33448 Federal Register / Vol. 86, No. 119 / Thursday, June 24, 2021 / Notices 

15 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release Nos. 91750 

(May 4, 2021), 86 FR 25045 (May 10, 2021) (SR– 

BX–2021–018) (‘‘Notice’’); 91751 (May 4, 2021), 86 

FR 24941 (May 10, 2021) (SR–PHLX–2021–25); 

91752 (May 4, 2021), 86 FR 24921 (May 10, 2021) 

(SR–NASDAQ–2021–029); 91753 (May 4, 2021), 86 

FR 24994 (May 10, 2021) (SR–MRX–2021–05); 

91755 (May 4, 2021), 86 FR 25035 (May 10, 2021) 

(SR–ISE–2021–08); 91756 (May 4, 2021), 86 FR 

24979 (May 10, 2021) (SR–GEMX–2021–03); 91757 

(May 4, 2021), 86 FR 24911 (May 10, 2021) (SR– 

C2–2021–008); 91758 (May 4, 2021), 86 FR 25004 

(May 10, 2021) (SR-CboeEDGX–2021–024); 91759 

(May 4, 2021), 86 FR 24956 (May 10, 2021) (SRCboeEDGA–2021–010); 91760 (May 4, 2021), 86 FR 

24966 (May 10, 2021) (SR–CBOE–2021–030); 91761 

(May 4, 2021), 86 FR 25016 (May 10, 2021) (SRCboeBYX–2021–011); and 91762 (May 4, 2021), 86 

FR 24931 (May 10, 2021) (SR-CboeBZX–2021–034). 

4The CAT NMS Plan defines ‘‘Industry Member’’ 

as ‘‘a member of a national securities exchange or 

a member of a national securities association.’’ See 

CAT NMS Plan, infra note 5, at Section 1.1. 

5The CAT NMS Plan is a national market system 

plan approved by the Commission pursuant to 

Section 11A of the Act and the rules and 

regulations thereunder. See Securities Exchange Act 

Release No. 79318 (November 15, 2016), 81 FR 

84696 (November 23, 2016). 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 (‘‘Company’’). On August 29, 2019, the 

Participants replaced the CAT NMS Plan in its 

entirety with the limited liability company 

agreement of a new limited liability company 

named Consolidated Audit Trail, LLC, which 

became the Company. See Securities Exchange Act 

Release No. 87149 (September 27, 2019), 84 FR 

52905 (October 3, 2019). 

6 15 U.S.C. 78s(b)(3)(A). A proposed rule change 

may take effect upon filing with the Commission if 

it is designated by the exchange as ‘‘establishing or 

changing a due, fee, or other charge imposed by the 

self-regulatory organization on any person, whether 

or not the person is a member of the self-regulatory 

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

7See supra note 3. 

8For a more detailed description of the proposed 

rule changes, see Notice, supra note 3. 

9The 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, 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. 

10See Securities Exchange Act Release No. 67457 

(July 18, 2012), 77 FR 45722 (August 1, 2012). 

11See supra note 5. 

12See CAT NMS Plan, supra note 5, at Section 

11.1(b). 

13 Id. at Section 11.2(c). See Article XI of the CAT 

NMS Plan for additional detail. Id. at Article XI. 

14 Id. at Section 11.2(b) and (e). 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.15

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–13283 Filed 6–23–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92207; File Nos. SR–BX– 

2021–018; SR–C2–2021–008; SR–CBOE– 

2021–030; SR-CboeBYX–2021–011; SRCboeBZX–2021–034; SR-CboeEDGA–2021– 

010; SR-CboeEDGX–2021–024; SR–GEMX– 

2021–03; SR–ISE–2021–08; SR–MRX–2021– 

05; SR–NASDAQ–2021–029; SR–PHLX– 

2021–25] 

Self-Regulatory Organizations; Cboe 

BYX Exchange, Inc.; Cboe BZX 

Exchange, Inc.; Cboe C2 Exchange, 

Inc.; Cboe EDGA Exchange, Inc.; Cboe 

EDGX Exchange, Inc.; Cboe Exchange, 

Inc.; NASDAQ BX, Inc.; Nasdaq GEMX, 

LLC; Nasdaq ISE, LLC; Nasdaq MRX, 

LLC; NASDAQ PHLX LLC and The 

NASDAQ Stock Market LLC; 

Suspension of and Order Instituting 

Proceedings To Determine Whether To 

Approve or Disapprove Proposed Rule 

Changes To Adopt a Fee Schedule To 

Establish Fees for Industry Members 

Related to the National Market System 

Plan Governing the Consolidated Audit 

Trail 

June 17, 2021. 

I. Introduction 

On April 21, 2021, Cboe BYX 

Exchange, Inc. (‘‘CboeBYX’’), Cboe BZX 

Exchange, Inc. (‘‘CboeBZX’’), Cboe C2 

Exchange, Inc. (‘‘C2’’), Cboe EDGA 

Exchange, Inc. (‘‘Cboe EDGA’’), Cboe 

EDGX Exchange, Inc. (‘‘Cboe EDGX’’), 

Cboe Exchange, Inc. (‘‘Cboe’’), NASDAQ 

BX, Inc. (‘‘BX’’), Nasdaq GEMX, LLC 

(‘‘GEMX’’), Nasdaq ISE, LLC (‘‘ISE’’), 

Nasdaq MRX, LLC (‘‘MRX’’), NASDAQ 

PHLX LLC (‘‘Phlx’’), The NASDAQ 

Stock Market LLC (‘‘Nasdaq’’) 

(collectively, the ‘‘Nasdaq and Cboe 

Participants’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’), pursuant to Section 

19(b)(1) of the Securities Exchange Act 

of 1934 (‘‘Act’’) 1 and Rule 19b–4 

thereunder,2 proposed rule changes 3 to 

adopt a fee schedule to establish fees for 

Industry Members 4 related to the 

National Market System Plan Governing 

the Consolidated Audit Trail (‘‘CAT 

NMS Plan’’ or ‘‘Plan’’).5 The proposed 

rule changes were immediately effective 

upon filing with the Commission 

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

Act.6 The proposed rule changes were 

published for comment in the Federal 

Register on May 10, 2021.7 The 

Commission has received no comments 

on the proposed rule changes. 

Pursuant to Section 19(b)(3)(C) of the 

Act, the Commission is hereby: (1) 

Temporarily suspending the proposed 

rule changes; and (2) instituting 

proceedings to determine whether to 

approve or disapprove the proposals. 

II. Summary of the Proposed Rule 

Changes 8

In July 2012, the Commission adopted 

Rule 613 of Regulation NMS, which 

required national securities exchanges 

and national securities associations 

(‘‘Participants’’) 9 to jointly develop and 

submit to the Commission a national 

market system plan (‘‘NMS plan’’) to 

create, implement, and maintain a 

consolidated audit trail (‘‘CAT’’) 10 that 

would capture customer and order event 

information for orders in NMS 

securities. On November 15, 2016, the 

Commission approved the CAT NMS 

Plan required by Rule 613.11 Under the 

CAT NMS Plan, the Operating 

Committee of a newly formed 

company—CAT NMS, LLC, of which 

each Participant is a member—has the 

discretion (subject to the funding 

principles set forth in the CAT NMS 

Plan) to establish funding for the 

Company to operate the CAT, including 

establishing fees to be paid by the 

Participants and Industry Members.12

The Plan specified that, in 

establishing the funding of the 

Company, the Operating Committee 

shall establish ‘‘a tiered fee structure in 

which the fees charged to: (i) CAT 

Reporters that are Execution Venues, 

including ATSs, are based upon the 

level of market share; (ii) Industry 

Members’ non-ATS activities are based 

upon message traffic; and (iii) the CAT 

Reporters with the most CAT-related 

activity (measured by market share and/ 

or message traffic, as applicable) are 

generally comparable (where, for these 

comparability purposes, the tiered fee 

structure takes into consideration 

affiliations between or among CAT 

Reporters, whether Execution Venues 

and/or Industry Members).’’ 13 Under 

the Plan, such fees are to be 

implemented in accordance with 

various funding principles, including an 

‘‘allocation of the Company’s related 

costs among Participants and Industry 

Members that is consistent with the 

Exchange Act taking into account . . . 

distinctions in the securities trading 

operations of Participants and Industry 

Members and their relative impact upon 

the Company resources and operations’’ 

and the ‘‘avoid[ance of] any 

disincentives such as placing an 

inappropriate burden on competition 

and reduction in market quality.’’ 14


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15See Securities Exchange Act Release No. 88890, 

85 FR 31322 (May 22, 2020). 

16See CAT NMS Plan, supra note 5, at Section 

1.1. 

17 Id. at Section 11.6(a)(i). 

18 Id. at Section 11.6(a)(ii) and (iii). 

19See Securities Exchange Act Release No. 91555 

(April 14, 2021), 86 FR 21050 (April 21, 2021). 

20 Id. 

21Section 11.1(b) of the CAT NMS Plan requires 

the Participants to file with the Commission under 

Section 19(b) of the Act any CAT fees applicable to 

Industry Members that the Operating Committee 

approves. See CAT NMS Plan, supra note 5, at 

Section 11.1(b). 

22For additional details regarding these fees, see, 

e.g., Notice, supra note 3. 

23 Id. at 25045. 

24 Id. at 25045–6. 

25 Id. at 25046. 

26See infra Section II.D.a. 

27See infra Section II.D.b. 

28See infra Section II.D.c. 

29See infra Section II.D.d. 

30See, e.g., Notice, supra note 3, at 25049. 

31Proposed CAT Fee Plan Amendment, supra 

note 19, at 21064. 

32See, e.g., Notice, supra note 3, at 25049. 

33 Id. 

34 Id. at 25050. 

35 Id. at 25051. 

36 Id. at 25052. 

37The proposed rule changes state that the 

budgeted Total CAT Costs may be adjusted on a 

quarterly basis, and if the Operating Committee 

adjusts such costs within a year, the adjusted costs 

would be used in calculating the remaining CAT 

fees for that year. Id. at 25052. 

38See, e.g., Notice, supra note 3, at 25050, 25051. 

On May 15, 2020, the Commission 

adopted amendments to the CAT NMS 

Plan designed to increase the 

Participants’ financial accountability for 

the timely completion of the CAT 

(‘‘Financial Accountability 

Amendments’’).15 The Financial 

Accountability Amendments added 

Section 11.6 to the CAT NMS Plan to 

govern the recovery from Industry 

Members of any fees, costs, and 

expenses (including legal and 

consulting fees, costs and expenses) 

incurred by or for the Company in 

connection with the development, 

implementation and operation of the 

CAT from June 22, 2020 until such time 

that the Participants have completed 

Full Implementation of CAT NMS Plan 

Requirements 16 (‘‘Post-Amendment 

Expenses’’). Section 11.6 establishes 

target deadlines for four critical 

implementation milestones (Periods 1, 

2, 3 and 4) 17 and reduces the amount 

of fee recovery available to the 

Participants if these deadlines are 

missed.18

The Participants filed an amendment 

to the CAT NMS Plan on March 31, 

2021 (‘‘Proposed CAT Fee Plan 

Amendment’’) to implement a revised 

funding model (‘‘Proposed Funding 

Model’’) and to establish the CAT fees 

to be charged to themselves.19 On April 

21, 2021, the Proposed CAT Fee Plan 

Amendment was published for 

comment in the Federal Register.20 The 

Commission has not acted on the 

Proposed CAT Fee Plan Amendment. In 

the meantime, the Nasdaq and Cboe 

Participants submitted the proposed 

rule changes that are the subject of this 

Order 21 to adopt a fee schedule to 

establish CAT fees applicable to their 

Industry Members in accordance with 

the Proposed CAT Fee Plan 

Amendment.22 In their filings, the 

Nasdaq and Cboe Participants stated 

that the fee schedule provisions will 

become operative upon the 

Commission’s approval of the Proposed 

CAT Fee Plan Amendment.23

A. Allocation of Total CAT Costs 

Under the Proposed Funding Model, 

‘‘Total CAT Costs’’ would include costs 

associated with developing, 

implementing and operating the CAT 

for the relevant period.24 The Nasdaq 

and Cboe Participants propose to 

recover 75% of the Total CAT Costs 

from Industry Members (‘‘Industry 

Member Allocation’’).25 As detailed 

below, the proposed rule changes would 

recover the Total CAT Costs from 

Industry Members on a quarterly basis 

through four categories of CAT fees: A 

Historical CAT Assessment,26 a Period 3 

CAT Fee,27 a Period 4 CAT Fee 28 and 

a Quarterly CAT Fee.29 The Historical 

CAT Assessment would be designed to 

recover certain CAT costs incurred prior 

to January 1, 2021 (‘‘Historical CAT 

Assessment Costs’’).30 Excluding certain 

costs,31 the Total CAT Costs for this 

period are $193,273,342.32 Under the 

proposed rule changes, the Historical 

CAT Assessment would recover 75% of 

these costs from Industry Members 

($144,955,006).33 As proposed, the 

Period 3 CAT Fee would recover from 

Industry Members 75% of the Total 

CAT Costs incurred from January 1, 

2021 through December 31, 2021.34 The 

Period 4 CAT Fee would recover 75% 

of Total CAT Costs incurred from 

January 1, 2022 through December 30, 

2022.35 Beginning in the second quarter 

of 2023, Industry Members would be 

assessed a Quarterly CAT Fee on an 

ongoing basis of 75% of the budgeted 

Total CAT Costs for the relevant year.36

The proposed rule changes state that the 

budgeted Total CAT Costs would be set 

forth in the annual operating budget 

approved by the Operating Committee 

for the relevant year pursuant to Section 

11.1(a) of the CAT NMS Plan.37 The 

Total CAT Costs applicable to the 

Period 3 and 4 CAT Fees would be set 

forth in the year-end financial 

statements of the Company for 2021 and 

2022, respectively.38


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39The proposed rule changes state that message 

traffic would be calculated based on Industry 

Members’ Reportable Events reported to the CAT, 

as defined in the CAT Reporting Technical 

Specifications for Industry Members. Reportable 

Events that would be counted as message traffic 

would include the New Order Event, the Order 

Route Event and the Trade Event. Message traffic 

would not include reporting activity related to 

Customer information as set forth in the CAT 

Reporting Customer and Account Technical 

Specifications for Industry Members. Id. at 25047. 

40See infra Section II.C. 

41The CAT NMS Plan defines ‘‘Options Market 

Maker’’ as ‘‘a broker-dealer registered with an 

exchange for the purpose of making markets in 

options contracts traded on the exchange.’’ See CAT 

NMS Plan, supra note 5, at Section 1.1. 

42The CAT NMS Plan states that ‘‘Listed Option’’ 

has the meaning set forth in Regulation NMS. Id. 

Rule 600(b)(43) of Regulation NMS defines ‘‘Listed 

Option’’ as ‘‘any option traded on a registered 

national securities exchange or automated facility of 

a national securities association.’’ See 17 CFR 

242.600(b)(43). 

43See, e.g., BX Proposed Rule General 7A(g)(1). 

44See, e.g., Notice, supra note 3, at 25047. See 

also CAT NMS Plan, supra note 5, at Section 1.1., 

Section 6.5(a)(ii). 

45See, e.g., Notice, supra note 3, at 25047. See 

also CAT NMS Plan, supra note 5, at Section 1.1. 

46The proposed rule changes describe the 

adjusted trade count as ‘‘the total number of trades 

for the quarter minus the total number of trade 

busts.’’ See, e.g., Notice, supra note 3, at 25047. 

47For each Options Market Maker, the discount 

would apply to ‘‘(1) all message traffic reported to 

the CAT by the Options Market Maker related to an 

order originated by a market maker in its market 

making account for a security in which it is 

registered . . . and (2) all message traffic for which 

a ‘quote sent time’ is reported by an Options 

Exchange on behalf of the given Options Market 

Maker.’’ Id. 

48See, e.g., BX Proposed Rule General 7A(g)(2). 

49See, e.g., Notice, supra note 3, at 25048. 

50 Id. See also supra note 46. 

51See, e.g., Notice, supra note 3, at 25047. 

52 Id. at 25048; see, e.g., BX Proposed Rule 

General 7A(h)(1). 

53See, e.g., Notice, supra note 3, at 25048. 

54See, e.g., BX Proposed Rule General 7A(h)(2). 

Options Market Makers and Equity Market Makers 

would be required to pay the Minimum Industry 

Member CAT Fee if their quarterly CAT fee 

calculated with the market maker discounts is less 

than $125 per quarter. See, e.g., Notice, supra note 

3, at 25048, n.32. 

55 Id. at 25048. The Commission notes that the 

proposed rule text states ‘‘[t]he Maximum Industry 

Member CAT Fee for each quarter is 8% of the total 

CAT costs for the relevant quarter’’ (emphasis 

added). See, e.g., BX Proposed Rule General 

7A(f)(1). 

56See, e.g., BX Proposed Rule General 7A(f)(2). 

57See, e.g., Notice, supra note 3, at 25049. 

58The Commission notes that $36,238,752 is onequarter of the $144,955,006 Historical CAT 

Assessment Costs. See supra Section II.A. 

59See, e.g., BX Proposed Rule General 7A(b). 

60See supra Section II.A. 

B. Message Traffic 

Under the proposed rule changes, 

each Industry Member would pay a CAT 

fee calculated by multiplying its 

message traffic percentage of total 

Industry Member message traffic per 

quarter 39 by the Industry Member 

Allocation, subject to market maker 

discounts for message traffic, as 

applicable, as well as a minimum fee 

and a maximum fee.40 Under the 

proposed rule changes, when 

calculating the message traffic of an 

Industry Member that is an Options 

Market Maker,41 its market making 

message traffic would be discounted by 

multiplying its Listed Options 42 market 

making message traffic by the Listed 

Options trade-to-quote ratio.43 The 

trade-to-quote ratio would be calculated 

each quarter based on the prior quarter’s 

SIP Data 44 that is included in CAT 

Data.45 The proposed discount would be 

calculated by dividing the adjusted 

trade count 46 by the total number of 

quotes received by the SIPs.47

Under the proposed rule changes, 

when calculating the message traffic of 

an Industry Member that is an equity 

market maker in NMS Stocks (‘‘Equity 

Market Maker’’), its market making 

message traffic would be discounted by 

multiplying its market making message 

traffic in NMS Stocks by the NMS Stock 

trade-to-quote ratio.48 The trade-toquote ratio would be calculated each 

quarter based on the prior quarter’s SIP 

Data that is included in CAT Data.49 The 

proposed discount would be calculated 

by dividing the adjusted trade count by 

the total number of quotes received by 

the SIPs.50 The discounted message 

traffic of Options Market Makers and 

Equity Market Makers would be counted 

as part of total Industry Member 

message traffic.51

C. Minimum and Maximum Industry 

Member CAT Fee 

Under the proposed rule changes, 

each Industry Member would be subject 

to a minimum Industry Member CAT 

fee of $125 per quarter (‘‘Minimum 

Industry Member CAT Fee’’).52 If an 

Industry Member’s CAT fee would be 

less than $125 per quarter, it would pay 

the Minimum Industry Member CAT 

Fee, even if it has not yet begun to 

report to the CAT.53 If any Industry 

Member is required to pay the 

Minimum Industry Member CAT Fee, 

the total additional amount paid by all 

such Industry Members over the amount 

they otherwise would have paid as a 

result of their message traffic calculation 

would be discounted from all Industry 

Members other than those that were 

subject to a Minimum Industry Member 

CAT Fee in accordance with their 

message traffic percentage (‘‘Minimum 

Industry Member CAT Fee ReAllocation’’).54

Under the proposed rule changes, 

each Industry Member’s CAT fee would 

also be subject to a maximum Industry 

Member CAT fee, which would be the 

fee calculated based on 8% of the total 

Industry Member message traffic for the 

relevant quarter (‘‘Maximum Industry 

Member CAT Fee’’).55 If any Industry 

Member’s fee is subject to the Maximum 

Industry Member CAT Fee, any excess 

amount which the Industry Member 

would have paid as a fee above such 

Maximum Industry Member CAT Fee 

will be re-allocated among all Industry 

Members (including any Industry 

Members subject to the Maximum 

Industry Member CAT Fee and any 

Industry Members subject to the 

Minimum Industry Member CAT Fee) in 

accordance with their percentage of 

total message traffic (‘‘Maximum 

Industry Member CAT Fee ReAllocation’’).56

D. Amount and Timing of Proposed 

CAT Fees 

As discussed above, the proposed rule 

changes would recover the Total CAT 

Costs from Industry Members through 

the assessment of four categories of CAT 

fees on a quarterly basis: A Historical 

CAT Assessment, a Period 3 CAT Fee, 

a Period 4 CAT Fee and a Quarterly 

CAT Fee. 

a. Historical CAT Assessment 

The proposed rule changes state that, 

for four calendar quarters commencing 

‘‘in the first quarter after SEC approval 

of the Historical CAT Assessment, based 

on CAT Data from the quarter in which 

the SEC approved the CAT fees,’’ 57 each 

Industry Member would pay a Historical 

CAT Assessment which would be the 

greater of: (1) The Minimum Industry 

Member CAT Fee (plus any applicable 

Maximum Industry Member CAT Fee 

Re-Allocation); or (2) the amount 

calculated by multiplying the 

percentage of the Industry Member’s 

message traffic of the total Industry 

Member message traffic based on the 

prior quarter’s message traffic by 

$36,238,752 58 (subject to the proposed 

market maker discounts for message 

traffic, as applicable, as well as the 

Maximum Industry Member CAT Fee, 

Maximum Industry Member CAT Fee 

Re-Allocation and Minimum Industry 

Member CAT Fee Re-Allocation).59

As discussed above, the proposed 

Historical CAT Assessment is intended 

to recover the Historical CAT 

Assessment Costs, which comprise 

certain CAT costs incurred prior to 

January 1, 2021.60 These costs would 

include costs incurred through June 22, 

2020, the effective date of Section 11.6 

of the CAT NMS Plan, and costs related 

to Post-Amendment Expenses incurred 

during Period 1 (June 22, 2020 through 

July 31, 2020, the date of Initial Industry 


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61See CAT NMS Plan, supra note 5, at Section 

1.1. 

62 Id. 

63See, e.g., Notice, supra note 3, at 25049, 25050. 

64 Id. 

65The Period 3 CAT Costs would be the Total 

CAT Costs incurred from January 1, 2021 through 

December 31, 2021. Id. at 25050. 

66See, e.g., BX Proposed Rule General 7A(c). 

67See, e.g., Notice, supra note 3, at 25050. 

68 Id. at 25051. 

69 Id. 

70 Id. at 25050. The proposed rule changes state 

that the Period 3 CAT Costs will be the total actual 

CAT costs incurred for the CAT for 2021 as set forth 

70 Id. at 25050. The proposed rule changes state 

that the Period 3 CAT Costs will be the total actual 

CAT costs incurred for the CAT for 2021 as set forth 

in the year-end financial statements of the Company 

for 2021. Id. 

71 Id. 

72See, e.g., Notice, supra note 3, at 25050. 

73See CAT NMS Plan, supra note 5, at Section 

1.1. 

74See, e.g., Notice, supra note 3, at 25051. 

75 Id. See also supra note 15. 

76The Period 4 CAT Costs would be the Total 

CAT Costs incurred from January 1, 2022 through 

December 30, 2022. See, e.g., Notice, supra note 3, 

at 25050. 

81 Id. at 25051. The proposed rule changes state 

that the Period 4 CAT Costs will be the total actual 

CAT costs incurred for the CAT in 2022 as set forth 

in the year-end financial statements of the Company 

for 2022. Id. 

82 Id. 

83See, e.g., Notice, supra note 3, at 25052. 

84 Id. at 25051. See also supra note 15. 

85The proposed rule changes state that the 

budgeted Total CAT Costs for the relevant year 

would be the total CAT costs set forth in the annual 

operating budget approved by the Operating 

Committee pursuant to Section 11.1(a) of the CAT 

NMS Plan for the relevant year. See, e.g., Notice, 

supra note 3, at 25052. 

86See, e.g., BX Proposed Rule General 7A(a). 

87See, e.g., Notice, supra note 3, at 25052. 

Member Core Equity and Options 

Reporting 61) and during Period 2 

(August 1, 2020 through December 31, 

2020, the date of the Full 

Implementation of Core Equity 

Reporting 62).63 The Historical CAT 

Assessment Costs would include fees, 

costs and expenses incurred by or for 

the Company in connection with the 

development, implementation and 

operation of the CAT during Periods 1 

and 2.64

b. Period 3 CAT Fee 

Under the proposed rule changes, for 

four quarters commencing in the second 

quarter of 2022, each Industry Member 

would pay a Period 3 CAT Fee which 

would be the greater of: (1) The 

Minimum Industry Member CAT Fee 

(plus any applicable Maximum Industry 

Member CAT Fee Re-Allocation); or (2) 

the amount calculated by multiplying 

the percentage of the Industry Member’s 

message traffic of the total Industry 

Member message traffic based on the 

prior quarter’s message traffic by 1⁄4 of 

75% of the Period 3 Total CAT Costs 65

(subject to the proposed market maker 

message traffic discounts, as applicable, 

as well as the Maximum Industry 

Member CAT Fee, Maximum Industry 

Member CAT Fee Re-Allocation and 

Minimum Industry Member CAT Fee 

Re-Allocation).66

According to the Nasdaq and Cboe 

Participants, the proposed Period 3 CAT 

Fee is intended to recover a percentage 

of the Total CAT Costs incurred from 

January 1, 2021 through December 31, 

2021.67 The Period 3 CAT Costs would 

be related to Post-Amendment 

Expenses 68 and would include fees, 

costs and expenses incurred by or for 

the Company in connection with the 

development, implementation and 

operation of the CAT during Period 3.69

The Period 3 CAT Costs would be 

calculated at the end of 2021 and would 

be set forth in the 2021 financial 

statements for the Company.70 Through 

a CAT alert after the end of 2021, the 

Operating Committee would announce 

the Total CAT Costs for 2021 to be used 

to calculate the Period 3 CAT Fees.71

Industry Members would be required to 

commence paying the Period 3 CAT Fee 

in the second quarter of 2022, based on 

CAT Data from the first quarter of 

2022.72

The proposed rule changes state that 

collection of the full amount of the 

Period 3 CAT Fee will depend upon 

achievement of Full Availability and 

Regulatory Utilization of Transaction 

Database Functionality 73 by December 

31, 2021.74 If such achievement is not 

met, the amount of the Period 3 CAT 

Fee that may be recovered from Industry 

Members will depend upon the fee 

limitations in Section 11.6(a)(ii) of the 

CAT NMS Plan, as established by the 

Financial Accountability 

Amendments.75

c. Period 4 CAT Fee 

Under the proposed rule changes, for 

four quarters commencing in the second 

quarter of 2023, each Industry Member 

shall pay a Period 4 CAT Fee which 

shall be the greater of: (1) The Minimum 

Industry Member CAT Fee (plus any 

applicable Maximum Industry Member 

CAT Fee Re-Allocation); or (2) the 

amount calculated by multiplying the 

percentage of the Industry Member’s 

message traffic of the total Industry 

Member message traffic based on the 

prior quarter’s message traffic by 1⁄4 of 

75% of the Period 4 Total CAT Costs 76

(subject to the proposed market maker 

message traffic discounts, as applicable, 

as well as the Maximum Industry 

Member CAT Fee, Maximum Industry 

Member CAT Fee Re-Allocation and 

Minimum Industry Member CAT Fee 

Re-Allocation).77

According to the Nasdaq and Cboe 

Participants, the proposed Period 4 CAT 

Fee is intended to recover a percentage 

of the Total CAT Costs incurred from 

January 1, 2022 through December 30, 

2022 (the date of Full Implementation of 

CAT NMS Plan Requirements).78 The 

Period 4 CAT Costs would recover costs 

related to Post-Amendment Expenses 79

and would include fees, costs and 

expenses incurred by or for the 

Company in connection with the 

development, implementation and 

operation of the CAT during Period 4.80

The Period 4 CAT Costs would be 

calculated at the end of 2022 and will 

be set forth in the 2022 financial 

statements for the Company.81 Through 

a CAT alert after the end of 2022, the 

Operating Committee would announce 

the Total CAT Costs for 2022 to be used 

to calculate the Period 4 CAT Fees.82

The proposed rule changes state that 

collection of the full amount of the 

Period 4 CAT Fee will depend upon 

achievement of Full Implementation of 

CAT NMS Plan Requirements by 

December 30, 2022.83 If such 

achievement is not met, the amount of 

the Period 4 CAT Fee that may be 

recovered from Industry Members will 

depend upon the fee limitations in 

Section 11.6(a)(ii) of the CAT NMS Plan, 

as established by the Financial 

Accountability Amendments.84

d. Quarterly CAT Fee 

Under the proposed rule changes, on 

an ongoing basis commencing in the 

second quarter of 2023, each Industry 

Member would pay a Quarterly CAT Fee 

which would be the greater of: (1) The 

Minimum Industry Member CAT Fee 

(plus any applicable Maximum Industry 

Member CAT Fee Re-Allocation); or (2) 

the amount calculated by multiplying 

the percentage of the Industry Member’s 

message traffic of the total Industry 

Member message traffic based on the 

prior quarter’s message traffic by 1⁄4 of 

75% of the budgeted Total CAT Costs 85

(subject to the proposed market maker 

message traffic discounts, as applicable, 

as well as the Maximum Industry 

Member CAT Fee, Maximum Industry 

Member CAT Fee Re-Allocation and 

Minimum Industry Member CAT Fee 

Re-Allocation).86

According to the Nasdaq and Cboe 

Participants, the proposed Quarterly 

CAT Fee is intended to recover 

estimated Total CAT Costs budgeted for 

an upcoming year.87 The budgeted Total 

CAT Costs would include Plan 

Processor costs, insurance costs, thirdparty support costs and an operational 


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88 Id. 

89 Id. 

90 Id. 

91 Id. at n.44. 

92 Id. 

93See, e.g., Notice, supra note 3, at 25053. 

94 Id. 

95 Id. 

96 Id. 

97 Id. 98 15 U.S.C. 78s(b)(3)(C). 99 15 U.S.C. 78s(b)(1). 100 17 CFR 242.608. 101 17 CFR 242.608(c). 102See CAT NMS Plan, supra note 5, at Section 

11.3(b). 

103 Id. at Section 11.2(c). 

104 Id. at Section 11.3(b). 

105 Id. at Section 11.1(d). 

106 Id. at Section 11.2(c). 

reserve.88 The Operating Committee 

may adjust the budgeted Total CAT 

Costs on a quarterly basis for the 

prudent operation of the Company, in 

which case, the adjusted budgeted costs 

for the CAT would be used to calculate 

the remaining CAT fees for that year.89

Through a CAT alert at the beginning of 

the relevant year, the Operating 

Committee would announce the 

budgeted Total CAT Costs to be used to 

calculate the Quarterly CAT Fee for the 

year.90

e. Multiple Payments 

According to the proposed rule 

changes, to the extent that any two or 

more of the four categories of Industry 

Member CAT fees are due during the 

same quarter, any Industry Member that 

is obligated to pay one or more 

categories of fees would be required to 

pay each category of fee for that 

quarter.91 The proposed rule changes 

explain, ‘‘[f]or example, if an Industry 

Member would be subject to the 

Minimum Industry Member CAT Fee for 

the Period 4 CAT Fee and the Minimum 

Industry Member CAT Fee for the 

Quarterly CAT Fee during the same 

quarter, the Industry Member would be 

required to pay two minimum $125 fees 

that quarter for a total of $250. As 

another example, suppose that an 

Industry Member owed a CAT fee (other 

than the minimum fee of $125) for both 

the Historical CAT Assessment and the 

Period 3 CAT Fee, the Industry Member 

would be required to pay both fees that 

quarter.’’ 92

f. Timing and Manner of Payment 

Under the proposed rule changes, the 

Company would provide one invoice to 

each Industry Member per payment 

period for the Historical CAT 

Assessment, Period 3 CAT Fee, Period 

4 CAT Fee and Quarterly CAT Fee.93 An 

Industry Member that is a member of 

multiple self-regulatory organizations 

would only receive one invoice from the 

Company per payment period.94

Industry Members would pay their 

CAT fees to the Company through a 

centralized system.95 Payment of CAT 

fees would be due within 30 days after 

receipt of an invoice, unless a longer 

period is indicated.96 If an Industry 

Member’s payment is late, the Industry 

Member would pay interest on the 

outstanding balance from the due date 

until such fee is paid at a per annum 

rate equal to the lesser of (i) the Prime 

Rate plus 300 basis points, or (ii) the 

maximum rate permitted by applicable 

law.97

III. Suspension of the Proposed Rule 

Changes 

Pursuant to Section 19(b)(3)(C) of the 

Act,98 at any time within 60 days of the 

date of filing of an immediately effective 

proposed rule change in accordance 

with Section 19(b)(1) of the Act,99 the 

Commission summarily may 

temporarily suspend the change in the 

rules of a self-regulatory organization 

(‘‘SRO’’) made thereby if it appears to 

the Commission that such action is 

necessary or appropriate in the public 

interest, for the protection of investors, 

or otherwise in furtherance of the 

purposes of the Act. The Commission 

believes a temporary suspension of the 

proposed rule changes is warranted 

here. 

As Participants of the CAT NMS Plan, 

the Nasdaq and Cboe Participants are 

subject to Rule 608 of Regulation NMS 

under the Act,100 which governs the 

filing and amendment of NMS plans. 

Rule 608(c) of Regulation NMS 101

requires each SRO that is a sponsor or 

participant of an effective NMS plan to 

comply with the terms of the plan. In 

temporarily suspending the proposed 

rule changes, the Commission intends to 

consider whether, among other things, 

the following aspects of the proposed 

rule changes are consistent with the 

CAT NMS Plan, and, consequently, Rule 

608(c) of Regulation NMS: 

Alternative Trading Systems: The 

proposed rule changes include all 

alternative trading system (‘‘ATS’’) 

message traffic in calculating Industry 

Member CAT fees. The Commission is 

considering whether the proposed rule 

changes are consistent with Section 

11.3(b) of the Plan, which requires the 

Operating Committee to establish fixed 

fees to be payable by Industry Members, 

that include message traffic generated 

by: (i) An ATS that does not execute 

orders that is sponsored by an Industry 

Member; and (ii) routing orders to and 

from any ATS sponsored by an Industry 

Member.102 In addition, the 

Commission is considering whether the 

proposed rule changes are consistent 

with Section 11.2(c) of the CAT NMS 

Plan, which requires the Operating 

Committee to establish a tiered fee 

structure whereby Industry Members are 

charged fees based on message traffic for 

non-ATS activities.103

Tiered Fixed Fees: Under the 

proposed rule changes, Industry 

Member CAT fees would be calculated 

based on an Industry Member’s 

percentage of total Industry Member 

message traffic without any tiering 

(subject to the proposed market maker 

message traffic discounts, as applicable, 

as well as the Maximum Industry 

Member CAT Fee, the Maximum 

Industry Member CAT Fee ReAllocation and the Minimum Industry 

Member CAT Fee Re-Allocation). The 

Commission is considering whether the 

proposed rule changes are consistent 

with Section 11.3(b) of the CAT NMS 

Plan, which requires the Operating 

Committee to establish at least five, but 

no more than nine, tiers of fixed fees to 

be payable by Industry Members,104 and 

Section 11.1(d) of the Plan, which 

requires the Operating Committee to 

adopt policies, procedures, and 

practices regarding the assignment of 

tiers.105

Comparability: The proposed rule 

changes do not require that CAT fees for 

Industry Members and Participants with 

the most CAT-related activity be 

generally comparable. The Commission 

is considering whether the proposed 

rule changes are consistent with Section 

11.2(c) of the CAT NMS Plan, which 

requires the tiered fee structure to 

charge fees whereby ‘‘CAT Reporters 

with the most CAT-related activity 

(measured by market share and/or 

message traffic, as applicable) are 

generally comparable (where, for these 

comparability purposes, the tiered fee 

structure takes into consideration 

affiliations between or among CAT 

Reporters, whether Execution Venues 

and/or Industry Members).’’ 106

Minimum and Maximum Industry 

Member CAT Fees and Market Maker 

Discounts: In calculating an Industry 

Member’s CAT fee, the proposed rule 

changes would require the application 

of the Minimum Industry Member CAT 

Fee, Minimum Industry Member CAT 

Fee Allocation, Maximum Industry 

Member CAT Fee, Maximum Industry 

Member CAT Fee Allocation, and, as 

applicable, discounts on the message 

traffic of Options Market Makers and 

Equity Market Makers. The Commission 

is considering whether the proposed 

rule changes are consistent with Section 

11.3(b) of the CAT NMS Plan, which 


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107 Id. at Section 11.3(b). 

108See, e.g., Notice, supra note 3, at 25049. 

109 Id. at 25050. 

110 Id. at 25051. 

111See text accompanying notes 15–16. 

112See CAT NMS Plan, supra note 5, at Section 

11.6(a) 

113 Id. 

114See Securities Exchange Act Release No. 

86901 (September 9, 2019), 84 FR 48458, 48472 

(‘‘Requiring the Participants to specify whether any 

proposed fees are related to Post-Amendment 

Expenses, and the Period to which they are related, 

will help the Commission to determine whether it 

must consider the provisions of proposed Section 

11.6 in evaluating the proposed fees.’’). 

115See CAT NMS Plan, supra note 5, at Section 

11.6(b). 

116 Id. at Section 11.6. 117 15 U.S.C. 78s(b)(3)(C). Once the Commission 

temporarily suspends a proposed rule change, 

Section 19(b)(3)(C) of the Act requires that the 

Commission institute proceedings under Section 

19(b)(2)(B) to determine whether a proposed rule 

change should be approved or disapproved. 118 15 U.S.C. 78s(b)(2)(B). 119 15 U.S.C. 78s(b)(2)(B). Section 19(b)(2)(B) of 

the Act also provides that proceedings to determine 

whether to disapprove a proposed rule change must 

be concluded within 180 days of the date of 

publication of notice of the filing of the proposed 

rule change. See id. The time for conclusion of the 

proceedings may be extended for up to 60 days if 

the Commission finds good cause for such 

extension and publishes its reasons for so finding, 

or if the exchanges consent to the longer period. See 

id. 

120 15 U.S.C. 78k–1. 121 17 CFR 242.608(c). 122See supra note 120. 

123See supra note 121. 

124See CAT NMS Plan, supra note 5, at Sections 

11.1(d), 11.2(c), 11.3(b) and 11.6. 

125See, e.g., Notice, supra note 3. 

requires the Operating Committee to 

establish fixed fees to be payable by 

Industry Members, based on the 

message traffic generated by such 

Industry Member, subject to tiering.107

Financial Accountability Milestones: 

In describing the costs to be recovered 

by the Historical CAT Assessment, the 

proposed rule changes refer to ‘‘certain 

costs from Period 1 of the Financial 

Accountability Milestones (which 

covered the period from June 22, 2020– 

July 31, 2020 and certain costs from 

Period 2 of the Financial Accountability 

Milestones (which covered the period 

from August 1, 2020–December 31, 

2020).’’ 108 For the Period 3 CAT Fee, 

the proposed rule changes refer to 

‘‘Total CAT Costs incurred from January 

1, 2021 through December 31, 2021.’’ 109

For the Period 4 CAT Fee, the proposed 

rule changes refer to ‘‘Total CAT Costs 

incurred from January 1, 2022 through 

December 30, 2022.’’ 110

Section 11.6 of the CAT NMS Plan 

provides that the Participants may 

recover from Industry Members PostAmendment Expenses 111 over four 

Periods: Period 1, Period 2, Period 3 and 

Period 4. Section 11.6(a) sets target 

deadlines for each Period and 

establishes a fee reduction schedule if 

those target deadlines are missed.112

The target dates for Period 1, Period 2, 

Period 3 and Period 4 are July 31, 2020, 

December 31, 2020, December 31, 2021 

and December 30, 2022, respectively.113

To enable the Commission to determine 

whether the fee reduction provisions 

should be applied to fees associated 

with a specific Period,114 Section 

11.6(b) further requires that filings 

submitted by the Participants to the 

Commission under Section 19(b) of the 

Act, to establish or implement fees to 

recover Post-Amendment Expenses, 

must clearly indicate whether such fees 

are related to Post-Amendment 

Expenses incurred during Period 1, 

Period 2, Period 3, or Period 4.115 The 

Commission is considering whether the 

aspects of the proposed rule changes 

related to the Financial Accountability 

Milestones are consistent with Section 

11.6 of the CAT NMS Plan.116

IV. Proceedings To Determine Whether 

To Approve or Disapprove the 

Proposed Rule Changes 

The Commission also hereby 

institutes proceedings pursuant to 

Sections 19(b)(3)(C) 117 and 19(b)(2)(B) 

of the Act 118 to determine whether the 

proposed rule changes should be 

approved or disapproved. Institution of 

proceedings does not indicate that the 

Commission has reached any 

conclusions with respect to any of the 

issues involved. Rather, as stated below, 

the Commission seeks and encourages 

interested persons to provide comment 

on the proposed rule change to inform 

the Commission’s analysis of whether to 

disapprove the proposed rule change. 

Pursuant to Section 19(b)(2)(B) of the 

Act,119 the Commission is hereby 

providing notice of the grounds for 

disapproval under consideration. The 

Commission believes that instituting 

proceedings will allow for additional 

analysis of, and input from commenters 

with respect to, the proposed rule 

change’s consistency with Section 11A 

of the Act 120 and Rule 608(c) of 

Regulation NMS thereunder.121 Section 

11A of the Act directs the Commission, 

with due regard for the public interest, 

the protection of investors, and the 

maintenance of fair and orderly markets, 

to use its authority to facilitate the 

establishment of a national market 

system for securities, including by 

authorizing or requiring SROs to act 

jointly to plan, develop, operate, or 

regulate an NMS plan. Rule 608(c) 

requires each SRO to comply with the 

terms of any effective NMS plan of 

which it is a sponsor or a participant. As 

discussed above, the Commission is 

considering whether the proposed rule 

changes are consistent with Section 11A 

of the Act 122 and the rules and 

regulations thereunder, including Rule 

608(c).123 The Commission also is 

considering whether the proposed rule 

changes are consistent with Sections 

11.1(d), 11.2(c), 11.3(b) and 11.6 of the 

CAT NMS Plan.124

V. Commission’s Solicitation of 

Comments 

The Commission requests written 

views, data, and arguments with respect 

to the concerns identified above as well 

as any other relevant concerns. Such 

comments should be submitted by July 

15, 2021. Rebuttal comments should be 

submitted by July 29, 2021. The 

Commission asks that commenters 

address the sufficiency and merit of the 

Participants’ statements in support of 

the proposal, which are set forth in the 

proposed rule changes,125 in addition to 

any other comments they may wish to 

submit about the proposed rule changes. 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the proposed rule 

changes, including whether the 

proposed rule changes are consistent 

with the Act. Comments may be 

submitted by any of the following 

methods: 

Electronic Comments 

• Use the Commission’s internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include any of: File Nos. 

SR–BX–2021–018; SR–C2–2021–008; 

SR–CBOE–2021–030; SR–CboeBYX– 

2021–011; SR–CboeBZX–2021–034; SR– 

CboeEDGA–2021–010; SR–CboeEDGX– 

2021–024; SR–GEMX–2021–03; SR– 

ISE–2021–08; SR–MRX–2021–05; SR– 

NASDAQ–2021–029; or SR–PHLX– 

2021–25 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to any of: 

File Nos. SR–BX–2021–018; SR–C2– 

2021–008; SR–CBOE–2021–030; SR– 

CboeBYX–2021–011; SR–CboeBZX– 

2021–034; SR–CboeEDGA–2021–010; 

SR–CboeEDGX–2021–024; SR–GEMX– 

2021–03; SR–ISE–2021–08; SR–MRX– 

2021–05; SR–NASDAQ–2021–029; or 

SR–PHLX–2021–25 on the subject line. 

The file numbers should be included on 

the subject line if email is used. To help 

the Commission process and review 


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126 15 U.S.C. 78s(b)(3)(C). 

127 17 CFR 200.30–3(a)(57) and (58). 

1THL Credit Inc., et al., Investment Company Act 

Rel. No. 33212 (Aug. 24, 2018) (notice) and 

Investment Company Act Rel. No. 33239 (Sep. 19, 

2018) (order). 

your comments more efficiently, please 

use only one method. The Commission 

will post all comments on the 

Commission’s internet website (http://

www.sec.gov/rules/sro.shtml). Copies of 

the submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

changes that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule changes between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549, on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of such 

filing also will be available for 

inspection and copying at the principal 

office of the Participants. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to any of: File 

Nos. SR–BX–2021–018; SR–C2–2021– 

008; SR–CBOE–2021–030; SR– 

CboeBYX–2021–011; SR–CboeBZX– 

2021–034; SR–CboeEDGA–2021–010; 

SR–CboeEDGX–2021–024; SR–GEMX– 

2021–03; SR–ISE–2021–08; SR–MRX– 

2021–05; SR–NASDAQ–2021–029; or 

SR–PHLX–2021–25 and should be 

submitted on or before July 15, 2021. 

Rebuttal comments should be submitted 

by July 29, 2021. 

VI. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(3)(C) of the Act,126 that 

File Nos. SR–BX–2021–018; SR–C2– 

2021–008; SR–CBOE–2021–030; SR– 

CboeBYX–2021–011; SR–CboeBZX– 

2021–034; SR–CboeEDGA–2021–010; 

SR–CboeEDGX–2021–024; SR–GEMX– 

2021–03; SR–ISE–2021–08; SR–MRX– 

2021–05; SR–NASDAQ–2021–029; and 

SR–PHLX–2021–25 be and hereby are, 

temporarily suspended. In addition, the 

Commission is instituting proceedings 

to determine whether the proposed rule 

changes should be approved or 

disapproved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.127

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–13247 Filed 6–23–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

34301; File No. 812–15151] 

First Eagle Alternative Capital BDC, 

Inc., et al. 

June 15, 2021. 

AGENCY: Securities and Exchange 

Commission (‘‘Commission’’). 

ACTION: Notice. 

Notice of application for an order 

(‘‘Order’’) under sections 17(d) and 57(i) 

of the Investment Company Act of 1940 

(the ‘‘Act’’) and rule 17d–1 under the 

Act to permit certain joint transactions 

otherwise prohibited by sections 17(d) 

and 57(a)(4) of the Act and rule 17d–1 

under the Act. The Order would 

supersede the prior order.1

Summary of Application: Applicants 

request an order to permit certain 

business development companies 

(‘‘BDCs’’) and closed-end management 

investment companies to co-invest in 

portfolio companies with each other and 

with certain affiliated investment funds 

and accounts. 

Applicants: First Eagle Alternative 

Capital BDC, Inc. (‘‘FCRD’’), First Eagle 

Credit Opportunities Fund (‘‘FECOF’’), 

First Eagle BDC, LLC (‘‘FE BDC’’), First 

Eagle Alternative Capital Holdings, Inc. 

(‘‘FCRD Subsidiary’’), First Eagle 

Investment Management, LLC (‘‘First 

Eagle’’), First Eagle Alternative Credit, 

LLC (‘‘FEAC’’), First Eagle Alternative 

Credit EU, LLC (‘‘FEAC EU,’’ together 

with First Eagle and FEAC, the 

‘‘Existing Advisers’’), First Eagle Credit 

Opportunities Fund SPV, LLC, First 

Eagle Direct Lending Fund I, LP, First 

Eagle Direct Lending Fund I (EE), LP, 

First Eagle Direct Lending Fund I 

(Parallel), LP, First Eagle DL Fund I 

Aggregator LLC, NewStar Arlington 

Senior Loan Program LLC, First Eagle 

Berkeley Fund CLO LLC, First Eagle 

Commercial Loan Funding 2016–1 LLC, 

First Eagle Commercial Loan Originator 

I LLC, First Eagle Dartmouth Holding 

LLC, NewStar Fairfield Fund CLO Ltd., 

First Eagle Warehouse Funding I LLC, 

Lake Shore MM CLO I Ltd., First Eagle 

Direct Lending Fund III LLC, First Eagle 

Direct Lending Co-Invest III (E) LLC, 

First Eagle Direct Lending Co-Invest III 

LLC, First Eagle Direct Lending Fund III 

(A) LLC, Lake Shore MM CLO II Ltd., 

Lake Shore MM CLO III LLC, First Eagle 

Direct Lending Fund IV, LLC, First 

Eagle Direct Lending Levered Fund IV, 

LLC, First Eagle Direct Lending IV CoInvest, LLC, First Eagle Direct Lending 

Levered Fund IV SPV, LLC, First Eagle 

Direct Lending V–A, LLC, First Eagle 

Direct Lending V–B, LLC, First Eagle 

Direct Lending V–C SCSP, South Shore 

V LLC, Wind River 2018–1 CLO Ltd., 

Wind River 2018–2 CLO Ltd., Wind 

River 2018–3 CLO Ltd., Wind River 

2019–1 CLO Ltd., Wind River 2019–2 

CLO Ltd., Wind River 2019–3 CLO Ltd., 

Wind River 2020–1 CLO Ltd., Wind 

River 2021–1 CLO Ltd., Wind River 

2021–2 CLO, Ltd., Bighorn III, Ltd., 

NewStar Commercial Loan Funding 

2017–1 LLC, First Eagle Clarendon Fund 

CLO LLC, NewStar Exeter Fund CLO 

LLC, Arch Street CLO, Ltd., First Eagle 

BSL CLO 2019–1 Ltd., Hull Street CLO, 

Ltd., Longfellow Place CLO, Ltd., 

Staniford Street CLO, Ltd. and First 

Eagle Strategic Funding, LLC. 

Filing Dates: The application was 

filed on August 13, 2020, and amended 

on December 18, 2020, March 31, 2021 

and May 27, 2021. 

Hearing or Notification of Hearing: An 

order granting the requested relief will 

be issued unless the Commission orders 

a hearing. Interested persons may 

request a hearing by emailing the 

Commission’s Secretary at SecretarysOffice@sec.gov and serving applicants 

with a copy of the request, by email. 

Hearing requests should be received by 

the Commission by 5:30 p.m. on July 12, 

2021, and should be accompanied by 

proof of service on the applicants, in the 

form of an affidavit, or, for lawyers, a 

certificate of service. Pursuant to rule 

0–5 under the Act, hearing requests 

should state the nature of the writer’s 

interest, any facts bearing upon the 

desirability of a hearing on the matter, 

the reason for the request, and the issues 

contested. Persons who wish to be 

notified of a hearing may request 

notification by emailing the 

Commission’s Secretary at SecretarysOffice@sec.gov. 

ADDRESSES: The Commission: 

Secretarys-Office@sec.gov. Applicants: 

c/o Sabrina Rusnak-Carlson, 500 

Boylston Street, Suite 1200, Boston, MA 

02116, and by email to: David.Blass@

stblaw.com; Rajib.Chanda@stblaw.com 

and Christopher.Healey@stblaw.com. 

FOR FURTHER INFORMATION CONTACT: 

Laura L. Solomon, Senior Counsel, at 


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