8078 Federal Register / Vol. 90, No. 14 / Thursday, January 23, 2025 / Notices 

inspection and copying at the principal office of 

SRO. 

7 17 CFR 200.30–3(a)(12). 

1See Letter from Howard Meyerson, Managing 

Director, Financial Information Forum, to 

Commission, dated Dec. 9, 2024, available at 

https://fif.com/index.php/working-groups/category/ 

271-comment-letters?download=3057:fif-request-tothe-commission-for-a-six-month-extension-of-thecurrent-exemption-relating-to-cat-representativeorder-linkage&view=category (‘‘Request’’). 

2 15 U.S.C. 78mm(a)(1). 

3 17 CFR 242.608(e). 

4See Securities Exchange Act Release No. 79318 

(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 id. 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 Aug. 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). 

5See id. at Appendix D, section 3. A 

representative order is an order originated in a firmowned or -controlled account, including principal, 

agency average price and omnibus accounts, by an 

industry member for the purpose of working one or 

more customer or client orders. See, e.g., Securities 

Exchange Act Release No. 88702 (Apr. 20, 2020), 85 

FR 23075, 23076 n.26 (Apr. 24, 2020). FIF states in 

the Request that ‘‘the term ‘representative order’ is 

a concept created by CAT (it is not a concept that 

exists in actual trading), and that all of the linkage 

requirements covered in [the] July 2024 FIF 

exemption request involve linkage either from or to 

a representative order.’’ See Request, supra note 1. 

6The Participants include 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., 

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, MIAX Sapphire, 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. 

7See Securities Exchange Act Release No. 67457 

(July 18, 2012), 77 FR 45722 (Aug. 1, 2012); 17 CFR 

242.613. 

8See CAT NMS Plan Approval Order, supra note 

4. 

9See Securities Exchange Act Release No. 90688 

(Dec. 16, 2020), 85 FR 83634 (Dec. 22, 2020). 

Comments may be submitted 

electronically by using the 

Commission’s internet comment form 

(https://www.sec.gov/rules-regulations/ 

self-regulatory-organizationrulemaking/national-securitiesexchanges?file_number=SR-NASDAQ2025-002) or by sending an email to 

rule-comments@sec.gov. Please include 

file number SR–NASDAQ–2025–002) on 

the subject line. Alternatively, paper 

comments may be sent to Secretary, 

Securities and Exchange Commission, 

100 F Street NE, Washington, DC 

20549–1090. All submissions should 

refer to file number SR–NASDAQ– 

2025–002). To help the Commission 

process and review your comments 

more efficiently, please use only one 

method. The Commission will post all 

comments on the Commission’s internet 

website (https://www.sec.gov/rulesregulations/self-regulatory-organizationrulemaking/national-securitiesexchanges?file_number=SR-NASDAQ2025-002). Do not include personal 

identifiable information in submissions; 

you should submit only information 

that you wish to make available 

publicly. We may redact in part or 

withhold entirely from publication 

submitted material that is obscene or 

subject to copyright protection. All 

submissions should refer to file number 

SR–NASDAQ–2025–002) and should be 

submitted on or before February 13, 

2025. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.7

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2025–01544 Filed 1–22–25; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–102234] 

Order Granting Temporary Conditional 

Exemptive Relief, Pursuant to Section 

36(a)(1) of the Securities Exchange Act 

of 1934 and Rule 608(e) of Regulation 

NMS Thereunder, From Certain 

Requirements of Appendix D, Section 

3 of the National Market System Plan 

Governing the Consolidated Audit Trail 

January 17, 2025. 

I. Introduction 

On December 9, 2024,1 Financial 

Information Forum (‘‘FIF’’) requested 

that the Securities and Exchange 

Commission (‘‘Commission’’ or ‘‘SEC’’) 

extend temporary conditional 

exemptive relief, pursuant to its 

authority under section 36(a)(1) of the 

Securities Exchange Act of 1934 

(‘‘Exchange Act’’) 2 and Rule 608(e) of 

Regulation NMS under the Exchange 

Act,3 related to the requirement set forth 

in Appendix D, section 3 of the national 

market system plan governing the 

consolidated audit trail (‘‘CAT NMS 

Plan’’) 4 that the consolidated audit trail 

(‘‘CAT’’) ‘‘must be able to create the 

lifecycle between . . . [c]ustomer orders 

to ‘representative’ orders created in firm 

accounts for the purpose of facilitating 

a customer order (e.g., linking a 

customer order handled on a riskless 

principal basis to the street-side 

proprietary order).’’ 5 For the reasons set 

forth below, the Commission has 

determined to grant FIF’s request for a 

six-month extension of the temporary 

conditional exemptive relief previously 

provided by the Commission with 

respect to the above-described 

requirement set forth in Appendix D, 

section 3 of the CAT NMS Plan for 

representative order scenarios in which 

Industry Members do not have a 

systematic or direct link between their 

order management systems and 

execution management systems. 

II. Discussion of the Request for Relief 

On July 18, 2012, the Commission 

adopted Rule 613 of Regulation NMS, 

which required national securities 

exchanges and national securities 

associations (‘‘Participants’’) 6 to jointly 

develop and submit to the Commission 

a national market system plan to create, 

implement, and maintain the CAT.7 The 

goal of Rule 613 was to create a 

modernized audit trail system that 

would provide regulators with timely 

access to a comprehensive set of trading 

data, thus enabling regulators to more 

efficiently and effectively analyze and 

reconstruct market events, monitor 

market behavior, conduct market 

analysis to support regulatory decisions, 

and perform surveillance, investigation, 

and enforcement activities. On 

November 15, 2016, the Commission 

approved the national market system 

plan required by Rule 613—the CAT 

NMS Plan.8

On December 16, 2020, the 

Commission issued an exemptive relief 

order regarding the implementation of 

the CAT NMS Plan (‘‘First Order’’).9

This order granted temporary 


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Federal Register / Vol. 90, No. 14 / Thursday, January 23, 2025 / Notices 8079 

10See id. at 83636. The Commission stated its 

understanding that ‘‘the Participants do not 

currently have the ability to create lifecycles in 

certain representative order scenarios, particularly 

because of the difficulty of linking representative 

orders for Industry Members with separate order 

management systems and execution management 

systems that do not currently have a systematic or 

direct link between them.’’ Id. 

11 Id. 

12See Securities Exchange Act Release No. 95234 

(July 8, 2022), 87 FR 42247 (July 14, 2022). 

13 Id. at 42255–56. The term ‘‘Industry Member’’ 

is defined as ‘‘a member of a national securities 

exchange or a member of a national securities 

association.’’ See CAT NMS Plan, supra note 4, at 

section 1.1. 

14See Securities Exchange Act Release No. 97530 

(May 19, 2023), 88 FR 33655 (May 24, 2023). 

15See Securities Exchange Act Release No. 98848 

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

16 Id. at 77132. 

17 Id. 18See Request, supra note 1, at 1. 19See Request, supra note 1, at 1–2 (citing CAT 

Reporting Technical Specifications for Industry 

Members, version 4.1.0 r4, dated Oct. 18, 2024, at 

367–69, available at https://catnmsplan.com/sites/ 

default/files/2024-10/10.18.24_CAT_Reporting_

Technical_Specifications_for_Industry_Members_

v4.1.0r4_CLEAN.pdf). Contrary to the assertion 

made by FIF, the Commission has not directed the 

Participants to remove the ‘‘YE’’ or ‘‘YP’’ flags from 

the CAT Reporting Technical Specifications for 

Industry Members by any specific date. 

Furthermore, and also contrary to the assertion 

made by FIF in its request, the Commission 

understands that the ‘‘YE’’ and ‘‘YP’’ flags would 

continue to be available after Jan. 31, 2025, even in 

the absence of the temporary conditional exemptive 

relief granted by the Commission herein. 

20See Request, supra note 1, at 3. 

21But see supra note 19. 

22See Request, supra note 1, at 2. 

23 Id. 

24 Id. FIF states that these scenarios are more fully 

described in a previous request for exemptive relief 

submitted to the Commission. See id.; see also 

Letter from Howard Meyerson, Managing Director, 

FIF, to Commission, dated July 2, 2024, available 

at https://fif.com/index.php/working-groups/ 

category/271-comment-letters?download=2962:fifexemptive-request-letter-to-the-sec-onrepresentative-order-linkage&start=10&view=

category. 

25See Request, supra note 1, at 2. These outcomes 

could occur even if the ‘‘YE’’ and ‘‘YP’’ flags remain 

available after Jan. 31, 2025, because Industry 

Members would be required to report the 

information necessary for FINRA CAT to create 

lifecycle linkages between customer orders and 

representative orders in the absence of the 

temporary conditional exemptive relief granted by 

the Commission in the past and herein. See supra 

note 19. 

26See id. at 2–3. 

27See Request, supra note 1, at 3 n.10–11 and 

associated text. 

28See id. at 3–4 n.13–14 and associated text. 

29 Id. at 2, 4. 

conditional exemptive relief from 

several requirements set forth in the 

CAT NMS Plan, including the 

requirement set forth in Appendix D, 

section 3 of the CAT NMS Plan that the 

CAT ‘‘must be able to create the 

lifecycle between . . . [c]ustomer orders 

to ‘representative’ orders created in firm 

accounts for the purpose of facilitating 

a customer order (e.g., linking a 

customer order handled on a riskless 

principal basis to the street-side 

proprietary order).’’ 10 This relief was 

initially granted until July 31, 2023.11

On July 8, 2022, the Commission 

issued a new exemptive relief order 

(‘‘Second Order’’),12 which superseded 

the First Order and modified and/or 

clarified certain aspects of the First 

Order. The Second Order granted 

temporary conditional exemptive relief 

until July 31, 2024, from the abovedescribed linkage requirement set forth 

in Appendix D, section 3, ‘‘for 

representative order scenarios in which 

Industry Members do not have a 

systematic or direct link between their 

order management systems and 

execution management systems.’’ 13 The 

Commission subsequently issued an 

order (‘‘Third Order’’), on May 19, 2023, 

further extending such exemptive relief 

until January 31, 2025.14 This relief was 

superseded by a new order issued by the 

Commission on November 2, 2023 

(‘‘Fourth Order’’),15 which was intended 

to mirror the temporary conditional 

exemptive relief granted by the Third 

Order (and the Second Order) with 

respect to the requirements set forth in 

Appendix D, section 3 of the CAT NMS 

Plan regarding lifecycle linkages 

between customer orders and 

representative orders for scenarios in 

which Industry Members do not have a 

systematic or direct link between their 

order management systems and 

execution management systems.16 The 

Fourth Order did not extend the 

temporary conditional exemptive relief 

beyond the time period provided by the 

Third Order.17

FIF requests that the Commission 

extend the previously granted 

temporary conditional exemptive relief 

until July 31, 2025.18

FIF states that the Participants, at the 

direction of the Commission, will 

‘‘remove from the CAT system the 

ability for industry members to report 

certain flags on Order Fulfillment events 

(specifically, the ‘YE’ and ‘YP’ flags) in 

lieu of reporting linkage to specific 

representative orders’’ after January 31, 

2025.19 FIF states that FIF and its 

members have demonstrated the 

‘‘ongoing focus of industry members in 

complying with their CAT reporting 

obligations’’ and have devoted 

‘‘significant resources . . . over many 

years towards such compliance.’’ 20

Nevertheless, FIF suggests that it may be 

difficult or impossible for Industry 

Members to comply with the 

requirement to report linkages for 

certain scenarios, which it states will be 

required as of February 1, 2025.21 ‘‘In 

some scenarios,’’ FIF states that ‘‘no 

representative order exists, and thus it 

is not possible for industry members to 

provide the linkage to specific 

representative orders that will be 

required as of February 1, 2025.’’ 22 In 

other scenarios, FIF states that ‘‘industry 

members do not maintain this linkage in 

their books and records.’’ 23 Finally, FIF 

states that there are scenarios in which 

‘‘the CAT system does not provide a 

method to provide linkage to a specific 

order.’’ 24

If Industry Members cannot use the 

‘‘YE’’ and ‘‘YP’’ flags to report certain 

trading scenarios and/or must report the 

information necessary for FINRA CAT 

to create lifecycle linkages between 

customer orders and representative 

orders, FIF states that Industry Members 

‘‘will be faced with the choice of either 

(i) submitting large numbers of Order 

Fulfillment events that the CAT system 

will reject and that will not be 

repairable, or (ii) abandoning certain 

common existing trading workflows.’’ 25

FIF further states its view of the 

potential harms that could flow from the 

expiration of the existing exemptive 

relief: 

For example, it is a common workflow for 

industry members to trade as a principal 

against customer orders without the industry 

member creating a firm order. This workflow 

will no longer be possible if the flags 

referenced above are removed from CAT 

because a firm will not be able to report 

Order Fulfillments to CAT when the firm 

fulfills is ‘Manning’ obligation for this 

workflow. Conversely, if industry members 

submit large numbers of Order Fulfillments 

that the CAT system will reject, this will 

present a significant processing and 

workflow challenge for the CAT system, the 

regulators and industry members as large 

numbers of rejected and unsubmitted CAT 

events pile-up.26

FIF states that its members have 

further identified for Commission staff, 

the Participants, and FINRA CAT the 

‘‘significant challenges with 

implementing certain CAT linkage 

requirements relating to representative 

orders and order fulfilments’’ in 

presentations 27 and previous exemptive 

relief requests that were submitted to 

the Commission in March 2024 and July 

2024.28 FIF therefore requests an 

extension of the current exemptive relief 

to identify long-term reporting solutions 

for the specific trading scenarios set 

forth in previous exemptive relief 

requests.29

Section 36(a)(1) of the Exchange Act 

grants the Commission the authority to 

‘‘conditionally or unconditionally 

exempt any person, security, or 

transaction . . . from any provision or 

provisions of [the Exchange Act] or of 


ddrumheller on DSK120RN23PROD with NOTICES1
8080 Federal Register / Vol. 90, No. 14 / Thursday, January 23, 2025 / Notices 

30 15 U.S.C. 78mm(a)(1). 

31 17 CFR 242.608(e). 

32The requirements related to lifecycle linkages 

between customer orders and representative orders 

set forth in Appendix D, section 3 of the CAT NMS 

Plan are described in the Second Order. See Second 

Order, supra note 12, at 42255–56. 

33 15 U.S.C. 78mm(a)(1). 

34 17 CFR 242.608(e). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3 15 U.S.C. 78s(b)(3)(A). 

4 17 CFR 240.19b–4(f)(6). 

5Capitalized terms not defined herein are defined 

in the Rules, By-Laws and Organization Certificate 

of DTC (‘‘DTC Rules’’) or the National Securities 

Clearing Corporation (‘‘NSCC’’) Rules & Procedures 

(‘‘NSCC Rules’’), available at https://www.dtcc.com/ 

legal/rules-and-procedures, or the Second 

Amended and Restated Netting Contract and 

Limited Cross-Guaranty, dated as of October 1, 

2002, between NSCC and DTC, as applicable. 

6The Cross-Guaranty Agreement (i) is a Clearing 

Agency Agreement as defined in the DTC Rules 

(DTC Rule 1, Definitions; Governing Law, supra 

note 5) and is subject to, inter alia, Rule 9(E) of the 

DTC Rules (DTC Rule 9(E), Clearing Agency 

Agreements, supra note 5), and (ii) is a Clearing 

Agency Cross-Guaranty Agreement as defined in the 

NSCC Rules (NSCC Rule 1, Definitions and 

Descriptions, supra note 5) and is subject to, inter 

alia, Rule 25 of the NSCC Rules (NSCC Rule 25, 

Cross-Guaranty Obligation, supra note 5). 

7 15 U.S.C. 78(b)(3)(A). 

8 17 CFR 240.19b–4(f)(6). 

any rule or regulation thereunder, to the 

extent that such exemption is necessary 

or appropriate in the public interest, 

and is consistent with the protection of 

investors.’’ 30 Rule 608(e) of Regulation 

NMS similarly grants the Commission 

the authority to ‘‘exempt from [Rule 

608], either unconditionally or on 

specified terms and conditions, any selfregulatory organization, member 

thereof, or specified security, if the 

Commission determines that such 

exemption is consistent with the public 

interest, the protection of investors, the 

maintenance of fair and orderly markets 

and the removal of impediments to, and 

perfection of the mechanisms of, a 

national market system.’’ 31

The Commission agrees that 

additional time is needed to identify 

and evaluate appropriate long-term 

solutions for certain trading scenarios. 

In developing those solutions, the 

Commission emphasizes its willingness 

to consider alternative solutions that 

achieve the regulatory goals of Rule 613 

and the CAT NMS Plan. The 

Commission therefore determines that 

the requested extension of the existing 

exemptive relief is appropriate in the 

public interest and consistent with the 

protection of investors under section 

36(a)(1) of the Exchange Act, as well as 

consistent with the public interest, the 

protection of investors, the maintenance 

of fair and orderly markets, and the 

perfection of the mechanisms of a 

national market system under Rule 

608(e) of Regulation NMS. 

Specifically, the Commission grants 

temporary conditional exemptive relief 

from the requirements set forth in 

Appendix D, section 3 of the CAT NMS 

Plan related to lifecycle linkages 

between customer orders and 

representative orders,32 for 

representative order scenarios in which 

Industry Members do not have a 

systematic or direct link between their 

order management systems and 

execution management systems, until 

July 31, 2025. Such relief is intended to 

mirror the exemptive relief provided by 

the Second Order, the Third Order, and 

the Fourth Order. 

III. Conclusion 

Accordingly, it is hereby ordered, 

pursuant to Section 36(a)(1) of the 

Exchange Act 33 and Rule 608(e) under 

the Exchange Act,34 that the abovedescribed temporary conditional 

exemptive relief be granted. 

By the Commission. 

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2025–01613 Filed 1–22–25; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–102218; File No. SR–DTC– 

2025–001] 

Self-Regulatory Organizations; The 

Depository Trust Company; Notice of 

Filing and Immediate Effectiveness of 

a Proposed Rule Change To Amend 

and Restate the Second Amended and 

Restated Netting Contract and Limited 

Cross-Guaranty Between NSCC and 

DTC 

January 16, 2025. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Exchange Act’’) 1 and Rule 19b–4 

thereunder,2 notice is hereby given that 

on January 2, 2025, The Depository 

Trust Company (‘‘DTC’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Item I below, 

which Item has been substantially 

prepared by the clearing agency. DTC 

filed the proposed rule change pursuant 

to Section 19(b)(3)(A) of the Exchange 

Act 3 and Rule 19b–4(f)(6) thereunder.4

The Commission is publishing this 

notice to solicit comments on the 

proposed rule change from interested 

persons. 

I. Clearing Agency’s Statement of the 

Terms of Substance of the Proposed 

Rule Change 

The purpose of this proposed rule 

change 5 is to amend and restate the 

Second Amended and Restated Netting 

Contract and Limited Cross-Guaranty, 

dated as of October 1, 2002, between 

NSCC and DTC (the ‘‘Cross-Guaranty 

Agreement’’).6 As part of the proposed 

amendment and restatement of the 

Cross-Guaranty Agreement, NSCC and 

DTC (each, a ‘‘Clearing Agency,’’ and, 

together, the ‘‘Clearing Agencies’’) 

propose to enter into a Third Amended 

and Restated Netting Contract and 

Limited Cross-Guaranty. The proposed 

changes would amend and restate the 

Cross-Guaranty Agreement to (i) revise 

the description of the Clearing Agencies’ 

cross-endorsement procedures to better 

reflect current practices of the Clearing 

Agencies, (ii) simplify and consolidate 

the liquidity and guaranty obligations of 

the Clearing Agencies under the current 

Cross-Guaranty Agreement into a single 

guaranty obligation of each Clearing 

Agency, (iii) provide for the netting of 

guaranty obligations between the 

Clearing Agencies’ in certain instances, 

(iv) provide for more up-to-date 

valuations of securities under the CrossGuaranty Agreement, (v) provide for the 

Clearing Agency receiving securities in 

connection with the performance of the 

other Clearing Agency’s guaranty 

obligation the ability to select the 

particular securities it receives, (vi) 

enhance the information sharing 

between the Clearing Agencies under 

the Cross-Guaranty Agreement, and (vii) 

make appropriate conforming and 

clarifying changes to the Cross-Guaranty 

Agreement. 

The proposed rule change, including 

the Clearing Agency’s statement of the 

purpose of, and statutory basis for, the 

proposed rule change, is available on 

the Clearing Agency’s website at https:// 

www.dtcc.com/legal/sec-rule-filings and 

on the Commission’s website at https:// 

www.sec.gov/rules-regulations/selfregulatory-organization-rulemaking/ 

dtc?file_number=SR-DTC-2025-001. 

II. Date of Effectiveness of the Proposed 

Rule Change and Timing for 

Commission Action 

The Clearing Agency has filed the 

proposed rule change pursuant to 

Section 19(b)(3)(A) of the Act 7 and Rule 

19b–4(f)(6) 8 thereunder. Because the 

foregoing proposed rule change does 

not: (i) significantly affect the protection 

of investors or the public interest; (ii) 

impose any significant burden on 

competition; or (iii) become operative 

for 30 days from the date on which it 

was filed, or such shorter time as the 


ddrumheller on DSK120RN23PROD with NOTICES1