Federal Register / Vol. 87, No. 105 / Wednesday, June 1, 2022 / Notices 33223 

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

2 17 CFR 240.19b–4. 

3Self-Regulatory Organizations; ICE Clear Credit 

LLC; Notice of Filing of Proposed Rule Change 

Relating to the ICC Recovery Plan and the ICC 

Wind-Down Plan, Exchange Act Release No. 94650 

(Apr. 8, 2022); 87 FR 22276 (Apr. 14, 2022) (File 

No. SR–ICC–2022–004) (‘‘Notice’’). 

4The term ‘‘covered clearing agency’’ is defined 

in Rule 17Ad–22(a)(5), 17 CFR 240.17Ad–22(a)(5). 

ICC became subject to the requirements in Rule 

17Ad–22(e) with the amendment to the definition 

of the term ‘‘covered clearing agency.’’ See 

Definition of ‘‘Covered Clearing Agency,’’ Exchange 

Act Release No. 88616 (Apr. 9, 2020), 85 FR 28853 

(May 14, 2020) (File No. S7–23–16). 

5 17 CFR 240.17Ad–22(e)(3)(ii). 

6Standards for Covered Clearing Agencies, 

Exchange Act Release No. 78961 (Sep. 28, 2016), 81 

FR 70786, 70809 (Oct. 13, 2016) (File No. S7–03– 

14). 

7 ICC became a ‘‘covered clearing agency’’ 

following a change in the definition of the term in 

Rule 17Ad–22(a)(5). The previous definition of 

‘‘covered clearing agency’’ in Rule 17Ad–22(a)(5) 

stated that ‘‘covered clearing agency’’ means a 

designated clearing agency or a clearing agency 

involved in activities with a more complex risk 

profile for which the Commodity Futures Trading 

Commission is not the Supervisory Agency as 

defined in Section 803(8) of the Payment, Clearing 

and Settlement Supervision Act of 2010 (12 U.S.C. 

5461 et seq.). Under this definition, ICC was not a 

covered clearing agency. Under the revised 

definition, ‘‘covered clearing agency’’ means a 

registered clearing agency that provides the services 

of a central counterparty or central securities 

depository. Under the revised definition, ICC is a 

covered clearing agency. See Definition of ‘‘Covered 

Clearing Agency’’, Exchange Act Release No. 88616 

(Apr. 9, 2020), 85 FR 28853, 28854–55 (May 14, 

2020) (File No. S7–23–16). 

8Self-Regulatory Organizations; ICE Clear Credit 

LLC; Order Approving Proposed Rule Change 

Relating to the ICC Recovery Plan and the ICC 

Wind-Down Plan, Exchange Act Release No. 91806 

(May 10, 2021), 86 FR 26561 (May 14, 2021) (File 

No. SR–ICC–2021–005). 

9The descriptions of the Recovery and WindDown Plans are substantially excerpted from the 

Notice. Moreover, capitalized terms not otherwise 

defined herein have the meanings assigned to them 

in ICC Rules (‘‘Rules’’) or the Plans. 

would be 0.75 hours. Assuming that all 

285 funds that enter into new 

subadvisory contracts each year make 

the modification to their contract 

required by the rule, we estimate that 

the rule’s contract modification 

requirement will result in 214 burden 

hours annually. 

An agency may not conduct or 

sponsor, and a person is not required to 

respond to, a collection of information 

unless it displays a currently valid 

control number. 

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 in 

writing within 60 days of this 

publication by August 1, 2022. 

Please direct your written comments 

to David Bottom, Director/Chief 

Information Officer, Securities and 

Exchange Commission, C/O John 

Pezzullo, 100 F Street NE, Washington, 

DC 20549; or send an email to: PRA_

Mailbox@sec.gov. 

Dated: May 25, 2022. 

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–11662 Filed 5–31–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–94983; File No. SR–ICC– 

2022–004] 

Self-Regulatory Organizations; ICE 

Clear Credit LLC; Order Approving 

Proposed Rule Change Relating to the 

ICC Recovery Plan and the ICC WindDown Plan 

May 25, 2022. 

I. Introduction 

On April 1, 2022, CE Clear Credit LCC 

(‘‘ICC’’) filed with the Securities and 

Exchange Commission (‘‘Commission’’), 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’),1 and Rule 19b–4 thereunder,2 a 

proposed rule change to amend the ICC 

Recovery Plan and the ICC Wind-Down 

Plan (collectively, the ‘‘Plans’’). The 

proposed rule change was published for 

comment in the Federal Register on 

April 14, 2022.3 The Commission did 

not receive comments regarding the 

proposed rule change. For the reasons 

discussed below, the Commission is 

approving the proposed rule change. 

II. Description of the Proposed Rule 

Change 

A. Background 

As a ‘‘covered clearing agency,’’ 4 ICC 

is required to, among other things, 

‘‘establish, implement, maintain and 

enforce written policies and procedures 

reasonably designed to . . . maintain a 

sound risk management framework for 

comprehensively managing legal, credit, 

liquidity, operational, general business, 

investment, custody, and other risks 

that arise in or are borne by the covered 

clearing agency, which . . . includes 

plans for the recovery and orderly winddown of the covered clearing agency 

necessitated by credit losses, liquidity 

shortfalls, losses from general business 

risk, or any other losses.’’ 5 The 

Commission has previously clarified 

that it believes that such recovery and 

wind-down plans are ‘‘rules’’ within the 

meaning of Exchange Act Section 19(b) 

and Rule 19b–4 thereunder because 

such plans would constitute changes to 

a stated policy, practice, or 

interpretation of a covered clearing 

agency.6 Accordingly, a covered 

clearing agency, such as ICC, is required 

to file its plans for recovery and orderly 

wind-down with the Commission.7

Recovery and Wind-Down Plans have 

been in place at ICC for a number of 

years and approved by the Commission 

on May 10, 2021 for the first time since 

becoming a ‘‘covered clearing agency’’ 

under the definition in Rule 17Ad– 

22(a)(5).8

B. Recovery Plan 

The proposed rule change would 

make general updates to ensure that the 

information in the Recovery Plan is 

current and relates to changes that 

impacted ICC in the past year.9 The 

Recovery Plan would be updated to 

specify that the information provided is 

current as of December 31, 2021, unless 

otherwise stated. 

The proposed rule change would 

make the following updates related to 

ICC’s ownership and operations: 

• In Section II.A, add one additional 

entity to the list of companies owned by 

ICC’s parent. 

• In Section IV.A, adds iTraxx Index 

Swaptions as an example of the Index 

Swaptions products for which ICC 

provides clearing services. 

• In Section IV.D, updates numbers 

for ICC’s revenues, volumes, and 

expenses and includes those for Index 

Swaptions. 

• In Section VI.A, updates locations 

of facilities and personnel headcount 

and functions. 

• In Section X, updates the projected 

recovery and wind-down costs and 

regulatory capital. 

• In Section XI, updates ICC’s and 

ICE Group’s financial statements. 

• In Section XIII, updates the 

percentages held by financial services 

providers of clearing participant cash 

and collateral. 

The proposed rule change would also 

revise Section IV.C.1 to reflect (i) the 

change of the Board size from eleven to 

nine managers, consistent with the 


jspears on DSK121TN23PROD with NOTICES1
33224 Federal Register / Vol. 87, No. 105 / Wednesday, June 1, 2022 / Notices 

10 15 U.S.C. 78s(b)(2)(C). 

11 15 U.S.C. 78q–1(b)(3)(F). 

12 17 CFR 240.17Ad–22(e)(2) (v). 

13 17 CFR 240.17Ad–22(e)(3)(ii). 

14 15 U.S.C. 78q–1(b)(3)(F). 

adoption of the Sixth Amended and 

Restated Operating Agreement of ICC in 

2021, (ii) the reduction of the number of 

independent and non-independent 

managers by one, (iii) the revision of 

manager titles, and (iv) the removal of 

two specific managers. 

The proposed rule change would also 

change Section IV.C.3 to update the 

description of the responsibilities and 

membership composition of the 

Participant Review Committee (‘‘PRC’’) 

and Credit Review Subcommittee of the 

PRC (‘‘CRS’’), which are internal 

committees that assist in fulfilling 

counterparty review responsibilities, 

consistent with changes to their charters 

in 2021. The proposed rule change 

would also make corresponding changes 

in Section VI.B.1 to describe the 

advisory role of the CRS in making 

recommendations to the PRC and the 

required role of the PRC in approving 

FSPs. 

The proposed rule change would also 

amend Section IV.E.4 to state that ICC 

monitors the FSPs daily, intraday, and 

monthly, consistent with the processes 

described in the ICC Counterparty 

Monitoring Procedures. 

ICC would revise Section VII.B to 

remove discussion of a metric no longer 

used to measure ICC’s performance, and 

to update the date of a referenced 

policy. 

Under the proposed rule change, 

Section VII.C would specify that ICC 

will make required disclosures pursuant 

to applicable regulations once the 

Recovery Plan is initiated, and would 

include updated regulatory contacts. In 

Section VIII.B.2, the proposed changes 

would add minor language clarifications 

in describing the purpose of its 

Liquidity Risk Management Framework. 

In Section VIII.B.3, the proposed 

changes would make updates regarding 

the insurance coverage maintained at 

the ICE Group level, which may be used 

as a recovery tool in a non-clearing 

participant default scenario. 

Under the proposed rule change, 

Section VIII.B.3 would reflect updated 

balance sheet information that 

demonstrates the ability of ICC’s parent 

to make cash infusions to ICC as a 

recovery tool. Relatedly, the proposed 

rule change would amend the 

procedures for seeking such additional 

capital, including the individual within 

the ICE Group with whom such 

discussions would begin. The proposed 

changes would also identify the role of 

this individual within the ICE Group 

and update the description of the 

composition of certain ICE Group 

boards. Additionally, the proposed rule 

change would include updated financial 

information relevant to the efficacy of 

several other recovery tools that may be 

utilized in a non-clearing participant 

default scenario. 

ICC also proposed minor edits for 

clarity and consistency. Specifically, 

Section IX would be amended to clarify 

that the Recovery Plan is made available 

to regulators in accordance with 

relevant regulations, and to incorporate 

a reference to the ICC Default 

Management Procedures for details on 

ICC’s default management testing. 

Section XIV would include an updated 

index of exhibits referring to the current 

versions of policies and procedures, 

consistent with updated footnote 

references. Finally, the proposed rule 

change would make minor 

typographical fixes in the Recovery Plan 

as well as conforming changes in in the 

Wind-Down Plan, including updates to 

entity names, and grammatical and 

formatting changes. 

C. Wind-Down Plan 

The proposed rule changes to the 

Wind-Down Plan are, in large part, 

substantially similar to the proposed 

changes to the Recovery Plan, including 

general updates, clarifying edits, and 

amendments to make the information in 

the Wind-Down Plan current and reflect 

changes that have impacted ICC in the 

past year, including changes to the 

composition of the Board. 

Similar to the Recovery Plan, the 

document would be amended 

throughout to specify that the 

information provided is current as of 

December 31, 2021, unless otherwise 

stated. Under the proposed rule change, 

The Wind-Down Plan would also reflect 

the addition of one entity to the list of 

companies owned by ICC’s parent, as 

well as updates to facilities and 

personnel information, the financial 

resources available to support winddown, and the percentages of cash and 

collateral held by FSPs in Appendix C. 

Further, as with the Recovery Plan, 

the proposed changes to the WindDown Plan would update the 

description of the composition of the 

Board to reflect changes from 2021, 

including changes to the Board size 

from eleven to nine managers and 

revisions to manager titles. The 

proposed changes also describe 

procedures for seeking certain required 

consultations or approvals identified in 

the Wind-Down Plan, including the 

individual within the ICE Group with 

whom such discussions would begin. 

The proposed changes would identify 

the role of this individual within the 

ICE Group and include information on 

the composition of a relevant ICE Group 

board. The proposed changes would 

also specify that ICC will make required 

disclosures pursuant to applicable 

regulations once the decision to winddown is made, and update ICC’s 

regulatory contacts. 

Finally, Section X would be amended 

to note that the Wind-Down Plan is 

made available to regulators in 

accordance with relevant regulations 

and to state broadly that the testing of 

the Wind-Down Plan considers various 

options. In Section XII, the proposed 

rule change would update the index of 

exhibits to reflect the current versions of 

policies and procedures. 

III. Discussion and Commission 

Findings 

Section 19(b)(2)(C) of the Act directs 

the Commission to approve a proposed 

rule change of a self-regulatory 

organization if it finds that such 

proposed rule change is consistent with 

the requirements of the Act and the 

rules and regulations thereunder 

applicable to such organization.10 For 

the reasons given below, the 

Commission finds that the proposed 

rule change is consistent with Section 

17A(b)(3)(F) of the Act 11 and Rule 

17Ad–22(e)(2)(v),12 and (e)(3)(ii).13

A. Consistency With Section 

17A(b)(3)(F) of the Act 

Section 17A(b)(3)(F) of the Act 

requires, among other things, that the 

rules of ICC be designed to promote the 

prompt and accurate clearance and 

settlement of securities transactions 

and, to the extent applicable, derivative 

agreements, contracts, and transactions, 

as well as to assure the safeguarding of 

securities and funds which are in the 

custody or control of ICC or for which 

it is responsible, and, in general, to 

protect investors and the public 

interest.14

As noted above, the proposed rule 

changes relate mainly to updating the 

Recovery and Wind-Down Plans with 

current information about ICC’s 

facilities, finances, operations, and 

Board. The Commission believes that by 

providing updated numbers for ICC’s 

revenues, volumes, and expenses, 

including projected recovery and winddown costs and regulatory capital, the 

proposed changes will enhance ICC’s 

ability to monitor its finances and 

compare its regulatory capital to its 

estimated recovery and wind-down 

costs. This in turn will help ensure ICC 

has the financial resources to promptly 

and accurately clear and settle 


jspears on DSK121TN23PROD with NOTICES1
Federal Register / Vol. 87, No. 105 / Wednesday, June 1, 2022 / Notices 33225 

15 15 U.S.C. 78q–1(b)(3)(F). 

16 17 CFR 240.17Ad–22(e)(2)(v). 

17 17 CFR 240.17Ad–22(e)(2)(v). 

18 17 CFR 240.17Ad–22(e)(3)(ii). 

19 17 CFR 240.17Ad–22(e)(3)(ii). 

20 15 U.S.C. 78q–1(b)(3)(F). 

21 17 CFR 240.17Ad–22(e)(2)(v) and (e)(3)(ii). 

22 15 U.S.C. 78s(b)(2). 

23 In approving the proposed rule change, the 

Commission considered the proposal’s impact on 

efficiency, competition, and capital formation. 15 

U.S.C. 78c(f). 

24 17 CFR 200.30–3(a)(12). 

transactions during recovery and, if 

necessary, conduct an orderly winddown. 

Further, the Commission believes that 

adding iTraxx Index Swaptions to the 

list of Index Swaptions products for 

which ICC provides clearing services, 

adding the additional entity to the list 

of ICC parent-owned companies, and 

providing an updated exhibit index will 

generally support those utilizing the 

Plans by providing users of the Plans a 

current overview of ICC’s full 

operations, including all of its 

businesses and cleared products. 

As noted above, the proposed rule 

change would also update description of 

the Board size and its composition as 

well as the responsibilities and 

membership composition of the PRC 

and CRS. The Commission believes that 

these proposed changes would 

strengthen the Plans by ensuring that 

they delineate responsible individuals 

and their duties, which will support 

efficient operation of ICC, including 

during recovery or wind-down by 

ensuring they reflect the Sixth Amended 

and Restated Operating Agreement of 

ICC and amended committee charters. 

The proposed rule changes would 

also state that ICC monitors the FSPs 

daily, intraday, and monthly, consistent 

with the processes described in the ICC 

Counterparty Monitoring Procedures 

and update a metric used to measure 

ICC’s performance. The Commission 

believes that these changes would 

enhance ICC’s ability to manage its 

financial resources by ensuring they 

reflect current ICC’s Counterparty 

Monitoring Procedures, which in turn 

will enable ICC to promptly and 

accurately clear and settle securities 

transactions. 

The Commission believes that the 

proposed changes to specify that ICC 

will make required disclosures pursuant 

to applicable regulations once the Plans 

are initiated, update regulatory contacts, 

and to state that the Plans are made 

available to regulators in accordance 

with relevant regulations enhance ICC’s 

procedures for keeping regulatory 

authorities informed thereby promoting 

the protection of investors and the 

public interest. 

As noted above, the proposed rule 

change would also amend the 

procedures for seeking additional 

capital from ICC’s parent by including 

the current individual within the ICE 

Group with whom such discussions 

would begin. The proposed changes 

would also include procedures for 

seeking certain required consultations 

or approvals identified in the WindDown Plan, including the individual 

within the ICE Group with whom such 

discussions would begin. The proposed 

changes would identify the role of this 

individual within the ICE Group. The 

Commission believes that these 

proposed changes would strengthen the 

plans by ensuring those utilizing them 

have all of the information necessary to 

carryout recovery or an orderly winddown, which in turn would ensure ICC 

can promptly and accurately clear and 

settle trades and safeguard of securities 

and funds which are in its custody or 

control at these times. 

For the reasons stated above, the 

Commission believes that the proposed 

rule change is consistent with Section 

17A(b)(3)(F) of the Act.15

B. Consistency With Rules 17Ad– 

22(e)(2)(v) 

Rules 17Ad–22(e)(2)(v) requires that 

ICC establish, implement, maintain, and 

enforce written policies and procedures 

reasonably designed to, as applicable, 

provide for governance arrangements 

that specify clear and direct lines of 

responsibility.16

The Commission believes that the 

proposed rule changes help contribute 

to establishing, implementing, 

maintaining, and enforcing written 

policies and procedures reasonably 

designed to provide for governance 

arrangements that specify lines of 

control and responsibility because they 

update the number of board members, 

board composition, titles, and roles of 

committees. 

The Commission also believes that the 

proposed changes provide clear and 

direct lines of authority because they 

identify the individual within the ICE 

Group with whom discussions for 

seeking additional capital in recovery 

from ICC’s parent would begin as well 

as the procedures for seeking certain 

required consultations or approvals 

identified in the Wind-Down Plan, 

including the individual within the ICE 

Group with whom such discussions 

would begin. Further, the Commission 

believes that proposed changes to 

certain titles of managers and the 

removal of former managers promotes 

governance arrangements that specify 

lines of control and responsibility by 

including current information about 

individuals and their roles. 

Therefore, the Commission finds that 

the proposed rule change is consistent 

with Rule 17Ad–22(e)(2)(v).17

D. Consistency With Rule 17Ad– 

22(e)(3)(ii) 

Rule 17Ad–22(e)(3)(ii) requires ICC to 

establish, implement, maintain, and 

enforce written policies and procedures 

reasonably designed to maintain a 

sound risk management framework for 

comprehensively managing legal, credit, 

liquidity, operational, general business, 

investment, custody, and other risks 

that arise in or are borne by ICC, which 

includes plans for the recovery and 

orderly wind-down of ICC necessitated 

by credit losses, liquidity shortfalls, 

losses from general business risk, or any 

other losses.18

The Commission believes that the 

proposed changes described above that 

would add current financial, personnel, 

and board information support ICC’s 

maintenance of plans for the recovery 

and orderly wind-down of ICC with 

updated accurate information. For 

instance, the Commission believes that 

current financial information provides 

relevant information to those using the 

Plans to understand the resources 

available for recovery or an orderly 

wind-down. Further, the Commission 

believes that current information about 

the Board, updated procedures for 

seeking additional capital from the ICE 

Group, and updated procedures for 

seeking required consultations or 

approvals in a wind-down scenario 

support the utilization of the recovery 

and wind-down plans with accurate 

references to personnel and procedures. 

Therefore, the Commission finds that 

the proposed rule change is consistent 

with Rule 17Ad–22(e)(3)(ii).19

IV. Conclusion 

On the basis of the foregoing, the 

Commission finds that the proposed 

rule change is consistent with the 

requirements of the Act, and in 

particular, with the requirements of 

Section 17A(b)(3)(F) of the Act 20 and 

Rules 17Ad–22(e)(2)(v) and (e)(3)(ii) 

thereunder.21

It is therefore ordered pursuant to 

Section 19(b)(2) of the Act 22 that the 

proposed rule change (SR–ICC–2022– 

004) be, and hereby is, approved.23


jspears on DSK121TN23PROD with NOTICES1
33226 Federal Register / Vol. 87, No. 105 / Wednesday, June 1, 2022 / Notices 

1The CAT NMS Plan is a national market system 

plan approved by the Commission pursuant to 

Section 11A of the Exchange Act and the rules and 

regulations thereunder. See Securities Exchange Act 

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

84696 (November 23, 2016). 

2 15 U.S.C 78k–1(a)(3). 

3 17 CFR 242.608. 

4See Letter from Michael Simon, CAT NMS Plan 

Operating Committee Chair, to Vanessa 

Countryman, Secretary, Commission, dated May 13, 

2022 (‘‘Transmittal Letter’’). 

5 17 CFR 242.608. 

6See 17 CFR 242.608(a). 

7See Transmittal Letter, supra note 4. Unless 

otherwise defined herein, capitalized terms used 

herein are defined as set forth in the CAT NMS 

Plan. 

8The use of CAT Data in the Executed Share 

Model is discussed in more detail in Section A.5.k 

below. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.24

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–11677 Filed 5–31–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–94984; File No. 4–698] 

Joint Industry Plan; Notice of Filing of 

Amendment to the National Market 

System Plan Governing the 

Consolidated Audit Trail 

May 25, 2022. 

I. Introduction 

On May 13, 2022, the Operating 

Committee for Consolidated Audit Trail, 

LLC (‘‘CAT LLC’’), on behalf of the 

following parties to the National Market 

System Plan Governing the 

Consolidated Audit Trail (the ‘‘CAT 

NMS Plan’’ or ‘‘Plan’’): 1 BOX Exchange 

LLC; Cboe BYX Exchange, Inc., Cboe 

BZX Exchange, Inc., Cboe EDGA 

Exchange, Inc., Cboe EDGX Exchange, 

Inc., Cboe C2 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. (collectively, 

the ‘‘Participants,’’ ‘‘self-regulatory 

organizations,’’ or ‘‘SROs’’) filed with 

the Securities and Exchange 

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

pursuant to Section 11A(a)(3) of the 

Securities Exchange Act of 1934 

(‘‘Exchange Act’’),2 and Rule 608 

thereunder,3 a proposed amendment to 

the CAT NMS Plan to implement a 

revised funding model (‘‘Executed Share 

Model’’) for the consolidated audit trail 

(‘‘CAT’’) and to establish a fee schedule 

for Participant CAT fees in accordance 

with the Executed Share Model.4

Exhibit A, attached hereto, contains 

proposed revisions to Articles I and XI 

of the CAT NMS Plan as well as 

proposed Appendix B to the Plan 

containing the fee schedule setting forth 

the CAT fees to be paid by the 

Participants. In addition, the Operating 

Committee provided an example of how 

the Executed Share Model would 

operate for illustrative purposes only, as 

attached hereto as Exhibit B. The 

example is provided in two charts that, 

according to the Participants, set forth 

illustrative CAT fees for each 

Participant, Industry Member that is the 

clearing member for the seller in the 

transaction, and Industry Member that 

is the clearing member for the buyer in 

the transaction. The Commission is 

publishing this notice to solicit 

comments from interested persons on 

the amendment.5

II. Description of the Plan 

Set forth in this Section II is the 

statement of the purpose and summary 

of the amendment, along with 

information required by Rule 608(a) 

under the Exchange Act,6 substantially 

as prepared and submitted by the 

Participants to the Commission.7

A. Description of the Amendments to 

the CAT NMS Plan 

The Operating Committee proposes to 

replace the funding model set forth in 

Article XI of the CAT NMS Plan (the 

‘‘Original Funding Model’’) with the 

Executed Share Model. The Original 

Funding Model involves a bifurcated 

approach, where costs associated with 

building and operating the CAT would 

be borne by (1) Industry Members (other 

than alternative trading systems 

(‘‘ATSs’’) that execute transactions in 

Eligible Securities (‘‘Execution Venue 

ATSs’’)) through fixed tiered fees based 

on message traffic for Eligible Securities, 

and (2) Participants and Industry 

Members that are Execution Venue 

ATSs for Eligible Securities through 

fixed tiered fees based on market share. 

The Operating Committee proposes to 

amend the CAT NMS Plan to adopt the 

Executed Share Model. The Executed 

Share Model would impose fees on CAT 

Reporters based on the executed 

equivalent share volume of transactions 

in Eligible Securities rather than based 

on market share and message traffic. 

The Operating Committee also proposes 

to adopt a fee schedule to establish the 

CAT fees applicable to Participants 

based on the Executed Share Model. 

The Participants separately intend to 

file rule filings under Section 19(b) to 

establish the CAT fees applicable to 

Industry Members based on the 

Executed Share Model set forth in the 

CAT NMS Plan. 

1. Description of the Executed Share 

Model 

The Operating Committee proposes to 

amend the CAT NMS Plan to describe 

the Executed Share Model. Under the 

Executed Share Model, the Operating 

Committee would establish a fee 

structure in which the fees charged to 

Participants and Industry Members are 

based on the executed equivalent share 

volume of transactions in Eligible 

Securities using CAT Data.8

For each transaction in Eligible 

Securities based on CAT Data, the 

Industry Member that is the clearing 

member for the seller in the transaction 

(‘‘Clearing Broker for the Seller’’ or 

‘‘CBS’’), the Industry Member that is the 

clearing member for the buyer in the 

transaction (‘‘Clearing Broker for the 

Buyer’’ or ‘‘CBB’’), and the applicable 

Participant for the transaction each 

would pay a fee calculated by 

multiplying the number of executed 

equivalent shares in the transaction and 

the applicable Fee Rate (as defined 

below) and dividing the product by 

three. The applicable Participant for the 

transaction would be the national 

securities exchange on which the 

transaction was executed, or FINRA for 

each transaction executed otherwise 

than on an exchange. Accordingly, for 

each transaction, the Clearing Broker for 

the Buyer would pay one-third of the fee 

obligation, the Clearing Broker for the 

Seller would pay one-third of the fee 

obligation, and the relevant Participant 

for the transaction would pay the 

remaining one-third of the fee 

obligation. 

Both Participants and Industry 

Members would be required to pay CAT 

fees with regard to CAT costs not 

previously paid by the Participants 

(‘‘Prospective CAT Costs’’). These are 

the ongoing budgeted costs for the CAT 

after the CAT fees become operative. 

The Fee Rate for the CAT fees related to 

Prospective CAT Costs would be 

calculated by dividing the budgeted 

CAT costs for the relevant period (as 

determined by the Operating 

Committee) by the projected total 

executed equivalent share volume of all 


jspears on DSK121TN23PROD with NOTICES1