit of the Members and their 
respective legal representatives and successors.'' \511\ The provision 
is identical to the corresponding provision in the 2021 CT Plan 
approved by the Commission,\512\ and was not required to be modified by 
the Amended Governance Order. The Commission received no comments on 
Section 13.6, and the Commission is approving the provision as 
proposed.
---------------------------------------------------------------------------

    \511\ See Article XIII, Section 13.6 of the Proposed CT Plan.
    \512\ See 2021 Approval Order, supra note 19, 86 FR at 44206.
---------------------------------------------------------------------------

(g) Limitation on Rights of Others
    Section 13.7 of the Proposed CT Plan provides that the Proposed CT 
Plan shall not be for the benefit of or enforceable by any creditor of 
the Proposed CT Plan and shall not create any legal rights, remedies, 
or claims.\513\ The provision is identical to the corresponding 
provision in the 2021 CT Plan approved by the Commission,\514\ and was 
not required to be modified by the Amended Governance Order. The 
Commission received no comments on Section 13.7, and the Commission is 
approving the provision as proposed.
---------------------------------------------------------------------------

    \513\ See Article XIII, Section 13.7 of the Proposed CT Plan. 
Section 13.7 further provides that ``except as provided in Section 
3.7(b), the Members shall not have any duty or obligation to any 
creditor of the Company to make any contribution to the Company or 
to issue any call for capital pursuant to this Agreement.'' See id.
    \514\ See 2021 Approval Order, supra note 19, 86 FR at 44206.
---------------------------------------------------------------------------

(h) Counterparts
    Article XIII, Section 13.8 of the Proposed CT Plan provides that 
the Members to the Proposed CT Plan may execute the Proposed CT Plan 
individually in ``any number of counterparts,'' no one of which need 
contain the signature of all Members.\515\ Section 13.8 further 
provides that, as many counterparts as shall together contain all such 
signatures shall constitute one and the same instrument.\516\
---------------------------------------------------------------------------

    \515\ See Article XIII, Section 13.8 of the Proposed CT Plan.
    \516\ See id.
---------------------------------------------------------------------------

    Section 13.8 is identical to the corresponding provision in the 
2021 CT Plan approved by the Commission,\517\ and was not required to 
be modified by the Amended Governance Order. The Commission received no 
comments on Section 13.8, and the Commission is approving the provision 
as proposed.
---------------------------------------------------------------------------

    \517\ See 2021 Approval Order, supra note 19, 86 FR at 44207.
---------------------------------------------------------------------------

(i) Headings
    Section 13.9 of the Proposed CT Plan provides that CT Plan headings 
are for ``reference purposes only and shall not be deemed to be a part 
of this Agreement or to affect the meaning or interpretation of any 
provisions of this Agreement.'' \518\ The provision is identical to the 
corresponding provision in the 2021 CT Plan approved by the 
Commission,\519\ and was not required to be modified by Amended 
Governance Order. The Commission received no comments on Section 13.9, 
and the Commission is approving the provision as proposed.
---------------------------------------------------------------------------

    \518\ See Article XIII, Section 13.9 of the Proposed CT Plan.
    \519\ See 2021 Approval Order, supra note 19, 86 FR at 44207.
---------------------------------------------------------------------------

(j) Validity and Severability
    Section 13.10 of the Proposed CT Plan provides that any 
determination that any provision of the Proposed CT Plan is invalid or 
unenforceable shall not affect the validity or enforceability of any 
other provisions of the Proposed CT Plan, all of which shall remain in 
full force and effect.\520\ Section 13.10 is identical to the 
corresponding provision in the 2021 CT Plan approved by the 
Commission,\521\ and was not required to be modified by the Amended 
Governance Order. The Commission received no comments on Section 13.10,

[[Page 94955]]

and the Commission is approving the provision as proposed.
---------------------------------------------------------------------------

    \520\ See Article XIII, Section 13.10 of the Proposed CT Plan.
    \521\ See 2021 Approval Order, supra note 19, 86 FR at 44207.
---------------------------------------------------------------------------

(k) Statutory References
    Article XIII, Section 13.11 of the Proposed CT Plan provides that 
the references in the Proposed CT Plan to a particular statute or 
regulation, or a provision thereof, ``shall be deemed to refer to such 
statute or regulation, or provision thereof, or to any similar or 
superseding statute or regulation, or provision thereof, as is from 
time to time in effect.'' \522\ Section 13.11 is identical to the 
corresponding provision in the 2021 CT Plan approved by the 
Commission,\523\ and was not required to be modified by the Amended 
Governance Order. The Commission received no comments on Section 13.11, 
and the Commission is approving the provision as proposed.
---------------------------------------------------------------------------

    \522\ See Article XIII, Section 13.11 of the Proposed CT Plan.
    \523\ See 2021 Approval Order, supra note 19, 86 FR at 44207.
---------------------------------------------------------------------------

(l) Modifications To Be in Writing
    Article XIII, Section 13.12 of the Proposed CT Plan provides that 
the Proposed CT Plan constitutes the entire understanding of its 
parties, and that any amendment, modification, or alteration of the 
Proposed CT Plan must in writing and must be adopted in accordance with 
the provisions of Section 13.5.\524\ Section 13.12 is identical to the 
corresponding provision in the 2021 CT Plan approved by the Commission 
\525\ and was not required to be modified by the Amended Governance 
Order. The Commission received no comments on Section 13.12, and the 
Commission is approving the provision as proposed.
---------------------------------------------------------------------------

    \524\ See Article XIII, Section 13.12 of the Proposed CT Plan.
    \525\ See 2021 Approval Order, supra note 19, 86 FR at 44207.
---------------------------------------------------------------------------

15. Implementation
    Article XIV of the Proposed CT Plan governs the proposed schedule 
for implementation of the Proposed CT Plan.
(a) Implementation Timeline
    Section 14.1 provides that the steps to implement the Proposed CT 
Plan, and the timelines for completing these various steps, are set 
forth in Exhibit F.\526\ The proposed timelines would begin when the 
Proposed CT Plan is approved by the Commission and that approval is 
published on the Commission's website.\527\ Section 14.1 further 
provides (1) that the steps to implement the plan have been organized 
into multiple workstreams, some of which can be performed in parallel, 
and others which have dependencies that need to be completed before 
they can begin, and (2) that, in Exhibit F to the Proposed CT Plan, the 
Company has identified such dependencies, some of which are outside the 
control of the Operating Committee.\528\
---------------------------------------------------------------------------

    \526\ See Article XIV, Section 14.1 of the Proposed CT Plan.
    \527\ See id.
    \528\ See id.
---------------------------------------------------------------------------

    Furthermore, as proposed, Section 14.1 provides that, in the event 
a workstream listed in Exhibit F takes shorter or, due to factors 
outside the Operating Committee's reasonable control, takes longer than 
expected, the timelines for contingent steps will be adjusted 
accordingly to account for such change.\529\ As proposed in this 
section, any lengthening of the timeline would require the affirmative 
vote of the Operating Committee, and must be based on a reasonable 
determination that the timeline needs to be extended.\530\ Finally, as 
proposed, this section provides that, in such instances, the Operating 
Committee would be required to include any adjustment in its written 
progress report to the Commission in accordance with Section 14.2 of 
the Proposed CT Plan.
---------------------------------------------------------------------------

    \529\ See id.
    \530\ See id.
---------------------------------------------------------------------------

    In the OIP, the Commission sought comment on the proposed 
implementation timeline, including, among other things, (1) whether any 
elements of the proposed timeline should be shortened to ensure that 
implementation of the Proposed CT Plan can be achieved within a 
reasonable time, (2) whether the proposed implementation schedule's 
dependencies--the steps that need to be completed before other steps 
can begin--are justified or otherwise reasonable, and (3) whether 
certain dependencies could be removed or modified to accelerate 
implementation of the Proposed CT Plan.\531\ Finally, the Commission 
sought comment on (1) whether the Commission should modify the Proposed 
CT Plan to allow the Operating Committee to appoint one or more of the 
current Equity Data Plan administrators to serve as interim 
Administrator for the Proposed CT Plan pending the selection and 
onboarding of a permanent independent Administrator that meets the 
Amended Governance Order's requirements for the independent plan 
Administrator, (2) the advantages or disadvantages associated with 
appointing such an interim Administrator, (3) how an interim 
Administrator might affect the implementation schedule for the Proposed 
CT Plan, and (4) whether, and, if so, how, the implementation schedule 
should be modified, were the Commission to modify the Proposed CT Plan 
to permit the appointment of such an interim Administrator.\532\
---------------------------------------------------------------------------

    \531\ See OIP, supra note 6, 89 FR at 33413.
    \532\ See id.
---------------------------------------------------------------------------

    One commenter states that the Commission should consider measures 
to address unwarranted delays because the proposed timeline could be 
lengthened by a vote of the Operating Committee.\533\ Another commenter 
states that the provision allowing the Operating Committee to extend 
the proposed timeline is a potential source of delay and an aspect of 
the Proposed CT Plan that ``leaves much to be desired.'' \534\ This 
commenter states that the Commission should take all necessary steps to 
ensure that the Proposed CT Plan is implemented as expeditiously as 
possible.\535\
---------------------------------------------------------------------------

    \533\ See ICI Letter, supra note 109, at 3-4.
    \534\ MEMX Letter, supra note 109, at 5-7.
    \535\ See id.
---------------------------------------------------------------------------

    The Commission agrees that it is not appropriate for the Operating 
Committee of the Proposed CT Plan to be able to unilaterally modify the 
timeline for implementation by the affirmative vote of the Operating 
Committee, without being required to file a proposed amendment with the 
Commission. Such a provision could permit the implementation deadlines 
to be delayed indefinitely without a clear mechanism for enforcement of 
the implementation schedule. Accordingly, it is appropriate to modify 
the Proposed CT Plan to remove from proposed Section 14.1 of the 
Proposed CT Plan the ability of the Operating Committee to unilaterally 
extend the implementation timeline.\536\ The removal of this provision, 
however, would still permit the Operating Committee to file an 
amendment to the Plan with the Commission pursuant to Rule 608 of 
Regulation NMS or to otherwise seek exemptive relief from the 
Commission to extend any of the implementation deadlines.
---------------------------------------------------------------------------

    \536\ See Article XIV, Section 14.1 of the Proposed CT Plan (as 
approved).
---------------------------------------------------------------------------

    Additionally, as discussed below, the Commission is substantially 
simplifying the implementation schedule by setting deadlines for the 
most significant milestones, rather than for each step of the 
implementation schedule, thereby reducing the likelihood that the SROs 
would not be able to comply with the implementation schedule in the 
event of delays in the completion of any of the over 30 discrete 
activities that were set

[[Page 94956]]

forth in the Proposed CT Plan's implementation schedule. This 
modification is appropriate because it balances the need to provide a 
mechanism for adjusting the established implementation deadlines in the 
event of delay with the important goal of facilitating the timely 
implementation of the Proposed CT Plan, which is ``critical to reducing 
existing redundancies, inefficiencies, and inconsistencies in the 
current Equity Data Plans and to modernizing plan governance.'' \537\
---------------------------------------------------------------------------

    \537\ See 2021 Approval Order, supra note 19, 86 FR 44145-46 
(citing Governance Order, supra note 11, 85 FR at 28703-05, 28711).
---------------------------------------------------------------------------

    One commenter supports laying out a detailed transition plan as 
proposed, and offers two suggestions for improving the proposed 
transition schedule.\538\ First, this commenter supports progressing 
Workstream 2 (establishing fees, policies, and data subscriber 
agreements) in parallel with selecting and negotiating the contract 
with the independent administrator (Workstreams 3 and 4).\539\ Second, 
the commenter states that Workstreams 5.3, 5.5, 5.6, and 5.7 
(concerning customers transition from the legacy plans to the Proposed 
CT Plan) could be completed in fewer than the proposed ten months, and 
in as little as six months.\540\ One commenter states that all items in 
Workstream 2 (establishing fees, polices, data subscriber agreements) 
should not have to be completed as a condition to beginning work on 
Workstream 5 (independent administrator commences operations).\541\
---------------------------------------------------------------------------

    \538\ See dataBP Letter, supra note 392, at 3-4.
    \539\ See id.
    \540\ See id.
    \541\ See id.
---------------------------------------------------------------------------

    One commenter states that the proposed 30-month implementation 
period is too long,\542\ and that the Commission should not ``wait for 
all reforms to be ready before any could be implemented.'' \543\ This 
commenter states that merely setting an earlier deadline or reducing 
the timeframe for completing workstreams, however, would be 
insufficient given the potential sources of delay described by the 
SROs.\544\ According to the commenter, making the Operative Date 
contingent on the completion of all workstreams in Exhibit F, as 
proposed, would incentivize the three SRO groups to create gridlock in 
the voting process and remain responsible for the dissemination of 
consolidated market data through the current Equity Data Plans.\545\ 
This commenter states that because ``the selection and onboarding of 
the independent Administrator is responsible for the lion's share of 
the 30-month implementation period,'' the Commission should amend the 
Proposed CT Plan ``to allow the Operating Committee to select one of 
the two current Administrators of the Equity Data Plans as interim 
Administrator until such time as the Operating Committee selects and 
onboards a new Administrator that meets the Plans requirements for 
independence.'' \546\ This amendment, the commenter states, ``would 
allow the Plan to become operative while the Operating Committee works 
towards full implementation of all required Plan elements.'' \547\ 
Another commenter states that making the Service Level Agreement 
(``SLA'') terms part of the selection process could reduce the time for 
contract negotiations with the new Administrator from 4 months to 2 
months.\548\
---------------------------------------------------------------------------

    \542\ See MEMX Letter, supra note 109, at 6.
    \543\ See id. at 6, 9.
    \544\ See id. at 6.
    \545\ See id. at 9-10.
    \546\ Id. at 7-8.
    \547\ Id. at 9.
    \548\ See SIFMA Letter, supra note 109, at 3.
---------------------------------------------------------------------------

    The Commission recognizes the challenges associated with completing 
the actions required for implementation of the Proposed CT Plan and the 
complexity of the endeavor, as illustrated by Exhibit F to the Proposed 
CT Plan. And while setting enforceable deadlines for the implementation 
of the Proposed CT Plan is necessary for the timely achievement of the 
Operative Date, setting enforceable deadlines for each of the 30 
individual tasks specified in Exhibit F is impracticable because the 
failure of the Operating Committee to meet the deadline for any of 
those tasks--whether or not the specific deadline was critical to the 
timely implementation of the Proposed CT Plan--would require the 
Operating Committee either to file a proposed amendment with the 
Commission to modify the implementation schedule or to seek exemptive 
relief from the Commission. Instead, the detailed project-management 
information outlined in Exhibit F would be appropriate for, and should 
be included in, the written progress reports required by Section 14.2 
of the Proposed CT Plan, because including such detail in the written 
progress reports would provide transparency to the Commission and to 
market participants about the progress of implementation without 
requiring that any delay in the completion of a subtask creates the 
need for a proposed plan amendment or a request for exemptive relief 
from the Commission.
    Accordingly, the Commission is not adopting the commenters' 
suggestions with respect to modifying or otherwise reconfiguring the 
workstreams proposed in Exhibit F. Instead, the Commission is deleting 
Exhibit F in its entirety and is replacing the text of Section 14.1 
with a series of fixed deadlines for high-level milestones along the 
implementation timelines. The Commission recognizes that the SROs have 
extensive experience in operating the existing Equity Data Plans, and 
that they can draw on that experience to develop internal workstreams 
reasonably suited to help ensure the timely completion of the specific 
actions needed to implement the Proposed CT Plan within the deadlines 
specified in Section 14.1 as modified and approved by the Commission. 
The modification is appropriate because it strikes a balance between 
helping to ensure that implementation proceeds in a timely manner while 
providing for flexibility in the scheduling of individual 
implementation tasks.
    Accordingly, having considered the implementation schedule in 
Section 14.1 and Exhibit F of the Proposed CT Plan, the Commission is 
replacing Section 14.1 of the Proposed CT Plan as proposed with a 
series of deadlines for specific milestones in the implementation of 
the Proposed CT Plan.
    First, new paragraph 14.1(a) provides that, no later than one month 
after the Effective Date, the Voting Representatives shall be 
determined pursuant to Section 4.2 of the Proposed CT Plan.\549\ This 
timeframe is the same as proposed by the SROs in Exhibit F, Workstream 
1, and therefore does not represent, in and of itself, a substantive 
modification of the Proposed CT Plan as proposed.\550\ Moreover, the 
SROs, who have already selected their representatives to the operating 
committees of the existing Equity Data Plans, and who have extensive 
experience in doing so, should be able to select their Voting 
Representatives to the Operating Committee within the timeframe 
provided.
---------------------------------------------------------------------------

    \549\ See Article XIV, Section 14.1(b) of the Proposed CT Plan 
(as approved).
    \550\ See Exhibit F to the Proposed CT Plan (as proposed).
---------------------------------------------------------------------------

    Second, new paragraph 14.1(b) provides that, that no later than 
three months after the Effective Date, the Voting Representatives shall 
select the members of the Advisory Committee.\551\ This three month 
timeframe is the same as proposed by the SROs in Exhibit F,

[[Page 94957]]

Workstream 1.\552\ Moreover, the SROs have extensive experience in 
selecting members of the advisory committee of the Equity Data Plans 
such that they should be able to finalize all actions to select members 
of the Advisory Committee within the timeframe provided.\553\
---------------------------------------------------------------------------

    \551\ See Article XIV, Section 14.1(c) of the Proposed CT Plan 
(as approved).
    \552\ See Exhibit F to the Proposed CT Plan; Notice, supra note 
4, 89 FR at 5026-29.
    \553\ See, e.g., Section III(e)(ii) of the CTA Plan; Section 
IV.E.(b) of the UTP Plan.
---------------------------------------------------------------------------

    Third, new paragraph 14.1(c) provides that, no later than 12 months 
after the Effective Date, the Operating Committee shall file with the 
Commission proposed Fees charged to Vendors and Subscribers for 
Transaction Reports and Quotation Information in Eligible 
Securities.\554\ This 12-month timeframe is the same as proposed by the 
SROs in Exhibit F, Workstream 1.\555\ Moreover, given the importance of 
market data fees to both SROs and other market participants, the 
determination of Proposed CT Plan fees will be a critical priority for 
both SROs and members of the Advisory Committee. As stated in the 2021 
Approval Order, ``[a]ssessing fees to subscribers for access to the SIP 
data is one of the fundamental responsibilities of the Operating 
Committee and one of the issues most consequential to both SROs and 
other market participants.'' \556\ Additionally, through its extensive 
experience overseeing the Equity Data Plans and the national market 
system, the Commission has observed that the SROs have detailed and 
substantial pre-existing knowledge and experience with the content and 
pricing of the equity data products that are disseminated under the 
current centralized SIP model.
---------------------------------------------------------------------------

    \554\ See Article XIV, Section 14.1(d) of the Proposed CT Plan 
(as approved).
    \555\ See Exhibit F to the Proposed CT Plan; Notice, supra note 
4, 89 FR at 5026-29.
    \556\ 2021 Approval Order, supra note 19, 86 FR at 44148.
---------------------------------------------------------------------------

    The Commission received several comments addressing the substance 
of the fee amendment required to be filed by the Proposed CT Plan.\557\ 
One commenter states that the Commission should ensure that the fees 
proposed for the Proposed CT Plan are fair and reasonable.\558\ This 
commenter states that the Commission should encourage the Proposed CT 
Plan to evaluate new or alternative fee models for consolidated equity 
market data.\559\ According to this commenter, data costs are currently 
charged to retail customers on a per investor basis (based on whether 
they are acting in a non-professional or professional capacity) and to 
broker-dealers via a myriad of additional fees (e.g., display fees, 
non-display fees, access fees, etc.) for use of this exact same 
data.\560\ The commenter states that this ``complex and often opaque 
pricing model is completely inconsistent with the cost to the SROs to 
produce the data (which does not scale on a per investor basis) and is 
highly biased towards the retail investor.'' \561\
---------------------------------------------------------------------------

    \557\ See Workstream 2 (``New Fees, Policies, and Data 
Subscriber Agreements'') of proposed Exhibit F to the Proposed CT 
Plan.
    \558\ See Fidelity Letter, supra note 80, at 4-5.
    \559\ See id.
    \560\ See id.
    \561\ Id.
---------------------------------------------------------------------------

    The Commission received comments expressing concern about the fees 
required to be proposed for the Proposed CT Plan, as well as suggesting 
that the Commission clarify regulatory standards or encourage 
alternative models for such fee-related filings in the Proposed CT 
Plan.\562\ With respect to the development of fees for equity market 
data to be disseminated by the Proposed CT Plan more broadly, Article 
IV, Section 4.1 of the Proposed CT Plan charges the Operating Committee 
with ``developing fair and reasonable fees for equity market data,'' as 
well as with ``assessing the marketplace for equity data products and 
ensuring that CT Plan feeds are priced in a manner that is fair and 
reasonable, and designed to ensure the widespread availability of CT 
Feeds data to investors and market participants.'' \563\ And fees for 
data under the Proposed CT Plan will be established at a later date as 
proposed amendments, and any such fees will be assessed against the 
statutory and regulatory standards that apply to fees proposed by the 
effective national market system plan(s), including Sections 
11A(c)(1)(D) of the Exchange Act \564\ and Rule 603(a) under Regulation 
NMS.\565\ The proposed fees must be fair and reasonable.\566\ They must 
also be filed with the Commission pursuant to Rule 608 \567\ and would 
be published for public comment and thereafter must be approved by the 
Commission before becoming effective. Therefore, the requirement that 
fees be fair and reasonable need not be restated or otherwise clarified 
in the Proposed CT Plan.
---------------------------------------------------------------------------

    \562\ See id.; Polygon Letter, supra note 82, at 1.
    \563\ See Article IV, Section 4.1(a)(iii) and (a)(v) of the 
Proposed CT Plan (as approved).
    \564\ 15 U.S.C. 78k-1(c)(1)(D).
    \565\ 17 CFR 242.603(a).
    \566\ 17 CFR 242.603(a)(1).
    \567\ 17 CFR 242.608.
---------------------------------------------------------------------------

    Fourth, new paragraph Section 14.1(d) would require that, no later 
than 30 months after the Effective Date, or no later than 90 days after 
the Commission has approved Fees charged to Vendors and Subscribers for 
Transaction Reports and Quotation Information in Eligible Securities, 
whichever date is later, the Proposed CT Plan shall conduct the 
Processor and Administrator functions related to the public 
dissemination of real-time consolidated Transaction Reports and 
Quotation Information for Eligible Securities. The 30-month timeframe 
is the same as proposed by the SROs in Exhibit F, Workstream 1,\568\ 
and the text of this new paragraph further recognizes that approval of 
fees by the Commission is a necessary step toward implementation of the 
Proposed CT Plan. Providing a minimum of 90 days after Commission 
approval of the required fees is appropriate because the provision 
could not serve to shorten the 30-month provision for implementing the 
other aspects of the Proposed CT Plan and because, once implementation 
of those other aspects is complete, 90 days' notice should be 
sufficient notice to market participants of the upcoming change in the 
dissemination of consolidated market data. Additionally, the Commission 
is modifying the Proposed CT Plan to permit the Operating Committee to 
appoint one or more of the current Equity Data Plan administrators to 
serve as Interim Administrator(s) pending the selection and onboarding 
of the Administrator, which, because the selection process for the 
Administrator would take 26 of the 30-months in total required for the 
Proposed CT Plan to become operative, should reduce the likelihood that 
the process to select and onboard the independent Administrator would 
delay the Operative Date.
---------------------------------------------------------------------------

    \568\ See Exhibit F to the Proposed CT Plan; Notice, supra note 
4, 89 FR at 5026-29.
---------------------------------------------------------------------------

    Fifth, new paragraph 14.1(e) would provide that, no later than 30 
months after the Effective Date, the Administrator of the Proposed CT 
Plan, consistent with the provisions of Section 6.2 and Section 6.4 of 
the Proposed CT Plan, shall be selected. This modification, in 
conjunction with the modification to the Proposed CT Plan to add new 
Section 6.5 (Interim Administrator(s)), is appropriate to facilitate 
the full and timely implementation of the Proposed CT Plan by 
permitting crucial reforms to the governance of the NMS plans for 
consolidated equity market data without delaying the process until the 
lengthiest implementation component can be completed.
    Several commenters support close Commission oversight of the 
Proposed

[[Page 94958]]

CT Plan implementation process.\569\ One commenter states that, 
consistent with Rule 608, the Commission needs to have strong oversight 
over the implementation process for the Proposed CT Plan because the 
SROs have resisted changes to the Equity Data Plans, and the Proposed 
CT Plan does not include financial penalties if the SROs' 
implementation of the Proposed CT Plan does not proceed as 
anticipated.\570\ Another commenter states that the Commission should 
assert ``special oversight'' over the process, and urges the Commission 
to hold member SROs more accountable.\571\ Another commenter states 
that the Commission should focus on robust oversight of the Operating 
Committee to ensure that the Proposed CT Plan is implemented as 
expeditiously as possible.
---------------------------------------------------------------------------

    \569\ See Fidelity Letter, supra note 80, at 4; ICI Letter, 
supra note 109, at 3-4; Polygon Letter, supra note 82, at 2; SIFMA 
Letter, supra note 109, at 4; MEMX Letter, supra note 109, at 7.
    \570\ See Fidelity Letter, supra note 80, at 3-4.
    \571\ Polygon Letter, supra note 82, at 2.
---------------------------------------------------------------------------

    With respect to the comment suggesting that the Commission should 
exercise special or strong oversight over the Proposed CT Plan's 
implementation process, as well as the comment stating that the 
Proposed CT Plan does not provide for financial penalties in the event 
implementation of the plan does not proceed as anticipated, the 
modifications discussed above enhance the Commission's oversight over 
the implementation process by removing the ability of the Operating 
Committee to unilaterally extend the implementation timeline and by 
providing enforceable deadlines for the achievement of key milestones 
in the process. Additionally, the written progress reports required by 
Section 14.2 of the Proposed CT Plan will assist with the Commission's 
oversight of the plan and its requirements, including oversight of the 
progress made toward completing each of the steps required to implement 
the Proposed CT Plan. The written reports will also be available to the 
Equity Data Plans' websites, which should provide sufficient 
transparency and accountability with respect to implementation progress 
of the Proposed CT Plan.
    For the foregoing reasons, the Commission is approving Section 14.1 
of the Proposed CT Plan as modified.
(b) Written Progress Reports
    Section 14.2 of the Proposed CT Plan sets forth requirements for 
certain written reports to the Commission.\572\ Specifically, Section 
14.2(a) provides that beginning three months after the formation of the 
Operating Committee and continuing every three months until the 
Operative Date, the Operating Committee will provide written progress 
reports to the Commission.\573\ Section 14.2(b) provides that such 
written progress reports will contain the actions undertaken to date by 
the Operating Committee and a detailed description of the progress made 
toward completing each of the steps listed in Exhibit F to the Proposed 
CT Plan.\574\ Finally, this section requires that the Operating 
Committee make such progress reports available on the CQ Plan and CTA 
Plan's and UTP Plan's websites, and on the Proposed CT Plan's website, 
when available after the selection of the Administrator.\575\
---------------------------------------------------------------------------

    \572\ See Article XIV, Section 14.2 of the Proposed CT Plan.
    \573\ See Article XIV, Section 14.2(a) of the Proposed CT Plan.
    \574\ See Notice, supra note 4, 89 FR at 5027-29 (Exhibit F of 
the Proposed CT Plan).
    \575\ See Article XIV, Section 14.2(b) of the Proposed CT Plan.
---------------------------------------------------------------------------

    One commenter supports the requirement that the Proposed CT Plan 
Operating Committee provide written progress reports to the Commission 
every three months, beginning from the formation of the Operating 
Committee until the Operative Date.\576\ This commenter also supports 
the requirement to publish the required progress reports on plan 
websites, including those of the Equity Data Plans.\577\ Another 
commenter suggests making clear that progress reports provided to the 
Commission under this section are also required to be made publicly 
available at the same time as reports are provided to the 
Commission.\578\ One commenter states that the Commission should 
closely monitor the Operating Committee's progress, including carefully 
reviewing the public written progress reports that must be submitted to 
the Commission.\579\ Another commenter supports greater transparency 
during implementation of the Proposed CT Plan.\580\ One commenter 
states that Section 14.2 should be revised to clarify that posting of 
progress reports on the Equity Data Plans' websites must occur prior to 
the selection of the independent administrator, rather than after a new 
administrator is selected, as proposed, so as to avoid unnecessary 
delay and ensure that this provision is consistent with the Amended 
Governance Order.\581\
---------------------------------------------------------------------------

    \576\ See Fidelity Letter, supra note 80, at 4.
    \577\ See id.
    \578\ See SIFMA Letter, supra note 109, at 3.
    \579\ See ICI Letter, supra note 109, at 3-4.
    \580\ See Polygon Letter, supra note 82, at 2.
    \581\ See ICI Letter, supra note 109, at 3, n.12.
---------------------------------------------------------------------------

    The Commission agrees that ensuring transparency with respect to 
the progress made to implement the Proposed CT Plan will be helpful to 
market participants because such reports provide market participants 
visibility into the actions undertaken and the progress made toward 
completing each of the actions required for implementation of the 
Proposed CT Plan.\582\ For the reasons set out in the 2021 Approval 
Order, the required frequency of the progress reports, one report every 
three months, should be sufficient to identify for the Commission any 
significant delays in implementation without imposing unnecessary 
burdens on efforts to implement the Proposed CT Plan.\583\
---------------------------------------------------------------------------

    \582\ See 2021 Approval Order, supra note 19, 86 FR at 44149 
(``The requirement to provide progress reports in writing to the 
Commission on a quarterly basis and to make them publicly available 
is designed to help ensure that affected market participants are 
informed about the status of the steps that are taken to implement 
the CT Plan within the prescribed time periods. Providing periodic 
updates to the Commission should also facilitate holding the 
Operating Committee accountable for its progress in completing the 
interim steps towards satisfying the longer-range requirements.'').
    \583\ See id. (``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 CT Plan, because the quarterly reports would essentially reflect 
the analysis the Operating Committee would need to undertake in any 
event for its diligent oversight of the implementation process.'').
---------------------------------------------------------------------------

    The Commission agrees with commenters, however, that Section 14.2 
should be clearer with respect to requirements governing the 
publication of progress reports.\584\ The Commission is therefore 
modifying Section 14.2 to clarify that publication of the required 
progress reports must be promptly made on the CTA Plan, the CQ Plan, 
and the UTP Plan websites ``until such time as the Plan's website 
becomes available.'' This modification is appropriate to provide 
greater clarity with respect to requirements for publication of the 
required progress reports, including those concerning their timing. 
Requiring that such progress reports be made promptly available to the 
public on plan websites, as modified, is appropriate to help ensure 
that affected market participants are timely informed regarding the 
filing of such reports.
---------------------------------------------------------------------------

    \584\ See ICI Letter, supra note 109, at 3, n.12.
---------------------------------------------------------------------------

    The Commission agrees that close monitoring of progress towards the 
implementation of the Proposed CT Plan will be important.\585\ The

[[Page 94959]]

requirement to provide progress reports in writing to the Commission on 
a quarterly basis and to make them publicly available is designed to 
not only help ensure that affected market participants are informed 
about the status of the steps that are taken to implement the Proposed 
CT Plan within the prescribed time periods, but also to provide the 
Commission with periodic updates, which should facilitate holding the 
Operating Committee accountable for its progress in completing the 
interim steps towards satisfying the longer-range requirements. As 
discussed above, the required frequency of the progress reports should 
be sufficient to identify for the Commission any significant delays in 
implementation without imposing unnecessary burdens on efforts to 
implement the Proposed CT Plan.\586\ Thus, the required quarterly 
progress reports and the involvement of the Operating Committee, as 
well as of members of the Advisory Committee, should be sufficient to 
help ensure timely implementation of the Proposed CT Plan.
---------------------------------------------------------------------------

    \585\ See id. at 3-4.
    \586\ See 2021 Approval Order, supra note 19, 86 FR at 44149 
(``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 CT Plan, 
because the quarterly reports would essentially reflect the analysis 
the Operating Committee would need to undertake in any event for its 
diligent oversight of the implementation process.'').
---------------------------------------------------------------------------

    Finally, the Commission is modifying Section 14.2(b) to replace the 
phrase ``steps listed in Exhibit F'' with the phrase ``steps required 
to implement the Plan.'' This modification is appropriate to conform 
Section 14.2(b) with Commission modifications to Section XIV of the 
Proposed CT Plan governing its implementation.
    For the foregoing reasons, the Commission is approving Section 14.2 
as modified.
(c) Transition From CQ Plan, CTA Plan, and UTP Plan
    Article XIV, Section 14.3 of the Proposed CT Plan addresses the 
transition from the current Equity Data Plans to the Proposed CT Plan. 
Section 14.3(a) provides that until the Operative Date, the Members 
will continue to operate pursuant to the CQ Plan, CTA Plan, and UTP 
Plan with respect to the public dissemination of real-time consolidated 
equity market data for Eligible Securities rather than the Proposed CT 
Plan.\587\ And Section 14.3(b) provides that, as of the Operative Date, 
the Members shall conduct, through the Company, the Processor and 
Administrator functions related to the public dissemination of real-
time consolidated equity market data for Eligible Securities required 
by the Commission to be performed by the Members under the Exchange 
Act.\588\ Finally, paragraph (b) of Section 14.3 further provides that 
the Members must file an amendment to the CQ Plan, CTA Plan, and UTP 
Plan to cease their operation as of the Operative Date.\589\
---------------------------------------------------------------------------

    \587\ See Article XIV, Section 14.3(a) of the Proposed CT Plan.
    \588\ See Article XIV, Section 14.3(b) of the Proposed CT Plan.
    \589\ See id.
---------------------------------------------------------------------------

    Section 14.3 is substantively similar to the corresponding 
provisions of the 2021 CT Plan approved by the Commission,\590\ with 
the exception of the added requirement that, as of the Operative Date, 
the Members shall file an amendment to the CQ Plan, the CTA Plan, and 
the UTP Plan to cease those plans' operations. This addition is 
appropriate as it clarifies the steps to be taken to complete the 
transition from the existing Equity Data Plans to the Proposed CT Plan. 
The Commission is also modifying the text of paragraph 14.3(b) to add 
the words ``and the rules and regulations thereunder'' to the end of 
the phrase regarding the functions ``required by the Commission to be 
performed by the Members under the Exchange Act.'' This modification is 
appropriate because the SROs are also subject to certain requirements 
with respect to NMS plans, including the Proposed CT Plan under the 
rules and regulations adopted by the Commission under the Exchange Act. 
The Commission received no comments addressing Section 14.3, and the 
Commission is approving Section 14.3 of the Proposed CT Plan as 
modified.
---------------------------------------------------------------------------

    \590\ See 2021 Approval Order, supra note 19, 86 FR at 44140.
---------------------------------------------------------------------------

(d) Implementation of the MDI Rules
    Rule 614(e)(1) of the MDI Rules directed the participants of the 
effective national market system plan(s) for NMS stocks to file an 
amendment pursuant to Rule 608 of Regulation NMS to conform the 
effective national market system plan(s) for NMS stocks to reflect the 
provision of information with respect to quotations for and 
transactions in NMS stocks that is necessary to generate consolidated 
market data by the national securities exchange and national securities 
association participants to competing consolidators and self-
aggregators.\591\ The MDI Rules also required that the amendment to the 
effective national market system plan(s) required under Rule 614(e)(1) 
``must include the fees proposed by the plan(s) for data underlying 
consolidated market data.'' \592\
---------------------------------------------------------------------------

    \591\ 17 CFR 242.614(e)(1); see also MDI Rules Release, supra 
note 461, 86 FR at 18699.
    \592\ MDI Rules Release, supra note 461, 86 FR at 18699.
---------------------------------------------------------------------------

    On November 5, 2021, the SROs filed separate amendments of the 
Equity Data Plans pursuant to these requirements, and the Commission on 
September 22, 2022, disapproved the proposed amendments, finding, in 
the case of the amendments relating to the expanded definition of 
``core data'' and the introduction of competing consolidators, that the 
amendments did not conform the Equity Data Plans to reflect the 
provision of information with respect to quotations for and 
transactions in NMS stocks that is necessary to generate consolidated 
market data by the SROs to competing consolidators and self-
aggregators,\593\ and, in the case of the associated fee amendments, 
that the amendments did not demonstrate that the proposed fees were 
fair, reasonable, and not unreasonably discriminatory.\594\
---------------------------------------------------------------------------

    \593\ See Consolidated Tape Association; Order Disapproving the 
Thirty-Seventh Substantive Amendment to the Second Restatement of 
the CTA Plan and the Twenty-Eighth Substantive Amendment to the 
Restated CQ Plan, Securities Exchange Act Release No. 95850 (Sept. 
21, 2022), 87 FR 58560 (Sept. 27, 2022) (File No. SR-CTA/CQ-2021-
02); Joint Industry Plan; Order Disapproving the Fifty-First 
Amendment to 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, Securities 
Exchange Act Release No. 95848 (Sept. 21, 2022), 87 FR 58544 (Sept. 
27, 2022) (File No. S7-24-89).
    \594\ See Consolidated Tape Association; Order Disapproving the 
Twenty-Fifth Charges Amendment to the Second Restatement of the CTA 
Plan and Sixteenth Charges Amendment to the Restated CQ Plan, 
Securities Exchange Act Release No. 95851 (Sept. 21, 2022), 87 FR 
58613 (Sept. 27, 2022) (File No. SR-CTA/CQ-2021-03); Joint Industry 
Plan; Order Disapproving the Fifty-Second Amendment to 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, Securities Exchange Act Release 
No. 95849 (Sept. 21, 2022), 87 FR 58592 (Sept. 27, 2022) (File No. 
S7-24-89).
---------------------------------------------------------------------------

    One commenter states that the Proposed CT Plan should be amended to 
require that the Proposed CT Plan assume responsibility for all core 
data, as defined in Rule 600(b)(21) of Regulation NMS, and not only the 
subset of core data that is currently made available by the Equity Data 
Pans.\595\ This commenter states that the ``Amended [Governance] Order 
and the infrastructure rule appear to require that the Plan include 
provisions that are consistent with the revised definition of `core 
data' in Rule 600(b)(21) of

[[Page 94960]]

Regulation NMS,'' \596\ which would include data elements in addition 
to transaction reports and quotation information.\597\ This commenter 
further states that, ``by contrast, Section 4.1 of the [Proposed CT] 
Plan replaces the broad reference to `core data' in the Amended 
[Governance] Order with a significantly narrower reference'' to the 
Operating Committee's responsibilities with respect to Transaction 
Reports and Quotation Information in Eligible Security, which does not 
include all elements of ``core data'' as defined in Rule 600(b)(21) and 
is ``flatly inconsistent with the Amended Order and the infrastructure 
rule.'' \598\
---------------------------------------------------------------------------

    \595\ See MEMX Letter, supra note 109, at 15-20.
    \596\ Id. at 16-17 (emphasis in original).
    \597\ See id. at 17.
    \598\ Id.
---------------------------------------------------------------------------

    One commenter states that the Commission should clarify in this 
order its expectations with respect to establishing a credible plan for 
implementing the MDI Rules.\599\ Another commenter states that the 
Commission should require the SROs in the Proposed CT Plan to address 
other non-fee aspects prescribed in the MDI Rules, as this would 
address the current uncertainty as to when the current Operating 
Committee will submit revised proposals for the Commission's 
approval.\600\
---------------------------------------------------------------------------

    \599\ See SIFMA Letter, supra note 109, at 3-4.
    \600\ See ICI Letter, supra note 109, at 4.
---------------------------------------------------------------------------

    Several commenters suggest that the Commission address, whether in 
the Proposed CT Plan or in the order approving it, the fee proposals to 
be filed with the Commission under the MDI Rules.\601\ One commenter 
states that the Commission should require the SROs to act on the fees 
for data to be provided under the MDI Rules because, without approval 
of such fee filing, a competitive market for consolidated market data 
cannot begin.\602\ One commenter suggests that the Commission clarify, 
in the order approving the Proposed CT Plan, its expectations with 
respect to the timing for the SROs to propose fees for enhanced core 
equity market data to be distributed under the MDI Rules.\603\ Another 
commenter states that the Commission should require the SROs to re-file 
revised plan amendments setting the fees for the expanded core data 
elements to address the current uncertainty as to when the current 
Operating Committee will submit revised proposals.\604\
---------------------------------------------------------------------------

    \601\ See Fidelity Letter, supra note 80, at 5-6; SIFMA Letter, 
supra note 109, at 3-4; ICI Letter, supra note 109, at 4.
    \602\ See Fidelity Letter, supra note 80, at 5-6.
    \603\ See SIFMA Letter, supra note 109, at 3-4.
    \604\ See ICI Letter, supra note 109, at 4.
---------------------------------------------------------------------------

    Another commenter seeks clarification with respect to whether the 
fees under the Proposed CT Plan would be for the equity market data 
currently distributed under the Equity Market Data Plans or for the 
enhanced core data to be distributed under the Commission's MDI 
Rules.\605\
---------------------------------------------------------------------------

    \605\ See SIFMA Letter, supra note 109, at 3.
---------------------------------------------------------------------------

    The Commission recognizes that the full implementation of the 
revised governance structure of the Proposed CT Plan and of the MDI 
Rules must be appropriately sequenced and that an important step toward 
full implementation of these initiatives should be the implementation 
of the new governance structure of the Proposed CT Plan. The immediate 
implementation of the MDI Rules through the Proposed CT Plan would be 
impracticable, because it would require simultaneous implementation of 
both a new governance structure and the provisions of the MDI Rules, 
and the immediate implementation of the MDI Rules through the existing 
Equity Data Plans does not make sense, given that those plans are to be 
phased out of operation in favor of the Proposed CT Plan. Therefore, 
the Commission is not modifying the Proposed CT Plan to require the 
dissemination of ``core data'' as defined in the MDI Rules.
    The SROs, however, remain under the obligation imposed by Rule 
614(e) of Regulation NMS to file an amendment ``[c]onforming the 
effective national market system plan(s) for NMS stocks to reflect 
provision of information with respect to quotations for and 
transactions in NMS stocks that is necessary to generate consolidated 
market data by the national securities exchange and national securities 
association participants to competing consolidators and self-
aggregators.'' \606\ Although, as described above,\607\ the SROs 
previously filed proposed amendments to the Equity Data Plans under 
Rule 614(e), the Commission disapproved those proposed amendments, 
finding that the proposed amendments ``do not comply with Rule 
614(e)(1) because they do not conform the Plans to reflect the 
provision of information with respect to quotations for and 
transactions in NMS stocks that is necessary to generate consolidated 
market data by the SROs to competing consolidators and self-
aggregators.'' \608\ Because the previously filed and disapproved 
amendments were ``inconsistent with the MDI Rules, specifically Rule 
614(e),'' \609\ the participants to the effective national market 
system plan(s) will need to develop and file new proposed amendments 
pursuant to Rule 608,\610\ and--given that the approved CT Plan will, 
when fully implemented, replace the Equity Data Plans--it is the 
Commission's expectation that the SROs will file these proposed 
amendments to the approved CT Plan. The proposed amendments would also 
need to include the fees proposed for data underlying consolidated 
market data.\611\
---------------------------------------------------------------------------

    \606\ 17 CFR 242.614(e)(1).
    \607\ See supra note 593 and accompanying text.
    \608\ Securities Exchange Act Release No. 95848, supra note 593, 
87 FR at 58545; Securities Exchange Act Release No. 95850, supra 
note 593, 87 FR at 58561.
    \609\ Id.
    \610\ See Regulation NMS Amendments, supra note 159, 89 FR 
81625.
    \611\ See MDI Rules Release, supra note 461, 86 FR at 18699 
(``The first key milestone [in the implementation of the MDI Rules] 
will be the amendment to the effective national market system 
plan(s) required under Rule 614(e), which must include the fees 
proposed by the plan(s) for data underlying consolidated market 
data.''). On Nov. 5, 2021, the SROs filed proposed fee amendments 
pursuant to these requirements, but the Commission on Sept. 22, 
2022, disapproved the amendments because they did not demonstrate 
that the proposed fees were fair, reasonable, and not unreasonably 
discriminatory. See Consolidated Tape Association; Order 
Disapproving the Twenty-Fifth Charges Amendment to the Second 
Restatement of the CTA Plan and Sixteenth Charges Amendment to the 
Restated CQ Plan, Securities Exchange Act Release No. 95851 (Sept. 
21, 2022), 87 FR 58613 (Sept. 27, 2022) (File No. SR-CTA/CQ-2021-
03); Joint Industry Plan; Order Disapproving the Fifty-Second 
Amendment to 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, Securities 
Exchange Act Release No. 95849 (Sept. 21, 2022), 87 FR 58592 (Sept. 
27, 2022) (File No. S7-24-89).
---------------------------------------------------------------------------

(e) Consideration of Other Actions
    One commenter states that the Commission should consider ways of 
expediting implementation of the MDI Rules, including through the use 
of exchange proprietary data feeds.\612\ Specifically, this commenter 
states that the Commission (or the SROs on their initiative) could 
allow market data vendors, who would register with the Commission, to 
use exchange proprietary market data feeds to generate consolidated 
market data pursuant to the MDI Rules on a temporary basis until the 
fee arrangements and related infrastructure for the Proposed CT Plan 
are finalized. Otherwise, this commenter states that market 
participants would have to wait over two and a half years before the 
Commission's MDI Rules are implemented, even though the technical 
ability to actualize those rules already exists.\613\ This commenter 
further states that a top concern when implementing

[[Page 94961]]

the Commission's MDI Rules should be addressing certain onboarding 
paperwork and reporting processes.\614\ This commenter states that end 
users of consolidated market data should be required to contract with 
the competing consolidator of their choice, rather than with the Plan 
Administrator.\615\ To compensate the SROs for the loss of such 
downstream fee revenues, the commenter states that it would support a 
potential revenue sharing agreement, such as one whereby SROs would 
receive a portion of the competing consolidator's revenue.\616\ The 
commenter further states that that consolidated market data should be 
sold to competing consolidators free and clear of downstream fees, such 
as device fees or non-display fees. Otherwise competing consolidators 
would be reduced to ``mere fee collectors'' for the plan, with little 
incentive for operating as such.\617\
---------------------------------------------------------------------------

    \612\ See Databento Letter, supra note 365, at 3.
    \613\ See id.
    \614\ See id. at 2.
    \615\ See id.
    \616\ Id. at 2.
    \617\ Id.
---------------------------------------------------------------------------

    One commenter suggests rejecting the Proposed CT Plan and 
revisiting the MDI Rules.\618\ This commenter states that the MDI Rules 
and the decentralized consolidator model ``undermined the latency issue 
and skewed towards the interests of subscribers and proprietary 
products'' because users of SIPs or competing consolidators have an 
extra hop latency disadvantage that would affect demand of the new 
single consolidated tape.\619\ The commenter states that due to 
conflicting interests in connection with the sale of proprietary 
products, it is not in the exchanges' interest to ensure that the 
consolidated tape feeds are delivered timely, without latency, and that 
they have no interest in ensuring that the data sent to the SIP, or 
eventually competing consolidator, is published in sync with their 
proprietary products.\620\ According to this commenter, ``[w]ithout a 
secured and synchronized start line,'' competing consolidators will 
never be a reasonable compromise, if not a close substitute, to compete 
with proprietary products.\621\ This commenter states that the 
Commission should facilitate the establishment of the NMS in accordance 
with and in furtherance of Congress's objectives.\622\ To that end, 
this commenter suggests that the Commission: (1) disapprove the 
Proposed CT Plan and ``ditch regulatory price control through MDIR and/
or the CT Plan;'' (2) mandate that the availability of market data 
across SIPs and competing consolidators and proprietary data fees be 
secured and synchronized in accordance with an atomic clock; (3) 
require market and data redistributors to maintain a connectivity 
disparity ratio between the fastest proprietary products and the 
slowest mass market product (<2.5 to 4 times) to ensure consolidated 
market data evolves along with the ecosystem; (4) affirm that data 
ownership rights belong to content creators; (5) prohibit market 
centers from offering any proprietary products ``that the maximum 
capacity cannot be concurrently used by at least 20% of all market 
participants,'' and require that the offering of proprietary products 
must be ``accompanied by at least one mass market product,'' such as 
the SIPs or competing consolidator, that is ``available and affordable 
by 80% of all market participants;'' (6) ensure that the hierarchical 
pricing of proprietary products be in proportion with the performance 
improvement over mass market products, and that proprietary product 
pricing be transparent and publicly disclosed; and (7) introduce price 
gouging rules in times of market volatility.\623\
---------------------------------------------------------------------------

    \618\ See Data Boiler Letter, supra note 208, at 8.
    \619\ Id. at 2-8.
    \620\ See id.
    \621\ Id.
    \622\ See id. at 6-8.
    \623\ Data Boiler Letter, supra note 208, at 6-8.
---------------------------------------------------------------------------

    With respect to the comment recommending disapproval of the 
Proposed CT Plan,\624\ the purpose of the Proposed CT Plan is to 
facilitate the collection and dissemination of core data so that the 
public has ready access to a comprehensive, accurate, and reliable 
source of information for the prices and volume of any NMS stock at any 
time during the trading day. With the modifications approved by the 
Commission, as set forth in this order, the Proposed CT Plan is 
reasonably designed to achieve these goals. Therefore, disapproval of 
the Proposed CT Plan would not ensure the prompt, accurate, reliable, 
and fair collection processing, distribution, or the publication of 
information with respect to NMS securities in the public interest.
---------------------------------------------------------------------------

    \624\ Id. at 6-8.
---------------------------------------------------------------------------

    With respect to comments stating that the Proposed CT Plan seems to 
perpetuate the status quo of the Equity Data Plans,\625\ and as the 
Commission stated in the Governance Order, addressing issues with the 
current governance structure of the Equity Data Plans is ``an important 
first step in responding to concerns about the consolidated data 
feed.'' \626\ The Commission recognizes that the inadequacies in the 
governance model of the Equity Data Plans that the Proposed CT Plan is 
designed to address may not be the sole cause of broader concerns about 
the consolidated feed.\627\ As the Commission stated in the Governance 
Order, however, the governance structure of the Equity Data Plans 
contributes significantly to the broader concerns about the 
consolidated data feed.\628\ Thus, contrary to the commenter's 
statements,\629\ changing the governance structure through which the 
SROs oversee the operations of the SIPs, as provided under the Proposed 
CT Plan, is appropriate to create a governance structure that will 
reduce obstacles to ongoing improvement of the consolidated market data 
feeds in ways that the current governance structure of the Equity Data 
Plans has not.\630\
---------------------------------------------------------------------------

    \625\ See Polygon Letter, supra note 82, at 1.
    \626\ Governance Order, supra note 11, 85 FR at 28707 (citing to 
Securities Exchange Act Release No. 87906 (Jan. 8, 2020), 85 FR 
2164, 2173 (Jan. 14, 2020) (File No. 4-757) (emphasis in original; 
citations omitted)).
    \627\ See Governance Order, supra note 11, 85 FR at 28707.
    \628\ See id.
    \629\ See Polygon Letter, supra note 82, at 1.
    \630\ See Governance Order, supra note 11, 85 FR at 28707.
---------------------------------------------------------------------------

III. Conclusion

    For the reasons discussed above, the Commission finds that the 
Proposed CT Plan, as modified, is consistent with the requirements of 
section 11A of the Exchange Act,\631\ and Rule 608 thereunder,\632\ 
that the NMS plan is necessary or appropriate in the public interest, 
for the protection of investors and the maintenance of fair and orderly 
markets, to remove impediments to, and perfect the mechanism of, a 
national market system, or otherwise in furtherance of the purposes of 
the Exchange Act.
---------------------------------------------------------------------------

    \631\ 15 U.S.C. 78k-1.
    \632\ 17 CFR 242.608.
---------------------------------------------------------------------------

    It is therefore ordered that, pursuant to section 11A of the 
Exchange Act,\633\ and the rules and regulations thereunder, the 
Proposed CT Plan (File No. 4-757), as modified, be and it hereby is 
approved and declared effective, and the Participants are authorized to 
act jointly to implement the Proposed CT Plan as approved as a means of 
facilitating a national market system.
---------------------------------------------------------------------------

    \633\ 15 U.S.C. 78k-1.


[[Page 94962]]


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

    By the Commission.
Sherry R. Haywood,
Assistant Secretary.

Attachment A

LIMITED LIABILITY COMPANY AGREEMENT OF CT PLAN LLC, a Delaware Limited 
Liability Company

(As modified by the Commission; additions are italicized; deletions are 
[bracketed].)

    (1) This LIMITED LIABILITY COMPANY AGREEMENT (this ``Agreement'') 
dated as of the [] day of [], [] is made and 
entered into by and among the parties identified in Exhibit A, as 
Exhibit A may be amended from time to time (the ``Members''), which are 
the members of CT Plan LLC, a Delaware limited liability company (the 
``Company''). The Members shall constitute the ``members'' (as that 
term is defined in the Delaware Act) of the Company.

RECITALS

    (a) On September 1, 2023, the Commission ordered the Members to act 
jointly in developing and filing with the Commission by October 23, 
2023, a proposed new single national market system (``NMS'') plan to 
govern the public dissemination of real-time consolidated equity market 
data for NMS stocks. See Amended Order Directing the Exchanges and the 
Financial Industry Regulatory Authority to Submit a New National Market 
System Plan Regarding Consolidated Equity Market Data, Release No. 34-
98271 (September 1, 2023), 88 FR 61630 (Sept. 7, 2023) (File No. 4-757) 
(the ``Amended Order''). This Agreement is being filed with the 
Commission, as directed in the Amended Order.
    (b) As the Members have already formed the Company as a limited 
liability company pursuant to the Delaware Act by filing a certificate 
of formation (the ``Certificate'') with the Delaware Secretary of 
State, this Agreement will become effective on the date (the 
``Effective Date'') when approved by the Commission pursuant to Rule 
608 of Regulation NMS as an NMS plan governing the public dissemination 
of real-time consolidated market data for Eligible Securities (the 
``Plan'').
    (c) It is understood and agreed that, in performing their 
obligations and duties under this Agreement, the Members are performing 
and discharging functions and responsibilities related to the operation 
of the national market system for and on behalf of the Members in their 
capacities as self-regulatory organizations, as required under the 
Section 11A of the Exchange Act, and pursuant to Rule 603(b) of 
Regulation NMS thereunder. It is further understood and agreed that 
this Agreement and the operations of the Company shall be subject to 
ongoing oversight by the Commission. No provision of this Agreement 
shall be construed to limit or diminish the obligations and duties of 
the Members as self-regulatory organizations under the federal 
securities laws and the regulations thereunder.

Article I.

DEFINITIONS

Section 1.1 Definitions.

    As used throughout this Agreement and the Exhibits:
    (1) ``Administrator'' means the Person selected by the Company to 
perform the administrative functions under Article VI of this 
Agreement[described in this Agreement pursuant to the Administrative 
Services Agreement. The Person selected as the 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].
    (2) ``Advisory Committee'' means the committee formed in accordance 
with Section 4.7 of this Agreement.
    (3) ``Affiliate'' means, as to any Person, any other Person that, 
directly or indirectly, Controls, is Controlled by, or is under common 
Control with such Person. Affiliate or Affiliated, when used as an 
adjective, shall have a correlative meaning.
    [(3)](4) ``Agent'' means, for purposes of Exhibit C, agents of the 
Operating Committee, a Member, the Administrator, the Interim 
Administrator(s), and the Processors, including, but not limited to, 
attorneys, auditors, advisors, accountants, contractors or 
subcontractors.
    [(4)](5) ``Applicable Law'' means 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.
    [(5)](6) ``Best Bid and Offer'' has the meaning ascribed to the 
term ``best bid and best offer'' by Rule 600(b)(8) of Regulation NMS.
    [(6)](7) ``Capital Contributions'' means any cash, cash 
equivalents, or other property that a Member contributes to the Company 
with respect to its Membership Interest.
    [(7)](8) ``Chair'' shall mean the individual elected pursuant to 
Section 4.4(e).
    [(8)](9) ``Code'' means the Internal Revenue Code of 1986, as 
amended.
    [(9)](10) ``Commission'' or ``SEC'' means the U.S. Securities and 
Exchange Commission.
    [(10)](11) ``Company Indemnified Party'' means a Person, and any 
other Person of whom such Person is the legal representative, that is 
or was a Member or a[n SRO] Voting Representative.
    [(11)](12) ``Confidential Information'' means, except to the extent 
covered by the definitions for Restricted Information, Highly 
Confidential Information, or Public Information: (i) any non-public 
data or information designated as Confidential by the Operating 
Committee pursuant to Section 4.3; (ii) any document generated by a 
Member and designated by that Member as Confidential; and (iii) the 
individual views and statements of Covered Persons and SEC staff 
disclosed during a meeting of the Operating Committee or any 
subcommittees thereunder.
    [(12)](13) ``Control'' means, with respect to any Person, the 
possession, directly or indirectly, of the power to direct or cause the 
direction of the management and policies of such Person, whether 
through the ownership of voting securities (or other ownership 
interest), by contract or otherwise.
    [(13)](14) ``Covered Persons'' means representatives of the Members 
(including the [SRO ]Voting Representative, alternate Voting 
Representative, and Member Observers), members of the Advisory 
Committee, SRO Applicants, SRO Applicant Observers, the Administrator, 
the Interim Administrator(s), and the Processors; Affiliates, 
employees, and Agents of the Operating Committee, a Member, the 
Administrator, the Interim Administrator(s), and the Processors; and 
any third parties invited to attend meetings of the Operating Committee 
or subcommittees. Covered Persons do not include staff of the SEC.
    [(14)](15) ``CQ Plan'' means the Restated CQ Plan.
    [(15)](16) ``CT Feeds'' means the CT Quote Data Feed(s) and the CT 
Trade Data Feed(s).
    [(16)](17) ``CT Quote Data Feed(s)'' means the service(s) that 
provides Vendors and Subscribers with (i) National Best Bids and Offers 
and their sizes and the Members' identifiers

[[Page 94963]]

providing the National Best Bids and Offers; (ii) each Member's Best 
Bids and Offers and their sizes and the Member's identifier; and (iii) 
in the case of FINRA, the identifier of the FINRA Participant(s) that 
constitute(s) FINRA's Best Bids and Offers, in each case for Eligible 
Securities.
    [(17)](18) ``CT Trade Data Feed(s)'' means the service(s) that 
provides Vendors and Subscribers with Transaction Reports for Eligible 
Securities.
    [(18)](19) ``CTA Plan'' means the Second Restatement of the CTA 
Plan.
    [(19)](20) ``Current'' means, with respect to Transaction Reports 
or Quotation Information, such Transaction Reports or Quotation 
Information during the fifteen (15) minute period immediately following 
the initial transmission thereof by the Processors.
    [(20)](21) ``Delaware Act'' means the Delaware Limited Liability 
Company Act, Title 6, Chapter 18, Sec. Sec.  18-101, et seq., and any 
successor statute, as amended.
    [(21)](22) ``Distribution'' means a distribution to the Members of 
revenues of the Company under this Agreement pursuant to Section 8.3 
and Exhibit D of the Agreement.
    [(22)](23) ``Eligible Security'' means (i) any equity security, as 
defined in Section 3(a)(11) of the Exchange Act, or (ii) a security 
that trades like an equity security, in each case that is listed on a 
national securities exchange.
    [(23)](24) ``ET'' means Eastern Time.
    [(24)](25) ``Exchange Act'' means the Securities Exchange Act of 
1934, as amended.
    [(25)](26) ``Executive Session'' means a meeting of the Operating 
Committee pursuant to Section 4.4(g), which includes [SRO ]Voting 
Representatives, Member Observers, SEC Staff, and other persons as 
deemed appropriate by a majority vote of the [SRO ]Voting 
Representatives.
    [(26)](27) ``Extraordinary Market Activity'' means a disruption or 
malfunction of any electronic quotation, communication, reporting, or 
execution system operated by, or linked to, the Processors or a Trading 
Center or a member of such Trading Center that has a severe and 
continuing negative impact, on a market-wide basis, on quoting, order, 
or trading activity or on the availability of market information 
necessary to maintain a fair and orderly market. For purposes of this 
definition, a severe and continuing negative impact on quoting, order, 
or trading activity includes (i) a series of quotes, orders, or 
transactions at prices substantially unrelated to the current market 
for the security or securities; (ii) duplicative or erroneous quoting, 
order, trade reporting, or other related message traffic between one or 
more Trading Centers or their members; or (iii) the unavailability of 
quoting, order, transaction information, or regulatory messages for a 
sustained period.
    [(27)](28) ``Fees'' means fees charged to Vendors and Subscribers 
for Transaction Reports and Quotation Information in Eligible 
Securities.
    [(28)](29) ``Final Decision of the Operating Committee'' means an 
action or inaction of the Operating Committee as a result of the vote 
of the Operating Committee, but will not include the individual votes 
of a Voting Representative.
    [(29)](30) ``FINRA'' means the Financial Industry Regulatory 
Authority, Inc.
    [(30)](31) ``FINRA Participant'' means a FINRA member that utilizes 
the facilities of FINRA pursuant to applicable FINRA rules.
    [(31)](32) ``Fiscal Year'' means the fiscal year of the Company 
adopted pursuant to Section 10.1(a) of this Agreement.
    [(32)](33) ``GAAP'' means United States generally accepted 
accounting principles in effect from time to time, consistently 
applied.
    [(33)](34) ``Governmental Authority'' means (a) the U.S. federal 
government or government of any state of the U.S., (b) any 
instrumentality or agency of any such government, (c) any other 
individual, entity or organization authorized by law to perform any 
executive, legislative, judicial, regulatory, administrative, military 
or police functions of any such government, or (d) any 
intergovernmental organization of U.S. entities, but ``Governmental 
Authority'' excludes any self-regulatory organization registered with 
the Commission.
    [(34)](35) ``Highly Confidential Information'' means any highly 
sensitive Member-specific, customer-specific, individual-specific, or 
otherwise sensitive information relating to the Operating Committee, 
Members, Vendors, Subscribers, or customers that is not otherwise 
Restricted Information. Highly Confidential Information includes: the 
Company's contract negotiations with the Processors, or Administrator 
or Interim Administrator(s); personnel matters that affect the 
employees of SROs or the Company; information concerning the 
intellectual property of Members or customers; and any document subject 
to the Attorney-Client Privilege, Work Product Doctrine, or any other 
[applicable ]privilege or immunity recognized under Applicable Law.
    [(35)](36) ``Limit Up Limit Down'' means the Plan to Address 
Extraordinary Market Volatility pursuant to Rule 608 of Regulation NMS 
under the Exchange Act.
    [(36)](37) ``Losses'' means losses, judgments, penalties (including 
excise and similar taxes and punitive damages), fines, settlements, and 
reasonable expenses (including reasonable attorneys' fees) actually 
incurred by such Company Indemnified Party as a Party to a Proceeding.
    [(37)](38) ``Market'' means (i) in respect of FINRA or a national 
securities association, the facilities through which FINRA Participants 
display quotations and report transactions in Eligible Securities to 
FINRA and (ii) in respect of each national securities exchange, the 
marketplace for Eligible Securities that such exchange operates.
    [(38)](39) ``Market-Wide Circuit Breaker'' means a halt in trading 
in all stocks in all Markets under the rules of a Primary Listing 
Market.
    [(39)](40) ``Material SIP Latency'' means a delay of quotation or 
last sale price information in one or more securities between the time 
data is received by the Processors and the time the Processors 
disseminate the data, which delay the Primary Listing Market 
determines, in consultation with, and in accordance with, publicly 
disclosed guidelines established by the Operating Committee, to be (a) 
material and (b) unlikely to be resolved in the near future.
    [(40)](41) ``Member Observer'' means any employee of a Member or 
any attorney to a Member (other than a Voting Representative) that a 
Member determines is necessary in connection with such Member's 
compliance with its obligations under Rule 608(c) of Regulation NMS to 
attend Operating Committee and subcommittee meetings, provided that the 
designation of the Member Observer is consistent with the prohibition 
in Section 4.11(b)(i).
    [(41)](42) ``Membership Fee'' means the fee to be paid by a new 
Member pursuant to Section 3.2.
    [(42)](43) ``Membership Interest'' means an interest in the Company 
owned by a Member.
    [(43)](44) ``Nasdaq'' means The Nasdaq Stock Market LLC.
    [(44)](45) ``National Best Bid and Offer'' has the meaning ascribed 
to the term ``national best bid and national best offer'' by Rule 
600(b)(43) of Regulation NMS.
    [(45)](46) ``National securities association'' means a securities

[[Page 94964]]

association that is registered under Section 15A of the Exchange Act.
    [(46)](47) ``National securities exchange'' means a securities 
exchange that is registered under Section 6 of the Exchange Act.
    [(47)](48) ``Network A Security'' means an Eligible Security for 
which NYSE is the Primary Listing Market.
    [(48)](49) ``Network B Security'' means an Eligible Security for 
which a national securities exchange other than NYSE or Nasdaq is the 
Primary Listing Market.
    [(49)](50) ``Network C Security'' means an Eligible Security for 
which Nasdaq is the Primary Listing Market.
    [(50)](51) ``Non-Affiliated SRO'' means a Member that is not 
affiliated with any other Member.
    [(51)](52) ``NYSE'' means the New York Stock Exchange LLC.
    [(52)](53) ``Officer'' means each individual designated as an 
officer of the Company pursuant to Section 4.8.
    [(53)](54) ``Operating Committee'' means the committee established 
under Article IV of this Agreement, each member of which shall be 
deemed a ``manager'' (as defined in the Delaware Act) and shall be 
referred to herein as a Voting Representative.
    [(54)](55) ``Operational Halt'' means a halt in trading in one or 
more securities only on a Member's Market declared by such Member and 
is not a Regulatory Halt.
    [(55)](56) ``Operative Date'' means the date that (i) the Members 
conduct, through the Company, the Processor and Administrator functions 
related to the public dissemination of real-time consolidated equity 
market data for Eligible Securities required by the Commission to be 
performed by the Members under the Exchange Act and the rules and 
regulations thereunder and (ii) the CQ Plan, CTA Plan, and UTP Plan 
cease their operations.
    [(56)](57) ``Party to a Proceeding'' means a Company Indemnified 
Party that is, was, or is threatened to be made, a party to a 
Proceeding, or is involved in a Proceeding, by reason of the fact that 
such Company Indemnified Party is or was a Member, or a[n SRO] Voting 
Representative.
    [(57)](58) ``PDP'' means a Member or non-Member's proprietary 
market data product that includes Transaction Reports and Quotation 
Information data in Eligible Securities from a Member's Market or a 
Trading Center, and if from a Member, is filed with the Commission.
    [(58)](59) ``Person'' means an individual, corporation, 
partnership, joint venture, limited liability company, Governmental 
Authority, unincorporated organization, trust, association, or other 
entity.
    [(59)](60) ``Primary Listing Market'' means the national securities 
exchange on which an Eligible Security is listed. If an Eligible 
Security is listed on more than one national securities exchange, 
Primary Listing Market means the exchange on which the security has 
been listed the longest.
    [(60)](61) ``Proceeding'' means any threatened, pending or 
completed suit, proceeding, or other action, whether civil, criminal, 
administrative, or arbitrative, or any appeal in such action or any 
inquiry or investigation that could lead to such an action.
    [(61)](62) ``Processor(s)'' means the entity(ies) selected by the 
Company to perform the processing functions described in this Agreement 
and pursuant to the Processor Services Agreement(s), including the 
operation of the System.
    [(62)](63) ``Public Information'' means: (i) any information that 
is not either Restricted Information or Highly Confidential Information 
or that has not been designated as Confidential Information; (ii) any 
Confidential Information that has been approved by the Operating 
Committee for release to the public; (iii) the duly approved minutes of 
the Operating Committee with detail sufficient to inform the public on 
matters under discussion and the views expressed thereon (without 
attribution); (iv) Vendor, Subscriber and performance metrics; (v) 
Processor transmission metrics; and (vi) any information that is 
otherwise publicly available, except for information made public as a 
result of a violation of the Company's Confidentiality Policy or 
Applicable Law. Public Information includes, but is not limited to, any 
topic discussed during a meeting of the Operating Committee, an outcome 
of a topic discussed, or a Final Decision of the Operating Committee.
    [(63)](64) ``Regulatory Halt'' means a halt declared by the Primary 
Listing Market in trading in one or more securities on all Trading 
Centers for regulatory purposes, including for the dissemination of 
material news, news pending, suspensions, or where otherwise necessary 
to maintain a fair and orderly market. A Regulatory Halt includes a 
trading pause triggered by Limit Up Limit Down, a halt based on 
Extraordinary Market Activity, a trading halt triggered by a Market-
Wide Circuit Breaker, and a SIP Halt.
    [(64)](65) ``Restricted Information'' means highly sensitive 
customer-specific financial information, customer-specific audit 
information, other customer financial information, and personal 
identifiable information.
    [(65)](66) ``Quotation Information'' means all bids, offers, 
displayed quotation sizes, market center identifiers and, in the case 
of FINRA, the identifier of the FINRA Participant that entered the 
quotation, all withdrawals, and all other information pertaining to 
quotations in Eligible Securities required to be collected and made 
available to the Processors pursuant to this Agreement.
    [(66)](67) ``Regular Trading Hours'' has the meaning provided in 
Rule 600(b)(68) of Regulation NMS. Regular Trading Hours can end 
earlier than 4:00 p.m. ET in the case of an early scheduled close.
    [(67)](68) ``Retail Representative'' means an individual who (1) 
represents the interests of retail investors, (2) has experience 
working with or on behalf of retail investors, (3) has the requisite 
background and professional experience to understand the interests of 
retail investors, the work of the Operating Committee of the Company, 
and the role of market data in the U.S. equity market, and (4) is not 
affiliated with a Member or broker-dealer.
    [(68)](69) ``Self-regulatory organization'' or ``SRO'' has the 
meaning provided in Section 3(a)(26) of the Exchange Act.
    [(69)](70) ``SIP Halt'' means a Regulatory Halt to trading in one 
or more securities that a Primary Listing Market declares in the event 
of a SIP Outage or Material SIP Latency.
    [(70)](71) ``SIP Halt Resume Time'' means the time that the Primary 
Listing Market determines as the end of a SIP Halt.
    [(71)](72) ``SIP Outage'' means a situation in which a Processor 
has ceased, or anticipates being unable, to provide updated and/or 
accurate quotation or last sale price information in one or more 
securities for a material period that exceeds the time thresholds for 
an orderly failover to backup facilities established by mutual 
agreement among the Processors, the Primary Listing Market for the 
affected securities, and the Operating Committee unless the Primary 
Listing Market, in consultation with the affected Processor and the 
Operating Committee, determines that resumption of accurate data is 
expected in the near future.
    [(72)](73) ``SRO Applicant'' means (1) any Person that is not a 
Member and for which the Commission has published a Form 1 to be 
registered as a national securities exchange or national securities 
association to operate a Market, or (2) a national securities exchange 
that is not a Member and for

[[Page 94965]]

which the Commission has published a proposed rules change to operate a 
Market.
    [(73)](74) ``SRO Group'' means a group of Members that are 
Affiliates.
    [(74)](75) ``Subscriber'' means a Person that receives Current 
Transaction Reports or Quotation Information from the Processors or a 
Vendor and that itself is not a Vendor.
    [(75)](76) ``System'' means all data processing equipment, 
software, communications facilities, and other technology and 
facilities, utilized by the Company or the Processors in connection 
with the collection, consolidation, and dissemination of Transaction 
Reports, Quotation Information, and other information concerning 
Eligible Securities.
    [(76)](77) ``Taxes'' means taxes, levies, imposts, charges, and 
duties (including withholding tax, stamp, and transaction duties) 
imposed by any taxing authority together with any related interest, 
penalties, fines, and expenses in connection with them.
    [(77)](78) ``Trading Center'' has the same meaning as that term is 
defined in Rule 600(b)(82) of Regulation NMS.
    [(78)](79) ``Transaction Reports'' means reports required to be 
collected and made available pursuant to this Agreement containing the 
stock symbol, price, and size of the transaction executed, the Market 
in which the transaction was executed, and related information, 
including a buy/sell/cross indicator, trade modifiers, and any other 
required information reflecting completed transactions in Eligible 
Securities.
    [(79)](80) ``Transfer'' means to directly sell, transfer, assign, 
pledge, encumber, hypothecate, or similarly dispose of, either 
voluntarily or involuntarily, by operation of law or otherwise, or to 
enter into any contract, option, or other arrangement or understanding 
with respect to the sale, transfer, assignment, pledge, encumbrance, 
hypothecation, or similar disposition of any Membership Interests owned 
by a Person or any interest (including a beneficial interest) in any 
Membership Interests owned by a Person. ``Transfer'' when used as a 
noun shall have a correlative meaning.
    [(80)](81) ``UTP Plan'' means 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.
    [(81)](82) ``Vendor'' means a Person that the Administrator has 
approved to re-distribute Current Transaction Reports or Quotation 
Information to the Person's employees or to others.
    [(82)](83) ``Voting Representative'' means an individual designated 
by each SRO Group and each Non-Affiliated SRO pursuant to Section 
4.2(a) to vote on behalf of such SRO Group or such Non-Affiliated SRO.

Section 1.2 Interpretation.

    For purposes of this Agreement: (a) the words ``include,'' 
``includes,'' and ``including'' shall be deemed to be followed by the 
words ``without limitation''; (b) the word ``or'' is not exclusive; and 
(c) the words ``herein,'' ``hereof,'' ``hereby,'' ``hereto,'' and 
``hereunder'' refer to this Agreement as a whole. The definitions given 
for any defined terms in this Agreement shall apply equally to both the 
singular and plural forms of the terms defined. Whenever the context 
may require, any pronoun shall include the corresponding masculine, 
feminine, and neuter forms. Unless the context otherwise requires, 
references herein: (x) to Articles, Sections, and Exhibits mean the 
Articles and Sections of, and Exhibits attached to, this Agreement; (y) 
to an agreement, instrument, or other document mean such agreement, 
instrument, or other document as amended, supplemented, and modified 
from time to time to the extent permitted by the provisions thereof; 
and (z) to a statute mean such statute as amended from time to time and 
includes any successor legislation thereto and any rules and 
regulations promulgated thereunder. This Agreement shall be construed 
without regard to any presumption or rule requiring construction or 
interpretation against the party drafting an instrument or causing any 
instrument to be drafted. The Exhibits referred to herein shall be 
construed with, and as an integral part of, this Agreement to the same 
extent as if they were set forth verbatim herein.

Article II.

ORGANIZATION

Section 2.1 Formation.

    (a) The Members formed the Company as a limited liability company 
on [], [] pursuant to the Delaware Act by filing a 
certificate of formation (the ``Certificate'') with the Delaware 
Secretary of State.
    (b) This Agreement shall constitute the ``limited liability company 
agreement'' (as that term is used in the Delaware Act) of the Company. 
The rights, powers, duties, obligations, and liabilities of the Members 
shall be determined pursuant to the Delaware Act and this Agreement. To 
the extent that the rights, powers, duties, obligations, and 
liabilities of any Member are different by reason of any provision of 
this Agreement than they would be under the Delaware Act in the absence 
of such provision, this Agreement shall, to the extent permitted by the 
Delaware Act, control.

Section 2.2 Name.

    The name of the Company is ``CT Plan LLC'' and all Company business 
shall be conducted in that name or such other name or names as the 
Operating Committee may designate; provided, that the name shall always 
contain the words ``Limited Liability Company'' or the abbreviation 
``L.L.C.'' or the designation ``LLC.''

Section 2.3 Registered Office; Registered Agent; Principal Office; 
Other Offices.

    (a) The registered office of the Company required by the Delaware 
Act to be maintained in the State of Delaware shall be the office of 
the initial registered agent named in the Certificate or such other 
office (which need not be a place of business of the Company) as the 
Operating Committee may designate from time to time in the manner 
provided by the Delaware Act and Applicable Law.
    (b) The registered agent for service of process of the Company in 
the State of Delaware shall be the initial registered agent named in 
the Certificate or such other Person or Persons as the Operating 
Committee may designate from time to time in the manner provided by the 
Delaware Act and Applicable Law.
    (c) The principal office of the Company shall be located at such 
place as the Operating Committee may designate from time to time, which 
need not be in the State of Delaware, and the Company shall maintain 
its books and records there. The Company shall give prompt notice to 
each of the Members of any change to the principal office of the 
Company.
    (d) The Company may have such other offices as the Operating 
Committee may designate from time to time.

Section 2.4 Purpose; Powers.

    (a) The purposes of the Company are to engage in the following 
activities on behalf of the Members:
    (i) the collection, consolidation, and dissemination of Transaction 
Reports, Quotation Information, and such other information concerning 
Eligible Securities as the Members shall agree as provided herein;
    (ii) contracting for the distribution of such information;
    (iii) contracting for and maintaining facilities to support any 
activities

[[Page 94966]]

permitted in this Agreement and guidelines adopted hereunder, including 
the operation and administration of the System;
    (iv) providing for those other matters set forth in this Agreement 
and in all guidelines adopted hereunder;
    (v) operating the System to comply with Applicable Laws; and
    (vi) engaging in any other business or activity that now or 
hereafter may be necessary, incidental, proper, advisable, or 
convenient to accomplish any of the foregoing purposes and that is not 
prohibited by the Delaware Act, the Exchange Act, or other Applicable 
Law.
    (b) The Company shall have all the powers necessary or convenient 
to carry out the purposes for which it is formed, including the powers 
granted by the Delaware Act.
    (c) It is expressly understood that each Member shall be 
responsible for the collection of Transaction Reports and Quotation 
Information within its Market and that nothing in this Agreement shall 
be deemed to govern or apply to the manner in which each Member does 
so.

Section 2.5 Term.

    The term of the Company commenced as of the date the Certificate 
was filed with the Secretary of State of the State of Delaware, and 
shall continue in existence perpetually until the Company is dissolved 
in accordance with the provisions of the Certificate or this Agreement. 
Notwithstanding the foregoing, this Agreement shall not become 
effective until the Effective Date.

Section 2.6 No State-Law Partnership.

    The Members intend that the Company not be a partnership (including 
a limited partnership) or joint venture, and that no Member be a 
partner or joint venturer of any other Member by virtue of this 
Agreement for any purposes other than as set forth in Sections 10.2 and 
10.3, and neither this Agreement nor any other document entered into by 
the Company or any Member relating to the subject matter of this 
Agreement shall be construed to suggest otherwise.

Article III.

MEMBERSHIP

Section 3.1 Members.

    The Members of the Company shall consist of the Persons identified 
in Exhibit A, as updated from time to time to reflect the admission of 
new Members pursuant to this Agreement.

Section 3.2 New Members.

    (a) Any national securities association or national securities 
exchange whose market, facilities, or members, as applicable, trades 
Eligible Securities may become a Member by (i) providing written notice 
to the Company, (ii) executing a joinder to this Agreement, at which 
time Exhibit A shall be amended to reflect the addition of such 
association or exchange as a Member, (iii) paying a Membership Fee to 
the Company as determined pursuant to Section 3.2(b), and (iv) 
executing a joinder to any other agreements to which all of the other 
Members have been made party in connection with being a Member. 
Membership Fees paid shall be added to the general revenues of the 
Company.
    (b) The Membership Fee shall be based upon the following factors:
    (i) the portion of costs previously paid by the Company (or by the 
Members prior to the formation of the Company) for the development, 
expansion, and maintenance of the System which, under GAAP, would have 
been treated as capital expenditures and would have been amortized over 
the five years preceding the admission of the new Member (and for this 
purpose all such capital expenditures shall be deemed to have a five-
year amortizable life); and
    (ii) an assessment of costs incurred and to be incurred by the 
Company for modifying the System or any part thereof to accommodate the 
new Member, which are not otherwise required to be paid or reimbursed 
by the new Member.
    (c) Participants of the CQ Plan, CTA Plan, and UTP Plan will not be 
required to pay the Membership Fee.

Section 3.3 Transfer of Membership Interests.

    Except as set forth in Section 3.4, a Member shall not have the 
right to Transfer (whether in whole or in part) its Membership Interest 
in the Company.

Section 3.4 Withdrawal from Membership.

    (a) Any Member may voluntarily withdraw from the Company at any 
time on not less than 30 days' prior written notice (the ``Withdrawal 
Date''), by (i) providing such notice of such withdrawal to the 
Company, (ii) causing the Company to file with the Commission an 
amendment to effectuate the withdrawal and (iii) Transferring such 
Member's Membership Interest to the Company.
    (b) A Member shall automatically be withdrawn from the Company upon 
such Member no longer being a registered national securities 
association or registered national securities exchange. Such Member's 
Membership Interest will automatically transfer to the Company. The 
Company shall file with the Commission an amendment to effectuate the 
withdrawal.
    (c) A withdrawal of a Member shall not be effective until approved 
by the Commission after filing an amendment to the Agreement in 
accordance with Section 13.5.
    (d) From and after the Withdrawal Date of such Member:
    (i) Such Member shall remain liable for any obligations under this 
Agreement of such Member (including indemnification obligations) 
arising prior to the Withdrawal Date (but such Member shall have no 
further obligations under this Agreement or to any of the other Members 
arising after the Withdrawal Date);
    (ii) Such Member shall be entitled to receive a portion of the Net 
Distributable Operating Income (if any) in accordance with Exhibit D 
attributable to the period prior to the Withdrawal Date of such Member;
    (iii) Such Member shall cease to have the right to have its 
Transaction Reports, Quotation Information, or other information 
disseminated over the System; and
    (iv) Profits and losses of the Company shall cease to be allocated 
to the Capital Account of such Member.

Section 3.5 Member Bankruptcy.

    In the event a Member becomes subject to one or more of the events 
of bankruptcy enumerated in Section 18-304 of the Delaware Act, that 
event by itself shall not cause a withdrawal of such Member from the 
Company so long as such Member continues to be a national securities 
association or national securities exchange.

Section 3.6 Undertaking by All Members.

    Following the [Operative]Effective Date, each Member shall be 
required, pursuant to Rule 608(c) of Regulation NMS, to comply with the 
provisions hereof and enforce compliance by its members with the 
provisions hereof.

Section 3.7 Obligations and Liability of Members.

    (a) Except as otherwise provided in this Agreement or Applicable 
Law, no Member shall be obligated to contribute capital or make loans 
to the Company.
    (b) Except as provided in this Agreement or Applicable Law, no 
Member shall have any liability whatsoever in its capacity as a Member,

[[Page 94967]]

whether to the Company, to any of the Members, to the creditors of the 
Company or to any other Person, for the debts, liabilities, commitments 
or any other obligations of the Company or for any losses of the 
Company. Notwithstanding the foregoing, to the extent that amounts have 
not been paid to the Processors or Administrator under the terms of the 
Processor Services Agreements and Administrative Services Agreement, 
respectively, or this Agreement, as and when due, (i) each Member shall 
be obligated to return to the Company its pro rata share of any moneys 
distributed to such Member in the one year period prior to such default 
in payment (such pro rata share to be based upon such Member's 
proportionate receipt of the aggregate distributions made to all 
Members in such one year period) until an aggregate amount equal to the 
amount of any such defaulted payments has been re-contributed to the 
Company and (ii) the Company shall promptly pay such amount to the 
Processors or Administrator, as applicable.
    (c) In accordance with the Delaware Act, a member of a limited 
liability company may, under certain circumstances, be required to 
return amounts previously distributed to such member. It is the intent 
of the Members that no distribution to any Member pursuant to this 
Agreement shall be deemed a return of money or other property paid or 
distributed in violation of the Delaware Act. The payment of any such 
money or distribution of any such property to a Member shall be deemed 
to be a compromise within the meaning of the Delaware Act, and the 
Member receiving any such money or property shall not be required to 
return any such money or property to any Person; provided, however, 
that a Member shall be required to return to the Company any money or 
property distributed to it in clear and manifest accounting or similar 
error or as otherwise provided in Section 3.7(b). However, if any court 
of competent jurisdiction holds that, notwithstanding the provisions of 
this Agreement, any Member is obligated to make any such payment, such 
obligation shall be the obligation of such Member and not of the 
Operating Committee.
    (d) No Member (unless duly authorized by the Operating Committee) 
has the authority or power to represent, act for, sign for or bind the 
Company or to make any expenditure on behalf of the Company; provided, 
however, that the Tax Matters Partner may represent, act for, sign for 
or bind the Company as permitted under Sections 10.2 and 10.3 of this 
Agreement.
    (e) To the fullest extent permitted by law, no Member shall, in its 
capacity as a Member, owe any duty (fiduciary or otherwise) to the 
Company or to any other Member other than the duties expressly set 
forth in this Agreement.

Article IV.

MANAGEMENT OF THE COMPANY

Section 4.1 Operating Committee.

    [(f)](a) Except for situations in which the approval of the Members 
is required by this Agreement, the Company shall be managed by the 
Operating Committee. Unless otherwise expressly provided to the 
contrary in this Agreement, no Member shall have authority to act for, 
or to assume any obligation or responsibility on behalf of, the 
Company, without the prior approval of the Operating Committee. Without 
limiting the generality of the foregoing and except as otherwise 
expressly provided in this Agreement, the Operating Committee shall 
have full and complete discretion to manage and control the business 
and affairs of the Company, to make all decisions affecting the 
business and affairs of the Company, and to take all such actions as it 
deems necessary or appropriate to accomplish the purposes of the 
Company, including the following:
    (i) proposing amendments to this Agreement 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 Transaction Reports and 
Quotation Information in Eligible Securities and the fairness and 
usefulness of the form and content of that information;
    (ii) selecting, overseeing, specifying the role and 
responsibilities of, and evaluating the performance of, the 
Administrator, the Processors, an auditor, and other professional 
service providers, provided that any expenditures for professional 
services that are paid for from the Company's revenues must be for 
activities consistent with the terms of this Agreement and must be 
authorized by the Operating Committee;
    (iii) developing and maintaining fair and reasonable Fees and 
consistent terms for the distribution, transmission, and aggregation of 
Transaction Reports and Quotation Information in Eligible Securities;
    (iv) reviewing the performance of the Processors and ensuring the 
public reporting of Processors' performance and other metrics and 
information about the Processors;
    (v) assessing the marketplace for equity market data products and 
ensuring that the CT Feeds are priced in a manner that is fair and 
reasonable, and designed to ensure the widespread availability of CT 
Feeds data to investors and market participants;
    (vi) designing a fair and reasonable revenue allocation formula for 
allocating plan revenues to be applied by the Administrator, and 
overseeing, reviewing, and revising that formula as needed;
    (vii) interpreting the Agreement and its provisions; and
    (viii) carrying out such other specific responsibilities as 
provided under this Agreement.
    [(g)](b) The Operating Committee may delegate all or part of its 
administrative functions under this Agreement, excluding those 
administrative functions to be performed by the Administrator pursuant 
to Section 6.1, to a subcommittee, to one or more of the Members, or to 
other Persons (including the Administrator), and any Person to which 
administrative functions are so delegated shall perform the same as 
agent for the Company, in the name of the Company. For the avoidance of 
doubt, no delegation to a subcommittee shall contravene Section 4.3 and 
no subcommittee shall take actions requiring approval of the Operating 
Committee pursuant to Section 4.3 unless such approval shall have been 
obtained. Any authority delegated hereunder is subject to the 
provisions of Section 4.3 hereof.
    [(h)](c) It is expressly agreed and understood that neither the 
Company nor the Operating Committee shall have authority in any respect 
of any Member's proprietary systems. Neither the Company nor the 
Operating Committee shall have any authority over the collection and 
dissemination of quotation or transaction information in Eligible 
Securities in any Member's Market, or, in the case of FINRA, from FINRA 
Participants.

Section 4.2 Composition and Selection of Operating Committee.

    (a) Voting Representatives. The Operating Committee shall include 
one Voting Representative designated by each SRO Group and each Non-
Affiliated SRO to vote on behalf of such SRO Group or such Non-
Affiliated SRO. Each SRO Group and each Non-Affiliated SRO may 
designate an alternate individual or individuals who shall be 
authorized to vote on behalf of such SRO Group or such Non-Affiliated 
SRO, respectively, in the absence of the designated Voting 
Representative.

[[Page 94968]]

    (b) An SRO Applicant will be permitted to appoint one individual to 
attend (subject to Section 4.4(i)) regularly scheduled Operating 
Committee meetings in the capacity of a non-voting observer (each, an 
``SRO Applicant Observer''). Each SRO Applicant may designate an 
alternate individual or individuals who shall be authorized to act as 
the SRO Applicant Observer on behalf of the SRO Applicant in the 
absence of the designated SRO Applicant Observer. If the SRO 
Applicant's Form 1 petition or Section 19(b)(1) filing is withdrawn, 
returned, or is otherwise not actively pending with the Commission for 
any reason, then the SRO Applicant will no longer be eligible to have 
an SRO Applicant Observer attend Operating Committee meetings.
    (c) Notwithstanding anything to the contrary herein, (i) a national 
securities exchange that has ceased operations as a Market (or has yet 
to commence operation as a Market) and that is a Non-Affiliated SRO 
will not be permitted to designate a Voting Representative and (ii) an 
SRO Group in which all national securities exchanges have ceased 
operations as a Market (or have yet to commence operation as a Market) 
will not be permitted to designate a Voting Representative. Such SRO 
Group or Non-Affiliated SRO may attend the Operating Committee as an 
observer but may not attend the Executive Session of the Operating 
Committee. In the event such an SRO Group or Non-Affiliated SRO does 
not commence operation as a Market for six months after first attending 
an Operating Committee meeting, such SRO Group or Non-Affiliated SRO 
may no longer attend the Operating Committee until it commences/re-
commences operation as a Market.

Section 4.3 Action of Operating Committee.

    (a) Each Voting Representative shall be authorized to cast one vote 
on behalf of the SRO Group or Non-Affiliated SRO that he or she 
represents, provided, however, that each Voting Representative 
representing an SRO Group or Non-Affiliated SRO whose combined market 
center(s) have consolidated equity market share of more than fifteen 
(15) percent during four of the six calendar months preceding an 
Operating Committee vote shall be authorized to cast two votes. For 
purposes of this Section 4.3(a), ``consolidated equity market share'' 
means the average daily dollar equity trading volume of Eligible 
Securities of an SRO Group or Non-Affiliated SRO as a percentage of the 
average daily dollar equity trading volume of all of the SRO Groups and 
Non-Affiliated SROs, as reported under this Agreement or under the CQ, 
CTA, and UTP Plans. For the avoidance of doubt, FINRA shall not be 
considered to operate a market center within the meaning of this 
Section 4.3(a) solely by virtue of facilitating quoting on the FINRA 
Alternative Display Facility or trade reporting of Eligible Securities 
through the FINRA/Nasdaq Trade Reporting Facility Carteret, the FINRA/
Nasdaq Trade Reporting Facility Chicago, the FINRA/NYSE Trade Reporting 
Facility, or any other trade reporting facility that FINRA may operate 
from time to time in affiliation with a registered national securities 
exchange to provide a mechanism for FINRA Participants to report 
transactions in Eligible Securities effected otherwise than on an 
exchange.
    (b) All actions of the Operating Committee will require an 
affirmative vote of not less than (2/3rd) two-thirds of all votes 
allocated in the manner described in Section 4.3(a) to Voting 
Representatives who are eligible to vote on such action.
    (c) Notwithstanding Section 4.3(b), the following actions will 
require only a majority vote of the Operating Committee:
    (i) the election of the Chair and other Officers of the Plan;
    (ii) the selection of members of the Advisory Committee pursuant to 
Section 4.7;
    [(ii)](iii) the decision to enter Executive Session pursuant to 
Section 4.4(g), except for matters considered pursuant to Section 
4.4(g)(i)(E);
    [(iii)](iv) the decision to discuss a matter in a legal 
subcommittee pursuant to Section 4.8(d); and
    [(iv)](v) decisions concerning the operation of the Company as an 
LLC as specified in Section 10.3 and Section 11.2.

Section 4.4 Meetings of the Operating Committee.

    (a) Subject to Section 4.4(g), meetings of the Operating Committee 
may be attended by each Voting Representative, Member Observers, SRO 
Applicant Observers, Advisory Committee members, SEC staff, and other 
persons as deemed appropriate by the Operating Committee. Meetings 
shall be held at such times and locations as shall from time to time be 
determined by the Operating Committee. Member Observers shall be 
entitled to attend and participate in any discussion at any such 
meeting, unless attendance or participation would be inconsistent with 
the provisions of Section 4.11(b), but shall not be entitled to vote on 
any matter.
    (b) Special meetings of the Operating Committee may be called by 
the Chair on at least 24 hours' notice to each Voting Representative 
and all persons eligible to attend Operating Committee meetings.
    (c) Any action requiring a vote can be taken at a meeting only if a 
quorum of all Voting Representatives is present. A quorum is equal to 
the minimum votes necessary to obtain approval under Section 4.3(b), 
i.e., Voting Representatives reflecting 2/3rd of Operating Committee 
votes eligible to vote on such action.
    (i) Any Voting Representative recused from voting on a particular 
action (i) mandatorily pursuant to Section 4.10(b) or (ii) upon a 
Voting Representative's voluntary recusal, shall not be considered in 
the numerator or denominator of the calculations in paragraph (c) for 
determining whether a quorum is present.
    (ii) A Voting Representative is considered present at a meeting 
only if such Voting Representative is either in physical attendance at 
the meeting or participating by conference telephone or other 
electronic means that enables each Voting Representative to hear and be 
heard by all others present at the meeting.
    (d) A summary of any action sought to be resolved at a meeting 
shall be sent to each Voting Representative entitled to vote on such 
matter at least one week prior to the meeting via electronic mail, 
portal notification, or regular U.S. or private mail (or if one week is 
not practicable, then with as much time as may be reasonably 
practicable under the circumstances); provided, however, that this 
requirement to provide a summary of any action prior to a meeting may 
be waived by the vote of the percentage of the Committee required to 
vote on any particular matter, under Section 4.3 above.
    (e) Beginning with the first quarterly meeting of the Operating 
Committee following the [Operative]Effective Date, the Chair of the 
Operating Committee shall be elected for a one-year term from the 
constituent Voting Representatives (and an election for the Chair shall 
be held every year). Subject to the requirements of Section 4.3 hereof, 
the Chair shall have the authority to enter into contracts on behalf of 
the Company and otherwise bind the Company, but only as directed by the 
Operating Committee. The Chair shall designate a Person to act as 
Secretary to record the minutes of each meeting. The location of 
meetings shall be in a location capable of holding the number of

[[Page 94969]]

attendees of such meetings, or such other locations as may from time to 
time be determined by the Operating Committee.
    (i) To elect a Chair, the Operating Committee will elicit 
nominations for those individuals to be considered for Chair.
    (ii) In the event that no nominated Person is elected by an 
affirmative vote of the Operating Committee pursuant to Section 4.3(c), 
the Person(s) with the lowest number of votes will be eliminated from 
consideration. The Operating Committee will repeat this process until a 
Person is elected by affirmative vote of the Operating Committee 
pursuant to Section 4.3. In the event two candidates remain and neither 
is elected by an affirmative vote of the Operating Committee pursuant 
to Section 4.3(c), the Person receiving the most votes from Voting 
Representatives will be elected.
    (f) Meetings may be held by conference telephone or other 
electronic means that enables each Voting Representative to hear and be 
heard by all others present at the meeting.
    (g) Voting Representatives, Member Observers, SEC Staff, and other 
persons as deemed appropriate by a majority vote of the Voting 
Representatives may meet in Executive Session of the Operating 
Committee to discuss an item of business that falls within the topics 
identified in subsection (i) below and for which it is appropriate to 
exclude the Advisory Committee. A request to create an Executive 
Session must be included on the written agenda for an Operating 
Committee meeting, along with the clearly stated rationale as to why 
such item to be discussed would be appropriate for Executive Session. 
The creation of an Executive Session will be by a majority vote of 
Voting Representatives with votes allocated pursuant to Section 
4.3(a)(1). The Executive Session shall only discuss the topic for which 
it was created and shall be disbanded upon fully discussing the topic.
    (i) Items for discussion within an Executive Session [should]shall 
be limited to the following topics[ as]:
    (A) Any topic that requires discussion of Highly Confidential 
Information;
    (B) Vendor or Subscriber Audit Findings;
    (C) Litigation matters;
    (D) Responses to regulators with respect to inquiries, 
examinations, or findings; and
    (E) Other discrete matters approved by the Operating Committee.
    (ii) The mere fact that a topic is controversial or a matter of 
dispute does not, by itself, make a topic appropriate for Executive 
Session. The minutes for an Executive Session shall include the reason 
for including any item in Executive Session.
    (iii) Requests to discuss a topic in Executive Session must be 
included on the written agenda for the Operating Committee meeting, 
along with the clearly stated rationale for each topic as to why such 
discussion is appropriate for Executive Session. Such rationale may be 
that the topic to be discussed falls within the list provided in 
subparagraph (g)(i).

Section 4.5 Certain Transactions.

    The fact that a Member or any of its Affiliates is directly or 
indirectly interested in or connected with any Person employed by the 
Company to render or perform a service, or from which or to whom the 
Company may buy or sell any property, shall not prohibit the Company 
from employing or dealing with such Person.

Section 4.6 Company Opportunities.

    (a) Each Member, its Affiliates, and each of their respective 
equity holders, controlling persons and employees may have business 
interests and engage in business activities in addition to those 
relating to the Company. Neither the Company nor any Member shall have 
any rights by virtue of this Agreement in any business ventures of any 
such Person.
    (b) Each Member expressly acknowledges that (i) the other Members 
are permitted to have, and may presently or in the future have, 
investments or other business relationships with Persons engaged in the 
business of the Company other than through the Company (an ``Other 
Business''), (ii) the other Members have and may develop strategic 
relationships with businesses that are and may be competitive or 
complementary with the Company, (iii) the other Members shall not be 
obligated to recommend or take any action that prefers the interests of 
the Company or any Member over its own interests, (iv) none of the 
other Members will be prohibited by virtue of their ownership of equity 
in the Company or service on the Operating Committee (or body 
performing similar duties) from pursuing and engaging in any such 
activities, (v) none of the other Members will be obligated to inform 
or present to the Company any such opportunity, relationship, or 
investment, (vi) such Member will not acquire or be entitled to any 
interest or participation in any Other Business as a result of the 
participation therein of any of the other Members, and (vii) the 
involvement of another Member in any Other Business in and of itself 
will not constitute a conflict of interest by such Person with respect 
to the Company or any of the Members.

Section 4.7 Advisory Committee.

    (a) Formation. Notwithstanding any other provision of this Plan, an 
Advisory Committee to the Plan shall be formed and shall function in 
accordance with the provisions set forth in this section.
    (b) Composition. [Members of the Advisory Committee shall be 
selected for two year terms as follows:
    (i) Operating Committee Selections. By affirmative vote of a 
majority of the Members entitled to vote, t]The Operating Committee 
shall, by majority vote, select at least one representative from each 
of the following categories to be members of the Advisory Committee: 
(A) an institutional investor; (B) a broker-dealer with a predominantly 
retail investor customer base; (C) a broker-dealer with a predominantly 
institutional investor customer base; (D) a securities market data 
vendor that is not affiliated or associated with a Member, broker-
dealer, or investment adviser with third-party clients; (E) an issuer 
of NMS stock that is not affiliated or associated with a Member, 
broker-dealer, or investment adviser with third-party clients; and (F) 
a Retail Representative. The Operating Committee shall not select any 
person employed by or affiliated with any Member or its affiliates or 
facilities.
    [(ii) Member Selections. Each Member shall have the right to select 
one member of the Advisory Committee. A Member shall not select any 
person employed by or affiliated with any Member or its affiliates or 
facilities.]
    (c) Term: Members of the Advisory Committee shall be selected for 
two-year terms.
    (d) Function. Members of the Advisory Committee shall have the 
right to submit their views to the Operating Committee on Plan matters, 
prior to a decision by the Operating Committee on such matters. Such 
matters shall include, but not be limited to, any new or modified 
product, fee, contract, or pilot program that is offered or used 
pursuant to the Plan.
    [(d)](e) Not Members of the Company. For the sake of clarity, 
members of the Advisory Committee are not Members of the Company.

Section 4.8 Subcommittees.

    (a) Subject to Section 4.1, the Operating Committee shall have the 
power and right, but not the obligation, to create and disband 
subcommittees of the Operating Committee and to

[[Page 94970]]

determine the duties, responsibilities, powers, and composition of such 
subcommittees. Subcommittee chairs will be selected by the Operating 
Committee from Voting Representatives. Notwithstanding the foregoing, 
the Operating Committee may not delegate to a subcommittee those 
administrative functions to be performed by the Administrator.
    (b) Except as provided in Section 4.8(d), the Secretary or designee 
shall prepare minutes of all subcommittee meetings and such minutes 
will be made available to the Operating Committee and members of the 
Advisory Committee.
    (c) Voting Representatives, the Advisory Committee, Member 
Observers, SEC Staff, and other persons as deemed appropriate by the 
Operating Committee may attend meetings of any subcommittees.
    (d) Notwithstanding paragraph (c), Voting Representatives, Member 
Observers, and other persons as deemed appropriate by majority vote of 
the Voting Representatives may meet in a subcommittee to discuss an 
item that exclusively affects the Members with respect to: (1) 
litigation matters or responses to regulators with respect to 
inquiries, examinations, or findings; and (2) other discrete legal 
matters approved by the Operating Committee. The Secretary shall 
prepare the minutes of such subcommittee's meetings, and such minutes 
shall 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. Such minutes will be made available only to the Voting 
Representatives, Member Observers, and other persons deemed appropriate 
by a majority vote of the Operating Committee.

Section 4.9 Officers.

    (a) Except as provided in Section 4.4(e), the Operating Committee 
may (but need not), from time to time, designate and appoint one or 
more persons as an Officer of the Company. Other than the Chair, no 
Officer need be a Voting Representative. Any Officers so designated 
shall have such authority and perform such duties as the Operating 
Committee may, from time to time, delegate to them. Any such delegation 
may be revoked at any time by the Operating Committee. The Operating 
Committee may assign titles to particular Officers. Each Officer shall 
hold office until such Officer's successor shall be duly designated or 
until such Officer's death, resignation, or removal as provided in this 
Agreement. Any number of offices may be held by the same individual. 
Officers shall not be entitled to receive salary or other compensation, 
unless approved by the Operating Committee.
    (b) Any Officer may resign at any time. Such resignation shall be 
made in writing and shall take effect at the time specified in the 
notice, or if no time be specified, at the time of its receipt by the 
Operating Committee. The acceptance of a resignation shall not be 
necessary to make it effective.
    (c) Any Officer may be removed at any time upon the majority vote 
of the [Members]Operating Committee.

Section 4.10 Commission Access to Information and Records.

    Nothing in this Agreement shall be interpreted to limit or impede 
the rights of the Commission or SEC staff to access information and 
records of the Company or any of the Members (including their 
employees) pursuant to U.S. federal securities laws and the rules and 
regulations promulgated thereunder.

Section 4.11 Disclosure of Potential Conflicts of Interest; Recusal.

    (a) Disclosure Requirements. The Members (including any Member 
Observers), the Processors, the Administrator, members of the Advisory 
Committee, and each service provider or subcontractor engaged in 
Company business (including the audit of Subscribers' data usage) that 
has access to Restricted or Highly Confidential information (for 
purposes of this section, ``Disclosing Parties'') shall complete the 
applicable questionnaire to provide the required disclosures set forth 
in subsection (c) below to disclose all material facts necessary to 
identify potential conflicts of interest. The Operating Committee, a 
Member, Processors, or Administrator may not use a service provider or 
subcontractor on Company business unless that service provider or 
subcontractor has agreed in writing to provide the disclosures required 
by this section and has submitted completed disclosures to the 
Administrator prior to starting work. If state laws, rules, or 
regulations, or applicable professional ethics rules or standards of 
conduct, would act to restrict or prohibit a Disclosing Party from 
making any particular required disclosure, a Disclosing Party shall 
refer to such law, rule, regulation, or professional ethics rule or 
standard and include in response to that disclosure the basis for its 
inability to provide a complete response. This does not relieve the 
Disclosing Party from disclosing any information it is not restricted 
from providing.
    (i) A potential conflict of interest may exist when personal, 
business, financial, or employment relationships could be perceived by 
a reasonable objective observer to affect the ability of a person to be 
impartial.
    (ii) Updates to Disclosures. Following a material change in the 
information disclosed pursuant to Section 4.11(a), a Disclosing Party 
shall promptly update its disclosures. Additionally, a Disclosing Party 
shall update annually any inaccurate information prior to the Operating 
Committee's first quarterly meeting of a calendar year.
    (iii) Public Dissemination of Disclosures. The Disclosing Parties 
shall provide the Administrator with its disclosures and any required 
updates. The Administrator shall ensure that the disclosures are 
promptly posted to the Company's website.
    (iv) The Company will arrange for Disclosing Parties that are not 
Members or members of the Advisory Committee to comply with the 
required disclosures and recusals under this Section 4.11 and Exhibit B 
in their respective agreements with either the Company, a Member, the 
Administrator, or the Processors.
    (b) Recusal.
    (i) A Disclosing Party that is a Member may not appoint as its 
Voting Representative, alternate Voting Representative, or a Member 
Observer a person that is responsible for or involved with the 
procurement for, or 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 PDP offered to 
customers of the CT Feeds if the person has a financial interest 
(including compensation) that is tied directly to the Disclosing 
Party'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.
    (ii) A Disclosing Party (including its representative(s), 
employees, and agents) will be recused from participating in Company 
activities if it has not submitted a required disclosure form or the 
Operating Committee votes that its disclosure form is materially 
deficient. The recusal will be in effect until the Disclosing Party 
submits a sufficiently complete disclosure form to the Administrator.

[[Page 94971]]

    (iii) A Disclosing Party, including its representative(s), and its 
Affiliates and their representative(s), are recused from voting on 
matters in which it or its Affiliate (i) is seeking a position or 
contract with the Company or (ii) have a position or contract with the 
Company and whose performance is being evaluated by the Company.
    (iv) All recusals, including a person's determination of whether to 
voluntarily recuse himself or herself, shall be reflected in the 
meeting minutes.
    (c) Required Disclosures. As part of the disclosure regime, the 
Members, the Processors, the Administrator, members of the Advisory 
Committee, and service providers and subcontractors must respond to 
questions that are tailored to elicit responses that disclose the 
potential conflicts of interest as set forth in Exhibit B.

Section 4.12 Confidentiality Policy.

    All Covered Persons are subject to the Confidentiality Policy set 
forth in Exhibit C to the Plan. The Company will arrange for Covered 
Persons that are not Voting Representatives, Member Observers, or 
members of the Advisory Committee to comply with the Confidentiality 
Policy under their respective agreements with either the Company, a 
Member, the Administrator, or the Processors.

Article V.

THE PROCESSORS; INFORMATION; INDEMNIFICATION

Section 5.1 General Functions of the Processors.

    Subject to the general direction of the Operating Committee, as 
more fully set forth in the agreement to be entered into between the 
Company and the Processors (the ``Processor Services Agreements''), the 
Company shall require the Processors to perform certain processing 
functions on behalf of the Company. Among other things, the Company 
shall require the Processors to collect from the Members, and 
consolidate and disseminate to Vendors and Subscribers, Transaction 
Reports and Quotation Information in Eligible Securities in a manner 
designed to assure the prompt, accurate, and reliable collection, 
processing, and dissemination of information with respect to all 
Eligible Securities in a fair and non-discriminatory manner.

Section 5.2 Evaluation of the Processors.

    The Processors' performance of their functions under the Processor 
Services Agreements shall be subject to review at any time as 
determined by a vote of the Operating Committee pursuant to Section 
4.3; provided, however, that a review shall be conducted at least once 
every two calendar years but not more frequently than once each 
calendar year (unless the Processors have materially defaulted in their 
obligations under the Processor Services Agreements and such default 
has not been cured within the applicable cure period set forth in the 
Processor Services Agreements, in which event such limitation shall not 
apply). The Operating Committee may review the Processors at staggered 
intervals.

Section 5.3 Process for Selecting New Processors.

    (a) No later than upon the termination or withdrawal of a Processor 
or the expiration of a Processor Services Agreement with a Processor, 
the Operating Committee shall establish procedures for selecting a new 
Processor (the ``Processor Selection Procedures''). The Operating 
Committee, as part of the process of establishing Processor Selection 
Procedures, may solicit and consider the timely comment of any entity 
affected by the operation of this Agreement. The Operating Committee 
will not need to establish Processor Selection Procedures if the 
Operating Committee initially selects the CQ Plan and CTA Plan's 
processor and the UTP Plan's processor to provide the same services to 
the Company that are currently provided under the CQ Plan, CTA Plan, 
and UTP Plan.
    (b) The Processor Selection Procedures shall be established by the 
affirmative vote of the Operating Committee pursuant to Section 4.3, 
and shall set forth, at a minimum:
    (i) the entity that will:
    (A) draft the Operating Committee's request for proposal for bids 
on a new Processor;
    (B) assist the Operating Committee in evaluating bids for the new 
Processor; and
    (C) otherwise provide assistance and guidance to the Operating 
Committee in the selection process;
    (ii) the minimum technical and operational requirements to be 
fulfilled by the Processor;
    (iii) the criteria to be considered in selecting the Processor; and
    (iv) the entities (other than Voting Representatives) that are 
eligible to comment on the selection of the Processor.

Section 5.4 Transmission of Information to Processors by Members.

    (a) Quotation Information.
    (i) Each Member shall, during the time it is open for trading, be 
responsible for promptly collecting and transmitting to the Processors 
accurate Quotation Information in Eligible Securities through any means 
set forth in the Processor Services Agreements to ensure that the 
Company complies with its obligations under the Processor Services 
Agreements.
    (ii) Quotation Information shall include:
    (A) identification of the Eligible Security, using the Listing 
Market's symbol;
    (B) the price bid and offered, together with size;
    (C) for FINRA, the FINRA Participant along with the FINRA 
Participant's market participant identification or Member from which 
the quotation emanates;
    (D) appropriate timestamps;
    (E) identification of quotations that are not firm; and
    (F) through appropriate codes and messages, withdrawals and similar 
matters.
    (iii) In addition, Quotation Information shall include:
    (A) in the case of a national securities exchange, the reporting 
Member's matching engine publication timestamp; or
    (B) in the case of FINRA, the quotation publication timestamp that 
FINRA's bidding or offering member reports to FINRA's quotation 
facility in accordance with FINRA rules. In addition, if FINRA's 
quotation facility provides a proprietary feed of its quotation 
information, then the quotation facility shall also furnish the 
Processors with the time of the quotation as published on the quotation 
facility's proprietary feed. FINRA shall convert any quotation times 
reported to it to nanoseconds and shall furnish such times to the 
Processors in nanoseconds since Epoch.
    (b) Transaction Reports.
    (i) Each Member shall, during the time it is open for trading, be 
responsible for promptly transmitting to the Processor Transaction 
Reports in Eligible Securities executed in its Market by means set 
forth in the Processor Services Agreements.
    (ii) Transaction Reports shall include:
    (A) identification of the Eligible Security, using the Listing 
Market's symbol;
    (B) the number of shares in the transaction;
    (C) the price at which the shares were purchased or sold;
    (D) the buy/sell/cross indicator;
    (E) appropriate timestamps;
    (F) the Market of execution; and
    (G) through appropriate codes and messages, late or out-of-sequence 
trades, corrections, and similar matters.

[[Page 94972]]

    (iii) In addition, Transaction Reports shall include the time of 
the transaction as identified in the Member's matching engine 
publication timestamp. However, in the case of FINRA, the time of the 
transaction shall be the time of execution that a FINRA member reports 
to a FINRA trade reporting facility in accordance with FINRA rules. In 
addition, if the FINRA trade reporting facility provides a proprietary 
feed of trades reported by the trade reporting facility to the 
Processor, then the FINRA trade reporting facility shall also furnish 
the Processors with the time of the transmission as published on the 
facility's proprietary feed. The FINRA trade reporting facility shall 
convert times that its members report to it to nanoseconds and shall 
furnish such times to the Processors in nanoseconds since Epoch.
    (iv) Each Member shall (a) transmit all Transaction Reports in 
Eligible Securities to the Processors as soon as practicable, but not 
later than 10 seconds, after the time of execution, (b) establish and 
maintain collection and reporting procedures and facilities reasonably 
designed to comply with this requirement, and (c) designate as ``late'' 
any last sale price not collected and reported in accordance with the 
above-referenced procedures or as to which the Member has knowledge 
that the time interval after the time of execution is significantly 
greater than the time period referred to above. The Members shall seek 
to reduce the time period for reporting last sale prices to the 
Processors as conditions warrant.
    (v) The following types of transactions are not required to be 
reported to the Processors pursuant to this Agreement:
    (A) transactions that are part of a primary distribution by an 
issuer or of a registered secondary distribution or of an unregistered 
secondary distribution;
    (B) transactions made in reliance on Section 4(a)(2) of the 
Securities Act of 1933;
    (C) transactions in which the buyer and the seller have agreed to 
trade at a price unrelated to the current market for the security 
(e.g., to enable the seller to make a gift);
    (D) the acquisition of securities by a broker-dealer as principal 
in anticipation of making an immediate exchange distribution or 
exchange offering on an exchange;
    (E) purchases of securities pursuant to a tender offer;
    (F) purchases or sales of securities effected upon the exercise of 
an option pursuant to the terms thereof or the exercise of any other 
right to acquire securities at a pre-established consideration 
unrelated to the current market; and
    (G) transfers of securities that are expressly excluded from trade 
reporting under FINRA rules.
    (c) The following symbols shall be used to denote the applicable 
Member:

------------------------------------------------------------------------
                Code                                Member
------------------------------------------------------------------------
A...................................  NYSE American LLC.
B...................................  Nasdaq BX, Inc.
C...................................  NYSE National, Inc.
D...................................  Financial Industry Regulatory
                                       Authority, Inc.
H...................................  MIAX Pearl Exchange, LLC.
I...................................  Nasdaq ISE, LLC.
J...................................  Cboe EDGA Exchange, Inc.
K...................................  Cboe EDGX Exchange, Inc.
L...................................  Long-Term Stock Exchange Inc.
M...................................  NYSE Chicago, Inc.
N...................................  New York Stock Exchange LLC.
P...................................  NYSE Arca, Inc.
Q...................................  The Nasdaq Stock Market LLC.
U...................................  MEMX LLC.
V...................................  Investors Exchange LLC.
W...................................  Cboe Exchange, Inc.
X...................................  Nasdaq PHLX LLC.
Y...................................  Cboe BYX Exchange, Inc.
Z...................................  Cboe BZX Exchange, Inc.
------------------------------------------------------------------------

    (d) Indemnification.
    (i) Each Member agrees, severally and not jointly, to indemnify and 
hold harmless and defend the Company, each other Member, the 
Processors, the Administrator, the Operating Committee, and each of 
their respective directors, officers, employees, agents, and Affiliates 
(each, an ``Member Indemnified Party'') from and against any and all 
loss, liability, claim, damage, and expense whatsoever incurred or 
threatened against such Member Indemnified Party as a result of a 
system error or disruption at such Member's Market affecting any 
Transaction Reports, Quotation Information, or other information 
reported to the Processors by such Member and disseminated by the 
Processors to Vendors and Subscribers. This indemnity shall be in 
addition to any liability that the indemnifying Member may otherwise 
have.
    (ii) Promptly after receipt by a Member Indemnified Party of notice 
of the commencement of any action, such Member Indemnified Party will, 
if it intends to make a claim in respect thereof against an 
indemnifying Member, notify the indemnifying Member in writing of the 
commencement thereof; provided, however, that the failure to so notify 
the indemnifying Member will only relieve the indemnifying Member from 
any liability which it may have to any Member Indemnified Party to the 
extent such indemnifying Member is actually prejudiced by such failure. 
In case any such action is brought against any Member Indemnified Party 
and it promptly notifies an indemnifying Member of the commencement 
thereof, the indemnifying Member will be entitled to participate in, 
and, to the extent that it elects (jointly with any other indemnifying 
Member similarly notified), to assume and control the defense thereof 
with counsel chosen by it. After notice from the indemnifying Member of 
its election to assume the defense thereof, the indemnifying Member 
will not be liable to such Indemnified Party for any legal or other 
expenses subsequently incurred by such Member Indemnified Party in 
connection with the defense thereof but the Member Indemnified Party 
may, at its own expense, participate in such defense by counsel chosen 
by it without, however, impairing the indemnifying Member's control of 
the defense. If the indemnifying Member has assumed the defense in 
accordance with the terms hereof, the indemnifying Member may enter 
into a settlement or consent to any judgment without the prior written 
consent of the Member Indemnified Party if (i) such settlement or 
judgment involves monetary damages only, all of which will be fully 
paid by the indemnifying Member and without admission of fault or 
culpability on behalf of any Member Indemnified Party, and (ii) a term 
of the settlement or judgment is that the Person or Persons asserting 
such claim unconditionally and irrevocably release all Member 
Indemnified Parties from all liability with respect to such claim; 
otherwise, the consent of the Member Indemnified Party shall be 
required in order to enter into any settlement of, or consent to the 
entry of a judgment with respect to, any claim (which consent shall not 
be unreasonably withheld, delayed, or conditioned).

Section 5.5 Operational Issues.

    (a) Each Member shall be responsible for collecting and validating 
quotes and last sale reports within its own system prior to 
transmitting this data to the Processors.
    (b) Each Member may utilize a dedicated Member line into the 
Processors to transmit Transaction Reports and Quotation Information to 
the Processors.
    (c) Whenever a Member determines that a level of trading activity 
or other unusual market conditions prevent it from collecting and 
transmitting Transaction Reports or Quotation Information to the 
Processor, or where

[[Page 94973]]

a trading halt or suspension in an Eligible Security is in effect in 
its Market, the Member shall promptly notify the Processors of such 
condition or event and shall resume collecting and transmitting 
Transaction Reports and Quotation Information to it as soon as the 
condition or event is terminated. In the event of a system malfunction 
resulting in the inability of a Member or its members to transmit 
Transaction Reports or Quotation Information to the Processors, the 
Member shall promptly notify the Processors of such event or condition. 
Upon receiving such notification, the Processors shall take appropriate 
action, including either closing the quotation or purging the system of 
the affected quotations.

Article VI.

THE ADMINISTRATOR

Section 6.1 General Functions of the Administrator.

    Subject to the general direction of the Operating Committee, as 
more fully set forth in the agreement entered into between the Company 
and the Administrator (the ``Administrative Services Agreement''), the 
Administrator shall perform administrative functions on behalf of the 
Company including recordkeeping; administering Vendor and Subscriber 
contracts; administering Fees, including billing, collection, and 
auditing of Vendors and Subscribers; administering Distributions; tax 
functions of the Company; the preparation of the Company's audited 
financial reports; and support of Company governance.

Section 6.2 Independence of the Administrator.

    The Administrator may not be owned or controlled by a corporate 
entity that, either directly or via another subsidiary, offers for sale 
its own PDP. The Administrator may not employ any person who is also 
employed by a corporate entity that, either directly or via a 
subsidiary, offers for sale its own PDP.

Section 6.3 Evaluation of the Administrator.

    The Administrator's performance of its functions under the 
Administrative Services Agreement shall be subject to review at any 
time as determined by an affirmative vote of the Operating Committee 
pursuant to Section 4.3; provided, however, that a review shall be 
conducted at least once every two calendar years but not more 
frequently than once each calendar year (unless the Administrator has 
materially defaulted in its obligations under the Administrative 
Services Agreement and such default has not been cured within the 
applicable cure period set forth in the Administrative Services 
Agreement, in which event such limitation shall not apply). The 
Operating Committee shall appoint a subcommittee or other Persons to 
conduct the review. The Company shall require the reviewer to provide 
the Operating Committee with a written report of its findings and to 
make recommendations (if necessary), including with respect to the 
continuing operation of the Administrator. The Administrator shall be 
required to assist and participate in such review. The Operating 
Committee shall notify the Commission of any recommendations it may 
approve as a result of the review of the Administrator and shall supply 
the Commission with a copy of any reports that may be prepared in 
connection therewith.

Section 6.4 Process for Selecting New Administrator.

    Prior to the Operative Date, upon the termination or withdrawal of 
the Administrator, or upon the expiration of the Administrative 
Services Agreement, the Operating Committee shall establish procedures 
for selecting a new Administrator (the ``Administrator Selection 
Procedures''). The Operating Committee, as part of the process of 
establishing Administrator Selection Procedures, may solicit and 
consider the timely comment of any entity affected by the operation of 
this Agreement. The Administrator Selection Procedures shall be 
established by the Operating Committee pursuant to Section 4.3, and 
shall set forth, at a minimum:
    (a) the entity that will:
    (i) draft the Operating Committee's request for proposal for bids 
on a new Administrator;
    (ii) assist the Operating Committee in evaluating bids for the new 
Administrator; and
    (iii) otherwise provide assistance and guidance to the Operating 
Committee in the selection process.
    (b) the minimum technical and operational requirements to be 
fulfilled by the Administrator;
    (c) the criteria to be considered in selecting the Administrator; 
and
    (d) the entities (other than Voting Representatives) that are 
eligible to comment on the selection of the Administrator.

Section 6.5 Interim Administrator(s).

    Notwithstanding the provisions of Sections 6.2 and 6.4 of this 
Agreement, the Operating Committee may select one or more of the 
current administrators of the CTA Plan, CQ Plan, and UTP Plan to 
perform the general functions of the Administrator under Section 6.1 of 
the Plan on an interim basis during the implementation of the Plan, 
consistent with the timeline set forth in Article XIV of this Agreement 
(``Interim Administrator(s)'').

Article VII.

REGULATORY MATTERS

Section 7.1 Regulatory and Operational Halts.

    (a) Operational Halts. A Member shall notify the Processors if it 
has concerns about its ability to collect and transmit quotes, orders, 
or last sale prices, or where it has declared an Operational Halt or 
suspension of trading in one or more Eligible Securities, pursuant to 
the procedures adopted by the Operating Committee.
    (b) Regulatory Halts.
    (i) The Primary Listing Market may declare a Regulatory Halt in 
trading for any security for which it is the Primary Listing Market:
    (A) as provided for in the rules of the Primary Listing Market;
    (B) if it determines there is a SIP Outage, Material SIP Latency, 
or Extraordinary Market Activity; or
    (C) in the event of national, regional, or localized disruption 
that necessitates a Regulatory Halt to maintain a fair and orderly 
market.
    (ii) In making a determination to declare a Regulatory Halt under 
subparagraph (b)(i), the Primary Listing Market will consider the 
totality of information available concerning the severity of the issue, 
its likely duration, and potential impact on Member Firms and other 
market participants and will make a good-faith determination that the 
criteria of subparagraph (b)(i) have been satisfied and that a 
Regulatory Halt is appropriate. The Primary Listing Market will 
consult, if feasible, with the affected Trading Center(s), the other 
Members, or the Processors, as applicable, regarding the scope of the 
issue and what steps are being taken to address the issue. Once a 
Regulatory Halt under subparagraph (b)(i) has been declared, the 
Primary Listing Market will continue to evaluate the circumstances to 
determine when trading may resume in accordance with the rules of the 
Primary Listing Market.
    (c) Initiating a Regulatory Halt.
    (i) The start time of a Regulatory Halt is when the Primary Listing 
Market declares the halt, regardless of whether an issue with 
communications impacts the dissemination of the notice.
    (ii) If a Processor is unable to disseminate notice of a Regulatory 
Halt

[[Page 94974]]

or the Primary Listing Market is not open for trading, the Primary 
Listing Market will take reasonable steps to provide notice of a 
Regulatory Halt, which shall include both the type and start time of 
the Regulatory Halt, by dissemination through:
    (A) PDP;
    (B) posting on a publicly-available Member website;
    (C) system status messages; or
    (D) a notification via an alternate Processor, if available.
    (iii) Except in exigent circumstances, the Primary Listing Market 
will not declare a Regulatory Halt retroactive to a time earlier than 
the notice of such halt.
    (iv) Resumption of Trading After Regulatory Halts Other Than SIP 
Halts. The Primary Listing Market will declare a resumption of trading 
when it makes a good-faith determination that trading may resume in a 
fair and orderly manner and in accordance with its rules.
    (v) For a Regulatory Halt that is initiated by another Member that 
is a Primary Listing Market, a Member may resume trading after the 
Member receives notification from the Primary Listing Market that the 
Regulatory Halt has been terminated.
    (d) Resumption of Trading After SIP Halt.
    (i) The Primary Listing Market will determine the SIP Halt Resume 
Time. In making such determination, the Primary Listing Market will 
make a good-faith determination and consider the totality of 
information to determine whether resuming trading would promote a fair 
and orderly market, including input from the Processors, the other 
Members, or the operator of the system in question (as well as any 
Trading Center(s) to which such system is linked), regarding 
operational readiness to resume trading. The Primary Listing Market 
retains discretion to delay the SIP Halt Resume Time if it believes 
trading will not resume in a fair and orderly manner.
    (ii) The Primary Listing Market will terminate a SIP Halt with a 
notification that specifies a SIP Halt Resume Time. The Primary Listing 
Market shall provide a minimum notice of a SIP Halt Resume Time, as 
specified by the rules of the Primary Listing Market, during which 
period market participants may enter quotes and orders in the affected 
securities. During Regular Trading Hours, the last SIP Halt Resume Time 
before the end of Regular Trading Hours shall be an amount of time as 
specified by the rules of the Primary Listing Market. The Primary 
Listing Market may stagger the SIP Halt Resume Times for multiple 
symbols in order to reopen in a fair and orderly manner.
    (iii) During Regular Trading Hours, if the Primary Listing Market 
does not open a security within the amount of time as specified by the 
rules of the Primary Listing Market after the SIP Halt Resume Time, a 
Member may resume trading in that security. Outside Regular Trading 
Hours, a Member may resume trading immediately after the SIP Halt 
Resume Time.
    (e) Member to Halt Trading During Regulatory Halt. A Member will 
halt trading for any security traded on its Market if the Primary 
Listing Market declares a Regulatory Halt for the security.
    (f) Communications. Whenever, in the exercise of its regulatory 
functions, the Primary Listing Market for an Eligible Security 
determines it is appropriate to initiate a Regulatory Halt, the Primary 
Listing Market will notify all other Members and the affected 
Processors of such Regulatory Halt as well as provide notice that a 
Regulatory Halt has been lifted using such protocols and other 
emergency procedures as may be mutually agreed to between the Members 
and the Primary Listing Market. The affected Processors shall 
disseminate to Members notice of the Regulatory Halt (as well as notice 
of the lifting of a Regulatory Halt) (i) through the CT Feeds or (ii) 
any other means the affected Processors, in its sole discretion, 
considers appropriate. Each Member shall be required to continuously 
monitor these communication protocols established by the Operating 
Committee and the Processors during market hours, and the failure of a 
Member to do so shall not prevent the Primary Listing Market from 
initiating a Regulatory Halt in accordance with the procedures 
specified herein.

Section 7.2 Hours of Operation of the System.

    (a) Quotation Information shall be entered, as applicable, by 
Members as to all Eligible Securities in which they make a market 
during Regular Trading Hours on all days the Processors are in 
operation. Transaction Reports shall be entered for executions that 
occur from 9:30 a.m. until 4:00:00 p.m. ET by Members as to all 
Eligible Securities in which they execute transactions during Regular 
Trading Hours on all days the Processors are in operation.
    (b) Members that execute transactions in Eligible Securities 
outside of Regular Trading Hours, shall report such transactions as 
follows:
    (i) transactions in Eligible Securities executed from 4:00 a.m. up 
to 9:30:00 a.m. ET (or as otherwise designated by a Member as an 
execution occurring outside of Regular Trading Hours) and after 4:00:00 
p.m. until 8:00 p.m. ET, shall be designated with an appropriate 
indicator to denote their execution outside normal market hours;
    (ii) transactions in Eligible Securities executed after 8:00 p.m. 
and before 12:00 a.m. (midnight) shall be reported to the Processors 
between the hours of 4:00 a.m. and 8:00 p.m. ET on the next business 
day (T+1), and shall be designated ``as/of'' trades to denote their 
execution on a prior day, and be accompanied by the time of execution;
    (iii) transactions in Eligible Securities executed between 12:00 
a.m. (midnight) and 4:00 a.m. ET shall be transmitted to the Processors 
between 4:00 a.m. and 9:30 a.m. ET, on trade date, shall be designated 
with an appropriate indicator to denote their execution outside normal 
market hours, and shall be accompanied by the time of execution; and
    (iv) transactions reported pursuant to this Section [7.3]7.2 shall 
be included in the calculation of total trade volume for purposes of 
determining Net Distributable Operating Revenue, but shall not be 
included in the calculation of the daily high, low, or last sale.
    (c) Late trades shall be reported in accordance with the rules of 
the Member in whose Market the transaction occurred and can be reported 
between the hours of 4:00 a.m. and 8:00 p.m. ET.
    (d) The Processors shall collect, process and disseminate Quotation 
Information in Eligible Securities at other times between 4:00 a.m. and 
9:30 a.m. ET, and after 4:00 p.m. ET, when any Member or FINRA 
Participant is open for trading, until 8:00 p.m. ET (the ``Additional 
Period''); provided, however, that the National Best Bid and Offer 
quotation will not be disseminated before 4:00 a.m. or after 8:00 p.m. 
ET. Members that enter Quotation Information or submit Transaction 
Reports to the Processors during the Additional Period shall do so for 
all Eligible Securities in which they enter quotations.

Article VIII.

CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS

Section 8.1 Capital Accounts.

    (a) A separate capital account (``Capital Account'') shall be 
established by the Company and maintained by the Administrator for each 
Member in accordance with section 704(b) of the Code and Treasury 
Regulation section 1.704-1(b)(2)(iv). There shall be

[[Page 94975]]

credited to each Member's Capital Account (i) the Capital Contributions 
(at fair market value in the case of contributed property) made by such 
Member (which shall be deemed to be zero for the initial Members), (ii) 
allocations of Company profits and gain (or items thereof) to such 
Member pursuant to Section 9.2 and (iii) any recaptured tax credits, or 
portion thereof, to the extent such increase to the tax basis of a 
Member's interest in the Company may be allowed pursuant to the Code. 
Each Member's Capital Account shall be decreased by (x) the amount of 
distributions (at fair market value in the case of property distributed 
in kind) to such Member, (y) allocations of Company losses to such 
Member (including expenditures which can neither by capitalized nor 
deducted for tax purposes, organization and syndication expenses not 
subject to amortization and loss on sale or disposition of the 
Company's assets, whether or not disallowed under sections 267 or 707 
of the Code) pursuant to Section 9.2 and (z) any tax credits, or 
portion thereof, as may be required to be charged to the tax basis of a 
Membership Interest pursuant to the Code. Capital Accounts shall not be 
adjusted to reflect a Member's share of liabilities under section 752 
of the Code.
    (b) The fair market value of contributed, distributed, or revalued 
property shall be agreed to by the Operating Committee or, if there is 
no such agreement, by an appraisal.
    (c) The foregoing provisions and the other provisions of this 
Agreement relating to the maintenance of Capital Accounts are intended 
to comply with Treasury Regulation section 1.704-1(b) promulgated under 
section 704(b) of the Code, and shall be interpreted and applied in a 
manner consistent with such Treasury Regulations.

Section 8.2 Additional Capital Contributions.

    Except with the approval of the Operating Committee or as otherwise 
provided in this Section 8.2, no Member shall be obligated or permitted 
to make any additional contribution to the capital of the Company. The 
Members agree to make additional Capital Contributions from time to 
time as appropriate in respect of reasonable administrative and other 
reasonable expenses of the Company.

Section 8.3 Distributions.

    Except as set forth in this Section 8.3 and Section 11.2, and 
subject to the provisions of Section 13.1, Distributions shall be made 
to the Members at the times and in the aggregate amounts set forth in 
Exhibit D. Notwithstanding any provisions to the contrary contained in 
this Agreement, the Company shall not make a Distribution to a Member 
on account of its interest in the Company if such Distribution would 
violate Section 18-607 of the Delaware Act or other Applicable Law. 
Distributions may be made in cash or, if determined by the Operating 
Committee, in-kind. The Operating Committee may reserve amounts for 
anticipated expenses or contingent liabilities of the Company. In the 
event that additional Capital Contributions are called for, and any 
Member fails to provide the full amount of such additional Capital 
Contributions as set forth in the relevant resolution of the Operating 
Committee, any Distributions to be made to such defaulting Member shall 
be reduced by the amount of any required but unpaid Capital 
Contribution due from such Member.

Article IX.

ALLOCATIONS

Section 9.1 Calculation of Profits and Losses.

    To the fullest extent permitted by Applicable Law, the profits and 
losses of the Company shall be determined for each fiscal year in a 
manner consistent with GAAP.

Section 9.2 Allocation of Profits and Losses.

    (a) Except as otherwise set forth in this Section 9.2, for Capital 
Account purposes, all items of income, gain, loss, and deduction shall 
be allocated among the Members in accordance with Exhibit D.
    (b) For federal, state and local income tax purposes, items of 
income, gain, loss, deduction, and credit shall be allocated to the 
Members in accordance with the allocations of the corresponding items 
for Capital Account purposes under this Section 9.2, except that items 
with respect to which there is a difference between tax and book basis 
will be allocated in accordance with Section 704(c) of the Code, the 
Treasury Regulations thereunder and Treasury Regulations Section 1.704-
1(b)(4)(i).
    (c) Notwithstanding any provision set forth in this Section 9.2, no 
item of deduction or loss shall be allocated to a Member to the extent 
the allocation would cause a negative balance in such Member's Capital 
Account (after taking into account the adjustments, allocations and 
distributions described in Treasury Regulations Sections 1.704-
1(b)(2)(ii)(d)(4), (5) and (6)) that exceeds the amount that such 
Member would be required to reimburse the Company pursuant to this 
Agreement or Applicable Law.
    (d) In the event any Member unexpectedly receives any adjustments, 
allocations, or distributions described in Treasury Regulations 
Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6), items of the Company's 
income and gain shall be specially allocated to such Member in an 
amount and manner sufficient to eliminate as quickly as possible any 
deficit balance in its Capital Account created by such adjustments, 
allocations or distributions in excess of that permitted under Section 
9.2(c). Any special allocations of items of income or gain pursuant to 
this Section 9.2(d) shall be taken into account in computing subsequent 
allocations pursuant to this Section 9.2 so that the net amount of any 
items so allocated and all other items allocated to each Member 
pursuant to this Section 9.2 shall, to the extent possible, be equal to 
the net amount that would have been allocated to each such Member 
pursuant to the provisions of this Section 9.2 if such unexpected 
adjustments, allocations or distributions had not occurred.

Article X.

RECORDS AND ACCOUNTING; REPORTS

Section 10.1 Accounting.

    (a) The Operating Committee shall maintain a system of accounting 
which enables the Company to produce accounting records and information 
substantially consistent with GAAP. The Fiscal Year of the Company 
shall be the calendar year unless Applicable Law requires a different 
Fiscal Year.
    (b) All matters concerning accounting procedures shall be 
determined by the Operating Committee.

Section 10.2 Tax Status; Returns.

    (a) It is the intent of this Company and the Members that this 
Company shall be treated as a partnership for federal, state and local 
income tax purposes. Neither the Company nor any Member shall make an 
election for the Company to be classified as other than a partnership 
pursuant to Treasury Regulations Section 301.7701-3 or otherwise.
    (b) The Company shall cause federal, state, and local income tax 
returns for the Company to be prepared and timely filed with the 
appropriate authorities and shall arrange for the timely delivery to 
the Members of such information as is necessary for such Members to 
prepare their federal, state and local tax returns. All tax returns 
shall be prepared in a manner consistent with

[[Page 94976]]

the Distributions made in accordance with Exhibit D.

Section 10.3 Partnership Representative.

    (a) The Operating Committee shall appoint an entity as the 
``Partnership Representative'' of the Company for purposes of Section 
6223 of the Code and the Treasury Regulations promulgated thereunder, 
and all federal, state, and local Tax audits and litigation shall be 
conducted under the direction of the Partnership Representative.
    (b) The Partnership Representative shall use reasonable efforts to 
inform each Member of all significant matters that may come to its 
attention by giving notice thereof and to forward to each Member copies 
of all significant written communications it may receive in such 
capacity. The Partnership Representative shall consult with the Members 
before taking any material actions with respect to tax matters, 
including actions relating to (i) an IRS examination of the Company 
commenced under Section 6231(a) of the Code, (ii) a request for 
administrative adjustment filed by the Company under Section 6227 of 
the Code, (iii) the filing of a petition for readjustment under Section 
6234 of the Code with respect to a final notice of partnership 
adjustment, (iv) the appeal of an adverse judicial decision, and (v) 
the compromise, settlement, or dismissal of any such proceedings.
    (c) The Partnership Representative shall not compromise or settle 
any tax audit or litigation affecting the Members without the approval 
of a majority of Members. Any material proposed action, inaction, or 
election to be taken by the Partnership Representative, including the 
election under Section 6226(a)(1) of the Code, shall require the prior 
approval of a majority of Members.

Article XI.

DISSOLUTION AND TERMINATION

Section 11.1 Dissolution of Company.

    The Company shall dissolve, and its assets and business shall be 
wound up, upon the occurrence of any of the following events:
    (a) Unanimous written consent of the Members to dissolve the 
Company;
    (b) The sale or other disposition of all or substantially all the 
Company's assets outside the ordinary course of business;
    (c) An event which makes it unlawful or impossible for the Company 
business to be continued;
    (d) The withdrawal of one or more Members such that there is only 
one remaining Member; or
    (e) The entry of a decree of judicial dissolution under Sec.  18-
802 of the Delaware Act.

Section 11.2 Liquidation and Distribution.

    Following the occurrence of an event described in Section 11.1, the 
Members shall appoint a liquidating trustee who shall wind up the 
affairs of the Company by (i) selling its assets in an orderly manner 
(so as to avoid the loss normally associated with forced sales), and 
(ii) applying and distributing the proceeds of such sale, together with 
other funds held by the Company: (a) first, to the payment of all debts 
and liabilities of the Company; (b) second, to the establishments of 
any reserves reasonably necessary to provide for any contingent 
recourse liabilities and obligations; (c) third, to the Members in 
accordance with Exhibit D; and (d) fourth, to the Members as determined 
by a majority of Members.

Section 11.3 Termination.

    Each of the Members shall be furnished with a statement prepared by 
the independent accountants retained on behalf of the Company, which 
shall set forth the assets and liabilities of the Company as of the 
date of the final distribution of Company's assets under Section 11.2 
and the net profit or net loss for the fiscal period ending on such 
date. Upon compliance with the distribution plan set forth in Section 
11.2, the Members shall cease to be such, and the liquidating trustee 
shall execute, acknowledge, and cause to be filed a certificate of 
cancellation of the Company. Upon completion of the dissolution, 
winding up, liquidation, and distribution of the liquidation proceeds, 
the Company shall terminate.

Article XII.

EXCULPATION AND INDEMNIFICATION

Section 12.1 Exculpation.

    Each Member, by and for itself, each of its Affiliates and each of 
its and their respective equity holders, directors, officers, 
controlling persons, partners, employees, successors and assigns, 
hereby acknowledges and agrees that it is the intent of the Company and 
each Member that the liability of each Member and each individual 
currently or formerly serving as a[n SRO] Voting Representative (each, 
an ``Exculpated Party'') be limited to the maximum extent permitted by 
Applicable Law or as otherwise expressly provided herein. In accordance 
with the foregoing, the Members hereby acknowledge and agree that:
    (a) To the maximum extent permitted by Applicable Law or as 
otherwise expressly provided herein, no present or former Exculpated 
Party or any of such Exculpated Party's Affiliates, heirs, successors, 
assigns, agents or representatives shall be liable to the Company or 
any Member for any loss suffered in connection with a breach of any 
fiduciary duty, errors in judgment or other acts or omissions by such 
Exculpated Party; provided, however, that this provision shall not 
eliminate or limit the liability of such Exculpated Party for (i) acts 
or omissions which involve gross negligence, willful misconduct or a 
knowing violation of law, or (ii) as provided in Section 5.4(d) hereof, 
losses resulting from such Exculpated Party's Transaction Reports, 
Quotation Information or other information reported to the Processors 
by such Exculpated Party (collectively ``Non-Exculpated Items''). Any 
Exculpated Party may consult with counsel and accountants in respect of 
Company affairs, and provided such Person acts in good faith reliance 
upon the advice or opinion of such counsel or accountants, such Person 
shall not be liable for any loss suffered in reliance thereon.
    (b) Notwithstanding anything to the contrary contained herein, 
whenever in this Agreement or any other agreement contemplated herein 
or otherwise, an Exculpated Party is permitted or required to take any 
action or to make a decision in its ``sole discretion'' or 
``discretion'' or that it deems ``necessary,'' or ``necessary or 
appropriate'' or under a grant of similar authority or latitude, the 
Exculpated Party may, insofar as Applicable Law permits, make such 
decision in its sole discretion (regardless of whether there is a 
reference to ``sole discretion'' or ``discretion''). The Exculpated 
Party (i) shall be entitled to consider such interests and factors as 
it desires (including its own interests), (ii) shall have no duty or 
obligation (fiduciary or otherwise) to give any consideration to any 
interest of or factors affecting the Company or the Members, and (iii) 
shall not be subject to any other or different standards imposed by 
this Agreement, or any other agreement contemplated hereby, under any 
Applicable Law or in equity.

Section 12.2 Right to Indemnification.

    (a) Subject to the limitations and conditions provided in this 
Article XII and to the fullest extent permitted by Applicable Law, the 
Company shall indemnify each Company Indemnified Party for Losses as a 
result of the Company Indemnified Party being a

[[Page 94977]]

Party to a Proceeding. Notwithstanding the foregoing, no such 
indemnification shall be available in the event the Company is a 
claimant against the Company Indemnified Party.
    (b) Indemnification under this Article XII shall continue as to a 
Company Indemnified Party who has ceased to serve in the capacity that 
initially entitled such Company Indemnified Party to indemnity 
hereunder; provided, however, that the Company shall not be obligated 
to indemnify a Company Indemnified Party for the Company Indemnified 
Party's Non-Exculpated Items.
    (c) The rights granted pursuant to this Article XII shall be deemed 
contract rights, and no amendment, modification, or repeal of this 
Article XII shall have the effect of limiting or denying any such 
rights with respect to actions taken or Proceedings arising prior to 
any amendment, modification, or repeal. It is expressly acknowledged 
that the indemnification provided in this Article XII could involve 
indemnification for negligence or under theories of strict liability.
    (d) The Company shall be the primary obligor in respect of any 
Company Indemnified Party's claim for indemnification, for advancement 
of expenses, or for providing insurance, subject to this Article XII. 
The obligation, if any, of any Member or its Affiliates to indemnify, 
to advance expenses to, or provide insurance for any Company 
Indemnified Party shall be secondary to the obligations of the Company 
under this Article XII (and the Company's insurance providers shall 
have no right to contribution or subrogation with respect to the 
insurance plans of such Member or its Affiliates).

Section 12.3 Advance Payment.

    Reasonable expenses incurred by a Company Indemnified Party who is 
a named defendant or respondent to a Proceeding shall be paid by the 
Company in advance of the final disposition of the Proceeding upon 
receipt of an undertaking by or on behalf of such Company Indemnified 
Party to repay such amount if it shall ultimately be determined that he 
or she is not entitled to be indemnified by the Company.

Section 12.4 Appearance as a Witness.

    Notwithstanding any other provision of this Article XII, the 
Company shall pay or reimburse reasonable out-of-pocket expenses 
incurred by a Company Indemnified Party in connection with his 
appearance as a witness or other participation in a Proceeding at a 
time when he is not a named defendant or respondent in the Proceeding.

Section 12.5 Nonexclusivity of Rights.

    The right to indemnification and the advancement and payment of 
expenses conferred in this Article XII shall not be exclusive of any 
other right which any Company Indemnified Person may have or hereafter 
acquire under any law (common or statutory), provision of the 
Certificate or this Agreement or otherwise.

Article XIII.

MISCELLANEOUS

Section 13.1 Expenses.

    The Company shall pay all current expenses, including any Taxes 
payable by the Company, whether for its own account or otherwise 
required by law (including any costs of complying with applicable tax 
obligations), third-party service provider fees, and all administrative 
and processing expenses and fees, as well as any other amounts owing to 
the Processors under the Processor Services Agreements, to the 
Administrator under the Administrative Services Agreement, or to the 
Processors, Administrator, or FINRA under Exhibit D to this Agreement, 
before any allocations may be made to the Members. Appropriate 
reserves, as unanimously determined by the Members, may be charged to 
the Capital Account of the Members for (i) contingent liabilities, if 
any, as of the date any such contingent liabilities become known to the 
Operating Committee, or (ii) amounts needed to pay the Company's 
operating expenses, including administrative and processing expenses 
and fees, before any allocations are made to the Member. Each Member 
shall bear the cost of implementation of any technical enhancements to 
the System made at its request and solely for its use, subject to 
reapportionment should any other Member subsequently make use of the 
enhancement, or the development thereof.

Section 13.2 Entire Agreement.

    Upon the Operative Date, this Agreement supersedes the CQ Plan, the 
CTA Plan, and the UTP Plan and all other prior agreements among the 
Members with respect to the subject matter hereof. This instrument 
contains the entire agreement with respect to such subject matter.

Section 13.3 Notices and Addresses.

    Unless otherwise specified herein, all notices, consents, 
approvals, reports, designations, requests, waivers, elections, and 
other communications (collectively, ``Notices'') authorized or required 
to be given pursuant to this Agreement shall be in writing and may be 
delivered by certified or registered mail, postage prepaid, by hand, by 
any private overnight courier service, or notification through the 
Company's web portal. Such Notices shall be mailed or delivered to the 
Members at the addresses set forth on Exhibit A or such other address 
as a Member may notify the other Members of in writing. Any Notices to 
be sent to the Company shall be delivered to the principal place of 
business of the Company or at such other address as the Operating 
Committee may specify in a notice sent to all of the Members. Notices 
shall be effective (i) if mailed, on the date three days after the date 
of mailing, (ii) if hand delivered or delivered by private courier, on 
the date of delivery, or (iii) if sent by through the Company's web 
portal, on the date sent; provided, however, that notices of a change 
of address shall be effective only upon receipt.

Section 13.4 Governing Law.

    This Agreement shall be governed by and construed in accordance 
with the Delaware Act and internal laws and decisions of the State of 
Delaware, without regard to the conflicts of laws principles thereof; 
provided, however, that the rights and obligations of the Members, the 
Processors and the Administrator, and of Vendors, Subscribers, and 
other Persons contracting with the Company in respect of the matters 
covered by this Agreement, shall at all times also be subject to any 
applicable provisions of the Exchange Act and any rules and regulations 
promulgated thereunder. For the avoidance of doubt, nothing in this 
Agreement waives any protection or limitation of liability afforded any 
of the Members or any of their Affiliates by common law, including the 
doctrines of self-regulatory organization immunity and federal 
preemption.

Section 13.5 Amendments.

    (a) Except as this Agreement otherwise provides, this Agreement may 
be modified from time to time when authorized by the Operating 
Committee pursuant to Section 4.3, subject to the approval of the 
Commission or when such modification otherwise becomes effective 
pursuant to Section 11A of the Exchange Act and Rule 608 of Regulation 
NMS.
    (b) In the case of a Ministerial Amendment, the Chair of the 
Company's Operating Committee may modify this Agreement by submitting 
to

[[Page 94978]]

the Commission an appropriate amendment that sets forth the 
modification; provided, however, that 48-hours advance notice of the 
amendment to the Operating Committee in writing is required. Such an 
amendment shall become effective upon filing with the Commission in 
accordance with Section 11A of the Exchange Act and Rule 608 of 
Regulation NMS.
    (c) ``Ministerial Amendment'' means an amendment to this Agreement 
that pertains solely to any one or more of the following:
    (i) admitting a new Member to the Company;
    (ii) changing the name or address of a Member;
    (iii) incorporating a change that the Commission has implemented by 
rule and that requires no conforming language to the text of this 
Agreement;
    (iv) incorporating a change (A) that the Commission has implemented 
by rule, (B) that requires conforming language to the text of this 
Agreement, and (C) whose conforming language to the text of this 
Agreement has been approved by the affirmative vote of the Operating 
Committee pursuant to Section 4.3;
    (v) incorporating a change (A) that a Governmental Authority 
requires relating to the governance or operation of an LLC, (B) that 
requires conforming language to the text of this Agreement, and (C) 
whose conforming language to the text of this Agreement has been 
approved by the affirmative vote of the Operating Committee pursuant to 
Section 4.3[ or upon approval by a majority of Members pursuant to 
Section 13.5(b), as applicable]; or
    (vi) incorporating a purely technical change, such as correcting an 
error or an inaccurate reference to a statutory provision, or removing 
language that has become obsolete.

Section 13.6 Successors.

    This Agreement shall be binding upon and inure to the benefit of 
the Members and their respective legal representatives and successors.

Section 13.7 Limitation on Rights of Others.

    None of the provisions of this Agreement shall be for the benefit 
of or enforceable by any creditor of the Company. Furthermore, except 
as provided in Section 3.7(b), the Members shall not have any duty or 
obligation to any creditor of the Company to make any contribution to 
the Company or to issue any call for capital pursuant to this 
Agreement. Nothing in this Agreement shall be deemed to create any 
legal or equitable right, remedy or claim in any Person not a party 
hereto (other than any Person indemnified under Article XII).

Section 13.8 Counterparts.

    This Agreement may be executed by the Members in any number of 
counterparts, no one of which need contain the signature of all 
Members. As many such counterparts as shall together contain all such 
signatures shall constitute one and the same instrument.

Section 13.9 Headings.

    The section and other headings contained in this Agreement are for 
reference purposes only and shall not be deemed to be a part of this 
Agreement or to affect the meaning or interpretation of any provisions 
of this Agreement.

Section 13.10 Validity and Severability.

    If any provision of this Agreement shall be held invalid or 
unenforceable, that shall not affect the validity or enforceability of 
any other provisions of this Agreement, all of which shall remain in 
full force and effect.

Section 13.11 Statutory References.

    Each reference in this Agreement to a particular statute or 
regulation, or a provision thereof, shall be deemed to refer to such 
statute or regulation, or provision thereof, or to any similar or 
superseding statute or regulation, or provision thereof, as is from 
time to time in effect.

Section 13.12 Modifications To Be in Writing.

    This Agreement constitutes the entire understanding of the parties 
hereto with respect to the subject matter hereof, and no amendment, 
modification or alteration shall be binding unless the same is in 
writing and adopted in accordance with the provisions of Section 13.5.

Article XIV.

IMPLEMENTATION

Section 14.1 Implementation Timeline.

    [The steps to implement the Plan and timelines for completing these 
various steps are set forth in Exhibit F. The timeline shall begin when 
the Plan is approved by the Commission, and such approval is published 
on the Commission's website. The steps to implement the Plan have been 
organized into multiple workstreams, some of which can be performed in 
parallel, and others have dependencies that need to be completed before 
they can begin. In the Exhibit F, the Company has identified such 
dependencies, some of which are outside the control of the Operating 
Committee. In the event a workstream listed in Exhibit F takes shorter 
or, due to factors outside the Operating Committee's reasonable 
control, takes longer than expected, the timelines for contingent steps 
shall be adjusted accordingly to account for such change. Any 
lengthening of the timeline must be made by an affirmative vote of the 
Operating Committee pursuant to Section 4.3(b) and must be based on a 
reasonable determination that the timeline needs to be extended. In 
such instances, the Operating Committee will include the adjustment in 
its written progress report to the Commission in accordance with 
Section 14.2.]
    (a) No later than one month after the Effective Date, the Voting 
Representatives shall be determined pursuant to Section 4.2 of this 
Agreement.
    (b) No later than three months after the Effective Date, the Voting 
Representatives shall select the members of the Advisory Committee.
    (c) No later than 12 months after the Effective Date, the Operating 
Committee shall file with the Commission proposed Fees charged to 
Vendors and Subscribers for Transaction Reports and Quotation 
Information in Eligible Securities.
    (d) No later than 30 months after the Effective Date, or no later 
than 90 days after the Commission has approved Fees charged to Vendors 
and Subscribers for Transaction Reports and Quotation Information in 
Eligible Securities, whichever date is later, the Plan shall conduct 
the Processor and Administrator functions related to the public 
dissemination of real-time consolidated Transaction Reports and 
Quotation Information for Eligible Securities.
    (e) No later than 30 months after the Effective Date, the entity 
performing the role of Administrator of the Plan shall meet the 
requirements of Section 6.2 of this Agreement and shall have been 
selected pursuant to the process in Section 6.4 of this Agreement.

Section 14.2 Written Progress Reports to Commission.

    (a) Beginning three months after the formation of the Operating 
Committee and continuing every three months until the Operative Date, 
the Operating Committee will provide written progress reports to the 
Commission every three months.

[[Page 94979]]

    (b) The written progress reports will contain the actions 
undertaken to date by the Operating Committee and a detailed 
description of the progress made toward completing each of the steps 
[listed in Exhibit F]required to implement the Plan. The Operating 
Committee will promptly make such progress reports available on the CQ 
Plan and CTA Plan's and UTP Plan's websites until such time as[, and 
on] the Plan's website becomes available[, when available after the 
selection of the Administrator].

Section 14.3 Transition From CQ Plan, CTA Plan, and UTP Plan.

    (a) Until the Operative Date, the Members will continue to operate 
pursuant to the CQ Plan, CTA Plan, and UTP Plan with respect to the 
public dissemination of real-time consolidated equity market data for 
Eligible Securities rather than this Agreement.
    (b) As of the Operative Date, the Members shall conduct, through 
the Company, the Processor and Administrator functions related to the 
public dissemination of real-time consolidated equity market data for 
Eligible Securities required by the Commission to be performed by the 
Members under the Exchange Act and the rules and regulations 
thereunder. The Members shall file an amendment to the CQ Plan, CTA 
Plan, and UTP Plan to cease their operation as of the Operative Date.
    IN WITNESS WHEREOF, the undersigned Members have executed this 
Agreement as of the day and year first above written.

EXHIBIT A

Members of CT Plan LLC

Member Name and Address

Cboe BYX Exchange, Inc., 400 South LaSalle Street, Chicago, Illinois 
60605
Cboe BZX Exchange, Inc., 400 South LaSalle Street, Chicago, Illinois 
60605
Cboe EDGA Exchange, Inc., 400 South LaSalle Street, Chicago, Illinois 
60605
Cboe EDGX Exchange, Inc., 400 South LaSalle Street, Chicago, Illinois 
60605
Cboe Exchange, Inc., 400 South LaSalle Street, Chicago, Illinois 60605
Financial Industry Regulatory Authority, Inc., 1700 K Street NW, 
Washington, D.C. 20006
Investors Exchange LLC, 3 World Trade Center 58th Floor, New York, New 
York 10007
Long-Term Stock Exchange, Inc., 101 Greenwich Street, 15th Floor, New 
York, New York 10014
MEMX LLC, 382 NE 191st Street, Suite 92178, Miami, FL 33179
MIAX PEARL, LLC, 7 Roszel Road, Suite 1A, Princeton, New Jersey 08540
Nasdaq BX, Inc., One Liberty Plaza, 165 Broadway, New York, New York 
10006
Nasdaq ISE, LLC, One Liberty Plaza, 165 Broadway, New York, New York 
10006
Nasdaq PHLX LLC, FMC Tower, Level 8, 2929 Walnut Street, Philadelphia, 
Pennsylvania 19104
The Nasdaq Stock Market LLC, One Liberty Plaza, 165 Broadway, New York, 
NY 10006
New York Stock Exchange LLC, 11 Wall Street, New York, New York 10005
NYSE American LLC, 11 Wall Street, New York, New York 10005
NYSE Arca, Inc., 11 Wall Street, New York, New York 10005
NYSE Chicago, Inc., 11 Wall Street, New York, New York 10005
NYSE National, Inc., 11 Wall Street, New York, NY 10005

EXHIBIT B

Disclosures

    (a) The Members must respond to the following questions and 
instructions:
    (i) Is the Member for profit or not-for-profit? If the Member is 
for profit, is it publicly or privately owned? If privately owned, list 
any owner with an interest of 5% or more of the Member, where to the 
Member's knowledge, such owner, or any affiliate controlling, 
controlled by, or under common control with the owner, subscribes, 
directly or through a third-party vendor, to CT Feeds and/or Member 
PDP.
    (ii) Does the Member offer PDP? If yes, list each product, describe 
its content, and provide a link to where fees for each product are 
disclosed.
    (iii) Provide the names of the Voting Representative, any alternate 
Voting Representatives designated by the Member, and any Member 
Observers. Also provide a narrative description of such persons' roles 
within the Member organization, including the title of each individual 
as well as any direct responsibilities related to the development, 
dissemination, sales, or marketing of the Member's PDP, and the nature 
of those responsibilities sufficient for the public to identify the 
nature of any potential conflict of interest that could be perceived by 
a reasonable objective observer as having an effect on the operation of 
the Company. If such persons work in or with the Member's PDP business, 
describe such persons' roles and describe how that business and such 
persons' Company responsibilities impacts their compensation. In 
addition, describe how such persons' responsibilities with the PDP 
business may present a conflict of interest with their responsibilities 
to the Company.
    (iv) Does the Member, its Voting Representative, its alternate 
Voting Representative, or its Member Observers or any affiliate have 
additional relationships or material economic interests that could be 
perceived by a reasonable objective observer to present a potential 
conflict of interest with their responsibilities to the Company? If so, 
provide a detailed narrative discussion of all material facts necessary 
to identify the potential conflicts of interest and the effects they 
may have on the Company.
    (b) The Processors must respond to the following questions and 
instructions:
    (i) Is the Processor an affiliate of or affiliated with any Member? 
If yes, disclose the Member(s) and describe the nature of the 
affiliation. Include an entity-level organizational chart depicting the 
Processor and its affiliates.
    (ii) Provide a narrative description of the functions directly 
performed by senior staff, the manager employed by the Processor to 
provide Processor services to the Company, and the staff that reports 
to that manager.
    (iii) Does the Processor provide any services for any Member's PDP, 
other NMS Plans, or creation of consolidated equity data information 
for its own use? If Yes, disclose the services the Processor performs 
and identify which NMS Plans. Does the Processor have any profit or 
loss responsibility for a Member's PDP or any other professional 
involvement with persons the Processor knows are engaged in a Member's 
PDP business? If so, describe.
    (iv) List the policies and procedures established to safeguard 
Restricted Information, Highly Confidential Information, and 
Confidential Information that is applicable to the Processor.
    (v) Does the Processor, or its representatives, have additional 
relationships or material economic interests that could be perceived by 
a reasonable objective observer to present a potential conflict of 
interest with the representatives' responsibilities to the Company? If 
so, provide a detailed narrative discussion of all material facts 
necessary to identify the potential conflicts of interest and the 
effects they may have on the Company.
    (c) The Administrator must respond to the following questions and 
instructions:
    (i) Provide a narrative description of the functions directly 
performed by senior staff, the administrative services

[[Page 94980]]

manager, and the staff that reports to that manager.
    (ii) Does the Administrator provide any services for any Member's 
PDP? If yes, what services? Does the Administrator have any profit or 
loss responsibility, or licensing responsibility, for a Member's PDP or 
any other professional involvement with persons the Administrator knows 
are engaged in the Member's PDP business? If so, describe.
    (iii) List the policies and procedures established to safeguard 
Restricted Information, Highly Confidential Information, and 
Confidential Information that is applicable to the Administrator.
    (iv) Does the Administrator, or its representatives, have 
additional relationships or material economic interests that could be 
perceived by a reasonable objective observer to present a potential 
conflict of interest with the representatives' responsibilities to the 
Company? If so, provide a detailed narrative discussion of all material 
facts necessary to identify the potential conflicts of interest and the 
effects they may have on the Company.
    (d) The members of the Advisory Committee must respond to the 
following questions and instructions:
    (i) Provide the member of the Advisory Committee's title and a 
brief description of the member of the Advisory Committee's role within 
the firm as well as any direct responsibilities related to the 
procurement of PDP or CT Feeds or the development, dissemination, 
sales, or marketing of PDP, and the nature of those responsibilities 
sufficient for the public to identify the nature of any potential 
conflict of interest that could be perceived by a reasonable objective 
observer as having an effect on the operation of the Company. If such 
representatives work in or with their employer's market data business, 
describe such member of the Advisory Committee's roles and describe how 
that business impacts their compensation. In addition, describe how 
such representatives' responsibilities with the market data business 
may present a conflict of interest with their responsibilities to the 
Company.
    (ii) Does the member of the Advisory Committee have 
responsibilities related to the firm's use or procurement of market 
data?
    (iii) Does the member of the Advisory Committee have 
responsibilities related to the firm's trading or brokerage services?
    (iv) Does the member of the Advisory Committee's firm use the CT 
Feeds? Does the member of the Advisory Committee's firm use a Member's 
PDP?
    (v) Does the member of the Advisory Committee's firm offer PDP? If 
yes, list each product, described its content, and provide information 
about the fees for each product.
    (vi) Does the member of the Advisory Committee's firm have an 
ownership interest of 5% or more in one or more Members? If yes, list 
the Member(s).
    (vii) Does the member of the Advisory Committee actively 
participate in any litigation against the CQ Plan, CTA Plan, UTP Plan, 
or the Company?
    (viii) Does the member of the Advisory Committee or the member of 
the Advisory Committee's firm have additional relationships or material 
economic interests that could be perceived by a reasonable objective 
observer to present a potential conflict of interest with their 
responsibilities to the Company. If so, provide a detailed narrative 
discussion of all material facts necessary to identify the potential 
conflicts of interest and the effects they may have on the Company.
    (e) Each service provider or subcontractor that has agreed in 
writing to provide required disclosures and be treated as a Disclosing 
Party shall respond to the following questions and instructions:
    (i) Is the service provider or subcontractor affiliated with a 
Member, Processor, Administrator, or employer of a member of the 
Advisory Committee? If yes, disclose with whom the person is affiliated 
and describe the nature of the affiliation.
    (ii) If the service provider's or subcontractor's compensation is 
on a commission basis or is tied to specific metrics, provide a 
detailed narrative summary of how compensation is determined for 
performing work on behalf of the Company.
    (iii) Is the service provider or subcontractor subject to policies 
and procedures (including information barriers) concerning the 
protection of confidential information that includes affiliates? If so, 
describe. If not, explain their absence.
    (iv) Does the service provider or subcontractor, or its 
representative, have additional relationships or material economic 
interests that could be perceived by a reasonable objective observer to 
present a potential conflict of interest with its responsibilities to 
the Company? If so, provide a detailed narrative discussion of all 
material facts necessary to identify the potential conflicts of 
interest and the effects they may have on the Company.
    (f) The responses to these questions will be posted on the 
Company's website. If a Disclosing Party has any material changes in 
its responses, the Disclosing Party must promptly update its 
disclosures. Additionally, the Disclosing Parties must update the 
disclosures on an annual basis to reflect any changes. This annual 
update must be made before the first quarterly session meeting of each 
calendar year, which is generally held in mid-February.

EXHIBIT C

Confidentiality Policy

    (a) Purpose and Scope.
    (i) The purpose of this Confidentiality Policy is to provide 
guidance to the Operating Committee, and all subcommittees thereof, 
regarding the confidentiality of any data or information (in physical 
or electronic form) generated by, accessed by, or transmitted to the 
Operating Committee or any subcommittee, as well as discussions 
occurring at a meeting of the Operating Committee or any subcommittee.
    (ii) This Policy applies to all Covered Persons. All Covered 
Persons must adhere to the principles set out in this Policy and all 
Covered Persons that are natural persons may not receive Company data 
and information until they affirm in writing that they have read this 
Policy and undertake to abide by its terms.
    (iii) Covered Persons may not disclose Restricted, Highly 
Confidential, or Confidential information except as consistent with 
this Policy and directed by the Operating Committee.
    (iv) The Administrator and Processors will establish written 
confidential information policies that provide for the protection of 
information under their control and the control of their Agents, 
including policies and procedures that provide systemic controls for 
classifying, declassifying, redacting, aggregating, anonymizing, and 
safeguarding information, that is in addition to, and not less than, 
the protection afforded herein. Such policies will be reviewed and 
approved by the Operating Committee pursuant to Section 4.3, publicly 
posted, and made available to the Operating Committee for review and 
approval every two years thereafter or when changes are made, whichever 
is sooner.
    (v) Information will be classified solely based on its content.
    (b) Procedures.
    (i) General
    (A) The Administrator and Processors will be the custodians of all 
documents discussed by the Operating Committee and will be responsible 
for maintaining

[[Page 94981]]

the classification of such documents pursuant to this Policy.
    (B) The Administrator may, under delegated authority, designate 
documents as Restricted, Highly Confidential, or Confidential, which 
will be determinative unless altered by an affirmative vote of the 
Operating Committee pursuant to Section 4.3.
    (C) The Administrator will ensure that all Restricted, Highly 
Confidential, or Confidential documents are properly labeled and, if 
applicable, electronically safeguarded.
    (D) All contracts between the Company and its Agents shall require 
Company information to be treated as Confidential Information that may 
not be disclosed to third parties, except as necessary to effect the 
terms of the contract or as required by law, and shall incorporate the 
terms of this Policy, or terms that are substantially equivalent or 
more restrictive, into the contract.
    (ii) Procedures Concerning Restricted Information.
    (A) Disclosure of Restricted Information
    (1) Except as provided below, Covered Persons in possession of 
Restricted Information are prohibited from disclosing it to others.
    (2) Covered Persons in possession of Restricted Information are 
prohibited from disclosing it to others, including Agents, except where 
authorized to do so by the Operating Committee. Any authorization to 
disclose Restricted Information must specify the information to be 
disclosed and identify the Covered Persons or third party authorized to 
receive the Restricted Information, and such disclosure must be in 
furtherance of the interests of the plan. Any authorization must 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. Any Covered Person or third 
party receiving or having access to Restricted Information pursuant to 
this subparagraph must segregate such information, retain it in 
confidence, and use it only in a manner consistent with the terms of 
this Policy.
    (3) Covered Persons may disclose Restricted Information to the 
staff of the SEC or as otherwise required by Applicable Law, or to 
other Covered Persons as expressly provided for by this Policy.
    (B) If the Administrator determines that it is appropriate to share 
a customer's financial information with the Operating Committee or a 
subcommittee thereof, the Administrator will first anonymize the 
information by redacting the customer's name and any other information 
that may lead to the identification of the customer.
    (C) The Administrator may disclose the identity of a customer that 
is the subject of Restricted Information in Executive Session only if 
the Administrator determines in good faith that it is necessary to 
disclose the customer's identity in order to obtain input or feedback 
from the Operating Committee or a subcommittee thereof about a matter 
of importance to the Company. In such an event, the Administrator will 
change the designation of the information at issue from ``Restricted 
Information'' to ``Highly Confidential Information,'' and its use will 
be governed by the procedures for Highly Confidential Information in 
subparagraph (iii) below.
    (iii) Procedures Concerning Highly Confidential Information
    (A) Disclosure of Highly Confidential Information:
    (1) Highly Confidential Information may be disclosed in Executive 
Session of the Operating Committee or to the subcommittee established 
pursuant to Section [4.7(c)]4.8(d). Covered Persons in possession of 
Highly Confidential Information are prohibited from disclosing it to 
others, including Agents, except as provided below. This prohibition 
does not apply to disclosures to the staff of the SEC[or as otherwise 
required by law (such as those required to receive the information to 
ensure the Member complies with its regulatory obligations)].
    (2) A[n SRO] Voting Representative may disclose certain Highly 
Confidential Information to officers or employees of a Member who have 
direct or supervisory responsibility for the Member's participation in 
the Plan, or with agents for the Member supporting the Member'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, PDP. The types of Highly Confidential 
Information permitted to be shared under this subparagraph shall 
consist of (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 Member or of the Plan. Any Covered 
Person receiving or having access to [Restricted Information]Highly 
Confidential Information pursuant to this subparagraph must segregate 
such information, retain it in confidence, and use it only in a manner 
consistent with the terms of this Policy. Any [SRO]Voting 
Representative who discloses Highly Confidential Information pursuant 
to this subparagraph 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.
    (3) Highly Confidential Information may be disclosed to the staff 
of the SEC, unless it is protected by the Attorney-Client Privilege or 
the Work Product Doctrine. Any disclosure of Highly Confidential 
Information to the staff of the SEC will be accompanied by a FOIA 
Confidential Treatment request.
    (4) Highly Confidential Information may be disclosed, as required 
by Applicable Law.
    (5) The Operating Committee may authorize the disclosure of 
specified Highly Confidential Information to identified third parties 
that are acting as Agents. Any authorization must be granted on a case-
by-case basis, unless the Operating Committee grants standing approval 
to allow disclosure of specified recurring information to identified 
third parties[Covered Persons]. Any [Covered Person or ]third party 
receiving or having access to Highly Confidential Information pursuant 
to this subparagraph must segregate such information, retain it in 
confidence, and use it only in a manner consistent with the terms of 
this Policy.
    [(5)](6) Apart from the foregoing, the Operating Committee has no 
power to authorize any other disclosure of Highly Confidential 
Information.
    (B) In the event that a Covered Person is determined by an 
affirmative vote of the Operating Committee pursuant to this Policy to 
have disclosed Highly Confidential Information, the Operating Committee 
will determine the appropriate remedy for the breach based on the facts 
and circumstances of the event. For a[n SRO] Voting Representative or 
Member Observer, remedies include a letter of complaint submitted to 
the SEC, which may be made public by the Operating Committee. For a 
member of the Advisory Committee, remedies include removal of that 
member of the Advisory Committee.
    (iv) Procedures Concerning Confidential Information
    (A) Confidential Information may be disclosed during a meeting of 
the Operating Committee or any subcommittee thereof. Additionally, a 
Covered Person may disclose Confidential Information to other persons 
who need to receive such information to fulfill their

[[Page 94982]]

responsibilities to the Plan, including oversight of the Plan. The 
recipient must segregate the information, retain it in confidence, and 
use it only in a manner consistent with the terms of this policy. A 
Covered Person also may disclose Confidential Information to the staff 
of the SEC, as authorized by the Operating Committee as described 
below, or as may be otherwise required by [law]Applicable Law.
    (B) The Operating Committee may authorize the disclosure of 
Confidential Information by an affirmative vote of the Operating 
Committee pursuant to Section 4.3. Any authorization must 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. Any Covered Person or third party receiving 
or having access to Confidential Information pursuant to this 
subparagraph must segregate such information, retain it in confidence, 
and use it only in a manner consistent with the terms of this Policy. 
Notwithstanding the foregoing, the Operating Committee will not 
authorize the disclosure of Confidential Information that is generated 
by a Member or member of the Advisory Committee and designated by such 
Member or member of the Advisory Committee as Confidential, unless such 
Member or member of the Advisory Committee consents to the disclosure.
    (C) Members of the Advisory Committee may be authorized by the 
Operating Committee to disclose particular Confidential Information 
only in furtherance of the interests of the Company, to enable them to 
consult with industry representatives or technical experts, provided 
that the members of the Advisory Committee take any steps requested by 
the Operating Committee to prevent further dissemination of that 
Confidential Information, including providing the individual(s) 
consulted with a copy of this Policy and requesting that person to 
maintain the confidentiality of such information in a manner consistent 
with this policy.
    (D) A Covered Person that is a representative of a Member may be 
authorized by the Operating Committee to disclose particular 
Confidential Information to other employees or agents of the Member or 
its affiliates only in furtherance of the interests of the Company as 
needed for such Covered Person to perform his or her function on behalf 
of the Company. A copy of this Policy will be made available to 
recipients of such information who are employees or agents of a Member 
or its affiliates that are not Covered Persons, who will be required to 
abide by this Confidentiality Policy.
    (E) A Covered Person may disclose their own individual views and 
statements that may otherwise be considered Confidential Information 
without obtaining authorization of the Operating Committee, provided 
that in so disclosing, the Covered Person is not disclosing the views 
or statements of any other Covered Person or Member that are considered 
Confidential Information.
    (F) A person that has reason to believe that Confidential 
Information has been disclosed by another without the authorization of 
the Operating Committee or otherwise in a manner inconsistent with this 
Policy may report such potential unauthorized disclosure to the Chair 
of the Operating Committee. In addition, a Covered Person that 
discloses Confidential Information without the authorization of the 
Operating Committee will report such disclosure to the Chair of the 
Operating Committee. Such self-reported unauthorized disclosure of 
Confidential Information will be recorded in the minutes of the meeting 
of the Operating Committee and will contain: (a) the name(s) of the 
person(s) who disclosed such Confidential Information, and (b) a 
description of the Confidential Information disclosed. The name(s) of 
the person(s) who disclosed such Confidential Information will also be 
recorded in any publicly available summaries of Operating Committee 
minutes.

EXHIBIT D

Distributions

Cost Allocation and Revenue Sharing

    (a) Payments. In accordance with Paragraph (l) of this Exhibit D, 
each Member will receive an annual payment (if any) for each calendar 
year that is equal to the sum of the Member's Trading Shares and 
Quoting Shares (each as defined below), in each Eligible Security for 
such calendar year. In the event that total Net Distributable Operating 
Income (as defined below) is negative for a given calendar year, each 
Member will receive an annual bill for such calendar year to be 
determined according to the same formula (described in this paragraph) 
for determining annual payments to the Members. Unless otherwise stated 
in this agreement, a year shall run from January 1st to December 31st 
and quarters shall end on March 31st, June 30th, September 30th, and 
December 31st. The Company shall cause the Administrator to provide the 
Members with written estimates of each Member's percentage of total 
volume within five business days of the end of each calendar month.
    (b) Security Income Allocation. The ``Security Income Allocation'' 
for an Eligible Security shall be determined by multiplying (i) the Net 
Distributable Operating Income under this Agreement for the calendar 
year by (ii) the Volume Percentage for such Eligible Security (the 
``Initial Allocation''), and then adding or subtracting any amounts 
specified in the reallocation set forth below.
    (c) Volume Percentage. The ``Volume Percentage'' for an Eligible 
Security shall be determined by dividing (A) the square root of the 
dollar volume of Transaction Reports disseminated by the Processors in 
such Eligible Security during the calendar year by (B) the sum of the 
square roots of the dollar volume of Transaction Reports disseminated 
by the Processors in each Eligible Security during the calendar year.
    (d) Cap on Net Distributable Operating Income. If the Initial 
Allocation of Net Distributable Operating Income in accordance with the 
Volume Percentage of an Eligible Security equals an amount greater than 
$4.00 multiplied by the total number of qualified Transaction Reports 
in such Eligible Security during the calendar year, the excess amount 
shall be subtracted from the Initial Allocation for such Eligible 
Security and reallocated among all Eligible Securities in direct 
proportion to the dollar volume of Transaction Reports disseminated by 
the Processors in Eligible Securities during the calendar year. A 
Transaction Report with a dollar volume of $5,000 or more shall 
constitute one qualified Transaction Report. A Transaction Report with 
a dollar volume of less than $5,000 shall constitute a fraction of a 
qualified Transaction Report that equals the dollar volume of the 
Transaction Report divided by $5,000.
    (e) Trading Share. The ``Trading Share'' of a Member in an Eligible 
Security shall be determined by multiplying (i) an amount equal to 
fifty percent of the Security Income Allocation for the Eligible 
Security by (ii) the Member's Trade Rating in the Eligible Security.
    (f) Trade Rating. A Member's ``Trade Rating'' in an Eligible 
Security shall be determined by taking the average of (A) the Member's 
percentage of the total dollar volume of Transaction Reports 
disseminated by the Processors in the Eligible Security during the 
calendar year, and (B) the Member's percentage of the total number of 
qualified

[[Page 94983]]

Transaction Reports disseminated by the Processors in the Eligible 
Security during the calendar year.
    (g) Quoting Share. The ``Quoting Share'' of a Member in an Eligible 
Security shall be determined by multiplying (A) an amount equal to 
fifty percent of the Security Income Allocation for the Eligible 
Security by (B) the Member's Quote Rating in the Eligible Security.
    (h) Quote Rating. A Member's ``Quote Rating'' in an Eligible 
Security shall be determined by dividing (A) the sum of the Quote 
Credits earned by the Member in such Eligible Security during the 
calendar year by (B) the sum of the Quote Credits earned by all Members 
in such Eligible Security during the calendar year.
    (i) Quote Credits. A Member shall earn one ``Quote Credit'' for 
each second of time (with a minimum of one full second) multiplied by 
dollar value of size that an automated best bid (offer) transmitted by 
the Member to the Processors during regular trading hours is equal to 
the price of the National Best Bid and Offer in the Eligible Security 
and does not lock or cross a previously displayed ``automated 
quotation'' (as defined under Rule 600 of Regulation NMS). The dollar 
value of size of a quote shall be determined by multiplying the price 
of a quote by its size.
    (j) Net Distributable Operating Income. The ``Net Distributable 
Operating Income'' for any particular calendar year shall mean:
    (i) all cash revenues, funds and proceeds received by the Company 
during such calendar year (other than Capital Contributions by the 
Members or amounts paid pursuant to Section 3.7(b) of this Agreement), 
including all revenues from (A) the CT Feeds, which includes the 
dissemination of information with respect to Eligible Securities to 
foreign marketplaces, and (B) FINRA quotation data and last sale 
information for securities classified as OTC Equity Securities under 
FINRA's Rule 6400 Series (the ``FINRA OTC Data'') ((A) and (B) 
collectively, the ``Data Feeds''), and (C) any Membership Fees; less
    (ii) 6.25% of the revenue received by the Company during such 
calendar year attributable to the segment of the Data Feeds reflecting 
the dissemination of information with respect to Network C Securities 
and FINRA OTC Data (but, for the avoidance of doubt, not including 
revenue attributable to the segment of the Data Feeds reflecting the 
dissemination of information with respect to Network A Securities and 
Network B Securities), which amount shall be paid to FINRA as 
compensation for the FINRA OTC Data; \1\ less
---------------------------------------------------------------------------

    \1\ All costs associated with collecting, consolidating, 
validating, generating, and disseminating the FINRA OTC Data are 
borne directly by FINRA and not the Company and the Members.
---------------------------------------------------------------------------

    (iii) reasonable working capital reserves and reasonable reserves 
for contingencies for such calendar year, as determined by the 
Operating Committee, and all costs and expenses of the Company during 
such calendar year, including:
    (A) all amounts payable during such calendar year to the 
Administrator pursuant to the Administrative Services Agreement or this 
Agreement;
    (B) all amounts payable during such calendar year to the Processors 
pursuant to the Processor Services Agreements or this Agreement; and
    (C) all amounts payable during such calendar year to third-party 
service providers engaged by or on behalf of the Company.
    (k) Initial Eligibility. At the time a Member implements a 
Processor-approved electronic interface with the Processors, the Member 
will become eligible to receive revenue.
    (l) Quarterly Distributions. The Company shall cause the 
Administrator to provide Members with written estimates of each 
Member's quarterly Net Distributable Operating Income within 45 
calendar days of the end of the quarter, and estimated quarterly 
payments or billings shall be made on the basis of such estimates. All 
quarterly payments or billings shall be made to each eligible Member 
within 45 days following the end of each calendar quarter in which the 
Member is eligible to receive revenue; provided, that each quarterly 
payment or billing shall be reconciled against a Member's cumulative 
year-to-date payment or billing received to date and adjusted 
accordingly; further, provided, that the total of such estimated 
payments or billings shall be reconciled at the end of each calendar 
year and, if necessary, adjusted by March 31st of the following year. 
Interest shall be included in quarterly payments and in adjusted 
payments made on March 31st of the following year. Such interest shall 
accrue monthly during the period in which revenue was earned and not 
yet paid and will be based on the 90-day Treasury bill rate in effect 
at the end of the quarter in which the payment is made. Monthly 
interest shall start accruing 45 days following the month in which it 
is earned and accrue until the date on which the payment is made.
    (m) Itemized Statements. In conjunction with calculating estimated 
quarterly and reconciled annual payments under this Exhibit D, the 
Company shall cause the Administrator to submit to the Members a 
quarterly itemized statement setting forth the basis upon which Net 
Distributable Operating Income was calculated. Such Net Distributable 
Operating Income shall be adjusted annually based solely on the 
quarterly itemized statement audited pursuant to the annual audit. The 
Company shall cause the Administrator to pay or bill Members for the 
audit adjustments within thirty days of completion of the annual audit. 
Upon the affirmative vote of Voting Representatives pursuant to Section 
4.3, the Company shall cause the Administrator to engage an independent 
auditor to audit the Administrator's costs or other calculation(s).

EXHIBIT E

Fees

(To be determined by the Operating Committee under this Agreement)

[EXHIBIT F] *

* The Commission has deleted proposed Exhibit F in its entirety.

[FR Doc. 2024-27644 Filed 11-27-24; 8:45 am]
BILLING CODE 8011-01-P`