Document ID: SEC-2015-1256-0002
Agency: sec
Document Type: Notice
Title: Agency Information Collection Activities; Proposals, Submissions, and Approvals
Posted Date: 2020-04-17T04:00Z

[Federal Register Volume 85, Number 75 (Friday, April 17, 2020)]
[Notices]
[Pages 21493-21494]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-08122]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[SEC File No. 270-616, OMB Control No. 3235-0671]

Proposed Collection; Comment Request

Upon Written Request, Copies Available From: Securities and Exchange 
Commission, Office of FOIA Services, 100 F Street NE, Washington, DC 
20549-2736

Extension:
    Rule 613 of Regulation NMS

    Notice is hereby given that pursuant to the Paperwork Reduction Act 
of 1995 (``PRA'') (44 U.S.C. 3501 et seq.), the Securities and Exchange 
Commission (``Commission'') is soliciting comments on the existing 
collection of information provided for in connection with a National 
Market System (NMS) Plan filed with the Commission under Rule 613 (17 
CFR 242.613), under the Securities Exchange Act of 1934 (15 U.S.C. 78a 
et seq.). The Commission plans to submit this existing collection of 
information to the Office of Management and Budget (``OMB'') for 
extension and approval.
    Rule 613 of Regulation NMS (17 CFR part 242) required national 
securities exchanges and national securities associations 
(``Participants'') to jointly submit to the Commission a national 
market system (``NMS'') plan to govern the creation, implementation, 
and maintenance of a consolidated audit trail (``CAT'') and Central 
Repository for the collection of information for NMS securities. On 
February 27, 2015, the Participants submitted the CAT NMS Plan to the 
Commission.\1\ On April 27, 2016, the Commission published a notice 
soliciting comments from the public (``CAT NMS Plan Notice'').\2\ On 
November 15, 2016, the Commission approved the CAT NMS Plan (``CAT NMS 
Plan Order''), including the information collections proposed in the 
CAT NMS Plan Notice, and certain additional information collections.\3\
---------------------------------------------------------------------------

    \1\ See Letter from Participants to Brent J. Fields, Secretary, 
Commission, dated February 27, 2015. The Participants filed the CAT 
NMS Plan on September 30, 2014. See Letter from the Participants, to 
Brent J. Fields, Secretary, Commission, dated September 30, 2014. 
The CAT NMS Plan filed on February 27, 2015, was an amendment to and 
replacement of the Initial CAT NMS Plan (the ``Amended and Restated 
CAT NMS Plan''). On December 24, 2015, the Participants submitted an 
Amendment to the Amended and Restated CAT NMS Plan. See Letter from 
Participants to Brent J. Fields, Secretary, Commission, dated 
December 23, 2015 (the ``Amendment''). On February 9, 2016, the 
Participants filed with the Commission an identical, but unmarked, 
version of the Amended and Restated CAT NMS Plan, dated February 27, 
2015, as modified by the Amendment, as well as a copy of the request 
for proposal issued by the Participants to solicit Bids from parties 
interested in serving as the Plan Processor for the consolidated 
audit trail. Unless the context otherwise requires, the ``CAT NMS 
Plan'' shall refer to the Amended and Restated CAT NMS Plan, as 
modified by the Amendment.
    \2\ See Securities Exchange Act Release No. 77724 (April 27, 
2016), 81 FR 30613 (May 17, 2016). The burdens associated with the 
CAT NMS Plan Notice were submitted under OMB number 3235-0671 which 
relates to the NMS Plan required to be filed under Rule 613.
    \3\ See Securities Exchange Act Release No. 79318 (November 15, 
2016), 81 FR 84696 (November 23, 2016), available at https://www.sec.gov/rules/sro/nms/2016/34-79318.pdf (``CAT NMS Plan 
Order'').
---------------------------------------------------------------------------

    Since November 15, 2016, the Commission believes that three 
information collection requirements have been completed, specifically: 
(1) A document outlining how the Participants could incorporate into 
the consolidated audit trail information regarding certain products 
that are not NMS securities; \4\ (2) a one-time assessment of the clock 
synchronization standards in the Plan before reporting begins for 
Industry Members, which assessment shall take into account the 
diversity of CAT Reporters and systems; \5\ and (3) a one-time report 
that discusses the Participants' assessment of implementing coordinated 
surveillance.\6\
---------------------------------------------------------------------------

    \4\ See 17 CFR 242.613(i). See also ``One-Time Written 
Assessments,'' Consolidated Audit Trail, LLC at: https://www.catnmsplan.com/one-time-written-assessments/index.html.
    \5\ See CAT NMS Plan Order, supra note 3, at 84940.
    \6\ Id. at 84940-84941.
---------------------------------------------------------------------------

    This Notice addresses the remaining information collection 
requirements noticed in the CAT NMS Plan Notice and certain additional 
information collections of the CAT NMS Plan Order, which are: (1) 
Development of a Central Repository tasked with the receipt, 
consolidation, and retention of reported order and execution 
information submitted by Participants and their members; \7\ (2) the 
requirement that each Participant, and any member of such Participant, 
record and electronically report to the Central Repository details for 
each order and Reportable Event documenting the life of an order 
through the process of original receipt or origination, routing, 
modification, cancellation, and execution (in whole or in part) for 
each NMS security; \8\ (3) the requirement that the CAT NMS Plan 
require the Central Repository to collect and retain on a current and 
continuous basis NBBO information for each NMS security, transaction 
reports reported pursuant to an effective transaction reporting plan, 
and Last Sale Reports reported pursuant to the Options Price Reporting 
Authority Plan; \9\ (4) the requirement that the CAT NMS Plan must 
require that every national securities exchange and national securities 
association develop and implement a surveillance system, or enhance 
existing surveillance systems, reasonably designed to make use of the 
consolidated information contained in the consolidated audit trail; 
\10\ (5) a one-time independent audit of the fees, costs, and expenses 
incurred by the Participants on behalf of CAT NMS, LLC prior to the 
Effective Date \11\ of the Plan; \12\ (6) a one-time report from the 
Participants discussing the feasibility and advisability of allowing 
Industry Members to bulk download the Raw Data that it has submitted to 
the Central Repository; \13\ (7) a one-time assessment of the nature 
and extent of errors in the Customer information submitted to the 
Central Repository and whether the

[[Page 21494]]

correction of certain data fields over others should be prioritized 
from the Participants; \14\ (8) a one-time report on the impact of 
tiered fees on market liquidity, including an analysis of the impact of 
the tiered-fee structure on Industry Members provision of liquidity 
from the Participants; \15\ (9) an assessment of the projected impact 
of any Material Systems Change on the Maximum Error Rate, prior to the 
implementation of such Material Systems Change from the Participants; 
\16\ (10) an annual requirement that that the CAT LLC financials be (i) 
in compliance with GAAP, (ii) be audited by an independent public 
accounting firm, and (iii) be made publicly available; \17\ (11) a 
requirement that each Participant conduct background checks for its 
employees and contractors that will use the CAT System.\18\
---------------------------------------------------------------------------

    \7\ See 17 CFR 242.613.
    \8\ See 17 CFR 242.613(c)(1), (c)(5), (c)(6), (c)(7).
    \9\ See 17 CFR 242.613(e)(7).
    \10\ See 17 CFR 242.613(f).
    \11\ The ``Effective Date'' is the date the Commission approved 
the CAT NMS Plan, which is November 15, 2016. See id.
    \12\ See CAT NMS Plan Order, supra note, at 84940.
    \13\ Id. at 84941.
    \14\ Id.
    \15\ Id. at 84941-84942.
    \16\ Id. at 84942. The Commission believes that four assessments 
would be filed annually.
    \17\ Id.
    \18\ Id. The Commission believes that these background checks 
are necessary to ensure that only authorized and qualified persons 
are using the CAT System.
---------------------------------------------------------------------------

    The Commission believes that the CAT NMS Plan, once fully 
implemented, will improve the quality of the data available to 
regulators in four areas that affect the ultimate effectiveness of core 
regulatory efforts--completeness, accuracy, accessibility and 
timeliness.\19\ The improvements in these data qualities would 
substantially improve regulators' ability to perform analysis and 
reconstruction of market events, and market analysis and research to 
inform policy decisions, as well as perform regulatory activities, in 
particular market surveillance, examinations, investigations, and other 
enforcement functions.
---------------------------------------------------------------------------

    \19\ See CAT NMS Plan Order, supra note 3, at 45727 (discussing 
four ``qualities'' of trade and order data that impact the 
effectiveness of core Participant and Commission regulatory efforts: 
accuracy, completeness, accessibility, and timeliness).
---------------------------------------------------------------------------

    The Commission estimates that 1524 respondents \20\ will require an 
aggregate total of approximately 7,572,610 hours per year to comply 
with the collection of information. The Commission further estimates 
that the aggregate cost to comply with the collection of information 
will be approximately $463,322,593 per year.
---------------------------------------------------------------------------

    \20\ The Commission notes that 24 Participants (the 23 national 
securities exchanges and one national securities association) and 
1,500 broker-dealers subject to information collections requirements 
pursuant to Rule 613 and the CAT NMS Plan.
---------------------------------------------------------------------------

    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.
    An agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information under the PRA unless it 
displays a currently valid OMB control number.
    Please direct your written comments to: David Bottom, Director/
Chief Information Officer, Securities and Exchange Commission, c/o 
Cynthia Roscoe, 100 F Street, NE, Washington, DC 20549, or send an 
email to: PRA_Mailbox@sec.gov.

    Dated: April 14, 2020.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-08122 Filed 4-16-20; 8:45 am]
BILLING CODE 8011-01-P