Document ID: SEC-2015-1256-0003
Agency: sec
Document Type: Notice
Title: Agency Information Collection Activities; Proposals, Submissions, and Approvals
Posted Date: 2020-06-23T04:00Z

[Federal Register Volume 85, Number 121 (Tuesday, June 23, 2020)]
[Notices]
[Pages 37721-37722]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-13512]

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SECURITIES AND EXCHANGE COMMISSION

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

Submission for OMB Review; 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'') has submitted to the Office of Management 
and Budget (``OMB'') a request for approval of extension of the 
previously approved 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.).
    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\
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    \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'').
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    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\
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    \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.
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    This Notice addresses the remaining information collection 
requirements noticed in the CAT NMS Plan Notice and certain additional 
information collection requirements 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

[[Page 37722]]

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 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\
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    \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 3, 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.
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    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.
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    \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).
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    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.
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    \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.
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    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.
    The public may view background documentation for this information 
collection at the following website: www.reginfo.gov. Find this 
particular information collection by selecting ``Currently under 30-day 
Review--Open for Public Comments'' or by using the search function. 
Written comments and recommendations for the proposed information 
collection should be sent within 30 days of publication of this notice 
to (i) www.reginfo.gov/public/do/PRAMain and (ii) David Bottom, 
Director/Chief Information Officer, Securities and Exchange Commission, 
c/o Cynthia Roscoe, 100 F Street NE, Washington, DC 20549, or by 
sending an email to: PRA_Mailbox@sec.gov.

    Dated: June 18, 2020.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-13512 Filed 6-22-20; 8:45 am]
BILLING CODE 8011-01-P