resolve concerns regarding geographic latency and noted that the NBBO
could differ among the distributed SIPs, leading to operational and
compliance questions.\649\
---------------------------------------------------------------------------

    \649\ See Albers Letter at 3; Wittman Letter at 14. The Albers
and Wittman Letters were submitted on behalf of Nasdaq. The
commenter also believed that significant advances in clock
synchronization techniques would be necessary. See Wittman Letter at
14. This commenter later expressed support for the distributed SIP
model, stating that the approach could reduce data transmission time
for some market participants between 400 and 750 microseconds. See
Nasdaq Total Markets Report, supra note 127, at 19-20; Remarks by
Tal Cohen, Nasdaq, Meeting of the Securities and Exchange Commission
Investor Advisory Committee, at 50 (``[R]ecognizing the industry's
desire for a distributed SIP, we support this in concept to ensure
geographic latency concerns are addressed.'').
---------------------------------------------------------------------------

(b) Commission Discussion
    The Commission preliminarily believes that a distributed SIP model
could address the geographic latencies that exist in the current
centralized consolidation model but is concerned that the distributed
SIP model has certain fundamental shortcomings that make it a less
desirable option compared to the proposed competitive, decentralized
consolidation model. In particular, the distributed SIP model does not
allow for the introduction of competitive forces and continues to allow
for one exclusive SIP to have exclusive rights for the dissemination of
market data for the NMS stocks on a given consolidated tape. Because
the distributed SIP model does not introduce competitive forces, it is
less likely to adequately address the broader array of latencies and
competitive product and service offerings.
    In addition, insofar as the distributed SIP model does not allow
for the provision of all three consolidated tapes to be consolidated
and disseminated from a single entity, it retains the inefficiencies
that would not apply to a competing consolidator model, such as the
need for end-users to obtain data from multiple SIPs.\650\
---------------------------------------------------------------------------

    \650\ Since 2017, a distributed SIP subcommittee created by the
CTA and Nasdaq UTP Plan operating committees has considered and
continues to consider implementation of a distributed SIP model to
address geographic latencies. See CTA and UTP Annual Letter, supra
note 181, at 1-2.
---------------------------------------------------------------------------

    As a result, the Commission preliminarily believes that, since the
distributed SIP model could result in significant additional costs and
complexity and would not be likely to competitively address all forms
of content and latency differentials, the Commission preliminarily
believes that the distributed SIP model is not the optimal solution for
the provision of consolidated market data.
    The Commission requests comment on the distributed SIP alternative.
In particular, the Commission solicits comment on the following:
    153. Is the distributed SIP alternative a viable or superior
alternative to the proposed competing consolidator and self-aggregator
model? If so, please describe the benefits of the distributed SIP model
and why that model is the preferred alternative.
    2. Single SIP Alternative
    Another suggestion to modify the centralized consolidation model to
address latency concerns was to combine the exclusive SIPs into a
single exclusive SIP for all exchange-listed securities.\651\ Comments
noted that such a change would permit the harmonization of exclusive
SIP infrastructure \652\ and narrow the latency difference between the
exclusive SIPs and proprietary data feeds.\653\ One commenter thought
this alternative would be a low cost alternative.\654\
---------------------------------------------------------------------------

    \651\ See Nasdaq Total Markets Report, supra note 127, at 21;
SIFMA Letter II at 3. This suggestion would apply the centralized
consolidation structure.
    \652\ See Nasdaq Total Markets Report, supra note 127, at 21.
    \653\ See SIFMA Letter II at 3. The commenter did not elaborate
on how this model could address latency issues. This commenter,
however, noted that the use of competing consolidators would best
resolve the latency issues because competition would provide the
incentives for improvements.
    \654\ Id.
---------------------------------------------------------------------------

    In light of the fact that the Nasdaq UTP SIP has less latency that
the CTA/CQ SIP, within the current exclusive and centralized exclusive
SIP model, this solution has certain merits. It could allow for an
upgrade to existing processor technology for the CTA/CQ SIP, which
continues to lag the performance of the Nasdaq UTP SIP. It could also
eliminate certain inefficiencies in having two separate exclusive SIPs
for SIP data. Potentially having a single administrator and exclusive
SIP could ease these burdens and introduce benefits such as a less
complex infrastructure and greater standardization.
    However, this alternative has certain key shortcomings. For one
thing, it does not attempt to introduce competitive forces, and,
therefore, as with the distributed SIP alternative, would not
necessarily be expected to fully address all forms of latency in a
competitive data environment. Further, it does not attempt to address
geographic latency, which, as noted, is believed to be the most
significant source of latency undermining the viability of the current
centralized exclusive SIP model.
    The Commission requests comment on these alternative approaches to
the current centralized consolidation

model. In particular, the Commission solicits comment on the following:
    154. Is the single exclusive SIP alternative a viable alternative
to addressing the concerns with the current centralized consolidation
model? If so, please describe the operation of the single exclusive SIP
alternative and how it would address the latency and cost concerns
arising from the centralized consolidation model. Are there any other
viable alternatives?
    155. Do commenters believe that the single centralized exclusive
SIP model could be a viable solution despite the fact that it would not
introduce competitive forces into the provision of consolidated data
and would not address geographic latency? If so, please describe any
factors that make this solution as good as or better than the proposed
decentralized model.

V. Paperwork Reduction Act

    Certain provisions of the proposed rules and proposed rule
amendments contain ``collection of information requirements'' within
the meaning of the Paperwork Reduction Act of 1995 (``PRA'').\655\ The
Commission is submitting these collections of information to the Office
of Management and Budget (``OMB'') for review in accordance with 44
U.S.C. 3507(d) and 5 CFR 1320.11. The title of the new collection of
information is ``Market Data Infrastructure and Form CC.'' Further, the
title of the existing collection of information for Regulation SCI is
``Regulation SCI, Form SCI,'' OMB Control No. 3235-0703.\656\ An agency
may not conduct or sponsor, and a person is not required to respond to,
a collection of information unless the agency displays a currently
valid control number.
---------------------------------------------------------------------------

    \655\ 44 U.S.C. 3501 et seq.
    \656\ As discussed below, the proposed modifications to
Regulation SCI contain ``collection of information requirements''
within the meaning of the PRA. See infra Section V.G. Further, as
discussed above, the proposed definition of round lot would affect
Rule 606(b)(3) by requiring actionable indications of interest to be
in the proposed round lot sizes and included in 606(b)(3) reports.
The Commission preliminarily believes that the PRA estimates set
forth in the Rule 606 Adopting Release would cover the collection of
actionable indications of interest in the proposed round lot sizes
because there should only be minor systems updates to reflect the
new round lot sizes. See Rule 606 Adopting Release, supra note 227.
---------------------------------------------------------------------------

A. Summary of Collection of Information

    The proposed rules and rule amendments would include a collection
of information within the meaning of the PRA for competing
consolidators who would be required to comply with the provisions of
Rule 614 and file a Form CC with the Commission. In addition, SROs
would be required to collect information that they would then have to
provide to competing consolidators and self-aggregators for the
purposes to generating proposed consolidated market data. Finally, the
SROs would be required to amend the effective national market system
plan(s) required under Rule 603(b).
1. Registration Requirements and Form CC
    Proposed Rule 614(a)(1)(i) would require each competing
consolidator to register with the Commission by filing Form CC
electronically in accordance with the instructions contained on the
form.\657\ To file a form CC, a competing consolidator would need to
access the Commission's EFFS, a secure website operated by the
Commission. Each competing consolidator would have to submit an
application and register each individual who would access the EFFS
system on behalf of the competing consolidator. Proposed Rule
614(a)(1)(ii) would require any reports required under proposed Rule
614 to be filed electronically on Form CC, include all of the
information as prescribed in Form CC and contain an electronic
signature. Proposed Rule 614(a)(1)(iv) would require a competing
consolidator to withdraw an initial Form CC during its review by the
Commission if information on the initial Form CC is or becomes
inaccurate or incomplete. Under proposed Rule 614(a)(2)(i), a competing
consolidator would be required to amend an effective Form CC in
accordance with the instructions therein: (i) Prior to the
implementation of a material change to pricing, connectivity or
products offered; and (ii) no later than 30 calendar days after the end
of each calendar year to correct information that has become inaccurate
or incomplete for any reason. Proposed Rule 614(a)(3) would require a
competing consolidator to provide notice of its cessation of operations
on Form CC at least 30 business days before the date the competing
consolidator ceases to operate as a competing consolidator.
---------------------------------------------------------------------------

    \657\ As explained above, SROs that wish to act as competing
consolidators would not be required to register with the Commission
on Form CC. See supra note 537.
---------------------------------------------------------------------------

2. Competing Consolidator Duties and Data Collection
    Proposed Rules 614(d)(1)-(4) would require each competing
consolidator to: (1) Collect from each national securities exchange and
national securities association, either directly or indirectly, the
information with respect to quotations for and transactions in NMS
stocks as provided in Rule 603(b); (2) calculate and generate
consolidated market data as defined in proposed Rule 600(b)(19) from
the information collected pursuant proposed Rule 614(d)(1); (3) make
consolidated market data, as defined in proposed Rule 600(b)(19), and
as timestamped as required by proposed Rule 614(d)(4) and including the
SRO data generation timestamp required to be provided by the SROs by
proposed Rule 614(e)(1)(ii), available to subscribers on a consolidated
basis on terms that are not unreasonably discriminatory; and (4)
timestamp the information collected pursuant to proposed Rule
614(d)(1): (i) Upon receipt from each national securities exchange and
national securities association; (ii) upon receipt of such information
at its aggregation mechanism; and (iii) upon dissemination of
consolidated market data, as defined in proposed Rule 600(b)(19), to
customers. Proposed Rule 614(c) would require each competing
consolidator to make public on its website a direct URL hyperlink to
the Commission's website that contains each effective initial Form CC,
as amended, order of ineffective initial Form CC, and Form CC amendment
to an effective Form CC.
3. Recordkeeping
    Proposed Rule 614(d)(7) would require each competing consolidator
to keep and preserve at least one copy of all documents, including all
correspondence, memoranda, papers, books, notices, accounts and such
other records as shall be made or received by it in the course of its
business as such and in the conduct of its business. The proposed rule
would require competing consolidators to keep these documents for a
period of no less than five years, the first two years in an easily
accessible place. Proposed Rule 614(d)(8) would require each competing
consolidator, upon request of any representative of the Commission, to
promptly furnish to such representative copies of any documents
required to be kept and preserved by it.
4. Reports and Reviews
    Proposed Rule 614(d)(5) would require each competing consolidator,
within 15 calendar days after the end of each month, to publish
prominently on its website monthly performance metrics, as defined by
the effective national market system plan(s) for NMS stocks, that shall
include at least the following: (i) Capacity statistics; (ii)

message rate and total statistics; (iii) system availability; (iv)
network delay statistics; (v) latency statistics for the following,
with distribution statistics up to the 99.99th percentile: (A) When a
national securities exchange or national securities association sends
an inbound message to a competing consolidator network and when the
competing consolidator network receives the inbound message; (B) when
the competing consolidator network receives the inbound message and
when the competing consolidator network sends the corresponding
consolidated message to a subscriber; and (C) when a national
securities exchange or national securities association sends an inbound
message to a competing consolidator network and when the competing
consolidator network sends the corresponding consolidated message to a
subscriber. All information posted pursuant to proposed Rule 614(d)(5)
must be publicly posted in downloadable files and must remain free and
accessible (without any encumbrances or restrictions) by the general
public on the website for a period of not less than three years from
the initial date of posting.
    Proposed Rule 614(d)(6) would require a competing consolidator,
within 15 calendar days after the end of each month, to publish
prominently on its website the following information: (i) Data quality
issues; (ii) system issues; (iii) any clock synchronization protocol
utilized; (iv) for the clocks used to generate the timestamps described
in proposed Rule 614(d)(4), the clock drift averages and peaks, and the
number of instances of clock drift greater than 100 microseconds; and
(v) vendor alerts. All information posted pursuant to proposed Rule
614(d)(6) must be publicly posted and must remain free and accessible
(without any encumbrances or restrictions) by the general public on the
website for a period of not less than three years from the initial date
of posting.
5. Amendment to the Effective National Market System Plan(s) for NMS
Stocks
    As detailed above, proposed Rule 614(e)(1) would direct the
participants to the effective national market system plan(s) for NMS
stocks to submit an amendment to such plan(s) within 60 days of the
effectiveness of the proposed rule that would address several
articulated provisions. In particular, proposed Rule 614(e)(1)(i) would
require that the amendment conform the plan(s) to reflect the provision
of market data that is necessary to generate consolidated market data,
as defined in proposed Rule 600(b)(19), by the SRO participants to
competing consolidators and self-aggregators, and the role that the
plan(s) would have in developing fees for consolidated market data and
defining the monthly performance metrics that competing consolidators
would be required to publish.\658\ Proposed Rule 614(e)(1)(ii) would
require that the participants to the effective national market system
plan(s) for NMS stocks file an amendment that contains provisions
regarding the application of timestamps by the SRO participants on all
consolidated market data, as defined in proposed Rule 600(b)(19), and
that such time stamps be attached at the time the data was generated by
the SRO and the time that the SRO made the proposed consolidated market
data available to competing consolidators and self-aggregators. The
participants to the effective national market system plan(s) for NMS
stocks would be required to file an amendment that includes provisions
relating to assessments of competing consolidator performance that
would include the speed, reliability and cost of data provision and the
provision of an annual report of such assessment to the Commission.
Finally, participants to the effective national market system plan(s)
for NMS stocks would be required to file an amendment to identify the
primary listing market for each NMS stock.
---------------------------------------------------------------------------

    \658\ See proposed Rule 614(d)(6).
---------------------------------------------------------------------------

    Proposed Rule 614(e) would impose paperwork burdens on the
participants to the effective national market system plan(s) for NMS
stocks. First, requiring the submission of an amendment or amendments
to the effective national market system plan(s) for NMS stocks would
impose a paperwork burden on the participants of such plan(s)
associated with preparing and filing the amendment or amendments.
Second, defining the monthly performance metrics for competing
consolidators would impose a paperwork burden on the participants of
the plan(s). Third, developing the requirements for the application of
timestamps by the SROs would impose a paperwork burden on the SRO
participants of such plans. Fourth, requiring the provision of an
annual report to the Commission assessing competing consolidator
performance would impose a paperwork burden on the participants of the
effective national market system plan(s) for NMS stocks. Finally,
developing and maintaining a list of the primary listing market for
each NMS stock would impose a paperwork burden on the participants of
the effective national market system plan(s) for NMS stocks.
6. Collection and Dissemination of Information by National Securities
Exchanges and National Securities Associations
    The proposed amendment to Rule 603(b) would require every national
securities exchange on which an NMS stock is traded and national
securities association to make available to all competing consolidators
and self-aggregators all information with respect to quotations for and
transactions in NMS stocks, including all data necessary to generate
consolidated market data, in the same manner and using the same
methods, including all methods of access and using the same format, as
such exchange or association makes available any information with
respect to quotations for and transactions in NMS stocks to any person.
SROs would be required to collect the information necessary to generate
proposed consolidated market data, which would be required to be made
available under proposed Rule 603(b). As proposed, the primary listing
exchange would have to collect and make available pursuant to Rule
603(b) information required under Rule 201 of Regulation SHO. Moreover,
the proposal would require the primary listing exchange with the
largest proportion of stocks includes in the S&P 500 Index to monitor
the index throughout the trading day. The collection of information may
require system changes by the SROs.

B. Proposed Use of Information

1. Registration Requirements and Form CC
    As discussed above, proposed Form CC, Rules 614(a)(1) and 614(a)(2)
would generally require competing consolidators to register on Form CC
and make amendments to an effective Form CC prior to implementing a
material change to the pricing, connectivity or products offered and
annually to correct information that has become inaccurate or
incomplete for any reason. The information collected in Form CC would
be used to help assure that a competing consolidator's disclosures
comply with the requirements of proposed Rule 614 and so that specified
information would be made publicly available and could be used to
evaluate competing consolidators. The information required under
proposed Rule 614(a)(1) also would be used by the Commission to
determine whether to declare ineffective an initial Form CC filed by a
competing consolidator.
    Proposed Rule 614(a)(3) would require a competing consolidator to

provide notice of its cessation of operations on Form CC at least 30
business days prior to the date the competing consolidator will cease
to operate as a competing consolidator. This information would be used
by the Commission to monitor and oversee competing consolidators and
would provide notice to the public that the competing consolidator
intends to cease operations.
2. Competing Consolidator Duties and Data Collection
    Under the proposed decentralized consolidation model, proposed
Rules 614(d)(1)-(d)(3) would require the competing consolidators to
collect from the SROs quotation and transaction information for NMS
stocks, calculate and generate consolidated market data, as proposed,
from this information, and make such consolidated market data available
on terms that are not unreasonably discriminatory to subscribers. The
information that would be collected under these provisions is a
critical element of the U.S. national market system, and the
availability of this information would promote fair and efficient
markets and facilitate the ability of brokers and dealers to trade more
effectively and to provide best execution to their customers.
    Proposed Rule 614(d)(4) would require competing consolidators to
timestamp the information with respect to quotations and transactions
in NMS stocks that they collect from the SROs pursuant to proposed Rule
614(d)(1) upon receipt, upon receipt by the aggregation mechanism, and
upon dissemination to subscribers. This information would be used by
subscribers to determine a competing consolidator's realized latency
and should assist subscribers in choosing a competing consolidator or
in deciding whether the chosen competing consolidator continues to meet
their latency needs.
    Proposed Rule 614(c) would require each competing consolidator to
make public on its website a direct URL hyperlink to the Commission's
website that contains each effective initial Form CC, order of
ineffective initial Form CC, and amendments to effective Form CCs.
These proposed requirements will help to assure that information
regarding competing consolidators is readily available.
3. Recordkeeping
    Proposed Rule 614(d)(7) would require each competing consolidator
to keep and preserve at least one copy of all documents made or
received by it in the course of its business and in the conduct of its
business. These documents must be kept for a period of no less than
five years, the first two years in an easily accessible place. Proposed
Rule 614(d)(8) would require each competing consolidator to promptly
furnish these documents to any representative of the Commission upon
request. This information would facilitate the Commission's oversight
of competing consolidators.
4. Reports and Reviews
    Proposed Rules 614(d)(5) and (d)(6) would require the monthly
publication, on a competing consolidator's website, of metrics and
other information concerning the competing consolidator's performance
and operations. This information would include, among other things,
latency statistics, system availability, data quality problems, and
clock drift information. The information must be publicly posted and
must remain free and accessible (without any encumbrances or
restrictions) by the general public on the website for a period of not
less than three years from the initial date of posting. These proposed
rules would provide transparency with respect to the services and
performance of a competing consolidator, which would allow market
participants to evaluate the merits of a competing consolidator.
5. Amendment to the Effective National Market System Plan(s) for NMS
Stocks
    As discussed above, the effective national market system plan(s)
for NMS stocks would need to be updated and would be required to
include specified new provisions. Accordingly, the participants would
be required to file an amendment or amendments to the plans to reflect
the new role and functions of the plan(s). For example, the proposed
amendment would need to reflect that the plan(s) is (are) no longer
operating the exclusive SIPs. In addition, the amendment would reflect
the new fees for consolidated market data as well as the approach to
billing protocols, including an MISU policy. In addition, the
participants to the plan(s) would need to file an amendment to define
the monthly performance metrics of competing consolidators. The
information that would be collected pursuant to the proposed plan(s)
amendment would inform market participants of the proposed operation of
the effective national market system plan(s) for NMS stocks and
facilitate the Commission's ability to oversee the national market
system for NMS stocks. The information that would be collected pursuant
to the proposed plan(s) amendment would also inform competing
consolidators of the monthly performance metrics that they would be
required to develop. The amendment or amendments would be published for
public comment.
(a) Proposed Application of Timestamps (Rule 614(e)(1)(iii))
    As noted above, timestamps are used extensively in reporting market
data elements. Timestamps are used to properly sequence events and are
necessary for the elements of consolidated market data, as proposed.
Timestamps also help to measure latencies with the provision of
proposed consolidated market data. The lack of timestamps would impair
the usefulness of the data and would impair market participants'
ability to measure the latencies involved with the provision of
proposed consolidated market data. Accordingly, the Commission
preliminarily believes that the timestamp information that would be
collected pursuant to the effective national market system plan(s)
would be used by competing consolidators and self-aggregators to
properly sequence core data elements and measure latencies relating to
the collection, calculation and generation of core data.\659\
---------------------------------------------------------------------------

    \659\ In addition, the proposed timestamps would be used by
competing consolidators to generate the monthly performance metrics
pursuant to proposed Rule 614(d)(5).
---------------------------------------------------------------------------

(b) Proposed Annual Report (Rule 614(a)(2)(ii))
    The proposed assessment of competing consolidators' performance and
the proposed annual report would be used by the Commission to analyze
and oversee the operation of the effective national market system
plan(s) for the provision of proposed consolidated market data in NMS
stocks. The annual report would contain useful information for
measuring the promptness, accuracy and reliability of the competing
consolidator model. As noted above, the provision of consolidated
market data is a necessary part of the national market system and the
annual report would be useful in assessing its operation.
(c) Proposed List of Primary Listing Markets (Rule 614(e)(1)(iv))
    The proposed list of the primary listing market for each NMS stock
would be used by the Commission to oversee the development and
provision of proposed regulatory data. In addition, the list would be
used by primary listing exchanges to identify which primary listing
exchange is responsible for making Short Sale Circuit Breaker

information available pursuant to Rule 201(b)(3) is clearly identified.
6. Collection and Dissemination of Information by National Securities
Exchanges and National Securities Associations
    As discussed above, the proposed amendment to Rule 603(b) would
require every national securities exchange on which an NMS stock is
traded and national securities association to make available to all
competing consolidators and self-aggregators all information with
respect to quotations for and transactions in NMS stocks, including all
data necessary to generate consolidated market data, as proposed, in
the same manner and using the same methods, including all methods of
access and using the same format, as such exchange or association makes
available any information with respect to quotations for and
transactions in NMS stocks to any person. In addition, as proposed, the
primary listing exchange would have to collect and make available
pursuant to Rule 603(b) information required under Rule 201 of
Regulation SHO. Moreover, the primary listing exchange with the largest
proportion of stocks included in the S&P 500 Index would need to
monitor the index throughout the trading day. Therefore, to comply with
this provision, the SROs would have to collect all elements of
consolidated market data. The competing consolidators would
consolidate, process, and sell to their customers these data regarding
NMS stock quotations and transactions. The data will also be used by
self-aggregators to trade and provide services to their customers.

C. Respondents

    The collection of information in the proposed changes to Rule
603(b) would apply to the sixteen national securities exchanges (that
are equity securities exchanges) and the one national securities
association (Financial Industry Regulatory Authority, Inc.) that are
registered with the Commission. The amendment to the effective national
market system plan(s) for NMS stocks would apply to these sixteen
national securities exchanges and the one national securities
association (Financial Industry Regulatory Authority, Inc.) that are
registered with the Commission and that are participants in the
effective national market system plan(s) for NMS stocks.\660\ In
addition, the proposed information collections regarding registration
requirements and Form CC, competing consolidator duties and data
collection, recordkeeping, reports and reviews, and policies and
procedures as contemplated in proposed Rule 614 would apply to those
entities that register under the process in proposed Rule 614 to become
competing consolidators. The Commission preliminarily estimates that
there would initially be 12 persons who decide to perform the functions
of a competing consolidator that would have to comply with the proposed
information collections.
---------------------------------------------------------------------------

    \660\ Currently, these national securities exchanges are: Cboe
BYX Exchange, Inc., Cboe BZX Exchange, Inc., Cboe EDGA Exchange,
Inc., Cboe EDGX Exchange, Inc., Cboe Exchange, Inc., Investors
Exchange LLC, Long-Term Stock Exchange, Inc., Nasdaq BX, Inc.,
Nasdaq ISE, LLC, Nasdaq PHLX LLC, Nasdaq Stock Market LLC, New York
Stock Exchange LLC, NYSE American LLC, NYSE Arca, Inc., NYSE
Chicago, Inc., and NYSE National, Inc. The primary listing exchanges
responsible for making Short Sale Circuit Breaker information
available pursuant to Rule 201(b)(3) would be identified in the
effective national market system plan(s).
---------------------------------------------------------------------------

D. Total Annual Reporting and Recordkeeping Burden

1. Registration Requirements and Form CC
(a) Initial Burden and Costs
    As discussed above, proposed Rule 614(a)(1) would require competing
consolidators to register with the Commission by filing electronically
new Form CC in accordance with the instructions to the Form CC. For
purposes of the PRA, the Commission preliminarily estimates that it
will take 200 hours to complete the initial Form CC with the
information required, including all exhibits to Form CC. The Commission
based this estimate on the number of hours necessary to complete Form
SIP because Form CC was generally based on Form SIP and incorporated
many of the provisions of Form SIP.\661\ In addition, the Commission
estimates that each competing consolidator would initially designate
two individuals to access EFFS, with each application to access EFFS
taking 0.15 hours for a total of 0.3 hours per competing consolidator.
Therefore, the Commission estimates that it would take 200.3 hours to
complete the Form CC and gain access to EFFS.
---------------------------------------------------------------------------

    \661\ The Commission estimated that completing Form SIP, which
includes 20 exhibits, would take 400 hours. See Securities Exchange
Act Release No. 63347 (Nov. 19, 2010), 75 FR 77306 (Dec. 10, 2010)
(``The Commission calculated in 2008 that Form SIP takes 400 hours
to complete.''). Proposed Form CC includes 9 exhibits, so the
Commission preliminarily estimates that completing proposed Form CC
would take 200 hours.
---------------------------------------------------------------------------

    As noted above, the Commission preliminarily estimates that 12
respondents would be subject to this burden, however, as noted above,
SROs are not required to file Form CC.\662\ Therefore, there would be 8
respondents (the Commission preliminarily estimates that 4 SROs would
also act as competing consolidators). Accordingly, the Commission
estimates that the one-time initial registration burden for all
competing consolidators is approximately 1,602.4 burden hours.\663\ The
Commission estimates that competing consolidators will, as a general
matter, prepare Form CC internally and not use external service
providers to complete the form. It is likely that Form CC would be
prepared by an attorney, and, with approximately 1,602.4 burden hours
for all competing consolidators, the total cost to register all
competing consolidators would be $748,320.80.\664\ In addition, the
Commission estimates that each respondent would designate two
individuals to sign the Form CC. An individual signing the Form CC must
obtain a digital ID, at the cost of approximately $25 each year.
Therefore, each respondent would expend approximately $50 annually to
obtain digital IDs for the individuals with access to EFFS for the
purposes of signing the Form CC \665\ or approximately $400 for all
respondents.\666\
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    \662\ See supra note 537.
    \663\ The hour figure is based on 200.3 hours x an estimated 8
competing consolidators. The Commission preliminarily believes that
additional competing consolidators may register from time to time
and would be subject to a similar one-time initial registration
burden.
    \664\ The Commission based this estimate on the $467 hourly rate
as of May 2019 for an assistant general counsel x 200.3 hours x 8
respondents. The Commission derived this estimate based on per hour
figures from SIFMA's Management & Professional Earnings in the
Securities Industry 2013, modified by Commission staff to account
for an 1,800-hour work-year and inflation, and multiplied by 5.35 to
account for bonuses, firm size, employee benefits and overhead.
Burden estimates may vary to the extent that competing consolidators
utilize external service providers or outside counsel. The
Commission preliminarily believes that competing consolidators would
use in-house counsel and not use external service providers or
outside counsel to file the Form CC.
    \665\ $25 per digital ID x 2 individuals = $50 per respondent.
    \666\ $50 per respondent x 8 total respondents = $400.
---------------------------------------------------------------------------

    As discussed below, the Commission believes that amendments to Form
CC represent the ongoing annual burdens of Form CC and proposed Rule
614(a)(2). The Commission preliminarily estimates that competing
consolidators may file two amendments--one Material Amendment and one
Annual Report--during its first year after the

effectiveness of its Form CC. As discussed below, the ongoing annual
burden for complying with these amendment requirements will be
approximately 6.0 burden hours for each competing consolidator per
amendment \667\ (for a total of $2,802), and approximately 48 burden
hours for all competing consolidators per amendment (for a total of
$22,416).\668\ Therefore, the Commission preliminarily estimates that
each respondent will have an average annual burden of 12.0 hours (for a
total of $5,604) for a total estimated average annual burden of 96
hours (for a total of $44,832).\669\ As with the initial Form CC, the
Commission believes the competing consolidators will conduct this work
internally.
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    \667\ When Form SDR was adopted in 2015, the Commission
estimated the hour burden for amendments to be roughly 3% of the
initial burden. Securities Exchange Act Release No. 74246, supra
note 554, at 14522. In that release, the initial burden was
calculated to be 400 hours per respondent and 12 hours per
respondent for amendments. The Commission believes that a similar
ratio will apply to filers of Form CC because filers of Form SDR,
like filers of Form CC, are required to file amendments annually as
well as when certain information on Form SDR becomes inaccurate.
Form SDR: General Instructions for Preparing and Filing Form SDR,
available at https://www.sec.gov/about/forms/formsdr.pdf (last
accessed Jan. 8, 2020). Thus, the Commission estimates that the
annual burden of filing one amendment on Form CC will be 3% of the
200 hour initial burden, or 6 hours.
    \668\ See supra note 664.
    \669\ See id.
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(b) Ongoing Burden and Costs
    As discussed above, proposed Rule 614(a)(2) would require competing
consolidators to amend Form CC prior to the implementation of material
changes to pricing, connectivity, or products offered as well as
annually to correct information that has become inaccurate or
incomplete for any reason. On an ongoing basis, each competing
consolidator may add one individual to access the EFFS system for
amendments, adding 0.15 hours per competing consolidator.\670\ The
Commission believes that these amendments represent the ongoing annual
burdens of Form CC and proposed Rule 614(a)(2). The Commission
preliminarily estimates that the ongoing annual burden for complying
with these amendment requirements will be approximately 6.15 burden
hours for each competing consolidator per amendment \671\ (for a total
of $2,872.05), and approximately 49.2 burden hours for all competing
consolidators per amendment (for a total of $22,976.40).\672\
---------------------------------------------------------------------------

    \670\ For example, a competing consolidator may have to add an
individual to access EFFS to account for staffing changes.
    \671\ When Form SDR was adopted in 2015, the Commission
estimated the hour burden for amendments to be roughly 3% of the
initial burden. Securities Exchange Act Release No. 74246, supra
note 554, at 14522. In that release, the initial burden was
calculated to be 400 hours per respondent and 12 hours per
respondent for amendments. The Commission believes that a similar
ratio will apply to filers of Form CC because filers of Form SDR,
like filers of Form CC, are required to file amendments annually as
well as when certain information on Form SDR becomes inaccurate.
Form SDR: General Instructions for Preparing and Filing Form SDR,
available at https://www.sec.gov/about/forms/formsdr.pdf (last
accessed Jan. 8, 2020). Thus, the Commission estimates that the
annual burden of filing one amendment on Form CC will be 3% of the
200 hour initial burden, or 6 hours.
    \672\ See supra note 664.
---------------------------------------------------------------------------

    The Commission preliminarily believes that one Material Amendment
would be a reasonable estimate for the number of such amendments per
year. Thus, the Commission preliminarily estimates that respondents
will be required to file on average a total of two amendments per year,
one Material Amendment plus one Annual Report. Therefore, the
Commission preliminarily estimates that each respondent will have an
average annual burden of 12.3 hours (for a total of $5,744.10) for a
total estimated average annual burden of 98.4 hours (for a total of
$45,952.80).\673\ As with the initial Form CC, the Commission believes
the competing consolidators will conduct this work internally. Further,
as noted above, an individual signing the Form CC must obtain a digital
ID, at the cost of approximately $25 each year. Therefore, each
respondent would expend approximately $25 annually to obtain digital
IDs for the individuals with access to EFFS for the purposes of signing
the Form CC or approximately $200 for all respondents. Thus, the
Commission preliminary estimates that each respondent will have an
average annual cost of $5,769.10 ($5,744.10 + $25) and a total
estimated annual cost of $46,152.80 ($5,769.10 * 8).
---------------------------------------------------------------------------

    \673\ See id.
---------------------------------------------------------------------------

    As discussed above, proposed Rule 614(a)(3) would permit a
competing consolidator to cease acting as a competing consolidator by
filing an amendment to Form CC 30 business days before the proposed
cessation of acting as a competing consolidator. The Commission
preliminarily believes that a competing consolidator's notice of
cessation of acting as a competing consolidator on Form CC will be
substantially similar to its most recently filed Form CC. The Form CC
being filed in this circumstance will therefore already be
substantially complete and as a result, the burden will not be as great
as the burden of filing an application for registration on Form CC.
Rather, the Commission preliminarily believes that the burden of filing
a notice of cessation of acting as a competing consolidator on Form CC
will be akin to filing an amendment on Form CC. Thus, the Commission
estimates that the one-time burden of filing Form CC to notice
cessation of acting as a competing consolidator will be approximately 2
burden hours (for a total of $934).\674\
---------------------------------------------------------------------------

    \674\ See id. The Commission preliminarily estimates that no
competing consolidators would cease operation in the first three
years of the rule's effectiveness.
---------------------------------------------------------------------------

2. Competing Consolidator Duties and Data Collection
    As discussed above, proposed Rules 614(d)(1)-(d)(3) would require
the competing consolidators to collect from the SROs quotation and
transaction information for NMS stocks, calculate and generate proposed
consolidated market data from this information, and make proposed
consolidated market data available to subscribers on a consolidated
basis on terms that are not unreasonably discriminatory. Proposed Rule
614(d)(4) would require competing consolidators to timestamp the
information with respect to quotations and transactions in NMS stocks
that they collect from the SROs pursuant to proposed Rule 614(d)(1)
upon receipt, upon receipt by the aggregation mechanism, and upon
dissemination to subscribers. The Commission preliminarily believes
that five types of entities may register to become competing
consolidators and would have to build systems, or modify existing
systems, that comply with Rules 614(d)(1)-(d)(4): (1) Market data
aggregation firms, (2) broker-dealers that currently aggregate market
data for internal uses, (3) the existing exclusive SIPs (CTA/CQ and
Nasdaq UTP SIPs), (4) entities that would be entering the market data
aggregation business for the first time (``new entrants''), and (5)
SROs. The Commission preliminarily estimates that, apart from the SRO
category, two respondents from each category may register to become a
competing consolidator; the Commission preliminarily believes that four
SROs may register to become competing consolidators.\675\
---------------------------------------------------------------------------

    \675\ The Commission preliminarily believes that these SROs may
be a national securities association and equities national
securities exchanges that do not currently operate an exclusive SIP.
---------------------------------------------------------------------------

(a) Initial Burden Hours and Costs for Market Data Aggregation Firms
    There are a number of technology firms that provide proprietary
market data aggregation services. The Commission preliminarily believes
that

some of these firms may choose to become competing consolidators
because they currently collect, consolidate and disseminate market data
to their customers, much like competing consolidators would. The
systems used by these firms already collect, consolidate and
disseminate more extensive proprietary market data than the data that
is provided by the exclusive SIPs. Therefore, the Commission
preliminarily believes that firms providing proprietary market data
aggregation services would not have to extensively modify their systems
to comply with Rules 614(d)(1)-(d)(4). For example, the Commission
preliminarily believes that each market data aggregation firm would
incur burden hours to expand their bandwidth to receive information
that is not currently disseminated in the exchange proprietary market
data feeds, such as the proposed regulatory data and administrative
data, and may incur external costs to purchase hardware to receive such
added information.
    The Commission preliminarily believes that each market data
aggregation firm that chooses to become a competing consolidator would
incur initial burden hours to upgrade its systems to comply with Rules
614(d)(1)-(d)(4) in order to collect, consolidate and disseminate the
proposed consolidated market data. The Commission also preliminarily
believes that each market data aggregation firm would incur initial
external costs associated with such upgrades, including co-location
fees at the exchange data centers and the cost of market data.
    The Commission preliminarily believes that each market data
aggregation firm would incur 900 initial burden hours \676\ and
$206,250 in external costs \677\ to modify its systems to comply with
Rules 614(d)(1)-(d)(4). Additionally, the Commission estimates that an
existing market data aggregator would incur initial external costs of
$14,000 to purchase market data from the SROs,\678\ and an additional
initial external cost of $194,000 to co-locate at four exchange data
centers,\679\ for a total initial external cost of $414,250 per
existing market data aggregator,\680\ and an aggregate estimate of
1,800 initial burden hours \681\ and $828,500 in initial external
costs.\682\ The Commission solicits comment on the accuracy of this
information.
---------------------------------------------------------------------------

    \676\ The Commission estimates the monetized initial burden for
this requirement to be $293,750. Based on discussions with a market
participant, the Commission reached the following estimates: [(Sr.
Programmer at $332/hour for 350 hours) + (Sr. Systems Analyst at
$285/hour for 300 hours) + (Compliance Manager at $310/hour for 100
hours) + (Director of Compliance at $489/hour for 50 hours) +
(Compliance Attorney at $366/hour for 100 hours)] = 6 months (900
burden hours) to upgrade existing systems to comply with Rules
614(d)(1)-(d)(4). The Commission derived this estimate based on per
hour figures from SIFMA's Management & Professional Earnings in the
Securities Industry 2013, modified by Commission staff to account
for an 1,800-hour work-year and inflation, and multiplied by 5.35 to
account for bonuses, firm size, employee benefits and overhead.
    \677\ This estimate is based on discussions with a market
participant and the Commission's understanding of hardware costs.
    \678\ The Commission is using the monthly market data access and
redistribution fees currently charged by the CTA/CQ SIP and Nasdaq
UTP SIP as the basis of this estimate ($14,000).
    \679\ This estimate is based on an estimated $48,500 in initial
co-location fees as calculated from NYSE Price List 2020, multiplied
by four exchange data centers. The Commission preliminarily believes
that the market data aggregators would already be co-located at the
four exchange data centers, which may lower this estimate. See NYSE
Price List 2020, supra note 408.
    \680\ $414,250 = [($206,250 in initial external costs to modify
systems to comply with Rules 614(d)(1)-(d)(4)) + ($14,000 for the
first month of market data costs) + ($194,000 in initial co-location
costs at four exchange data centers)].
    \681\ The Commission estimates the monetized initial burden for
this requirement to be $587,500. Based on discussions with a market
participant, the Commission reached the following estimates: [(Sr.
Programmer at $332/hour for 350 hours) + (Sr. Systems Analyst at
$285/hour for 300 hours) + (Compliance Manager at $310/hour for 100
hours) + (Director of Compliance at $489/hour for 50 hours) +
(Compliance Attorney at $366/hour for 100 hours)] x [(2 market data
aggregation firms)] = 1,800 initial burden hours across the market
data aggregation firms.
    \682\ The Commission preliminarily estimates that the market
data aggregation firms would incur the following initial external
costs: [($206,250 to modify systems to comply with Rules 614(d)(1)-
(d)(4)) + ($14,000 to purchase market data) + ($194,000 to co-locate
within four exchange data centers)] x [(2 market data aggregation
firms)] = $828,500.
---------------------------------------------------------------------------

(b) Initial Burden Hours and Costs for Broker-Dealers That Aggregate
Market Data
    The Commission preliminarily believes that some broker-dealers that
currently aggregate market data for their own internal uses may choose
to become competing consolidators. The systems used by such broker-
dealers already collect and consolidate the proprietary feeds from the
exchanges, which contain more extensive data than the data provided by
the exclusive SIPs. Therefore, Commission preliminarily believes that
these firms may not have to extensively modify their systems to comply
with Rules 614(d)(1)-(d)(4). For example, the Commission preliminarily
believes that each broker-dealer would incur burden hours to expand
their bandwidth to receive information that is not currently
disseminated in the exchange proprietary market data feeds, such as
data from the OTC market, the proposed regulatory data and
administrative data and may incur external costs to purchase hardware
to receive such added information. In addition, these broker-dealers
would incur burden hours to disseminate proposed consolidated market
data to subscribers. The Commission estimates that the initial burden
hour and external costs estimates for these broker-dealers to modify
their systems to comply with Rules 614(d)(1)-(d)(4) would be similar to
market data aggregation firms because, for both types of respondents,
the scope of the systems changes and costs associated with becoming
competing consolidators would be comparable.
    The Commission preliminarily believes that each broker-dealer that
aggregates market data for internal uses that chooses to become a
competing consolidator would incur burden hours to upgrade its systems
to comply with Rules 614(d)(1)-(d)(4) in order to collect, consolidate,
and disseminate the proposed consolidated market data. The Commission
also preliminarily believes that each broker-dealer would also incur
initial external costs associated with such upgrades, including co-
location fees at the exchange data centers and the cost of market data.
    The Commission preliminarily believes that each broker-dealer would
incur 900 initial burden hours \683\ and $206,250 in external costs
\684\ to modify its systems to comply with Rules 614(d)(1)-(d)(4).
Additionally, the Commission estimates that a broker-dealer would incur
initial external costs of $14,000 to purchase market data from the
SROs,\685\ and an additional initial external cost of $194,000 to co-
locate itself at four exchange data centers,\686\

for a total initial external cost of $414,250 per broker-dealer,\687\
and an aggregate estimate of 1,800 initial burden hours \688\ and
$828,500 in initial external costs.\689\ The Commission solicits
comment on the accuracy of this information.
---------------------------------------------------------------------------

    \683\ The Commission estimates the monetized initial burden for
this requirement to be $293,750. Based on discussions with a market
participant, the Commission reached the following estimates: [(Sr.
Programmer at $332/hour for 350 hours) + (Sr. Systems Analyst at
$285/hour for 300 hours) + (Compliance Manager at $310/hour for 100
hours) + (Director of Compliance at $489/hour for 50 hours) +
(Compliance Attorney at $366/hour for 100 hours)] = 6 months (900
burden hours) to upgrade existing systems to comply with Rules
614(d)(1)-(d)(4). The Commission derived this estimate based on per
hour figures from SIFMA's Management & Professional Earnings in the
Securities Industry 2013, modified by Commission staff to account
for a 1,800-hour work-year and inflation, and multiplied by 5.35 to
account for bonuses, firm size, employee benefits and overhead.
    \684\ This estimate is based on discussions with a market
participant and the Commission's understanding of hardware costs.
    \685\ The Commission is using the monthly market data access and
redistribution fees currently charged by the CTA/CQ SIP and Nasdaq
UTP SIP as the basis of this estimate ($14,000).
    \686\ This estimate is based on an estimated $48,500 in initial
co-location fees as calculated from NYSE Price List 2020, multiplied
by four exchange data centers. See NYSE Price List 2020, supra note
408.
    \687\ $414,250 = [($206,250 in initial external costs to modify
systems to comply with Rules 614(d)(1)-(d)(4)) + ($14,000 for the
first month of market data costs) + ($194,000 in initial co-location
costs at four exchange data centers)].
    \688\ The Commission estimates the monetized initial burden for
this requirement to be $587,500. Based on discussions with a market
participant, the Commission reached the following estimates: [(Sr.
Programmer at $332/hour for 350 hours) + (Sr. Systems Analyst at
$285/hour for 300 hours) + (Compliance Manager at $310/hour for 100
hours) + (Director of Compliance at $489/hour for 50 hours) +
(Compliance Attorney at $366/hour for 100 hours)] x [(2 broker-
dealers)] = 1,800 initial burden hours across the broker-dealers.
    \689\ The Commission preliminarily estimates that broker-dealers
would incur the following initial external costs: [($206,250 to
modify systems to comply with Rules 614(d)(1)-(d)(4)) + ($14,000 to
purchase market data) + ($194,000 to co-locate within four exchange
data centers) x (2 broker-dealers)] = $828,500.
---------------------------------------------------------------------------

(c) Initial Implementation Burden Hours and Costs for the Exclusive
SIPs
    The Commission preliminarily believes that the CTA/CQ SIP and the
Nasdaq UTP SIP could choose to become competing consolidators due to
their years of experience in collecting, consolidating and
disseminating market data. The systems used by the exclusive SIPs
already collect, consolidate and disseminate SIP data. Therefore, the
Commission preliminarily believes that the exclusive SIPs would not
have to build entirely new systems to comply with Rules 614(d)(1)-
(d)(4). For example, each exclusive SIP would incur burden hours and
external costs to expand their bandwidth and connections to consume and
disseminate proposed consolidated market data as well as to transmit
it, and to program feed handlers to receive and normalize the different
formats of the data feeds developed by the exchanges.\690\ Further,
each exclusive SIP would expend external costs on purchasing proposed
consolidated market data and on colocation fees at the exchange data
centers.
---------------------------------------------------------------------------

    \690\ Feed handlers receive market data and make it usable to
customers.
---------------------------------------------------------------------------

    However, the exclusive SIPs may have to make a greater scope of
changes to become competing consolidators than market data aggregation
firms. For this reason, the Commission has estimated initial burden
hour and external cost estimates that are higher than those estimated
for market data aggregation firms.
    The Commission preliminarily believes that each exclusive SIP would
incur burden hours to upgrade their systems to comply with Rules
614(d)(1)-(d)(4) to collect, consolidate and disseminate the proposed
consolidated market data. The Commission also preliminarily believes
that each exclusive SIP would also incur external costs associated with
such upgrades, including co-location fees at the exchange data centers
and the cost of market data. The Commission preliminarily believes that
each exclusive SIP would incur 1,800 initial burden hours \691\ and
$412,500 in external costs \692\ to modify its systems to comply with
Rules 614(d)(1)-(d)(4). Additionally, the Commission estimates that an
exclusive SIP would incur initial external costs of $14,000 to purchase
market data from the SROs,\693\ and an additional initial external cost
of $194,000 to co-locate itself at four exchange data centers,\694\ for
a total initial external cost of $620,500 per existing SIP,\695\ and an
aggregate estimate of 3,600 initial burden hours \696\ and $1,241,000
in initial external costs.\697\ The Commission solicits comment on the
accuracy of this information.
---------------------------------------------------------------------------

    \691\ Based on discussions with a market participant, the
Commission reached the following estimates for a market data
aggregation firm: [(Sr. Programmer at $332/hour for 350 hours) +
(Sr. Systems Analyst at $285/hour for 300 hours) + (Compliance
Manager at $310/hour for 100 hours) + (Director of Compliance at
$489/hour for 50 hours) + (Compliance Attorney at $366/hour for 100
hours)] = 6 months (900 burden hours) to upgrade existing systems to
comply with Rules 614(d)(1)-(d)(4). The Commission derived this
estimate based on per hour figures from SIFMA's Management &
Professional Earnings in the Securities Industry 2013, modified by
Commission staff to account for a 1,800-hour work-year and
inflation, and multiplied by 5.35 to account for bonuses, firm size,
employee benefits and overhead. As noted above, the Commission has
increased this initial burden hour estimate for the exclusive SIPs.
Therefore, the Commission preliminarily estimates that each
exclusive SIP will incur 1,800 initial burden hours to upgrade its
existing systems to comply with Rules 614(d)(1)-(d)(4) (or $587,500,
as monetized).
    \692\ As noted above, the Commission estimates the initial
external cost estimates to comply with Rules 614(d)(1)-(d)(4) will
be higher for exclusive SIPs than for market data aggregation firms.
Therefore, the Commission preliminarily estimates that each existing
SIP will incur $412,500 in initial external costs to modify its
systems to comply with Rules 614(d)(1)-(d)(4).
    \693\ The Commission is using the monthly market data access and
redistribution fees currently charged by the CTA/CQ SIP and Nasdaq
UTP SIP as the basis of this estimate ($14,000).
    \694\ This estimate is based on an estimated $48,500 in initial
co-location fees as calculated from NYSE Price List 2020, multiplied
by four exchange data centers. See NYSE Price List 2020, supra note
408.
    \695\ The Commission preliminarily estimates that each existing
SIP would incur the following initial external costs: [($412,500 to
modify systems to comply with Rules 614(d)(1)-(d)(4)) + ($14,000 to
purchase market data) + ($194,000 to co-locate within four exchange
data centers)] = $620,500.
    \696\ Based on discussions with a market participant, the
Commission reached the following estimates for a market data
aggregation firm: [(Sr. Programmer at $332/hour for 350 hours) +
(Sr. Systems Analyst at $285/hour for 300 hours) + (Compliance
Manager at $310/hour for 100 hours) + (Director of Compliance at
$489/hour for 50 hours) + (Compliance Attorney at $366/hour for 100
hours)] = 900 initial burden hours across the market data
aggregation firms. As noted above, the Commission has increased this
initial burden hour estimate to apply to the exclusive SIPs.
Therefore, the Commission preliminarily estimates that each
exclusive SIP will incur 1,800 initial burden hours to upgrade its
existing systems to comply with Rules 614(d)(1)-(d)(4) (or $587,500,
as monetized). The aggregate initial burden hour estimate for two
exclusive SIPs would be [(1,800 initial burden hours) x (2 existing
SIPs)] = 3,600 initial burden hours.
    \697\ The Commission preliminarily estimates that the exclusive
SIPs would incur the following initial external costs: [($412,500 to
modify systems to comply with Rules 614(d)(1)-(d)(4)) + ($14,000 to
purchase market data) + ($194,000 to co-locate within four exchange
data centers)] x [(2 exclusive SIPs)] = $1,241,000.
---------------------------------------------------------------------------

(d) Initial Implementation Burden Hours and Costs for New Entrants
    The Commission anticipates that firms without prior experience in
the business of collecting, consolidating and disseminating market data
may choose to become competing consolidators and would have to build
systems to comply with Rules 614(d)(1)-(d)(4). Because these systems
would be completely new, the Commission preliminarily believes that
these new entrants will incur substantially higher initial burden hours
and external costs to build a system that complies with Rules
614(d)(1)-(d)(4) than the other entities described above. For this
reason, the Commission has estimated initial burden hour and external
cost estimates for new entrants that are higher than those estimated
for the other potential entities that may choose to become competing
consolidators. The Commission preliminarily believes that each new
entrant would incur initial burden hours to comply with Rules
614(d)(1)-(d)(4) to build a system that collects, consolidates, and
disseminates the proposed consolidated market data. The Commission also
preliminarily believes that each new entrant would incur associated
external costs, including co-location fees at the exchange data centers
and the cost of market data. The Commission preliminarily believes that
each new entrant would incur 3,600 initial burden hours \698\ and
$825,000 in external

costs \699\ to build systems to comply with Rules 614(d)(1)-(d)(4).
Additionally, the Commission estimates that a new entrant would incur
initial external costs of $14,000 to purchase market data from the
SROs,\700\ and an additional initial external cost of $194,000 to co-
locate itself at four exchange data centers,\701\ for a total initial
external cost of $1,033,000 per new entrant,\702\ and an aggregate
estimate of 7,200 initial burden hours \703\ and $2,066,000 in initial
external costs.\704\ The Commission solicits comment on the accuracy of
this information.
---------------------------------------------------------------------------

    \698\ Based on discussions with a market participant, the
Commission reached the following estimates for a market data
aggregation firm: [(Sr. Programmer at $332/hour for 350 hours) +
(Sr. Systems Analyst at $285/hour for 300 hours) + (Compliance
Manager at $310/hour for 100 hours) + (Director of Compliance at
$489/hour for 50 hours) + (Compliance Attorney at $366/hour for 100
hours)] = 6 months (900 burden hours) to upgrade existing systems to
comply with Rules 614(d)(1)-(d)(4). The Commission derived this
estimate based on per hour figures from SIFMA's Management &
Professional Earnings in the Securities Industry 2013, modified by
Commission staff to account for an 1,800-hour work-year and
inflation, and multiplied by 5.35 to account for bonuses, firm size,
employee benefits and overhead. As noted above, the Commission has
increased this initial burden hour estimate to apply to the new
entrants. Therefore, the Commission preliminarily estimates that
each new entrant will incur 3,600 initial burden hours to build
systems to comply with Rules 614(d)(1)-(d)(4) (or $1,175,000, as
monetized).
    \699\ As noted above, the Commission has increased its initial
external cost estimates for market data aggregation firms to apply
to new entrants. Therefore, the Commission preliminarily estimates
that each new entrant will incur $825,000 in initial external costs
to build systems to comply with Rules 614(d)(1)-(d)(4).
    \700\ The Commission is using the monthly market data access and
redistribution fees currently charged by the CTA/CQ SIP and Nasdaq
UTP SIP as the basis of this estimate ($14,000).
    \701\ This estimate is based on an estimated $48,500 in initial
co-location fees as calculated from NYSE Price List 2020, multiplied
by four exchange data centers. See NYSE Price List 2020, supra note
408.
    \702\ The Commission preliminarily estimates that each new
entrant would incur the following initial external costs: [($825,000
to build systems to comply with Rules 614(d)(1)-(d)(4)) + ($14,000
to purchase market data) + ($194,000 to co-locate within four
exchange data centers)] = $1,033,000.
    \703\ Based on discussions with a market participant, the
Commission reached the following estimates for a market data
aggregation firm: [(Sr. Programmer at $332/hour for 350 hours) +
(Sr. Systems Analyst at $285/hour for 300 hours) + (Compliance
Manager at $310/hour for 100 hours) + (Director of Compliance at
$489/hour for 50 hours) + (Compliance Attorney at $366/hour for 100
hours)] = 900 initial burden hours. As noted above, the Commission
has increased the per market data aggregation firm initial burden
hour estimate to apply to the new entrants. Therefore, the
Commission preliminarily estimates that each existing SIP will incur
3,600 initial burden hours to upgrade its existing systems to comply
with Rules 614(d)(1)-(d)(4) (or $1,175,000, as monetized). [(3,600
burden hours) x (2 new entrants] = 7,200 hours (or $2,350,000 as
monetized).
    \704\ The Commission preliminarily estimates that each new
entrant would incur the following initial external costs: [($825,000
to build systems to comply with Rules 614(d)(1)-(d)(4)) + ($14,000
to purchase market data) + ($194,000 to co-locate within four
exchange data centers) x (2 new entrants)] = $1,033,000.
[($1,033,000 in initial external costs) x (2 new entrants)] =
$2,066,000.
---------------------------------------------------------------------------

(e) Initial Implementation Burden Hours and Costs for SROs
    The Commission anticipates that SROs may choose to become competing
consolidators and would have to build new systems to comply with Rules
614(d)(1)-(d)(4). Although these SROs may be able to leverage existing
systems in developing a system compliant with Rules 614(d)(1)-(d)(4),
the Commission preliminarily believes that these SROs would likely have
to build new systems and thus will incur initial burden hours to comply
with Rules 614(d)(1)-(d)(4) that are similar to new entrants. The
Commission preliminarily believes that each SRO would incur initial
burden hours to comply with Rules 614(d)(1)-(d)(4) to build a system
that collects, consolidates, and disseminates the proposed consolidated
market data. The Commission also preliminarily believes that each SRO
would incur associated external costs, including co-location fees at
the exchange data centers and the cost of market data. The Commission
preliminarily believes that each SRO would incur 3,600 initial burden
hours \705\ and $825,000 in external costs \706\ to build systems to
comply with Rules 614(d)(1)-(d)(4). Additionally, the Commission
estimates that an SRO would incur initial external costs of $14,000 to
purchase market data from the SROs,\707\ and an additional initial
external cost of $194,000 to co-locate itself at four exchange data
centers,\708\ for a total initial external cost of $1,033,000 per new
entrant,\709\ and an aggregate estimate of 14,400 initial burden hours
\710\ and $4,132,000 in initial external costs.\711\ The Commission
solicits comment on the accuracy of this information.
---------------------------------------------------------------------------

    \705\ Based on discussions with a market participant, the
Commission reached the following estimates for a market data
aggregation firm: [(Sr. Programmer at $332/hour for 350 hours) +
(Sr. Systems Analyst at $285/hour for 300 hours) + (Compliance
Manager at $310/hour for 100 hours) + (Director of Compliance at
$489/hour for 50 hours) + (Compliance Attorney at $366/hour for 100
hours)] = 6 months (900 burden hours) to upgrade existing systems to
comply with Rules 614(d)(1)-(d)(4). The Commission derived this
estimate based on per hour figures from SIFMA's Management &
Professional Earnings in the Securities Industry 2013, modified by
Commission staff to account for an 1,800-hour work-year and
inflation, and multiplied by 5.35 to account for bonuses, firm size,
employee benefits and overhead. As it did for its new entrant
estimates, the Commission has increased this initial burden hour
estimate to apply to the SROs. Therefore, the Commission
preliminarily estimates that each new entrant will incur 3,600
initial burden hours to build systems to comply with Rules
614(d)(1)-(d)(4) (or $1,175,000, as monetized).
    \706\ As it did for its new entrant estimates, the Commission
has increased its initial external cost estimates for market data
aggregation firms to apply to the SROs. Therefore, the Commission
preliminarily estimates that each SRO will incur $825,000 in initial
external costs to build systems to comply with Rules 614(d)(1)-
(d)(4).
    \707\ The Commission is using the monthly market data access and
redistribution fees currently charged by the CTA/CQ SIP and Nasdaq
UTP SIP as the basis of this estimate ($14,000).
    \708\ This estimate is based on an estimated $48,500 in initial
co-location fees as calculated from NYSE Price List 2020, multiplied
by four exchange data centers. See NYSE Price List 2020, supra note
408.
    \709\ The Commission preliminarily estimates that each SRO would
incur the following initial external costs: [($825,000 to build
systems to comply with Rules 614(d)(1)-(d)(4)) + ($14,000 to
purchase market data) + ($194,000 to co-locate within four exchange
data centers)] = $1,033,000.
    \710\ Based on discussions with a market participant, the
Commission reached the following estimates for a market data
aggregation firm: [(Sr. Programmer at $332/hour for 350 hours) +
(Sr. Systems Analyst at $285/hour for 300 hours) + (Compliance
Manager at $310/hour for 100 hours) + (Director of Compliance at
$489/hour for 50 hours) + (Compliance Attorney at $366/hour for 100
hours)] = 900 initial burden hours. As it did for its new entrant
estimates, the Commission has increased the per market data
aggregation firm initial burden hour estimate to apply to the SROs.
Therefore, the Commission preliminarily estimates that each SRO will
incur 3,600 initial burden hours to upgrade its existing systems to
comply with Rules 614(d)(1)-(d)(4) (or $1,175,000, as monetized).
[(3,600 burden hours) x (4 new entrants] = 14,400 hours (or
$4,700,000 as monetized).
    \711\ The Commission preliminarily estimates that each SRO would
incur the following initial external costs: [($825,000 to build
systems to comply with Rules 614(d)(1)-(d)(4)) + ($14,000 to
purchase market data) + ($194,000 to co-locate within four exchange
data centers)] = $1,033,000. [($1,033,000 in initial external costs)
x (4 new entrants)] = $4,132,000.
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(f) Ongoing Burden Hours and Costs for Market Data Aggregation Firms,
Broker-Dealers That Aggregate Market Data, Exclusive SIPs, New
Entrants, and SROs
    The Commission preliminarily believes that once a competing
consolidator's system has been built, the entities that have become
competing consolidators (originally, the existing market data
aggregation firms, broker-dealers that aggregate market data, exclusive
SIPs, new entrants, and SROs) will incur annual ongoing burden hours
and external costs to operate and maintain their systems to comply with
Rules 614(d)(1)-(d)(4). The Commission also preliminarily believes that
these annual ongoing burdens should be similar across the competing
consolidators because such systems would likely be similar in nature.
Therefore, the burden hours and costs associated with operating and
maintain a competing consolidator system should be comparable across
competing consolidators. The Commission is therefore applying the same
annual ongoing burden hour and external cost estimates across the five
types of entities that the Commission anticipates may choose to become
competing consolidators.

    The Commission preliminarily believes that entities choosing to
become competing consolidators would incur annual ongoing burden hours
and external costs to operate and maintain their modified systems to
comply with Rules 614(d)(1)-(d)(4). The Commission preliminarily
believes that each entity would incur 540 annual ongoing burden hours
\712\ and $123,725 in annual ongoing external costs \713\ to operate
and maintain its systems to comply with Rules 614(d)(1)-(d)(4).
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    \712\ The Commission preliminarily believes that once a
competing consolidator's infrastructure is in place, the burden of
operating and maintaining the infrastructure will be less than the
burdens associated with establishing the infrastructure. The
Commission estimates the monetized initial burden for this
requirement to be $176,250. The Commission derived this estimate
based on per hour figures from SIFMA's Management & Professional
Earnings in the Securities Industry 2013, modified by Commission
staff to account for an 1,800-hour work-year and inflation, and
multiplied by 5.35 to account for bonuses, firm size, employee
benefits and overhead: [(Sr. Programmer at $332 for 210 hours) +
(Sr. Systems Analyst at $285 for 180 hours) + (Compliance Manager at
$310 for 60 hours) + (Director of Compliance at $489 for 30 hours) +
(Compliance Attorney at $366 for 60 hours)] = 540 burden hours per
entity and $176,250.
    \713\ This estimate is based on the initial external cost
estimate for a market data aggregation firm to modify its systems to
comply with Rules 614(d)(1)-(d)(4), but reduced because the
Commission preliminarily believes that once a competing
consolidator's infrastructure is in place, the burden of operating
and maintaining the infrastructure will be less than the burdens
associated with establishing the infrastructure.
---------------------------------------------------------------------------

    Additionally, the Commission estimates that each entity would incur
annual ongoing external costs of $168,000 to purchase market data from
the SROs,\714\ and an additional annual ongoing external cost of
$4,602,720 to co-locate itself at four exchange data centers,\715\ for
a total annual ongoing external cost of $4,894,445 per entity.\716\
Because the Commission preliminarily believes that there will be two
entities per category of potential competing consolidators for existing
market data aggregators, broker-dealers that currently aggregate market
data, exclusive SIPs and new entrants, for each of these categories,
the aggregate estimates would amount to estimate of 1,080 annual
ongoing burden hours \717\ and $9,797,530 in annual ongoing external
costs.\718\
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    \714\ The Commission is using the monthly market data access and
redistribution fees currently charged by the CTA/CQ SIP and Nasdaq
UTP SIP as the basis of this estimate ($14,000), multiplied by 12
months.
    \715\ This estimate is based on an estimated $95,890 in monthly
co-location fees as calculated from NYSE Price List 2020, multiplied
by four exchange data centers over 12 months. The Commission
preliminarily believes that the market data aggregators would
already be co-located at the four exchange data centers, which may
lower this estimate for this category of respondent. See NYSE Price
List 2020, supra note 408.
    \716\ $4,894,445 = [($123,725 to operate and maintain systems to
comply with Rules 614(d)(1)-(d)(4)) + ($168,000 in monthly market
data fees over 12 months) + ($4,602,720 to co-locate within four
exchange data centers over 12 months)].
    \717\ The Commission estimates the monetized annual ongoing
burden for this requirement to be $352,500. The Commission derived
this estimate based on per hour figures from SIFMA's Management &
Professional Earnings in the Securities Industry 2013, modified by
Commission staff to account for an 1,800-hour work-year and
inflation, and multiplied by 5.35 to account for bonuses, firm size,
employee benefits and overhead: [(Sr. Programmer at $332 for 210
hours) + (Sr. Systems Analyst at $285 for 180 hours) + (Compliance
Manager at $310 for 60 hours) + (Director of Compliance at $489 for
30 hours) + (Compliance Attorney at $366 for 60 hours)] x [(2 market
data aggregation firms/broker-dealers that currently aggregate
market data/existing SIPs/new entrants)] = 1,080 annual ongoing
burden hours and $352,500.
    \718\ The Commission preliminarily estimates that the market
data aggregation firms/broker-dealers that currently aggregate
market data for their own usage/exclusive SIPs/new entrants would
incur the following aggregate annual ongoing external costs:
[($123,725 to operate and maintain systems to comply with Rules
614(d)(1)-(d)(4)) + ($168,000 in monthly market data fees over 12
months) + ($4,602,720 to co-locate within four exchange data centers
over 12 months)] x [(2 entities)] = $9,788,890.
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    Since the Commission preliminarily believes that there may be four
SROs that will choose to become competing consolidators, it is
estimating that these SROs will incur an aggregate estimate of 2,160
annual ongoing burden hours \719\ and $19,577,780 in annual ongoing
external costs.\720\ The Commission solicits comment on the accuracy of
this information.
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    \719\ The Commission estimates the monetized initial burden for
this requirement to be $353,500. The Commission derived this
estimate based on per hour figures from SIFMA's Management &
Professional Earnings in the Securities Industry 2013, modified by
Commission staff to account for an 1,800-hour work-year and
inflation, and multiplied by 5.35 to account for bonuses, firm size,
employee benefits and overhead: [(Sr. Programmer at $332 for 210
hours) + (Sr. Systems Analyst at $285 for 180 hours) + (Compliance
Manager at $310 for 60 hours) + (Director of Compliance at $489 for
30 hours) + (Compliance Attorney at $366 for 60 hours)] x [(4 SROs)]
= 2,160 annual ongoing burden hours across the SROs and $705,000.
    \720\ The Commission preliminarily estimates that the SROs would
incur the following initial external costs: [($123,725 to operate
and maintain systems to comply with Rules 614(d)(1)-(d)(4)) +
($168,000 in monthly market data fees over 12 months) + ($4,602,720
to co-locate within four exchange data centers over 12 months)] x
[(4 SROs)] = $19,577,780 across the SROs.
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(g) Initial Burden and Costs for Proposed Rule 614(c)
    As discussed above, proposed Rule 614(c) would require each
competing consolidator to make public on its website a direct URL
hyperlink to the Commission's website that contains each effective
initial Form CC, order of ineffective initial Form CC, and amendments
to effective Form CCs. The Commission preliminarily estimates an
initial burden of 0.5 hours per competing consolidator to publicly post
the Commission's direct URL hyperlink to its website upon filing of the
initial Form CC,\721\ for an aggregate initial burden of approximately
six hours for the competing consolidators to publicly post the direct
URL hyperlink to the Commission's website on their own respective
websites.\722\
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    \721\ The Commission bases this estimate on a full-time
Programmer Analyst spending approximately 0.5 hours to publicly post
the URL hyperlink per competing consolidator. The Commission
estimates the monetized initial burden for this requirement to be
$120.50. The Commission derived this estimate based on per hour
figures from SIFMA's Management & Professional Earnings in the
Securities Industry 2013, modified by Commission staff to account
for an 1,800-hour work-year and inflation, and multiplied by 5.35 to
account for bonuses, firm size, employee benefits and overhead:
Programmer Analyst at $241 for 0.5 hours = 0.5 initial burden hours
per competing consolidator and $120.50.
    \722\ The Commission estimates the monetized initial aggregate
burden for this requirement to be $1,446. The Commission derived
this estimate based on per hour figures from SIFMA's Management &
Professional Earnings in the Securities Industry 2013, modified by
Commission staff to account for an 1,800-hour work-year and
inflation, and multiplied by 5.35 to account for bonuses, firm size,
employee benefits and overhead: [(Programmer Analyst at $241 for 0.5
hours) x (12 competing consolidators)] = 6 initial burden hours
across the competing consolidators and $1,446.
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(h) Ongoing Burden and Costs for Proposed Rule 614(c)
    The Commission preliminarily believes that each competing
consolidator would check the Commission's website whenever it submits
amendments to effective Form CCs to ensure that the Commission's direct
URL hyperlink that the competing consolidator has posted to its own
website remains valid. The Commission preliminarily believes that a
competing consolidator will file two amendments per year, so the
Commission preliminarily estimates that each competing consolidator
will incur an ongoing burden of 0.25 hours per amendment, or 0.5 hours
per year, to ensure that it has posted the correct direct URL hyperlink
to the Commission's website on its own website,\723\ for an aggregate
annual

burden of approximately six hours for the competing consolidators to do
so.\724\
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    \723\ The Commission bases this estimate on a full-time
Programmer Analyst spending approximately 0.25 hours to check the
Commission's website when the competing consolidator submits an
amendment to effective Form CCs to ensure that the Commission's
direct URL hyperlink that the competing consolidator has posted to
its own website remains valid. Since the Commission preliminarily
believes that a competing consolidator would file two amendments per
year, the Commission preliminarily estimates that each competing
consolidator would incur a burden of 0.5 hours per year. [(0.25
hours) x (2 amendments per year)] = 0.5 hours per year to check the
URL hyperlink. The Commission estimates the monetized annual burden
for this requirement to be $120.50. The Commission derived this
estimate based on per hour figures from SIFMA's Management &
Professional Earnings in the Securities Industry 2013, modified by
Commission staff to account for an 1,800-hour work-year and
inflation, and multiplied by 5.35 to account for bonuses, firm size,
employee benefits and overhead: Programmer Analyst at $241 for 0.5
hours = 0.5 annual burden hours per competing consolidator and
$120.50.
    \724\ The Commission estimates the monetized aggregate annual
burden for this requirement to be $1,446.00. The Commission derived
this estimate based on per hour figures from SIFMA's Management &
Professional Earnings in the Securities Industry 2013, modified by
Commission staff to account for an 1,800-hour work-year and
inflation, and multiplied by 5.35 to account for bonuses, firm size,
employee benefits and overhead: [(Programmer Analyst at $241 for 0.5
hours) x (12 competing consolidators)] = 6 annual burden hours
across the competing consolidators and $1,446.00.
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3. Recordkeeping
(a) Initial Burden and Costs
    Proposed Rule 614(d)(7) would require each competing consolidator
to keep and preserve at least one copy of all documents made or
received by it in the course of its business and in the conduct of its
business. These documents must be kept for a period of no less than
five years, the first two years in an easily accessible place. Proposed
Rule 614(d)(8) would require each competing consolidator to promptly
furnish these documents to any representative of the Commission upon
request. Based on the Commission's experience with recordkeeping costs
and consistent with prior burden estimates for similar provisions,\725\
the Commission preliminarily estimates that this requirement will
create an initial burden of 40 hours (for a total cost of $8,720),\726\
for a total initial burden of 480 hours for all respondents (for a
total cost of $104,640).
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    \725\ See Securities Exchange Act Release No. 74246, supra note
554, at 14541.
    \726\ The Commission based this estimate on the $218 hourly rate
as of May 2019 for a paralegal x 40 hours. The Commission derived
this estimate based on per hour figures from SIFMA's Management &
Professional Earnings in the Securities Industry 2013, modified by
Commission staff to account for an 1,800-hour work-year and
inflation, and multiplied by 5.35 to account for bonuses, firm size,
employee benefits and overhead.
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(b) Ongoing Burden and Costs
    The Commission preliminarily believes that the ongoing annual
burden of recordkeeping in accordance with proposed Rules 614(d)(7) and
614(d)(8) would be 20 hours per respondent (for a total cost of $4,360)
and a total ongoing annual burden of 240 hours for all respondents (for
a total cost of $52,320).
4. Reports and Reviews
(a) Initial Burden and Costs
    The Commission preliminarily believes that the average one-time,
initial burden to program systems to produce the monthly reports
required by proposed Rules 614(d)(5) and (d)(6), including keeping the
information publicly posted and free and accessible (in downloadable
files under Rule 614(d)(5)), would be 246 hours per competing
consolidator (for a total cost of $80,507) \727\ and $800 in external
costs.\728\ The Commission estimates that the total initial burden
would be 2,952 hours (for a total cost of $966,804) \729\ and a total
initial external cost of $9,600.\730\
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    \727\ This figure is based on the estimated initial paperwork
burden for Rule 606(a), which requires each broker or dealer to make
publicly available on a website a quarterly report on its routing of
non-directed orders in NMS stocks that are submitted on a held basis
and of non-directed orders that are customer orders in NMS
securities. See Disclosure of Order Handling Information, Securities
Exchange Act Release No. 84528, supra note 10. For purposes of this
proposal, the Commission is converting the 10 hour estimate for a
quarterly report to an estimate for a monthly report. Additionally,
the Commission is adding the burden of posting the required
information to the website. The Commission estimates the monetized
initial burden for this requirement to be $80,507. The Commission
derived this estimate based on per hour figures from SIFMA's
Management & Professional Earnings in the Securities Industry 2013,
modified by Commission staff to account for an 1,800-hour work-year
and inflation, and multiplied by 5.35 to account for bonuses, firm
size, employee benefits and overhead: [(Sr. Programmer at $332 per
hour for 160 hours) + (Sr. Database Administrator at $342 per hour
for 20 hours) + (Sr. Business Analyst at $275 per hour for 20 hours)
+ (Attorney at $417 per hour for 4 hours) + (Sr. Operations Manager
at $366 per hour for 20 hours) + (Systems Analyst at $263 per hour
for 16 hours) + ($308.50 blended rate for Sr. Systems Analyst and
Sr. Programmer for 6 hours)] = 246 initial burden hours per
competing consolidator and $80,507.
    \728\ The Commission estimates that each competing consolidator
would incur an initial external cost of $800 for an external website
developer to create the website.
    \729\ The Commission estimates the monetized initial aggregate
burden for this requirement to be $966,804. The Commission derived
this estimate based on per hour figures from SIFMA's Management &
Professional Earnings in the Securities Industry 2013, modified by
Commission staff to account for an 1,800-hour work-year and
inflation, and multiplied by 5.35 to account for bonuses, firm size,
employee benefits and overhead: [(Sr. Programmer at $332 per hour
for 160 hours) + (Sr. Database Administrator at $342 per hour for 20
hours) + (Sr. Business Analyst at $275 per hour for 20 hours) +
(Attorney at $417 per hour for 4 hours) + (Sr. Operations Manager at
$366 per hour for 20 hours) + (Systems Analyst at $263 per hour for
16 hours) + ($308.50 blended rate for Sr. Systems Analyst and Sr.
Programmer for 6 hours)] x [(12 competing consolidators)] = 2,952
initial aggregate burden hours across the competing consolidators
and $966,804.
    \730\ $9,600 = ($800 for an external website developer to create
the website) x (12 competing consolidators).
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(b) Ongoing Burden and Costs
    The Commission estimates that each competing consolidator would
incur an average burden of 11 hours to prepare and make publicly
available a monthly report in the format required by proposed Rules
614(d)(5) and (d)(6) (for a total cost of $3,768.50), or a burden of
132 hours per year (for a total cost of $45,222).\731\ Once a report is
posted on an internet website, the Commission does not estimate that
there would be an additional burden to allow the report to remain
posted for the period of time specified in the rules. The total burden
per year for all competing consolidators to comply with the monthly
reporting requirement in proposed Rules 614(d)(5) and (d)(6) is
estimated to be 1,584 hours (for a total cost of $542,664).\732\
---------------------------------------------------------------------------

    \731\ This figure is based on the estimated ongoing paperwork
burden for Rule 606(a), which requires each broker or dealer to make
publicly available on a website a report on a quarterly basis. In
the Paperwork Reduction Act discussion for Rule 606(a), the
Commission established that the average annual burden for a broker-
dealer to comply with Rules 606(a)(1)(i)-(iii) would be 10 hours.
See supra note 727, at 58388. For purposes of this proposal, the
Commission is converting the 10 hour estimate for a quarterly report
to an estimate for a monthly report. Additionally, the Commission is
adding the burden of updating the website. The Commission estimates
the monetized annual burden for this requirement to be $3,768.50.
The Commission derived this estimate based on per hour figures from
SIFMA's Management & Professional Earnings in the Securities
Industry 2013, modified by Commission staff to account for an 1,800-
hour work-year and inflation, and multiplied by 5.35 to account for
bonuses, firm size, employee benefits and overhead: [(Sr. Business
Analyst at $275 per hour for 5 hours) + (Attorney at $417 per hour
for 5 hours) + ($308.50 blended rate for Sr. Systems Analyst and Sr.
Programmer for 1 hour)] x [(12 months)] = 132 initial burden hours
per competing consolidator and $45,222.
    \732\ The Commission estimates the monetized annual aggregate
burden for this requirement to be $542,664. The Commission derived
this estimate based on per hour figures from SIFMA's Management &
Professional Earnings in the Securities Industry 2013, modified by
Commission staff to account for an 1,800-hour work-year and
inflation, and multiplied by 5.35 to account for bonuses, firm size,
employee benefits and overhead: [(Sr. Business Analyst at $275 per
hour for 5 hours) + (Attorney at $417 per hour for 5 hours) +
($308.50 blended rate for Sr. Systems Analyst and Sr. Programmer for
1 hour)] x [(12 competing consolidators)] x [(12 months)] = 1,584
aggregate burden hours across the competing consolidators and
$542,664.
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5. Amendment to the Effective National Market System Plan(s) for NMS
Stocks
    As discussed above, the proposed rule would require an amendment to
the effective national market system plan(s) for NMS stocks from the 16
national securities exchanges and one national securities association
respondents who are participants in the effective national market
system plan(s). The Commission preliminarily estimates that it would
take the participants to the effective

national market system plan(s) approximately 420 hours to prepare the
amendment. This preliminary estimate includes 210 hours for a
respondent to comply with the timestamps required by the proposed rule,
including a review and any applicable change of the respondent's
technical systems and rules. Each SRO already employs some form of
timestamping, and the Commission does not necessarily expect that the
burden to comply with the timestamp requirement would be particularly
burdensome.\733\ The preliminary estimate also includes 105 hours for
the participants to compose the form of annual report on competing
consolidator performance. Finally, the preliminary estimate includes 20
hours the participants to compile and confirm the primary listing
exchange for each NMS stock. The initial burden hours for all
respondents would be 420 hours x 17 (for a total cost of
$2,977,380).\734\
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    \733\ Currently, under the Equity Data Plans, the SROs attach
timestamps to quotation information and transaction information
provided to the exclusive SIPs. See, e.g., Nasdaq UTP Plan, supra
note 13, at Section VIII; CQ Plan, supra note 13, at Section VI; CTA
Plan, supra note 13, at Section VI.
    \734\ The Commission estimates the monetized burden for this
requirement to be $130,860. The Commission derived this estimate
based on per hour figures from SIFMA's Management & Professional
Earnings in the Securities Industry 2013, modified by Commission
staff to account for an 1,800-hour work-year and inflation, and
multiplied by 5.35 to account for bonuses, firm size, employee
benefits and overhead: [(Attorney at $417 for (420 x 17) hours)].
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6. Collection and Dissemination of Information by National Securities
Exchanges and National Securities Associations
    As discussed above, the proposed amendment to Rule 603(b) would
require every national securities exchange on which an NMS stock is
traded and national securities association to make available to all
competing consolidators and self-aggregators all information with
respect to quotations for and transactions in NMS stocks, including all
data necessary to generate consolidated market data, in the same manner
and using the same methods, including all methods of access and using
the same formats, as such exchange or association makes available any
information with respect to quotations for and transactions in NMS
stocks to any person. Accordingly, the SROs would be required to
collect the information necessary to generate proposed consolidated
market data, which would be required to be made available under
proposed Rule 603(b). The respondents to this collection of information
are the 16 national securities exchanges and the one national
securities association who are participants in the effective national
market system plan(s). The new data elements of proposed consolidated
market data that the national securities exchanges and national
securities associations must make available include auction
information, depth of book data, round lot data, regulatory data
(including LULD price bands), and administrative data. The Commission
understands that the national securities exchanges and national
securities associations currently collect and/or calculate all data
necessary to generate proposed consolidated market data.\735\
Therefore, the Commission believes that the proposed amendments to
603(b) would impose minimal initial and ongoing burdens on these
respondents, including any changes to their systems, because they
already collect and provide the data necessary to generate proposed
consolidated market data, including regulatory data, to the exclusive
SIPs and to subscribers of their proprietary data feeds.
---------------------------------------------------------------------------

    \735\ For example, the primary listing exchanges currently
calculate LULD price bands and related information to generate
synthetic LULD price bands. See Nasdaq, Equity Trader Alert #2016-
79: NASDAQ Announces Improved Protections for Equity Markets Coming
Out of Halts (``Leaky Bands'') (Apr. 12, 2016), available at https://www.nasdaqtrader.com/TraderNews.aspx?id=ETA2016-79; NYSE, Trader
Update: NYSE and NYSE MKT: Enhanced Limit Up Limit Down Procedures
(Aug. 1, 2016), available at https://www.nyse.com/trader-update/history#110000029205; Securities Exchange Act Release No. 34-78435
(July 28, 2016), 81 FR 51239 (Aug. 3, 2016) (SR-FINRA-2016-028).
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(a) Initial Burden and Costs
    The Commission preliminarily estimates, in order to collect the
information necessary to generate consolidated market data as required
by proposed Rule 603(b), that a national securities exchange on which
an NMS stock is traded or national securities association will require
an average of 220 \736\ initial burden hours of legal, compliance,
information technology, and business operations personnel time to
prepare and implement such a system (for a total cost per exchange of
$70,865).\737\
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    \736\ The Commission based its estimate on the burden hour
estimate provided in connection with the adoption of Regulation SHO
because the requirements are similar to what a national securities
exchange or national securities association would need to do to
comply with proposed Rule 603(b). See Commission, Supporting
Statement for the Paperwork Reduction Act Information Collection
Submission for Rule 201 and Rule 200(g) of Regulation SHO (Sept. 5,
2019).
    \737\ The Commission estimates the monetized initial burden for
this requirement to be $70,865. The Commission derived this estimate
based on per hour figures from SIFMA's Management & Professional
Earnings in the Securities Industry 2013, modified by Commission
staff to account for an 1,800-hour work-year and inflation, and
multiplied by 5.35 to account for bonuses, firm size, employee
benefits and overhead: [(Compliance Manager at $310 for 105 hours) +
(Attorney at $417 for 70 hours) + (Sr. Systems Analyst at $285 for
20 hours) + (Operations Specialist at $137 for 25 hours)] = 220
initial burden hours and $70,865.
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(b) Ongoing Burden and Costs
    The Commission estimates that each national securities exchange on
which an NMS stock is traded and national securities association would
incur an annual average burden on an ongoing basis of 396 hours to
collect the information necessary to generate proposed consolidated
market data required by proposed Rule 603(b) (for a total cost per
exchange of $128,064).\738\
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    \738\ The Commission estimates the monetized ongoing, annual
burden for this requirement to be $128,064. The Commission derived
this estimate based on per hour figures from SIFMA's Management &
Professional Earnings in the Securities Industry 2013, modified by
Commission staff to account for an 1,800-hour work-year and
inflation, and multiplied by 5.35 to account for bonuses, firm size,
employee benefits and overhead: [(Compliance Manager at $310 for 192
hours) + (Attorney at $417 for 48 hours) + (Sr. Systems Analyst at
$285 for 96 hours)] = 336 initial burden hours and $128,064.
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E. Collection of Information Is Mandatory

    The collection of information discussed above would be a mandatory
collection of information.

F. Confidentiality

1. Registration Requirements and Form CC
    As discussed above, under proposed Rule 614(b)(2), the Commission
would make public via posting on the Commission's website each: (i)
Effective initial Form CC, as amended; (ii) order of ineffectiveness of
a Form CC; (iii) filed Form CC Amendment; and (iv) notice of cessation.
2. Competing Consolidator Duties and Data Collection and Maintenance
    The collection of information regarding competing consolidator
duties and data collection and maintenance relates to the proposed
consolidated market data that competing consolidators will collect,
calculate, and provide to subscribers.
3. Recordkeeping
    The collection of information relating to recordkeeping would be
available to the Commission and its staff, and to other regulators.
4. Reports and Reviews
    The collection of information regarding reports and reviews relates
to information that would be published on competing consolidator
websites.

5. Amendment to the Effective National Market System Plan(s) for NMS
Stocks
    Amendments to the effective national market system plan(s) for NMS
stocks would be required to be filed with the Commission pursuant to
Rule 608. Once filed, the Commission would publish the amendments for
public comment. Finally, the annual report of competing consolidator
performance would be submitted to the Commission.
6. Collection and Dissemination of Information by National Securities
Exchanges and National Securities Associations
    As discussed above, the proposed amendment to Rule 603(b) would
require national securities exchanges and national securities
associations to collect and provide information to the competing
consolidators and self-aggregators, not to the Commission. Therefore,
no assurances of confidentiality are necessary because the information
will be made available to the public for a fee from the competing
consolidators.

G. Revisions to Current Regulation SCI Burden Estimates

    As described above, the Commission is proposing to expand the
definition of ``SCI entities'' under Regulation SCI to include
``competing consolidators,'' which would be defined to have the same
meaning as set forth in the proposed amendments to Rule 600(b)(16) of
Regulation NMS.\739\ Thus, under the proposal, competing consolidators
would be subject to the requirements of Regulation SCI.
---------------------------------------------------------------------------

    \739\ See proposed amendment to Rule 1000 of Regulation SCI.
---------------------------------------------------------------------------

    The rules under Regulation SCI impose ``collection of information''
requirements within the meaning of the PRA.\740\ Rule 1001(a) of
Regulation SCI requires each SCI entity to establish, maintain, and
enforce written policies and procedures for systems capacity,
integrity, resiliency, availability, and security. Rule 1001(b)
requires each SCI entity to establish, maintain, and enforce written
policies and procedures to ensure that its SCI systems operate in a
manner that complies with the Exchange Act, the rules and regulations
thereunder, and the SCI entity's rules and governing documents, as
applicable. Rule 1001(c) requires each SCI entity to establish,
maintain, and enforce written policies and procedures for the
identification, designation, and documentation of responsible SCI
personnel and escalation procedures. Rule 1002(a) requires each SCI
entity to begin to take appropriate corrective action upon any
responsible SCI personnel having a reasonable basis to conclude that an
SCI event has occurred. Rule 1002(b) requires each SCI entity to notify
the Commission of certain SCI events. Rule 1002(c) requires each SCI
entity, with certain exceptions, to disseminate information about SCI
events to affected members or participants, and disseminate information
about major SCI events to all members or participants. Rule 1003(a)
requires each SCI entity to notify the Commission of material systems
changes quarterly. Rule 1003(b) requires each SCI entity to conduct
annual SCI reviews. Rule 1004 requires each SCI entity to designate
certain members or participants for participation in functional and
performance testing of the SCI entity's business continuity and
disaster recovery plans, and to coordinate such testing with other SCI
entities. Rules 1005 and 1007 set forth recordkeeping requirements for
SCI entities. Rule 1006 requires, with certain exceptions, that each
SCI entity electronically file required notifications, reviews,
descriptions, analysis, or reports to the Commission on Form SCI.\741\
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    \740\ For a complete analysis of Regulation SCI under the PRA,
see SCI Adopting Release, supra note 28, at 18141; and Proposed
Collection; Comment Request; Extension: Regulation SCI, Form SCI;
SEC File No. 270-653, OMB Control No. 3235-0703, 83 FR 34179 (``2018
PRA Extension'').
    \741\ For further details regarding the requirements of
Regulation SCI, see Regulation SCI Adopting Release, supra note 28.
See also ``Responses to Frequently Asked Questions Concerning
Regulation SCI,'' September 2, 2015 (updated August 21, 2019),
available at: https://www.sec.gov/divisions/marketreg/regulation-sci-faq.shtml.
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    In 2018, there were an estimated 42 entities that met the
definition of SCI entity and were subject to the collection of
information requirements of Regulation SCI (``respondents'').\742\ At
that time, an estimate of approximately 2 entities would become SCI
entities each year, one of which would be an SRO. Accordingly, under
these estimates, over the following three years, there would be an
average of approximately 44 SCI entities each year.\743\
---------------------------------------------------------------------------

    \742\ See 2018 PRA Extension, supra note 740, at 34180.
    \743\ Id.
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    As discussed above, the Commission preliminarily estimates that,
under the current proposal, there could be 12 competing consolidators
that would be subject to Regulation SCI as SCI entities.\744\ As
discussed below, some of these entities may already be SCI entities and
subject to the requirements of Regulation SCI. While the Commission
estimates that the number of respondents would increase as a result of
this proposal, the Commission preliminarily believes that its prior
paperwork burden estimates per entity under Regulation SCI generally
would be applicable to these new competing consolidators because they
would be subject to the same requirements and burdens as other SCI
entities.\745\ At the same time, the Commission preliminarily believes
that burden estimates also should take into account the extent to which
the entities that may register to become competing consolidators
already comply with the requirements of Regulation SCI.
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    \744\ See supra Section V.C.
    \745\ See 2018 PRA Extension, supra note 740. As discussed
below, the Commission believes that 6 of the 12 entities estimated
to register as competing consolidators are currently SCI entities.
Thus, the Commission preliminarily estimates that, if the proposal
were adopted, there would be an average of approximately 50 SCI
entities each year.
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    In particular, the Commission preliminarily believes that 2 of the
estimated 12 competing consolidators may be the existing exclusive
SIPs, which are currently subject to Regulation SCI as plan processors.
Because these entities are responsible for collecting, consolidating,
and disseminating proposed consolidated market data to market
participants and thus would be operating a substantially similar
business and performing a similar function in their role as competing
consolidators, the Commission preliminarily believes that the current
ongoing burden estimates for existing SCI entities would be applicable
and there would be no material change in the estimated paperwork
burdens for these entities under Regulation SCI.\746\
---------------------------------------------------------------------------

    \746\ Id. The burden estimates for SCI entity respondents
included initial burdens for new SCI entities and ongoing burdens
for all SCI entities. For the reasons discussed herein, the
Commission preliminarily believes that the initial paperwork burdens
for new SCI entities would not be applicable to these entities.
---------------------------------------------------------------------------

    As stated above, the Commission also preliminarily believes that 4
of the entities that may register to become competing consolidators may
be either: (i) An SRO currently subject to Regulation SCI; or (ii) an
entity affiliated with an SCI SRO, formerly subject to Regulation SCI.
The burden estimates for SCI entity respondents include both initial
burdens for new SCI entities and ongoing burdens for all SCI
entities.\747\ Because these SRO entities that would become competing
consolidators are current SCI entities and are already required to
implement the requirements of Regulation SCI with regard to SCI systems
that they operate in their role as

SCI SROs, the Commission preliminarily believes that these entities
would not have initial burdens equivalent to those estimated for new
SCI entities. At the same time, as discussed above, the Commission
preliminarily believes that these SROs may be a national securities
association and/or equities national securities exchanges that do not
currently operate an exclusive SIP. Because these entities would be
entering an entirely new business and performing a new function with
new SCI systems, unlike the current exclusive SIPs who may register to
become competing consolidators discussed above, the Commission
preliminarily believes that these SRO entities would have some initial
burden that would be a percentage of that which entirely new SCI
entities have. In particular, the Commission preliminarily estimates
that the initial burdens for existing SCI SROs who register as
competing consolidators would be 50 percent of the estimated initial
burdens for entirely new SCI entities. For example, the Commission
believes that such SCI SROs would need to develop and draft the
policies and procedures required by Rule 1001(a) for new SCI systems
utilized in their role as competing consolidators, but unlike
completely new SCI entities, SCI SROs would already have existing Rule
1001(a) policies and procedures in place for other types of SCI systems
that they could utilize as a model and modify as needed for new SCI
systems.\748\ The Commission also believes that the estimated ongoing
paperwork burden estimates for all SCI entities would be applicable to
these entities as well.\749\
---------------------------------------------------------------------------

    \747\ Id.
    \748\ As an example, the estimate of an initial recordkeeping
burden was 694 hours per new respondent to comply with the policies
and procedures requirement of Rule 1001(a). Id. at 34180. The
Commission preliminarily estimates that, for an SCI SRO who
registers as a competing consolidator, the initial burden for Rule
1001(a) would be 50 percent of this estimated amount, or 347 hours.
    \749\ The ongoing paperwork burden estimates in the PRA
Extension do not distinguish between different categories of SCI
entities, but rather provides an average for all SCI entities.
---------------------------------------------------------------------------

    The Commission preliminarily believes that the remaining 6
estimated competing consolidators may be entities that are not
currently subject to Regulation SCI. As discussed above, the Commission
believes that these 6 entities may be market data aggregation firms,
broker-dealers that currently aggregate market data for internal uses,
and entities that would be entering the market data aggregation
business for the first time.\750\ Accordingly, the Commission
preliminarily believes that these entities would have the same
estimated initial paperwork burdens as those estimated for new SCI
entities and the same ongoing paperwork burdens as all other SCI
entities.\751\
---------------------------------------------------------------------------

    \750\ See supra Section V.D.2.
    \751\ See 2018 PRA Extension, supra note 740.
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H. Request for Comments

    Pursuant to 44 U.S.C. 3506(c)(2)(B), the Commission solicits
comments to:
    156. Evaluate whether the proposed collections of information are
necessary for the proper performance of the functions of the agency,
including whether the information shall have practical utility;
    157. Evaluate the accuracy of our estimates of the burden of the
proposed collection of information;
    158. Determine whether there are ways to enhance the quality,
utility, and clarity of the information to be collected;
    159. Evaluate whether there are ways to minimize the burden of
collection of information on those who are to respond, including
through the use of automated collection techniques or other forms of
information technology; and
    160. Evaluate whether the proposed amendments would have any
effects on any other collection of information not previously
identified in this section.
    Persons submitting comments on the collection of information
requirements should direct them to the Office of Management and Budget,
Attention: Desk Officer for the Securities and Exchange Commission,
Office of Information and Regulatory Affairs, Washington, DC 20503, and
should also send a copy of their comments to Vanessa Countryman,
Secretary, Securities and Exchange Commission, 100 F Street NE,
Washington, DC 20549-1090, with reference to File Number S7-03-20.
Requests for materials submitted to OMB by the Commission with regard
to this collection of information should be in writing, with reference
to File Number S7-03-20 and be submitted to the Securities and Exchange
Commission, Office of FOIA/PA Services, 100 F Street NE, Washington, DC
20549-2736. As OMB is required to make a decision concerning the
collection of information between 30 and 60 days after publication, a
comment to OMB is best assured of having its full effect if OMB
receives it within 30 days of publication.

VI. Economic Analysis

A. Introduction and Market Failures

1. Introduction
    Section 3(f) of the Exchange Act requires the Commission, whenever
it engages in rulemaking and is required to consider or determine
whether an action is necessary or appropriate in the public interest,
to consider, in addition to the protection of investors, whether the
action would promote efficiency, competition, and capital
formation.\752\ In addition, Section 23(a)(2) of the Exchange Act
requires the Commission, when making rules under the Exchange Act, to
consider the impact such rules would have on competition.\753\ Exchange
Act Section 23(a)(2) prohibits the Commission from adopting any rule
that would impose a burden on competition not necessary or appropriate
in furtherance of the purposes of the Exchange Act.
---------------------------------------------------------------------------

    \752\ 15 U.S.C. 78c(f).
    \753\ 15 U.S.C. 78w(a)(2).
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    Wherever possible, the Commission has quantified the likely
economic effects of the proposed amendments. The Commission is
providing both a qualitative assessment and quantified estimates of the
potential economic effects of the proposed amendments where feasible.
The Commission has incorporated data and other information provided by
commenters to assist it in the analysis of the economic effects of the
proposed amendments. However, as explained in more detail below,
because the Commission does not have, and in certain cases does not
believe it can reasonably obtain data that may inform the Commission on
certain economic effects, the Commission is unable to quantify certain
economic effects. Further, even in cases where the Commission has some
data, it is not practicable due to the number and type of assumptions
necessary to quantify certain economic effects, which render any such
quantification unreliable. Our inability to quantify certain costs,
benefits, and effects does not imply that such costs, benefits, or
effects are less significant. The Commission requests that commenters
provide relevant data and information to assist the Commission in
analyzing the economic consequences of the proposed amendments.
    In general, the Commission preliminarily believes that the proposed
amendments would result in benefits by enhancing the consolidated
market data content, reducing the latency of consolidated market data,
and improving the dissemination of

consolidated market data. This would reduce information asymmetries
that exist between market participants who subscribe to proprietary DOB
and other proprietary products and market participants who only
subscribe to SIP data, and could allow some market participants who
subscribe to the more expensive proprietary DOB products to replace
them with potentially cheaper consolidated market data feeds.
Improvements to the content and latency of consolidated market data
from the proposed amendments could also help market participants that
currently rely on SIP data to make more informed trading decisions,
which would facilitate their ability to trade competitively and improve
their execution quality, and would facilitate best execution.
    The Commission preliminarily believes there are three main benefits
from the expanded content of consolidated market data, which as noted
above includes proposed ``core data.'' First, the expanded content of
consolidated market data could allow market participants that currently
only subscribe to SIP data to get additional content from expanded
consolidated market data and to experience increased gains from trade
by allowing them to take advantage of trading opportunities they may
not have been aware of due to the lack of information in existing SIP
data.\754\ Second, the expanded content of consolidated market data
could also allow these market participants to improve their order
routing and order execution capabilities, potentially lowering investor
transaction costs. Finally, the expanded consolidated market data
content and associated changes in how the NBBO and protected quotes are
calculated could result in a narrower NBBO and wider protected quote in
some stocks. A narrower NBBO and changes in protected quotes could
affect price improvement that trading venues, including ATSs,
exchanges, and internalizers, could offer.
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    \754\ Here and throughout, the phrase ``gains from trade'' is
meant to refer to a situation in which two market participants would
each be better off if they exchanged their respective property. It
captures the idea of a potential welfare benefit that could be
realized if trade was allowed and possible. Generally in this
proposal the relevant property will be securities and cash.
---------------------------------------------------------------------------

    The Commission preliminarily believes that there are costs to
expanding the content of consolidated market data, including costs to
new competing consolidators related to upgrading existing
infrastructure in order to handle the dissemination of the increased
message traffic; upgrading software and trading systems that consume
consolidated market data; costs to market participants receiving
consolidated market data from technological investments required to
handle increased content and message traffic; as well as other costs.
Expanding consolidated market data would also result in transfers among
various market participants, including transfers from the current
beneficiaries of asymmetric information associated with the uneven
distribution of market data to market participants who currently do not
have access to the additional information contained in proprietary DOB
products and other proprietary products. There could also be costs to
SROs associated with the dissemination of consolidated market data.
    With respect to the introduction of the decentralized consolidation
model, the Commission has several reasons to believe that it is likely
that a sufficient number of firms would be willing to enter the space
of competing consolidators so that the market would be competitive.
Under this assumption, the potential economic benefits of the proposed
decentralized consolidation model would include a reduction in the
latency differential that exists between SIP data and proprietary data
feeds (as measured at the location of market participants using the
data) and potential improvements in innovation and efficiency in the
consolidated market data delivery space. Moreover, the fees for
proposed consolidated market data could be lower than fees that market
participants pay for similar depth of book data today because today
market participants would need to subscribe to both the exclusive SIPs
and proprietary data feeds to receive the same content that would be
included in proposed consolidated market data. However, the Commission
recognizes that there is uncertainty in the fees for proposed
consolidated market data because they would depend on the structure of
fees ultimately proposed for data content by an effective national
market system plan(s) and on the ultimate fee structure of competing
consolidators.\755\ The Commission also recognizes uncertainty in the
fees that subscribers choosing to receive a subset of consolidated
market data would pay under the proposed rule and that these
subscribers could pay higher or lower fees than they do today for
equivalent data.
---------------------------------------------------------------------------

    \755\ See infra Section VI.C.2(b).
---------------------------------------------------------------------------

    At the same time, the introduction of the decentralized
consolidation model would impose direct costs on SROs, the existing
exclusive SIPs, and potential competing consolidators. It would also
impose indirect costs on the existing exclusive SIPs and market
participants. The direct costs for potential competing consolidators
(such as SROs, exclusive SIPs, and current market data aggregators)
would include registration and compliance costs and implementation and
incremental infrastructure costs. The Commission, however,
preliminarily believes that many of the potential competing
consolidators have currently already invested in this infrastructure
for the existing business services that they provide (e.g., proprietary
data aggregation services). The indirect costs to the existing
exclusive SIPs would be a potential loss in revenue to competing
consolidators from no longer being the exclusive distributors of
consolidated market data. The indirect costs for market participants
would include implementation costs and potential effects on prices that
market participants would pay for the proposed consolidated market
data. However, new fees for the data content of consolidated market
data would need to be proposed by the effective NMS plan(s) for NMS
stocks and filed with the Commission.
    The Commission preliminarily believes that there are a number of
economic effects that are only possible as a result of expanding
consolidated market data and the introduction of the decentralized
consolidation model. These changes would lead to the benefits of less
expensive alternatives to proprietary DOB products for market
participants; potential new entrants into the broker-dealer, market