Federal Register / Vol. 89, No. 243 / Wednesday, December 18, 2024 / Notices 103033 

1The hourly rate used for a compliance clerk was 

from SIFMA’s Office Salaries in the Securities 

Industry 2013, modified by Commission staff to 

account for an 1,800-hour work-year and multiplied 

by 2.93 to account for bonuses, firm size, employee 

benefits and overhead. 

2The hourly rate used for a compliance manager 

was from SIFMA’s Management & Professional 

Earnings in the Securities Industry 2013, modified 

by Commission staff to account for an 1,800-hour 

work-year and multiplied by 5.35 to account for 

bonuses, firm size, employee benefits and overhead. 

1 15 U.S.C 78k-1(a)(3). 

2 17 CFR 242.608. 

3 In July 2012, the Commission adopted Rule 613 

of Regulation NMS, which required the Participants 

to jointly develop and submit to the Commission a 

national market system plan to create, implement, 

and maintain a consolidated audit trail (the 

‘‘CAT’’). See Securities Exchange Act Release No. 

67457 (July 18, 2012), 77 FR 45722 (Aug. 1, 2012) 

(‘‘Rule 613 Adopting Release’’); 17 CFR 242.613. On 

November 15, 2016, the Commission approved the 

CAT NMS Plan. See Securities Exchange Act 

Release No. 78318 (Nov. 15, 2016), 81 FR 84696 

(Nov. 23, 2016) (‘‘CAT NMS Plan Approval Order’’). 

The CAT NMS Plan is Exhibit A to the CAT NMS 

Plan Approval Order. See CAT NMS Plan Approval 

Order, at 84943–85034. The CAT NMS Plan 

functions as the limited liability company 

agreement of the jointly owned limited liability 

company formed under Delaware state law through 

which the Participants conduct the activities of the 

CAT (the ‘‘Company’’). Each Participant is a 

member of the Company and jointly owns the 

Company on an equal basis. The Participants 

submitted to the Commission a proposed 

amendment to the CAT NMS Plan on August 29, 

2019, which they designated as effective on filing. 

Under the amendment, the limited liability 

company agreement of a new limited liability 

company named Consolidated Audit Trail, LLC 

serves as the CAT NMS Plan, replacing in its 

entirety the CAT NMS Plan. See Securities 

Exchange Act Release No. 87149 (Sept. 27, 2019), 

84 FR 52905 (Oct. 3, 2019). 

4See Letter from Brandon Becker, CAT NMS Plan 

Operating Committee Chair, to Vanessa 

Countryman, Secretary, Commission, dated March 

27, 2024, available at https://catnmsplan.com/sites/ 

default/files/2024-03/03.27.24-Proposed-CAT-NMSPlan-Amendment-Cost-Savings-Amendment.pdf. 

MIAX Sapphire, LLC was not a Participant to the 

CAT NMS Plan when the Proposal was originally 

filed, but the Participants filed an immediatelyeffective amendment to the CAT NMS Plan on July 

30, 2024 to add MIAX Sapphire, LLC as a 

Participant. See Securities Exchange Act Release 

No. 100631 (July 31, 2024), 89 FR 64011 (Aug. 6, 

2024). 

5The ‘‘Plan Processor’’ is ‘‘the Initial Plan 

Processor or any other Person selected by the 

Operating Committee pursuant to SEC Rule 613 and 

Sections 4.3(b)(i) and 6.1, and with regard to the 

Initial Plan Processor, the Selection Plan, to 

perform the CAT processing functions required by 

SEC Rule 613 and set forth in this Agreement.’’ See 

CAT NMS Plan, supra note 3, at Section 1.1. 

6 ‘‘CAT Data’’ is ‘‘data derived from Participant 

Data, Industry Member Data, SIP Data, and such 

other data as the Operating Committee may 

designate as ‘CAT Data’ from time to time.’’ See id. 

seq.). The Commission plans to submit 

this existing collection of information to 

the Office of Management and Budget 

(‘‘OMB’’) for extension and approval. 

Rule 15a–6 provides conditional 

exemptions from the requirement to 

register as a broker-dealer pursuant to 

Section 15 of the Securities Exchange 

Act for foreign broker-dealers that 

engage in certain specified activities 

involving U.S. persons. In particular, 

Rule 15a–6(a)(3) provides an exemption 

from broker-dealer registration for 

foreign broker-dealers that solicit and 

effect transactions with or for U.S. 

institutional investors or major U.S. 

institutional investors through a 

registered broker-dealer, provided that 

the U.S. broker-dealer, among other 

things, obtains certain information 

about, and consents to service of process 

from, the personnel of the foreign 

broker-dealer involved in such 

transactions, and maintains certain 

records in connection therewith. 

These requirements are intended to 

ensure (a) that the registered brokerdealer will receive notice of the identity 

of, and has reviewed the background of, 

foreign personnel who will contact U.S. 

investors, (b) that the foreign brokerdealer and its personnel effectively may 

be served with process in the event 

enforcement action is necessary, and (c) 

that the Commission has ready access to 

information concerning these persons 

and their U.S. securities activities. 

Commission staff estimates that 

approximately 2,000 U.S. registered 

broker-dealers will spend an average of 

two hours of clerical staff time and one 

hour of managerial staff time per year 

obtaining the information required by 

the rule, resulting in a total aggregate 

time burden of 6,000 hours per year for 

complying with the rule. Assuming an 

hourly cost of $78 1 for a compliance 

clerk and $344 2 for a compliance 

manager, the resultant total internal 

labor cost of compliance for the 

respondents is $1,000,000 per year 

(2,000 entities × ((2 hours per entity × 

$78/hour) + (1 hour per entity × $344/ 

hour)) = $1,000,000). 

Written comments are invited on: (a) 

whether the proposed collection of 

information is necessary for the proper 

performance of the functions of the 

Commission, including whether the 

information shall have practical utility; 

(b) the accuracy of the Commission’s 

estimates of the burden of the proposed 

collection of information; (c) ways to 

enhance the quality, utility, and clarity 

of the information collected; and (d) 

ways to minimize the burden of the 

collection of information on 

respondents, including through the use 

of automated collection techniques or 

other forms of information technology. 

Consideration will be given to 

comments and suggestions submitted by 

February 18, 2025. 

An agency may not conduct or 

sponsor, and a person is not required to 

respond to, a collection of information 

under the PRA unless it displays a 

currently valid OMB control number. 

Please direct your written comments 

to: Austin Gerig, Director/Chief Data 

Officer, Securities and Exchange 

Commission, c/o Tanya Ruttenberg, 100 

F Street NE, Washington, DC 20549, or 

send an email to: PRA_Mailbox@

sec.gov. 

Dated: December 12, 2024. 

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2024–29914 Filed 12–17–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–101901; File No. 4–698] 

Joint Industry Plan; Order Approving 

Amendments to the National Market 

System Plan Governing the 

Consolidated Audit Trail Designed To 

Implement Cost Savings Measures 

December 12, 2024. 

I. Introduction 

On March 27, 2024, and pursuant to 

Section 11A(a)(3) of the Securities 

Exchange Act of 1934 (the ‘‘Exchange 

Act’’) 1 and Rule 608 of Regulation NMS 

thereunder,2 BOX Exchange LLC, Cboe 

BYX Exchange, Inc., Cboe BZX 

Exchange, Inc., Cboe C2 Exchange, Inc., 

Cboe EDGA Exchange, Inc., Cboe EDGX 

Exchange, Inc., Cboe Exchange, Inc., 

The Financial Industry Regulatory 

Authority, Inc., Investors’ Exchange 

LLC, Long-Term Stock Exchange, Inc., 

MEMX LLC, Miami International 

Securities Exchange LLC, MIAX 

Emerald, LLC, MIAX PEARL, LLC, 

Nasdaq BX, Inc., Nasdaq GEMX, LLC, 

Nasdaq ISE, LLC, Nasdaq MRX, LLC, 

Nasdaq PHLX LLC, The Nasdaq Stock 

Market LLC, New York Stock Exchange 

LLC, NYSE American LLC, NYSE Arca, 

Inc., NYSE Chicago, Inc., and NYSE 

National, Inc. (‘‘the Participants’’) filed 

with the Securities and Exchange 

Commission (the ‘‘Commission’’ or the 

‘‘SEC’’) proposed amendments to the 

national market system plan governing 

the consolidated audit trail (the ‘‘CAT 

NMS Plan’’ or ‘‘Plan’’).3 These proposed 

amendments (the ‘‘Proposal’’) were 

designed to implement certain costs 

saving measures,4 including: (A) 

provisions that would change 

processing, query, and storage 

requirements for options market maker 

quotes in listed options; (B) provisions 

that would permit the Plan Processor 5

to move raw unprocessed data and 

interim operational copies of CAT Data 6


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103034 Federal Register / Vol. 89, No. 243 / Wednesday, December 18, 2024 / Notices 

7The ‘‘CAT-Order-ID’’ is ‘‘a unique order 

identifier or series of unique order identifiers that 

allows the central repository to efficiently and 

accurately link all reportable events for an order, 

and all orders that result from the aggregation or 

disaggregation of such order.’’ See 17 CFR 

242.613(j)(1); see also CAT NMS Plan, supra note 

3, at Section 1.1 (‘‘‘CAT-Order-ID’ has the same 

meaning provided in SEC Rule 613(j)(1).’’). 

8See Securities Exchange Act Release No. 99023 

(Nov. 27, 2023), 88 FR 84026 (Dec. 1, 2023) 

(‘‘Industry Test Data Exemptive Relief Order’’). 

9See Securities Exchange Act Release No. 99938 

(Apr. 10, 2024), 89 FR 26983 (Apr. 16, 2024) 

(‘‘Notice’’). Comments received in response to the 

Notice can be found on the Commission’s website 

at https://www.sec.gov/comments/4-698/4-698- 

d.htm. 

10 17 CFR 242.608(b)(2)(i). 

11See Securities Exchange Act Release No. 

100530 (July 15, 2024), 89 FR 58838 (July 19, 2024). 

12See Letter from Brandon Becker, CAT NMS 

Plan Operating Committee Chair, to Vanessa 

Countryman, Secretary, Commission, dated Sept. 

20, 2024, available at https://www.sec.gov/ 

comments/4-698/4698-522995-1501362.pdf. 

13See Securities Exchange Act Release No. 

101225 (Oct 1, 2024), 89 FR 81120 (Oct. 7, 2024). 

Comments received in response to the Amendment 

can be found on the Commission’s website at 

https://www.sec.gov/comments/4-698/4-698-d.htm. 

14See Securities Exchange Act Release No. 

101277 (Oct. 8, 2024), 89 FR 83068 (Oct. 15, 2024). 

15See Notice at note 9, OIP at note 11, and 

Amendment at note 13 for further description of the 

changes proposed by the Participants. 

16An ‘‘Options Market Maker’’ is a ‘‘broker-dealer 

registered with an exchange for the purpose of 

making markets in options contracts on the 

exchange.’’ See CAT NMS Plan, supra note 3, at 

Section 1.1. Each Participant has also promulgated 

rules for its members that generally govern what 

constitutes a ‘‘market maker quote’’ and/or ‘‘market 

maker quotation’’ for that Participant. See, e.g., The 

Nasdaq Stock Market LLC Rules, Options 2, Section 

5, ‘‘Market Maker Quotations’’; Cboe Exchange, Inc. 

Rule 5.52, ‘‘Market Maker Quotes’’; NYSE Arca, Inc. 

Rule 6.37AP–O, ‘‘Market Maker Quotations.’’ 

17A ‘‘Listed Option’’ is ‘‘any option traded on a 

registered national securities exchange or 

automated facility of a national securities 

association.’’ See Rule 600(b)(35) of Regulation 

NMS; see also CAT NMS Plan, supra note 3, at 

Section 1.1. (defining a ‘‘Listed Option’’ as having 

‘‘the meaning set forth in Rule 600(b)(35) of 

Regulation NMS.’’). Subsequent to approval of the 

CAT NMS Plan, Rule 600(b)(35) was redesignated 

as Rule 600(b)(43) without any changes to its terms. 

18 ‘‘Central Repository’’ means ‘‘the repository 

responsible for the receipt, consolidation, and 

retention of all information reported to the CAT 

pursuant to SEC Rule 613 and [the CAT NMS 

Plan.]’’ See CAT NMS Plan, supra note 3, at Section 

1.1. 

19See Notice, supra note 9, at 26985. 

20A ‘‘Reportable Event’’ includes, but is not 

limited to, ‘‘the original receipt or origination, 

modification, cancellation, routing, execution (in 

whole or in part) and allocation of an order, and 

receipt of a routed order.’’ See CAT NMS Plan, 

supra note 3, at Section 1.1. 

21See Notice, supra note 9, at 26985. 

22 Id. 

23 Id.; see also CAT NMS Plan, supra note 3, at 

Section 6.4(d)(iii). 

24See Notice, supra note 9, at 26985; see also 

CAT NMS Plan, supra note 3, at Section 6.5(b)(i) 

(requiring the Plan Processor to link CAT data). 

25 ‘‘CAT Reporter’’ means ‘‘each national 

securities exchange, national securities association 

and Industry Member that is required to record and 

report information to the Central Repository 

pursuant to SEC Rule 613(c).’’ See CAT NMS Plan, 

supra note 3, at Section 1.1. 

26See also Notice, supra note 9, at 26985. 

27 Id. 

28 Id. See also CAT NMS Plan, supra note 3, at 

Section 6.5(c)(ii). 

older than 15 days to what the 

Participants described as a more costeffective storage tier; (C) provisions that 

would permit the Plan Processor to 

provide an interim CAT-Order-ID 7 to 

regulatory users on an ‘‘as requested’’ 

basis, rather than on a daily basis; and 

(D) provisions that would codify and 

expand exemptive relief recently 

provided by the Commission related to 

certain recordkeeping and data retention 

requirements for industry testing data.8

The Proposal was published for 

comment in the Federal Register on 

April 16, 2024.9

On July 15, 2024, the Commission 

instituted proceedings pursuant to Rule 

608(b)(2)(i) of Regulation NMS,10 to 

determine whether to disapprove the 

Proposal or to approve the Proposal 

with any changes or subject to any 

conditions the Commission deems 

necessary or appropriate after 

considering public comment (the 

‘‘OIP’’).11

The Participants subsequently 

submitted an amendment to their 

Proposal on September 20, 2024 (the 

‘‘Amendment’’), which, among other 

things, withdrew the proposed 

provisions that would have permitted 

the Plan Processor to provide an interim 

CAT-Order-ID to regulatory users on an 

‘‘as requested’’ basis, rather than on a 

daily basis.12 The Amendment was 

published for comment in the Federal 

Register on October 7, 2024.13 On 

October 8, 2024, to provide sufficient 

time to consider the changes set forth in 

the Amendment and any comments 

received on the Amendment, the 

Commission extended the period within 

which it must conclude its proceedings 

to December 12, 2024.14

This order approves the Proposal, as 

modified by the Amendment 

(hereinafter, the ‘‘Proposal’’ unless 

otherwise noted). 

II. Description of the Proposal, as 

Modified by the Amendment 

The Commission is approving the 

proposed changes to the CAT NMS 

Plan.15

A. Processing, Query, and Storage 

Requirements for Options Market Maker 

Quotes in Listed Options 

The Participants proposed to amend 

the processing, query, and storage 

requirements that apply to Options 

Market Maker 16 quotes in Listed 

Options 17 through the inclusion of a 

new Section 3.4 in Appendix D of the 

CAT NMS Plan. Section 6.3(d) of the 

CAT NMS Plan currently requires each 

Participant to record and electronically 

report to the Central Repository 18

details for all Options Market Maker 

quotes.19 With respect to Options 

Market Maker quotes in Listed Options, 

Section 6.4(d)(iii) of the CAT NMS Plan 

states that Reportable Events 20 required 

pursuant to Section 6.3(d)(ii) and (iv) 

shall be reported to the Central 

Repository by an Options Exchange in 

lieu of the reporting of such information 

by the Options Market Maker.21 Section 

6.4(d)(iii) of the CAT NMS Plan also 

requires Options Market Makers to 

report to an Options Exchange the time 

at which a quote in a Listed Option is 

sent to the Options Exchange (and, if 

applicable, any subsequent quote 

modifications and/or cancellation time 

when such modification or cancellation 

is originated by the Options Market 

Maker), pursuant to compliance rules 

established by the Options Exchanges.22

Quote sent time information must be 

reported to the Central Repository by 

the Options Exchange in lieu of 

reporting by the Options Market 

Maker.23

The CAT NMS Plan requires all CAT 

Data reported to the Central Repository 

to be processed and assembled to create 

the complete lifecycle of each 

Reportable Event.24 Appendix D, 

Section 3 of the CAT NMS Plan states 

that the Plan Processor must use a 

‘‘daisy chain approach,’’ in which a 

series of unique order identifiers, 

assigned to all order events handled by 

CAT Reporters,25 are linked together by 

the Central Repository and assigned a 

single CAT-generated CAT-Order-ID 

that is associated with each individual 

order event and used to create the 

complete lifecycle of an order.26

Timelines for data processing and data 

availability are described in Section 6.1 

and Section 6.2 of Appendix D of the 

CAT NMS Plan.27 The CAT NMS Plan 

further provides that regulators will 

have access to processed CAT Data 

through an online targeted query tool 

and through user-defined direct queries 

and bulk extract tools described in 

Section 8.1 and Section 8.2 of Appendix 

D of the CAT NMS Plan.28

The Participants proposed to amend 

the CAT NMS Plan to provide that 

Options Market Maker quotes in Listed 

Options will not be subject to any 

requirement to link and create an order 

lifecycle, and will not undergo any 

linkage validation, linkage feedback, or 

lifecycle enrichment processing, but 


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29See Amendment, supra note 13, at proposed 

Section 3.4. 

30See id. at 81121; see also CAT Reporting 

Technical Specifications for Plan Participant v. 

4.1.0–r22 (Sept. 10, 2024), at Section 5.1, available 

at https://catnmsplan.com/sites/default/files/2024- 

09/9.10.2024-CAT-Reporting_Technical_

Specifications_for_Participants_4.1.0-r22.pdf. 

31See Amendment, supra note 13, at 81121. 

32See Part III.B, Table 1, Note 1 infra for further 

description of other options events; see also Letter 

from Brandon Becker, CAT NMS Plan Operating 

Committee Chair, to Vanessa Countryman, 

Secretary, Commission, dated July 8, 2024, at 6–7, 

available at https://www.sec.gov/comments/4-698/ 

4698-489583-1406426.pdf (‘‘Participant Letter’’). 

Additionally, when an Options Market Maker quote 

is on one side of an ‘‘Options Trade’’ or ‘‘OT’’ event, 

the Participants explained that the quote side of the 

OT event will not be linked to the Options Market 

Maker quote via the linkage process. Rather, a 

single event lifecycle will be created that contains 

only the quote side of the OT event. The 

Participants stated that regulators would be able to 

‘‘readily identify’’ the Options Market Maker quote 

executed in an OT event via the quoteID field on 

the side of the OT event involving the Options 

Market Maker quote. In addition, the Participants 

explained that the side of the OT event that does 

not involve an Options Market Maker quote would 

be linked with the relevant order, would include 

the order lifecycle related to such order, and would 

be subject to all lifecycle enrichment processing. 

See Amendment, supra note 13, at 81121. 

33See, e.g., Participant Letter, supra note 32, at 

6–7; Amendment, supra note 13, at 81121. 

34See, e.g., Notice, supra note 9, at 26984. 

35See, e.g., CAT NMS Plan, supra note 3, at 

Section 6.4(d)(iii); id. at Section 6.3(ii)(G) and 

(iv)(E). 36See Notice, supra note 9, at 26984. 37 Id. at 26984 n.15; Amendment, supra note 13 

at proposed Appendix D, Section 3.4. See also 

Amendment, supra note 13, at 81121 (citing 

Appendix B–1 and Appendix B–3 of the CAT 

Reporting Technical Specifications for Plan 

Participants, Version 4.1.0–r.21 (Apr. 15, 2024), 

available at https://www.catnmsplan.com/sites/ 

default/files/2024-04/04.15.2024-CAT_Reporting_

Technical_Specifications_for_Participants_4.1.0- 

r21.pdf, which describe data ingestion error codes 

and linkage validation error codes). Aside from 

‘‘linkage validation,’’ the CAT NMS Plan would 

continue to obligate the Plan Processor to perform 

the other kinds of data validation that are required 

by Section 7.2 of the CAT NMS Plan. 

38See Amendment, supra note 13, at proposed 

Appendix D, Section 3.4. In addition, the 

Participants proposed to make conforming changes 

to certain provisions of Appendix D to include 

cross-references to proposed Section 3.4. See id. at 

81121–22; see also id. at proposed Appendix D, 

Section 3, Section 6.1, and Section 8.1.1. 

39See id. at 81124. 

40 Id. The Participants also explained that the Top 

Indicator data element would not be affected, 

because it is not a processing enrichment available 

on Participant events like Options Market Maker 

quotes on Listed Options. Id. 

41 Id. According to the Participants, the Plan 

Processor would not update this code and/or logic 

following approval of proposed Section 3.4; rather, 

it would ‘‘maintain a copy of each so that they may 

be provided to any regulators that might request 

them in the future,’’ such that regulators would ‘‘all 

receive the same version of the code and/or logic 

regardless of whether they make their request 

immediately upon the approval of the 

[Amendment] or at some point in the future.’’ See 

Participant Letter, supra note 32, at 6. However, the 

Participants stated that the ‘‘regulatory groups of 

each of the Participants have indicated that they do 

not require these data elements to perform their 

surveillance and regulatory functions and/or have 

the capability to derive these data elements 

themselves.’’ See Participant Letter, supra note 32, 

at 6. 

42See CAT NMS Plan, supra note 3, at Section 

6.10(c); see id. at Appendix D, Section 8.1 and 

Section 8.2. See also id. at Section 6.5(c)(ii) 

(requiring the CAT to ‘‘allow the ability to return 

results of queries that are complex in nature, 

including market reconstruction and the status of 

order books at varying time intervals). 

will undergo ingestion validation.29 The 

Participants stated that, as described in 

Section 5.1 (Market Maker Quotes) of 

the Plan Participant Technical 

Specifications, there are two types of 

events used to report Options Market 

Maker quotes in Listed Options: Option 

Quote (‘‘OQ’’) events, which are used to 

report a new quote or a quote 

replacement, and Option Quote Cancel 

(‘‘OQC’’) events, which are used to 

report when a quote is canceled.30 The 

Participants also stated that only OQ 

and/or OQC events would be subject to 

the amended processing, query, and 

storage requirements.31 All other 

options events 32 would continue to be 

subject to the requirement to link and 

create an order lifecycle, would 

continue to undergo linkage validation, 

linkage feedback, and linkage 

enrichment processing, and would 

continue to be available as usual to 

regulatory users through existing query 

tools.33 The Proposal does not alter any 

of the reporting obligations set forth 

under the CAT NMS Plan 34 including, 

without limitation, obligations to 

accurately report OQ and OQC events, 

obligations related to the reporting of 

‘‘all Material Terms of the Order’’ for 

Options Market Maker quotes or 

obligations related to the reporting of 

the time at which a quote in a Listed 

Option is sent to an Options 

Exchange.35

While such reporting obligations 

would not be altered by proposed 

Section 3.4 of Appendix D, the Proposal 

alters the Plan Processor’s obligations 

regarding the processing, query, and 

storage of Options Market Maker quotes 

in Listed Options. Specifically, the Plan 

Processor would be required by 

proposed Section 3.4 of Appendix D 

only to ingest and store Options Market 

Maker quotes in Listed Options.36

Pursuant to proposed Section 3.4 of 

Appendix D, the Plan Processor would 

not be required to also link and create 

an order lifecycle for Options Market 

Maker quotes in Listed Options, and 

such data would not undergo any 

linkage validation, linkage feedback, or 

lifecycle enrichment processing, 

although it would undergo ingestion 

validation.37 Proposed Section 3.4 of 

Appendix D would state that unlinked 

data for Options Market Maker quotes in 

Listed Options would be made available 

to regulators by T+1 at 12:00 p.m. 

Eastern Time.38

The Participants clarified the impact 

of this change by explaining that the 

following data elements would no 

longer be available for Options Market 

Maker quotes in Listed Options under 

proposed Section 3.4 of Appendix D: 

Derived Next Event Timestamp/Derived 

Next Event Epoch Timestamp, CAT 

Lifecycle Sequence Number, CAT 

Lifecycle ID (i.e., CAT Order ID and 

Venue Order ID), and Derived Next 

Event Type Code.39 In addition, certain 

processing enrichments, which the 

Participants characterized as ‘‘linkage 

metadata,’’ would no longer be available 

under proposed Section 3.4 of 

Appendix D: Intra Venue Link Status 

Code, Unlinked Indicator, Lifecycle 

Assembly Date, and Associated 

Lifecycles.40 Nevertheless, proposed 

Section 3.4 of Appendix D would 

require the Plan Processor to provide to 

regulatory users, upon request, the 

business and technical requirements 

needed to re-create the eliminated data 

elements and/or enrichments, as well as 

the code the Plan Processor currently 

uses to derive these eliminated data 

elements and/or enrichments from the 

unprocessed Options Market Maker 

quotes in Listed Options.41

The CAT NMS Plan currently requires 

that the Plan Processor provide access to 

CAT Data to the Participants and the 

Commission through various query 

tools, including an online targeted query 

tool that provides authorized users with 

the ability to retrieve CAT Data via an 

online query screen that includes the 

ability to choose from a variety of predefined selection criteria and userdefined direct queries and bulk extracts 

that provide authorized users with the 

ability to retrieve CAT Data via a query 

tool or language that allows users to 

query all available attributes and data 

sources.42 The online targeted query 

tool functionality provided by FINRA 

CAT, the current Plan Processor, is 

provided by tools that are sometimes 

referred to as ‘‘DIVER’’ or ‘‘MIRS.’’ 

‘‘BDSQL’’ is the user-defined direct 

query tool provided by FINRA CAT, and 

‘‘Direct Read’’ is the bulk extract tool 

provided by FINRA CAT. 

Under proposed Section 3.4 of 

Appendix D, Options Market Maker 

quotes in Listed Options would be 

accessible through BDSQL and Direct 

Read interfaces only and would not be 


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43See Amendment, supra note 13, at proposed 

Appendix D, Section 3.4; see also Participant Letter, 

supra note 32, at 5. 44See Notice, supra note 9, at 26984. 45See Participant Letter, supra note 32, at 5. 46 Id. According to the Participants, this estimate 

consisted of ‘‘approximately (i) $2.2 million per 

year in compute costs for producing the DIVERspecific hash partition copy of Options Market 

Maker Quotes, and (ii) $600,000 per year in storage 

costs for one year’s worth of DIVER-specific copies 

of Options Market Maker Quotes.’’ Id. The 

Participants explained that these costs were 

included in the larger processing and storage cost 

estimates described below. See Amendment, supra 

note 13, at 88123; see also notes 53–57 and 

associated text infra. 

47See Notice, supra note 9, at 26985; see also 

Participant Letter, supra note 32, at 5. 

48See Notice, supra note 9, at 26985. 

49See Securities Exchange Act Release No. 98848 

(Nov. 2, 2023), 88 FR 77128 (Nov. 8, 2023) 

(‘‘November 2023 Exemptive Relief Order’’). 

50See Notice, supra note 9, at 26984 n.15 (citing 

November 2023 Exemptive Relief Order). The 

Participants stated that the Plan Processor would no 

longer be required to create any lifecycle linkages 

for Options Market Maker quotes in Listed Options 

under their Proposal. See id. at 26984. 

51 Id. at 26984. 

52See id. at 26984–85. The Participants stated 

that their cost savings estimates assumed an 

approximate 65% reduction in compute runtime 

associated with options exchange events and an 

approximate 80% reduction in storage footprint 

through the elimination of versioned options quote 

data (e.g., interim, final, DIVER-optimized, OLA 

copies). See id. at 26985 n.19. 

53See Amendment, supra note 13, at 81123. 

54 Id. 

55 Id. 

56 Id. 

57 Id. 

58 Id. 

59 Id. 

60See Participant Letter, supra note 32, at 2; see 

also Amendment, supra note 13, at 81122–23. 

‘‘Industry Member’’ means ‘‘a member of a national 

securities exchange or a member of a national 

securities association.’’ See CAT NMS Plan, supra 

note 3, at Section 1.1. 

accessible through DIVER.43 In addition, 

the Participants stated that elimination 

of linkage and feedback processes 

would remove Options Market Maker 

quotes in Listed Options from certain 

DIVER and/or MIRS interfaces: Options 

Market Replay, OLA Viewer, and AllRelated Lifecycle Event queries.44 These 

DIVER and MIRS tools currently enable 

regulatory users with less expertise in 

sophisticated programming skills to 

access CAT Data. BDSQL and Direct 

Read—which will be the only query 

tools that still contain Options Market 

Maker quotes in Listed Options data 

under the Proposal—require 

programming skills in remote data 

processing and/or knowledge of 

structured query programming language. 

The Participants explained that the 

BDSQL and Direct Read interfaces 

‘‘represent a significantly more costefficient method of providing access’’ to 

the relevant data,45 insofar as the Plan 

Processor estimated that ‘‘the continued 

optimization of Options Market Maker 

Quotes to make them available via 

DIVER would cost approximately $2.8 

million per year.’’ 46 The Participants 

stated that each of their regulatory 

groups would be able to conduct their 

regulatory programs accessing Options 

Market Maker quotes in Listed Options 

using only BDSQL and Direct Read and 

that each regulatory group supported 

the proposed modification.47

The Participants estimated that costs 

related to creating lifecycles for Options 

Market Maker quotes in Listed Options 

were $30 million in 2023.48 However, 

the Participants acknowledged, in their 

Proposal, that they had already begun to 

implement certain measures to reduce 

the costs associated with lifecycle 

linkages for Options Market Maker 

quotes in Listed Options, pursuant to 

exemptive relief issued by the 

Commission in November 2023.49 The 

Participants stated that the November 

2023 Exemptive Relief Order allows the 

Plan Processor to create lifecycle 

linkages for Options Market Maker 

quotes in Listed Options only once by 

T+2 at 8 a.m. Eastern Time (as opposed 

to requiring both an interim lifecycle by 

T+1 at 9 p.m. Eastern Time and a final 

lifecycle by T+5 at 8 a.m. Eastern 

Time).50 The Participants stated that 

they expected the above-described 

‘‘single pass’’ approach to generating 

lifecycles for options quotes to result in 

annual savings of approximately $5.4 

million upon implementation in April 

2024,51 and the Commission 

understands that this ‘‘single pass’’ 

functionality has now been 

implemented. 

The Participants estimated that the 

Proposal would result in approximately 

$20 million in additional annual cost 

savings in the first year, such that the 

cost impact of Options Market Maker 

quotes in Listed Options on the CAT 

would be reduced from approximately 

$24.4 million (inclusive of anticipated 

savings resulting from the 

implementation of the options quotes 

‘‘single pass’’ proposal described above) 

to approximately $4.0 million 

annually.52

According to the Participants, 

approximately $12 million of these 

estimated $20 million in cost savings 

would be attributable to ‘‘linkage 

processing and data processing 

reductions, assuming 22 processing 

days per month for a total of 264 

processing days in a year and based on 

data volumes observed in the first half 

of 2024.’’ 53 Specifically, the 

Participants stated that ‘‘[l]inkage 

processing costs would be reduced from 

approximately $27,000 per day to $0 per 

day, resulting in estimated annual 

linkage processing savings of $7,128,000 

($27,000/day × 264 days). Data 

processing costs (i.e., costs attributable 

to data ingestion and preparation and 

publication of data versions to the 

relevant regulatory interfaces) would be 

reduced from approximately $27,000 

per day to $9,000 per day, resulting in 

estimated annual data processing 

savings of $4,752,000 ($18,000/day × 

264 days).’’ 54 The Participants 

explained that these estimated cost 

savings could increase if ‘‘data volumes 

continue to increase as they have 

historically . . . .’’ 55 The Participants 

further estimated that approximately $8 

million of the estimated $20 million in 

cost savings would be attributable to 

‘‘the reduction in the storage footprint 

for Options Market Maker Quotes in 

Listed Options through the elimination 

of versioned quote data (i.e., T+2 8 a.m. 

ET, T+5 8 a.m. ET, DIVER and OLA 

copies).’’ 56 The Participants explained 

that this estimate assumed a ‘‘reduction 

of the current production storage 

footprint of approximately 37.5 

petabytes (PB) per month based on the 

data volumes from the first half of 2024 

to approximately 9 PB per month’’ 

across various storage tiers.57

The Participants stated that one-time 

implementation costs, which would 

‘‘generally consist of Plan Processor 

labor costs associated with coding and 

software development, as well as any 

related cloud fees associated with the 

development, testing and load testing of 

the proposed changes,’’ were expected 

to be ‘‘minimal relative to overall cost 

savings’’ and explained that such costs 

‘‘may vary based on various factors, 

including the details of any 

requirements in any final amendment 

approved by the Commission and any 

changes in labor costs.’’ 58 The 

Participants stated that ‘‘[o]ngoing 

operational costs, other than cloud 

hosting costs’’ would not be affected by 

the proposed amendments.59 They also 

stated that actual future savings could 

be more or less than their estimates due 

to changes in a number of variables on 

which their estimates were based, 

including ‘‘current CAT NMS Plan 

requirements; reporting by Participants, 

Industry Members, and market data 

providers; observed data rates and 

volumes; current storage and compute 

pricing discounts, compute reservations, 

and cost savings plans (i.e., including 

savings attributable to the daily OnDemand Capacity Reservations and 

Compute Savings Plan); and associated 

cloud fees.’’ 60 The Participants stated 

that they believed that ‘‘the cost savings 


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61See Amendment, supra note 13, at 81122–23. 

62See Notice, supra note 9, at 26984. 

63 Id. at 26984–85. 

64 Id. at 26984. 

65See Participant Letter, supra note 32, at 4. 

66See Notice, supra note 9, at 26985. 

67 Id. at 26984. 

68See Letter from Howard Meyerson, Managing 

Director, Financial Information Forum, to Secretary, 

Commission, dated May 7, 2024, available at 

https://www.sec.gov/comments/4-698/4698-467591- 

1256394.pdf (‘‘FIF Letter I’’); Letter from Ellen 

Greene, Managing Director, Equities and Options 

Market Structure, and Joseph Corcoran, Managing 

Director, Associate General Counsel, The Securities 

Industry and Financial Markets Association, to 

Vanessa Countryman, Secretary, Commission, dated 

May 31, 2024, available at https://www.sec.gov/ 

comments/4-698/4698-479631-1372454.pdf 

(‘‘SIFMA Letter I’’); Letter from Howard Meyerson, 

Managing Director, Financial Information Forum, to 

Secretary, Commission, dated October 25, 2024, 

available at https://www.sec.gov/comments/4-698/ 

4698-534415-1532782.pdf (‘‘FIF Letter II’’); Letter 

from Ellen Greene, Managing Director, Equities and 

Options Market Structure, and Joseph Corcoran, 

Managing Director, Associate General Counsel, The 

Securities Industry and Financial Markets 

Association, to Vanessa Countryman, Secretary, 

Commission, dated October 28, 2024, available at 

https://www.sec.gov/comments/4-698/4698-535155- 

1534962.pdf (‘‘SIFMA Letter II’’). Nasdaq also 

commented in support of the proposed 

amendments, reiterating points made by the 

Participants in their filings and noting the support 

of SIFMA and FIF. See also Letter from Jeffrey S. 

Davis, Senior Vice President, Principal Deputy 

General Counsel, Nasdaq, Inc., to Vanessa A. 

Countryman, Secretary, Commission, dated July 1, 

2024 (‘‘Nasdaq Letter’’), available at https://

www.sec.gov/comments/4-698/4698-487351- 

1391254.pdf. 

69SIFMA Letter I at 1–2; SIFMA Letter II at 1– 

2. 

70SIFMA Letter I at 2–3. 

71 Id. at 2 (citing CAT NMS Plan Approval Order, 

supra note 3, at 84750). 

72 Id. For example, SIFMA explained that the 

Commission’s recent ‘‘tick size proposal has the 

potential to significantly expand the amount of 

quoting activity in the equities and listed options 

markets.’’ Id. at 2 n.7. 

73 Id. at 2–3. 

74FIF Letter I at 2; FIF Letter II at 2. 

75FIF Letter I at 2. 

76 17 CFR 242.608(b)(2). See also 15 U.S.C. 78k– 

1 (authorizing the Commission, by rule or order, to 

authorize or require the self-regulatory 

organizations to act jointly with respect to matters 

as to which they share authority under the 

Exchange Act in planning, developing, operating, or 

regulating a facility of the national market system). 

77See Amendment, supra note 13, at 81122–23. 

See also notes 53–57 and associated text supra. 

78The Commission recognizes that there are 

additional measures beyond the specific 

amendments proposed by the Participants here that 

could further reduce CAT costs or could identify 

areas for potential additional cost savings, such as 

FIF’s suggestions that Options Market Maker quotes 

in Listed Options be eliminated from the CAT 

altogether and/or that the Commission and the 

Participants should conduct a separate ‘‘cost-benefit 

analysis of maintaining Options Market Maker 

Quotes in CAT vs. removing them from CAT.’’ See 

notes 74–75 and associated text supra. But, in our 

view, it is appropriate to proceed with the 

Participants’ Proposal at this time. Approval of 

proposed Section 3.4 of Appendix D advances FIF’s 

stated goal to ‘‘manage and reduce CAT operating 

costs,’’ FIF Letter I at 2, and does not foreclose the 

Commission’s or the Participants’ ability to 

consider additional cost savings opportunities in 

the future. Nor does the existence of such 

additional measures or potential analyses call into 

question the proposed amendments’ satisfaction of 

the approval standard set forth by Rule 608(b)(2) or 

otherwise warrant a departure from the policy 

choices proposed by the Participants. 

79Although the Participants have represented that 

usage data ‘‘demonstrates that such data is very 

rarely accessed by regulators,’’ see Notice, supra 

note 9, at 26984, such usage data was obtained 

before the Participants represented to the 

Commission that CAT implementation was 

complete and does not reflect current usage 

patterns. Such data is therefore not dispositive 

evidence of the lack of regulatory need. See CAT 

Continued 

estimates and assumptions [were] 

reasonable and provide[d] an adequate 

basis for the Commission to evaluate the 

costs and benefits’’ of their Proposal.61

Although the Participants represented 

that Options Market Maker quotes in 

Listed Options are the single largest data 

source for the CAT, comprising 

approximately 98% of all options 

exchange events and approximately 

75% of all transaction volume stored in 

the CAT,62 the Participants stated the 

changes set forth in the Proposal would 

have a limited impact on regulators.63

The Participants stated that regulators 

would still have access to unlinked 

Options Market Maker quotes in Listed 

Options by T+1 at 12:00 p.m. Eastern 

Time under the Proposal and asserted 

that regulatory users would be able to 

derive the currently available data 

enrichments if needed.64 The 

Participants further stated that 

‘‘[l]inkage validation is not necessary for 

Options Market Maker Quotes because 

the quoteID is an effective replacement 

for tying quotes to trades.’’ 65 Since the 

vast majority of Options Market Maker 

quotes in Listed Options lifecycles 

consist of just two events—the quote 

and its subsequent cancellation—the 

Participants also explained that the 

number of Options Market Maker quotes 

in Listed Options that result in an 

execution and/or allocation in the first 

place would be extremely low.66

Finally, the Participants stated that their 

usage data ‘‘demonstrates’’ that Options 

Market Maker quotes in Listed Options 

lifecycles are ‘‘very rarely accessed by 

regulators.’’ 67

Two commenters were supportive of 

these aspects of the Proposal.68 For 

example, SIFMA stated that the 

‘‘enormity of this data set . . . has 

created costs and challenges far beyond 

those envisioned when CAT was 

approved.’’ 69 SIFMA explained that the 

‘‘quote-to-trade ratio in listed options 

markets is so large that the operational 

costs of linking quotes to trades is an 

unreasonable burden’’ that had not been 

supported by a cost-benefit analysis.70

Moreover, SIFMA stated that ‘‘the ratio 

keeps increasing, with [its] member data 

showing the most recent peak of 32,000 

quotes per trade in the U.S. options 

market in December 2023,’’ a ratio that 

they stated was ‘‘nearly 4 times greater 

than the ratio described’’ in the CAT 

NMS Plan Approval Order.71 SIFMA 

further expressed concern that there 

were no forces to ‘‘constrain the 

increase in this ratio’’ and asserted that 

‘‘certain SEC market structure initiatives 

might only accelerate the increase.’’ 72

Given the ‘‘extremely small number of 

quotes’’ with a ‘‘corresponding trade,’’ 

SIFMA did not believe it was reasonable 

to spend so much on processing and 

storage costs for Options Market Maker 

quotes in Listed Options, especially if 

such data would continue to be reported 

to the CAT and if ‘‘the SEC or a 

Participant can use the quote data as 

part of its surveillance or investigation 

patterns, albeit with the need to perform 

some additional computations.’’ 73 FIF 

supported the Proposal, but suggested 

that the Commission go further and 

eliminate Options Market Maker quotes 

in Listed Options from the CAT 

altogether.74 FIF also requested that the 

Commission and the Participants 

‘‘conduct’’ and make public ‘‘a costbenefit analysis of maintaining Options 

Market Maker Quotes in CAT vs. 

removing them from CAT.’’ 75

Rule 608(b)(2) states that the 

Commission shall approve a proposed 

amendment to an effective national 

market system plan, with such changes 

or subject to such conditions as the 

Commission may deem necessary or 

appropriate, if it finds that such 

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.76

When evaluating the estimated cost 

savings of approximately $20 million 

annually (and potentially more if data 

volumes continue to increase as they 

have historically) in light of the reduced 

functionalities for Options Market 

Maker quotes in Listed Options,77 the 

Proposal satisfies the approval standard 

set forth in Rule 608.78

In reaching this conclusion, the 

Commission emphasizes several 

important considerations. The Proposal 

would preserve some of the 

functionality that would have otherwise 

been available to regulators with respect 

to Options Market Maker quotes in 

Listed Options, and the Commission 

continues to believe that such data has 

substantial regulatory value.79


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103038 Federal Register / Vol. 89, No. 243 / Wednesday, December 18, 2024 / Notices 

Q2 & Q3 2024 Quarterly Progress Report, available 

at https://catnmsplan.com/sites/default/files/2024- 

07/CAT_Q2-and-Q3-2024-QPR.pdf. 

80See Amendment, supra note 13, at proposed 

Section 3.4. 

81 Id. 

82See id. 

83See, e.g., Part III.B infra. 

84See CAT NMS Plan, supra note 3, at Section 

6.5(d)(ii). 

85See, e.g., Nasdaq General Equity and Options 

Rule 7, Section 11(a) (‘‘Industry Members are 

required to record and report data to the Central 

Repository as required by this General 7 in a 

manner that ensures the timeliness, accuracy, 

integrity and completeness of such data.’’); Cboe 

Rule 7.30(a) (‘‘Industry Members are required to 

record and report data to the Central Repository as 

required by this Section B in a manner that ensures 

the timeliness, accuracy, integrity and completeness 

of such data.’’); NYSE Rule 6893(a) (‘‘Industry 

Members are required to record and report data to 

the Central Repository as required by this Rule 

Series in a manner that ensures the timeliness, 

accuracy, integrity and completeness of such 

data.’’). 

86See CAT NMS Plan, supra note 3, at Section 

6.5(b)(i) and Appendix D, Section 1.4. 

87See, e.g., CAT NMS Plan, supra note 3, at 

Appendix D, Section 8.1 and 8.2. The Participants 

explained that the Commission had granted 

conditional exemptive relief from certain 

performance requirements related to the online 

targeted query tool. See Notice, supra note 9, at 

26986; see also November 2023 Exemptive Relief 

Order, supra note 49. 

88See Notice, supra note 9, at 26986. 

89CAT NMS Plan, supra note 3, at Appendix D, 

Section 6.2. 

90See Amendment, supra note 13, at proposed 

Section 6.3. 

91 Id. The Commission understands, from Staff 

discussions with the Participants, that Options 

Market Maker quotes in Listed Options would not 

qualify as Raw Unprocessed Data, Interim 

Operational Data, and/or submission and feedback 

files, and this Order does not approve application 

of proposed Section 6.3 of Appendix D to Options 

Market Maker quotes in Listed Options. See, e.g., 

id. (stating that ‘‘Interim Operational Data’’ does not 

include ‘‘processed data relating to Options Market 

Maker quotes in Listed Options made available to 

regulators by T+1 at 12:00 p.m. ET’’). 

92See Notice, supra note 9, at 26986. 

93 Id. 

94See Participant Letter, supra note 32, at 3–4. 

95See Amendment, supra note 13, at 81122 n.18. 

96 Id. 

97 Id. 

98See Participant Letter, supra note 32, at 3. 

99When a regulator queries CAT Data, the 

Participants explained that the CAT currently 

provides results to the user based on the latest, most 

current version of the data. Between T+1 and T+5, 

the CAT query tools will return the latest iteration 

of processed data available, and any interim data 

versions are ultimately supplanted in all CAT query 

tools by the final version of corrected data that is 

made available at T+5 at 8:00 a.m. ET. See 

Amendment, supra note 13, at 81123. 

Specifically, under proposed Section 3.4 

of Appendix D, regulators would still 

have direct access to unlinked Options 

Market Maker quotes in Listed Options 

by T+1 at 12:00 p.m. Eastern Time.80

Regulators would also still be able to 

use two of the existing query tools— 

BDSQL and Direct Read—to access the 

relevant data, although access to this 

data through DIVER and certain MIRS 

interfaces would be eliminated.81

The Commission further understands 

that proposed Section 3.4 of Appendix 

D would also require the Plan Processor 

to provide regulators, on request, with 

the business and technical requirements 

needed to re-create data elements and/ 

or enrichments that would otherwise be 

eliminated for Options Market Maker 

quotes in Listed Options, as well as the 

code currently used by the Plan 

Processor to derive those data elements 

and/or enrichments.82 It may be feasible 

for regulators to perform such ad hoc 

processing of Options Market Maker 

Quotes in Listed Options, if they have 

adequate staff possessing the necessary 

specialized skills for this work and 

access to the necessary technical tools. 

In part, this is because lifecycles for 

Options Market Maker quotes in Listed 

Options data are generally less complex 

compared to lifecycles that include 

other CAT events, in that Options 

Market Maker quotes in Listed Options 

lifecycles usually involve only a single 

broker-dealer, a single exchange, an 

exchange quote, and a single cancel or 

trade event.83 At the same time, ad hoc 

processing would likely require 

technical assistance from the Plan 

Processor and would impose costs on 

the regulator. The magnitude of this cost 

depends on the complexity of revising 

the code for regulators’ systems, the 

frequency of updates required to 

maintain the code, and the chosen 

amount and frequency of data 

processed. Finally, the CAT NMS Plan 

will continue to obligate Participants to 

‘‘adopt policies and procedures, 

including standards, requiring CAT Data 

reported to the Central Repository [to] 

be timely, accurate, and complete, and 

to ensure the integrity of such CAT Data 

(e.g., that such CAT Data has not been 

altered and remains reliable),’’ 84 and 

each Participant’s rulebook obligates its 

members to record and report CAT data 

in a manner that ensures its timeliness, 

accuracy, integrity and completeness.85

B. Storage for Raw Unprocessed Data, 

Interim Operational Data, and/or 

Submission and Feedback Files Older 

Than 15 Days 

The CAT NMS Plan requires CAT 

Data to be ‘‘directly available and 

searchable electronically without 

manual intervention for at least six 

years’’ 86 and within certain query tool 

response times.87 These requirements 

apply not only to the final corrected 

data version that is delivered to 

regulators by T+5 at 8 a.m. Eastern 

Time, but also to raw unprocessed data 

and various types of interim operational 

data, as well as to copies of all 

submission and feedback files provided 

to CAT Reporters as part of the 

correction process.88 Specifically, with 

respect to raw unprocessed data and 

interim operational copies of data 

created between T+1 and T+5, Section 

6.2 of Appendix D of the CAT NMS Plan 

provides that, prior to 12:00 p.m. 

Eastern Time on T+1, raw unprocessed 

data that has been ingested by the Plan 

Processor must be available to 

Participants’ regulatory staff and the 

SEC, and between 12:00 p.m. Eastern 

Time on T+1 and T+5, access to all 

iterations of processed data must be 

available to Participants’ regulatory staff 

and the SEC.89

The Participants distinguish between 

Raw Unprocessed Data, Interim 

Operational Data, and/or submission 

and feedback files in the Amendment, 

which would define Raw Unprocessed 

Data as ‘‘data that has been ingested by 

the Plan Processor and made available 

to regulators prior to 12:00 p.m. Eastern 

Time on T+1.’’ 90 Interim Operational 

Data, on the other hand, would be 

defined as ‘‘all processed, validated and 

unlinked data made available to 

regulators by T+1 at 12:00 p.m. ET and 

all iterations of processed data made 

available to regulators between T+1 and 

T+5, but excludes the final version of 

corrected data that is made available at 

T+5 at 8:00 a.m. ET.’’ 91 Currently, the 

Participants explained that such data is 

supplanted in all CAT query tools by 

the final version of corrected data that 

is made available to regulators at T+5 at 

8:00 a.m. Eastern Time.92 The 

Participants stated, however, that such 

data remains available to regulators after 

T+5 ‘‘without manual intervention’’ via 

the use of CAT data management 

APIs.93

To enable such access, Raw 

Unprocessed Data, Interim Operational 

Data, and submission and feedback files 

are stored in S3 Intelligent Tiers 

provided by the cloud service provider 

that currently hosts the CAT System, 

Amazon Web Services (‘‘AWS’’).94 Data 

files that are either new or that have 

been recently read by a regulatory user 

are stored in the S3 Frequent Access 

tier.95 Files that have not been read by 

a regulatory user for 30 days are moved 

to the S3 Infrequent Access tier.96 Files 

that have not been read by a regulatory 

user for 90 days are moved to the S3 

Archive Instant Access tier.97 Once a 

regulatory user accesses an older file, it 

is moved back into the S3 Frequent 

Access tier.98

The Participants stated that regulatory 

users generally access the latest, 

corrected version of CAT data 99 and 


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100See Notice, supra note 9, 26986; see also 

Amendment, supra note 13, at 81122. According to 

the Participants, after four years of operation, the 

Plan Processor has not seen any regulatory usage of 

this interim operational data. See Notice, supra note 

9, 26986; see also Amendment, supra note 13, at 

81123. 

101See Amendment, supra note 13, at proposed 

Section 6.3. The Participants anticipated that 

‘‘archived data would be restored to the S3 

Frequent Access tier,’’ but cautioned that ‘‘[s]torage 

tiers are subject to change based on future 

technology developments and product offerings.’’ 

See id. at 81122 n.18. 

102See Notice, supra note 9, at 26986. 

103See Amendment, supra note 13, at proposed 

Section 6.3. In addition, the Participants proposed 

to add references to proposed Section 6.3 of 

Appendix D to Section 6.5(d)(i) and Section 1.4 of 

Appendix D of the CAT NMS Plan. See id. at 81122. 

104See Notice, supra note 9, at 26986. By 

contrast, the Participants stated that, when the 

Commission adopted the CAT NMS Plan, ‘‘[m]ost 

current data sources do not provide direct access to 

most regulators, and data requests can take as long 

as weeks or even months to process.’’ See id. (citing 

CAT NMS Plan Approval Order, supra note 3, at 

84833 and Rule 613 Adopting Release, supra note 

3, at 45729). 

105 Id. 

106 Id. The Participants stated that their Proposal, 

as revised by the Amendment, would not delete the 

data subject to proposed Section 6.3 of Appendix 

D, but simply move it to a ‘‘more cost-effective’’ 

storage tier requiring some ‘‘manual intervention.’’ 

Upon restoration to an accessible storage tier, the 

Participants stated that the relevant data would be 

‘‘available and searchable electronically . . . in the 

same manner as it is today.’’ See Amendment supra 

note 13, at 81123–24. 

107See Amendment, supra, note 13, at 81123. The 

Participants further explained that the ‘‘affected 

data currently represents approximately 52% of the 

daily storage footprint in CAT. Specifically, raw 

unprocessed data (i.e., as-submitted data) represents 

approximately 16% of the daily storage footprint, 

and interim operational copies (i.e., T+1 12 p.m. ET, 

T+1 9 p.m. T, and associated DIVER copies) 

represent approximately 36% of the daily storage 

footprint.’’ See id. at 81123 n.27. 

108 Id. at 81123. 

109 Id. 

110See Participant Letter, supra note 32, at 2; see 

also Amendment, supra note 13, at 81122–23. 

111See Amendment, supra note 13, at 81122–23. 

112FIF Letter I at 3; SIFMA Letter I at 3. See also 

Nasdaq Letter (reiterating points made by the 

Participants in their filings and noting the support 

of SIFMA and FIF). 

113SIFMA Letter I at 3. 

114 ‘‘CAT Reporter’’ means ‘‘each national 

securities exchange, national securities association 

and Industry Member that is required to record and 

report information to the Central Repository 

pursuant to SEC Rule 613(c).’’ See CAT NMS Plan, 

supra note 3, at Section 1.1. 

115FIF Letter I at 3; FIF Letter II at 2. 

116FIF Letter I at 3. 

therefore stated that Raw Unprocessed 

Data, Interim Operational Data, and/or 

submission and feedback files generally 

do not provide any regulatory value 

after the final corrected data is delivered 

by T+5 at 8 a.m. Eastern Time.100 The 

Participants asserted that cost savings 

could be achieved by archiving Raw 

Unprocessed Data, Interim Operational 

Data, and/or submission and feedback 

files older than 15 days to a more costeffective storage tier that is optimized 

for infrequent access. 

Specifically, the Participants 

proposed to add new Section 6.3 to 

Appendix D of the CAT NMS Plan that 

would state that Raw Unprocessed Data, 

Interim Operational Data, and/or 

submission and feedback files older 

than 15 days may be retained in an 

archive storage tier that would not be 

directly available and searchable 

electronically without manual 

intervention and that would not be 

subject to any query tool performance 

requirements until it is restored to an 

accessible storage tier.101 The 

Participants stated that Raw 

Unprocessed Data, Interim Operational 

Data, and/or submission and feedback 

files not older than 15 days, as well as 

all final, corrected data, would remain 

accessible ‘‘without manual 

intervention’’ within required query tool 

response times.102

Proposed Section 6.3 of Appendix D 

would also state that the Plan Processor 

would restore archived data to an 

accessible storage tier upon request to 

the CAT Help Desk by an authorized 

regulatory user from the Participants or 

a senior officer from the Commission.103

The Participants explained that 

archived data would be restored 

generally within several hours or 

business days of a request to the CAT 

Help Desk that is maintained pursuant 

to Section 10.3 of Appendix D of the 

CAT NMS Plan, depending on the 

volume and size of the date range of the 

requested data restore. For example, 

they stated that a request to restore a 

single day of data may take less than 24 

hours, whereas a request to restore a 

year’s worth of data may take several 

days.104 The Participants further 

represented that the Plan Processor 

would develop policies and procedures 

to ensure the confidentiality of any 

regulator requests to obtain data subject 

to proposed Section 6.3 of Appendix 

D.105

Accordingly, the Participants stated 

that they believed that the anticipated 

savings associated with optimizing 

storage costs, which they estimated as 

approximately $1 million in annual 

costs, outweighed the impact on 

regulatory access to this data.106 The 

Participants reached their estimate by 

calculating the savings that would result 

from moving Raw Unprocessed Data, 

Interim Operational Data, and/or 

submission and feedback files from the 

S3 Frequent Access tier to the Glacier 

Deep Archive tier, ‘‘based on data 

volumes observed in the first half of 

2024.’’ 107 The Participants stated that 

one-time implementation costs, which 

would ‘‘generally consist of Plan 

Processor labor costs associated with 

coding and software development, as 

well as any related cloud fees associated 

with the development, testing and load 

testing of the proposed changes,’’ were 

expected to be ‘‘minimal relative to 

overall cost savings’’ and explained that 

such costs ‘‘may vary based on various 

factors, including the details of any 

requirements in any final amendment 

approved by the Commission and any 

changes in labor costs.’’ 108 The 

Participants stated that ‘‘[o]ngoing 

operational costs, other than cloud 

hosting costs’’ would not be affected by 

the proposed amendments.109 They also 

stated that actual future savings could 

be more or less than their estimates due 

to changes in a number of variables on 

which their estimates were based, 

including ‘‘current CAT NMS Plan 

requirements; reporting by Participants, 

Industry Members, and market data 

providers; observed data rates and 

volumes; current storage and compute 

pricing discounts, compute reservations, 

and cost savings plans (i.e., including 

savings attributable to the daily OnDemand Capacity Reservations and 

Compute Savings Plan); and associated 

cloud fees.’’ 110 The Participants stated 

that they believed that ‘‘the cost savings 

estimates and assumptions [were] 

reasonable and provide[d] an adequate 

basis for the Commission to evaluate the 

costs and benefits’’ of their Proposal.111

Both commenters supported this 

aspect of the Proposal.112 SIFMA further 

urged the Commission to consider 

‘‘whether its recordkeeping 

requirements are appropriate’’ and to 

‘‘embark on a more comprehensive 

undertaking about what other data can 

be moved to more cost-effective storage 

solutions.’’ 113 FIF suggested that, ‘‘[i]f 

the Operational Data does not provide 

any value to CAT Reporters 114 or to 

regulators after T+5, there is no reason 

to store this data after T+5.’’ 115

Conversely, if the Commission and the 

Participants issued a public report that 

‘‘explains the regulatory value of 

maintaining this Operational Data,’’ FIF 

stated that it would ‘‘agree with the 

proposal . . . to move the Operational 

Data to a more cost-effective storage 

tier.’’ 116 FIF further requested that the 

Commission and the Participants 

‘‘publish an analysis as to whether this 

data could be stored in tiers within 

AWS S3, such as Glacier or Glacier 

Deep Archive, that could be more cost 

effective than the AWS S3 Intelligent 

Tier, as proposed in the Participant 


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117 Id. Contrary to FIF’s suggestion, the 

Commission understands that the Participants do, 

in fact, propose to store Raw Unprocessed Data, 

Interim Operational Data, and/or submission and 

feedback files older than 15 days in tiers like 

Glacier Deep Archive. See, e.g., note 107 and 

associated text supra. 

118FIF Letter I at 3–4. 

119 Id. 

120See, e.g., Notice, supra note 9, at 26986. 

121See CAT Q2 & Q3 2024 Quarterly Progress 

Report, available at https://catnmsplan.com/sites/ 

default/files/2024-07/CAT_Q2-and-Q3-2024- 

QPR.pdf. 

122 17 CFR 242.608(b)(2). The Commission 

recognizes that the amendments proposed by the 

Participants here are not the only measures that 

could potentially reduce the costs of storing CAT 

Data. As noted above, commenters made several 

additional suggestions, including that the 

Commission consider revisions to its recordkeeping 

requirements, that the Commission evaluate what 

other data might be moved to more cost-effective 

storage solutions, that the Commission eliminate 

storage of Raw Unprocessed Data, Interim 

Operational Data, and/or submission and feedback 

files after T+5, and that the Commission and the 

Participants issue a public report explaining the 

value of maintaining such data. See notes 113–119 

and associated text supra. But, in our view, it is 

appropriate to proceed with the Participants’ 

Proposal at this time. Approval of proposed Section 

6.3 of Appendix D achieves cost savings sought by 

SIFMA and FIF without foreclosing the 

Commission’s or the Participants’ ability to 

consider additional cost savings measures in the 

future. And the existence of these additional cost 

savings measures or potential analyses does not call 

into question the proposed amendments’ 

satisfaction of the approval standard set forth by 

Rule 608(b)(2) or otherwise warrant a departure 

from the policy choices proposed by the 

Participants. 

123Separately, the Participants stated that CAT 

LLC, through the Plan Processor, also retains 

‘‘[o]perational metrics associated with industry 

testing (including but not limited to testing results, 

firms who participated, and amount of data 

reported and linked)’’ for six years, in accordance 

with the CAT NMS Plan. See Notice, supra note 9, 

at 26988 n.30; see also CAT NMS Plan, supra note 

3, at Appendix D, Section 1.2. The Participants 

explained that the Proposal would not affect such 

operational metrics. See Notice, supra note 9, at 

26988 n.30. 

124See Notice, supra note 9, at 26988. 

125See 17 CFR 240.17a–1(a)–(b) and 17 CFR 

240.17a–6; 15 U.S.C. 78q. See also Notice, supra 

note 9, at 26988. The Participants explained that the 

CAT is a facility of each of the Participants to the 

CAT NMS Plan. See Notice, supra note 9, at 26988. 

126See id. at 26988–89. 

127See Notice, supra note 9, at 26988; see also 

Letter from Brandon Becker, CAT NMS Plan 

Operating Committee Chair, to Vanessa 

Countryman, Secretary, Commission, dated June 2, 

2023, https://catnmsplan.com/sites/default/files/ 

2023-06/06.02.23-Exemptive-Request-Test-DataRetention.pdf. As explained in the exemptive 

request, CAT LLC does not believe that Industry 

Test Data constitutes documents covered by Rule 

17a–1 under the Exchange Act and adheres to its 

view that the specific three-month period for 

Industry Test Data supersedes the more general, 

longer retention periods in the CAT NMS Plan, but 

submitted the exemptive request to obtain 

regulatory clarity in light of Staff comments that the 

longer retention periods set forth in Rule 17a–1 

under the Exchange Act and the CAT NMS Plan 

may apply to Industry Test Data. 

128See Industry Test Data Exemptive Relief 

Order, supra note 8. 

129See Notice, supra note 9, at 26988. 

130 Id. at 26989. 

131 Id. 

filing.’’ 117 In addition, FIF stated that 

‘‘enhanced transparency regarding the 

operation of the CAT system is 

necessary and appropriate’’ and 

expressed concern that ‘‘there could be 

other requirements that the Commission 

is imposing on the . . . Participants that 

either do not provide regulatory value or 

are beyond the scope of CAT.’’ 118 FIF 

requested that the Commission ‘‘provide 

clarification’’ as to why Industry 

Members and their customers should be 

‘‘required to incur costs for storage of 

data that has no regulatory value.’’ 119

The Commission does not agree that 

Raw Unprocessed Data, Interim 

Operational Data, and/or submission 

and feedback files have no regulatory 

value after final data is published at 8 

a.m. Eastern Time on T+5. Although the 

Participants have represented that Raw 

Unprocessed Data, Interim Operational 

Data, and/or submission and feedback 

files has not yet been accessed by 

regulatory users,120 the Participants 

have only very recently represented to 

the Commission that CAT 

implementation is complete.121 Current 

use is therefore not necessarily a reliable 

or dispositive reflection of the 

regulatory need for Raw Unprocessed 

Data, Interim Operational Data, and/or 

submission and feedback files. The 

Commission does agree, however, that 

the expected regulatory use cases 

involving this subset of data would 

likely not be time-sensitive, such that 

the Participants’ proposal to move Raw 

Unprocessed Data, Interim Operational 

Data, and/or submission and feedback 

files to a more cost-effective storage tier 

after 15 days reflects a reasonable 

approach.122 Accordingly, and pursuant 

to Rule 608(b)(2) under the Exchange 

Act, the Commission finds that it 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 mechanisms of, a national market 

system, or otherwise in furtherance of 

the purposes of the Exchange Act to 

approve the proposed amendments that 

relate to the storage of Raw Unprocessed 

Data, Interim Operational Data, and/or 

submission and feedback files. 

C. Codification and Expansion of 

Exemptive Relief Permitting Deletion of 

Industry Test Data Older Than Three 

Months 

According to the Participants, 

Industry Members and Participants 

submit data to the CAT pursuant to 

required and voluntary testing, feedback 

files related to such data, and output 

files that hold the detailed transactions, 

referred to herein as ‘‘Industry Test 

Data.’’ 123 Under Section 1.2 of 

Appendix D of the CAT NMS Plan, such 

Industry Test Data must be saved for 

three months.124 Separate from this 

specific three-month retention 

requirement, Rule 17a–1 under the 

Exchange Act requires every national 

securities exchange and national 

securities association to keep and 

preserve at least one copy of all 

documents, including all 

correspondence, memoranda, papers, 

books, notices, accounts, and other such 

records as shall be made or received by 

it in the course of its business as such 

and in the conduct of its self-regulatory 

activity, and to keep all such documents 

for a period of not less than five years, 

the first two years in an easily accessible 

place, subject to the destruction and 

disposition provisions of Rule 17a–6 

under the Exchange Act.125 Section 9.1 

of the CAT NMS Plan, the general 

recordkeeping provision for the CAT 

NMS Plan, also states, in relevant part, 

that the Company shall maintain 

complete and accurate books and 

records of the Company in accordance 

with Rule 17a–1 under the Exchange 

Act.126

The Participants explained that, on 

June 2, 2023, CAT LLC requested 

exemptive relief from Rule 17a–1 under 

the Exchange Act and certain provisions 

of the CAT NMS Plan relating to the 

retention of Industry Test Data beyond 

three months.127 On November 27, 

2023, the Commission granted the 

requested relief.128 The Participants 

stated that their previous request for 

exemptive relief and the Industry Test 

Data Exemptive Relief Order apply only 

to Industry Test Data related to the CAT 

order and transaction system, not to the 

customer account and information 

system (‘‘CAIS’’).129

The Participants therefore proposed to 

amend Section 1.2 of Appendix D of the 

CAT NMS Plan to provide that test data 

(whether related to the CAT order and 

transaction system or to the CAIS) may 

be deleted by the Plan Processor after 

three months.130 Proposed Section 1.2 

of Appendix D would continue to state 

that operational metrics associated with 

industry testing (including, but not 

limited to, testing results, firms who 

participated, and amount of data 

reported and linked) must be stored for 

the same duration as the CAT 

production data.131

The Participants explained that 

eliminating Industry Test Data older 

than three months as permitted by the 

Industry Test Data Exemptive Relief 


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132 Id. 

133 Id. 

134See Participant Letter, supra note 32, at 2; see 

also Amendment, supra note 13, at 81122–23. 

135See Amendment, supra note 13, at 81123. 

136 Id. 

137 Id. at 81122–23. 

138SIFMA Letter I at 4; FIF Letter I at 5. See also 

Nasdaq Letter (reiterating points made by the 

Participants in their filings and noting the support 

of SIFMA and FIF). 

139FIF Letter I at 5; FIF Letter II at 2. 

140See, e.g., Industry Test Data Exemptive Relief 

Order, supra note 8, at 84027. The Commission 

recognizes that there are additional measures 

beyond those proposed by the Participants here that 

could further reduce the costs associated with 

retaining Industry Test Data, such as FIF’s 

suggestions that Industry Test Data be deleted after 

one week and/or that the Commission and that the 

Participants conduct a related cost-benefit analysis. 

But, in our view, it is appropriate to proceed with 

the Participants’ Proposal at this time. Approval of 

proposed Section 1.2 of Appendix D advances FIF’s 

stated goal to ‘‘manage and reduce CAT operating 

costs,’’ FIF Letter I at 2, and does not foreclose the 

Commission’s or the Participants’ ability to 

consider additional cost savings measures in the 

future. And the existence of these additional cost 

savings measures or potential analyses does not call 

into question the proposed amendments’ 

satisfaction of the approval standard set forth by 

Rule 608(b)(2) or otherwise warrant a departure 

from the policy choices proposed by the 

Participants. 

141 17 CFR 242.608(b)(2). 

142 17 CFR 240.17a–1; see also 15 U.S.C. 78q 

(requiring, among other things, the Participants and 

their members to make and keep for prescribed 

periods such records, furnish such copies thereof, 

and make and disseminate such reports as the 

Commission, by rule, prescribes as necessary in the 

public interest, for the protection of investors, or 

otherwise in furtherance of the purposes of the 

Exchange Act). As the Participants explain, the 

Commission has already granted such exemptive 

relief for Industry Test Data related to the order and 

transaction system. See note 129 and associated text 

supra; see also Industry Test Data Exemptive Relief 

Order, supra note 8. 

143 15 U.S.C. 78mm(a)(1). 

144 17 CFR 242.608(e). 

145 17 CFR 240.17a–1. 

146See, e.g., FIF Letter I at 2; SIFMA Letter I at 

1. 

147SIFMA Letter II at 2. See also note 173 and 

associated text for a discussion of how investors 

benefit from CAT-enabled regulatory activities. 

148See Notice, supra note 9, at proposed 

Appendix D, Section 6.1. 

149See Amendment, supra note 13, at 81120, 

81122. 

150SIFMA Letter II at 2–3. SIFMA also noted that 

‘‘the level of detail the Commission required the 

Participants to provide to justify other aspects of the 

proposed Cost Savings Amendments in 

Amendment No. 1, such as requiring the 

Participants to provide actual data on the proposed 

savings related to the processing, query, and storage 

requirements for options market maker quotes, goes 

well beyond what the Commission required the 

Participants to provide in their last set of CAT fee 

filings.’’ SIFMA Letter II at 3. SIFMA stated that 

Continued 

Order is expected to achieve 

approximately $1 million per year in 

savings.132 According to the 

Participants, the proposed amendments 

would not generate additional cost 

savings beyond those achievable 

pursuant to the Industry Test Data 

Exemptive Relief Order,133 although the 

Participants generally noted that actual 

future savings could be more or less 

than their estimates due to changes in 

a number of variables on which their 

estimates were based, including 

‘‘current CAT NMS Plan requirements; 

reporting by Participants, Industry 

Members, and market data providers; 

observed data rates and volumes; 

current storage and compute pricing 

discounts, compute reservations, and 

cost savings plans (i.e., including 

savings attributable to the daily OnDemand Capacity Reservations and 

Compute Savings Plan); and associated 

cloud fees.’’ 134 The Participants stated 

that one-time implementation costs, 

which would ‘‘generally consist of Plan 

Processor labor costs associated with 

coding and software development, as 

well as any related cloud fees associated 

with the development, testing and load 

testing of the proposed changes,’’ were 

expected to be ‘‘minimal relative to 

overall cost savings’’ and explained that 

such costs ‘‘may vary based on various 

factors, including the details of any 

requirements in any final amendment 

approved by the Commission and any 

changes in labor costs.’’ 135 The 

Participants stated that ‘‘[o]ngoing 

operational costs, other than cloud 

hosting costs’’ would not be affected by 

the proposed amendments.136 The 

Participants stated that they believed 

that ‘‘the cost savings estimates and 

assumptions [were] reasonable and 

provide[d] an adequate basis for the 

Commission to evaluate the costs and 

benefits’’ of their Proposal.137

Two commenters, SIFMA and FIF, 

supported this aspect of the Proposal.138

FIF further stated that it supported 

‘‘deletion of all test data after one week’’ 

and requested that the Commission and 

the Participants ‘‘publish a cost-benefit 

analysis of any mandate to retain test 

data beyond one week,’’ which analysis 

should ‘‘identify any use cases that 

would involve access to test data 

beyond one week, including the 

regulatory purpose.’’ 139

The Commission understands from 

the Participants that the primary 

purpose of Industry Test Data is to 

facilitate CAT Reporter testing needs 

and not to facilitate regulatory use.140

The Commission therefore agrees with 

the Participants and the commenters 

that, in light of the approximately $1 

million per year cost for retaining 

Industry Test Data beyond three 

months, the proposed approach to 

retention of Industry Test Data is 

reasonable. Accordingly, and pursuant 

to Rule 608(b)(2) under the Exchange 

Act, the Commission finds that it 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 mechanisms of, a national market 

system, or otherwise in furtherance of 

the purposes of the Exchange Act to 

approve the provisions of the Proposal 

that relate to the retention of Industry 

Test Data.141

Although the Participants did not 

specifically also request exemptive 

relief from Rule 17a–1 under the 

Exchange Act with respect to Industry 

Test Data related to the CAIS,142 such 

relief is necessary in order to effectuate 

the Proposal, as Rule 17a–1 would 

otherwise require Industry Test Data 

related to the CAIS to be retained for a 

longer time period. For the abovedescribed reasons, and consistent with 

its action in the Industry Test Data 

Retention Exemptive Relief Order, the 

Commission finds that it is appropriate 

in the public interest and consistent 

with the protection of investors under 

Section 36 of the Exchange Act,143 as 

well as consistent with the public 

interest, the protection of investors, the 

maintenance of fair and orderly markets 

and the removal of impediments to, and 

the perfection of, a national market 

system under Rule 608(e) under the 

Exchange Act,144 to grant relief that 

exempts each Participant from the 

longer recordkeeping and data retention 

requirements for CAIS-related Industry 

Test Data that otherwise would apply as 

set forth in Rule 17a–1 under the 

Exchange Act.145

D. Other Comments Received on the 

Proposal 

Both commenters proposed that 

additional steps be taken to further 

manage and reduce CAT operating 

costs.146 For instance, SIFMA expressed 

concern that the Commission, ‘‘the 

primary beneficiary of the CAT, . . . 

does not pay for it, and thus does not 

have a direct incentive to consider costs, 

or opportunities for cost savings, in 

connection with making decisions 

regarding its operation.’’ 147 SIFMA 

stated that the Commission’s ‘‘rejection’’ 

of provisions that would have permitted 

the Plan Processor to provide an interim 

CAT-Order-ID to regulatory users on an 

‘‘as requested’’ basis, rather than on a 

daily basis—provisions that were 

initially included in the Proposal,148 but 

withdrawn by the Participants 149— 

suggested that ‘‘costs and cost savings 

are not necessarily a Commission 

priority in connection with decisionmaking regarding the operation of the 

CAT.’’ 150


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‘‘[t]hese inconsistent actions by the Commission,’’ 

including its ‘‘failure . . . to offer data to support 

the regulatory value of the interim CAT-Order-ID,’’ 

suggested ‘‘that while the Commission is concerned 

about preserving what it perceives as the regulatory 

utility of the CAT, it does not necessarily give equal 

weight or consideration to the ever-increasing costs 

associated with operating it.’’ Id. at 3. The 

Commission does not agree that it has acted in a 

manner inconsistent with its obligations. In each of 

the proceedings discussed by the commenter, the 

Commission has sought from the Participants the 

information necessary to make the required findings 

in accordance with the rules and regulations that 

govern the Commission action at issue. 

151SIFMA Letter I at 2; SIFMA Letter II at 4. 

152SIFMA Letter I at 2; SIFMA Letter II at 4. 

153SIFMA Letter I at 1; SIFMA Letter II at 3–4. 

154SIFMA Letter I at 1; SIFMA Letter II at 3–4. 

155SIFMA Letter I at 1; SIFMA Letter II at 4. 

156Some of these concerns were also set forth in 

a previous comment letter to the Commission that 

was jointly submitted by SIFMA and FIF. See FIF 

Letter I, at 5 n.19; see also Letter from Joseph 

Corcoran, Managing Director, Associate General 

Counsel, and Ellen Greene, Managing Director, 

Equities & Options Market Structure, SIFMA, and 

Howard Meyerson, Managing Director, FIF, to 

Secretary, Commission, dated July 31, 2023, 

available at https://www.sec.gov/comments/4-698/ 

4698-238359-498762.pdf. 

157See Letter from Howard Meyerson, Managing 

Director, FIF, to Secretary, Commission, dated Dec. 

2, 2024, at 2, available at https://www.sec.gov/ 

comments/4-698/4698-544735-1559702.pdf (‘‘FIF 

Letter III’’). 

158 Id. In addition to the measures described 

above, FIF urged the Commission to ‘‘reevaluate the 

currently-mandated CAT processing timeframes, 

which FIF members consider to be a major 

contributor to the high CAT operating costs.’’ Id.; 

see also FIF Letter I at 5. 

159FIF Letter III at 2. 

160FIF Letter I at 5. 

161See also Nasdaq Letter at 2–3 (‘‘Similar to 

SIFMA and FIF, Nasdaq believes that reducing CAT 

costs requires more work and exploration of other 

methods. The Cost Savings Amendment is the 

beginning of what Nasdaq expects will be a range 

of strategies to lessen the increasing costs. . . . . 

Participants are proposing these changes as a first 

step in their efforts to reduce CAT costs while 

exploring further cost-saving measures.’’). 

162See Securities Exchange Act Release No. 

98290 (Sept. 6, 2023), 88 FR 62628, 62655 (Sept. 12, 

2023) (‘‘CAT Funding Model Approval Order’’). 

163See CAT NMS Plan, supra note 3, at Section 

4.13. 

164See, e.g., CAT Funding Model Approval 

Order, supra note 162, at 62652–57. 165See 17 CFR 242.608; see also 17 CFR 

242.613(a)(5) (‘‘No national market system plan 

filed pursuant to this section, or any amendment 

thereto, shall become effective unless approved by 

the Commission or otherwise permitted in 

accordance with the procedures set forth in 

§ 242.608. In determining whether to approve the 

national market system plan, or any amendment 

thereto, and whether the national market system 

plan is in the public interest under § 242.608(b)(2), 

the Commission shall consider the impact of the 

national market system plan or amendment, as 

applicable, on efficiency, competition, and capital 

formation.’’). 

166See also notes 78, 122, and 140 supra. 167 17 CFR 242.613(a)(5). 

SIFMA therefore suggested that the 

Commission and the Participants should 

‘‘assess their own CAT usage patterns 

and needs to identify further cost saving 

measures.’’ 151 SIFMA further stated that 

the CAT ‘‘should be operated to meet 

the reasonable and legitimate needs of 

regulators, and not as a monolith to 

address any regulatory use case 

regardless of the costs.’’ 152

SIFMA stated that the ‘‘Commission’s 

action in connection with Amendment 

No. 1 to the proposed Cost Savings 

Amendment’’ demonstrated the need for 

the Participants and the Commission to 

‘‘provide Industry Members with a more 

meaningful opportunity to contribute 

their experience and expertise to the 

CAT’s budget setting and cost savings 

processes.’’ 153 Specifically, SIFMA 

recommended that the Participants 

establish a separate working group that 

includes Industry Members to focus on 

ways the CAT System can be made more 

efficient from a cost perspective while 

still achieving its goals, rather than 

relying on the existing Cost 

Management Working Group, which is 

comprised solely of Participant 

members.154 ‘‘Without more direct 

involvement by Industry Members in 

the CAT budgeting process,’’ SIFMA 

stated that ‘‘there is an insufficient 

structural framework and incentives to 

bring CAT costs under control.’’ 155

FIF expressed similar concerns.156

Noting that the Participants have 

recently estimated ‘‘total CAT operating 

expenses of $248,846,076 for 2025,’’ FIF 

stated that this ‘‘14.8% increase over the 

estimated CAT operating expenses for 

2024’’ was ‘‘not sustainable over the 

long-term.’’ 157 FIF stated that it was 

‘‘imperative that the Commission take 

steps to manage CAT operating costs,’’ 

including approval of the Proposal and 

other recommendations made by FIF in 

their comment letters that were not 

included in the Proposal.158 FIF further 

requested that the Commission ‘‘publish 

a report setting forth the factors giving 

rise to the significant estimated cost 

increase for 2025 and whether these 

factors will continue to apply year-overyear for the foreseeable future.’’ 159 FIF 

stated that the Commission ‘‘should not 

impose CAT reporting requirements that 

are beyond the scope of Commission 

Rule 613 and the CAT NMS Plan’’ and 

that ‘‘[p]roposed changes to current CAT 

processing or reporting requirements 

that could involve further significant 

increases in CAT operating costs should 

be subject to an appropriate cost-benefit 

analysis that is included as part of a 

CAT NMS Plan amendment.’’ 160

Contrary to the assertions of SIFMA, 

both the Commission and the 

Participants have demonstrated their 

commitment to reducing CAT costs 

where appropriate—and even where 

there is some amount of regulatory 

loss—as evidenced by the very existence 

of the cost savings measures proposed 

by the Participants and approved herein 

by the Commission.161 The Participants 

have already formed a Cost Management 

Working Group comprised of senior 

members of the Participants that works 

to find and address cost management 

needs,162 and the findings of this group 

are discussed with the Industry 

Members that sit on the CAT’s Advisory 

Committee.163 There are also 

meaningful and reasonable constraints 

set on the CAT budgeting process, 

including a process that gives Industry 

Members a chance to review and 

publicly comment on the CAT’s budget 

and that requires Commission review of 

CAT funding.164 And the Commission 

agrees with FIF that any amendments to 

the requirements of Rule 613 and/or the 

CAT NMS Plan must be pursued either: 

(1) through a Commission-led rulemaking process that includes public 

notice and comment and economic 

analysis; or (2) through the amendment 

process set forth under Rule 608, which 

would require the Participants to file 

with the Commission a proposed 

amendment to the CAT NMS Plan, 

subject that amendment to public notice 

and comment, and generally require 

approval by the Commission and a 

consideration of the impact of the 

amendment on efficiency, competition, 

and capital formation.165

In determining whether any particular 

cost savings amendment meets the 

approval standard set forth in Rule 

608(b)(2), the Commission evaluates and 

balances many factors, including the 

amount of costs savings as well as the 

potential downstream harms to 

investors and the U.S. financial markets 

that could result from less effective 

regulatory oversight by the SROs and 

the Commission. The Commission 

emphasizes that its approval of the 

specific cost savings amendments that 

the Participants have proposed for 

consideration in this proceeding does 

not foreclose future consideration of 

additional cost savings amendments and 

analyses, including the withdrawn 

interim CAT-Order-ID proposal and the 

other measures suggested by 

commenters.166

III. Efficiency, Competition, and Capital 

Formation 

A. Introduction 

In determining whether to approve an 

amendment to the CAT NMS Plan and 

whether that amendment is in the 

public interest, Rule 613 requires the 

Commission to consider the impact of 

that amendment on efficiency, 

competition, and capital formation.167


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167 17 CFR 242.613(a)(5). 168See Notice, supra note 9, at 26989. 169See infra note 188. 170See supra note 6 for a description of ‘‘CAT 

171 In market reconstructions, regulators aim to 

provide an accurate and factual accounting of what 

transpired during a market event. These market 

events often encompass activities in many 

securities across multiple trading venues. See CAT 

NMS Plan Approval Order, supra note 3, at 84805. 

172See CAT NMS Plan Approval Order, supra 

note 3, at 84833–84840. 

173A discussion of the expected benefits and 

regulatory usage of the CAT NMS Plan is available 

in the CAT NMS Plan Approval Order. See CAT 

NMS Plan Approval Order, supra note 3, at 84816– 

84840. 

174 Id. at Section 6.10(c)(i)(B) (requiring the userdefined direct queries tool to provide authorized 

users with the ability to retrieve CAT Data via a 

query tool or language that allows users to query all 

available attributes and data sources). See also 

supra note 45 and associated text. 

175The Participants state that these quotes 

comprise approximately 98% of all options 

exchange events and approximately 75% of all 

transaction volume stored in the CAT. They, 

however, do not specify the time period over which 

these estimates were obtained. See Notice, supra 

note 9, at 26984. 

176See Notice, supra note 9, at 26984; see also 

Participant Letter, supra note 32, at 2. 

177See Notice, supra note 9, at 26984. 

The Participants stated that their 

proposed amendments ‘‘will have a 

positive impact on competition, 

efficiency, and capital formation.’’ 168

The Commission has analyzed the 

potential impacts of the Proposal. 

Based on its analysis, and after 

considering potential sources of 

imprecision in the Participants’ 

estimates, the Commission concludes 

that savings in operating costs will 

enhance the operational efficiency of 

CAT,169 while the changes to CAT Data 

will lessen some regulatory efficiencies. 

These changes to regulatory efficiencies, 

however, are likely to be limited for 

regulatory activities using small samples 

of data but potentially more significant 

for certain time-sensitive regulatory 

activities using large amounts of data. 

Effects on market efficiency, 

competition, and capital formation, 

stemming from the impacts of the 

Proposal on regulatory and operational 

efficiencies, will likely be second-order 

and limited. 

B. Baseline 

In analyzing the impact of the 

Proposal on efficiency, competition and 

capital formation, the Commission 

considered the current CAT Data 170 as 

the baseline. Specifically, the baseline 

consists of the current properties, and 

the actual and potential regulatory 

usages of the CAT Data, in the absence 

of the Proposal. CAT Data was intended 

to make possible reconstruction of 

market events,171 market analysis and 

research that inform policy decisions, 

regulatory activities such as market 

surveillance, examinations and 

investigations, and more efficient 

execution of numerous other regulatory 

functions.172 In the CAT NMS Plan 

Approval Order, the Commission 

explained how investors benefit from 

the CAT-enabled improvements to such 

regulatory activities.173

The first provision of the Proposal 

focuses on Options Market Maker 

quotes in Listed Options. Along with 

their lifecycle linkages and associated 

derived fields, Options Market Maker 

quotes in Listed Options are currently 

accessible via an online targeted query 

tool, called DIVER. Alternatively, 

regulatory users with specialized 

knowledge of remote data processing 

and the structured query programming 

language (‘‘SQL’’) can use BDSQL to 

construct and run their own complex 

queries.174

The Participants stated that, while the 

Options Market Maker quotes in Listed 

Options constitute the largest 

component of CAT Data,175 only a small 

fraction of them end in an execution or 

allocation.176 In addition, the Proposal 

stated that ‘‘the vast majority of Options 

Market Maker Quote lifecycles consist 

of just two events—the quote and its 

subsequent cancellation,’’ 177 which 

suggests that these quotes have simple 

lifecycles. 

Figure 1 shows the backdrop of the 

evolution of Options Market Maker 

quotes in Listed Options, which is that 

the options market has experienced 

noticeable overall growth. As Figure 1 

shows, the volumes in both the equity 

and the options markets (equity shares 

traded and options contracts traded, 

respectively) have markedly increased 

since early 2020. While volume growth 

has somewhat stagnated in the equity 

market since 2021, volume has 

continued to grow in the options 

market. Between 2016 and 2022, the 

volume of equity shares traded 

increased by 61 percent and options 

contracts traded increased by 153 

percent. 

BILLING CODE 8011–01–P 


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178These estimates are similar to those presented 

in the Notice. See supra note 175. 

179Lifecycles that include both OQ and OQC 

events can have more than two events. For example, 

lifecycles with both OQ and OQC events can also 

have quote modifications and partial executions. 

See also supra note 30 and associated text. 

BILLING CODE 8011–01–C 

Table 1 presents an analysis of CAT 

Data from the first quarter of 2024. It 

shows that, approximately 90 percent of 

all options-related events and 80 

percent of all events in CAT are Options 

Market Maker quotes in Listed 

Options,178 which include both OQ and 

OQC events.179 OQ events account for 

approximately 72 percent of all optionsrelated events and 63 percent of all 

events in CAT. 

TABLE 1—THE SHARES OF OPTIONS QUOTE EVENTS AND OPTIONS MARKET MAKER QUOTES IN LISTED OPTIONS IN CAT 

[January 2024–March 2024] 

Jan-24 Feb-24 Mar-24 

Panel A (numbers in billions) 

All events in CAT (1) [= (2) + (9)] ............................................................................................... 8,164 7,811 7,892 

All options-related events in CAT (2) [= (3) + (8)] ............................................................... 7,166 6,905 7,039 

All options exchange events (3) [= (4) + (7)] ................................................................ 6,817 6,530 6,655 

OMM a quotes in Listed Options (4) [= (5) + (6)] ................................................... 6,528 6,225 6,340 

Options quote (OQ) events (5) ....................................................................... 5,287 4,884 4,896 

Options quote cancel (OQC) events (6) ......................................................... 1,241 1,341 1,444 

Other options exchange events (7) ....................................................................... 289 305 315 

Industry member options-related events (8) ................................................................. 349 376 384 

All equities events in CAT (9) .............................................................................................. 998 906 853 

Panel B (%) 

Options quote events as percent of all options exchange events [=100*(5)/(3)] ........................ 78 75 74 

Options quote events as percent of all options-related events in CAT [=100*(5)/(2)] ................ 74 71 70 

Options quote events as percent of all events in CAT [=100*(5)/(1)] ......................................... 65 63 62 

Options Market Maker quotes in Listed Options as percent of all options exchange events 

[=100*(4)/(3)] ............................................................................................................................ 96 95 95 

Options Market Maker quotes in Listed Options as percent of all options-related events in 

CAT [=100*(4)/(2)] .................................................................................................................... 91 90 90 

Options Market Maker quotes in Listed Options as percent of all events in CAT [=100*(4)/(1)] 80 80 80 

Source: CAT Data. 


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180 In this analysis, both OQ events and option 

trade (OT) events are defined as one-sided events. 

Thus, each side of a trade is counted as a separate 

trade. 

181This supports the Participants’ statements, see 

supra note 176. 

182Focusing on one day, March 7, 2024, this 

analysis studied the Listed Options on one widely 

traded ETF. The number of CAT events per CAT 

lifecycle reflects the number of CAT events that 

occurred on March 7, 2024, for CAT lifecycles that 

had an options quote event also on March 7, 2024. 

On March 7, 2024, options with the underlying ETF 

used in this analysis had one of the highest volumes 

of options exchange CAT events across all 

underlying symbols. See supra note 177 and 

associated text for the Participant’s characterization 

of the lifecycles of the Options Market Maker quotes 

in Listed Options. 

183See supra notes 86–87 and associated text. 

184See supra note 94 and associated text. 

185See CAT NMS Plan Approval Order, supra 

note 3, at 84831 for a discussion of the 

improvements to timeliness of access to such data. 

In addition, based on Commission staff’s knowledge 

of CAT, these are the only data within CAT that 

identify error records and corrections. 

186See supra section II.C, supra note 123 and 

associated text. 

187 In November 2023, the CAT LLC was granted 

exemptive relief from the requirement to retain 

Industry Test Data for six years and was permitted 

to eliminate such data after three months. The 

Participants stated that this exemptive relief 

applied only to Industry Test Data related to the 

CAT order and transaction system, not to CAIS. See 

supra section II.C, supra notes 127–128 and 

associated text. 

188Economically, operational efficiency refers to 

the effective use of resources to generate a given 

output. In the case of CAT, the output refers to the 

CAT Data, which are generated for regulatory 

purposes. Even though the outputs, CAT Data, 

under the proposal are not the same as that in the 

absence of the proposal, the analysis of operational 

efficiency is simplified by focusing on the use of 

resources as measured by the cost savings, net of 

implementation costs; the efficiency effects of 

changes in CAT Data are discussed separately (as 

impacts on regulatory efficiency). 

189The Participants characterized the impact of 

the Proposal as a whole, on regulatory functions, 

regulatory users or CAT Data, as ‘‘limited’’ or 

‘‘minimal.’’ See Notice, supra note 9, at 26983– 

26986; see also Amendment, supra note 13, at 

81121; Participant Letter, supra note 32, at 1. 

190For 2023 total operating costs, see 

Consolidated Audit Trail, LLC, 2023 Financial and 

Operating Budget (Revised as of Nov. 7, 2023) 

available at https://www.catnmsplan.com/sites/ 

default/files/2023-11/11.07.23-CAT-2023-Financialand-Operating-Budget.pdf; see also Consolidated 

Audit Trail, LLC, 2023 Financial and Operating 

Budget, https://www.catnmsplan.com/sites/default/ 

Continued 

Notes: (1) Other options exchange events include options order accepted, options order modified and options order canceled events, internal 

options route and options cancel route events, options trade events, and various other options exchange events. Industry member options-related events include industry member options events and industry member multi-leg events. (2) All equities events in CAT include all equities exchange events and industry member equities events. (3) All events in CAT include all options exchange events, all equities exchange events, 

and all industry member events. aOMM refers to Options Market Maker. 

Further analysis of options trades 

associated with Options Market Maker 

quotes in Listed Options, in the options 

market data from Q1–2024,180 showed 

that the number of option trades 

associated with Options Market Maker 

quotes in Listed Options as percent of 

CAT OQ events is small, 0.001 percent 

or less.181 The analysis, however, also 

shows that a substantial portion of all 

options trades, approximately 20 

percent, is associated with Options 

Market Maker quotes. 

An analysis of lifecycles of Options 

Market Maker quotes in selected Listed 

Options shows that at least for some 

options on some days these lifecycles 

can be more complex than suggested by 

the Participants.182 For these selected 

Options, 63 percent of the Options 

Market Maker quotes had a lifecycle 

with two events, while almost 10 

percent had lifecycles that included five 

or more events. 

The second provision of the Proposal 

involves Raw Unprocessed Data, Interim 

Operational Data and/or submission and 

feedback files data. These data are 

currently available without ‘‘manual 

intervention’’ for at least six years 

within certain query tools.183 These data 

are currently stored within the Central 

Repository via AWS S3–FA storage tier 

for the first 30 days, in the S3-Infrequent 

Access tier for the next 60 days, and in 

the S3-Archive Instant Access tier 

thereafter.184 Access to such data prior 

to the availability of final data can 

improve the timeliness of regulatory 

activities for those regulators who do 

not already have such data.185

The third provision of the Proposal 

relates to the retention of Industry Test 

Data.186 Industry Members and 

Participants submit data to CAT 

pursuant to both required and voluntary 

testing; CAT retains the Industry Test 

Data in connection with such testing. 

Industry Test Data associated with CAIS 

is required to be retained for six years 

whereas CAT LLC was previously 

permitted to eliminate Industry Test 

Data related to the CAT order and 

transaction system after three 

months.187 The Participants proposed 

that test data (whether related to the 

CAT order and transaction system or to 

the CAIS) may be deleted by the Plan 

Processor after three months. 

C. Efficiency

The Commission analyzed three types

of efficiency impacts from the Proposal: 

operational efficiency in terms of cost 

savings of operating the Central 

Repository; 188 regulatory efficiency in 

terms of the impact of changes in CAT 

Data on regulatory activities; and market 

efficiency in the form of second order 

impacts on the market. 

As discussed further below, cost 

savings in operating the Central 

Repository represent an enhancement of 

the operational efficiency of CAT. The 

changes to CAT Data from the Proposal 

will lessen some regulatory efficiencies 

by delaying certain regulatory activities. 

While these inefficiencies could be 

relatively more significant for certain 

time-sensitive regulatory activities 

involving large amounts of data, in 

general, these inefficiencies are likely to 

be limited.189 Effects on market 

efficiency, competition, and capital 

formation, which stem from the 

aforementioned impacts of the Proposal 

on regulatory and operational 

efficiencies, will likely be second-order 

and, hence, also limited. 

1. Operational Efficiency

The Proposal will result in

operational cost savings, net of 

implementation costs, of operating the 

Central Repository, which will reduce 

the CAT Fees borne by Participants, 

Industry Members, and investors 

(through pass-throughs). The 

Participants’ estimates of cost savings 

could be imprecise, however. The actual 

cost savings could differ from the 

projected cost savings for several 

reasons including: (1) assumptions used 

to generate estimates, (2) uncertainty in 

the future direction of a number of 

factors, (3) implementation costs, which 

are not included in the estimates, (4) 

some of the cost savings representing 

costs transferred to regulators, and (5) 

potential interactions of the Proposal 

with a recent regulatory change. These 

issues could mean that the Participants’ 

estimates are somewhat over-estimated 

or, alternatively, potentially 

considerably underestimated, 

depending upon the assumptions and 

methodologies used. 

a. Estimated Cost Savings,

Methodologies and Assumptions

The Proposal will result in 

meaningful cost savings even when 

considering some of the alternate 

methodologies and assumptions 

discussed below. The Participants 

estimate that the cost savings will be 

$21 million in the first year, which is 11 

percent of the total operating costs of 

CAT in 2023.190 The Participants state 


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191See Participant Letter, supra note 32, at 3. 

192See supra sections II.A, II.B, and II.C for 

additional discussions of these estimates. 

193See Notice, supra note 9, at 26983, note 8. See 

also, Participant Letter, supra note 32, at 2; 

Amendment, supra note 13, at 81122. 

194 In addition, the cost savings estimates for the 

provision on Raw Unprocessed, Interim Operational 

Data and/or submission and feedback files do not 

include any Options Market Maker quotes on Listed 

Options data. This helps to ensure that this 

provision does not also count cost savings that 

would be attributed to the provision that would set 

forth the new processing, query, and storage 

requirements for Options Market Maker quotes in 

Listed Options (i.e., Participants do not double 

count cost savings). 

195None of the Notice, Participant Letter, or 

Amendment states directly whether the costs are 

estimated for one year or six years of data. While 

the Participants state that they assume current CAT 

requirements, they also state that the estimates for 

the Options Market Maker quotes in Listed Options 

provision are ‘‘in the first year.’’ See Notice, supra 

note 9, at 26983–26985; see also Participant Letter, 

supra note 32, at 1–2 and 8. 

196These estimates assume that the Participants’ 

cost savings estimates are for one year of data, such 

that cost savings eventually reflect five additional 

years of data. The $48 million estimate is six times 

the $8 million estimate for the first year. This 

assumes constant message traffic and the 

Participants’ 1:1:8 cost ratio across the S3 storage 

tiers. See supra note 56 and associated text; see also 

Notice, supra note 9, at 26983, note 8. 

197The $6 million estimate is six times the $1 

million annual estimate. This assumes constant 

message traffic and the Participants’ 1:1:8 cost ratio 

across the S3 storage tiers. See supra note 132 and 

associated text; see also Notice, supra note 9, at 

26983, note 8. 

198While the CAIS test data provision will also 

affect historical data, those data are much smaller 

and have a much shorter history. 

199See e.g., Notice, supra note 9, at 26986. 

200 If we assume the same annual storage footprint 

and add four additional years of data, we get an 

additional cost savings of $4 million. However, the 

CAT NMS Plan was not fully implemented for the 

entire four years, and therefore the storage footprint 

of later years is larger than earlier years. A smaller 

storage footprint for this cost savings would result 

in a smaller cost savings estimate. 

201The $12 million estimate allocates $27,000/ 

day to linkages involving Options Market Maker 

quotes in Listed Options. When comparing this 

figure to others from the Participants, it seems to 

be in line with the relative volume of Options 

Market Maker quotes in Listed Options in CAT 

Data, indicating that this figure comes from an 

implied assumption of similar per message linkage 

costs. See Amendment, supra note 13, at 81123; see 

also Notice, supra note 9, at 26983–26984 and 

26988. 

202The Commission understood that complexity 

of the order lifecycles is a cost driver within the 

linkage processing. See CAT Funding Model 

Approval Order, supra note 162, at 62677. 

203See CAT Funding Model Approval Order, 

supra note 162, at 62678. The ‘‘Linker’’ costs 

involve looking across four days of data to link 

order messages across a lifecycle. See id, at 62677. 

Certain order handling practices of Industry 

Members, such as the use of riskless principal 

transactions, involve relatively more complex 

linkages. See id. 

204This is consistent with the analysis presented 

above regarding complexities of lifecycles in the 

Options Market Maker quotes in Listed Options. 

See supra section III.B; see also supra note 177 and 

the associated text. 

205As the Participants stated, ‘‘there is not a 

linear relationship between volume and costs; 

rather, a combination of volume and processing 

complexity drive costs.’’ See Notice, supra note 9, 

at 26984, note 14. 

206See Notice, supra note 9, at 26989. 

207See Notice, supra note 9, at 26983, note 8; see 

also Participant Letter, supra note 32, at 2–3. 

208See Notice, supra note 9, at 26983, note 8; see 

also Participant Letter, supra note 32, at 2. 

that they believe their assumptions and 

estimates are reasonable.191 The 

Commission acknowledges the necessity 

of using simplifying assumptions to 

generate estimates and that such 

assumptions can affect the precision of 

the estimates. The Commission has 

considered the methodologies and 

assumptions and concludes that there 

are at least three issues that could affect 

the magnitude of the cost estimates— 

two relating to the volume of CAT Data 

affected and one relating to a processing 

cost assumption. However, the cost 

savings will be meaningful regardless of 

these issues. 

The Participants’ cost estimates 192 are 

generated using current costs. 

Specifically, the Participants state that, 

among other things, cost savings 

estimates are based on ‘‘observed data 

rates and volumes; current discounts, 

reservations and cost savings plans; and 

associated cloud fees.’’ 193 The 

Commission agrees that using current 

costs to generate cost savings estimates 

is reasonable and recognizes that the 

cost savings in the future could change 

depending on factors discussed in the 

next section.194

The Participants’ storage cost saving 

estimates are annual cost savings for the 

first year. However, the CAT NMS Plan 

requires the storage of six years of data, 

so the maximum annual cost savings 

would not be achieved in the first 

year.195 Indeed, the Proposal will result 

in additional potential annual cost 

savings each year until the Proposal 

affects the annual storage of six years of 

data. Based on the current assumptions, 

the cost savings could eventually reach 

$48 million per year for the provision 

on Options Market Maker quotes in 

Listed Options.196 Likewise, the storage 

cost savings from the provision on Raw 

Unprocessed, Interim Operational Data 

and/or submission and feedback files 

could reach $6 million per year to 

account for a baseline of storing six 

years of data in an S3 storage tier.197

These additional annual cost savings 

would not be expected in full until six 

years after the implementation of the 

Proposal. 

The Participants’ estimates may also 

not account for the one-time cost 

savings for affected historical data. The 

primary historical CAT Data affected by 

the Proposal are the Raw Unprocessed, 

Interim Operational Data and/or 

submission and feedback files.198 All 

Raw Unprocessed, Interim Operational 

Data and/or submission and feedback 

files older than 15 days will be moved 

to a cheaper storage tier, including 

historical data. However, the 

Participants describe the cost savings 

estimates as ‘‘annual,’’ 199 suggesting 

that they do not account for historical 

data. We estimate that including 

historical data could add up to $4 

million in one-time cost savings.200

The Participants, however, likely 

over-estimated the $12 million estimate 

in annual processing cost savings from 

the provision on Options Market Maker 

quotes in Listed Options. To generate 

this estimate, the Participants 

apparently assumed that the per 

message linkage costs of options events 

were the same as those for equities 

events,201 but this is unlikely.202 As the 

CAT Funding Model Approval Order 

discusses, the linkage processing of 

equities orders is generally more 

complex than the linkage processing of 

options orders.203 Further, Options 

Market Maker quotes in Listed Options 

have mostly simple lifecycles.204

However, the volume of the Options 

Market Maker quotes in Listed Options 

data suggests that they will still account 

for a large proportion of overall linkage 

processing costs.205 Therefore, while the 

cost savings could be less than $12 

million, they will likely still be large. 

The Participants did not estimate any 

cost savings from the provision on CAIS 

test data but reiterated the $1 million 

cost savings from the prior related 

exemptive relief.206 We expect these test 

data to have a small storage footprint. 

While the cost savings will be positive, 

they are unlikely to increase the 

approximate magnitude of the cost 

savings from the prior exemptive relief. 

b. Future Magnitude of Cost Savings

The Participants recognize that the

actual future cost savings could differ 

from the estimates because of 

uncertainty in several factors.207 These 

factors include the number of 

exchanges, Plan requirements, data rates 

and volumes, discounts, reservations 

and cost savings plans, and cloud 

fees.208 The Participants also state that 

future cost savings could be greater than 


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209See Participant Letter, supra note 32, at 2. 210The Participants state that all costs and 

savings projections are estimates only and reflect 

the current state and costs of CAT operations. See 

the Proposal, supra note 4, at 2; see also Participant 

Letter, supra note 32, at 2–3. 211See, for example, the Federal Reserve Bank of 

St. Louis publication of monthly aggregate cost data 

on host computers and servers, at https://

fred.stlouisfed.org/series/WPU11510116 (last 

visited Dec 5, 2024); the cost estimate for Machinery 

and Equipment: Host Computers, Multiusers 

(Mainframes, Unix and PC Servers) in August 2024 

is 26 percent of that in December 2004. In contrast, 

the same publication estimated that the cost for all 

commodities for August 2024 is 170 percent of that 

in December 2004. From December 2004 until 

March 2021, the price of host computers and 

servers was on a downward trend. Then, from 

March 2021 to July 2022, these prices rose. Prices 

have since stayed close to or below June 22 level. 

Note that different indices use different 

methodologies and industry/product classifications 

and these estimates can be different from estimates 

by other agencies. 

212On November 1, 2008, for example, AWS 

Storage (standard) was priced at $0.12 per GB per 

month. In August of 2024, S3 (standard) was priced 

as ‘‘Over 500 TB/Month $0.021 per GB’’ (a decline 

of 83 percent). New service tiers were also 

introduced, for example, in August of 2024, S3 

Infrequent Access (long lived but infrequently 

accessed data that needs millisecond access) was 

priced as ‘‘All Storage/Month $0.0125 per GB’’ (90 

percent decline compared to the 2008 product), S3 

Archive Instant Access as ‘‘All Storage/Month 

$0.004 per GB,’’ and S3 Glacier Deep Archive (longterm archiving, accessed once or twice in a year and 

can be restored within 12 hours) was priced as ‘‘All 

Storage/Month $0.00099 per GB’’ (99 percent 

decline compared to the 2008 product). See AWS, 

New Tiered Pricing for Amazon S3 Storage, (Oct. 

9, 2009) available at https://aws.amazon.com/ 

about-aws/whats-new/2008/10/09/new-tieredpricing-for-amazon-s3-storage/; see also AWS, 

Amazon S3 Pricing, available at https://

aws.amazon.com/s3/pricing/ (last visited Dec. 5, 

2024). 

213 $20 million of these savings are based on a 65 

percent reduction in computer runtime for Options 

Exchange events, and an 80 percent reduction in 

storage footprint. See Participant Letter, supra note 

32, at 3. 

214This is also acknowledged by the Participants, 

who state that, ‘‘If data volumes continue to 

increase as they have historically, the associated 

costs avoided would similarly increase.’’ See 

Amendment, supra note 13, at 81123. 

215This exchange is MIAX Sapphire, LLC. See 

supra note 4. 

216This exchange is 24X National Exchange LLC. 

See Securities Exchange Act Release No. 34–101777 

(Nov. 27, 2024), 89 FR 97092 (Dec. 6, 2024). 

217See Notice, supra note 9, at 26986, where the 

Participants state, ‘‘Upon request by the SEC or one 

of the Participants to the CAT Help Desk, archived 

data would be restored by the Plan Processor to an 

accessible storage tier, at which point it would be 

available and searchable electronically by 

regulatory users in the same manner it is today.’’ 

218See Notice, supra note 9, at 26986. 

219See Notice, supra note 9, at 26986. 

220See infra note 253 253and associated text. 

221See Amendment, supra note 13, at 81123. 

222 Id. 

223See Amendment, supra note 13, at 81123. 

224See Notice, supra note 9, at 26986. 

the estimates as data volumes grow over 

time.209 The Participants produce cost 

savings estimates that apply only to the 

first year of implementation.210

However, the cost savings estimated for 

the first year may not continue at the 

same level for at least two reasons: (1) 

changes in the costs of cloud 

computing, and (2) changes in the 

frequency of regulatory requests to have 

data restored. 

Cost savings (and CAT operational 

costs) could decline as cloud computing 

evolves. The storage and computing 

services industries, technologically, are 

among the most rapidly evolving 

industries. In some estimates, the costs 

of host computer and storage services 

have steadily declined.211 Similar 

trends can be observed in the pricing of 

some of the cloud storage products.212

The Participants’ estimated cost savings 

of $21 million are based on the current 

cloud computing and storage costs.213

Therefore, declines in cloud computing 

costs could result in smaller than 

expected future cost savings. 

On the other hand, if message traffic 

keeps increasing, then, despite the rapid 

technological advancements, the future 

cost savings could be higher than those 

estimated for the first year.214 Indeed, 

one new options exchange has started 

operations since the publication of the 

Notice, likely resulting in a higher 

volume of Options Market Maker quotes 

in Listed Options.215 In addition, one 

new equities exchange has been 

approved since the costs were 

estimated, potentially increasing the 

storage footprint of Raw Unprocessed 

Data, Interim Operational Data, and/or 

submission and feedback files.216

Cost savings from the provision on 

Raw Unprocessed, Interim Operational 

Data and/or submission and feedback 

files will be reduced by any data 

requests by regulators to restore such 

data.217 Participants state that retrieving 

data from Glacier Deep Archive storage 

is costly and the costs are a function of 

the size of the data being pulled in 

addition to the speed with which the 

request must be fulfilled.218 This $1 

million savings is also based, in part, on 

an expectation of usage of Raw 

Unprocessed, Interim Operational Data 

and/or submission and feedback files 

older than 15 days that matches the 

previous four years.219 According to the 

Participants, these data were not used 

during the development of the CAT 

NMS Plan over the last four years.220

c. Implementation Costs 

The Amendment states that ‘‘the onetime implementation costs are expected 

to be minimal relative to overall cost 

savings.’’ 221 While the Participants do 

not estimate implementation costs, the 

Commission can compare anticipated 

implementation activity to that of recent 

Commission final rules that include 

estimates for such activity. According to 

the Participants, ‘‘[o]ne-time 

implementation costs will generally 

consist of Plan Processor labor costs 

associated with coding and software 

development, as well as any related 

cloud feed associated with the 

development, testing and load testing of 

the proposed changes.’’ 222 The 

Participants state that, ‘‘[o]ngoing 

operational costs, other than cloud 

hosting costs,’’ will not be affected by 

the proposed amendments.223 The 

Commission agrees that the 

implementation costs seem minimal 

relative to overall cost savings. 

The Proposal will result in costs to 

the Plan Processor with respect to 

developing policies and procedures, 

revising and testing coding changes, and 

revising user manuals and training 

materials. Policies and procedures will 

dictate how the Plan Processor responds 

to requests to restore the operational 

data and ensure confidentiality in the 

request.224 Implementing the Proposal 

will also require changes to 

programming code to change the 

processing of affected CAT Data. 

Finally, user manuals and training will 

have to be revised to ensure they reflect 

the CAT Data and access for regulators 

after the Proposal. 

TABLE 2—IMPLEMENTATION COSTS FOR COMPARABLE COMPLIANCE ACTIONS

Implementation activity Lowest estimate Highest estimate 

Developing Policies and Procedures a ........................................................................................................ $49,000 $53,000 

Revising and Testing Code b ....................................................................................................................... 20,000 114,000 

aSee infra note 225. bSee infra note 226. 


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225See e.g., Standards for Covered Clearing 

Agencies for U.S. Treasury Securities and 

Application of the Broker-Dealer Customer 

Protection Rule with Respect to U.S. Treasury 

Securities, Release No. 34–99149 (Dec. 13, 2023), 89 

FR 2714 (Jan. 16, 2024) (‘‘Treasury Clearing 

Adopting Release’’) at note 981 for the high 

estimate, rounded down from $53,425; Covered 

Clearing Agency Resilience and Recovery and 

Orderly Wind-Down Plans, Release No. Securities 

Exchange Act Release No. 34–101446 (Oct. 25, 

2024), 89 FR 91000 (Nov. 18, 2024) (‘‘Covered 

Clearing Adopting Release’’) at 183 for the low 

estimate. 

226Estimates for coding changes from recent 

Commission final rules vary based on programming 

staff labor from 50 hours for code revisions to 

calculate metrics to 300 hours for code revisions to 

accept new information in the CAT Central 

Repository. See Short Position and Short Activity 

Reporting by Institutional Investment Managers, 

Release No. 34–98738 (Oct. 13, 2023), 88 FR 75100 

(Nov. 1, 2023) (the ‘‘Short Position Reporting 

Adopting Release’’) at 75144, note 475 for the high 

estimate. Among other changes, this release 

amended section 6.4(d)(ii) of the CAT NMS Plan 

(the ‘‘Bona Fide Market Maker Amendment’’) 

requiring the 25 Plan Participants to update their 

compliance rules by July 2. See Short Position 

Reporting Adopting Release, section VI for a 

discussion of the Bona Fide Market Maker 

Amendment. Implementing the Bona Fide Market 

Maker Amendment will involve approximately 300 

labor hours spread across programming, database 

administration, business and legal personnel. The 

Commission anticipates that coding changes to 

implement the Proposal involve a similar mix of 

labor as in the Bona Fide Market Maker 

Amendment but will need fewer hours. For the low 

estimate, rounded down from $20,075, see 

Disclosure of Order Execution Information, Release 

No. 34–99679 (March 6, 2024), 89 FR 26428 (April 

15, 2024) (‘‘Order Disclosure Adopting Release’’), at 

26499 note 951. These costs reflect approximately 

50 labor hours spread across programming and 

compliance personnel. While the amendments in 

the Commission’s recent Order Disclosure Adopting 

Release involve entities other than the Central 

Repository, the types of coding revisions may 

involve a similar effort. These numbers are rounded 

to the nearest thousand to reflect imprecision. 

227See infra section III.C.2.a.(i). 

228See infra section III.C.2.a.(ii) for a discussion 

of the impact of the provision that Options Market 

Maker quotes in Listed Options will no longer be 

available in DIVER. 

229See Regulation NMS: Minimum Pricing 

Increments, Access Fees, and Transparency of 

Better Priced Orders, Release No. 34–96494 (Dec. 

14, 2022), 87 FR 80266 (Dec. 29, 2022) (‘‘Tick Size 

Proposing Release’’). 230See SIFMA Letter I, supra note 68, at 2, stating 

that ‘‘the [quote-to-trade ratio] is nearly 4 times 

greater than the ratio. described in the SEC’s 

approval order,’’ and citing to the tick size proposal 

in stating that ‘‘certain SEC market structure 

initiatives might only accelerate the increase.’’ 

231See CAT NMS Plan Approval Order, supra 

note 3, at 84833–84840 for a discussion of the 

benefits from the types of regulatory activities that 

the CAT NMS Plan was intended to improve. 

232See infra section III.C.2.a.(ii). 

233For example, each time a regulator has to 

create lifecycles for a set of Options Market Maker 

quotes. See infra section III.C.2.a.(i). 

Table 2 shows ranges of 

implementation costs for 

implementation activities in recent 

Commission final rules. The 

Commission expects the Proposal to fall 

near the lower end of these ranges, and 

possibly below them. The estimates for 

developing policies and procedures in 

Table 2 apply to policies and 

procedures that codify business 

practices,225 which would be a bigger 

effort than the policies and procedures 

for fulfilling requests to restore data. 

Second, the Commission expects the 

coding changes necessary to implement 

the Proposal to involve fewer labor 

hours than the comparison rules for 

revising code in Table 2.226 Finally, 

while the recent Commission final rules 

surveyed did not separately itemize the 

costs of revising user manuals and 

training (and thus are not included in 

Table 2), the Commission expects that 

the costs will be lower than the costs of 

developing policies and procedures. 

The Commission understands, from 

Staff discussions with the Participants, 

that moving data to Glacier Deep 

Archive is a service provided by the 

cloud provider and, thus, costs are 

unaffected by the Proposal. In addition, 

the proposed amendments will not 

involve any costs of building security 

for the Glacier Deep Archive because 

the Plan Processor has already built 

such security measures. 

As for ongoing implementation costs, 

the Proposal could result in ongoing 

costs related to an increase in help desk 

demands to assist regulatory staff 

requesting assistances in linking 

Options Market Maker quotes in Listed 

Options lifecycles, and restoration of 

Raw Unprocessed, Interim Operational 

Data and/or submission and feedback 

files older than 15 days. 

d. Cost Transfers to Regulators 

Regulators may undertake activities to 

mitigate the impact of the proposed 

amendments on regulatory activities 

and, as a result, incur costs. For 

regulatory activity that necessitates 

lifecycle information for Options Market 

Maker quotes in Listed Options, 

regulators could reduce the impact of 

the Proposal by revising lifecycleproducing code from the Plan Processor 

to apply it to their systems, maintaining 

such code over time, and processing 

data with that code.227 The cost of 

applying and maintaining the code as 

well as processing data with the code is 

a cost transfer from the Company to 

regulators. The magnitude of this cost 

depends on the complexity of revising 

the code for regulators’ systems, the 

frequency of updates required to 

maintain the code, and the chosen 

amount and frequency of data 

processed. In addition, regulators could 

incur staffing costs to mitigate the loss 

of data in DIVER and MIRS query 

tools 228 and to request restorations of 

Raw Unprocessed, Interim Operational 

Data and/or submission and feedback 

files older than 15 days. The costs 

incurred by regulators would reduce the 

cost savings of the proposed 

amendments. However, cost savings 

would still be meaningful after taking 

these transfers into consideration. 

e. Interaction With Tick Size Adopting 

Release 

One commenter stated that the rules 

and amendments proposed in the Tick 

Size Proposing Release 229 (the 

‘‘Proposed Tick Size Rules’’) had ‘‘the 

potential to significantly expand the 

amount of quoting activity in the . . . 

listed options markets,’’ 230 implying 

that the costs of linking Options Market 

Maker quotes in Listed Options would 

increase following the implementation 

of the Proposed Tick Size Rules. The 

commenter did not provide an 

explanation as to why they expected the 

Proposed Tick Size Rules would 

increase Options Market Maker quotes 

in Listed Options, and while the 

Commission has considered this 

potential interaction, it finds the 

connection is unclear. Regardless, the 

cost savings in the Proposal will still be 

meaningful as to all Options Market 

Maker quotes in Listed Options. 

2. Regulatory efficiency 

Regulatory efficiency refers to the 

efficiency of regulatory activities 

conducted by SROs and/or the 

Commission necessary to protect 

investors, maintain fair, orderly, and 

efficient markets, and facilitate capital 

formation.231 In analyzing how the 

Proposal will impact regulatory 

efficiency, the Commission assessed 

how the Proposal will impact regulatory 

activities. 

The Commission identified regulatory 

inefficiencies resulting from the 

Proposal. Most of these regulatory 

inefficiencies are transitional.232 The 

other regulatory inefficiencies will be 

permanent in nature and will occur 

each time certain regulatory use cases 

arise.233 The Commission concludes 

that the regulatory inefficiencies will 

have a limited overall impact. 

a. Options Market Maker Quotes in 

Listed Options 

The Participants state that the 

provision of the proposed amendments 

involving Options Market Maker quotes 

in Listed Options will have a ‘‘limited 

impact on the regulatory function of the 

CAT.’’ The Commission expects that 

this provision will delay potential 

regulatory activities involving lifecycle 

linkages for Options Market Maker 

quotes in Listed Options and reduce the 


khammond on DSK9W7S144PROD with NOTICES
Federal Register / Vol. 89, No. 243 / Wednesday, December 18, 2024 / Notices 103049 

234The lifecycle linkages and derived fields will 

not be available as they will not be produced and 

while the unprocessed Options Market Maker 

quotes in Listed Options will remain in the CAT 

Data they will no longer be available in DIVER. 

235The field quoteID is the internal ID assigned 

to the order/quote by the exchange. 

236See infra notes 252251–253252, and 

associated text. 

237See, e.g., CAT NMS Plan Approval Order, 

supra note 3, at 84826–84827, 84831–84832, 84834 

and 84839 for a discussion of the benefits of linking 

order data. 

238See CAT NMS Plan Approval Order, supra 

note 3, at 84834–84840 for examples of regulatory 

activities improved by having ready access to 

linkage information. Types of regulatory activities 

include analysis and reconstruction of market 

events, market analysis and research, and 

surveillance and investigations (SRO surveillance, 

SRO and Commission examinations, and SRO and 

Commission enforcement investigations). 

Regulatory activities involving Options Market 

Maker quotes in Listed Options can fall into any of 

these activities. 

239See supra note 82 and associated text. See also 

Notice, supra note 9, at 26984; Participant Letter, 

supra note 32, at 5–6. 

240See supra note 41. The Plan Processor 

technicians presumably have more expertise on 

particular changes to CAT Data affecting their 

linkage code than data users at SROs or the 

Commission. 

241See Notice, supra note 9, at 26984. 

242 Id. In addition, the Participants stated that 

‘‘[l]inkage validation is not necessary for Options 

Market Maker [q]uotes because quoteID is an 

effective replacement for tying quotes to trades.’’ 

See Participant Letter, supra note 32, at 4. 

243See section III.B, supra note 182 and 

associated text. 

244See Participant Letter, supra note 32, at 2. 

245See Participant Letter, supra note 32, at 4; see 

also Notice, supra note 9, at 26984. 

246For the purpose of this Order, using a day’s 

trading (the day of March 7, 2024), 2,706,647 

options trade events linked to Options Market 

Maker quotes were analyzed. The analysis focused 

on whether the lifecycles (using CAT Lifecycle IDs) 

contained information sufficient for regulators to 

create the lifecycles themselves, absent the CAT 

Lifecycle ID. The analysis studied the linkages 

using a combination of Exchange ID, OSI Symbol 

ID, quoteID, Side, and Event Date and found that 

142,578 (approximately 5 percent) trades did not 

contain information sufficient to link to the quote 

(if not using the CAT-Lifecycle-ID). For any 

remaining unlinked trades, other elements of the 

linkage processing currently used by the Plan 

Processor might offer additional means or methods 

for linking trades to quotes once the Proposal is 

implemented. Also, regulators may be able to obtain 

the information necessary to link trades to quotes 

by making information requests to the relevant 

Market Makers and/or exchanges. However, this 

would involve significant delays. 

247See Staff Report on Equity and Options Market 

Structure Conditions in Early 2021, (Oct. 14, 2021) 

available at https://www.sec.gov/files/staff-reportequity-options-market-struction-conditions-early2021.pdf. 

248A small sample, for example, could involve 

trades on a particular day, in a specific option 

contract by a specific market maker. 

249See Participant Letter, supra note 32, at 5. 

accessibility of Options Market Maker 

quotes in Listed Options.234 The 

Commission expects the mitigation 

mechanisms—e.g., the provision of code 

from the Plan Processor and the use of 

the quoteID field—to partially alleviate 

the delays created by the Proposal.235

The removal of Options Market Maker 

quotes from DIVER will result in certain 

regulatory inefficiencies; most of these 

inefficiencies, however, will dissipate in 

the long run.236

(i) Cessation of Processing of Options 

Market Maker Quotes by the Plan 

Processor 

The loss of the linkage processing and 

derived fields specified in the Proposal 

could adversely affect investigations, 

examinations, or market analyses that 

rely on the lifecycle information in 

Options Market Maker data in CAT.237

When the Plan Processor ceases 

lifecycle processing on Options Market 

Maker quotes in Listed Options, CAT 

Data will no longer include a CATLifecycle-ID. The absence of CATLifecycle-IDs for Options Market Maker 

quotes will delay any regulatory 

activities involving order linkages for 

Options Marker Maker quotes in Listed 

Options.238 Lack of lifecycle linkages 

would also preclude derived fields such 

as Derived Next Event Timestamp (and 

Type Code) from being used by 

regulators to make regulatory activities, 

such as order book reconstructions, 

easier and faster. 

To mitigate the impact of this 

provision, regulators will have the 

option of requesting from the Plan 

Processor the code underlying the 

current linkage processing for Options 

Market Maker quotes in Listed Options 

for the purpose of creating the lifecycles 

and derived fields themselves.239 While 

such code could be helpful, it may also 

need to be modified by regulators to run 

on their own systems. Further, the Plan 

Processor will not update this code over 

time, and thus, regulators will need to 

maintain it themselves.240 Also, the 

processing and maintenance of lifecycle 

linkages of Options Market Maker 

quotes in Listed Options will shift from 

a single entity (the Plan Processor) to 

multiple regulators. Such 

decentralization could result in 

duplicative efforts across regulators. 

The Commission recognizes that 

potential delays depend on how 

complex the linkage processes are. A 

simpler linkage process will reduce the 

inefficiencies associated with 

decentralization and stale code. The 

Participants stated that ‘‘the vast 

majority of options market maker quote 

lifecycles consist of just two events,’’ 241

and that ‘‘[e]xecutions that result from 

Options Market Maker quotes will 

identify the quoteId of the quote that 

resulted in an execution,’’ 242 which 

suggests that these quotes have simple 

lifecycle processing. 

While the majority of lifecycles of 

Options Market Maker quotes in Listed 

Options, with or without trades, may 

contain only two events, a substantial 

number of lifecycles could be more 

complex.243 The Proposal further states 

that a large portion of lifecycles of 

Options Market Maker quotes in Listed 

Options do not involve any execution or 

allocation.244 However, regulatory 

activities that analyze lifecycles or 

reconstruct order books are not 

restricted to lifecycles that contain 

trades. 

Similarly, while having a quoteID on 

all options events in the lifecycle of an 

Options Market Maker quote in Listed 

Options can simplify the process of 

linking events,245 quote ID does not 

fully substitute for CAT-Lifecycle-ID in 

all instances. An analysis of the 

effectiveness of quoteID in linking 

trades to quotes, and linking lifecycles 

more generally, found that quoteID is 

approximately 95 percent as effective as 

CAT-Lifecycle-ID is.246

Resulting delays from the 

implementation of the Proposal will 

vary across the impacted regulatory 

activities. Certain analyses using high 

volumes of data (e.g., the January 2021 

volatility 247) are more likely to face a 

large number of disparate complexities 

in linkage processing, which could take 

more time to address. Also, in these 

cases, the aforementioned challenges in 

using quoteID and Plan Processor code 

could be significant if such regulatory 

activities are time-sensitive. The 

implementation of the Proposal likely 

will have a limited impact for regulatory 

activities that focus on small 

samples,248 where the Plan Processor’s 

code and quoteID may be sufficient to 

avoid meaningful delays associated with 

linkage complexities. 

(ii) Loss of Options Market Maker 

Quotes in Listed Options in Tools Such 

as DIVER and MIRS 

The provision of the proposed 

amendments involving the Options 

Market Maker quotes in Listed Options 

will also eliminate Options Market 

Maker quotes in Listed Options from 

DIVER. The Participants state that, 

‘‘[t]he regulatory groups of each of the 

Participants have indicated that they are 

able to conduct their regulatory 

programs accessing Options Market 

Maker Quotations via BDSQL and/or 

Direct Read, and each group supports 

the proposed modification.’’ 249

The loss of Options Market Maker 

quotes in Listed Options from DIVER 

may delay regulatory activities, at least 


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103050 Federal Register / Vol. 89, No. 243 / Wednesday, December 18, 2024 / Notices 

250See supra note 174, and associated text. 

251The Commission previously discussed the 

economic impact of how user-friendly CAT access 

tools would be. In discussing how the CAT NMS 

Plan would improve the accessibility of regulatory 

data by providing regulators with direct access to 

the consolidated CAT Data, the Commission stated 

that improving accessibility of regulatory data over 

the regulatory baseline requires ensuring that 

enough SRO and Commission staff members are 

able to use the [access] system supplied by the 

Central Repository when they need it. The 

Commission also discussed its belief that the ability 

to use the direct access system depends, among 

other things, on how user-friendly the system is. 

See Securities Exchange Act Release No. 34–77724 

(April 27, 2016), 81 FR 30614 (May 17, 2016) at 

30689. 

252Some regulatory users might have to rely on 

regulatory users with programing skills to assist 

them in affected regulatory activities. This could 

increase the workload of regulatory users with 

programming skills and slow down other regulatory 

activities involving CAT. In addition, regulators 

would spend more time writing code to pull data 

from BDSQL than they expend to select from among 

the pre-defined criteria in DIVER. 

253See supra note 120 and associated text. The 

Proposal could delay Designated Examining 

Authorities (‘‘DEAs’’) examinations of CAT 

reporting errors by their members if these 

examinations require restoring data. 

254See supra sections III.C.2.a. and III.C.2.b. for 

the impact of the Amendment on regulatory 

efficiency. The impact on CAT data in terms of 

reduced accessibility and timeliness could lead to 

a modest reduction in the deterrence effects of CAT. 

See CAT NMS Plan Approval Order, supra note 3, 

at 84836, note 2266. The reduced timeliness could 

also allow violative behaviors to persist for slightly 

longer. 

255The CAT Funding Approval Order concludes 

that the expected magnitude of CAT Fees ‘‘are 

expected to be relatively small’’ based on a 

comparison of illustrative fees to other per share 

transaction costs. See CAT Funding Model 

Approval Order, supra note 162, at 62682. 

Therefore, a reduction in CAT fees would also be 

small when distributed on a per share basis. 

256See Notice, supra note 9, at 26989. 

257The CAT Funding Model establishes the 

framework under which CAT costs will be allocated 

among Participants and Industry Members, 

resulting in competitive advantages for some 

Participants and Industry Members over others. 

Such competitive advantages are dampened by a 

reduction in CAT costs as a result of the Proposal. 

See CAT Funding Model Approval Order, supra 

note 162, at 62684–62685. 

258See supra section III.C.3. for a discussion of 

why the reduction in fees will likely be small. 

259See supra note 254254. 

260A reduction in the deterrence effects of CAT 

and a potential increase in the persistence of 

violative behaviors could impact the market for 

trading services. See supra note 254 for a discussion 

of the effect of the Proposal on deterrence; see also 

CAT NMS Plan Approval Order, supra note 3, at 

84885. 

261See Notice, supra note 9, at 26989. 

262 Id. 

263See supra note 255 255for why CAT fees, 

which are passed on to market participants, are 

unlikely to be meaningfully lowered on a per share 

basis under the Proposal. 

264 Violative behavior could persist longer as a 

result of a decrease in timeliness of regulatory 

actions. However, the effect on regulatory actions is 

likely to be small. Therefore, the effect on capital 

formation is likely to be small. 

265 15 U.S.C. 78k–1. 

266 17 CFR 242.608(b)(2). 

267See 15 U.S.C. 78k–1(a)(3)(B). 

268See 17 CFR 242.608. 

in the short-term. While use of DIVER 

does not require programming skills in 

remote data processing and/or 

knowledge of structured query 

programming language,250 regulatory 

users seeking to access Options Market 

Maker quotes in Listed Options will 

now have to do so through BDSQL and 

Direct Read, which do require such 

specialized skills and are therefore less 

user-friendly.251 This may create some 

inefficiencies in the short term for 

regulatory activities involving Option 

Market Maker quotes.252 Over a longer 

term, however, some regulatory users 

may become more familiar with BDSQL 

and Direct Read. Further, regulators 

could also adjust by creating internal 

tools for to replicate the same targeted 

queries they would otherwise run on 

DIVER. Once the code has been written 

out, BDSQL would likely be less timeconsuming compared to DIVER, which 

can offset the delays. However, this 

could result in another inefficiency 

should multiple SROs and the 

Commission create code to replicate the 

commonly-used functionality formerly 

centralized within DIVER. 

b. Raw Unprocessed, Interim 

Operational Data and/or Submission 

and Feedback Files 

Based on the potential future use of 

Raw Unprocessed, Interim Operational 

Data and/or submission and feedback 

files older than 15 days, as well as the 

Participants’ statements on past use, the 

Commission expects the Proposal not to 

have a consequential negative impact on 

regulatory efficiency. Some future 

regulatory activities of SROs could 

depend on the use of the Raw 

Unprocessed, Interim Operational Data 

and/or submission and feedback files 

older than 15 days, and therefore may 

be affected by a delay in access to data. 

It could, for example, be used by SROs 

to investigate patterns of errors in CAT 

Data submissions by their members.253

However, such regulatory activities are 

unlikely to be time-sensitive. 

3. Market Efficiency 

Market efficiency could be slightly 

negatively impacted by the Proposal 

with the impact coming from reductions 

in regulatory efficiency.254 Since the 

impact of the Proposal on regulatory 

efficiency is limited, the impact on 

market efficiency will be minimal. 

There could also be minor 

improvements in market efficiency due 

to a reduction in CAT fees.255

D. Competition 

The Participants believe that the 

Proposal will have a positive impact on 

competition.256 The Commission 

expects that the Proposal is likely to 

result in slightly reduced CAT fees, 

which could dampen existing 

competitive advantages for some market 

participants relative to the baseline,257

but this is unlikely to have a meaningful 

effect on competition.258 To the extent 

that the Proposal results in a modest 

reduction in the deterrence effects of 

CAT and a potential increase in 

persistence of violative behaviors,259

there could be a resulting small adverse 

effect on competition in the market for 

trading services.260 None of these effects 

on competition, however, is likely to be 

meaningfully large. 

E. Capital Formation 

The Participants state that the 

Proposal will have a positive impact on 

capital formation.261 While they do not 

explain the mechanism, they state that 

the savings under the proposed 

amendments will ‘‘inure to the benefit 

of all participants in the markets for 

NMS Securities and OTC Equity 

Securities, including Participants, 

Industry Members, and most 

importantly, the investors.’’ 262 The 

Commission does not expect that the 

cost savings will result in any 

meaningful positive impact on capital 

formation.263 In addition, any adverse 

impact on capital formation resulting 

from the regulatory inefficiencies 

created by the proposed amendments 

will also be small.264

IV. Conclusion 

For the reasons discussed, the 

Commission, pursuant to Section 11A of 

the Exchange Act,265 and Rule 

608(b)(2) 266 thereunder, is approving 

the proposed changes to the CAT NMS 

Plan, as those changes are set forth in 

the Proposal. Section 11A of the 

Exchange Act authorizes the 

Commission, by rule or order, to 

authorize or require the self-regulatory 

organizations to act jointly with respect 

to matters as to which they share 

authority under the Exchange Act in 

planning, developing, operating, or 

regulating a facility of the national 

market system.267 Rule 608 of 

Regulation NMS authorizes two or more 

SROs, acting jointly, to file with the 

Commission proposed amendments to 

an effective NMS plan,268 and further 

provides that the Commission shall 

approve an amendment to an effective 

NMS plan if it finds that the amendment 

is necessary or appropriate in the public 

interest, for the protection of investors 

and the maintenance of fair and orderly 


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Federal Register / Vol. 89, No. 243 / Wednesday, December 18, 2024 / Notices 103051 

269See 17 CFR 242.608(b)(2). 

270 15 U.S.C. 78k–1. 

271 17 CFR 242.608(b)(2). 

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.269

For the reasons set forth above, the 

Commission finds that the proposed 

changes to the CAT NMS Plan, as set 

forth in the Proposal, meet the required 

standard. 

It is therefore ordered, pursuant to 

Section 11A of the Exchange Act,270 and 

Rule 608(b)(2) 271 thereunder, that such 

changes be, and hereby are, approved. 

By the Commission. 

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2024–29912 Filed 12–17–24; 8:45 am] 

BILLING CODE 8011–01–P 

SMALL BUSINESS ADMINISTRATION 

Data Collection Available for Public 

Comments 

ACTION: 60-Day notice and request for 

comments 

SUMMARY: The Small Business 

Administration (SBA) intends to request 

approval, from the Office of 

Management and Budget (OMB) for the 

collection of information described 

below. The Paperwork Reduction Act 

(PRA) requires federal agencies to 

publish a notice in the Federal Register 

concerning each proposed collection of 

information before submission to OMB, 

and to allow 60 days for public 

comment in response to the notice. This 

notice complies with that requirement. 

DATES: Submit comments on or before 

February 18, 2025 

ADDRESSES: Send all comments to, 

Office of Veterans Business 

Development, Amy Garcia, amy.garcia@

sba.gov, Small Business Administration. 

FOR FURTHER INFORMATION CONTACT: 

Amy Garcia, Veterans Business Analyst, 

Office of Veterans, amy.garcia@sba.gov 

202–205–7526, or Curtis B. Rich, 

Agency Clearance Officer curtis.rich@

sba.gov 202–205–7030. 

SUPPLEMENTARY INFORMATION: This 

voluntary collection form enables the 

program office to assess both the quality 

of the Boots to Business courses and 

outcomes achieved by participants after 

attending Boots to Business. The data 

will be used for overall program 

management, continuous improvement 

initiatives, and reporting outcomes to 

better serve veteran entrepreneurs. 

Information used for reporting will be 

done in the aggregate and will not 

include Personally Identifiable 

Information (PII). 

Solicitation of Public Comments 

SBA is requesting comments on (a) 

Whether the collection of information is 

necessary for the agency to properly 

perform its functions; (b) whether the 

burden estimates are accurate; (c) 

whether there are ways to minimize the 

burden, including through the use of 

automated techniques or other forms of 

information technology; and (d) whether 

there are ways to enhance the quality, 

utility, and clarity of the information. 

Summary of Information Collection 

PRA Number: 3245–0390. 

Title: Boots to Business Post Course 

Surveys. 

Description of Respondents: Boots to 

Business Program Participants. 

Form Number: None. 

Total Estimated Annual Responses: 

10,000. 

Total Estimated Annual Hour Burden: 

27 hours. 

Curtis B. Rich, 

Agency Clearance Officer. 

[FR Doc. 2024–29863 Filed 12–17–24; 8:45 am] 

BILLING CODE 8026–09–P 

DEPARTMENT OF STATE 

[Public Notice: 12604] 

Notice of Determinations; Culturally 

Significant Objects Being Imported for 

Exhibition and Storage— 

Determinations: ‘‘Christine Sun Kim: 

All Day All Night’’ Exhibition 

SUMMARY: Notice is hereby given of the 

following determinations: I hereby 

determine that certain objects being 

imported from abroad pursuant to an 

agreement with their foreign owner or 

custodian for temporary storage and 

display in the exhibition ‘‘Christine Sun 

Kim: All Day All Night’’ at the Whitney 

Museum of American Art, New York, 

New York; the Walker Art Center, 

Minneapolis, Minnesota; and at possible 

additional exhibitions or venues yet to 

be determined, are of cultural 

significance, and, further, that their 

temporary exhibition or display and 

storage within the United States as 

aforementioned is in the national 

interest. I have ordered that Public 

Notice of these determinations be 

published in the Federal Register. 

FOR FURTHER INFORMATION CONTACT: 

Reed Liriano, Program Coordinator, 

Office of the Legal Adviser, U.S. 

Department of State (telephone: 202– 

632–6471; email: section2459@

state.gov). The mailing address is U.S. 

Department of State, L/PD, 2200 C 

Street, NW (SA–5), Suite 5H03, 

Washington, DC 20522–0505. 

SUPPLEMENTARY INFORMATION: The 

foregoing determinations were made 

pursuant to the authority vested in me 

by the Act of October 19, 1965 (79 Stat. 

985; 22 U.S.C. 2459), Executive Order 

12047 of March 27, 1978, the Foreign 

Affairs Reform and Restructuring Act of 

1998 (112 Stat. 2681, et seq.; 22 U.S.C. 

6501 note, et seq.), Delegation of 

Authority No. 234 of October 1, 1999, 

Delegation of Authority No. 236–3 of 

August 28, 2000, and Delegation of 

Authority No. 523 of December 22, 

2021. 

Nicole L. Elkon, 

Deputy Assistant Secretary for Professional 

and Cultural Exchanges, Bureau of 

Educational and Cultural Affairs, Department 

of State. 

[FR Doc. 2024–29970 Filed 12–17–24; 8:45 am] 

BILLING CODE 4710–05–P 

SURFACE TRANSPORTATION BOARD 

[Docket No. FD 36820] 

Puerto Verde Industrial Railroad, 

LLC—Operation Exemption—Line in 

Maverick County, Tex. 

Puerto Verde Industrial Railroad, LLC 

(PVIR), a noncarrier, has filed a verified 

notice of exemption under 49 CFR 

1150.31 to operate approximately 2.43 

miles of private railroad track located 

within the property of a former coal 

mine in Maverick County, Tex. (the 

Line). The former coal mine is owned by 

a corporate affiliate of PVIR, Farming 

Hydrasource, LLC (Farming 

Hydrasource), and is being converted 

into a rail-served industrial park. 

According to the verified notice, 

Farming Hydrasource and PVIR will 

enter into a lease and operating 

agreement giving PVIR control of the 

Line. PVIR states that, once the 

exemption becomes effective, it will 

provide common carrier switching 

services and transloading for customers 

that locate to the industrial park. 

PVIR states that no interchange 

commitments are being imposed on its 

operations. PVIR also certifies that its 

projected annual revenues will not 

exceed those that would qualify it as a 

Class III rail carrier and will not exceed 

$5 million. 

The earliest this transaction may be 

consummated is January 1, 2025, the 

effective date of the exemption. If the 

verified notice contains false or 


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