Release No. 50486 (October 4, 2004), 69 FR 60287, 60294 (October 8,
2004).
    \1138\ These disclosures will be provided on Form ATS-N and may
have to be amended periodically as provided in proposed Rule 304.
---------------------------------------------------------------------------

(i) Analysis of Estimated Additional Burden for Form ATS-N
(a) Part I
    In the Proposal, we estimated that preparing Parts I and II for a
Form ATS-N would add 0.5 hours to the current baseline for an NMS Stock
ATS to prepare an initial operation report on current Form ATS.\1139\
Part I of adopted Form ATS-N contains substantially the same
information as Parts I and II of proposed Form ATS-N. However, adopted
Form ATS-N does not include several proposed disclosure requirements
and contains several new requests. Overall, we estimate that the burden
for Part I of adopted Form ATS-N will be the same as that which was
estimated for proposed Form ATS-N. Accordingly, we estimate that Part I
of adopted Form ATS-N will add an additional 0.5 hours above the
baseline of current Form ATS.
---------------------------------------------------------------------------

    \1139\ See Proposal, supra note 2, at 81095.
---------------------------------------------------------------------------

(b) Part II
    As explained above, Part II, Items 1 and 2 contain disclosure
requests about the broker-dealer operator's and affiliates',
respectively, trading activity on the NMS Stock ATS. For Part II, Item
1(a), to the extent that the broker-dealer operator is not permitted to
enter or direct orders and trading interest to the NMS Stock ATS, the
NMS Stock ATS would only be required to check ``no.'' In addition, to
the extent the broker-dealer operator enters or directs the entry of
orders and trading interest into the NMS Stock ATS, but such orders and
trading interest is treated the same as trading interest from other
subscribers and persons, Part II, Item 1(b) would require that the NMS
Stock ATS check ``no.''
    Part II, Item 1(a) of adopted Form ATS-N incorporates aspects of
several proposed disclosures that addressed the activity of the broker-
dealer operator's trading activity on the NMS Stock ATS. First, Part
II, Item 1(a) of adopted Form ATS-N incorporates requirements of Part
III, Items 1 and 2 of proposed Form ATS-N, which would have requested
disclosures about the non-ATS trading centers and other NMS Stock ATSs
operated by the broker-dealer operator and its affiliates. In the
Proposal, we estimated that preparing Part III, Item 1 for proposed
Form ATS-N would add 10 hours to the current baseline of Form ATS and
Part III, Item 2 would add 4 hours to the current baseline of Form ATS,
for a total estimated burden of 14 hours for Part III, Items 1 and 2.
    Adopted Part II, Item 1(a) more narrowly tailors those proposed
requests by focusing on the actual trading activities of the broker-
dealer operator on the NMS Stock ATS and its use of the ATS's services.
Primarily, the request under adopted Item 1(a): (i) Does not require an
NMS Stock ATS to list all non-ATS trading centers and NMS Stock ATSs
operated by the broker-dealer operator, regardless of whether those
entities trade on the NMS Stock ATS; and (ii) replaces what some
commenters perceived as potentially broad narrative requests to
describe the ``interaction and coordination'' between

the NMS Stock ATS and those non-ATS trading centers and other NMS Stock
ATSs. Instead, the NMS Stock ATS is now required to name and describe
each type of business unit of the broker-dealer operator that enters or
directs the entry of orders and trading interest into the NMS Stock
ATS, and we have replaced the term ``interaction and coordination''
with specific, enumerated data points and narratives that the NMS Stock
ATS must provide. Furthermore, the corresponding affiliate disclosures
for Part III, Items 1 and 2 of proposed Form ATS-N are now encompassed
by Part II, Item 2(a) of adopted Form ATS-N, so Part II, Item 1(a) of
adopted Form ATS-N will not impose the entire burden that was estimated
for proposed Part III, Items 1 and 2. It will impose the burden from
those proposed items that would have been imposed by the disclosure
requirements related to the broker-dealer operator itself, which we
believe is a small fraction of the proposed estimate relevant to the
requirements related to affiliates of the broker-dealer operator.
Accordingly, out of the 14-hour estimate for proposed Part III, Items 1
and 2, we estimate that Part II, Item 1(a) of adopted Form ATS-N would
add approximately 2.75 hours to the baseline estimate to complete an
initial operation report on Form ATS.
    Second, the request under Part II, Items 1(a) of adopted Form ATS-N
also incorporates aspects of the disclosures proposed under Part III,
Item 5(a) of proposed Form ATS-N. We estimated that preparing proposed
Part III, Item 5(a) would add 5 hours to the current baseline.\1140\
While we did not provide estimates for each individual subpart of Part
III, Item 5 of proposed Form ATS-N, the aspects of Part III, Item 5
that are incorporated into Part II, Item 1(a) of adopted Form ATS-N
(i.e., information about the broker-dealer operator's trading activity
on the ATS, other than the information covered by proposed Item 5(d))
accounted for approximately 1.5 hours of the 5 hour estimate. We
believe that the aspects of proposed Part III, Item 5 that are
incorporated into Part II, Item 1(a) of adopted Form ATS-N would still
add approximately 1.5 hours to the baseline for an initial operation
report on current Form ATS.\1141\ Adopted Form ATS-N requires the NMS
Stock ATS to identify business units of the broker-dealer operator that
enter or direct the entry of orders, whereas proposed Form ATS-N would
have required the NMS Stock ATS to identity all business units that may
enter orders or other trading interest. However, we believe that it
would impose approximately the same burden for the broker-dealer
operator to compile both lists because both would involve the
collection of information about internal units of the broker-dealer
operator.\1142\ Accordingly, we estimate that the adopted requests
under Part II, Item 1(a) would add a total of approximately 4.25 hours
to the current baseline for an initial operation report on current Form
ATS. This would result in an aggregate initial burden of 174.25 hours
above the baseline for all NMS Stock ATSs to complete Part II, Items
1(a) and (b) of Form ATS-N.\1143\
---------------------------------------------------------------------------

    \1140\ See Proposal, supra note 2, at 81097.
    \1141\ The estimated burden hours for proposed Part III, Item
5(a) related to affiliate trading on the ATS are now allocated to
Part II, Item 2(a) of adopted Form ATS-N.
    \1142\ As noted below with regard to Part II, Item 2(a) of
adopted Form ATS-N, however, the analogous change in scope for
affiliate trading activity on the NMS Stock ATS will reduce the
burden on NMS Stock ATSs relative to that which was proposed.
    \1143\ (Attorney at 3.75 + Compliance Manager at 0.5) x 41 NMS
Stock ATSs = 174.25 burden hours.
---------------------------------------------------------------------------

    The information sought under Part II, Item 1(b) of adopted Form
ATS-N would have been requested under Part III, Item 9 of proposed Form
ATS-N. We estimated that completing Part III, Item 9 of proposed Form
ATS-N would add 2 hours to the current baseline of Form ATS.\1144\ In
most cases, Part II, Item 1(b) of adopted Form ATS-N will require the
NMS Stock ATS to answer ``yes'' or ``no'' and list applicable item
numbers in Part III of adopted Form ATS-N. An NMS Stock ATS will need
to provide a narrative under Item 1(b) only if there are differences
that are not applicable to Part III. But we believe that the subject
matter covered by Part III is very comprehensive, and therefore, we do
not believe that an NMS Stock ATS typically will need to provide
additional narratives about differences in treatment that are not
otherwise covered by Part III. Accordingly, we estimate that Part II,
Item 1(b) of adopted Form ATS-N would add 0.25 hours out of the
proposed 2-hour estimate for Part III, Item 9 to the current baseline
for an initial operation report on Form ATS because in most instances,
the NMS Stock ATS will be required to check the ``yes'' or ``no'' box
and provide a list of relevant requests in Part III. This would result
in an aggregate initial burden of 10.25 hours above the baseline for
all NMS Stock ATSs to complete Part II, Item 1(b) of Form ATS-N.\1145\
---------------------------------------------------------------------------

    \1144\ See Proposal, supra note 2, at 81098.
    \1145\ Attorney at 0.25 hours x 41 NMS Stock ATSs = 10.25 burden
hours.
---------------------------------------------------------------------------

    Similarly, Part II, Items 1(c) and 1(d) of adopted Form ATS-N
include requests for information that are intended to highlight
disclosures about conflicts of interests and potential information
leakage in Part III, Items 12 and 16, respectively, of adopted Form
ATS-N. Part IV, Item 1(d) of proposed Form ATS-N set forth the proposed
disclosure requirements regarding liquidity providers on the NMS Stock
ATS. This request for information is now set forth in Part III, Item 12
of adopted Form ATS-N. In Part II, Item 1(c) of adopted Form ATS-N, we
have now added the additional disclosure requirements for the NMS Stock
ATS to answer a ``yes'' or ``no'' question and provide a list of any
internal business units that trade on the NMS Stock ATS as liquidity
providers in order to highlight information about potential conflicts
of interest that might be disclosed in Part III, Item 12 of adopted
Form ATS-N. We therefore estimate that, on average, preparing Part II,
Item 1(c) for a Form ATS-N would add 1 hour to the current baseline for
an initial operation report on current Form ATS. This would result in
an aggregate initial burden of 41 hours above the baseline for all NMS
Stock ATSs to complete Part II, Item 1(c) of Form ATS-N.\1146\
---------------------------------------------------------------------------

    \1146\ Compliance Manager at 1.0 hours x 41 NMS Stock ATSs = 41
burden hours.
---------------------------------------------------------------------------

    Part III, Items 1(b)(iii) and 2(b)(iii) of proposed Form ATS-N
would have required the NMS Stock ATS to explain the circumstances
under which subscriber orders or trading interest received by the NMS
Stock ATS may be removed from the NMS Stock ATS and sent to non-ATS
trading centers or other NMS Stock ATSs operated or controlled by the
broker-dealer operator, respectively. These disclosures are now
incorporated into Part III, Item 16 of adopted Form ATS-N. However, we
believe that information about the routing or removal of orders from
the NMS Stock ATS to a trading center operated or controlled by the
broker-dealer operator may include information that market participants
find necessary to evaluate potential conflicts of interest or
information leakage on the NMS Stock ATS, so we have added Part II,
Item 1(d) to Part II of adopted Form ATS-N. Part II, Item 1(d) of
adopted Form ATS-N requires the NMS Stock ATS to answer a ``yes'' or
``no'' question. The narrative associated with this disclosure will be
set forth in Part III, Item 16. We therefore estimate that, on average,
preparing Part II, Item 1(d) for a Form ATS-N would add 0.5 hour to the
current baseline for an initial operation report on current Form ATS.
This would result in an aggregate initial

burden of 20.5 hours above the baseline for all NMS Stock ATSs to
complete Part II, Item 1(d) of Form ATS-N.\1147\
---------------------------------------------------------------------------

    \1147\ Compliance Manager at 0.5 hours x 41 NMS Stock ATSs =
20.5 burden hours.
---------------------------------------------------------------------------

    The requests under Part II, Item 2 of adopted Form ATS-N mirror
those of Part II, Item 2 of adopted Form ATS-N, except that the former
requires disclosures about the trading activity of the broker-dealer
operator and the latter require disclosures about the trading
activities of affiliates.\1148\ As with Item 1, to the extent no
affiliate of the broker-dealer operator can enter or direct the entry
of orders and trading interest into the NMS Stock ATS, the NMS Stock
ATS would be required to check ``no'' under Part II, Item 2(a). In
addition, to the extent that there are no differences between treatment
of affiliates that can enter or direct the entry of orders and trading
interest into the ATS and other subscribers and persons regarding
services offered and provided by the NMS Stock ATS, the NMS Stock ATS
would \ be required to check ``no'' under Part II, Item 2(b).
---------------------------------------------------------------------------

    \1148\ See supra Section V.C.1.
---------------------------------------------------------------------------

    Likewise, as with Part II, Item 1(a) of adopted Form ATS-N, the
disclosure requests in Part II, Item 2(a) of adopted Form ATS-N are
more narrowly tailored than those which were proposed, and the
disclosure requests about trading activities of the broker-dealer
operator are no longer contained in the same questions as those
regarding affiliate trading in adopted Form ATS-N. Most significantly,
we believe that the burden for an NMS Stocks ATS to provide information
about each of its broker-dealer operator's affiliates that trades on
the NMS Stock ATS will be less than it would have been to provide: (i)
A comprehensive list of all non-ATS trading centers and NMS Stock ATSs
operated by affiliates, as was proposed under Part III, Items 1 and 2,
respectively; and (ii) a list of each affiliate that may enter orders
or other trading interest on the NMS Stock ATS, as was proposed under
Part III, Item 5(a). Under their current disclosure requirements
pursuant to Regulation ATS, ATSs must compile a list of subscribers
that were participants on the ATS for its quarterly reports on current
Form ATS-R.\1149\ On the other hand, there is no current requirement
for an ATS to maintain a list of its broker-dealer operator's
affiliates' non-ATS trading centers or NMS Stock ATSs, as was proposed.
To the extent that an NMS Stock ATS must dedicate resources to
determine whether any of its affiliates direct the entry of orders or
trading interest into the ATS through a third-party broker-dealer in
order to be responsive to Part II, Item 2(a) of adopted Form ATS-N, we
believe that burden will also be less than it would have been to
compile--and keep up-to-date--a list of all non-ATS trading centers and
NMS Stock ATSs operated by its affiliates.
---------------------------------------------------------------------------

    \1149\ See Exhibit A of Form ATS-R.
---------------------------------------------------------------------------

    Additionally, the burden to complete Item 2(a) will likely vary
significantly among NMS Stock ATSs because the number of affiliates of
each broker-dealer operator--and the number of those affiliates that
trade on the NMS Stock ATS--may vary significantly among ATSs. However,
even though the wording of the disclosure requests are almost
identical, Part II, Item 2(a) of adopted Form ATS-N will likely impose
a greater burden than that of Part II, Item 1(a) because we believe it
will take an NMS Stock ATS longer to compile the necessary information
about affiliated third-party entities than it will to compile that
information for internal business units of the broker-dealer operator.
Accordingly, we estimate that, on average, preparing adopted Part II,
Item 2(a) would add approximately 6.25 hours to the current baseline
for an initial operation report on current Form ATS. This will result
in an aggregate initial burden of 256.25 hours above the baseline for
all NMS Stock ATSs to complete Part II, Item 2(a) of Form ATS-N.\1150\
---------------------------------------------------------------------------

    \1150\ (Attorney at 5.75 hours + Compliance Manager at 0.5
hours) x 41 NMS Stock ATSs = 256.25 burden hours.
---------------------------------------------------------------------------

    Like Part II, Item 1(b) of adopted Form ATS-N, the disclosure
request in Part II, Item 2(b) will usually require the NMS Stock ATS to
answer ``yes'' or ``no'' and list applicable item numbers in Part III
of adopted Form ATS-N. An NMS Stock ATS must provide a narrative under
Item 2(b) only if there are differences that are not applicable to Part
III. Accordingly, we estimate that Part II, Item 2(b) of adopted Form
ATS-N would add .25 hours out of the proposed 2 hours for Part III,
Item 9 to the current baseline for an initial operation report on Form
ATS because in most instances, the NMS Stock ATS will be required to
check the ``yes'' or ``no'' box and provide a list of relevant requests
in Part III. This would result in an aggregate initial burden of 10.25
hours above the baseline for all NMS Stock ATSs to complete Part II,
Item 1(b) of Form ATS-N.\1151\
---------------------------------------------------------------------------

    \1151\ Attorney at 0.25 hours x 41 NMS Stock ATSs = 10.25 burden
hours.
---------------------------------------------------------------------------

    Furthermore, as is the case with Part II, Item 1 of adopted Form
ATS-N, Part II, Items 2(c) and 2(d) of adopted Form ATS-N includes
requests for information that are intended to highlight potential
conflicts of interests and information leakage that will be disclosed
in Part III, Items 12 and 16, respectively, of adopted Form ATS-N.
Accordingly, similar to Part II, Item 1(c), we estimate that, on
average, preparing Part II, Item 2(c) for a Form ATS-N would add 1 hour
to the current baseline for an initial operation report on current Form
ATS. This would result in an aggregate initial burden of 41 hours above
the baseline for all NMS Stock ATSs to complete Part II, Item 1(c) of
Form ATS-N.\1152\ Similar to Part II, Item 1(d), we estimate that, on
average, preparing Part II, Item 2(d) for a Form ATS-N would add 0.5
hour to the current baseline for an initial operation report on current
Form ATS. This would result in an aggregate initial burden of 20.5
hours above the baseline for all NMS Stock ATSs to complete Part II,
Item 2(d) of Form ATS-N.\1153\
---------------------------------------------------------------------------

    \1152\ (Compliance Manager at 1.0 hours) x 41 NMS Stock ATSs =
41 burden hours.
    \1153\ (Compliance Manager at 0.5 hours) x 41 NMS Stock ATSs =
20.5 burden hours.
---------------------------------------------------------------------------

    As explained above, Part II, Item 3 of adopted Form ATS-N contains
disclosure requests about order interaction with the broker-dealer
operator and its affiliates. To the extent that the NMS Stock ATS does
not allow subscribers to opt out of interacting with the broker-dealer
operator, the NMS Stock ATS must check ``no'' to Part II, Item 3(a).
Similarly, to the extent that the NMS Stock ATS does not allow
subscribers to opt out of interacting with the broker-dealer operator,
the NMS Stock ATS must check ``no'' to Part II, Item 3(b). In addition,
to the extent that the terms and conditions of the opt out processes
are the same for all subscribers, the NMS Stock ATS must check ``no''
to Part II, Item 3(c).
    The requirements under Part II, Items 3(a) and (b) of adopted Form
ATS-N are intended to cover the subject matter originally proposed
under Part III, Item 5(d) of proposed Form ATS-N.\1154\ In the
Proposal, we estimated that all of the items of Part III, Item 5 of
proposed Form ATS-N would add 5 hours to the current baseline for an
initial operation report on current Form ATS.\1155\ While we did not
provide estimates for each individual subpart of Part III, Item 5 of
proposed Form ATS-N, subpart (d) of Part III, Item 5 of proposed Form
ATS-N accounted for approximately 1 hour of the 5 hour estimate. We
believe that the requests under Part II, Items 3(a)

and (b) would still add approximately 1 hour to the baseline for an
initial operation report on current Form ATS. As described in the
Proposal, the broker-dealer operator should already know whether
subscribers can opt out of interacting with the orders and trading
interests of the broker-dealer operator and its affiliates.\1156\
---------------------------------------------------------------------------

    \1154\ Other requirements of Part III, Item 5 of proposed Form
ATS-N are incorporated in adopted Part II, Item 1.
    \1155\ See Proposal, supra note 2, at 81097.
    \1156\ See id. at 81096.
---------------------------------------------------------------------------

    In addition, we have incorporated the disclosure request from Part
III, Item 9 regarding differentiated and preferential treatment into
the disclosure request under Part II, Item 3(c) of adopted Form ATS-N.
We estimate that Item 3(c) would add approximately .5 hours out of the
proposed 2 hours for Part III, Item 9 to the baseline for an initial
operation report on Form ATS. To the extent there are such differences,
the NMS Stock ATS would be required to provide a narrative under Part
II, Item 3(c) regarding services or functionalities of the NMS Stock
ATS in addition to the narratives about manner of operations required
under Part III. Accordingly, we estimate that, on average, preparing
Part II, Item 3 for adopted Form ATS-N would add 1.5 hours to the
baseline for an initial operation report on current Form ATS. This will
result in an aggregate initial burden of 61.5 hours above the baseline
for all NMS Stock ATSs to complete Part II, Item 3 of adopted Form ATS-
N.\1157\
---------------------------------------------------------------------------

    \1157\ (Attorney at 1 hours + Compliance Manager at 0.5 hours) x
41 NMS Stock ATSs = 61.5 burden hours.
---------------------------------------------------------------------------

    As explained above, Part II, Item 4 of adopted Form ATS-N contains
disclosure requests about arrangements with other trading centers. In
the Proposal, we estimated that the requirements of Part III, Item 4 of
proposed Form ATS-N--which set forth the proposed requests regarding
arrangements with unaffiliated trading centers--would add 4 hours to
the current baseline for an initial operation report on current Form
ATS.\1158\ We have revised the proposed disclosure to clarify the scope
of requested information and to add a requirement to disclose any
arrangements with affiliated trading centers.\1159\ As we stated in the
Proposal, depending on the extent to which the broker-dealer operator
or any affiliate of the broker-dealer operator has any formal or
informal arrangement with a trading center to access the services of
the NMS Stock, the hourly burden related to completing Part II, Item 4
would likely vary.\1160\ While the scope of Part III, Item 4 of
proposed Form ATS-N only encompassed arrangements with unaffiliated
trading centers, Part II, Item 4 of adopted Form ATS-N encompasses
arrangements with both unaffiliated and affiliated trading centers.
However, we still believe that the hourly burden for the adopted
disclosure request will vary depending on the extent to which a broker-
dealer operator enters into arrangements with its affiliates and on the
number of the broker-dealer operator's affiliates. We therefore,
estimate that, on average and consistent with the proposed disclosure
requirement, preparing Part II, Item 4 for a Form ATS-N would still add
approximately 4 hours, on average, to the current baseline for an
initial operation report on current Form ATS. This results in an
aggregate initial burden of 164 hours above the current baseline for
all NMS Stock ATSs to complete Part II, Item 4 of adopted Form ATS-
N.\1161\
---------------------------------------------------------------------------

    \1158\ See Proposal, supra note 2, at 81096.
    \1159\ See supra Section V.C.3.
    \1160\ See Proposal, supra note 2, at 81096.
    \1161\ (Compliance Manager at 3 hours + Senior Marketing Manager
at 1 hour) x 164 NMS Stock ATSs = 164 burden hours.
---------------------------------------------------------------------------

    As explained above, Part II, Item 5 of adopted Form ATS-N contains
disclosure requests about other products or services. To the extent
that that the broker-dealer operator or any of its affiliates does not
offer subscribers any products or services for the purpose of effecting
transactions or for submitting, disseminating, or displaying orders and
trading interest in the NMS Stock ATS, the NMS Stock ATS would need to
check ``no'' on Part II, Items 5(a) and 5(b) and Items 5(c) and 5(d),
respectively.
    Part II, Item 5 of adopted Form ATS-N adopts, with modifications,
the disclosure requests in Part III, Item 3 of proposed Form ATS-N,
which would have required an NMS Stock ATS to disclose whether the
broker-dealer operator, or any of its affiliates, offers subscribers
any products or services used in connection with trading on the NMS
Stock ATS (e.g., algorithmic trading products, market data feeds). In
the Proposal, we estimated that it would take an average of 3 hours for
an NMS Stock ATS to disclose this information.\1162\ As noted in the
Proposal, we believe that depending on the extent to which the broker-
dealer operator or any of its affiliates offers subscribers or persons
any products or services for the purpose of effecting transactions or
for submitting, disseminating, or displaying orders and trading
interest in the NMS Stock ATS, the hourly burden related to completing
Part II, Item 5 would likely vary.\1163\ We have modified the proposed
disclosures to require a summary of the terms and conditions for use
and a cross-reference to the applicable Item number(s) in Part III of
adopted Form ATS-N where the use of the product or service is
explained. Only if there is no applicable Item in Part III would the
NMS Stock ATS be required to include a narrative of the use of the
product or service with the ATS under Part II, Item 5. While we have
revised the wording of the adopted disclosure request to reduce the
potential of NMS Stock ATSs unnecessarily disclosing commercially
sensitive information,\1164\ we do not believe that the estimated
burden of the proposed disclosure request should change. It was not our
intent to require NMS Stock ATSs to provide granular details that might
constitute commercially sensitive information in response to the
proposed disclosure requests. We therefore, estimate that, on average
and consistent with the estimate in the Proposal, preparing Part II,
Item 5 for a Form ATS-N would add 3 hour to the current baseline for an
initial operation report on current Form ATS. This results in an
aggregate initial burden of 123 hours above the current baseline for
all NMS Stock ATSs to complete Part II, Item 5 of Form ATS-N.\1165\
---------------------------------------------------------------------------

    \1162\ See Proposal, supra note 2, at 81096.
    \1163\ See id.
    \1164\ See supra Section V.C.4.
    \1165\ (Compliance Manager at 2 hours + Senior Marketing Manager
at 1 hour) x 41 NMS Stock ATSs = 123 burden hours.
---------------------------------------------------------------------------

    As explained above, Part II, Item 6 of adopted Form ATS-N contains
disclosure requests about the activities of service providers. Part II,
Item 6(a) is similar to the request contained in Part III, Item 7 of
proposed Form ATS-N, and Part II, Items 6(b) and (c) of adopted Form
ATS-N are similar to the requests in Part III, Item 8 of proposed Form
ATS-N. In the Proposal, we estimated that, on average, preparing Part
III, Item 7 of proposed Form ATS-N would add 4 hours to the current
baseline for an initial operation report on current Form ATS.\1166\
Part II, Item 6(a) of adopted Form ATS-N asks for information about
shared employees like proposed Part III, Item 7, but does not require
the NMS Stock ATS to disclose the identity and titles of such
employees, as was proposed. In addition, Part II, Item 6(a) requires a
summary of such information, which results in a reduced filing burden
relative to that which was proposed.
---------------------------------------------------------------------------

    \1166\ See Proposal, supra note 2, at 81097.
---------------------------------------------------------------------------

    Part III, Item 8 of proposed Form ATS-N would have required an NMS
Stock ATS to disclose information about whether any operation, service,
or function of the NMS Stock ATS is

performed by any person(s) other than the broker-dealer operator of the
NMS Stock ATS. We had estimated that, on average, preparing Part III,
Item 8 for proposed Form ATS-N would add 3 hours to the current
baseline for an initial operation report on current Form ATS.\1167\
Like Part II, Item 6(a), Part II, Item 6(b) of adopted Form ATS-N only
requires a summary of the role and responsibilities of service
providers to the ATS. As with Part II, Item 6(a) of adopted Form ATS-N,
we estimate that only requiring a summary narrative for the service
provider request in adopted Form ATS-N would result in a reduced filing
burden relative to that which was proposed. Additionally, Item 6(c)
requires the NMS Stock ATS to identify service providers and their
affiliates that use the services of the ATS and list the services used;
Part III, Item 8(c) of proposed Form ATS-N would have required the NMS
Stock ATS to describe the circumstances and means by which service
providers enter orders or trading interest on the ATS. Due to the
reduced filing burden of adopted Part II, Items 6(a)-(c) relative that
which was proposed, we estimate that, on average, Part II, Items 6(a)-
(c) of adopted Form ATS-N would add 4.5 hours to the current baseline
for an initial operating report on Form ATS.
---------------------------------------------------------------------------

    \1167\ See id.
---------------------------------------------------------------------------

    Furthermore, as with Part II, Items 1, 2, and 3 of adopted Form
ATS-N, we have incorporated aspects of Part III, Item 9 of proposed
Form ATS-N regarding differentiated and preferential treatment into
Part II, Item 6(d) of adopted Form ATS-N.\1168\ We estimate that Item
3(c) would add approximately .5 hours out of the proposed 2-hour burden
estimate for Part III, Item 9 to the current baseline for an initial
operation report on current Form ATS because the NMS Stock ATS would be
required to provide a narrative in Item 6(d) in additional to
narratives about the manner of operations under Part III of adopted
Form ATS-N. Accordingly, we estimate that on average, Part II, Item 6
of adopted Form ATS-N will add approximately 5 hours to the burden for
an initial operation report on current Form ATS. This results in an
aggregate initial burden of 205 hours above the current baseline for
all NMS Stock ATSs to complete Part II, Item 6 of Form ATS-N.\1169\
---------------------------------------------------------------------------

    \1168\ Other requirements of Part III, Item 5 of proposed Form
ATS-N are incorporated in adopted Part II, Item 1.
    \1169\ (Attorney at 3 hours + Compliance Manager at 2 hours) x
41 NMS Stock ATSs = 205.
---------------------------------------------------------------------------

    As explained above, Part II, Item 7 of adopted Form ATS-N contains
disclosure requests about the NMS Stock ATS's protection of
confidential subscriber trading information. Part II, Item 7 of adopted
Form ATS-N is similar to Part III, Item 10 of proposed Form ATS-N,
which would have required certain disclosures related to the NMS Stock
ATS's written safeguards and written procedures to protect the
confidential trading information of subscribers pursuant to Rule
301(b)(10) of Regulation ATS.\1170\ As previously discussed, NMS Stock
ATSs will now be required to have and maintain written policies and
procedures under Rule 301(b)(10) of Regulation ATS.\1171\ Part II, Item
7(a) of adopted Form ATS-N requires a description of these policies and
procedures, and the request in Item 7(a) will contain the information
requested in Part III, Items 10(c) and (d) of proposed Form ATS-N. Part
II, Item 7(b)-(c) of adopted Form ATS-N requests the same information
as Part III, Item 10(a) of proposed Form ATS-N. Lastly, Part II, Item
7(d) is similar to Part III, Item 10(b) of proposed Form ATS-N, but the
adopted request only requires a summary of roles and responsibilities,
rather than identification of the positions or titles of all persons
that have access to confidential trading information and a description
of the circumstances of such access as was proposed. We continue to
believe that NMS Stock ATSs should, pursuant to their existing
obligations under Rule 301(b)(10), be aware of all persons that can
access the confidential trading information of subscribers, the
circumstances under which such persons can access that information, and
what information they can access. As such, we believe that this change
to proposed Part II, Item 10(b) of adopted Form ATS-N does not increase
the proposed burden estimate. Rather, because the adopted request in
Part II, Item 7(d) reduces the level of detail from that which was
proposed and the other requests from proposed Part III, Item 10 are
unchanged in adopted Form ATS-N, we estimate that the burden for Part
II, Item 7 of adopted Form ATS-N is less than that which was proposed
by 0.5 hours. In the Proposal, we estimated that Part III, Item 10
would add 2 hours to the baseline for an NMS Stock ATS to complete this
item.\1172\ Accordingly, we estimate that, on average, preparing Part
II, Item 7 for a Form ATS-N would add 1.5 hours above the current
baseline for an initial operation report on current Form ATS. This
would result in an aggregate initial burden of 61.5 hours above the
current baseline for all NMS Stock ATSs to complete Item 7 of Part II
of Form ATS-N.\1173\
---------------------------------------------------------------------------

    \1170\ Specifically, an NMS Stock ATS would be required to: (1)
Describe the means by which a subscriber may consent or withdraw
consent to the disclosure of confidential trading information to any
persons (including the broker-dealer operator and any of its
affiliates); (2) identify the positions or titles of any persons
that have access to confidential trading information, describe the
confidential trading information to which the persons have access,
and describe the circumstances under which the persons can access
confidential trading information; (3) describe the written standards
controlling employees of the NMS Stock ATS that trade for employees'
accounts; and (4) describe the written oversight procedures to
ensure that the safeguards and procedures are implemented and
followed.
    \1171\ See supra Section VI.
    \1172\ See Proposal, supra note 1 at 81098.
    \1173\ (Attorney at 1.0 hour + Compliance Manager at 0.5 hour) x
41 NMS Stock ATSs = 61.5 burden hours.
---------------------------------------------------------------------------

(c) Part III
    Part III, Item 1 of adopted Form ATS-N is based on Part IV, Item
1(c) of proposed Form ATS-N, although certain information from the
proposed item is not required to be disclosed in this item.
Specifically, the requirement to describe any criteria for
distinguishing among types of subscribers, classes of subscribers, or
other persons is being removed from the item because such information
is covered under Part III, Item 13 of adopted Form ATS-N on
``Segmentation; Notice.'' \1174\ Moreover, the required information on
whether the NMS Stock ATS accepts non-broker-dealers as subscribers to
the ATS is being converted to a ``yes'' or ``no'' question and placed
in Part III, Item 2 of adopted Form ATS-N.
---------------------------------------------------------------------------

    \1174\ See supra Section V.D.1.
---------------------------------------------------------------------------

    Part IV, Item 1 of proposed Form ATS-N is, in large part, already
required under current Form ATS.\1175\ We estimated all of Part IV,
Item 1 of proposed Form ATS-N, which includes subparts (a)-(e), would
add 6 hours to the to the current baseline for an initial operation
report on current Form ATS.\1176\ We now estimate that Part III, Item 1
as adopted would add 0.5 hours of burden to the current baseline. The
current requirement of Exhibit A on Form ATS to describe the classes of
subscribers on the ATS should oftentimes have substantial overlap with
the requirement in Part III, Item 1 to select the types of subscribers
from a list of checkboxes and identify any other types of subscribers.
The additional 0.5 hours of burden is meant to account for identifying
and listing any types of

subscribers that are not already captured by the classes of subscribers
identified in Exhibit A of Form ATS. We therefore estimate that, on
average, preparing Part III, Item 1 for a Form ATS-N would add 0.5
hours to the current baseline for an initial operation report on
current Form ATS. This would result in an aggregate initial burden of
20.5 hours above the current baseline for all NMS Stock ATSs to
complete Part III, Item 1 of adopted Form ATS-N.\1177\
---------------------------------------------------------------------------

    \1175\ See Proposal, supra note 2, at 81098-81099.
    \1176\ The requirements related to subparts (a)-(e) of Item 1 of
proposed Form ATS-N have been broken out into separate questions
with the exception of subpart (b) which is being eliminated. We did
not provide estimates for each individual subpart of Part IV, Item 1
of proposed Form ATS-N.
    \1177\ Attorney at 0.5 hours x 41 NMS Stock ATSs = 20.5 burden
hours.
---------------------------------------------------------------------------

    Part III, Item 2 of adopted Form ATS-N requires similar information
to that required under Part IV, Items 1(a) and 1(b) of proposed Form
ATS-N.\1178\ In the Proposal, we estimated all of Part IV, Item 1 of
proposed Form ATS-N, which includes subparts (a)-(e), would add 6 hours
to the to the current baseline for an initial operation report on
current Form ATS.\1179\ However, a number of provisions of Part IV,
Item 1 of proposed Form ATS-N either have been eliminated or moved to
other Items in the adopted Form. Depending on the complexity of the NMS
Stock ATS, the disclosure burden related to Part III, Item 2 of Form
ATS-N would likely vary. For example, an NMS Stock ATS with two sets of
conditions for different persons to satisfy before accessing the ATS
services would likely have less of a burden than an NMS Stock ATS with
five groups of persons that have to satisfy varying conditions.
Accordingly, we estimate that, on average, preparing Part III, Item 2
for a Form ATS-N would add 1.0 hour to the current baseline for an
initial operation report on current Form ATS. This would result in an
aggregate initial burden of 41 hours above the current baseline for all
NMS Stock ATSs to complete Part III, Item 2 of adopted Form ATS-
N.\1180\
---------------------------------------------------------------------------

    \1178\ Adopted Part III, Item 2 removed some of the provisions
in Part IV, Items 1(a) and 1(b) of proposed Form ATS-N and formatted
the item to ''yes'' or ``no'' questions.
    \1179\ See Proposal, supra note 2, at 81098-81099.
    \1180\ (Attorney at 0.7 hours + Compliance Manager at 0.3 hours)
x 41 NMS Stock ATSs = 41 burden hours.
---------------------------------------------------------------------------

    Part III, Item 3 of adopted Form ATS-N requires similar information
to that required under Part IV, Item 1(e) of proposed Form ATS-N, with
certain clarifications to reduce potential confusion with the
application of Rule 301(b)(5) of Regulation ATS. First, Item 3(a) as
adopted asks for a summary description of the conditions for excluding,
in whole or in part, a subscriber from the ATS's services rather than
the more detailed proposed requirement that the NMS Stock ATS describe
the circumstances by which access for a subscriber or other person may
be limited or denied. Second, we are no longer requiring that the NMS
Stock ATS describe its procedures or standards to determine whether to
exclude. Third, we are changing the language in the request to
correspond closely with the definition of ATS in Regulation ATS.\1181\
In the Proposal, we estimated all of Part IV, Item 1 of proposed Form
ATS-N, which includes subparts (a)-(e), would add 6 hours to the
current baseline for an initial operation report on current Form
ATS.\1182\ Although ATSs are not required to establish conditions for
excluding subscribers from using the ATS, as stated in the
Proposal,\1183\ in our experience, ATSs often have rules governing
subscribers' participation on the ATS, and if a subscriber fails to
comply with these rules, the ATS may limit or deny access to the NMS
Stock ATS. The burden associated with the request would likely vary
depending on the complexity of the ATS, whether it has conditions for
excluding subscribers, and whether those conditions differ among
subscribers. For some NMS Stock ATSs, the information required by Part
III, Item 3 would require gathering information on its practices for
excluding subscribers that previously may have been ad hoc decisions in
order to prove the summary of conditions for excluding subscribers
required by the Item. Accordingly, we estimate that, on average,
preparing Part III, Item 3 for a Form ATS-N would add 1 hour to the
current baseline for an initial operation report on current Form ATS.
This would result in an aggregate initial burden of 41 hours above the
current baseline for all NMS Stock ATSs to complete Part III, Item 3 of
adopted Form ATS-N.\1184\
---------------------------------------------------------------------------

    \1181\ See 17 CFR 242.300(a).
    \1182\ See Proposal, supra note 2, at 81098-81099.
    \1183\ See Proposal, supra note 2, at 81063.
    \1184\ (Attorney at 0.7 hours + Compliance Manager at 0.3 hours)
x 41 NMS Stock ATSs = 41 burden hours.
---------------------------------------------------------------------------

    Part III, Item 4 of adopted Form ATS-N is substantially similar to
Part IV, Item 2 of proposed Form ATS-N, except that we are modifying
the example provided in this item by replacing references in the
Proposal to hours when ``pre-opening or after-hours trading occurs''
(emphasis added) with ``hours of operation outside of regular trading
hours'' and the format of the item is being changed to a ``yes'' or
``no'' question. In the Proposal, we estimated that, on average,
preparing Part IV, Item 2 for a Form ATS-N would add 0.5 hours to the
current baseline for an initial operation report on current Form ATS,
and we believe this estimate is still accurate for the adopted
Item.\1185\ The NMS Stock ATS is aware of the hours during which it
operates, including any hours of operation outside of regular trading
hours. Based on the experience of the Commission and its staff
reviewing Form ATS and ATS-R filings, we believe that most ATSs that
currently trade NMS stocks do not provide for after-hours or pre-
opening trading of NMS stock. For NMS Stock ATSs for which the times
when orders or trading interest may be sent to the NMS Stock ATS are
not the same for all subscribers and the broker-dealer operator, the
disclosure burden related to Part IV, Item 2 would likely be greater.
Considering the foregoing, we continue to believe that, on average,
preparing Part III, Item 4 for a Form ATS-N would add 0.5 hours to the
current baseline for an initial operation report on current Form ATS.
This would result in an aggregate initial burden of 20.5 hours above
the current baseline for all NMS Stock ATSs to complete Part III, Item
4 of adopted Form ATS-N.\1186\
---------------------------------------------------------------------------

    \1185\ See Proposal, supra note 2, at 81099.
    \1186\ Compliance Manager at 0.5 hours x 41 NMS Stock ATSs =
20.5 burden hours.
---------------------------------------------------------------------------

    Part III, Item 5 of adopted Form ATS-N is based on Part IV, Item
4(a) of proposed Form ATS-N, although we have made modifications to the
proposed item, and also are incorporating Part III, Item 6 proposed
Form ATS-N. First, we are separating the requests regarding direct and
indirect means of entry for orders and trading interest into the NMS
Stock ATS so that information regarding direct means of entry will be
disclosed in Part III, Item 5(a) of adopted Form ATS-N and information
about other means of entry for orders and trading interest will be
disclosed in adopted Part III, Item 5(c) of adopted Form ATS-N. Also,
the information required by Part III, Item 5(a) on the direct means of
order entry is being revised from the Proposal to be in a ``yes'' or
``no'' format. We are also moving and revising Part III, Item 6 of
proposed Form ATS-N to adopted Part III, Item 5(c) regarding the means
available for entering orders other than entering orders
directly.\1187\ Part III, Item 5(c) of adopted Form ATS-N would not
require a broker-dealer operator to disclose its SOR's routing table or
other information about how the SOR may route orders. Part III, Item
5(b) of adopted Form ATS-N no longer contains the proposed language
``[d]escribe the interaction and coordination,'' which was contained in

Part III, Item 6(b) of proposed Form ATS-N. Rather, Part III, Item 5(b)
requires the NMS Stock ATS to ``identify and explain'' sources of order
flow other than those used for direct entry into the ATS. Furthermore,
the adopted disclosure requirements of Part III, Item 5(c) require the
NMS Stock ATS to ``list and provide a summary description of the terms
and conditions for entering orders or trading interest into the ATS''
through these sources.
---------------------------------------------------------------------------

    \1187\ See supra Section V.D.5.
---------------------------------------------------------------------------

    In the Proposal, we estimated that, on average, preparing Part IV,
Item 4, which includes both subparts (a) (related to order entry) and
(b) (related to co-location) would add 5 hours to the current baseline
for an initial operation report on current Form ATS.\1188\ While we did
not provide estimates for each individual subpart, each subpart of Part
IV, Item 4 of proposed Form ATS-N accounted for half of the 5 hour
estimate (i.e., 2.5 hours each for subparts (a) and (b)). Furthermore,
we estimated that, on average, preparing Part III, Item 6 of proposed
Form ATS-N would add 10 hours to the current baseline for an initial
operation report on current Form ATS. We estimate that the burden hours
for adopted Part III, Item 5 that correspond to the information
required in Part IV, Item 4(a) of proposed Form ATS-N would be
substantially similar (i.e., 2.5 hours). Therefore, we estimate Part
III, Item 4 would add 2.5 hours to the current baseline for an initial
operation report on current Form ATS.\1189\ The disclosure requirements
that were proposed in Part III, Item 6 of proposed Form ATS-N have been
revised and moved to this Item 5(c) as adopted. We expect that the
associated burden would be reduced as we are allowing the NMS Stock ATS
to ``list and provide a summary description of the terms and conditions
for entering orders or trading interest into the ATS,'' as opposed to
the ``interaction and coordination'' language used in the Proposal.
Therefore, we estimate this requirement would add 8.0 hours to the
current baseline for an initial operation report on current Form ATS
\1190\ Thus, in total, we estimate that, on average, preparing Part
III, Item 5 for a Form ATS-N would add 10.5 hours to the current
baseline for an initial operation report on current Form ATS. This
would result in an aggregate initial burden of 430.5 hours above the
current baseline for all NMS Stock ATSs to complete Part III, Item 5 of
adopted Form ATS-N.\1191\
---------------------------------------------------------------------------

    \1188\ See Proposal, supra note 2, at 81101-02.
    \1189\ (Attorney at 0.5 hours + Compliance Manager at 1 hours +
Senior Systems Analyst at 1 hours) x 41 NMS Stock ATSs = 102.5
burden hours.
    \1190\ (Attorney at 3 hours + Compliance Manager at 2 hours +
Senior Systems Analyst at 3 hours) x 41 NMS Stock ATSs = 328 burden
hours.
    \1191\ (Attorney at 3.5 hours + Compliance Manager at 3 hours +
Senior Systems Analyst at 4 hours) x 41 NMS Stock ATSs = 430.5
burden hours.
---------------------------------------------------------------------------

    We have made various revisions to the proposed item in adopted Part
III, Item 6 of adopted Form ATS-N. Part III, Item 6(a) is limiting the
proposed request by allowing for a ``summary'' of the terms and
conditions for co-location and related services. We are also converting
the information required by Part IV, Item 4(b) of proposed Form ATS-N
into a series of ``yes'' or ``no'' questions, with accompanying
explanations as applicable, in Part III, Item 6 of adopted Form ATS-N.
\1192\ We are also separating the requests for disclosure into separate
sub-parts.
---------------------------------------------------------------------------

    \1192\ See supra note 839.
---------------------------------------------------------------------------

    In the Proposal, the we estimated that, on average, preparing Part
IV, Item 4 of proposed Form ATS-N, which included subparts (a)
(connectivity and order entry) and (b) (co-location), would add 5 hours
to the current baseline for an initial operation report on current Form
ATS.\1193\ We intended that each subpart of Part IV, Item 4 accounted
for half of the 5 hour estimate (i.e., 2.5 hours each for subparts (a)
and (b)). We have reduced the burden compared to the proposed item by
allowing for a summary of the terms and conditions related to co-
location and related services in Part III, Item 6(a). On the other
hand, the information required in Part III, Item 6(e) of Form ATS-N was
previously proposed under a different item (Part IV, Item 7 of proposed
Form ATS-N), and therefore, the burden related to responding to this
item is now being added to Item 6(e) as adopted. Therefore, as we have
revised Part III, Item 6 to both reduce the associated burden (by
allowing for a summary) and increase the associated burden (by moving
information required in proposed Part IV, Item 7 of proposed Form ATS-
N), we believe that the burden hours for Part III, Item 6 will remain
the same as the proposed estimate for Part IV, Item 4(b), 2.5 hours
above the current baseline for an initial operation report. This would
result in the aggregate initial burden of 95 hours above the current
baseline for all NMS Stock ATSs to complete Part III, Item 6 of adopted
Form ATS-N.\1194\
---------------------------------------------------------------------------

    \1193\ See Proposal, supra note 2, at 81101-02. The requirements
related to subparts (a) and (b) of Item 4 of proposed Form ATS-N
have been broken out into separate items in the adopted form. Item
4(a) is being adopted as Part III, Item 5, as modified. See supra
notes 1188- 1191 and accompanying text.
    \1194\ (Attorney at 1 hour + Compliance Manager at 1 hour +
Senior Systems Analyst at .5) x 41 NMS Stock ATSs = 102.5 burden
hours.
---------------------------------------------------------------------------

    The disclosure requirements in Part III, Item 7 of adopted Form
ATS-N are substantially the same as those set forth in Part IV, Item
3(a) and(b) of proposed Form ATS-N. ATSs that currently trade NMS
stocks vary in the depth of their disclosures related to order types.
We estimated in the Proposal that, on average, preparing Part IV, Item
3 of proposed Form ATS-N, which also included Items 3(c) and 3(d) that
have been moved to other items in the adopted form,\1195\ would add 6
hours to the current baseline for an initial operation report on
current Form ATS.\1196\ Because the requirements in Part III, Item 7 of
adopted Form ATS-N are substantially the same as the corresponding
requirements set forth in subparts (a) and (b) of Part IV, Item 3 of
proposed Form ATS-N, we estimate that the burden hours will also be
substantially similar. While we did not provide estimates for each
individual subpart of Part IV, Item 3 of proposed Form ATS-N, subparts
(a) and (b) of Part IV, Item 3 of proposed Form ATS-N, accounted for 4
hours (of the 6 burden hours estimated for Part IV, Item 3).
Consequently, we estimate that adopted Part III, Item 7 will also add 4
hours above the current baseline for an initial operation report on
current Form ATS, resulting in the aggregate initial burden of 164
hours above the current baseline for all NMS Stock ATSs to complete
Part III, Item 7 of adopted Form ATS-N.\1197\
---------------------------------------------------------------------------

    \1195\ Item 3(c) of proposed Form ATS-N is being adopted with
modifications as Item 8 of adopted Form ATS-N. Item 3(d) is being
adopted with modifications as Item 9 of adopted Form ATS-N.
    \1196\ See Proposal, supra note 2, at 81099.
    \1197\ (Attorney at 1.0 hours + Compliance Manager at 2 hours +
Senior Systems Analyst at 1) x 41 NMS Stock ATSs = 164 burden hours.
---------------------------------------------------------------------------

    Part III, Item 8 of adopted Form ATS-N is based on Part IV, Item
3(c) of proposed Form ATS-N. In adopted Form ATS-N, Part III, Item 8,
we separated the requests proposed under Item 3(c) into six sub-parts.
However, the requirements have not changed significantly.\1198\
Additionally, we are adding to Part III, Item 8(a) of adopted Form ATS-
N a request for the NMS Stock ATS to provide information about any
maximum order or trading interest size requirements. Because the
requirements in Part III, Item 8 of adopted Form ATS-N are
substantially the same as the corresponding

requirements set forth in Part IV, Item 3 of proposed Form ATS-N, we
estimate that the burden hours in adopted Part III, Item 8 that
correspond to the information required in proposed Part IV, Item 3
would be substantially similar. While we did not provide estimates for
each individual subpart of Part IV, Item 3 of proposed Form ATS-N,
subpart (c) of Part IV, Item 3 of proposed Form ATS-N, would have
accounted for 1 hour (of the 6 burden hours estimated for Part IV, Item
3). Consequently, we estimate that the burden hours in adopted Part
III, Item 8 would add 1 hour to the current baseline for an initial
operation report on current Form ATS, resulting in the aggregate
initial burden of 41 hours above the current baseline for all NMS Stock
ATSs to complete Part III, Item 8 of adopted Form ATS-N.\1199\
---------------------------------------------------------------------------

    \1198\ We are relocating Part IV, Item 3(c) of proposed Form
ATS-N to Part III, Item 8 of adopted Form ATS-N and adopting a
``yes'' or ``no'' format. We are requiring that the NMS Stock ATS
identify and explain any differences in the treatment of subscribers
and the broker-dealer operator, as applicable, in separate sub-items
8(b), 8(d), and 8(f), respectively, which is the same as required in
Part IV, Item 3(c) of the Proposal.
    \1199\ (Attorney at .25 hours + Compliance Manager at .25 hours
+ Senior Systems Analyst at .5) x 41 NMS Stock ATSs = 41burden
hours.
---------------------------------------------------------------------------

    Part III, Item 9 of adopted Form ATS-N is based on Part IV, Item
3(d) of proposed Form ATS-N. We separated Part IV, Item 3(d) of
proposed Form ATS-N into two sub-parts in adopted Part III, Item 9.
However, the requirements have not changed substantially. We are adding
``price or size minimums'' as examples of information that could be
contained in the messages and ``order management system, smart order
router and FIX'' to illustrate the types of mechanisms that could
transmit messages, such as IOIs and conditional orders. Because the
requirements in Part III, Item 9 of adopted Form ATS-N are
substantially the same as the corresponding requirements set forth in
Part IV, Item 3(d) of proposed Form ATS-N, we estimate that the burden
hours in adopted Part III, Item 9 that correspond to the information
required in Part IV, Item 3(d) of proposed Form ATS-N are substantially
similar. While we did not provide estimates for each individual subpart
of Part IV, Item 3 of proposed Form ATS-N, subpart (d) would have
accounted for 1 hour (of the 6 burden hours estimated for Part IV, Item
3). Accordingly, we estimate that the burden hours in adopted Part III,
Item 9 would add 1 hour to the current baseline for an initial
operation report on current Form ATS, resulting in the aggregate
initial burden of 41 hours above the current baseline for all NMS Stock
ATSs to complete Part III, Item 9 of adopted Form ATS-N.\1200\
---------------------------------------------------------------------------

    \1200\ (Attorney at .25 hours + Compliance Manager at 0.25 hours
+ Senior Systems Analyst at 0.5) x 41 NMS Stock ATSs = 41 burden
hours. As noted above, we estimate the burden for Part III, Item 7
of adopted Form ATS-N to be 4 hours above the baseline and the
burden for Part III, Item 8 to be 1 hour above the baseline.
Accordingly, we estimate that the total burden hours above the
baseline for Part III, Items 7, 8, and 9 of adopted Form ATS-N is 6
hours, which is the same as that which was proposed for Part IV,
Item 3.
---------------------------------------------------------------------------

    Part III, Item 10 of adopted Form ATS-N corresponds with Part IV,
Item 9(a) of proposed Form ATS-N. We separated what was proposed in
Part IV, Item 9(a) into five sub-parts in adopted Part III, Item 10. We
are adding to Part III, Item 10(a) of adopted Form ATS-N requirements
regarding ``when'' and how such orders and trading interest are
``priced [and] prioritized'' and ``any order types allowed'' during the
opening and reopening processes.\1201\ Additionally, we are formatting
the requests that parallel the information requested in the Proposal
into three sub-parts (adopted Items 10(a), 10(c) and 10(e)) and adding
a ``yes'' or ``no'' question to Item 10(e) to improve readability and
facilitate comparisons of the information for market participants.
Also, we are adding a new requirement to identify and explain any
differences in the treatment of subscribers and the broker-dealer
operator in the opening and reopening processes, if applicable, in the
form of ``yes'' or ``no'' questions in adopted Part III, Items 10(b)
and 10(d). We estimate that the overall burden hours for adopted Part
III, Item 10 will be slightly more than Part IV, Item 9(a) because
while the adopted subparts that parallel the information requested in
the proposed item (adopted Items 10(a), 10(c) and 10(e)) result in a
similar burden, we expect that the new subparts (adopted Items 10(b)
and 10(d)) will impose an additional burden on some NMS Stock ATSs that
treat subscribers and the broker-dealer operator differently. While we
did not provide an estimate for each individual subpart of Part IV,
Item 9 of proposed Form ATS-N, subpart (a) would have accounted for 1
hour (of the 3 burden hours estimated for Part IV, Item 9).\1202\
Consequently, we estimate that the burden hours in adopted Part III,
Item 10 would add 1.25 hours to the current baseline for an initial
operation report on current Form ATS, resulting in the aggregate
initial burden of 51.25 hours above the current baseline for all NMS
Stock ATSs to complete Part III, Item 9 of adopted Form ATS-N.\1203\
---------------------------------------------------------------------------

    \1201\ The words in quotes in this sentence represent new text
from that proposed in Item 9(a), adopted as Item 10(a). The
requirement to explain when orders and trading interest are priced,
prioritized, matched and executed when the NMS Stock ATS opens or
re-opens for trading is not expected to change significantly the
burden on the ATS given that Form ATS-N requires disclosure of the
hours of operations under Part III, Item 4 of adopted Form ATS-N.
    \1202\ Part IV, Item 9(b) of proposed Form ATS-N is being
adopted with modifications as Item 17 of adopted Form ATS-N. Part
IV, Item 9(c) of proposed Form ATS-N is being adopted with
modifications as Item 18 of adopted Form ATS-N. We are estimating
1.25 burden hours for Item 17 and 1.25 burden hours for Item 18 of
adopted Form ATS-N.
    \1203\ (Attorney at .5 hours + Senior Systems Analyst at .75) x
41 NMS Stock ATSs = 51.25 burden hours.
---------------------------------------------------------------------------

    Part III, Item 11 of adopted Form ATS-N is substantively similar to
Part IV, Item 7 of proposed Form ATS-N, but we are making various
revisions to the Item. We are limiting the request to require NMS Stock
ATSs to provide a summary of the structure of the NMS Stock ATS
marketplace instead of describing the means or facilities used by the
NMS Stock ATS to bring together the orders of multiple buyers and
sellers. In Part III, Item 11(c) of adopted Form ATS-N, we are
combining the requests in the Proposal in Part IV, Items 7(b) (``Order
Interaction Rules'') and 7(c) (``Other Trading Procedures''). Part IV,
Items 7(b) and 7(c) of proposed Form ATS-N were intended to solicit
information about the ATS's established non-discretionary methods that
dictate the terms of trading among the multiple buyers and sellers
entering orders and trading interest. In addition to a trading
facility, non-discretionary methods include rules and procedures. We
are revising the language in adopted Item 11(c) to recognize this
overlap by requiring the NMS Stock ATS to ``explain the established,
non-discretionary rules and procedures of the NMS Stock ATS, including
order interaction rules,'' which requires the same information as the
proposed subparts. As another component of an NMS Stock ATS's non-
discretionary methods, we are moving the trading procedures description
required in proposed Item 7(c) into adopted Item 11(c) and including
the examples of the trading procedures of an NMS Stock ATS (e.g., price
protection mechanisms, shorts sales, locked-cross markets) in adopted
Item 11(c) as well. Finally, we are converting the prompts in Part IV,
Item 7(a), 7(b) and 7(c) of proposed Form ATS-N to identify and explain
any differences among subscribers and persons into ``yes'' or ``no''
questions in Items 11(b) and 11(d) of adopted Form ATS-N.
    Consistent with the estimate in the Proposal, we estimate that, on
average, preparing Part III, Item 11 for a Form ATS-N will add 6 hours
to the current baseline for an initial operation report on current Form
ATS to provide a description of the NMS Stock ATS's trading services.
This will result in an aggregate initial burden of 246 hours

above the current baseline for all NMS Stock ATSs to complete Part III,
Item 11 of adopted Form ATS-N.\1204\
---------------------------------------------------------------------------

    \1204\ Attorney at 1.0 + Compliance Manager at 2.0 + Senior
Systems Analyst at 3.0) x 41 NMS Stock ATSs = 246 burden hours.
---------------------------------------------------------------------------

    The requirements of Part III, Item 12 were proposed as Part IV,
Item 1(d) of proposed Form ATS-N. In the Proposal, we estimated that
the entire Part IV, Item 1 (which also would have addressed
eligibility, terms and conditions of use, types of subscribers, and
liquidity providers) \1205\ would add 6 hours to the current baseline
for an initial operation report on current Form ATS. The requirements
related to eligibility, terms and conditions of use, types of
subscribers, and liquidity providers have been broken out into separate
questions, and Part III, Item 12 of adopted Form ATS-N solely relates
to formal and informal arrangements with subscribers or the broker-
dealer operator to provide orders or trading interest to the NMS Stock
ATS. We believe that Part III, Item 12 of adopted Form ATS-N will add 1
hour to the current baseline for an initial operation report on current
Form ATS. This would result in an aggregate initial burden of 41 hours
above the current baseline for all NMS Stock ATSs to complete Part III,
Item 12 of adopted Form ATS-N.\1206\
---------------------------------------------------------------------------

    \1205\ Proposed Part IV, Item 1(a) (``eligibility'') is being
adopted with modifications as Part III, Item 2 of adopted Form ATS-
N. Proposed Part IV, Item 1(b) (``terms and conditions'') is not
being adopted, except for the request to state whether contractual
agreements are written, which is being adopted with modifications as
Part III, Item 2(d) of adopted Form ATS-N. Proposed Part IV, Item
1(c) (``Types of Subscribers'') is being adopted with modifications
as Part III, Item 1 and Item 2(a) of adopted Form ATS-N. Proposed
Part IV, Item 1(e) (``Limitation and Denial of Services'') is being
adopted with modifications as Part III, Item 3 of adopted Form ATS-
N.
    \1206\ (Attorney at 0.7 hours + Compliance Manager at 0.3 hours)
x 41 NMS Stock ATSs = 41 burden hours.
---------------------------------------------------------------------------

    Part III, Item 13 of adopted Form ATS-N corresponds with Part IV,
Item 5(a) and (b) of proposed Form ATS-N. The requirements of Part III,
Item 13 of adopted Form ATS-N cover the requirements proposed under
Part IV, Items 5(a) and 5(b), although we have modified the proposed
requirements.\1207\ We are adding ``yes'' or ``no'' questions to Part
III, Item 13(a), 13(b), 13(d) and 13(e) of adopted Form ATS-N to
facilitate responses to the items and to facilitate market participants
finding the information.
---------------------------------------------------------------------------

    \1207\ See supra Section V.D.13.
---------------------------------------------------------------------------

    We are also modifying certain components of Part IV, Item 5 of
proposed Form ATS-N. First, we are adding the terms ``classifications,
tiers, or levels'' to adopted Part III, Item 13(a) through (e) in
addition to ``categories'' to describe the groupings that an NMS Stock
ATS may segment subscriber orders. Second, we are providing two
additional examples, order size and duration, of criteria for
segmentation of subscribers' orders and trading interest. Third, we are
providing additional specificity around what ``changing segmented
categories'' means by requiring NMS Stock ATSs to provide a discussion
around overriding a determination of segmented category. Fourth, we are
requiring a description of how segmentation affects order interaction
on Part III, Item 13 of adopted Form ATS-N. Finally, we are requiring
under Part III, Item 13(d) of adopted Form ATS-N that the NMS Stock ATS
describe ``whether and how such designation can be contested.''
    In the Proposal, we estimated that, on average, preparing Part IV,
Item 5 for a Form ATS-N would add 7 hours to the current baseline for
an initial operation report on current Form ATS to provide a detailed
description of how, if at all, the NMS Stock ATS segments order flow,
provides any notice to those trading on the NMS Stock ATS regarding
segmentation, and allows order preferencing. The proposed requirement
regarding order preferencing is broken out into a separate item, Part
III, Item 14 of adopted Form ATS-N, which is described below. We also
are adding a ``yes'' or ``no'' question in adopted Part III, Item 13(b)
regarding identifying orders by a customer of a broker-dealer as a
customer order. We believe the aforementioned minor modifications to
the proposed question will slightly increase the burden for the adopted
item. Therefore, we believe that Part III, Item 13 of adopted Form ATS-
N will add 6 hours to the current baseline for an initial operation
report on current Form ATS. This would result in an aggregate initial
burden of 205 hours above the current baseline for all NMS Stock ATSs
to complete Part III, Item 13 of adopted Form ATS-N.\1208\
---------------------------------------------------------------------------

    \1208\ (Attorney at 2.0 hours + Compliance Manager at 2.25 hours
+ Senior Systems Analyst at 1.75 hours) x 41 NMS Stock ATSs = 205
burden hours.
---------------------------------------------------------------------------

    Part III, Item 14(a) is substantially similar to Part IV, Item 5(c)
of proposed Form ATS-N. However, we have added a requirement in Item
14(b), that if counter-party selection functionality is not the same
for all subscribers and the broker-dealer operator, that the NMS Stock
ATS identify and explain any differences. The burden associated with
this change is likely to vary among NMS Stock ATS depending on their
complexity and the extent to which they treat all subscribers and the
broker-dealer operator the same or differently. We estimated that, on
average, preparing all of Part IV, Item 5 (including subparts (a), (b),
and (c)) for a Form ATS-N would add 7 hours to the current baseline for
an initial operation report on current Form ATS to provide a detailed
description of how, if at all, the NMS Stock ATS segments order flow,
provides any notice to those trading on the NMS Stock ATS regarding
segmentation, and allows counter-party selection.\1209\ We understand
that most, but not all, ATSs that currently trade NMS stocks allow
subscribers to enter some type of counter-party selection criteria.
These ATSs vary in the depth of their description as to how they allow
counter-party selection. We believe that Part III, Item 14 of adopted
Form ATS-N, which solely relates to counter-party selection, will add 2
hours to the current baseline for an initial Form ATS. This will result
in an aggregate initial burden of 82 hours above the current baseline
for all NMS Stock ATSs to complete Part III, Item 14 of adopted Form
ATS-N.\1210\
---------------------------------------------------------------------------

    \1209\ See Proposal, supra note 2, at 81100. Proposed Part IV,
Items 5(a) and 5(b) are being adopted with modifications as Part
III, Item 13 of adopted Form ATS-N. We are estimating 5 burden hours
for Part III, Item 13 of adopted Form ATS-N.
    \1210\ (Attorney at 0.5 hours + Compliance Manager at 0.75 hours
+ Senior Systems Analyst at 0.75 hours) x 41 NMS Stock ATSs = 82
burden hours.
---------------------------------------------------------------------------

    Part III, Item 15 is modified from a similar requirement of Part
IV, Item 6 of proposed Form ATS-N, which asked about order display and
the subscribers and persons to which orders and trading interest are
displayed or otherwise made known. We are changing the language in this
item from ``order information or other trading interest'' to
``subscriber orders and trading interest.'' We are also revising the
proposed requests to make clear that it only applies to the display of
the NMS Stock ATS's subscriber orders and trading interest as opposed
to non-ATS orders and trading interest handled or otherwise displayed
to the broker-dealer operator. Accordingly, the disclosure of non-ATS
orders by affiliates of the NMS Stock ATS and others external to the
ATS of non-ATS orders would not have to be disclosed. However, if for
example, an affiliate of the NMS Stock ATS is displaying an order that
is simultaneously bound for or resting in the NMS Stock ATS, then Item
15 would apply. In addition, we have revised the request so that Part
III, Item 15(b) of adopted Form ATS-N makes clear that the request does
not

require the NMS Stock ATS to identify employees of the ATS who are
operating the system. Finally, we are adding a ``yes'' or ``no''
questions in Part III, Item 15(a) that asks if the NMS Stock ATS is an
ECN as defined in Rule 600(a)(23) of Regulation NMS.
    Depending on the variety of trading interest that shares some
trading information outside of the NMS Stock ATS and the complexity of
such information sharing, the disclosure burden in responding to Part
III, Item 15 would likely vary among NMS Stock ATSs. In the Proposal,
we estimated that, on average, preparing Part IV, Item 6 of proposed
Form ATS-N would add 5 hours to the current baseline for an initial
operation report on current Form ATS, depending on such factors as
described above. Although we are revising the item text to provide more
specificity so NMS Stock ATSs better understand the requirements and
scope of the request and provide sufficient information to market
participants in Part III, Item 15 of adopted Form ATS-N, we are also
simplifying responses to the item by no longer requiring NMS Stock ATSs
to identify the subscriber or person to whom order and trading interest
is displayed and instead requiring disclosure of the types of market
participants that receive the information. Thus, we believe these
changes would, in total, provide no additional burden from proposed
Form ATS-N. We therefore believe that preparing Part III, Item 15 of
adopted Form ATS-N will add 5 hours to the current baseline for an
initial Form ATS. This will result in an aggregate initial burden of
205 hours above the current baseline for all NMS Stock ATSs to complete
Part III, Item 15 of adopted Form ATS-N.\1211\
---------------------------------------------------------------------------

    \1211\ (Attorney at 1 hour + Compliance Manager at 2 hours +
Senior Systems Analyst at 2 hours) x 41 NMS Stock ATSs = 205 burden
hours.
---------------------------------------------------------------------------

    Part III, Item 16(a) relates to disclosures surrounding orders and
trading interest in the NMS Stock ATS being routed to a destination
outside the ATS. We understand, based on disclosures in Form ATS
submissions, that some ATSs that currently trade NMS stocks do not
route orders out of the ATS. Consequently, the disclosure burden
related to Part III, Item 16 of adopted Form ATS-N will likely vary
among NMS Stock ATSs depending on whether they route orders at all. In
the Proposal, we estimated that, on average, preparing Part IV, Item 10
for proposed Form ATS-N would add 6 hours to the current baseline for
an initial operation report on current Form ATS, depending on such
factors as described above. We, however, are substantially simplifying
the item as adopted by converting subpart (a) into a ``yes'' or ``no''
question that no longer requires a description of the circumstances
under which orders are routed, and also removes the requirement to
describe the means by which routing is performed and the requirement to
describe any differences among subscribers and persons. We therefore
estimate that Part III, Item 16 of adopted Form ATS-N will add 2 hours
to the current baseline for an initial operation report, depending on
the extent to which the ATS routes orders and trading interest. This
will result in an aggregate initial burden of 82 hours above the
current baseline for all NMS Stock ATSs to complete Part III, Item 16
of adopted Form ATS-N.\1212\
---------------------------------------------------------------------------

    \1212\ (Attorney at 0.5 hours + Compliance Manager at 0.5 hours
+ Senior Systems Analyst at 1 hours) x 41 NMS Stock ATSs = 82 burden
hours.
---------------------------------------------------------------------------

    The requirements of Part III, Item 17(a) are similar to those
proposed in Part IV, Item 9(b) of the proposed Form ATS-N.\1213\ We
estimated that, on average, preparing all of Part IV, Item 9, including
subparts (a)-(c), for proposed Form ATS-N would have added 3 hours to
the current baseline for an initial operation report on current Form
ATS to describe its opening, reopening, or closing processes, and
after-hours trading procedures.\1214\ While we did not provide an
estimate for each individual subpart of Part IV, Item 9 of proposed
Form ATS-N, subpart (b) would have accounted for 1 hour (of the 3
burden hours estimated for Part IV, Item 9). As we stated in the
Proposal, current Form ATS, Exhibit F requires an ATS to describe its
closing processes. Therefore, we continue to believe that Part III,
Item 17 of adopted Form ATS-N will not impose a significant additional
requirement. We are newly requiring, as Part III, Item 17(b) of adopted
Form ATS-N, that if the treatment of orders and trading interest during
the close is not the same for all subscribers and the broker-dealer
operator, the NMS Stock ATS identify and explain such differences. The
burden associated with this change is likely to vary among NMS Stock
ATS depending on their complexity and the extent to which they treat
all subscribers and the broker-dealer operator the same or differently.
Therefore, we believe that it would add 1.25 hours to the current
baseline for an initial operation report on Form ATS-N. This would
result in an aggregate initial burden of 51.25 hours above the current
baseline for all NMS Stock ATSs to complete Part III, Item 17 of
adopted Form ATS-N.\1215\
---------------------------------------------------------------------------

    \1213\ Although we are revising the item text to provide more
specificity so NMS Stock ATSs better understand the requirements and
scope of the request and provide sufficient information to market
participants, we believe these revisions should not change the
burden of the required disclosure.
    \1214\ Part IV, Items 9(a) and 9(c) of proposed Form ATS-N are
being adopted with modifications as Part III, Items 10 and 18 of
adopted Form ATS-N, respectively. We are estimating 1.25 burden
hours for Item 10 and 1.25 burden hours for Item 18 of adopted Form
ATS-N.
    \1215\ (Compliance Manager at .75 hours + Senior Systems Analyst
at 0.50 hour) x 41 NMS Stock ATSs = 51.25 burden hours.
---------------------------------------------------------------------------

    Subparts (a) and (b) of Part III, Item 18 of adopted Form ATS-N are
substantially similar to Part IV, Item 9(c) of proposed Form ATS-N. We
estimated that, on average, preparing all of Part IV, Item 9 for a
proposed Form ATS-N would add 3 hours to the current baseline for an
initial operation report on current Form ATS to describe its opening,
reopening, or closing processes, and after-hours trading
procedures.\1216\ While we did not provide an estimate for each
individual subpart of Part IV, Item 9 of proposed Form ATS-N, subpart
(c) would have accounted for 1 hour (of the 3 burden hours estimated
for Part IV, Item 9). In the Proposal, we stated that Exhibit F of
current Form ATS requires an ATS to describe after-hours trading
procedures. These procedures may vary widely across different ATSs.
Therefore, we continue to estimate that the additional requirements
will not impose a significant additional burden above the current
baseline for an initial operation report on current Form ATS. Unlike
Part IV, Item 9(c) of proposed Form ATS-N, an ATS that has trading
outside of regular hours that follows the same procedures as trading
within regular trading hours would need to check the boxes to indicate
it conducts trading outside of its regular trading hours and to
indicate that its trading procedures do not differ between regular and
outside of regular trading hours; it would not need to describe any
after-hours trading procedures. We, however, also added the requirement
that the NMS Stock ATS describe, as applicable, the treatment of orders
and trading interest outside of regular trading hours if it is not the
same for all subscribers and broker-dealer operator as Item 18(c) of
adopted Form ATS-N. In light of these changes, we believe that Part
III, Item 18 of adopted Form ATS-N would add 1.25 hours to the current
baseline for an initial operation report on Form ATS-N. This would
result in an

aggregate initial burden of 51.25 hours above the current baseline for
all NMS Stock ATSs to complete Part III, Item 18 of adopted Form ATS-
N.\1217\
---------------------------------------------------------------------------

    \1216\ Part IV, Items 9(a) and 9(b) of proposed Form ATS-N are
being adopted with modifications as Part III, Items 10 and 17 of
adopted Form ATS-N, respectively. We are estimating 1.25 burden
hours for Item 10 and 1.25 burden hours for Item 17 of adopted Form
ATS-N.
    \1217\ (Compliance Manager at .75 hours + Senior Systems Analyst
at 0.50 hour) x 41 NMS Stock ATSs = 51.25 burden hours.
---------------------------------------------------------------------------

    Part III, Item 19 of adopted Form ATS-N is similar to Part IV, Item
12 of proposed Form ATS-N. In the Proposal, we estimated that, on
average, preparing Part IV, Item 12 for a Form ATS-N would add 5 hours
to the current baseline for an initial operation report on current Form
ATS to describe the NMS Stock ATS's fee structure and any differences
among subscribers relating to fees, rebates, or other charges. As
discussed in the Proposal,\1218\ current Form ATS does not require an
ATS to disclose and explain its fee structure, and few, if any, do so
in their current Form ATS filings. We recognize that, like national
securities exchanges, NMS Stock ATSs may adopt a variety of fee
structures that may include rebates, incentives for subscribers to
bring liquidity to the NMS Stock ATS, more traditional transaction-
based fee structures, and other fees such as a monthly subscriber
access fee. Depending on the complexity and variety of an NMS Stock
ATS's fee structure and the extent to which these fees are not the same
for all subscribers, the disclosure burden related to Part III, Item 19
of adopted Form ATS-N will likely vary.
---------------------------------------------------------------------------

    \1218\ See id. at 81103.
---------------------------------------------------------------------------

    However, we are requiring additional specificity related to the
description of fees of the NMS Stock ATS that are based on or bundled
with the use of non-ATS services or products offered by the broker-
dealer operator or its affiliates. These were not previously explicitly
specified by Part IV, Item 12 of proposed Form ATS-N, and the adopted
item will likely require additional burden hours for NMS Stock ATSs
that are operated by multi-service broker-dealers that bundle their ATS
fees with other non-ATS services or products. In contrast, we are
narrowing the request for NMS Stock ATSs to describe any differences in
fees or rebates charged to different ``subscribers,'' and instead
asking for NMS Stock ATSs to disclose any differentiation between fees
and/or rebates charged among ``types'' of subscribers, which should
reduce the burden of responding as differences among individual
subscribers need not be explained. Accordingly, we estimate that, on
average, preparing Part III, Item 19 of Form ATS-N would add 6 hours to
the current baseline for an initial operation report on current Form
ATS. This will result in an aggregate initial burden of 246 hours above
the current baseline for all NMS Stock ATSs to complete Part III, Item
19 of Form ATS-N.\1219\
---------------------------------------------------------------------------

    \1219\ (Attorney at 2 hour + Compliance Manager at 3 hours +
Senior Systems Analyst at 1 hour) x 41 NMS Stock ATSs = 246 burden
hours.
---------------------------------------------------------------------------

    Part III, Item 20 of adopted Form ATS-N is substantially similar to
Part IV, Item 8 of proposed Form ATS-N with certain modifications. We
are renaming the item ``Suspension of Trading,'' converting the prompt
in Part IV, Item 8(a) of proposed Form ATS-N to identify and explain
any differences among subscribers and persons into a ``yes'' or ``no''
question in Part III, Item 20(b) of adopted Form ATS-N, revising the
language to refer to procedures for stopping trading, and clarifying
that suspensions of trading in an NMS stock are responsive. In the
Proposal, we estimated that, on average, preparing Part IV, Item 8 for
a Form ATS-N would add 2.5 hours to the current baseline for an initial
operation report on current Form ATS to provide a detailed description
of the NMS Stock ATS's procedures for system disruptions, malfunctions,
or other suspensions.
    We believe that NMS Stock ATSs should be able to provide the
disclosures in Part III, Item 20 of adopted Form ATS-N as they should
already be aware of how the ATS operates, handles system disruptions,
malfunctions or other suspensions based on the information required in
Exhibits G and F of current Form ATS. We recognize, however, that Part
III, Item 20 is significantly more specific and detailed in its
disclosure requirements than current Form ATS.
    Accordingly, we estimate that respondents would incur an additional
burden above the current baseline when preparing the disclosures
required under Part III, Item 20 of Form ATS-N, consistent with the
estimated burden for proposed Item IV, Part 8. We estimate that, on
average, preparing Part III, Item 20 for a Form ATS-N would add 2.5
hours to the current baseline for an initial operation report on
current Form ATS to provide a detailed description of the NMS Stock
ATS's procedures for suspending or stopping trading on the NMS Stock
ATS. This would result in an aggregate initial burden of 102.5 hours
above the current baseline for all NMS Stock ATSs to complete Part III,
Item 20 of proposed Form ATS-N.\1220\
---------------------------------------------------------------------------

    \1220\ (Attorney at 1 hour + Compliance Manager at .5 hours +
Senior Systems Analyst at 1 hour) x 41 NMS Stock ATSs = 102.5 burden
hours.
---------------------------------------------------------------------------

    Part III, Item 21 is substantially the same as Part IV, Item 13(a)
of proposed Form ATS-N with certain modifications. We are limiting the
description of any arrangements for reporting transactions on the NMS
Stock ATS to only ``material arrangements'' in the adopted item, and
converting the prompt in the proposed Part IV, Item 13(a) to describe
any differences among subscribers and persons into a ``yes'' or ``no''
question in Part III, Item 21(b) of adopted Form ATS-N.
    Part III, Item 22 is substantially the same as Part IV, Item 13(b)
of proposed Form ATS-N with certain modifications. We are limiting the
description of any arrangements to facilitate the clearance and
settlement of transactions on the NMS Stock ATS to only ``material
arrangements'' in the adopted item, and converting the prompt in Part
IV, Item 13(b) of proposed Form ATS-N to describe any differences among
subscribers and persons into a ``yes'' or ``no'' question in Part III,
Item 22(b) of adopted Form ATS-N. In addition, we are removing the
phrase ``undertaken by the NMS Stock ATS'' from the proposed
requirement to describe any procedures or arrangements by the NMS Stock
ATS to facilitate clearance and settlement on the ATS.
    In the Proposal, we estimated that, on average, preparing Part IV,
Item 13 for a Form ATS-N would add 0.5 hours to the current baseline
for an initial operation report on current Form ATS.\1221\ We believe
that preparing Part III, Items 21 and 22 for a Form ATS-N will impose a
lesser burden as compared to the proposed items because the adopted
items only require that ``material'' arrangements related to reporting
and clearance and settlement of transactions be disclosed (as opposed
to ``any arrangements'' in the Proposal). Therefore, we estimate that,
on average, preparing Part III, Item 21 and 22 for a Form ATS-N would
add 0.5 hours to the current baseline for an initial operation report
on current Form ATS to provide a more detailed description of the NMS
Stock ATS's trade reporting, clearance, and settlement arrangements or
procedures. This will result in an aggregate initial burden of 20.5
hours above the current baseline for all NMS Stock ATSs to complete
Part III, Items 21 and 22 of adopted Form ATS-N.\1222\
---------------------------------------------------------------------------

    \1221\ See Proposal, supra note 2, at 81103.
    \1222\ Compliance Manager at 0.50 hours x 41 NMS Stock ATSs =
20.5 burden hours.
---------------------------------------------------------------------------

    Part III, Item 23 of adopted Form ATS-N is substantially the same
as Part IV, Item 11 of proposed Form ATS-N with certain modifications.
We are revising the request to make clear that an NMS Stock ATS would
not be

expected to provide information about the market data that the broker-
dealer operator uses to route orders and trading interest from the NMS
Stock ATS to away destinations by removing from the item the prompt to
describe how the ATS uses market data to determine routing
destinations. As discussed above in Section V.D.23, we believe,
however, that it would be responsive to Part III, Item 23 for the NMS
Stock ATS to provide information about the ATS's use of market data to
determine when resting orders and trading interest will be removed from
inside the NMS Stock ATS as such orders and trading interest reside
inside the ATS. Accordingly, the NMS Stock ATS should disclose, in
response to this request, the market data that is used to remove
resting orders and trading from the NMS Stock ATS. Because the adopted
Item is removing the requirement from the proposed Item for information
related to using market data to determine routing destinations, and the
adopted Item is adding a requirement to explain how market data is used
to determine when resting orders will be removed from the NMS Stock
ATS, we believe that the resulting overall burden for the adopted Item
will remain the same. In addition, we are adding a requirement that if
the use of market data is not the same for all subscribers and the
broker-dealer operator, that the NMS Stock ATS must identify and
explain any differences.
    We believe that the disclosures under Part III, Item 23 will not
impose any significant additional burden on NMS Stock ATSs, which
should already be aware of the market data that they use and the manner
in which they use it. The information requested in Part III, Item 23 of
adopted Form ATS-N is similar to that required by Part IV, Item 11 of
proposed Form ATS-N. In the Proposal, we estimated that, on average,
preparing Part IV, Item 11 for a Form ATS-N would add 4 hours to the
current baseline for an initial operation report on current Form ATS to
describe the sources of market data and the manner in which the NMS
Stock ATS uses market data.\1223\ However, unlike Part IV, Item 11 of
proposed Form ATS-N, Part III, Item 23 also requests information
regarding differences in treatment between subscribers and the broker-
dealer operator. We believe that this requirement would add to the
total additional burden; however, we believe that such information
should be readily available to the NMS Stock ATS. Therefore, we believe
that preparing Part IV, Item 11 for a Form ATS-N will add 5 hours to
the current baseline for an initial operation report on current Form
ATS. This would result in an aggregate initial burden of 205 hours
above the current baseline for all NMS Stock ATSs to complete Part IV,
Item 11 of adopted Form ATS-N.\1224\
---------------------------------------------------------------------------

    \1223\ See Proposal, supra note 2, at 81103.
    \1224\ (Compliance Manager at 2.5 hours + Senior Systems Analyst
at 2.5 hours) x 41 NMS Stock ATSs = 205 burden hours.
---------------------------------------------------------------------------

    Part III, Items 24 and 25 of adopted Form ATS-N correspond with of
Part IV, Item 14 and 15 of proposed Form ATS-N. Current Form ATS does
not require an ATS to disclose the information that would be required
under Part III, Items 24 and 25 of Form ATS-N. However, based on the
experience of the Commission and its staff, we continue to believe that
no ATSs currently executed 5% or more of the average daily volume in an
NMS Stock as reported by an effective transaction reporting plan for
four of the preceding six calendar months, and we believe that most--if
not all--ATSs that currently trade NMS stocks already have procedures
in place to prevent that threshold from being crossed on the ATS's
system. Historically, ATSs have crossed these thresholds very rarely,
with at most three ATSs that trade NMS stocks crossing either of the
thresholds in any given year.
    If, however, an NMS Stock ATS were to cross these 5% thresholds, a
disclosure burden related to amending a Form ATS-N to complete Part
III, Items 24 and 25 of Form ATS-N may result. Because Items 24 and 25
of Part III are tied to existing obligations that arise pursuant to
Rule 301(b)(3) and Rule 301(b)(5) of Regulation ATS, respectively, we
believe that NMS Stock ATSs should already be generally aware of the
procedures they would follow pursuant to those rules, which should
reduce the burden associated with the disclosures that would be
required under Items 24 and 25. An NMS Stock ATS would only have to
respond to Part III, Items 24 or 25 of a Form ATS-N if the NMS Stock
ATS previously operated as an ATS, triggered the applicable 5%
thresholds, and was subject to Rules 301(b)(3) and 301(b)(5). Further,
NMS Stock ATSs would be less likely to have to complete Item 24 as
compared to Item 25 because Item 24 requires as an additional
precondition that the NMS Stock ATS displays orders in an NMS stock to
more than one person in the system (other than employees of the NMS
Stock ATS). For new NMS Stock ATSs (i.e., NMS Stock ATSs that did not
previously operate as an ATS), the NMS Stock ATS would not have been in
operation for at least four months to trigger the applicable
thresholds, meaning that such NMS Stock ATSs would only be required to
complete Item 24 or 25 (or both) in a Form ATS-N Amendment. In the
Proposal, we estimated that completion of Part IV, Item 14 or 15 in a
Form ATS-N amendment (or in a Form ATS-N in the case of an NMS Stock
ATS that previously operated as an ATS), would be 5 hours per item. We
believe that the requirements in Part III, Items 24 and 25 remain
substantially unchanged, and that the burden should remain the same.
Therefore, we continue to believe that completion of Part III, Item 24
or 25 would be 5 hours per item.
    Triggering the 5% threshold, a precondition necessary to require
completion of Part III, Items 24 and 25 of Form ATS-N, currently
occurs, and we estimate would continue to occur, very infrequently.
Based on the review of Form ATS and Form ATS-R disclosures by the
Commission and its staff, we estimate that 1 NMS Stock ATS would have
to complete Item 24, and 2 NMS Stock ATSs would have to complete Item
25 in any given year. Accordingly, we estimate that the disclosures
that would be required under Part III, Items 24 and 25 of adopted Form
ATS-N would result in an aggregate initial burden of 15 hours above the
current baseline.\1225\
---------------------------------------------------------------------------

    \1225\ (Attorney at 2 hours + Compliance Manager at 1 hour +
Senior Systems Analyst at 2 hours) x 3 NMS Stock ATSs = 15 burden
hours.
---------------------------------------------------------------------------

    Part III, Item 26 of adopted Form ATS-N corresponds with of Part
IV, Item 16 of proposed Form ATS-N. An NMS Stock ATS will not be
required to develop or publish any new statistics for purposes of
making the required disclosures under Item 26. It is only be required
to make the disclosures for statistics it already otherwise publishes
or provides in the course of its operations. Thus, NMS Stock ATSs that
do not publish or otherwise provide aggregate platform-wide market
quality statistics, other than those currently required under Rule 605
of Regulation NMS, would not incur any additional burden due to the
adopted disclosure request under Item 26. For NMS Stock ATSs that do
publish or provide such statistics, Item 26 imposes an additional
burden above the baseline because current Form ATS does not require the
disclosure of market quality statistics. In the Proposal, we estimated
that preparing Part IV, Item 16 of proposed Form ATS-N would add 7
hours to the current baseline for an initial operation report on
current Form ATS.\1226\ Part III, Item 26 of adopted Form ATS-N is
substantially the same as Part IV, Item

16 of proposed Form ATS-N. Therefore, as adopted, we still estimate
that preparing Part III, Item 26 will add 7 hours to the current
baseline for an initial operation report on current Form ATS. This will
result in an aggregate initial burden of 287 hours above the current
baseline for all NMS Stock ATSs to complete Part III, Item 26 of
adopted Form ATS-N.\1227\
---------------------------------------------------------------------------

    \1226\ See Proposal, supra note 2, at 81104.
    \1227\ (Attorney at 1 hour + Compliance Manager at 1 hour +
Senior Systems Analyst at 5 hours) x 41 NMS Stock ATSs = 287 burden
hours. Unlike the proposed requirement under Part IV, Item 16, the
adopted requirement will allow the NMS Stock ATS to make
certifications in lieu of filing Exhibits 4 and 5, which we believe
will significantly reduce the burden imposed by this request for
information.
---------------------------------------------------------------------------

(ii) Estimated Burden Above the Current Baseline for an Initial Form
ATS-N, Form ATS-N Amendment, and Notice of Cessation on Form ATS-N
(a) Initial Form ATS-N
    Based on the above analysis, we estimate that an initial Form ATS-N
will, on average, require approximately 107.4 burden hours above the
baseline for an initial operation report on current Form ATS. This
results in an estimated 127.4 hours in total, including the current
baseline.\1228\ ATSs that trade NMS stocks vary in terms of their
structure, the manner in which they operate, and the depth and extent
of their disclosures on Form ATS. Consequently, we believe that the
estimated hour burden regarding Form ATS-N will likely vary among NMS
Stock ATSs, depending on such factors as the extent of their current
disclosures on Form ATS, the complexity and structure of their system,
and the extent of their other broker-dealer or affiliate activities.
---------------------------------------------------------------------------

    \1228\ (Current Baseline at 20 hours) + (Part I at 0.5 hour) +
(Part II at an average of 29 hours) + (Part III at an average of
77.5 hours) + (Access to EDGAR at 0.15 hours, see infra Section
IX.D.2.b.iv) = 127.4 burden hours. The aggregate totals by
professional, including the baseline, are estimated to be
approximately 54.1 hours for an Attorney, .5 hours for a Chief
Compliance Manager, 33.9 hours for a Compliance Manager, 30.25 hours
for a Senior Systems Analyst, 1 hour for a Senior Marketing Manager,
and 7.65 hours for a Compliance Clerk. This estimated burden for a
Form ATS-N includes the hour burden associated with completing Part
III, Items 24 and 25 of proposed Form ATS-N. We believe that the
majority of NMS Stock ATSs would not be required to complete those
items of the proposed form.
---------------------------------------------------------------------------

(b) Form ATS-N Amendments
    As previously noted, we estimate that ATSs that trade NMS stocks
submit 2 amendments on Form ATS, on average, each year.\1229\ In the
Proposal we estimated that the 46 respondents would file 3 Form ATS-N
amendments each year, for an estimated total of 138 Form ATS-N
amendments.\1230\
---------------------------------------------------------------------------

    \1229\ See supra note 1132 and accompanying text. During the
fiscal year of 2017, we received 85 amendments from ATSs that trade
NMS stocks, of which there were approximately 38 at any given time
during 2017. Some ATSs that trade NMS stocks filed as many as 7
amendments while others did not file any amendments in 2017.
    \1230\ See Proposal, supra note 2, at 81105.
---------------------------------------------------------------------------

    We currently estimate that the hourly burden related to an
amendment to Form ATS is 6 hours.\1231\ In the Proposal, we estimated
that the average hourly burden above this current baseline of 6 hours
for each Form ATS-N amendment would be 3 hours--for a total of 9
hours--to accommodate the more voluminous and detailed disclosures
required by Form ATS-N as compared to Form ATS.\1232\
---------------------------------------------------------------------------

    \1231\ See supra note 1133 and accompanying text.
    \1232\ Attorney at 1 hour + Compliance Manager at 2 hours = 3
burden hours above the baseline.
---------------------------------------------------------------------------

    Rule 304(a)(2) of Regulation ATS will contain the same three
general categories of required amendments for Form ATS-N as Rule
301(b)(2) of Regulation ATS currently requires for current Form ATS;
\1233\ in addition, Form ATS-N requires two additional types of
amendments--order display and fair access amendments. However, due to
the greater detail and number of disclosures required by Form ATS-N, we
believe that respondents will likely file more amendments to Form ATS-N
than NMS Stock ATSs currently do for Form ATS. For example, adopted
Form ATS-N requests information about the ATS-related activities of the
broker-dealer operator and its affiliates in Part III of Form ATS-N,
and these requests are not contained in current Form ATS. To the extent
information provided in response to these requests changes, an NMS
Stock ATS must file a Form ATS-N amendment. We are mitigating some of
the additional burden by requiring that NMS Stock ATSs file correcting
amendments only to correct ``material'' information that was inaccurate
or incomplete when filed.\1234\ Current Form ATS requires ATSs to
promptly file amendments upon discovery that any information was
inaccurate when filed. As adopted, filers instead would correct any
immaterial information when they file updating amendments, which could
potentially reduce the frequency with which NMS Stock ATSs would need
to file amendments.
---------------------------------------------------------------------------

    \1233\ See 17 CFR 242.301(b)(2). See also supra Section IV.B.1.
    \1234\ See supra note 498 and accompanying text.
---------------------------------------------------------------------------

    With respect to Form ATS-N amendments, one commenter expresses
concern that due to the breadth of Form ATS-N disclosures, the
estimated amount of time and resources required to keep Form ATS-N
``evergreen'' is ``daunting,'' and asserts that the Commission did not
fully consider in the Proposal the amount of time and resources that
would be required to keep Form ATS-N current.\1235\ We fully considered
the burden for each question on the Form ATS-N by indicating the
estimated burden hour for each item. After consideration of comments,
we made changes to adopted Form ATS-N, which we believe will alleviate
some of the potential burdens of Form ATS-N, including, among other
things, requiring correcting amendments only for ``material''
information,\1236\ narrowing the scope of the required disclosures
related to affiliates that can enter or direct the entry of orders and
trading interest into the ATS,\1237\ and eliminating the proposed
requirement to attach a copy of any materials currently provided to
subscribers or other persons related to the operations of the NMS Stock
ATS or the disclosures on Form ATS-N.\1238\ However, as with amendments
to Form ATS, the burden on NMS Stock ATSs associated with updating Form
ATS-N to reflect current ATS functionality will vary depending on the
frequency and scope of changes made by the NMS Stock ATSs. Making
complete and comprehensible disclosures of material changes to the NMS
Stock ATS's operations, such as the introduction of a new order type
and its attributes or changes to segmentation procedures and
parameters, would likely require more time and resources from an NMS
Stock ATS than providing complete and comprehensible disclosures of a
simple change to the NMS Stock ATS's physical or website address. We
believe that the frequency with which an NMS Stock ATS files Form ATS-N
amendments in a given year may vary greatly, as some NMS Stock ATSs may
make infrequent changes to their operations and functionality, but
other NMS Stock ATSs, such as those that publish or otherwise provide
to one or more subscribers or person aggregate platform-wide market
quality statistics, may file several Form ATS-N amendments annually.
---------------------------------------------------------------------------

    \1235\ See Fidelity Letter at 10.
    \1236\ See supra note 498 and accompanying text.
    \1237\ See supra Section V.C.
    \1238\ See supra Section V.B.2.
---------------------------------------------------------------------------

    Therefore, we continue to believe that the requirements for Form
ATS-N amendments will add 3 hours above the current baseline of 6 hours
for amendments to Form ATS, as set forth in the Proposal. We estimate
that the 41 respondents will file 3 Form ATS-N amendments each year,
for a total of 123

Form ATS-N amendments.\1239\ In addition, an NMS Stock ATS must provide
a brief summary of the amendment at the top of Form ATS-N.\1240\ As
proposed, an NMS Stock ATS would have been required to submit two
redlines--Exhibit 3A to show changes to Part III of proposed Form ATS-N
and Exhibit 4A to show changes to Part IV of proposed Form ATS-N. We
estimated that the requirement would create an additional burden of 0.5
hours to draft the summary and create the redline(s).\1241\ Adopted
Form ATS-N requires NMS Stock ATSs to submit as Exhibit 3 one marked
document that indicates changes to ``yes'' or ``no'' answers or
additions to or deletions to both Part I, Parts II, and III. We believe
that requiring a single marked document rather than two separate
documents will reduce the filing burden on ATSs, and that requiring a
marked document for changes to Part I would impose minimal burden, and
therefore we estimate that this requirement would add an additional
burden of 0.4 hours to draft the summary and prepare the marked
documents showing the amendments the NMS Stock ATS is making.\1242\
This would result in a total estimated hourly burden, including the
baseline, of 9.4 hours for a Form ATS-N amendment,\1243\ and an
aggregate annual burden on all NMS Stock ATSs of 1,156.2 hours.\1244\
---------------------------------------------------------------------------

    \1239\ 41 respondents x 3 Form ATS-N amendments per year = 123
Form ATS-N amendments per year.
    \1240\ See Exhibit 3 to Form ATS-N.
    \1241\ See Proposal, supra note 2, at 81105.
    \1242\ Compliance Clerk at 0.4 hours. Most word processing
software provides for this functionality.
    \1243\ Attorney at 5.5 hours + Compliance Manager at 2 hours +
Compliance Clerk at 1.9 hours = 9.4 burden hours.
    \1244\ 123 amendments per year x 9.4 hours = 1,156.2 aggregate
burden hours. Therefore, the aggregate burden hours equals 1,156.2
hours.
---------------------------------------------------------------------------

    Under the Proposal, a Legacy NMS Stock ATS would have continued to
operate pursuant to its existing Form ATS initial operation report
pending our review of the Legacy NMS Stock ATS's filed Form ATS-N and
would have been required to continue filing amendments on Form ATS to
provide notice of changes to the operations of its system.\1245\
Adopted Rule 304(a)(1)(iv)(C) requires a Legacy NMS Stock ATS to amend
its Form ATS-N to notify the Commission of operational changes during
the review period.\1246\ We believe that if a Legacy NMS Stock ATS had
been required to file amendments to Form ATS during the Commission
review period, the Legacy NMS Stock ATS would have also complied with
the requirements of Rule 304 by amending its Form ATS-N to reflect such
changes disclosed in such Form ATS amendments. During the Commission
review period, the Legacy NMS Stock ATS would have, therefore,
submitted amendments to both Form ATS and Form ATS-N. Although we are
now requiring that a Legacy NMS Stock ATS amend its Form ATS-N during
the review period rather than its Form ATS, this requirement does not
change our estimates of the aggregate burden hours for filing
amendments. Although a Legacy NMS Stock ATS will be required to amend
Form ATS-N, which requires greater detail and a larger number of
disclosures than Form ATS, the Legacy NMS Stock ATS will no longer need
to file a Form ATS amendment during the review period and a Form ATS-N
amendment to reflect changes disclosed in such Form ATS-N amendments.
---------------------------------------------------------------------------

    \1245\ See Proposal, supra note 2, at 81023; see also proposed
Rule 304(a)(1)(i).
    \1246\ See 17 CFR 242.304(a)(1)(iv)(C).
---------------------------------------------------------------------------

(c) Notice of Cessation on Form ATS-N
    From January 2014 through March 2018, an average of 9 ATSs that
trade NMS stocks ceased operations each year.\1247\ Although it is
unclear how many NMS Stock ATSs might cease operations each year going
forward, for purposes of providing a PRA burden estimate, we are
estimating that this average would generally remain the same for NMS
Stock ATSs using Form ATS-N because economic conditions, business
reasons, and other factors may cause some NMS Stock ATSs to cease
operations. Accordingly, we estimate that 9 respondents may file a
cessation of operation report on Form ATS-N each year. In the Proposal,
we estimated that the average compliance burden for each cessation of
operations filing would be 2 hours.\1248\ We received no comments on
this estimate, and continue to believe that the burden for filing a
notice of cessation on Form ATS-N will not be significantly greater
than that for filing a cessation of operations report on current Form
ATS. Both Form ATS and Form ATS-N require the ATS to check the
appropriate box indicating that the ATS is ceasing operations; however,
Form ATS-N also requires that the NMS Stock ATS provide the date that
the NMS Stock ATS expects to cease operating. Accordingly, we estimate
that the average compliance burden for each respondent will be 2
hours.\1249\ This will result in an aggregate annual burden of 18 hours
for all NMS Stock ATSs that choose to cease operations and submit a
cessation of operation report on Form ATS-N.\1250\
---------------------------------------------------------------------------

    \1247\ See supra note 1114.
    \1248\ See Proposal, supra note 2, at 81105.
    \1249\ Attorney at 1.5 hours + Compliance Clerk at 0.5 hours = 2
burden hours. See supra note 1135, and accompanying text.
    \1250\ 2 burden hours x 9 NMS Stock ATSs = 18 aggregate annual
burden hours.
---------------------------------------------------------------------------

(iii) ATSs That Trade Both NMS and Non-NMS Stocks
    ATSs that trade both NMS stocks and non-NMS stocks would incur: (1)
The above baseline burdens related to filing a Form ATS-N and Form ATS-
N amendments; \1251\ (2) the additional burden of filing a new Form ATS
to only disclose information related to non-NMS stock trading activity
on the ATS; \1252\ and (3) the burden of completing and filing two
Forms ATS-R. We received no comment on the estimated burden set forth
in the Proposal for ATSs to separately file a Form ATS for its non-NMS
stock trading activity and Form ATS-N for its NMS stock trading
activity.\1253\ We continue to believe that the average estimated
burden set forth in the Proposal is a reasonable estimate of the
additional burden. Accordingly, we estimate that the total hourly
burden for an ATS to separately file a Form ATS for its non-NMS stock
trading activity and Form ATS-N for its NMS stock trading activity will
be 20 burden hours to amend its initial operation report on Form ATS
for its non-NMS stock trading activity and 127.4 burden hours to file
its initial Form ATS-N. The estimated hour burden related to the
initial operation report submission on Form ATS for non-NMS stock
trading activity may be less than the estimated 20 burden hours, as, to
the extent the NMS Stock ATS in question is currently operating, the
description of its non-NMS stock trading activity should already be
contained in its existing Form ATS.\1254\ As previously noted, there
are currently 10 ATSs that trade, or have indicated that they expect to
trade, in Exhibit B to their Form ATS, both NMS stocks and non-NMS
stocks on the ATS. Consequently, we estimate that the aggregate initial
burden on ATSs to file these separate forms would be 1,774 hours, and
the aggregate annual

burden for filing amendments to both forms would be 402 hours.\1255\
---------------------------------------------------------------------------

    \1251\ See supra Sections IX.D.2.b.ii.A and B.
    \1252\ See supra Section IX.D.2.a and accompanying text for the
baseline estimates for submitting an IOR for Form ATS and amendments
to Form ATS.
    \1253\ See supra note 1136 and accompanying text for the
baseline estimate for submitting a Form ATS-R.
    \1254\ The hourly burden related to amendments to its Form ATS
and Form ATS-N would remain unchanged: 6 estimated burden hours for
amendments to Form ATS, and 9.4 estimated burden hours for Form ATS-
N amendments. See supra notes 1231-1232, 1240-1243 and accompanying
text.
    \1255\ (Form ATS initial operation report at 20 hours + Form
ATS-N at 127.4 hours) x 10 respondents = 1,774 aggregate burden
hours. Using the estimates of 2 amendments each year to Form ATS,
see supra Section IX.D.2.a, and 3 amendments each year to Form ATS-
N, see supra Section IX.D.2.b.ii.B, the ongoing aggregate burden for
these bifurcated ATSs would be ((2 Form ATS amendments per year x 6
hours) + (3 Form ATS-N amendments per year x 9.4 hours)) x 10
respondents = 402 aggregate ongoing burden hours per year relating
to amendments.
---------------------------------------------------------------------------

    We estimate that the total burden for completing and filing two
Forms ATS-R would be 4.5 hours, which is 0.5 hours \1256\ above the
current baseline burden of 4 hours for filing a Form ATS-R.\1257\ We
believe that ATSs required to file two Forms ATS-R will incur an
additional burden above the baseline because they would be required to
divide their trading statistics between two forms and file each form
separately. We do not believe that those ATSs will incur any additional
burden to collect the required information because they currently
assemble that information when preparing their current Form ATS-R
filings. As previously noted, there are currently 10 ATSs that trade,
or have indicated that they expect to trade in Exhibit B to their Form
ATS, both NMS stocks and non-NMS stocks on the ATS; those ATSs would be
required to file a pair of Forms ATS-R four times annually.
Consequently, we estimate that the aggregate annual burden of filing
two Forms ATS-R for those ATS that effect transactions in both NMS
stocks and non-NMS stocks would be 180 hours.\1258\
---------------------------------------------------------------------------

    \1256\ Attorney at 0.5 hours = 0.5 burden hours.
    \1257\ See supra note 1136 and accompanying text for the
baseline estimate for submitting a Form ATS-R.
    \1258\ ((Attorney at 3.5 hours + Compliance Clerk at 1 hour) x
(4 filings annually)) x 10 ATSs = 180 aggregate burden hours.
---------------------------------------------------------------------------

(iv) Access to EDGAR
    The Proposal contemplated the use of an online filing system, the
EFFS, but the adopted amendments to Regulation ATS will require NMS
Stock ATSs to submit certain Form ATS-N filings through the
Commission's EDGAR system. Based on the widespread use and availability
of the internet, we believe that filing Form ATS-N in an electronic
format will be a less burdensome and more efficient filing process for
NMS Stock ATSs and the Commission, as it is likely to be less expensive
and cumbersome than mailing and filing paper forms to the
Commission.\1259\
---------------------------------------------------------------------------

    \1259\ All estimated burden hours with regard to completing
Parts I-V of proposed Form ATS-N, which are explained above and
herein, include the estimated burden associated with the requirement
that NMS Stock ATSs file Form ATS-N in a structured XML format on
EDGAR, including narrative responses that are block-text tagged, or
use the web-fillable form.
---------------------------------------------------------------------------

    For a Form ATS-N filer to gain access to make filings on the EDGAR
system, the filer must submit a Form ID as required by Regulation S-T
Rule 11 (B) and submit the Form ID following the processes detailed in
Volume I of the EDGAR Filer Manual. Once a Form ID has been
successfully completed and processed, EDGAR will establish a Central
Index Key (``CIK'') number which enables each authorized user to create
EDGAR access codes, which will enable the NMS Stock ATS to use EDGAR.
We estimate that the burden associated with receiving access to EDGAR
by submitting a Form ID is 0.15 burden hours per response. All
registered broker-dealers have been assigned a CIK number and do not
need to submit a Form ID to access EDGAR.\1260\ Because all ATSs,
regardless of whether they trade NMS stocks, are operated by registered
broker-dealers, we estimate that there will be no burden associated
with gaining access to EDGAR for Legacy NMS Stock ATSs or non-NMS Stock
ATSs that later decide to trade NMS stocks. Based on the number of
initial filings and cessation of operations reports on current Form ATS
for ATSs that trade NMS stocks, we estimate that, 2 to 3 new entities
will file Form ATS-N to become an NMS Stock ATS in each of the next
three years. We estimate that among these new entities, 1 new entity
per year will be operated by an entity that has not previously
registered as a broker-dealer or that does not otherwise already have
access to EDGAR. The total estimated hourly burden and aggregate
initial burden for gaining access to EDGAR is therefore 0.15
hours.\1261\
---------------------------------------------------------------------------

    \1260\ A broker-dealer that has never used EDGAR to make
electronic submissions may use its assigned CIK number to receive
access codes that will allow the broker-dealer operator to submit
Form ATS-N filings on EDGAR without needing to apply for a Form ID.
    \1261\ Compliance Manager at 0.15 hours x 41 NMS Stock ATSs =
6.15 burden hours.
---------------------------------------------------------------------------

v. Public Posting on NMS Stock ATS's Website
    Rule 304(b)(3) will require each NMS Stock ATS to make public via
posting on the NMS Stock ATS's website, a direct URL hyperlink to the
Commission's website that contains the documents enumerated in Rule
304(b)(2). We estimate that each NMS Stock ATS will incur an initial,
one-time burden to program and configure its website to post the
required direct URL hyperlink pursuant to Rule 304(b)(3). We estimate
that this initial, one-time burden would be approximately 2 hours, in
part because many broker-dealer operators currently maintain a website
for their NMS Stock ATSs.\1262\ This is unchanged from the estimate set
forth in the Proposal.\1263\ We estimate that the aggregate initial,
one-time burden will be approximately 82 hours.\1264\
---------------------------------------------------------------------------

    \1262\ Senior Systems Analyst at 2 burden hours.
    \1263\ See Proposal, supra note 2, at 81106-07.
    \1264\ Senior Systems Analyst at 2 hours x 41 NMS Stock ATSs =
82 burden hours.
---------------------------------------------------------------------------

(v) Recordkeeping Requirements
    Because NMS Stock ATSs that solely trade NMS stocks will file Form
ATS-N in lieu of Form ATS, we believe that the amendment to Rule
303(a)(2)(ii) will not result in any burden for those ATSs that are not
already accounted for under the current baseline burden estimate for
Rule 303.\1265\ The estimated burden under amended Rule 303(a)(2)(ii)
for each ATS is the same as in the Proposal.\1266\ For the 10 ATSs that
transact in, or have indicated in Exhibit B to their Forms ATS that
they expect to trade both NMS stock and non-NMS stock on their
respective ATSs, we estimate that the burden above the current baseline
estimate for preserving records relating to compliance with the
amendment to Rule 303(a)(ii) will be, consistent with the estimate in
the proposing release, approximately 3 hours annually per ATS for a
total annual burden above the current baseline burden estimate of 30
hours for all respondents.\1267\ Accordingly, we are modifying the PRA
burden estimate for Rule 303 to account for the increased burden on
ATSs that trade both NMS stock and non-NMS stock.
---------------------------------------------------------------------------

    \1265\ To comply with all of the record preservation
requirements of Rule 303, we currently estimate that ATSs spend
approximately 1,305 hours per year (87 respondents at 15 burden
hours per respondent). See Rule 303 PRA Update, supra note 1613, 78
FR 43943. At an average cost per burden hour of $111.32, the
resultant total related cost of compliance is $145,272.60 per year
(1,305 burden hours x $111.32/hour). See id. The cost per burden
hour is adjusted for an inflation rate of 6.8% based on the Bureau
of Labor Statistics data on CPI-U between July 2013 and March 2018.
    \1266\ See Proposal, supra note 2, at 81107.
    \1267\ 3 additional burden hours x 10 ATSs = 30 aggregate burden
hours.
---------------------------------------------------------------------------

E. Collection of Information Is Mandatory

    All collections of information pursuant to the amended rules and
Form ATS-N are mandatory for entities that meet the definition of NMS
Stock ATS.

F. Confidentiality of Responses to Collection of Information

    With respect to the amendments to Rules 301(b)(2)(viii) and 304 of
Regulation ATS, including Form ATS-N, the Commission will make publicly
available on its website all effective Forms ATS-N, all properly filed
Form ATS-N amendments to effective Forms ATS-N, and notices of
cessation on Form ATS-N. The Commission will not make publicly
available on its website initial Forms ATS-N that the Commission has
declared ineffective, but these forms will be available for examination
and inspection by the Commission and its staff, state securities
authorities, and self-regulatory organizations. Form ATS-N amendments
also require each NMS Stock ATS that has a website to post on the NMS
Stock ATS's website a direct URL hyperlink to the Commission's website
that contains the documents enumerated in Rule 304(b)(2). The
collection of information required by the amendments to Rules
301(b)(10), 303(a)(1)(v), 301(b)(9), and 303(a)(2)(ii) will not be made
public, but would be used for regulatory purposes by the Commission and
the SRO(s) of which the ATS's broker-dealer operator is a member. In
Part II, Item 7 of Form ATS-N, however, NMS Stock ATSs must describe
the written safeguards and written procedures to ensure confidential
treatment of trading information that will be required under Rule
301(b)(10) as amended. To the extent that the Commission receives
confidential information pursuant to this collection of information,
such information will be kept confidential, subject to the provisions
of applicable law.

G. Retention Period for Recordkeeping Requirements

    All reports required to be made under Rules 301(b)(2)(viii),
301(b)(9), and 304 of Regulation ATS, including Form ATS-N, will be
required to be preserved during the life of the enterprise and any
successor enterprise, pursuant to the amendment to Rule 303(a)(2) of
Regulation ATS. In addition, ATSs will be required to preserve a copy
of their written safeguards and written procedures to protect
subscribers' confidential trading information under Rule 301(b)(10) of
Regulation ATS for not less than 3 years, the first 2 years in an
easily accessible place, pursuant to Rule 303(a)(1)(v) of Regulation
ATS.

X. Economic Analysis

A. Background

    We are concerned that the current regulatory requirements relating
to operational transparency for NMS Stock ATSs may no longer fully meet
the goals of furthering the public interest and protecting
investors.\1268\ We are concerned that the limited and differential
level of operational transparency around NMS Stock ATSs impedes market
participants' ability to adequately discern how their orders interact,
match, and execute on NMS Stock ATSs, which impedes their ability to
evaluate whether submitting order flow to a particular NMS Stock ATS
aligns with their business interests and would help them achieve their
investing or trading objectives. In addition, we are concerned that the
current lack of transparency around the potential conflicts of interest
that arise from the ATS-related activities of the broker-dealer
operator and its affiliates hinders market participants' abilities to
protect their interests when doing business on NMS Stock ATSs.
---------------------------------------------------------------------------

    \1268\ See supra Section I. See also supra Sections II.A and D.
---------------------------------------------------------------------------

    We are adopting amendments to Regulation ATS to require NMS Stock
ATSs to publicly file Form ATS-N, which would require NMS Stock ATSs to
provide detailed disclosures about their trading operations and the