Federal Register / Vol. 87, No. 111 / Thursday, June 9, 2022 / Notices 35273 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 94729 

(April 15, 2022), 87 FR 23893. The Commission has 

received one comment on the proposal which does 

not relate to the substance of the proposed rule 

change. The comment letter is available at https:// 

www.sec.gov/comments/sr-box-2022-08/ 

srbox202208.htm. 4 15 U.S.C. 78s(b)(2). 

5 15 U.S.C. 78s(b)(2). 

6 17 CFR 200.30–3(a)(31). 

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) (‘‘Order Approving 

CAT NMS Plan’’). 

2 15 U.S.C 78k–1(a)(3). 

3 17 CFR 242.608. 

4See Letter from Michael Simon, Chair, CAT 

NMS Plan Operating Committee, to Vanessa 

Countryman, Secretary, Commission, dated May 20, 

2022. 

5 17 CFR 242.608. 

6See 17 CFR 242.608(a)(4) and (a)(5). 

7See supra note 4. Unless otherwise defined 

herein, capitalized terms used herein are defined as 

set forth in the CAT NMS Plan. 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–95037; File No. SR–BOX– 

2022–08] 

Self-Regulatory Organizations; BOX 

Exchange LLC.; Notice of Designation 

of Longer Period for Commission 

Action on Proposed Rule Change To 

Amend Rule 12140 (Imposition of Fines 

for Minor Rule Violations) To Expand 

the List of Violations Eligible for 

Disposition Under the Exchange’s 

Minor Rule Violation Plan and Update 

the Fine Schedule Applicable to 

Certain Minor Rule Violations 

June 3, 2022. 

On March 31, 2022, BOX Exchange 

LLC (the ‘‘Exchange’’) 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 a proposed rule change to 

amend Rule 12140 (Imposition of Fines 

for Minor Rule Violations), to expand 

the list of violations eligible for 

disposition under the Exchange’s Minor 

Rule Violation Plan (‘‘MRVP’’) and 

update the fine schedule applicable to 

minor rule violations related to certain 

rule violations. The proposed rule 

change was published for comment in 

the Federal Register on April 21, 2022.3

Section 19(b)(2) of the Act 4 provides 

that within 45 days of the publication of 

notice of the filing of a proposed rule 

change, or within such longer period up 

to 90 days as the Commission may 

designate if it finds such longer period 

to be appropriate and publishes its 

reasons for so finding or as to which the 

self-regulatory organization consents, 

the Commission shall either approve the 

proposed rule change, disapprove the 

proposed rule change, or institute 

proceedings to determine whether the 

proposed rule change should be 

disapproved. The 45th day for this filing 

is June 5, 2022. The Commission is 

extending this 45-day time period. 

The Commission finds that it is 

appropriate to designate a longer period 

within which to take action on the 

proposed rule change so that it has 

sufficient time to consider the proposed 

rule change. Accordingly, pursuant to 

Section 19(b)(2) of the Act,5 the 

Commission designates July 20, 2022, as 

the date by which the Commission shall 

either approve or disapprove, or 

institute proceedings to determine 

whether to disapprove, the proposed 

rule change (File No. SR–BOX–2022– 

08). 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.6

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–12402 Filed 6–8–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–95031; File No. 4–698] 

Joint Industry Plan; Notice of Filing of 

Amendment to the National Market 

System Plan Governing the 

Consolidated Audit Trail by BOX 

Exchange LLC; Cboe BYX Exchange, 

Inc., Cboe BZX Exchange, Inc., Cboe 

EDGA Exchange, Inc., Cboe EDGX 

Exchange, Inc., Cboe C2 Exchange, 

Inc. and Cboe Exchange, Inc., 

Financial Industry Regulatory 

Authority, Inc., Investors Exchange 

LLC, Long-Term Stock Exchange, Inc., 

Miami International Securities 

Exchange LLC, MEMX, 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; and New York Stock 

Exchange LLC, NYSE American LLC, 

NYSE Arca, Inc., NYSE Chicago, Inc., 

and NYSE National, Inc. 

June 3, 2022. 

I. Introduction 

On May 20, 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., Miami International 

Securities Exchange LLC, MEMX, 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; and 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 that would authorize 

CAT LLC to revise the Consolidated 

Audit Trail Reporter Agreement (the 

‘‘Reporter Agreement’’) and the 

Consolidated Audit Trail Reporting 

Agent Agreement (the ‘‘Reporting Agent 

Agreement’’) as contained in Appendix 

A, attached hereto by: (1) removing the 

arbitration provision from each 

agreement and replacing it with a forum 

selection provision (the ‘‘Forum Section 

Provision’’) which would require that 

any dispute regarding CAT reporting be 

filed in a United States District Court for 

the Southern District of New York (the 

‘‘SDNY’’), or, in the absence of federal 

subject matter jurisdiction, a New York 

State Supreme Court within the First 

Judicial Department; (2) adding a jury 

waiver provision; (3) adding a 

disclaimer of warranties clause; and (4) 

and revising the existing choice of law 

clause to provide that any dispute will 

be governed by federal law (in addition 

to New York law).4 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)(4) 

and (5) under the Exchange Act,6

substantially as prepared and submitted 

by the Participants to the Commission.7


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8 In light of the complex factual and legal issues 

likely to be presented by any dispute concerning 

CAT Reporting, the Proposed Amendment also adds 

a jury waiver provision to the Reporter Agreement 

and the Reporting Agent Agreement. See infra at 

Appendices E & F. 

9The Proposed Amendment also contains a 

disclaimer of warranties, whereby CAT LLC, FINRA 

CAT, and the Participants disclaim all warranties in 

relation to the Reporter Agreement (or the Reporting 

Agent Agreement) and the CAT System. See infra 

§ 8. 

10See 17 CFR 242.613 (2012). 

11See Consol. Audit Trail Rep. Agreement 

(‘‘Reporter Agreement’’) and Consol. Audit Trail 

Reporting Agent Agreement (‘‘Reporting Agent 

Agreement’’), § 7.9, available at https://

www.catnmsplan.com/sites/default/files/2020-02/ 

Consolidated-Audit-Trail-ReporterAgreement%2808-29-19%20FINAL%29.pdf and 

https://www.catnmsplan.com/sites/default/files/ 

2020-05/Consolidated-Audit-Trail-Reporting-AgentAgreement-amended_0.pdf. 

12As part of the settlement of the Administrative 

Proceeding, SIFMA agreed to abandon its challenge 

to the industry standard indemnification provisions 

that were included in the original Reporter 

Agreement and Reporting Agent Agreement. See 

SIFMA Statement on Settlement on CAT Reporter 

Agreement, available at https://www.sifma.org/ 

resources/news/sifma-statement-on-settlement-oncat-reporter-agreement/. All CAT Reporters and 

CAT Reporting Agents eventually signed an 

agreement that contained those indemnification 

provisions. 

13See Letter from Michael Simon, CAT NMS Plan 

Operating Comm. Chair to Vanessa Countryman, 

Sec’y, SEC (Dec. 18, 2020), available at https://

catnmsplan.com/sites/default/files/2020-12/ 

12.18.2020-Proposed-Amendment-to-the-CATNMS-Plan.pdf. 

14See SEC, Joint Indus. Plan; Order Instituting 

Proceedings to Determine Whether to Approve or 

Disapprove an Amend. to the Nat’l Mkt. Sys. Plan 

A. Statement of Purpose of the 

Amendment to the CAT NMS Plan 

The Proposed Amendment would 

ensure that a dispute arising out of CAT 

reporting would be addressed by either 

the SDNY or the New York State 

Supreme Court. Designating an Article 

III court and a sophisticated state court 

as potential forums for dispute 

resolution is plainly consistent with the 

Exchange Act. 

Courts offer important substantive 

expertise and procedural mechanisms 

that would facilitate the fair and 

efficient resolution of claims in relation 

to CAT reporting. As an example, 

because a CAT technical issue, system 

failure, or data breach may impact 

thousands of potential parties, the 

ability of courts to consolidate and join 

claims and certify class actions would 

minimize costs of litigation for all 

potential parties (including Industry 

Members), which, in turn, furthers the 

market efficiency and fair competition 

objectives of the Exchange Act. 

The importance of a court resolving 

claims regarding CAT reporting is 

underscored by the regulatory nature of 

the CAT. The Participants are 

implementing the requirements of Rule 

613 and the CAT NMS Plan in their 

regulatory capacities. While cyber 

litigation frequently presents complex 

questions, the CAT’s regulatory nature 

adds a further layer of complexity to any 

potential dispute. Among other issues, a 

tribunal would have to evaluate the 

relationships between the Commission, 

the Participants, and Industry Members 

and determine the applicability of any 

immunity claims. In connection with 

the Participants’ limitation of liability 

proposal, both the Commission and the 

Securities Industry and Financial 

Markets Association (‘‘SIFMA’’) 

recognized that regulatory immunity 

may be at issue in a dispute regarding 

CAT reporting. Utilizing courts to 

resolve such disputes will ensure that 

bedrock principles of the self-regulatory 

framework are adjudicated based on 

decades of binding precedent (often 

developed through the Commission’s 

feedback via amicus briefs) and afford 

the parties critical appellate rights.8

Notwithstanding the benefits of 

litigation, an arbitration provision was 

included in the original Reporter 

Agreement because the agreement 

disclaimed all direct and indirect 

damages and capped the Participants’ 

liability to $500 per Industry Member or 

Participant that entered into the 

Reporter Agreement (‘‘CAT Reporter’’). 

Indeed, arbitrators routinely interpret— 

and enforce—liability limitations and 

damages exclusions, and the broad 

nature of those provisions would have 

deterred meritless claims. But 

considering the complex legal and 

factual issues likely implicated by a 

dispute concerning CAT reporting, in 

the absence of a robust limitation on 

liability, all parties should be able to 

rely on the protections available in 

litigation. 

The Participants’ proposed federal 

forum and alternative state forum are 

well equipped to handle any dispute 

relating to CAT reporting. The United 

States Court of Appeals for the Second 

Circuit, and the SDNY, have significant 

experience resolving securities matters 

and cyber claims. Likewise, the New 

York State Supreme Court in the First 

Judicial Department, and in particular 

its Commercial Division in New York 

County (Manhattan), is comprised of 

experienced judges who regularly 

preside over complex disputes. Both 

forums routinely adjudicate matters 

involving the Participants, Industry 

Members, and the Commission, and 

given the locations of potential parties 

to a CAT Data breach, New York would 

likely constitute a convenient forum for 

dispute resolution.9

(1) Background 

On July 11, 2012, the Commission 

adopted Rule 613 of Regulation NMS to 

enhance regulatory oversight of the U.S. 

securities markets. The rule directed the 

Participants to create a ‘‘Consolidated 

Audit Trail’’ (also referred to herein as 

the ‘‘CAT’’) that would strengthen the 

ability of regulators—including the 

Commission and the self-regulatory 

organizations—to surveil the securities 

markets.10 Following the adoption of 

Rule 613, the Participants prepared and 

proposed the CAT NMS Plan and then 

implemented—and continue to 

implement—the Plan’s extensive 

requirements. 

In preparation for CAT reporting, the 

Operating Committee of CAT LLC 

approved a Reporter Agreement and 

Reporting Agent Agreement by 

unanimous written consent on August 

29, 2019. Those agreements contained 

industry standard limitation of liability 

provisions that disclaimed all damages 

and capped the liability of CAT LLC, the 

Participants, and FINRA CAT to any 

CAT Reporter at $500 per calendar year. 

The agreements also contained a 

mandatory arbitration provision with 

respect to any disputes in connection 

with CAT reporting and authorized an 

arbitrator to grant remedies that ‘‘the 

arbitrator deems just and equitable 

within the scope of [the] Agreement.’’ 11

On April 22, 2020, SIFMA challenged 

the Reporter Agreement’s limitation of 

liability and indemnification provisions 

by filing an application for review of 

actions taken by CAT LLC and the 

Participants pursuant to Sections 19(d) 

and 19(f) of the Exchange Act (the 

‘‘Administrative Proceeding’’). On May 

13, 2020, SIFMA and the Participants 

reached a settlement of the 

Administrative Proceeding that 

permitted Industry Members to report 

data to the CAT pursuant to a revised 

Reporter Agreement that did not contain 

a limitation of liability provision, while 

the Participants prepared a filing with 

the Commission to resolve the parties’ 

underlying disagreement regarding the 

proper allocation of liability.12

On December 18, 2020, the 

Participants proposed to amend the 

CAT NMS Plan to authorize CAT LLC 

to revise the Reporter Agreement and 

the Reporting Agent Agreement to insert 

limitation of liability provisions (the 

‘‘Limitation of Liability Proposal’’).13

SIFMA and various Industry Members 

submitted comment letters in response 

to the Limitation of Liability Proposal 

and in response to the Commission’s 

April 6, 2021 Order Instituting 

Proceedings.14 Multiple comment 


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Governing the Consol. Audit Trail, Release No. 34– 

391487; File No. 4–698 (Apr. 6, 2021), available at 

https://www.sec.gov/rules/sro/nms/2021/34- 

91487.pdf, 86 FR 19054 (Apr. 12, 2021), available 

at https://www.govinfo.gov/content/pkg/FR-2021- 

04-12/pdf/2021-07390.pdf; 17 CFR 242.608(b)(2)(i). 

15See e.g., Letter from Ellen Greene, SIFMA to 

Vanessa Countryman, Sec’y, SEC, at 7 (May 3, 2021) 

(the ‘‘SIFMA Letter’’), available at https://

www.sec.gov/comments/4-698/4698-8751243- 

237404.pdf (discussing an indication that ‘‘courts 

are likely to view any regulatory activity the SROs 

conduct through CAT LLC as being subject to this 

judicial immunity’’); Letter from Stephen John 

Berger, Citadel Sec. to Vanessa Countryman, Sec’y, 

SEC, at 5 (Feb. 23, 2021) (the ‘‘Citadel Letter’’), 

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

4698-8411798-229501.pdf (‘‘[C]ourts must be 

‘careful not to extend the scope of the protection 

further than its purposes require.’ ’’) (citations 

omitted); Letter from Kelvin To, Data Boiler Techs., 

LLC to Vanessa Countryman, Sec’y, SEC, at 4 (May 

3, 2021) (the ‘‘Data Boiler Letter’’), available at 

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

8749987-237362.pdf (‘‘How courts apply a 

‘functional test’ to determine whether an SRO is 

entitled to immunity from burdens of litigation or 

civil damages suits may be a controversy here.’’). 

16SEC, Joint Industry Plan; Order Disapproving 

an Amend. to the Nat’l Mkt. Sys. Plan Governing 

the Consol. Audit Trail, Release No. 34–93484; File 

No. 4–698 (Oct. 29, 2021), available at https://

www.sec.gov/rules/sro/nms/2021/34-93484.pdf, 86 

FR 60,933 (Nov. 4, 2021), available at https://

www.govinfo.gov/content/pkg/FR-2021-11-04/pdf/ 

2021-24015.pdf. 

17See Disapproval Order at 29 (‘‘Even in the 

absence of the proposed Limitation of Liability 

Provisions, the Participants may have limited 

liability to Industry Members through courtestablished regulatory immunity.’’) (citation 

omitted); see also id. at 42 (‘‘The Commission 

believes that uncertainty regarding liability in case 

of a CAT Data breach thus serves as an incentive 

for the Participants to invest in data security to the 

extent that Participants believe a court might not 

uphold their regulatory immunity or it would be 

judged not to apply in a given case that was before 

the courts.’’); id. at 35 (‘‘Participants can assert 

regulatory immunity to the extent that the doctrine 

applies if there is a security breach that exposes 

CAT Data and Industry Members seek damages 

from the responsible Participants.’’). 

18See, e.g., supra n.17. 

19 In advance of filing this Proposed Amendment, 

the Participants attempted to confer with SIFMA to 

determine whether Industry Members would agree 

to revise the Reporter Agreement as described 

herein. SIFMA declined to engage in a discussion 

with the Participants. 

20Section 11.5 of the CAT NMS Plan authorizes 

Industry Members to ‘‘seek redress from the SEC 

pursuant to SEC Rule 608 or in any other 

appropriate forum’’ with respect to any dispute 

regarding CAT fees. The Forum Selection Provision 

would not impact the ability of Industry Members 

to petition the Commission directly with respect to 

such disputes. CAT NMS Plan, supra n.1, § 11.5. 

21The Commercial Division has two 

jurisdictional requirements: (1) a monetary 

threshold, which is $500,000 in Manhattan, and, 

provided that the monetary threshold is met (or 

equitable or declaratory relief is sought), (2) the 

principal claim must fall within an enumerated list 

of types of claims, which include, among others, 

claims for breach of contract. 22 N.Y.C.R.R. 

§§ 202.70(a), 202.70(b)(1)–(12). In addition, any 

party seeking assignment of a case to the 

Commercial Division must file a Commercial 

Division Request for Judicial Intervention 

Addendum certifying that the case meets those two 

jurisdictional requirements. 22 N.Y.C.R.R. 

§ 202.70(d)(1). 

22See, e.g., In re Google Assistant Privacy Litig., 

No. 19–cv–04286–BLF, 2021 WL 2711747, at *2 

(N.D. Cal. July 1, 2021); Cal-Cleve, Ltd. v. WragTime Air Freight, Inc., No. 04–cv–10543 SJO (JTLx), 

2005 WL 8157876, at *1 (C.D. Cal. June 1, 2005). 

23FINRA CAT has implemented robust controls 

to protect the security and confidentiality of CAT 

Data and the Commission has repeatedly concluded 

that the CAT NMS Plan incorporates ‘‘robust 

security requirements’’ that ‘‘provide appropriate, 

adequate protection for the CAT Data.’’ See Order 

Approving CAT NMS Plan, supra n.1, at 715; see 

also SEC, Proposed Amends. to the Nat’l Mkt. Sys. 

Plan Governing the Consol. Audit Trail to Enhance 

Data Sec., Release No. 34–89632; File No. S7–10– 

20, at 10 (Aug. 21, 2020) (the ‘‘Data Security 

Proposal’’), available at https://www.sec.gov/rules/ 

proposed/2020/34-89632.pdf, 85 FR 65990 at 65991 

(Oct. 16, 2020), available at https://

www.govinfo.gov/content/pkg/FR-2020-10-16/pdf/ 

2020-18801.pdf (‘‘CAT Data reported to and 

retained in the Central Repository is thus subject to 

what the Commission believes are stringent security 

policies, procedures, standards, and controls.’’). 

24The Participants recognize that certain 

individuals who serve as arbitrators may have 

experience with cybersecurity and securities 

matters. However, even if the parties to a CAT Data 

breach were able to ensure that such arbitrators 

presided over a potential dispute, litigation remains 

more suitable to resolve claims regarding CAT 

reporting for the reasons discussed in this 

submission, including (among other reasons) courts’ 

mechanisms to consolidate claims, the presence of 

Continued 

letters—including from SIFMA— 

discussed the applicability of regulatory 

immunity to a CAT Data breach, and 

demonstrated an assumption and 

understanding that assessments of 

immunity claims would be conducted 

by courts.15

On October 29, 2021, the Commission 

issued an order disapproving the 

Limitation of Liability Proposal (the 

‘‘Disapproval Order’’).16 The 

Commission noted that the Participants 

may have limited liability through 

‘‘court-established’’ regulatory 

immunity, and that the impact of the 

Limitation of Liability Proposal 

depended on assumptions about the 

applicability of regulatory immunity to 

a CAT Data breach.17 Throughout the 

Disapproval Order, the Commission 

indicated that the applicability of 

regulatory immunity is appropriately 

decided by courts.18

(2) The Forum Selection Provision 

The Forum Selection Provision is 

contained in Appendix A to this 

Proposed Amendment.19 In sum, the 

Forum Selection Provision provides that 

any dispute concerning CAT reporting 

must be filed in the SDNY if there is any 

basis for federal subject matter 

jurisdiction.20 The clause also provides 

that if federal courts lack jurisdiction 

over a dispute, plaintiffs must file suit 

in the New York State Supreme Court in 

New York County (Manhattan) within 

the First Judicial Department. The 

Proposed Amendment would require 

that the parties to any action filed in the 

New York State Supreme Court seek 

assignment to the court’s Commercial 

Division if permitted by the Uniform 

Civil Rules for the Supreme and County 

Courts.21

The Forum Selection Provision also 

provides that the parties to any 

litigation agree to accept service of a 

complaint by U.S. registered mail and 

waive any objections based on venue. 

The Proposed Amendment would apply 

to any litigation commenced by any 

signatory to the CAT Reporter 

Agreement (or Reporting Agent 

Agreement). 

(3) The Nature of Potential Claims 

The Participants believe that a court 

is the proper forum to resolve claims 

regarding CAT reporting, including 

claims in relation to potential technical 

issues, system failures, and data 

breaches. Although the specific claims 

asserted likely will depend on the 

nature of the incident, in the aftermath 

of high-profile data breaches (i.e., one 

category of potential claims), plaintiffs 

have brought common law claims of 

breach of contract and negligence as 

well as claims based on various federal 

statutes including the Stored 

Communications Act, the Federal 

Wiretap Act, and the Computer Fraud 

and Abuse Act.22 In those matters, 

plaintiffs sought substantial monetary 

relief including compensatory, punitive, 

and statutory damages. 

In any dispute regarding CAT 

reporting, CAT LLC will likely have 

strong defenses because of the CAT’s 

robust—and SEC-approved— 

cybersecurity, and the Participants’ 

regulatory role in implementing the 

CAT NMS Plan.23 Additionally, such 

disputes are likely to present complex 

legal and factual issues inherent in 

cyber litigation generally. As discussed 

infra at Section A(4), the Participants 

believe that a court is well-equipped to 

address and mitigate any challenges of 

adjudicating claims resulting from CAT 

reporting. 

(4) Litigation Would Promote the Fair, 

Expeditious, and Efficient Resolution of 

Any Claims Regarding CAT Reporting 

The Proposed Amendment would 

lead to the fair and efficient resolution 

of potential disputes, ensure that issues 

implicating foundational principles of 

the self-regulatory framework are 

decided based on longstanding 

precedent, and provide the parties with 

important appellate rights. Litigating 

claims in an Article III court, or 

sophisticated state court, is plainly 

consistent with the Exchange Act.24


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meaningful appellate rights, the role of legal 

precedent, the nature of the parties to a potential 

dispute, and the relevance of regulatory immunity 

to resolving claims. 

25See Fed. R. Civ. P. 19, 20, 42(a)(2); N.Y. 

C.P.L.R. §§ 602, 1001, 1002. 

26See Fed. R. Civ. P. 23; 28 U.S.C. 1332(d)(2); 

N.Y. C.P.L.R. § 901(a). 

27See AAA Rules P–2(a)(vi)(c). 

28See, e.g., 9 U.S.C. 2 (‘‘A written provision in 

. . . a contract evidencing a transaction involving 

commerce to settle by arbitration a controversy 

thereafter arising out of such contract or 

transaction, or the refusal to perform the whole or 

any part thereof, or an agreement in writing to 

submit to arbitration an existing controversy arising 

out of such a contract, transaction, or refusal, shall 

be valid, irrevocable, and enforceable, save upon 

such grounds as exist at law or in equity for the 

revocation of any contract.’’); see also AAA Rules 

R–1(a) (providing that the AAA Rules are deemed 

a part of parties’ agreement to arbitrate where the 

parties provide for AAA commercial arbitration). 

29See Rick Fleming, Investor Advocate, SEC, 

Mandatory Arbitration: An Illusory Remedy for 

Public Company Shareholders (Feb. 24, 2018), 

https://www.sec.gov/news/speech/fleming-secspeaks-mandatory-arbitration (‘‘[I]t seems terribly 

inefficient to require multiple plaintiffs to prove up 

the same claims in separate proceedings.’’). 

30See, e.g., supra n.15. 

31 Disapproval Order, supra n.16, 17. 

32See, e.g., D’Alessio v. N.Y. Stock Exchange, 

Inc., 258 F.3d 93 (2d Cir. 2001); In re NYSE 

Specialists Sec. Litig., 503 F.3d 89 (2d Cir. 2007). 

33AAA Rules only authorize appellate review of 

arbitration awards if the parties consent to appellate 

rights. See AAA Rules A–1. 

34As the Supreme Court has explained, ‘‘[t]he 

arbitrator’s construction holds, however good, bad, 

or ugly.’’ Oxford Health Plans LLC v. Sutter, 569 

U.S. 564, 573 (2013). 

35See 9 U.S.C. 9 (providing that if the parties 

have contractually agreed that a specific federal 

court will enter judgment upon an arbitration 

award, then at any time within one year after the 

award is made, any party may apply to that court 

for an order confirming the award; if no court is 

specified, then the application may be made to the 

U.S. district court for the district within which the 

a. Consolidation, Joinder of Claims, and 

Class Actions 

Because certain potential claims 

arising out of CAT reporting—including 

technical issues, system failures, and 

data breaches—are likely to impact 

multiple parties, one important 

consideration is the extent to which a 

particular dispute resolution 

mechanism allows for consolidation of 

claims. Indeed, consolidating such 

claims would reduce costs of dispute 

resolution, enable CAT LLC to focus on 

its regulatory mandate, and decrease the 

risk of disparate outcomes in similar 

cases, all of which promote the 

efficiency and fair competition 

objectives of the Exchange Act. 

In court, litigants can rely on the 

applicability of the rules of 

consolidation and joinder to increase 

the likelihood that all cases arising out 

of one incident are heard together. Both 

federal and New York State rules of civil 

procedure provide mechanisms to 

consolidate cases and join parties to 

actions.25 Relatedly, both federal and 

state courts permit the use of class 

actions for certain disputes.26 These 

rules promote consistency of outcomes 

and the efficient resolution of claims. 

By contrast, under the AAA 

Commercial Arbitration Rules (the 

‘‘AAA Rules’’), which govern arbitration 

under the current Reporter Agreement 

and Reporting Agent Agreement, 

consolidation is a ‘‘suggest[ion] . . . 

that the parties and the arbitrator should 

address at the preliminary hearing,’’ and 

the ultimate decision regarding whether 

consolidation is appropriate is ‘‘subject 

to the discretion of the arbitrator.’’ 27

The AAA Rules are also silent on 

joinder. While parties to an arbitration 

agreement may agree that signatories 

will be required to join claims,28 parties 

frequently face complications in joining 

non-signatories to an arbitration. This is 

particularly significant in the context of 

a potential claim arising out of CAT 

reporting because certain types of 

incidents may impact both Industry 

Members and other market participants 

(e.g., retail investors). 

For those reasons, if the arbitration 

provision remains in the Reporter 

Agreement and Reporting Agent 

Agreement, actions involving the same 

common questions of law or fact or 

arising out of the same ‘‘transaction or 

occurrence’’ may be brought piecemeal, 

with signatories to the agreements 

arbitrating their claims or defenses and 

non-signatories litigating those claims or 

defenses in court. This can lead to 

illogical or unworkable outcomes; 29

indeed, cases arising out of the same 

facts or involving the same legal issues 

or even the same parties may result in 

entirely different outcomes, creating 

inconsistent rules, rendering 

inconsistent damages awards, or both. 

b. Reliance on Precedent and the 

Expertise of Courts 

A dispute regarding CAT reporting is 

likely to present complex legal and 

factual issues inherent in cyber 

litigation generally as well as in relation 

to the Participants’ regulatory roles in 

overseeing the CAT. Allowing the 

parties to litigate in court would ensure 

that the forum charged with resolving 

disputes is bound by the substantial 

body of precedent that has been 

developed to address these issues. 

Relatedly, the doctrine of regulatory 

immunity may play an important role in 

any dispute concerning CAT reporting. 

In connection with the Limitation of 

Liability Proposal, multiple comment 

letters discussed the applicability of 

regulatory immunity to a CAT Data 

breach and demonstrated an assumption 

and understanding that such a 

determination was the province of 

courts.30 The Commission, likewise, 

recognized the importance of regulatory 

immunity claims and its Disapproval 

Order also indicated an expectation that 

such claims would be decided by 

courts.31 Indeed, courts have developed 

a robust body of case law on the 

immunity doctrine, which provides 

parameters to courts as they analyze the 

applicability of regulatory immunity to 

the specific facts presented by a given 

case. 

The ability to rely on binding 

precedent is even more critical in the 

event of a claim arising out of CAT 

reporting. As discussed supra at Section 

3, certain incidents may lead to claims 

in which impacted parties seek 

substantial damages from CAT LLC. In 

light of the potential amount in 

controversy, coupled with the likely 

legal and factual issues presented by a 

dispute—including the applicability of 

immunity claims—all parties should be 

able to rely on the certainty of knowing 

that their conduct will be evaluated by 

developed legal standards. In addition 

to affording all parties the opportunity 

to rely on precedent, litigating disputes 

in court will also promote the 

development of precedent to guide the 

conduct of the Participants and Industry 

Members. 

c. Appellate Review 

Adjudicating claims in relation to 

CAT reporting in court provides all 

parties with critical appellate rights. 

While important for any high stakes 

dispute, appellate rights are particularly 

important in the event of a CAT system 

failure, technical issue, or data breach, 

considering the complicated legal and 

factual issues, the nature of the parties, 

and the potentially large amount in 

controversy. Regulatory immunity 

claims, for example, are often the 

subject of appellate review.32

Direct appellate review is largely 

absent in arbitration.33 Moreover, even 

if the parties to the Reporter Agreement 

or Reporting Agent Agreement were able 

to avail themselves of appellate rights, 

an appellate arbitration tribunal would 

be similarly unbound by precedent as 

the lower arbitration forum that 

rendered a potentially erroneous 

award.34 With respect to judicial review 

of an arbitration award, the Federal 

Arbitration Act (the ‘‘FAA’’) provides 

limited grounds for federal courts to 

vacate, modify, or correct final 

arbitration decisions.35 In the absence of 


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award was made); 9 U.S.C. 10 (providing that the 

U.S. district court where the arbitration award was 

made may vacate the award upon an application of 

any party to the arbitration, where the award was 

‘‘procured by corruption, fraud, or undue means,’’ 

where there ‘‘was evident partiality or corruption in 

the arbitrators,’’ where the arbitrators ‘‘were guilty 

of misconduct,’’ or where the arbitrators ‘‘exceeded 

their powers’’ or ‘‘so imperfectly executed them that 

a mutual, final, and definite award’’ was not made); 

9 U.S.C. 11 (providing the following grounds for 

which a U.S. district court may upon the 

application of any party to an arbitration modify or 

correct an arbitration award: ‘‘an evident material 

miscalculation’’ or mistake in the award; an award 

upon a matter ‘‘not submitted’’ to the arbitrators; or 

‘‘where the award is imperfect in matter of form not 

affecting the merits of the controversy’’). 

36See 9 U.S.C. 11. 

37See, e.g., Fed. R. Civ. P. 1 (noting that the 

purpose of the rules is to ‘‘secure the just, speedy, 

and inexpensive determination of every action and 

proceeding’’). 

38See generally Fed. R. Civ. P. 26–28, 30–31, 33– 

34, 36; Fed. R. Evid. 101–02; N.Y. C.P.L.R. §§ 3101– 

02, 3122; 22 N.Y.C.R.R. §§ 202.11–12; Guide to N.Y. 

Evid. rule 1.03. Courts also have subpoena power 

over witnesses. See Fed. R. Civ. P. 30(a)(1), 

45(a)(1)(B), 45(c)(1); N.Y. C.P.L.R. §§ 2301, 3106(b); 

22 N.Y.C.R.R. § 202.20–d; see also 28 U.S.C. 1783; 

Convention on the Taking of Evidence Abroad in 

Civil or Commercial Matters (the Hague 

Convention); Uniform Interstate Depositions and 

Discovery Act (the ‘‘UIDDA’’) (providing 

mechanism for New York State courts to serve outof-state subpoenas; in the absence of the UIDDA, 

the provisions for service applicable in the out-ofstate jurisdiction apply). 

39See, e.g., Fed. R. Civ. P. 26; N.Y. C.P.L.R. 

§ 3101; 22 N.Y.C.R.R. §§ 202.11–12. 

40See Fed. R. Evid. 101, 102. New York State 

does not have a statutory code of evidence; instead, 

its rules of evidence reside in judicial precedent, 

the State constitution, and State statutes. The New 

York Unified Court System has compiled a guide 

setting forth current practice in New York State 

courts regarding the application of the rules of 

evidence. See generally Guide to N.Y. Evid. Rule 

1.03, Note. New York evidence law is generally in 

accord with the Federal Rules of Evidence, 

including rules on relevance, prejudice, privilege, 

and hearsay. See, e.g., id. rules 4.01, 4.07, 5.01–09, 

and 8.00–01. 

41AAA Rules P–1(b) (instructing parties to 

carefully ‘‘avoid importing procedures from court 

systems’’). 

42See, e.g., id. (disclaiming procedures from court 

systems), R–22 (providing for pre-hearing exchange 

and production of information), L–3(f) (noting that 

depositions are available only in ‘‘exceptional’’ 

circumstances), R–34 (governing the admissibility 

of evidence and noting conformity to the legal rules 

of evidence is not necessary); see also 9 U.S.C. 7 

(allowing arbitrator to subpoena witnesses to testify, 

but only in hearings, as opposed to depositions); 

CVS Health Corp. v. Vividus, LLC, 878 F.3d 703, 

706, 708 (9th Cir. 2017) (holding that ‘‘section 7 of 

the FAA does not grant arbitrators the power to 

order third parties to produce documents prior to 

an arbitration hearing’’); Life Receivables Tr. v. 

Syndicate 102 at Lloyd’s of London, 549 F.3d 210, 

217 (2d Cir. 2008); Hay Grp., Inc. v. E.B.S. 

Acquisition Corp., 360 F.3d 404, 407 (3d Cir. 2004) 

(Alito, J.). 

43Those Industry Members include, for example, 

Citigroup Global Markets, Inc., Goldman Sachs & 

Co. LLC, Morgan Stanley & Co. LLC, J.P. Morgan 

Securities, LLC, Deutsche Bank Securities, Inc., 

UBS Securities LLC, and Credit Suisse Securities 

USA, LLC. 

44Reporter Agreement § 7.11; Reporting Agent 

Agreement § 7.11. 

45Reporter Agreement § 7.8; Reporting Agent 

Agreement § 7.8. 

46The Supreme Court has referred to the Second 

Circuit as the ‘‘Mother Court’’ regarding securities 

matters. See, e.g., Morrison v. Nat’l Austl. Bank, 561 

U.S. 247, 275–76 (2010) (Stevens, J., concurring in 

judgment) (quoting Blue Chip Stamps v. Manor 

Drug Stores, 421 U.S. 723, 737 (1975)). 

47See, e.g., McMorris v. Carlos Lopez & Assocs., 

LLC, 995 F.3d 295, 300–03 (2d Cir. 2021) (standing); 

In re GE/CBPS Data Breach Litig., No. 20–cv–2903 

(KPF), 2021 WL 3406374, at *5–7 (S.D.N.Y. Aug. 4, 

2021) (standing); Sackin v. TransPerfect Glob., Inc., 

278 F. Supp. 3d 739, 745 (S.D.N.Y. 2017) (damages); 

Hammond v. Bank of New York Mellon Corp., No. 

08–cv–6060 (RMB) (RLE), 2010 WL 2643307, at *4 

(S.D.N.Y. June 25, 2010) (damages); see also Smahaj 

v. Retrieval-Masters Creditors Bureau, Inc., 69 

Misc.3d 597, 599–600, 604 (Sup. Ct. Westchester 

Cnty. 2020) (damages). 

48See, e.g., McMorris, 995 F.3d at 302 (weighing 

relative sensitivity of certain types of data); Wallace 

v. Health Quest Sys., Inc., No. 20–cv–545 (VB), 

2021 WL 1109727, at *1 n.1 (S.D.N.Y. Mar. 23, 

2021) (addressing claims for negligence, breach of 

implied contract, breach of contract, unjust 

enrichment, breach of confidence, bailment, and 

violations of New York’s General Business Law); 

Continued 

unusual circumstances, however, 

meaningful appellate review is generally 

unavailable: none of the grounds 

provided by the FAA would authorize a 

court to vacate an arbitration award that 

was premised on an error of law.36

d. Rules Governing Discovery and 

Evidence 

Considering the magnitude of data 

transmitted to the CAT, a dispute is 

likely to involve a substantial volume of 

documents and information. 

Additionally, many documents that 

might be the subject of discovery 

requests are likely to be either 

commercially sensitive for Industry 

Members or involve nonpublic, 

sensitive information regarding the 

CAT’s security. 

Parties to litigation are afforded the 

benefits of rules governing the discovery 

process and admissibility of evidence. 

These rules promote predictability of 

litigation, efficiency of resolutions, and 

fairness of results,37 and provide 

mechanisms for facilitating discovery as 

well as the admission of evidence.38 For 

example, litigants in court must comply 

with clear discovery rules, which 

govern the scope of discovery and the 

timing and content of disclosures, and 

facilitate communication among the 

parties and the court regarding these 

matters.39 Litigants in court also have 

the benefit of a uniform set of rules 

governing the admissibility of 

evidence.40 These protections do not 

exist under the AAA Rules,41 which 

provide a more limited set of procedures 

pertaining to discovery and evidence.42

Given the breadth and depth of the 

discovery and evidence rules in federal 

and state court, and the fact that courts 

are bound by precedent and subject to 

appellate review, see supra § A(4)(b)– 

(c), courts are better suited to handle 

disputes regarding CAT reporting. 

(5) Designating the SDNY and New York 

State Courts in a Forum Selection 

Provision is Consistent With the 

Exchange Act 

The Proposed Amendment’s Forum 

Selection Provision designates the 

SDNY, or, in the absence of federal 

subject matter jurisdiction, a New York 

State Supreme Court in New York 

County within the First Judicial 

Department as the venue for any dispute 

concerning CAT reporting. Both forums 

would provide the parties with a 

sophisticated tribunal that has 

experience adjudicating matters 

involving the federal securities laws, 

market structure, and cybersecurity. 

As an initial mater, based on the 

potential parties to any lawsuit arising 

out of CAT reporting, New York is likely 

to be a convenient venue. As the 

reputed financial capital of the world, 

New York is home to the two largest 

securities exchanges and several other 

Participants. Additionally, many of the 

most prominent Industry Members by 

trading volume are located in New 

York.43

The existing Reporter Agreement and 

Reporting Agent Agreement both 

provide that any claim must be 

commenced in New York (i.e., in the 

current arbitration provision) and that 

the Reporter Agreement and Reporting 

Agent Agreement are governed by New 

York law.44 Relatedly, all dates and 

times referenced in the agreements are 

set to New York time.45

In addition to being a convenient 

venue for potential parties, the 

Participants’ proposed forum—and 

backup forum—have the requisite 

subject matter expertise to resolve 

claims in relation to CAT reporting 

fairly and efficiently. The Second 

Circuit has extensive experience with 

securities and financial regulation 

matters.46 Moreover, applying the 

precedent set by the Second Circuit, the 

SDNY routinely handles complicated 

securities matters with broad 

implications for the national financial 

markets. 

The Second Circuit—and the SDNY in 

particular—also has significant 

experience determining the rights and 

remedies of parties following data 

breaches, including in relation to 

critical issues such as standing and 

damages,47 and balancing the competing 

interests involved in adjudicating 

sensitive and costly cybersecurity 

incidents.48 In light of its extensive 


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see also Pena v. British Airways, PLC (UK), No. 18– 

cv–6278 (LDH) (RML), 2020 WL 38989055, at *2 

n.2, *3–4, *6 (E.D.N.Y. Mar. 30, 2020) (granting 

motion to dismiss for lack of standing, preemption, 

and failure to state a claim); see also Keach v. BST 

& Co. CPAs, LLP, 71 Misc.3d 1204(A), at *7 (Sup. 

Ct. Albany Cnty. 2021) (citations omitted). 

49See Standard Inv. Chartered, Inc. v. Nat’l Ass’n 

of Sec. Dealers, Inc., 637 F.3d 112, 116 (2d Cir. 

2011) (noting Second Circuit decisions on 

regulatory immunity in the context of ‘‘(1) 

disciplinary proceedings against exchange 

members, [Barbara v. NYSE, 99 F.3d 49, 59 (2d Cir. 

1996)]; (2) the enforcement of security rules and 

regulations and general regulatory oversight over 

exchange members, [D’Alessio, 258 F.3d at 106]; (3) 

the interpretation of the securities laws and 

regulations as applied to the exchange or its 

members, id.; (4) the referral of exchange members 

to the SEC and other government agencies for civil 

enforcement or criminal prosecution under the 

securities laws, id.; and (5) the public 

announcement of regulatory decisions, [DL Cap. 

Grp., LLC v. Nasdaq Stock Mkt., Inc., 409 F.3d 93, 

98 (2d Cir. 2005)].’’). 

50See, e.g., In re Series 7 Broker Qualification 

Exam Scoring Litig., 548 F.3d 110, 113–15 (D.C. Cir. 

2008) (citing Barbara, 99 F.3d 49; Desiderio v. 

NASD, 191 F.3d 198 (2d Cir. 1999); DL Cap. Grp., 

409 F.3d 93; Feins v. Am. Stock Exch., Inc., 81 F.3d 

1215 (2d Cir. 1996)). 

51See generally 22 N.Y.C.R.R. § 202.70 (Rules of 

the Commercial Division of the Supreme Court). 

The Commercial Division ‘‘is an efficient, 

sophisticated, up-to-date court dealing with 

challenging commercial cases’’ and ‘‘its primary 

goal [is] the cost-effective, predictable and fair 

adjudication of complex commercial cases.’’ 22 

N.Y.C.R.R. § 202.70(g) (Preamble to the Rules of 

practice for the Commercial Division). 

52See Wey v. Nasdaq, Inc., 188 A.D.3d 587 (1st 

Dep’t 2020). 

experience with securities, financial 

regulation, market structure, and cyber 

matters, it is beyond reasonable dispute 

that the Second Circuit and the SDNY 

have the appropriate expertise to resolve 

a dispute regarding CAT reporting. 

As the Commission noted in its 

Disapproval Order, in the absence of a 

limitation on liability, the Participants 

can assert regulatory immunity in 

response to a claim for damages. The 

Second Circuit has authored several 

seminal opinions regarding the scope of 

regulatory immunity,49 and courts in 

other jurisdictions often cite to and rely 

on the Second Circuit’s analyses to 

apply the regulatory immunity doctrine 

to cases pending before them.50

New York State courts—particularly 

those within the Commercial Division of 

the First Judicial Department—are 

likewise well suited to address the 

complex issues that might arise during 

litigation regarding a CAT Data breach. 

The court’s judges focus primarily on 

complex cases and have developed 

sophisticated procedural rules designed 

to foster the efficient and fair resolution 

of disputes.51 Relying in part on the 

Second Circuit’s developed body of case 

law, the New York state courts within 

the First Judicial Department are one of 

only a few state courts that have 

addressed the scope of regulatory 

immunity.52

(6) Governing Law Provision 

The Proposed Amendment modifies 

the governing law provision contained 

in the existing Reporter Agreement and 

Reporting Agent Agreement to provide 

that the agreements, and any matters 

between CAT LLC and either a CAT 

Reporter or a CAT Reporting Agent, will 

be governed by federal law and the laws 

of the State of New York. The existing 

governing law provision refers only to 

New York state law and, because CAT 

LLC was created pursuant to federal law 

and is subject to a federal regulatory 

regime, claims by or against CAT LLC 

could involve issues of federal law. 

Therefore, the Proposed Amendment 

modifies the existing governing law 

provision to clarify that any disputes 

arising out of or related to the 

agreements will be governed by both 

federal law and by New York state law. 

(7) Waiver of Jury Trial Provision 

In conjunction with the Forum 

Selection Provision, the Proposed 

Amendment provides that the parties 

agree to waive the right to a jury trial of 

any claim arising out of the Reporter 

Agreement (or the Reporting Agent 

Agreement) or CAT reporting. As 

discussed above, a CAT Data breach is 

likely to present several complicated 

factual and legal issues. The 

Participants believe that the issues 

likely to be in dispute would be most 

effectively and efficiently resolved by 

judges, who have the requisite 

experience and expertise. In addition, 

utilizing a bench trial should reduce 

costs involved with litigation. 

(8) Disclaimer of Warranties Clause 

The Proposed Amendment adds a 

disclaimer of warranties, which 

provides that the Participants, CAT LLC, 

and FINRA CAT do not make any 

representations or warranties with 

respect to the CAT System or the 

Reporter Agreement (or the Reporting 

Agent Agreement). Such disclaimers are 

common in agreements, and CAT LLC is 

entitled to control the contractual 

representations and warranties that it 

makes. 

The proposed disclaimer of 

warranties clause was included (in sum 

and substance) in the original Reporter 

Agreement but was removed in 

connection with the settlement of the 

Administrative Proceeding along with 

the Limitation of Liability Provisions. 

Notably, although the Participants 

included a disclaimer of warranties 

clause in the Limitation of Liability 

Proposal, no commenter (including 

SIFMA) objected to the inclusion of that 

provision in the Reporter Agreement. 

Notwithstanding the lack of any 

objection, when the Commission issued 

the Disapproval Order—which focused 

in substance on the Limitation of 

Liability Provision—the Commission 

incidentally also disapproved the 

proposed disclaimer of warranties 

clause without commenting on whether 

the clause was consistent with the 

Exchange Act. 

Although substantively unrelated to 

the Forum Selection Provision, the 

Participants are including the 

disclaimer of warranties clause in this 

Proposed Amendment to enable the 

Commission to approve this proposed 

modification to the Reporter Agreement 

that did not generate any opposition 

among Industry Members or any 

commenter. As discussed above, the 

Participants are implementing the 

requirements of Rule 613 and the CAT 

NMS Plan for regulatory purposes at the 

behest of the Commission. Under those 

circumstances, the Participants should 

not be held liable for damages based on 

warranties or representations that they 

did not explicitly make. 

B. Governing or Constituent Documents 

Not applicable. 

C. Implementation of Amendment 

The Participants propose to 

implement the Proposed Amendment by 

making the revised agreements effective 

upon Commission approval of this 

Proposed Amendment, without 

requiring CAT Reporters and CAT 

Reporting Agents to re-sign the 

agreements. 

D. Development and Implementation 

Phases 

The Participants propose the revised 

agreements be effective upon 

Commission approval of this Proposed 

Amendment, without requiring CAT 

Reporters and CAT Reporting Agents to 

re-sign the agreements. 

E. Analysis of Impact on Competition 

The Participants do not believe the 

Proposed Amendment will have any 

impact on competition. The Proposed 

Amendment would mandate that all 

CAT Reporters and CAT Reporting 

Agents are bound by revised agreements 

that contain the amended provisions. 

Moreover, the Forum Selection 

Provision would apply equally to all 

Industry Members, the Participants, and 

CAT LLC, and would not impact the 

relative competitive positions among 


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53 17 CFR 200.30–3(a)(85). 

different Industry Members. 

Additionally, as discussed above, 

adjudication of disputes relating to CAT 

reporting in courts promotes 

consistency of outcomes, which thereby 

promotes fair competition. Conversely, 

arbitration could lead to disparate and 

inconsistent outcomes of similar 

disputes, which would unfairly 

advantage certain parties over others. 

F. Written Understanding or Agreements 

Relating to Interpretation of, or 

Participation in, Plan 

Not applicable. 

G. Approval by Plan Sponsors in 

Accordance With Plan 

Section 12.3 of the CAT NMS Plan 

states that, subject to certain exceptions, 

the Plan may be amended from time to 

time only by a written amendment, 

authorized by the affirmative vote of not 

less than two-thirds of all of the 

Participants, that has been approved by 

the SEC pursuant to Rule 608 or has 

otherwise become effective under Rule 

608. The Participants, by a vote of the 

Operating Committee taken on May 17, 

2022, have authorized the filing of this 

Proposed Amendment with the SEC in 

accordance with the Plan. 

H. Description of Operation of Facility 

Contemplated by the Proposed 

Amendment and Any Fees or Charges in 

Connection Thereto 

Not applicable. 

I. Terms and Conditions of Access 

Not applicable. 

J. Method and Frequency of Processor 

Evaluation 

Not applicable. 

K. Dispute Resolution 

Not applicable. 

III. Solicitation of Comments 

Interested persons are invited to 

submit written data, views and 

arguments concerning the foregoing, 

including whether the amendment is 

consistent with the Exchange 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 File Number 4– 

698 on the subject line. 

Paper Comments 

• Send paper comments to Secretary, 

Securities and Exchange Commission, 

100 F Street NE, Washington, DC 

20549–1090. 

All submissions should refer to File 

Number 4–698. This file number should 

be included on the subject line if email 

is used. 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 (http://www.sec.gov/rules/ 

sro.shtml). Copies of the submission, all 

subsequent amendments, all written 

statements with respect to the proposed 

plan amendment that are filed with the 

Commission, and all written 

communications relating to the 

amendment 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 Participants’ offices. 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 File 

Number 4–698 and should be submitted 

on or before June 30, 2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.53

J. Matthew DeLesDernier, 

Assistant Secretary. 

APPENDIX A 

LIMITED LIABILITY COMPANY 

AGREEMENT OF CONSOLIDATED AUDIT 

TRAIL, LLC 

* * * * * 

ARTICLE XII 

[proposed additions] 

* * * * * 

Section 12.15. Forum Selection; Governing 

Law; Waiver of Jury Trial; Disclaimer of 

Warranties. Each CAT Reporter shall be 

bound by an amended Consolidated Audit 

Trail Reporter Agreement containing, in 

substance, the forum selection provision, 

governing law provision, jury waiver 

provision, and disclaimer of warranties 

clause in Appendix E to this Agreement. 

Each Person engaged by a CAT Reporter to 

report CAT Data to the Central Repository on 

behalf of such CAT Reporter shall be bound 

by an amended Consolidated Audit Trail 

Reporting Agent Agreement containing, in 

substance, the forum selection provision, 

governing law provision, jury waiver 

provision, and disclaimer of warranties 

clause in Appendix F to this Agreement. The 

Operating Committee shall have authority in 

its sole discretion to make non-substantive 

amendments to the forum selection 

provision, governing law provision, jury 

waiver provision, and disclaimer of 

warranties clause in the Consolidated Audit 

Trail Reporter Agreement and the 

Consolidated Audit Trail Reporting Agent 

Agreement. 

* * * * * 

APPENDIX E 

[proposed additions] 

* * * * * 

Forum Selection Provision in the CAT 

Reporter Agreement 

7.9. Forum Selection. EXCEPT AS 

OTHERWISE PROHIBITED BY FEDERAL 

LAW OR OTHERWISE PROVIDED BY 

SECTION 11.5 OF THE CAT NMS PLAN, 

FOR ANY DISPUTE, CONTROVERSY, OR 

CLAIM IN CONNECTION WITH, RELATING 

TO, OR ASSOCIATED IN ANY WAY WITH 

THIS AGREEMENT, CAT REPORTING, OR 

THE CAT SYSTEM, THE PARTIES 

IRREVOCABLY SUBMIT TO THE 

EXCLUSIVE JURISDICTION AND VENUE OF 

THE UNITED STATES DISTRICT COURT 

FOR THE SOUTHERN DISTRICT OF NEW 

YORK AND THE NEW YORK STATE 

SUPREME COURT FOR NEW YORK 

COUNTY IN THE BOROUGH OF 

MANHATTAN, INCLUDING THE 

COMMERCIAL DIVISION. Each Party hereby 

agrees to commence any such action, suit, or 

other proceeding in (i) the United States 

District Court for the Southern District of 

New York, or (ii) if such action, suit, or other 

proceeding cannot be brought in such court 

for jurisdictional reasons, to commence such 

suit, action, or other proceeding in the New 

York State Supreme Court for New York 

County, borough of Manhattan, and seek 

assignment to the New York County 

Commercial Division whenever the 

jurisdictional requirements for Commercial 

Division assignment are met. Service of any 

process, summons, notice, or document by 

U.S. registered mail to such Party’s respective 

address shall be effective service of process 

for any action, suit, or other proceeding in 

New York with respect to any matters to 

which it has submitted to jurisdiction in this 

Agreement. Each Party irrevocably and 

unconditionally waives any objection to the 

laying of venue of any action, suit, or other 

proceeding connected to, related to, or 

associated in any way with this Agreement, 

CAT Reporting, or the CAT System in the 

courts identified in items (i)–(ii) above, and 

hereby and thereby further irrevocably and 

unconditionally waives and agrees not to 

plead or claim in any such court that any 

such action, suit, or other proceeding brought 

in any such court has been brought in an 

inconvenient forum. The provisions of this 

paragraph shall apply to any action, suit, or 

other proceeding commenced by any Party 

against any other Party to this Agreement, 


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including those in which one or more 

Participants or the Plan Processor (or any 

Representatives of one or more Participants 

or the Plan Processor) are named as parties, 

regardless of whether CATLLC is also named 

as a party. 

Governing Law Clause in the CAT Reporter 

Agreement 

7.11. Governing Law. THIS AGREEMENT, 

AND ALL MATTERS BETWEEN CATLLC 

AND CAT REPORTER ARISING OUT OF OR 

RELATING TO THIS AGREEMENT, SHALL 

BE CONSTRUED AND ENFORCED IN 

ACCORDANCE WITH THE FEDERAL LAWS 

OF THE UNITED STATES AND THE LAWS 

OF THE STATE OF NEW YORK WITHOUT 

GIVING EFFECT TO ANY LAWS, RULES OR 

PROVISIONS THAT WOULD CAUSE THE 

APPLICATION OF LAWS OF ANY 

JURISDICTION OTHER THAN THE 

FEDERAL LAWS OF THE UNITED STATES 

AND THE LAWS OF THE STATE OF NEW 

YORK. 

Jury Waiver Provision in the CAT Reporter 

Agreement 

7.13. Waiver of Jury Trial. EACH PARTY 

HEREBY WAIVES ITS RIGHTS TO A JURY 

TRIAL OF ANY CLAIM OR CAUSE OF 

ACTION FOR ANY DISPUTE, 

CONTROVERSY, OR CLAIM IN 

CONNECTION WITH, RELATING TO, OR 

ASSOCIATED IN ANY WAY WITH THIS 

AGREEMENT, CAT REPORTING, OR THE 

CAT SYSTEM. THE SCOPE OF THIS 

WAIVER IS INTENDED TO BE ALL– 

ENCOMPASSING OF ANY AND ALL 

DISPUTES THAT MAY BE FILED IN ANY 

COURT AND THAT RELATE TO THE 

SUBJECT MATTER OF THIS AGREEMENT, 

CAT REPORTING, OR THE CAT SYSTEM, 

INCLUDING, WITHOUT LIMITATION, 

CONTRACT CLAIMS, TORT CLAIMS 

(INCLUDING NEGLIGENCE), BREACH OF 

DUTY CLAIMS, AND ALL OTHER 

COMMON LAW AND STATUTORY 

CLAIMS. THESE PROVISIONS WILL NOT 

BE SUBJECT TO ANY EXCEPTIONS. 

Disclaimer of Warranties Clause in the CAT 

Reporter Agreement 

5.5. Disclaimer. EXCEPT AS EXPRESSLY 

SET FORTH IN THIS AGREEMENT, 

CATLLC, THE PLAN PROCESSOR, AND 

THE PARTICIPANTS DISCLAIM ANY, AND 

MAKE NO, REPRESENTATIONS OR 

WARRANTIES, WHETHER ORAL OR 

WRITTEN, EXPRESS OR IMPLIED, ARISING 

BY STATUTE OR OTHERWISE IN LAW, OR 

FROM A COURSE OF DEALING OR USAGE 

OF TRADE, REGARDING THE CAT SYSTEM 

OR ANY OTHER MATTER PERTAINING TO 

THIS AGREEMENT. THIS DISCLAIMER 

INCLUDES, WITHOUT LIMITATION, ANY 

REPRESENTATION OR WARRANTY OF OR 

RELATING TO: MERCHANTABILITY; 

QUALITY; FITNESS FOR A PARTICULAR 

PURPOSE: COMPLIANCE WITH 

APPLICABLE LAWS; NON– 

INFRINGEMENT; TITLE; AND 

SEQUENCING, TIMELINESS, ACCURACY 

OR COMPLETENESS OF INFORMATION. 

* * * * * 

APPENDIX F 

[proposed additions] 

* * * * * 

Forum Selection Provision in the CAT 

Reporting Agent Agreement 

7.9. Forum Selection. EXCEPT AS 

OTHERWISE PROHIBITED BY FEDERAL 

LAW OR OTHERWISE PROVIDED BY 

SECTION 11.5 OF THE CAT NMS PLAN, 

FOR ANY DISPUTE, CONTROVERSY, OR 

CLAIM IN CONNECTION WITH, RELATING 

TO, OR ASSOCIATED IN ANY WAY WITH 

THIS AGREEMENT, CAT REPORTING, OR 

THE CAT SYSTEM, THE PARTIES 

IRREVOCABLY SUBMIT TO THE 

EXCLUSIVE JURISDICTION AND VENUE OF 

THE UNITED STATES DISTRICT COURT 

FOR THE SOUTHERN DISTRICT OF NEW 

YORK AND THE NEW YORK STATE 

SUPREME COURT FOR NEW YORK 

COUNTY IN THE BOROUGH OF 

MANHATTAN, INCLUDING THE 

COMMERCIAL DIVISION. Each Party hereby 

agrees to commence any such action, suit, or 

other proceeding in (i) the United States 

District Court for the Southern District of 

New York, or (ii) if such action, suit, or other 

proceeding cannot be brought in such court 

for jurisdictional reasons, to commence such 

suit, action, or other proceeding in the New 

York State Supreme Court for New York 

County, borough of Manhattan, and seek 

assignment to the New York County 

Commercial Division whenever the 

jurisdictional requirements for Commercial 

Division assignment are met. Service of any 

process, summons, notice, or document by 

U.S. registered mail to such Party’s respective 

address shall be effective service of process 

for any action, suit, or other proceeding in 

New York with respect to any matters to 

which it has submitted to jurisdiction in this 

Agreement. Each Party irrevocably and 

unconditionally waives any objection to the 

laying of venue of any action, suit, or other 

proceeding connected to, related to, or 

associated in any way with this Agreement, 

CAT Reporting, or the CAT System in the 

courts identified in items (i)-(ii) above, and 

hereby and thereby further irrevocably and 

unconditionally waives and agrees not to 

plead or claim in any such court that any 

such action, suit, or other proceeding brought 

in any such court has been brought in an 

inconvenient forum. The provisions of this 

paragraph shall apply to any action, suit, or 

other proceeding commenced by any Party 

against any other Party to this Agreement, 

including those in which one or more 

Participants or the Plan Processor (or any 

Representatives of one or more Participants 

or the Plan Processor) are named as parties, 

regardless of whether CATLLC is also named 

as a party. 

Governing Law Clause in the CAT Reporting 

Agent Agreement 

7.11. Governing Law. THIS AGREEMENT, 

AND ALL MATTERS BETWEEN CATLLC 

AND CAT REPORTING AGENT ARISING 

OUT OF OR RELATING TO THIS 

AGREEMENT, SHALL BE CONSTRUED AND 

ENFORCED IN ACCORDANCE WITH THE 

FEDERAL LAWS OF THE UNITED STATES 

AND THE LAWS OF THE STATE OF NEW 

YORK WITHOUT GIVING EFFECT TO ANY 

LAWS, RULES OR PROVISIONS THAT 

WOULD CAUSE THE APPLICATION OF 

LAWS OF ANY JURISDICTION OTHER 

THAN THE FEDERAL LAWS OF THE 

UNITED STATES AND THE LAWS OF THE 

STATE OF NEW YORK. 

Jury Waiver Provision in the CAT Reporting 

Agent Agreement 

7.13. Waiver of Jury Trial. EACH PARTY 

HEREBY WAIVES ITS RIGHTS TO A JURY 

TRIAL OF ANY CLAIM OR CAUSE OF 

ACTION FOR ANY DISPUTE, 

CONTROVERSY, OR CLAIM IN 

CONNECTION WITH, RELATING TO, OR 

ASSOCIATED IN ANY WAY WITH THIS 

AGREEMENT, CAT REPORTING, OR THE 

CAT SYSTEM. THE SCOPE OF THIS 

WAIVER IS INTENDED TO BE ALL– 

ENCOMPASSING OF ANY AND ALL 

DISPUTES THAT MAY BE FILED IN ANY 

COURT AND THAT RELATE TO THE 

SUBJECT MATTER OF THIS AGREEMENT, 

CAT REPORTING, OR THE CAT SYSTEM, 

INCLUDING, WITHOUT LIMITATION, 

CONTRACT CLAIMS, TORT CLAIMS 

(INCLUDING NEGLIGENCE), BREACH OF 

DUTY CLAIMS, AND ALL OTHER 

COMMON LAW AND STATUTORY 

CLAIMS. THESE PROVISIONS WILL NOT 

BE SUBJECT TO ANY EXCEPTIONS. 

Disclaimer of Warranties Clause in the CAT 

Reporting Agent Agreement 

5.5. Disclaimer. EXCEPT AS EXPRESSLY 

SET FORTH IN THIS AGREEMENT, 

CATLLC, THE PLAN PROCESSOR, AND 

THE PARTICIPANTS DISCLAIM ANY, AND 

MAKE NO, REPRESENTATIONS OR 

WARRANTIES, WHETHER ORAL OR 

WRITTEN, EXPRESS OR IMPLIED, ARISING 

BY STATUTE OR OTHERWISE IN LAW, OR 

FROM A COURSE OF DEALING OR USAGE 

OF TRADE, REGARDING THE CAT SYSTEM 

OR ANY OTHER MATTER PERTAINING TO 

THIS AGREEMENT. THIS DISCLAIMER 

INCLUDES, WITHOUT LIMITATION, ANY 

REPRESENTATION OR WARRANTY OF OR 

RELATING TO: MERCHANTABILITY; 

QUALITY; FITNESS FOR A PARTICULAR 

PURPOSE: COMPLIANCE WITH 

APPLICABLE LAWS; NON– 

INFRINGEMENT; TITLE; AND 

SEQUENCING, TIMELINESS, ACCURACY 

OR COMPLETENESS OF INFORMATION. 

* * * * * 

[FR Doc. 2022–12398 Filed 6–8–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

34609; File No. 812–15314] 

Voya Senior Income Fund, et al. 

June 3, 2022. 

AGENCY: Securities and Exchange 

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

ACTION: Notice. 


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