[Federal Register Volume 87, Number 186 (Tuesday, September 27, 2022)]
[Notices]
[Pages 58560-58571]
[FR Doc No: 2022-20830]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-95850; File No. SR-CTA/CQ-2021-02]

Consolidated Tape Association; Order Disapproving the Thirty-
Seventh Substantive Amendment to the Second Restatement of the CTA Plan
and the Twenty-Eighth Substantive Amendment to the Restated CQ Plan

September 21, 2022.

I. Introduction

    On November 5, 2021,\1\ the Participants \2\ in the Second
Restatement of the Consolidated Tape Association (``CTA'') Plan and the
Restated Consolidated Quotation (``CQ'') Plan (collectively ``CTA/CQ
Plans'' or ``Plans'') \3\ filed with the Securities and Exchange
Commission (``Commission''), pursuant to Section 11A of the Securities
Exchange Act of 1934 (``Act'') \4\ and Rule 608 of Regulation National
Market System (``NMS'') thereunder,\5\ a proposal (the ``Proposed
Amendments'') to amend the Plans to implement the non-fee-related
aspects of the Commission's Market Data Infrastructure Rules (``MDI
Rules'').\6\ The Proposed Amendments were published for comment in the
Federal Register on November 29, 2021.\7\
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    \1\ See Letter from Robert Books, Chair, CTA/CQ Plans Operating
Committee, to Vanessa Countryman, Secretary, Commission (Nov. 5,
2021).
    \2\ The ``Participants'' are: Cboe BYX Exchange, Inc.; Cboe BZX
Exchange, Inc.; Cboe EDGA Exchange, Inc.; Cboe EDGX Exchange, Inc.;
Cboe Exchange, Inc.; Financial Industry Regulatory Authority, Inc.;
Investors Exchange LLC; Long-Term Stock Exchange, Inc.; MEMX LLC;
MIAX PEARL, LLC; Nasdaq BX, Inc.; Nasdaq ISE, LLC; Nasdaq PHLX LLC;
The Nasdaq Stock Market LLC; New York Stock Exchange LLC; NYSE
American LLC; NYSE Arca, Inc.; NYSE Chicago, Inc.; and NYSE
National, Inc.
    \3\ The CTA Plan, pursuant to which markets collect and
disseminate last-sale price information for non-Nasdaq-listed
securities, is a ``transaction reporting plan'' under Rule 601 of
Regulation NMS, 17 CFR 242.601, and a ``national market system
plan'' under Rule 608 of Regulation NMS, 17 CFR 242.608. The CQ
Plan, pursuant to which markets collect and disseminate bid/ask
quotation information for non-Nasdaq-listed securities, is a
``national market system plan'' under Rule 608 of Regulation NMS, 17
CFR 242.608. See Securities Exchange Act Release Nos. 10787 (May 10,
1974), 39 FR 17799 (May 20, 1974) (declaring the CTA Plan
effective); 15009 (July 28, 1978), 43 FR 34851 (Aug. 7, 1978)
(temporarily authorizing the CQ Plan); and 16518 (Jan. 22, 1980), 45
FR 6521 (Jan. 28, 1980) (permanently authorizing the CQ Plan).
    \4\ 15 U.S.C. 78k-1.
    \5\ 17 CFR 242.608.
    \6\ The ``MDI Rules'' as used in this Order, and as relevant to
the Proposed Amendments, are Rules 600, 603, and 614 of Regulation
NMS. 17 CFR 242.600, 603, 614. See also Securities Exchange Act
Release No. 90610 (Dec. 9, 2020), 86 FR 18596 (Apr. 9, 2021) (File
No. S7-03-20) (``MDI Rules Release''); Securities Exchange Act
Release No. 90610A (May 24, 2021), 86 FR 29195 (June 1, 2021) (File
No. S7-03-20) (technical correction to MDI Rules Release). Several
exchanges filed petitions for review challenging the MDI Rules
Release in the U.S. Court of Appeals for the District of Columbia
Circuit, which were denied on May 24, 2022. See The Nasdaq Stock
Market LLC, et al. v. SEC, No. 21-1100 (D.C. Cir. May 24, 2022).
    \7\ See Securities Exchange Act Release No. 93615 (Nov. 19,
2021), 86 FR 67800 (Nov. 29, 2021) (``Notice''). Comments received
in response to the Notice are available at https://www.sec.gov/comments/sr-ctacq-2021-02/srctacq202102.htm.
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    On February 24, 2022, the Commission instituted proceedings
pursuant to Rule 608(b)(2)(i) of Regulation NMS,\8\ to determine
whether to approve or disapprove the Proposed Amendments or to approve
the Proposed Amendments with any changes or subject to any conditions
the Commission deems necessary or appropriate after considering public
comment.\9\ On May 19, 2022, pursuant to Rule 608(b)(2)(i) of
Regulation NMS,\10\ the Commission extended the period within which to
conclude proceedings regarding the Proposed Amendments to July 27,
2022,\11\ and on July 21, 2022, the Commission further extended the
period within which to conclude proceedings regarding the Proposed
Amendments to September 25, 2022.\12\
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    \8\ 17 CFR 242.608(b)(2)(i).
    \9\ See Securities Exchange Act Release No. 94310 (Feb. 24,
2022), 87 FR 11748 (Mar. 2, 2022) (``OIP''). Comments received in
response to the OIP are available at https://www.sec.gov/comments/sr-ctacq-2021-02/srctacq202102.htm.
    \10\ See 17 CFR 242.608(b)(2)(i).
    \11\ See Securities Exchange Act Release No. 94951 (May 19,
2022), 87 FR 31920 (May 25, 2022).
    \12\ See Securities Exchange Act Release No. 95345 (July 21,
2022), 87 FR 45136 (July 27, 2022).
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    This order disapproves the Proposed Amendments.\13\
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    \13\ The Participants have filed a similar amendment to the
Joint Self-Regulatory Organization Plan Governing the Collection,
Consolidation, and Dissemination of Quotation and Transaction
Information for Nasdaq-Listed Securities Traded on Exchanges on an
Unlisted Trading Privileges Basis (``UTP Plan''), which the
Commission is also disapproving. See Securities Exchange Act Release
No. 95848 (Sept. 21, 2022). Separately, certain Participants have
also filed amendments to implement the fee-related aspects of the
MDI Rules. See Securities Exchange Act Release Nos. 93625 (Nov. 19,
2021), 86 FR 67517 (Nov. 26, 2021) (File No. SR-CTA/CQ-2021-03), and
93618 (Nov. 19, 2021), 86 FR 67562 (Nov. 26, 2021) (File No. S7-24-
89) (together, the ``Proposed Fee Amendments''). The Commission is,
by separate orders, also disapproving the Proposed Fee Amendments.
See Securities Exchange Act Release Nos. 95849 (Sept. 21, 2022)
(File No. S7-24-89); 95851 (Sept. 21, 2022) (File No. SR-CTA/CQ-
2021-03).
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II. Overview

    Pursuant to Regulation NMS and the Equity Data Plans,\14\ the
national securities exchange and national securities associations
(``self-regulatory organizations'' or ``SROs'') must provide certain
information with respect to quotations for and transactions in NMS
stocks (``NMS information'') to an exclusive plan securities
information processor (``exclusive SIP''), which consolidates the NMS
information and makes it available to market participants on the
consolidated tapes. The purpose of the Equity Data Plans is to
facilitate the collection and dissemination of SIP data so that the
public has ready access to a ``comprehensive, accurate, and reliable
source of information for the prices and volume of any NMS stock at any
time during the trading day.'' \15\ Because the infrastructure for the
collection, consolidation, and dissemination of this data had not been
significantly updated since its initial implementation in the 1970s,
the Commission adopted amendments to Regulation NMS that increase the
content of NMS information and amend the manner in which such NMS
information is collected, consolidated, and disseminated by the Equity
Data Plans.\16\ In the MDI Rules Release, the Commission stated,
``[t]he widespread availability of timely market information promotes
fair and efficient markets and facilitates the ability of brokers and
dealers to provide best execution to their customers.'' \17\
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    \14\ The three effective national market system plans that
govern the collection, consolidation, processing, and dissemination
of certain NMS information are: (1) the CTA Plan; (2) the CQ Plan;
and (3) the UTP Plan (collectively, the ``Equity Data Plans''). Each
of the Equity Data Plans is an effective national market system plan
under 17 CFR 242.608 (Rule 608) of Regulation NMS. See also
Securities Exchange Act Release No. 28146 (June 26, 1990), 55 FR
27917 (July 6, 1990) (order approving UTP Plan).
    \15\ Concept Release on Equity Market Structure, Securities
Exchange Act Release No. 61358 (Jan. 14, 2010), 75 FR 3593 (Jan. 21,
2010).
    \16\ See MDI Rules Release, supra note 6.
    \17\ Id. at 18599.
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    The MDI Rules increase the content of NMS information and modify
the manner in which NMS information is collected, consolidated, and
disseminated. Significantly, under the MDI Rules, the Commission
required the introduction of a competitive decentralized consolidation
model under which competing consolidators and self-aggregators will
replace the

exclusive SIPs that collect, consolidate, and disseminate equity market
data under the Equity Data Plans.\18\ Although the exclusive SIPs will
no longer disseminate consolidated information for an individual NMS
stock, the Equity Data Plans will continue to play an important role--
they will develop and propose fees for the data content underlying
consolidated market data, collect and allocate revenues collected for
this data, develop the monthly performance metrics for competing
consolidators, and provide an annual assessment of competing
consolidator performance.
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    \18\ See id. at 18637 (``The Commission is adopting a
decentralized consolidation model in which competing consolidators,
rather than the exclusive SIPs, will collect, consolidate, and
disseminate consolidated market data.'').
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    Rule 614(e) of Regulation NMS requires the participants of the
effective national market system plan(s) for NMS stocks to file an
amendment pursuant to Rule 608 of Regulation NMS to conform the plan(s)
to the decentralized consolidation model.\19\ Specifically, Rule
614(e)(1) directs the participants to file an amendment to conform the
plan(s) to reflect the provision of information with respect to
quotations for and transactions in NMS stocks that is necessary to
generate consolidated market data by the SROs to competing
consolidators and self-aggregators. The Proposed Amendments were filed
by the Participants pursuant to this requirement.\20\
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    \19\ 17 CFR 242.614(e). See also MDI Rules Release, supra note
6, 86 FR at 18680-81.
    \20\ The Participants have filed the Proposed Amendments under
the Equity Data Plans. See supra note 14. While the Commission
issued an order on August 6, 2020, approving, as modified, a new
national market system plan regarding equity market data--the CT
Plan--to replace the existing Equity Data Plans, that order was
stayed on October 13, 2021, see The Nasdaq Stock Market, et al. LLC
v. Securities and Exchange Commission, No. 21-1167 (D.C. Cir. Oct.
13, 2021), which was before the Participants filed the Proposed
Amendments. The Commission's order approving the CT Plan was
subsequently vacated. See The Nasdaq Stock Market LLC, et al. v.
Securities and Exchange Commission, Nos. 21-1167, 21-1168, 21-1169
(D.C. Cir., July 5, 2022) (vacating Securities Exchange Act Release
No. 92586 (Aug. 6, 2021), 86 FR 44142 (Aug. 11, 2021) (Order
Approving, as Modified, a National Market System Plan Regarding
Consolidated Market Data)).
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    As explained below, however, the Proposed Amendments do not comply
with Rule 614(e)(1) because they do not conform the Plans to reflect
the provision of information with respect to quotations for and
transactions in NMS stocks that is necessary to generate consolidated
market data by the SROs to competing consolidators and self-
aggregators. For example, inconsistent with the decentralized
consolidation model and with the requirements of Rule 614(e), the
Proposed Amendments: (1) amend the Plans to reflect that they will
disseminate consolidated market data to competing consolidators and
self-aggregators, even though the Plans will not be disseminating any
consolidated market data; \21\ (2) fail to amend the CTA Plan to
require the individual Participants to disseminate data necessary to
generate consolidated market data to competing consolidators and self-
aggregators; \22\ (3) fail to distinguish competing consolidators from
vendors and subscribers; \23\ (4) fail to amend the Plans to reflect
that the Processors will no longer have the responsibility to
disseminate regulatory halt notices once the decentralized
consolidation model has been implemented; \24\ (5) fail to include
requirements for the Participants to timestamp every element of data
necessary to generate consolidated market data; \25\ and (6) fail to
amend the Plans to remove references to a single processor.\26\
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    \21\ 17 CFR 242.603(b). See also MDI Rules Release, supra note
6, 86 FR at 18653 (``[T]hese changes to Rule 603(b) are appropriate
to establish the decentralized consolidation model.'').
    \22\ 17 CFR 242.603(b). See also MDI Rules Release, supra note
6, 86 FR at 18653.
    \23\ 17 CFR 242.600(b)(16) (defining ``competing
consolidators''). See, e.g., MDI Rules Release, supra note 6, 86 FR
at 18664-65 (discussing why market data vendors would not be
required to register as competing consolidators under the
decentralized consolidation model).
    \24\ See, e.g., MDI Rules Release, supra note 6, 86 FR at 18633-
35 (discussing the provision of ``regulatory data'' by the primary
listing exchange for an NMS stock to competing consolidators and
self-aggregators under the decentralized consolidation model).
    \25\ 17 CFR 242.614(e)(2).
    \26\ The MDI Rules Release amended Rule 603(b) to remove the
requirement that ``all consolidated information for an individual
NMS stock [be disseminated] through a single plan processor.'' See
MDI Rules Release, supra note 6, 86 FR at 18652-53. See also supra
note 21; MDI Rules Release, supra note 6, 86 FR at 18701 (discussing
the retirement of the exclusive SIPs).
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    Because the Proposed Amendments are inconsistent with the MDI
Rules, specifically Rule 614(e), the Commission must disapprove the
Proposed Amendments under Rule 608(b)(2) of Regulation NMS because it
cannot find that they are necessary or appropriate in the public
interest, for the protection of investors and the maintenance of fair
and orderly markets, to remove impediments to, and perfect the
mechanisms of, a national market system, or otherwise in furtherance of
the purposes of the Act.\27\
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    \27\ 17 CFR 242.608(b)(2).
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III. Summary of the Proposed Amendments

    The Participants propose to amend the Plans to comply with Rule
614(e) of the MDI Rules. Under Rule 614(e), participants to the
effective national market system plan(s) for NMS stocks were required
to file by November 5, 2021, an amendment with the Commission that
includes each of the requirements of Rule 614(e)(1)-(5).\28\
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    \28\ 17 CFR 242.614(e).
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    Specifically, Rule 614(e)(1) requires the amendment to conform the
effective national market system plan(s) for NMS stocks to reflect
that, under the decentralized consolidation model, the national
securities exchange and national securities association participants
will provide to competing consolidators and self-aggregators the
information, with respect to quotations for and transactions in NMS
stocks, that is necessary to generate consolidated market data.
    Rule 614(e)(2) requires the amendment to include the application of
timestamps by the national securities exchange and national securities
association participants on all information with respect to quotations
for and transactions in NMS stocks that is necessary to generate
consolidated market data, including the time that such information was
generated as applicable by the national securities exchange or national
securities association and the time the national securities exchange or
national securities association made such information available to
competing consolidators and self-aggregators.
    Rule 614(e)(3) requires the amendment to include assessments of
competing consolidator performance, including speed, reliability, and
cost of data provision and the provision of an annual report of such
assessment to the Commission.
    Rule 614(e)(4) requires the amendment to include the development,
maintenance, and publication of a list that identifies the primary
listing exchange for each NMS stock.
    Rule 614(e)(5) requires the amendment to include the calculation
and publication on a monthly basis of consolidated market data gross
revenues for NMS stocks as specified by (i) listed on the NYSE; (ii)
listed on Nasdaq; and (iii) listed on exchanges other than NYSE or
Nasdaq.
    The following is a summary of the changes proposed to be made to
the Plans by the Proposed Amendments.\29\
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    \29\ The full text of the Proposed Amendments appears as
Attachments A and B to the Notice. See Notice, supra note 7, 86 FR
at 67802-29.

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CTA Plan Proposed Amendments

Preface
    Under the Proposed Amendments, the CTA Plan would include the
following new provision: ``Terms used in this plan have the same
meaning as the terms are defined in Rule 600(b) under the Act.''
Section I.--Definitions
    The Proposed Amendments add, as Section I.(x), a definition of
``Primary Listing Exchange,'' which means ``the national securities
exchange on which an Eligible Security is listed.'' The proposed
definition further states, ``[i]f an Eligible Security is listed on
more than one national securities exchange, Primary Listing Exchange
means the exchange on which the security has been listed the longest.''
Section IV.--Administration of the CTA Plan
    The Proposed Amendments add new Section IV.(e), Plan website
Disclosures, requiring CTA to publish on the CTA Plan's website the
Primary Listing Exchange for each Eligible Security, and, on a monthly
basis, the consolidated market data gross revenues for Eligible
Securities as specified by Tape A and Tape B securities. The
Participants explain that this addition is intended to comply with Rule
614(e)(4) and Rule 614(e)(5)(i) and (iii).\30\
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    \30\ See id. at 67800.
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Section V.--The Processor and Competing Consolidators
    The Proposed Amendments amend the title of Section V. to include
competing consolidators, such that it is now titled ``The Processor and
Competing Consolidators,'' and to add new Section V.(f), Evaluation of
Competing Consolidators, to require the Operating Committee to assess
the performance of competing consolidators on an annual basis and to
submit an annual report to the Commission containing that assessment.
The Proposed Amendments require this annual report to include an
analysis with respect to competing consolidators' speed, reliability,
and cost of data provision. The Participants explain that these changes
are intended to comply with the requirements of Rule 614(e)(3).\31\
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    \31\ See id.
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    In addition, the Proposed Amendments require the Operating
Committee, in conducting the analysis, to review the monthly
performance metrics to be published by competing consolidators pursuant
to Rule 614(d)(5).\32\ Rule 614(d)(5) requires competing consolidators
to publish on their websites monthly performance metrics as defined by
the effective national market system plan(s) for NMS stocks.\33\ The
Proposed Amendments add the following monthly performance metrics to
this section:
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    \32\ 17 CFR 242.614(d)(5).
    \33\ See id.

    (i) Capacity statistics, including system tested capacity,
system output capacity, total transaction capacity, and total
transaction peak capacity;
    (ii) Message rate and total statistics, including peak output
rates on the following bases: 1-millisecond, 10-millisecond, 100-
millisecond, 500-millisecond, 1-second, and 5-second;
    (iii) System availability statistics, including system up-time
percentage and cumulative amount of outage time;
    (iv) Network delay statistics, including quote and trade zero
window size events, quote and trade retransmit events, and quote and
trade message total; and
    (v) Latency statistics, including distribution statistics up to
the 99.99th percentile, for the following:
    (A) When a Participant sends an inbound message to a competing
consolidator and when the competing consolidator receives the
inbound message;
    (B) When the competing consolidator receives the inbound message
and when the competing consolidator sends the corresponding
consolidated message to a customer of the competing consolidator;
and
    (C) When a Participant sends an inbound message to a competing
consolidator and when the competing consolidator sends the
corresponding consolidated message to a customer of the competing
consolidator.

    The Participants explain that they have proposed to amend Section
V. to define the monthly performance metrics in accordance with Rule
614(d)(5).\34\
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    \34\ See Notice, supra note 7, 86 FR at 67800.
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Section VI.--Consolidated Tape
    The Proposed Amendments amend Section VI.(c), Reporting Format and
Technical Specifications, to include a reference to competing
consolidators and self-aggregators such that last sale price
information relating to a completed transaction in an Eligible Security
reported to competing consolidators and self-aggregators by any
Participant or other reporting party shall be in the format required in
Section VI.(c).
    In addition, the Proposed Amendments amend Section VI.(c) to delete
from the required format the time of the transaction (reported in
microseconds) as identified in the Participant's matching engine
publication timestamp, and to replace it with the time the last sale
price information was generated by the Participant (reported in
microseconds). Furthermore, the Proposed Amendments amend Section
VI.(c) to add to the required format, with respect to reports to
competing consolidators and self-aggregators, the time the Participant
made the last sale price information available to competing
consolidators and self-aggregators (reported in microseconds). The
Participants explain that the proposed references to competing
consolidators and self-aggregators and the proposed requirement to
report in microseconds the time that a Participant made the last sale
price information available to competing consolidators and self-
aggregators are intended to comply with Rule 614(e)(1) and (2).\35\
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    \35\ See id.
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    With respect to FINRA, the Proposed Amendments amend a statement in
Section VI.(c) that the time of the transaction shall be the time of
execution that a FINRA member reports to a FINRA trade reporting
facility in accordance with FINRA rules. The Proposed Amendments amend
this statement to state that the time the last sale price information
was generated by a Participant shall be the time that a FINRA member
reports to a FINRA trade reporting facility in accordance with FINRA
rules. The Proposed Amendments also add references to competing
consolidators and self-aggregators such that--if FINRA's trade
reporting facility provides a proprietary feed of trades reported by
the trade reporting facility to the Processor, competing consolidators,
and self-aggregators--the FINRA trade reporting facility shall also
furnish the Processor, competing consolidators, and self-aggregators
with the time of the transmission as published on the facility's
proprietary feed.
    The Proposed Amendments also delete Section VI.(g), ITS
Transactions, which concerns last sale prices reflecting ITS
transactions. The Participants explain that they are proposing to
remove this provision because the ITS is obsolete.\36\
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    \36\ See id.
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Section VIII. Collection and Reporting of Last Sale Data
    The Proposed Amendments amend Section VIII.(a), Responsibility of
Exchange Participants, to remove a list of exchange participants and
the requirement that each collect and report to the Processor all last
sale price information to be reported to it relating to transactions in
Eligible Securities taking place on its floor. The Proposed Amendments
amend this statement to

state that each Participant agrees to collect and report to the
Processor all last sale price information to be reported by it relating
to transactions in Eligible Securities.
    The Proposed Amendments also add to the CTA Plan a statement that
``[e]ach Participant further agrees to collect and report to Competing
Consolidators and Self-Aggregators all last sale price information to
be reported to it related to transactions in Eligible Securities in the
same manner and using the same methods, including all methods of access
and the same format, as such Participant makes available any
information with respect to quotations for and transactions in Eligible
Securities to any person.'' \37\ In addition, the Proposed Amendments
amend Section VIII.(b), FINRA Responsibility, to add references to
competing consolidators and self-aggregators such that the provision
states: ``The FINRA shall develop and adopt rules governing the
reporting of last sale price information to be reported by its members
to both the Processor for inclusion on the consolidated tape and to
Competing Consolidators and Self-Aggregators. Such rules shall . . .
(ii) be designed to avoid duplicate reporting of transactions on the
consolidated tape or to Competing Consolidators and Self Aggregator. .
. .'' The Participants explain that these additions are designed to
comply with Rule 614(e)(1).\38\
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    \37\ The Proposed Amendments also delete the following statement
from Section VIII.(a): ``CTA shall seek to reduce the time period
for reporting last sale prices to the Processor as conditions
warrant.''
    \38\ See Notice, supra note 7, 86 FR at 67801.
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    Finally, the Proposed Amendments delete Section VIII.(c),
Description of Reporting Procedures, which states that each Participant
and each other reporting party has prepared and submitted to CTA and
the Commission a description of the procedures by which it collects and
reports to the Processor last sale price information reported by it
pursuant to the CTA Plan. The Participants explain that this provision
is no longer relevant under the MDI Rules.\39\
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    \39\ See id.
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Section IX.--Receipt and Use of CTA Information
    In Sections IX.(a), Requirements for Receipt and Use of
Information, (b), Approvals of Redisseminators and Terminations of
Approvals, and (c), Subscriber Terminations, the Proposed Amendments
replace several references to ``each CTA network's information,'' ``a
CTA network's information,'' ``that CTA network's information,'' and
``that CTA network's last sale price information'' with the term
``consolidated market data.''
    The Proposed Amendments also amend Section IX.(a) to include
references to competing consolidators and self-aggregators. Proposed
Section IX.(a) states that, ``[p]ursuant to fair and reasonable terms
and conditions, each CTA network's administrator shall provide for: (i)
the dissemination of consolidated market data on terms that are not
unreasonably discriminatory to Competing Consolidators, Self-
Aggregators, vendors, newspapers, Participants, Participant members and
member organizations, and other persons over that network's ticker and
over the high speed line; and (ii) the use of consolidated market data
by Competing Consolidators, Self-Aggregators, vendors, subscribers,
newspapers, Participants, Participant members and member organizations
and other persons.'' Additionally, the section now states that each CTA
network's Participants will determine the terms and conditions applying
in respect of a particular manner of receipt or use of consolidated
market data, including whether the manner of receipt or use will
require recipients or users to enter into agreements with the CTA
network's administrator, and that these determinations will be made in
a reasonably uniform manner to subject all parties that receive or use
consolidated market data in a particular manner to terms and conditions
that are substantially similar.
    In addition, the Proposed Amendments amend Section IX.(a) to state
that the Participants expect their CTA network's administrator to
require the following parties to enter into agreements with the CTA
network administrator: (i) any party that receives a CTA network's
information by means of a direct computer-to-computer interface with
the Processor or competing consolidator; (ii) any competing
consolidator or self-aggregator that receives last sale transaction
information directly from a Participant for the purpose of creating
consolidated market data; (iii) vendors and other parties that
redisseminate consolidated market data to others; and (iv) persons that
use consolidated market data for such purposes as that CTA network's
administrator may from time to time identify.
    The Participants explain that the proposed revisions to Section
IX.(a) are intended to make clear that the current market data
contracts regarding the receipt of market data will be applicable to
competing consolidators and self-aggregators.\40\ The Participants
state that the change is consistent with Rule 614(e)(1) and is
necessary because competing consolidators and self-aggregators would be
receiving and using consolidated market data and should be subject to
the same contracts applicable to vendors and subscribers.\41\
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    \40\ See id.
    \41\ See id.
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    The Proposed Amendments amend Section XI.(b), Approvals of
Redisseminators and Terminations of Approvals, to state that all
vendors and other parties that redisseminate consolidated market data
(``data redisseminators'') shall be required to be approved by a CTA
network's administrator. Additionally, the Proposed Amendments amend
Section XI.(c), Subscriber Terminations, to state that a CTA network's
administrator may determine that circumstances warrant directing a data
redisseminator to cease providing consolidated market data to a
subscriber, and that the CTA network's Participants may direct the data
redisseminator to cease providing consolidated market data to the
subscriber if a majority of those Participants determine that (i) such
action is necessary or appropriate in the public interest or for the
protection of investors, or (ii) the subscriber has breached any
agreement required by the CTA network's administrator pursuant to
Section IX.
Section XI.--Operational Matters
    The Proposed Amendments delete from Section XI.(a), Regulatory and
Operational Halts, the definition of ``Primary Listing Market'' in
Section XI.(a)(i)(H) and the definition of ``Trading Center'' in
Section XI.(a)(i)(N).
    The Proposed Amendments add a reference to competing consolidators
and self-aggregators to Section XI.(a)(ii), Operational Halts, to state
that a Participant shall notify competing consolidators and self-
aggregators if it has concerns about its ability to collect and
transmit quotes, orders, or last sale prices, or where the Participant
has declared an Operational Halt or suspension of trading in one or
more Eligible Securities, pursuant to the procedures adopted by the
Operating Committee. In addition, the Proposed Amendments add a
reference to competing consolidators and self-aggregators to Section
XI.(a)(viii), Communications, to require a Primary Listing Exchange for
an Eligible Security to notify competing consolidators and self-
aggregators if it determines to initiate a Regulatory Halt.

    The Proposed Amendments also replace references to ``Primary
Listing Market'' with ``Primary Listing Exchange'' throughout Section
XI.
    The Participants state that their revisions to Section XI to
include references to notifying competing consolidators and self-
aggregators in connection with Regulatory and Operational Halts are
consistent with Rule 614(e)(1) and would ensure that competing
consolidators and self-aggregators are notified of information related
to Regulatory and Operational Halts and that competing consolidators
can disseminate this information to their customers.\42\
---------------------------------------------------------------------------

    \42\ See id.
---------------------------------------------------------------------------

CQ Plan Proposed Amendments

Preface
    Under the Proposed Amendments, the CQ Plan would include the
following new provision: ``Terms used in this plan have the same
meaning as the terms are defined in Rule 600(b) under the Act.''
Section I.--Definitions
    The Proposed Amendments define ``Primary Listing Exchange'' in
Section I.(v) to mean ``the national securities exchange on which an
Eligible Security is listed.'' The proposed definition further states,
``[i]f an Eligible Security is listed on more than one national
securities exchange, Primary Listing Exchange means the exchange on
which the security has been listed the longest.''
    The Proposed Amendments amend the definition of ``Quotation
Information'' in Section I.(x) (formerly, Section I.(w)) to change a
reference to ``consolidated BBO'' to ``NBBO,'' such that Quotation
Information now means, among other things, ``(iii) each NBBO contained
in the foregoing information and any identifier associated therewith. .
. .''
Section IV.--Administration of this CQ Plan
    The Proposed Amendments add new Section IV.(d), Plan website
Disclosures, requiring the Operating Committee to publish on the CQ
Plan's website the Primary Listing Exchange for each Eligible Security
and, on a monthly basis, the consolidated market data gross revenues
for Eligible Securities as specified by Tape A and Tape B securities.
The Participants explain that this addition is intended to comply with
Rule 614(e)(4) and Rule 614(e)(5)(i) and (iii).\43\
---------------------------------------------------------------------------

    \43\ See id.
---------------------------------------------------------------------------

Section V.--The Processor and Competing Consolidators
    The Proposed Amendments amend the title of Section V. to include
competing consolidators, such that it is now titled ``The Processor and
Competing Consolidators,'' and to add new Section V.(f), Evaluation of
Competing Consolidators, to require the Operating Committee to assess
the performance of competing consolidators on an annual basis and to
submit an annual report to the Commission containing the assessment.
The Proposed Amendments require this annual report to include an
analysis with respect to competing consolidators' speed, reliability,
and cost of data provision. The Participants explain that these changes
are intended to comply with the requirements of Rule 614(e)(3).\44\
---------------------------------------------------------------------------

    \44\ See Notice, supra note 7, 86 FR at 67801.
---------------------------------------------------------------------------

    In addition, the Proposed Amendments require the Operating
Committee, in conducting the analysis, to review the monthly
performance metrics to be published by competing consolidators pursuant
to Rule 614(d)(5).\45\ Rule 614(d)(5) requires competing consolidators
to publish on their websites monthly performance metrics as defined by
the effective national market system plan(s) for NMS stocks.\46\ The
Proposed Amendments add the following monthly performance metrics to
this section:
---------------------------------------------------------------------------

    \45\ 17 CFR 242.614(d)(5).
    \46\ See id.

    (i) Capacity statistics, including system tested capacity,
system output capacity, total transaction capacity, and total
transaction peak capacity;
    (ii) Message rate and total statistics, including peak output
rates on the following bases: 1-millisecond, 10-millisecond, 100-
millisecond, 500-millisecond, 1-second, and 5-second;
    (iii) System availability statistics, including system up-time
percentage and cumulative amount of outage time;
    (iv) Network delay statistics, including quote and trade zero
window size events, quote and trade retransmit events, and quote and
trade message total; and
    (v) Latency statistics, including distribution statistics up to
the 99.99th percentile, for the following:
    (A) When a Participant sends an inbound message to a competing
consolidator and when the competing consolidator receives the
inbound message;
    (B) When the competing consolidator receives the inbound message
and when the competing consolidator sends the corresponding
consolidated message to a customer of the competing consolidator;
and
    (C) When a Participant sends an inbound message to a competing
consolidator and when the competing consolidator sends the
corresponding consolidated message to a customer of the competing
consolidator.

Section VI.--Collection and Reporting of Quotation Information
    The Proposed Amendments amend Section VI.(a), Responsibilities of
Participants, to state, ``Each Participant agrees to collect, and
furnish to the Processor in a format acceptable to the Operating
Committee, all quotation information required to be made available by
such Participant by Rules [sic] 602(b)(1) of Regulation NMS. Each
Participant further agrees to collect and report to Competing
Consolidators and Self Aggregators all quotation information required
to be made available by such Participant by Rule 603(b) of Regulation
NMS, including all data necessary to generated consolidated market
data.'' \47\
---------------------------------------------------------------------------

    \47\ Notice, supra note 7, 86 FR at 67801. The Participants
state that they propose to amend Sections VIII.(a) and (b) of the CQ
Plan to add the requirement that each Participant agrees to collect
and report to competing consolidators and self-aggregators all
quotation information in the same manner and using the same methods,
including all methods of access and the same format, as such
Participant makes available any information with respect to
quotations for and transactions in Eligible Securities to any
person. While the Participants refer to Sections VIII.(a) and (b) of
the CQ Plan here, this section reference seems to be an error, and
the Participants likely intended to refer instead to Section VI.(a)
and (b), as the requirement being discussed is only present in
Section VI.(b) of the CQ Plan as it is proposed to be amended.
Separately, the amendment to Section VI.(a) lacks the requirement
that Participants report quotation information to competing
consolidators and self-aggregators in the same manner and using the
same methods, including all methods of access and the same format,
as such Participant makes available any information with respect to
quotations for and transactions in Eligible Securities to any
person. See id. at 67823.
---------------------------------------------------------------------------

    In addition, under the Proposed Amendments, Section VI.(a) states
that each bid and offer with respect to an Eligible Security furnished
to the Processor, competing consolidators, and self-aggregators by any
Participant pursuant to the Plan would be accompanied by (i) the
information required by Rules 602(b)(1) or 603(b) of Regulation NMS, as
applicable, and (ii) the time of the bid or offer as identified by: (A)
in the case of a national securities exchange, the reporting
Participant's matching engine publication timestamp (reported in
microseconds); or (B) in the case of a national securities association,
the quotation publication timestamp that the association's bidding or
offering member reports to the association's quotation facility in
accordance with FINRA rules. Each bid and offer with respect to an
Eligible Security furnished to competing consolidators and self-
aggregators by any Participant must be

accompanied by the time (reported in microseconds) the Participant made
the bid and offer available to competing consolidators and self-
aggregators.
    With respect to national securities associations, under the
Proposed Amendments, if a national securities association quotation
facility provides a proprietary feed of its quotation information, then
the quotation facility shall also furnish the Processor, competing
consolidators, and self-aggregators with the time of the quotation as
published on the quotation facility's proprietary feed, and the
national securities association shall convert any quotation times
reported to it in seconds or milliseconds to microseconds and shall
furnish such times to the Processor, competing consolidators, and self-
aggregators in microseconds. Additionally, Section VI.(a), as proposed
to be amended, states, ``Each bid and offer with respect to an Eligible
Security made by a broker or dealer otherwise than on the floor of an
exchange and furnished to the Processor, Competing Consolidators, and
Self-Aggregators by any Participant which is a national securities
association shall, at the time furnished, be accompanied by an
appropriate symbol designated by the Operating Committee identifying
such broker or dealer as required by paragraph (b)(i) of the Rule.''
    The Proposed Amendments also amend Section VI.(b), Timeliness of
Reporting, to add the following requirement: ``Each Participant further
agrees to furnish quotation information, and changes in any such
information, to the Competing Consolidator[s] and Self-Aggregators in
the same manner and using the same methods, including all methods of
access and the same format, as such Participant makes available any
information with respect to quotations for and transactions in NMS
stocks to any person.'' The Participants explain that this addition is
designed to comply with the requirements of Rule 614(e)(1).
    In addition, the Proposed Amendments would amend Section VI.(c),
High Speed Line and Market Identifiers, to remove a reference to an
``ITS/CAES BBO'' as excepted from the requirement that each bid or
offer with respect to an Eligible Security furnished to the processor
by a Participant that is a national securities association shall be
accompanied by the symbol identifying the broker or dealer who was
reported to the Processor as having made such bid or offer otherwise
than on the floor of an exchange. The Participants explain that they
propose to remove this reference because references to ITS/CAES are
outdated.\48\
---------------------------------------------------------------------------

    \48\ See Notice, supra note 7, 86 FR at 67801.
---------------------------------------------------------------------------

    The Proposed Amendments also amend Section VI.(e), Unusual Market
Conditions, to include references to competing consolidators and self-
aggregators and to remove a reference to Rule 602(b)(1) \49\ and
replace it with a reference to Rules 601(b)(1) and 603(b) of Regulation
NMS. The Proposed Amendments also remove a reference to vendors in
Section VI.(e).
---------------------------------------------------------------------------

    \49\ See id. at 67824.
---------------------------------------------------------------------------

    Finally, the Proposed Amendments delete Section VI.(f), Description
of Reporting Procedures, which requires each Participant and each other
reporting party to prepare and submit to the Operating Committee and
the Processor a description of the procedures by which it intends to
comply with its obligations under the CQ Plan. The Participants explain
that the provisions of Section VI.(f) are no longer relevant.\50\
---------------------------------------------------------------------------

    \50\ See id. at 67801.
---------------------------------------------------------------------------

Section VII.--Receipt and Use of Quotation Information
    In Sections VII.(a), Requirements for Receipt and Use of
Information, (b), Approvals of Redisseminators and Terminations of
Approvals, and (c), Subscriber Terminations, the Proposed Amendments
replace several references to a ``CQ network's quotation information''
with the term ``consolidated market data.''
    The Proposed Amendments would also amend Section VII.(a) to include
references to competing consolidators and self-aggregators such that,
pursuant to fair and reasonable terms and conditions, each network's
administrator shall provide for: (i) the dissemination of each CQ
network's quotation information on terms that are not unreasonably
discriminatory to competing consolidators and self-aggregators; and
(ii) the use of that CQ network's quotation information by competing
consolidators and self-aggregators.
    In addition, the Proposed Amendments would amend Section VII.(a) to
state that the Participants in both CQ networks expect that their
network's administrator will require the following parties to enter
into agreements with the network's administrator: (i) any party that
receives consolidated market data by means of a direct computer-to-
computer interface with the Processor or competing consolidators; (ii)
any competing consolidator or self-aggregator that receives quotation
information directly from a Participant for the purpose of creating
consolidated market data; (iii) vendors and other parties that
redisseminate consolidated market data; and (iv) persons that use
consolidated market data for such purposes as the CQ network's
administrator may from time to time identify.
    The Participants explain that the proposed revisions intend to make
clear that the current market data contracts regarding the receipt of
market data will be applicable to competing consolidators and self-
aggregators.\51\ The Participants state that the change is consistent
with Rule 614(e)(1) and is necessary, stating that competing
consolidators and self-aggregators would be receiving and using
consolidated market data and should be subject to the same contracts
applicable to vendors and subscribers.\52\
---------------------------------------------------------------------------

    \51\ See id.
    \52\ See id.
---------------------------------------------------------------------------

    The Proposed Amendments would also amend Section VII.(b), Approvals
of Redisseminators and Terminations of Approvals, to state that all
vendors of and other parties that redisseminate consolidated market
data (``data redisseminators'') shall be required to be approved by a
CTA network's administrator. Additionally, the Proposed Amendments
amend Section XI.(c), Subscriber Terminations, to state that a
network's administrator may determine that circumstances warrant
directing a data redisseminator to cease providing consolidated market
data to a subscriber, and that the CQ network's Participants may direct
the data redisseminator to cease providing consolidated market data to
the subscriber if a majority of those Participants determine that (i)
such action is necessary or appropriate in the public interest or for
the protection of investors, or (ii) the subscriber has breached any
agreement required by the CTA network's administrator pursuant to
Section VII.

IV. Discussion

A. The Applicable Standard of Review

    Under Rule 608(b)(2) of Regulation NMS, the Commission shall
approve a national market system plan or proposed amendment to an
effective national market system plan, with such changes or subject to
such conditions as the Commission may deem necessary or appropriate, if
it finds that the plan or amendment is necessary or appropriate in the
public interest, for the protection of investors and the maintenance of
fair and orderly markets, to remove impediments to, and perfect the

mechanisms of, a national market system, or otherwise in furtherance of
the purposes of the Act.\53\ The Commission shall disapprove a national
market system plan or proposed amendment if it does not make such a
finding.\54\ Furthermore, Rule 700(b)(3)(ii) of the Commission's Rules
of Practice states:
---------------------------------------------------------------------------

    \53\ 17 CFR 242.608(b)(2).
    \54\ Id.

    The burden to demonstrate that a NMS plan filing is consistent
with the Exchange Act and the rules and regulations issued
thereunder that are applicable to NMS plans is on the plan
participants that filed the NMS plan filing. Any failure of the plan
participants that filed the NMS plan filing to provide such detail
and specificity may result in the Commission not having a sufficient
basis to make an affirmative finding that an NMS plan filing is
consistent with the Exchange Act and the rules and regulations
issued thereunder that are applicable to NMS plans.\55\
---------------------------------------------------------------------------

    \55\ 17 CFR 201.700(b)(3)(ii).

    For the reasons discussed below, the Commission does not find that
the Participants have met their burden to demonstrate that the Proposed
Amendments are consistent with the Act.\56\ Specifically, the
Commission does not find that the Participants have demonstrated that
the Proposed Amendments are consistent with either Rule 614(e) of
Regulation NMS or Rule 608 of Regulation NMS. The Proposed Amendments
clearly do not comply with the requirements of the MDI Rules.\57\
Accordingly, the Commission cannot make a finding that the Proposed
Amendments are necessary or appropriate in the public interest, for the
protection of investors and the maintenance of fair and orderly
markets, to remove impediments to, and perfect the mechanisms of, a
national market system, or otherwise in furtherance of the purposes of
the Act.\58\
---------------------------------------------------------------------------

    \56\ 17 CFR 201.700(b)(3).
    \57\ As discussed below, the Proposed Amendments do not comply
with MDI Rules 603(b), 614(e)(1), and 614(e)(2). 17 CFR 242.603(b),
17 CFR 242.614(e)(1), 17 CFR 242.614(e)(2).
    \58\ 17 CFR 242.608(b)(2).
---------------------------------------------------------------------------

B. The Requirements of the MDI Rules Regarding the Proposed Amendments

    As adopted by the Commission, the MDI Rules implement a
decentralized consolidation model in which competing consolidators
would replace the exclusive plan processors of the Equity Data Plans as
the entities responsible for disseminating consolidated market
data.\59\ The MDI Rules Release provides for an ``initial parallel
operation period'' of 180 days during which the existing exclusive SIPs
for the Equity Data Plans would operate in parallel with the competing
consolidators,\60\ and further provides for the transition from the
initial parallel operation period to the retirement of the exclusive
SIPs for equity market data:
---------------------------------------------------------------------------

    \59\ See MDI Rules Release, supra note 6, 86 FR at 18637.
    \60\ See id. at 18700.

    Within 90 days of the end of the initial parallel operation
period, the Operating Committee will make a recommendation to the
Commission as to whether the exclusive SIPs should be
decommissioned. The Commission will consider an effective national
market system plan amendment to effectuate a cessation of the
operations of the exclusive SIPs and, if consistent with the
requirements of Rule 608 and the Exchange Act, approve such an
amendment.\61\
---------------------------------------------------------------------------

    \61\ Id. at 18701.

    Pursuant to Rule 614(e)(1) of Regulation NMS, and as discussed in
the MDI Rules Release, the Participants to the Plans were required to
file an amendment to conform the Plans to reflect the provision of
information with respect to quotations for and transactions in NMS
stocks that is necessary to generate consolidated market data by the
national securities exchange and national securities association
participants to competing consolidators and self-aggregators.\62\
---------------------------------------------------------------------------

    \62\ See id. at 18700-01.
---------------------------------------------------------------------------

C. Whether the Proposed Amendments Are Consistent With Rule 614(e)(1)
of Regulation NMS

1. Consistency With the Decentralized Consolidation Model

    Two commenters recommend disapproval of the Proposed Amendments
because the amendments do not properly conform the Plans to the MDI
Rules in that the amendments fail to accurately reflect the
decentralized consolidation model.\63\ One commenter states, ``[t]he
MDI rule represents a fundamental shift to a decentralized
consolidation model. The Plan amendments need to reflect that
throughout the body and exhibits of the Plans.'' \64\ The commenter
also states that the Proposed Amendments did not include any revisions
to the exhibits, stating that Exhibit A to the current version of the
CTA Plan (``Restated Articles of Association of Consolidated Tape
Association'') ``does not reflect the shifting purpose of the Plan to
provide underlying content for the creation of consolidated market
data,'' \65\ and argues that the Proposed Amendments must
``[a]cknowledge that the Plan is no longer responsible for the
creation, distribution and pricing of consolidated market data.'' \66\
---------------------------------------------------------------------------

    \63\ See Letter from Patrick Flannery, Chief Executive Officer,
MayStreet, Inc., to Vanessa Countryman, Secretary, Commission (Dec.
17, 2021) (``MayStreet Letter I''); Letter from Manisha Kimmel,
Chief Policy Officer, MayStreet, Inc., to Vanessa Countryman,
Secretary, Commission (Mar. 23, 2022) (``MayStreet Letter II'');
Letter from Ellen Greene, Managing Director, Equity and Options
Market Structure, and William C. Thum, Managing Director and
Associate General Counsel, Asset Management Group, Securities
Industry and Financial Markets Association, to Vanessa Countryman,
Secretary, Commission (Dec. 17, 2021) (``SIFMA Letter I'').
    \64\ MayStreet Letter II, supra note 63, at 2.
    \65\ Id. at 8.
    \66\ Id. at 4-5.
---------------------------------------------------------------------------

    This commenter further argues that ``[t]he language of the Plan
Amendments that states that competing consolidators and self-
aggregators will be receiving and using consolidated market data is
inconsistent with their role in actually generating consolidated market
data based on the receipt of NMS information,'' \67\ and reiterates
that only competing consolidators would externally distribute and
charge for consolidated market data and that the Plans would only be
selling underlying content.\68\ This commenter also disagrees with what
it describes as the Proposed Amendments' treatment of competing
consolidators as vendors.\69\ The commenter states that ``[s]ubjecting
competing consolidators to the same fees and contractual requirements
as data vendors and subscribers that receive consolidated market data
from the exclusive SIP fails to recognize that competing consolidators
are SIPs and not similarly situated to today's data vendors.'' \70\ The
commenter further states that competing consolidators will take on
added risk and expense, ``including the costs associated with
generating consolidated market data, disclosing operational and
performance metrics, registering with the SEC, and ongoing compliance
with Rule 614.'' \71\
---------------------------------------------------------------------------

    \67\ MayStreet Letter I, supra note 63, at 5.
    \68\ See MayStreet Letter II, supra note 63, at 4-5.
    \69\ See MayStreet Letter I, supra note 63, at 2, 4-5
(explaining that competing consolidators are generating and
distributing consolidated market data for the first time, unlike
vendors who redistribute consolidated market data).
    \70\ MayStreet Letter I, supra note 63, at 3-4; see id. at 1
(stating that competing consolidators should be treated as the
replacements to the exclusive SIPs to meet the requirements of the
MDI Rules).
    \71\ Id. at 5.
---------------------------------------------------------------------------

    Another commenter also argues that the Proposed Amendments'
treatment of competing consolidators as market data vendors contravenes
the MDI Rules.\72\ This commenter argues that the

Commission's MDI Rules replace the exclusive SIPs with competing
consolidators and that competing consolidators should therefore be
``treated in the same manner as the exclusive SIPs are today.'' \73\
This commenter states that the Participants are, through the Proposed
Amendments, ``acting in an unreasonably discriminatory manner,
effectively disregarding these Exchange Act mandates in addition to the
Commission's directive in the Infrastructure Rule.'' \74\
---------------------------------------------------------------------------

    \72\ See SIFMA Letter I, supra note 63, at 8. See also id. at 4-
5; Letter from Ellen Greene, Managing Director, Equity and Options
Market Structure, and William C. Thum, Managing Director and
Associate General Counsel, Asset Management Group, Securities
Industry and Financial Markets Association, to Vanessa Countryman,
Secretary, Commission, at 2-3 (Apr. 27, 2022) (``SIFMA Letter II'').
    \73\ SIFMA Letter I, supra note 63, at 8.
    \74\ Id. at 8.
---------------------------------------------------------------------------

    One commenter argues that the sections of the Plans that discuss
vendors' and subscribers' contractual relationships with the Plans
should be ``removed or significantly altered to reflect that the Plans
no longer have agreements with vendors and end users and instead have
agreements with the competing consolidators and self-aggregators
related specifically to the cost of content underlying core market
data.'' \75\ This commenter states that ``the relationship between
competing consolidators and their customers should not include a
contractual relationship with the plan'' because vendors would be
receiving consolidated market data from competing consolidators rather
than from the Plans.\76\ The commenter also states that contracts
applicable to vendors would be inappropriate for competing
consolidators because, unlike vendors, competing consolidators would be
receiving data underlying consolidated market data from the exchanges,
not consolidated market data from the exclusive SIPs.\77\ This
commenter also objects to the continued references to subscribers and
vendors in the Plans as recipients of data from the Processor, arguing
that under the decentralized consolidation model, ``only competing
consolidators would sell consolidated market data to vendors and
subscribers.'' \78\
---------------------------------------------------------------------------

    \75\ MayStreet Letter I, supra note 63, at 3.
    \76\ Id. at 3. See also MayStreet Letter II, supra note 63 at 9
(arguing that, since the Plans would only be selling underlying
content to competing consolidators and self-aggregators, vendor and
subscriber agreements should not be required).
    \77\ See MayStreet Letter I, supra note 63, at 5.
    \78\ Id. at 3.
---------------------------------------------------------------------------

    One commenter objects to the retention of the concept of a single
processor in the Proposed Amendments.\79\ Another commenter also states
that ``it is worth noting that the Plans do not reflect the
decentralized consolidation model nor do they acknowledge the parallel
period.'' \80\ This commenter requests clarification of how the CTA and
CQ Plans will operate during the parallel operation period, such as the
inclusion in the Plans of objective criteria for ending the parallel
period and the addition of a section devoted to competing consolidators
and self-aggregators to help distinguish between their obligations and
the obligations of the exclusive SIPs during the parallel period.\81\
The commenter recommends that the Proposed Amendments clarify that all
content underlying consolidated market data will be provided to
competing consolidators and self-aggregators and provide validation
procedures to be followed by competing consolidators. The commenter
also suggests specific modifications to CTA Plan Sections V. and VI. to
make clear that the functions of the Processor apply only during the
parallel operation period and to embed in the body of the Plans the
contractual terms regarding the provision of capacity forecasts to
competing consolidators, data correction requirements, and
indemnification (of competing consolidators from Participants) from CQ
Plan Exhibit A and CTA Plan Exhibit B.\82\
---------------------------------------------------------------------------

    \79\ See SIFMA Letter I, supra note 63, at 8.
    \80\ MayStreet Letter II, supra note 63, at 8.
    \81\ See id. at 7-8.
    \82\ See id.
---------------------------------------------------------------------------

    The Participants submitted a comment letter in which they argue
that maintaining the exclusive SIPs through the parallel operation
period is consistent with the MDI Rules Release, stating:

    [P]ursuant to the phased transition period set forth in the MDI
Rules Release, the Plans must operate a parallel operation period
during which the decentralized consolidation model introduced by the
MDI Rules will run in parallel to the existing exclusive SIP model.
. . . After completion of the parallel operation period, the Plans
are required to submit an amendment to effectuate a cessation of the
operations of the exclusive SIPs, which would include removing
references of the exclusive SIPs from the text of the Plans.\83\
---------------------------------------------------------------------------

    \83\ Letter from James P. Dombach, Counsel for CTA, CQ, and UTP
Plans, McGonigle, P.C., to Vanessa Countryman, Secretary,
Commission, at 2 (Mar. 25, 2022) (``McGonigle Letter'').

    The Participants also maintain that the exclusive SIPs will
continue to provide market data under the current Equity Data Plans
during the parallel operation period and that the inclusion of the
exclusive SIPs in the Equity Data Plans (as provided for in the
Proposed Amendments) until the submission of a further amendment after
the parallel operation period is consistent with the MDI Rules
Release.\84\
---------------------------------------------------------------------------

    \84\ See id. at 1-2.
---------------------------------------------------------------------------

    The Commission agrees with the commenters who argue that the
Proposed Amendments do not properly conform the Plans to the
decentralized consolidation model. First, under the MDI Rules, the SROs
are required to make available to competing consolidators and self-
aggregators the data necessary to generate consolidated market
data,\85\ and competing consolidators and self-aggregators will then
generate consolidated market data, rather than receive consolidated
market data from the Plans.\86\ The Participants, however, propose to
amend the Plans to provide for the dissemination of consolidated data
to competing consolidators and self-aggregators.\87\ This is not
consistent with the decentralized consolidation model.
---------------------------------------------------------------------------

    \85\ See Rule 603(b), 17 CFR 242.603(b). See also Rule
600(b)(19), which defines ``consolidated market data'' as the
following data, consolidated across all national securities
exchanges and national securities associations: (i) Core data; (ii)
Regulatory data; (iii) Administrative data; (iv) Self-regulatory
organization-specific program data; and (v) Additional regulatory,
administrative, or self-regulatory organization-specific program
data elements defined as such pursuant to the effective national
market system plan or plans required under Sec.  242.603(b). See 17
CFR 242.600(b)(19).
    \86\ See Rule 614(d)(1)-(3). 17 CFR 242.614(d)(1)-(3).
    \87\ The Participants propose to amend the CTA Plan to require
the CTA network administrator to provide for the dissemination of
consolidated market data to competing consolidators and self-
aggregators and to provide for the use of that consolidated market
data by competing consolidators and self-aggregators. See Notice,
supra note 7, 86 FR at 67811 (CTA Plan Proposed Amendment at Section
IX.(a)). The Participants also propose to amend the CQ Plan to
require each network's administrator to provide for the
dissemination of each CQ network's consolidated quotation
information on terms that are not unreasonably discriminatory to
competing consolidators and self-aggregators, and to provide for the
use of that CQ network's consolidated quotation information by
competing consolidators and self-aggregators. See id. at 67824 (CQ
Plan Proposed Amendment at Section VII.(a)). See also Consolidated
Quotation System, Multicast Output Binary Specification, 8 (Jan. 26.
2021), available at https://www.ctaplan.com/publicdocs/ctaplan/CQS_Pillar_Output_Specification.pdf. The Participants also state
that, for both the CTA Plan and the CQ Plan, competing consolidators
and self-aggregators will be receiving and using consolidated market
data. See Notice, supra note 7, 86 FR at 67801 (describing the
Proposed Amendments).
---------------------------------------------------------------------------

    Specifically, Rule 614(d) provides that competing consolidators
shall collect any information with respect to quotations for and
transactions in NMS stocks as provided in Rule 603(b) that is necessary
to create a consolidated market data product from each national
securities exchange and national securities association,\88\ calculate
and

generate a consolidated market data product,\89\ and make the
consolidated market data product available to subscribers.\90\ Self-
aggregators will receive information with respect to quotations for and
transactions in NMS stocks, including all data necessary to generate
consolidated market data, and generate consolidated market data solely
for their internal use.\91\ Additionally, pursuant to Rule 603(b), the
Participants shall make available to all competing consolidators and
self-aggregators ``all data necessary to generate consolidated market
data.'' \92\ Accordingly, the Plans' modified role under the
decentralized consolidation model will be to develop and file with the
Commission the fees associated with the underlying data, to collect and
allocate revenues for that data, to develop monthly performance metrics
for competing consolidators, and to provide an annual assessment of
competing consolidator performance.\93\ Therefore, the Proposed
Amendments impermissibly provide for the dissemination by the Plans of
consolidated market data to competing consolidators and self-
aggregators, which is inconsistent with Rule 603(b), which requires the
Participants to make available the data necessary to generate
consolidated market data to competing consolidators and self-
aggregators so that, pursuant to Rule 614(d), those entities can
generate consolidated market data themselves.
---------------------------------------------------------------------------

    \88\ See Rule 614(d)(1), 17 CFR 242.614(d)(1).
    \89\ See Rule 614(d)(2), 17 CFR 242.614(d)(2).
    \90\ See Rule 614(d)(3), 17 CFR 242.614(d)(3). The MDI Rules
also define ``competing consolidator'' as a securities information
processor required to be registered pursuant to Sec.  242.614 (Rule
614) or a national securities exchange or national securities
association that receives information with respect to quotations for
and transactions in NMS stocks and generates a consolidated market
data product for dissemination to any person. See 17 CFR
242.600(b)(16).
    \91\ The definition of ``self-aggregator'' was added by the MDI
Rules. See 17 CFR 242.600(b)(83). A self-aggregator may make
consolidated market data available to its affiliates that are
registered with the Commission for their internal use. Id.
    \92\ 17 CFR 242.603(b).
    \93\ See MDI Rules Release, supra note 6, 86 FR at 18604, 18681.
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    Second, while Rule 603(b) requires national securities exchanges
and associations on which an NMS stock is traded to make available to
all competing consolidators and self-aggregators their information with
respect to quotations for and transactions in NMS stocks, including all
data necessary to generate consolidated market data,\94\ the Proposed
Amendments do not add this requirement to the CTA Plan. Instead, the
Proposed Amendments add to the CTA Plan a requirement that each
Participant agrees to collect and report to competing consolidators and
self-aggregators all ``last sale price information''--not all data
necessary to generate consolidated market data.\95\ Last sale price
information is but one component of ``core data'' adopted by the MDI
Rules, and core data is itself only one component of consolidated
market data.\96\ Rule 603(b) requires the Participants to make
available all data necessary to generate consolidated market data to
competing consolidators and self-aggregators,\97\ not just last sale
price information.
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    \94\ 17 CFR 242.603(b).
    \95\ See Notice, supra note 7, 86 FR at 67810 (CTA Plan Proposed
Amendment at Section VIII.(a)). As discussed above, Rule 600(b)(19)
defines ``consolidated market data'' as the following data,
consolidated across all national securities exchanges and national
securities associations: (i) Core data; (ii) Regulatory data; (iii)
Administrative data; (iv) Self-regulatory organization-specific
program data; and (v) Additional regulatory, administrative, or
self-regulatory organization-specific program data elements defined
as such pursuant to the effective national market system plan or
plans required under Sec.  242.603(b). See 17 CFR 242.600(b)(19).
Rule 600(b)(21) defines ``core data'' as (i) The following
information with respect to quotations for, and transactions in, NMS
stocks: (A) Quotation sizes; (B) Aggregate quotation sizes; (C) Best
bid and best offer; (D) National best bid and national best offer;
(E) Protected bid and protected offer; (F) Transaction reports; (G)
Last sale data; (H) Odd-lot information; (I) Depth of book data; and
(J) Auction information.'' See 17 CFR 242.600(b)(21).
    \96\ See id.
    \97\ 17 CFR 242.603(b).
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    Third, under the Proposed Amendments, the Plans would treat
competing consolidators in the same manner as vendors and subscribers
with respect to market data contracts.\98\ Under Rule 600(b)(16), a
competing consolidator is, by definition, either a SIP required to
register under Rule 614 or an SRO.\99\ The Participants, however, would
apply current market data contracts for vendors and subscribers to
competing consolidators and self-aggregators,\100\ arguing that this
``is necessary since the Competing Consolidators and Self-Aggregators
will [sic] receiving and using consolidated market data, and any such
party should be subject to the same contracts applicable to vendors and
subscribers.'' \101\
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    \98\ See SIFMA Letter I, supra note 63, at 4-5, 8; SIFMA Letter
II, supra note 72, at 2-3; MayStreet Letter I, supra note 63, at 2,
4-5.
    \99\ 17 CFR 242.600(b)(16).
    \100\ See Notice, supra note 7, 86 FR at 67811-12 (CTA Plan
Proposed Amendment at Section IX.; id. at 67824-25 (CQ Plan Proposed
Amendment at Section VII.).
    \101\ Notice, supra note 7, 86 FR at 67801.
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    The Commission agrees with the commenters who argue that applying
contract provisions for vendors and subscribers to competing
consolidators is inconsistent with the MDI Rules,\102\ because unlike
vendors and subscribers, competing consolidators will not receive
consolidated market data from the Plans. Instead, as replacements for
the exclusive SIPs, competing consolidators will generate consolidated
market data themselves and disseminate it to subscribers. In the MDI
Rules Release, the Commission clearly distinguished competing
consolidators from vendors. For example, the Commission explained that
only entities that receive information with respect to quotations for
and transactions in NMS stocks directly from an SRO pursuant to an
effective national market systems plan and that generate consolidated
market data products for dissemination must register as competing
consolidators.\103\ By comparison, the Commission stated, ``[a] market
data vendor that purchases proprietary data feeds from an SRO or SROs,
or that purchases data from a competing consolidator, and aggregates
and disseminates such data to its customers, will not be required to
register as a competing consolidator,'' \104\ but ``vendors that do not
register as competing consolidators would not be permitted to purchase
the NMS information necessary to generate consolidated market data from
the SROs at prices established by an effective national market system
plan.'' \105\
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    \102\ See SIFMA Letter I, supra note 63, at 4-5, 8; MayStreet
Letter I, supra note 63, at 2, 4-5. See also SIFMA Letter II, supra
note 72, at 2-3 (objecting to the Proposed Fee Amendments because
they propose to charge redistribution fees to competing
consolidators like market data vendors).
    \103\ See MDI Rules Release, supra note 6, 86 FR at 18665.
    \104\ Id.
    \105\ Id.
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    Fourth, the Proposed Amendments are inconsistent in certain other
ways with the decentralized consolidation model provided for in the MDI
Rules. Under the decentralized consolidation model, the primary listing
exchanges will be required to collect, calculate, and make available
regulatory data, which includes information relating to regulatory
halts, to competing consolidators and self-aggregators in accordance
with the definition of ``regulatory data'' in Rule 600(b)(78).\106\

The Proposed Amendments, however, do not reflect this requirement with
respect to regulatory data. For example, the Proposed Amendments fail
to amend the CTA and CQ Plans to reflect that the Processors will no
longer have the responsibility to disseminate regulatory halt notices
once the decentralized consolidation model has been implemented.
---------------------------------------------------------------------------

    \106\ 17 CFR 242.600(b)(78) defines ``Regulatory Data'' as,
among other things: (A) Information regarding Short Sale Circuit
Breakers pursuant to Sec.  242.201; (B) Information regarding Price
Bands required pursuant to the Plan to Address Extraordinary Market
Volatility . . . (C) Information relating to regulatory halts or
trading pauses (news dissemination/pending, LULD, Market-Wide
Circuit Breakers) and reopenings or resumptions; (D) The official
opening and closing prices of the primary listing exchange; and (E)
An indicator of the applicable round lot size. See 17 CFR
242.600(b)(78)(i). Regulatory data is one element of ``consolidated
market data,'' as defined in Rule 600(b)(19). See supra note 85.
---------------------------------------------------------------------------

    The Proposed Amendments also do not include requirements for the
Participants to timestamp every element of data necessary to generate
consolidated market data. Rule 614(e)(2) requires the application of
timestamps by the Participants on all information with respect to
quotations for and transactions in NMS stocks that is necessary to
generate consolidated market data, including the time that such
information was generated by the Participant and the time the
Participant made such information available to competing consolidators
and self-aggregators.\107\ While the Proposed Amendment to the CTA Plan
requires that a Participant that reports last sale price information to
competing consolidators and self-aggregators timestamp in microseconds
the time the Participant generated the last sale price information and
made the last sale price information available to those entities,\108\
this proposed timestamp provision does not satisfy the requirements of
Rule 614(e)(2), because it applies only to last sale price information,
not to ``all information with respect to quotations for and
transactions in NMS stocks that is necessary to generate consolidated
market data'' as required under the rule. And while the Proposed
Amendment to the CQ Plan amends the section governing the collection
and reporting of Quotation Information to require any Participant that
furnishes bids and offers to competing consolidators and self-
aggregators to timestamp the time the Participant made such bid and
offer available to competing consolidators and self-aggregators,\109\
this proposed timestamp provision does not apply to ``all information
with respect to quotations for and transactions in NMS stocks that is
necessary to generate consolidated market data.'' \110\ Additionally,
the Proposed Amendment to the CQ Plan states that each bid and offer
furnished to competing consolidators and self-aggregators shall be
accompanied by the information required by Rule 602(b)(1) or Rule
603(b),\111\ but it does not specifically require that each Participant
timestamp the data necessary to generate consolidated market data upon
generation and upon the time it is made available to competing
consolidators and self-aggregators, as required by Rule 614(e)(2).
---------------------------------------------------------------------------

    \107\ 17 CFR 242.614(e)(2).
    \108\ See Notice, supra note 7, 86 FR at 67808 (CTA Plan
Proposed Amendment at Section VI.(c)).
    \109\ See id. at 67823 (CQ Plan Proposed Amendment at Section
VI.(a)).
    \110\ In the MDI Rules Release, the Commission stated,
``[s]pecifically, the timestamps applied by the SROs must be to the
individual components of data content underlying consolidated market
data, i.e., all of the individual components of data content
underlying core data, regulatory data, administrative data, self-
regulatory organization-specific program data, and additional
elements defined as `consolidated market data.' '' MDI Rules
Release, supra note 6, 86 FR at 18688.
    \111\ See Notice, supra note 7, 86 FR at 67823 (CQ Plan Proposed
Amendment at Section VI.(a)).
---------------------------------------------------------------------------

    And finally, the Commission disagrees with the Participants'
statement that the continued references to the role of the Processor in
the Plans, as amended by the Proposed Amendments, comply with the MDI
Rules Release's implementation schedule for parallel operation of the
exclusive SIPs and the competing consolidators.\112\ Rule 614(e)(1)
requires the Participants to amend the Plans to reflect the provision
of information with respect to quotations for and transactions in NMS
stocks that is necessary to generate consolidated market data by the
SROs to competing consolidators and self-aggregators, i.e., to conform
the Plans to reflect the decentralized consolidation model.\113\
However, the Proposed Amendments are not consistent with the
decentralized consolidation model and do not conform to the fact that a
single processor will no longer be in operation once the decentralized
consolidation model has been fully implemented.
---------------------------------------------------------------------------

    \112\ See McGonigle Letter, supra note 83, at 1-2. See also MDI
Rules Release, supra note 6, 86 FR at 18700-01 (discussing the
parallel operation implementation schedule).
    \113\ 17 CFR 242.614(e)(1).
---------------------------------------------------------------------------

    And while the MDI Rules Release contemplates the filing of a second
amendment by the Plans ``to effectuate a cessation of the operations of
the exclusive SIPs,'' \114\ the current Proposed Amendments were
required to conform the Plans to reflect the provision of information
with respect to quotations for and transactions in NMS stocks that is
necessary to generate consolidated market data by the SROs to competing
consolidators and self-aggregators, which, as discussed above, they
have failed to do. Moreover, the failure of the Participants to explain
in the Proposed Amendments how the Plans will function under the fully
implemented decentralized consolidation model upon cessation of the
exclusive SIPs not only denies market participants the opportunity to
comment on those proposed provisions now, but it increases the
uncertainty that firms face in determining whether to become competing
consolidators or self-aggregators during the initial parallel operation
period, thus hampering the implementation of the decentralized
consolidation model required by the MDI Rules.\115\
---------------------------------------------------------------------------

    \114\ MDI Rules Release, supra note 6, 86 FR at 18701.
    \115\ See id. at 18699-700 (discussing the ``first wave''
registration period for competing consolidators, to begin on the
date the Commission approves the amendments to the effective
national market system plan(s) required under Rule 614(e) including
the fees for the SRO data content necessary to generate consolidated
market data).
---------------------------------------------------------------------------

    Because the Proposed Amendments clearly do not comply with the
plain terms of the MDI Rules \116\ and are thus inconsistent with the
requirements of Rule 614(e)(1), the Commission also does not find that
the Participants have met their burden to demonstrate that the Proposed
Amendments are consistent with Rule 608 as necessary or appropriate in
the public interest, for the protection of investors and the
maintenance of fair and orderly markets, to remove impediments to, and
perfect the mechanisms of, a national market system, or otherwise in
furtherance of the purposes of the Act.\117\
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    \116\ Specifically, Rules 603(b), 614(e)(1) and (e)(2). 17 CFR
242.603(b), 17 CFR 242.614(e)(1), 17 CFR 242.614(e)(2).
    \117\ See 17 CFR 242.608(b)(2).
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2. Technical Comments

    One commenter criticizes the failure of the Proposed Amendments to
incorporate the definitions of the MDI Rules.\118\ This commenter
states, ``[t]he definitions in each of the Plans should be updated to
reflect the decentralized consolidation model. It is insufficient to
simply refer to Rule 600(b), in large part because there seems to be
confusion within the Plans as to the role of competing consolidators,
self-aggregators, the exclusive SIPs and vendors.'' \119\ Specifically,
this commenter suggests that the Proposed Amendments add definitions of
the following terms: competing consolidator, self-aggregator,
consolidated market data, content

underlying consolidated market data, initial parallel period, and
parallel period, as well as a definition of the content that would be
disseminated by the exclusive SIP to the Plans.\120\ This commenter
also suggests updating the existing definitions of Processor, System,
and Consolidated Quotation System, and clarifying the existing
definitions of Subscriber, Vendor, and the CQ Network's Quotation
Information to reflect the decentralized consolidation model.\121\
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    \118\ See MayStreet Letter II, supra note 63, at 5. This
commenter also recommends that the Commission issue guidance to the
Participants to aid in revising the Proposed Amendments. See id. at
4. The discussion and findings in this Order, in addition to the MDI
Rules Release and the MDI Rules themselves, provide sufficient
guidance to the Participants in amending the Plans.
    \119\ Id. at 5.
    \120\ See id. at 5-6.
    \121\ See id. at 6.
---------------------------------------------------------------------------

    This commenter also describes several other technical criticisms of
the Proposed Amendments. The commenter states that the Proposed
Amendments should have removed the addition of a new SRO participant
from the Plans' ministerial amendment list,\122\ arguing that competing
consolidators and self-aggregators would need more time to update their
systems to handle the new Participant's data.\123\ The commenter also
states that the Proposed Amendments need to support the timestamps
required by the MDI Rules to the microsecond,\124\ and that validation
procedures to be used by competing consolidators need to be added to
the Plans to describe the Participants' and the competing
consolidator's obligations.\125\ The commenter further suggests that
the Plans' capacity planning process needs to apply to competing
consolidators and self-aggregators so that these entities can meet SRO-
expected capacity requirements.\126\ Finally, the commenter states that
the Plans' conflict of interest and confidentiality provisions need to
apply to competing consolidators since they will be replacing the
exclusive SIPs.\127\
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    \122\ A ``ministerial amendment'' permits an amendment to the
Plans that is submitted by the Chairman of the CTA Plan and the
Chairman of the CQ Operating Committee with less than 48 hours'
advance notice to the Participants. See Notice, supra note 7, 86 FR
at 67805 (CTA Plan Proposed Amendment at Section IV.(b)); id. at
67820 (CQ Plan Proposed Amendment at Section IV.(c)).
    \123\ See MayStreet Letter II, supra note 63, at 6-7.
    \124\ See id. at 5.
    \125\ See MayStreet Letter I, supra note 63, at 4; MayStreet
Letter II, supra note 63, at 8.
    \126\ See MayStreet Letter II, supra note 63, at 10.
    \127\ See id. at 7.
---------------------------------------------------------------------------

    The Commission agrees with the commenter that the failure to
include the definitions established by the MDI Rules contributes to
ambiguity within the Plans. In lieu of incorporating the MDI Rules'
definitions, the Proposed Amendments add a statement to each Plan that
``[t]erms used in this plan have the same meaning as the terms defined
in Rule 600(b) under the Act.'' \128\ This creates ambiguity because
the Proposed Amendments use the terms adopted by the MDI Rules but do
not include definitions of those terms, so their applicability and the
obligations they create are unclear or are not reflected in the
Proposed Amendments. For example, the Proposed Amendment to the CQ Plan
adds a requirement for the collection and reporting of Quotation
Information, stating that each Participant agrees to collect and
transmit to competing consolidators and self-aggregators ``all data
necessary to generated [sic] consolidated market data.'' \129\ However,
the Proposed Amendments do not define ``consolidated market data'' or
even the data necessary to generate it. The Plans thus fail to include
an express requirement for the Participants to disseminate to competing
consolidators and self-aggregators all of the elements of consolidated
market data (e.g., core data,\130\ regulatory data, and administrative
data) in accordance with the definition of ``consolidated market data''
in Rule 600(b)(19) \131\ and Rule 603(b).\132\ The absence of that
definition in the Plans, especially in light of the instances described
above in which the Proposed Amendments have failed to reflect the full
scope of data required to be made available to competing consolidators
and self-aggregators,\133\ would lead to ambiguity about the
Participants' obligations with respect to consolidated market data.
---------------------------------------------------------------------------

    \128\ Notice, supra note 7, 86 FR at 67802 (CTA Plan Proposed
Amendment at Preface); id. at 67818 (CQ Plan Proposed Amendment at
Preface).
    \129\ Notice, supra note 7, 86 FR at 67823 (CQ Plan Proposed
Amendment at Section VI.(a)).
    \130\ See supra note 95 (defining ``core data'').
    \131\ See id. (defining ``consolidated market data'').
    \132\ 17 CFR 242.603(b). As noted above, the CTA Plan Proposed
Amendment does not add a requirement for the Participants to collect
and report to competing consolidators and self-aggregators all data
necessary to generate consolidated market data. See supra notes 94-
97 and accompanying text.
    \133\ See supra notes 94-97 and accompanying text.
---------------------------------------------------------------------------

    Relatedly, Rule 614(e)(2) requires the Participants to amend the
Plans to apply timestamps to all information with respect to quotations
for and transactions in NMS stocks that is necessary to generate
consolidated market data. However, because there is no definition of
``consolidated market data'' in the Plans, there is thus no requirement
in the language of the Plans for the Participants to timestamp the data
components that constitute consolidated market data,\134\ such as the
elements of core data \135\ (another definition established by the MDI
Rules that the Proposed Amendments failed to include in the Plans),
which include auction information, odd-lot information, and depth of
book data. This is another instance in which the absence of definitions
in the Plans would lead to ambiguity about the Participants'
obligations with respect to consolidated market data.
---------------------------------------------------------------------------

    \134\ See supra note 95 (defining ``consolidated market data'').
    \135\ See id. (defining ``core data'').
---------------------------------------------------------------------------

    In addition, as discussed above, under the MDI Rules, the primary
listing exchanges are required to collect, calculate, and make
available regulatory data to competing consolidators and self-
aggregators in accordance with the definition of ``regulatory data'' in
Rule 600(b)(78)(i).\136\ The Proposed Amendments, however, do not add
the definition of ``regulatory data'' to the Plans. Therefore, there is
no unambiguous requirement in the Plans that the primary listing
exchanges perform these functions.
---------------------------------------------------------------------------

    \136\ See supra note 106 (defining ``regulatory data'').
Regulatory data is one element of ``consolidated market data,'' as
defined in Rule 600(b)(19). See supra note 95.
---------------------------------------------------------------------------

    Further, the CTA Plan Proposed Amendment would require that the CTA
network enter into agreements with vendors and other parties that
redisseminate consolidated market data to others,\137\ without
including the definition of ``consolidated market data.'' Also, as
stated by a commenter,\138\ the MDI Rules define a competing
consolidator as a securities information processor, but the Proposed
Amendments fail to add the definition of ``competing consolidator'' the
Plans. The Proposed Amendments also fail to treat competing
consolidators as securities information processors, instead treating
them, incorrectly, as vendors and subscribers.\139\ The failure to
incorporate into the Plans the full text of the definitions established
by the MDI Rules thus increases the likelihood of ambiguity.
---------------------------------------------------------------------------

    \137\ See Notice, supra note 7, 86 FR at 67811 (CTA Plan
Proposed Amendment at Section IX.(a)).
    \138\ See supra note 119.
    \139\ See supra notes 98-105 and accompanying text. See also
supra note 23.
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V. Conclusion

    For the reasons set forth above, the Commission finds, pursuant to
Section 11A of the Act, and Rule 608(b)(2) thereunder, that the
Proposed Amendments are inconsistent with the requirements of the Act
and the rules and regulations thereunder applicable to an NMS plan
amendment.
    It is therefore ordered, pursuant to Section 11A of the Act, and
Rule

608(b)(2) thereunder, that the Proposed Amendments (File No. SR-CTA/CQ-
2021-02) be, and hereby are, disapproved.

    By the Commission.
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022-20830 Filed 9-26-22; 8:45 am]
BILLING CODE 8011-01-P