[Federal Register Volume 86, Number 88 (Monday, May 10, 2021)]
[Notices]
[Pages 24979-24989]
[FR Doc No: 2021-09784]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-91756; File No. SR-GEMX-2021-03]

Self-Regulatory Organizations; Nasdaq GEMX, LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Adopt a Fee
Schedule To Establish Fees for Industry Members Related to the National
Market System Plan Governing the Consolidated Audit Trail

May 4, 2021.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on April 21, 2021, Nasdaq GEMX, LLC (``GEMX'' or ``Exchange'') filed
with the Securities and Exchange Commission (``SEC'' or ``Commission'')
the proposed rule change as described in Items I, II, and III, below,
which Items have been prepared by the Exchange. The Commission is
publishing this notice to solicit comments on the proposed rule change
from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to adopt a fee schedule to establish fees for
Industry Members related to the National Market

System Plan Governing the Consolidated Audit Trail (the ``CAT NMS
Plan'' or ``Plan'').\3\
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    \3\ Unless otherwise specified, capitalized terms used in this
rule filing are defined as set forth in Rule General 7 (Consolidated
Audit Trail Compliance) (GEMX General 7 incorporates The Nasdaq
Stock Market LLC General 7 by reference).
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    The text of the proposed rule change is available on the Exchange's
website at https://listingcenter.nasdaq.com/rulebook/gemx/rules, at the
principal office of the Exchange, and at the Commission's Public
Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

1. Purpose
    Under the CAT NMS Plan, the Operating Committee of the Consolidated
Audit Trail, LLC (``Company'') (``Operating Committee'') has discretion
to establish funding for the Company to operate the CAT, including
establishing fees that the Participants will pay, and establishing fees
for Industry Members that will be implemented by the Participants.\4\
The Operating Committee has filed with the SEC a proposal to amend the
CAT NMS Plan to implement a revised funding model for the CAT (``CAT
Funding Model'') and to establish a fee schedule for Participant CAT
fees (``Proposed CAT Fee Plan Amendment'').\5\ The Proposed CAT Fee
Plan Amendment describes the CAT Funding Model in detail, including the
proposal to charge Industry Members CAT fees. The Participants are
required to file with the SEC under Section 19(b) of the Exchange Act
any CAT fees applicable to Industry Members that the Operating
Committee approves.\6\ Accordingly, the purpose of this proposed rule
change is to implement the required fee schedule provisions for CAT
fees applicable to Industry Members that are GEMX members in accordance
with the CAT Funding Model. The fee schedule provisions will become
operative upon the SEC's approval of the Proposed CAT Fee Plan
Amendment.
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    \4\ Section 11.1(b) of the CAT NMS Plan.
    \5\ See Securities Exchange Act Release No. 91555 (April 14,
2017), 86 FR 21050 (April 21, 2021) (``Proposed CAT Fee Plan
Amendment'').
    \6\ Section 11.1(b) of the CAT NMS Plan.
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(1) CAT Funding Model
    Under the CAT Funding Model set out in the Proposed CAT Fee Plan
Amendment, the CAT fees applicable to Participants and Industry Members
for the relevant quarter would be designed to cover the total CAT costs
associated with developing, implementing and operating the CAT for the
relevant quarter (``Total CAT Costs'').\7\ The CAT Funding Model would
implement a bifurcated funding model, where these costs would be borne
by both Participants and Industry Members. Industry Members as a group
would pay 75% of the Total CAT Costs (the ``Industry Member
Allocation''), and Participants as a group would pay 25% of the Total
CAT Costs (the ``Participant Allocation'').\8\
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    \7\ Note that certain costs would be excluded from the
Historical CAT Assessment Costs, as discussed in more detail below.
See Proposed CAT Fee Plan Amendment at 21051 [sic], 21074 [sic].
    \8\ Each Industry Member and Participant CAT Reporter would be
required to pay CAT fees established via the CAT Funding Model. CAT
Reporting Agents acting in their role as such would not have an
obligation to pay CAT fees. See Proposed CAT Fee Plan Amendment at
21051 [sic].
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    Under the CAT Funding Model set out in the Proposed CAT Fee Plan
Amendment, each Industry Member will pay a CAT fee that is calculated
by multiplying each Industry Member's message traffic percentage of the
total message traffic of all Industry Members during the relevant time
period by the Industry Member Allocation, subject to certain market
maker message traffic discounts, a Minimum Industry Member CAT Fee and
a Maximum Industry Member CAT Fee. Each Industry Member that is an
Options Market Maker will have a discount based on the options trade-
to-quote ratio applied to its Options Market Maker message traffic when
calculating that Industry Member's message traffic, and each Industry
Member that is an Equity Market Maker will have a discount based on the
NMS Stock trade-to-quote ratio applied to its Equity Market Maker
message traffic when calculating that Industry Member's message
traffic. In addition, each Industry Member will pay a Minimum Industry
Member CAT Fee of $125 per quarter if its CAT fee would be less than
$125 per quarter when calculated based on message traffic. Furthermore,
an Industry Member's CAT fee would be subject to the Maximum Industry
Member CAT Fee. The Maximum Industry Member CAT Fee would be the fee
calculated based on 8% of the total message traffic for all Industry
Members. If an Industry Member is subject to the Maximum Industry
Member CAT Fee, any excess amount which the Industry Member would have
paid as a fee above such Maximum Industry Member CAT Fee will be re-
allocated among all Industry Members (including any Industry Members
subject to the Maximum Industry Member CAT Fee and any Industry Members
subject to the Minimum Industry Member CAT Fee) in accordance with each
Industry Member's percentage of total message traffic. Each of these
aspects of the Industry Member CAT fee are discussed in more detail
below.
(A) CAT Fees for Both Industry Members and Participants
    Under the CAT Funding Model, both Participants and Industry Members
would contribute to the funding of the CAT by paying a CAT fee.\9\ As
permitted by Rule 613, the CAT NMS Plan requires Industry Members to
pay a CAT fee. Rule 613(a)(1)(vii)(D) contemplates Industry Members
contributing to the payment of CAT costs. Specifically, this provision
requires the CAT NMS Plan to address ``[h]ow the plan sponsors propose
to fund the creation, implementation, and maintenance of the
consolidated audit trail, including the proposed allocation of such
estimated costs among the plan sponsors, and between the plan sponsors
and members of the plan sponsors.''
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    \9\ Proposed CAT Fee Plan Amendment at 21054-55.
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    In addition, as approved by the SEC, the CAT NMS Plan specifically
contemplates CAT fees to be paid by both Industry Members and
Participants. Section 11.1(b) states that ``the Operating Committee
shall have discretion to establish funding for the Company, including:
(i) Establishing fees that the Participants shall pay; and (ii)
establishing fees for Industry Members that shall be implemented by the
Participants.'' \10\ The Commission stated in approving the CAT NMS
Plan the following:
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    \10\ See also Sections 11.1(c), 11.2(c), and 11.3(a) and (b) of
the CAT NMS Plan.

    The Commission believes that the proposed funding model reflects
a reasonable exercise of the Participants' funding authority to
recover the Participants' costs related to the CAT. The CAT is a
regulatory facility jointly owned by the Participants and, as noted
above, the Exchange Act specifically permits the Participants to
charge

members fees to fund their self-regulatory obligations. The
Commission further believes that the proposed funding model is
designed to impose fees reasonably related to the Participants'
self-regulatory obligations because the fees would be directly
associated with the costs of establishing and maintaining the CAT,
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and not unrelated SRO services.\11\

    \11\ Securities Exchange Act Rel. No. 79318 (Nov. 15, 2016), 81
FR 84696, 84794 (Nov. 23, 2016) (``CAT NMS Plan Approval Order'').

    In its recent amendments to the CAT NMS Plan, the SEC reaffirmed
the ability for the Participants to charge Industry Members a CAT fee.
Specifically, the SEC noted that the amendments were not intended to
change the basic funding structure for the CAT, which may include fees
established by the Operating Committee, and implemented by the
Participants, to recover from Industry Members the costs and expenses
incurred by the Participants in connection with the development and
implementation of the CAT.\12\
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    \12\ Securities Exchange Act Rel. No. 88890 (May 15, 2020), 85
FR 31322, 31329 (May 22, 2020) (``Financial Accountability
Release'').
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    Finally, as noted by the SEC, the CAT ``substantially enhance[s]
the ability of the SROs and the Commission to oversee today's
securities markets,'' \13\ thereby benefitting all market participants.
As such, both Participants and Industry Members should contribute to
covering the cost of the CAT.
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    \13\ Securities Exchange Act Rel. No. 67457 (Jul. 18, 2012), 77
FR 45722, 45726 (Aug. 1, 2012).
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(B) 75%/25% Allocation Between Industry Members and Participants
    The CAT NMS Plan as approved by the Commission provides the
Operating Committee with discretion to establish CAT fees to be paid by
Participants and Industry Members. The CAT Funding Model as set out in
the Proposed CAT Fee Plan Amendment contemplates allocating CAT costs
between Participants and Industry Members to permit the calculation of
CAT fees based on market share for Participants and based on message
traffic for Industry Members.\14\ Under the CAT Funding Model as
proposed, Industry Members as a group would pay 75% of the Total CAT
Costs (the ``Industry Member Allocation''), and Participants as a group
would pay 25% of the Total CAT Costs (the ``Participant
Allocation'').\15\ As discussed in more detail below, the Industry
Member Allocation of 75% of the Total CAT Costs is included in proposed
paragraphs (a)(2), (b)(2), (c)(2) and (d)(2) of the fee schedule for
the Consolidated Audit Trail Funding Fees. In each such paragraph, the
calculation of the Industry Member CAT fees is based on 75% of the
Total CAT Costs.
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    \14\ See Proposed CAT Fee Plan Amendment at 21055-56 [sic]. Note
that, in the funding model set forth in Article XI of the CAT NMS
Plan (``Original Funding Model''), costs were allocated between
Execution Venues and certain Industry Members, whereas the CAT
Funding Model would allocate costs between Participants and Industry
Members.
    \15\ For additional discussions regarding the 75%-25%
allocation, see Proposed CAT Fee Plan Amendment at 21056-58 [sic].
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(C) Message Traffic
    The Industry Member Allocation would be allocated to each Industry
Member based on message traffic.\16\ Each Industry Member CAT Reporter
would pay a CAT fee that is calculated by multiplying each Industry
Member's percentage of the total message traffic of all Industry
Members each quarter by the Industry Member Allocation, subject to
certain market making discounts, Minimum Industry Member CAT Fees, and
Maximum Industry Member CAT Fees. To implement the use of message
traffic in the calculation of Industry Member CAT fees, the Exchange
proposes to describe the use of message traffic in proposed paragraphs
(a)(2), (b)(2), (c)(2) and (d)(2) of the fee schedule. In each such
paragraph, the Industry Member CAT fees are calculated based on
Industry Members' message traffic in the CAT.
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    \16\ For additional discussions regarding the use of message
traffic for calculating Industry Member CAT fees, see Proposed CAT
Fee Plan Amendment at 21059 [sic].
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    As set out in the Proposed CAT Fee Plan Amendment,\17\ message
traffic would be calculated based on Industry Members' Reportable
Events reported to the CAT as defined in the CAT Reporting Technical
Specifications for Industry Members (``IM Reporting Tech Specs'') as
amended from time to time.\18\ The Reportable Events may vary over time
if the IM Reporting Tech Specs are amended.\19\ However, Reportable
Events in the current IM Reporting Tech Specs that will be counted as
message traffic include, but are not limited to, such events as the New
Order Event, the Order Route Event and the Trade Event. In addition,
message traffic will not include reporting activity related to Customer
information as set forth in the CAT Reporting Customer and Account
Technical Specifications for Industry Members.\20\
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    \17\ See Proposed CAT Fee Plan Amendment at 21056-57.
    \18\ The CAT Reporting Technical Specifications for Industry
Members are available at www.catnmsplan.com.
    \19\ Due to the Phased Reporting approach, all Reportable Events
will not be reported until all Industry Members are reporting all
Reportable Events to the CAT. For example, Phase 2d CAT Reporting is
scheduled for December 2021, and Small Industry Non-OATS Reporters
are not required to report until December 2021. In addition, certain
Reportable Events, such as simple options manual orders and OTC link
messages, are not required to be reported until later in the Phased
Reporting. For a detailed description of such Reportable Events, see
CAT Reporting Technical Specifications for Industry Members
(available at www.catnmsplan.com). For the Industry Member CAT
reporting timeline, see, e.g., FINRA Rule 6895(c). CAT costs will be
allocated based on the Reportable Events reported to the CAT in any
relevant quarter, regardless of whether all Industry Members are
reporting to the CAT or all Reportable Events are required to be
reported to the CAT for a relevant quarter. See Proposed CAT Fee
Plan Amendment at 27.
    \20\ The CAT Reporting Customer and Account Technical
Specifications for Industry Members are available at
www.catnmsplan.com.
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(D) Market Maker Discounts
    As set out in the Proposed CAT Fee Plan Amendment, the Operating
Committee recognized that treating Options Market Maker message traffic
and Equity Market Maker message traffic in the same way as other
message traffic for purposes of calculating Industry Member CAT fees
may result in an undue or inappropriate burden on competition or may
lead to a reduction in market quality.\21\ For example, charging
Industry Members on the basis of message traffic may impact market
makers disproportionately because of their continuous quoting
obligations. Moreover, in the context of Options Market Makers, message
traffic would include bids and offers for every Listed Options strikes
and series. Accordingly, the Operating Committee determined to discount
Options Market Maker message traffic by the trade-to-quote ratio for
Listed Options when calculating message traffic for Options Market
Makers, and to discount Equity Market Maker message traffic by the
trade-to-quote ratio for NMS Stocks when calculating message traffic
for Equity Market Makers. The message traffic of Options Market Makers
and Equity Market Makers, as discounted, would be counted as part of
the total message traffic for all Industry Members. The practical
effect of applying such discounts for market making activity would be
to lower the CAT fees for Options Market Makers and Equity Market
Makers.
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    \21\ See Proposed CAT Fee Plan Amendment at 21057-58.
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(I) Options Market Maker Discount
    Each Industry Member that is an Options Market Maker \22\ would
have a

discount based on the options trade-to-quote ratio applied to its
options market making message traffic when calculating that Industry
Member's message traffic to prevent a potentially disproportionate
effect on options market making due to such message traffic.\23\
Specifically, for each Options Market Maker, a discount would be
applied to (1) all message traffic reported to the CAT by the Options
Market Maker related to an order originated by a market maker in its
market making account for a security in which it is registered,
regardless of where the order is ultimately routed or executed; \24\
and (2) all message traffic for which a ``quote sent time'' is reported
by an Options Exchange on behalf of the given Options Market Maker.
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    \22\ Section 1.1 of the CAT NMS Plan; Nasdaq General 7 Section
1(ee) defines an ``Options Market Maker'' as ``a broker-dealer
registered with an exchange for the purpose of making markets in
options contracts traded on the exchange.'' (GEMX General 7
incorporates The Nasdaq Stock Market LLC General 7 by reference).
    \23\ See Proposed CAT Fee Plan Amendment at 21058.
    \24\ Under the current version of the IM Reporting Tech Specs,
the discount would apply to new order messages and all related
messages reported to the CAT by an Options Market Maker with an
accountHolderType = O. See CAT FAQ C5 (available at
www.catnmsplan.com). The discount would not apply to messages by an
Industry Member that are associated with any other
accountHolderType. The IM Reporting Tech Specs may be amended from
time to time and this designation could be changed. See Proposed CAT
Fee Plan Amendment at 21058.
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    The relevant trade-to-quote ratio for the Options Market Maker
discount would be calculated each quarter based on the prior quarter's
SIP Data that is included in CAT Data. The discount is calculated by
dividing the adjusted trade count (that is, the total number of trades
for the quarter minus the total number of trade busts) by the total
number of quotes received by the securities information processors
(``SIP''). As an example, the trade-to-quote ratio for Listed Options
for the fourth quarter of 2020 was 0.01%.
    Accordingly, each Options Market Maker's discounted message traffic
count would be calculated by multiplying its message traffic by the
options trade-to-quote ratio. The Options Market Maker's CAT fee then
would be calculated by multiplying its discounted percentage of the
total message traffic of all Industry Members during the relevant time
period \25\ by the Industry Member Allocation, subject to the Minimum
Industry Member CAT Fee and the Maximum Industry Member CAT Fee.
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    \25\ Note that the total message traffic of all Industry Members
during the relevant time period will be calculated using the
discounted total for all Options Market Makers. See Proposed CAT Fee
Plan Amendment at 21058.
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    To implement the Options Market Maker discount, the Exchange
proposes to add paragraph (g)(1) to the fee schedule. Paragraph (g)(1)
would state that ``[w]hen calculating the message traffic of an
Industry Member that is an Options Market Maker, the Options Market
Maker's market making message traffic would be discounted by
multiplying its Listed Options market making message traffic by the
Listed Options trade-to-quote ratio.'' In addition, proposed paragraphs
(a)(2), (b)(2), (c)(2) and (d)(2) of the fee schedule would state that
the message traffic calculation would be subject to applicable
discounts for Options Market Maker message traffic for each of the four
Industry Member CAT fees.
(II) Equity Market Maker Discount
    Similarly, each Industry Member that is an equity market maker in
NMS Stocks (``Equity Market Maker'') would have a discount based on the
NMS Stock trade-to-quote ratio applied to its market making message
traffic in NMS Stocks when calculating that Industry Member's message
traffic to prevent a potentially disproportionate effect on market
making in NMS Stocks.\26\ Specifically, for each Equity Market Maker, a
discount would be applied to all message traffic reported to the CAT by
the Equity Market Maker related to an order originated by a market
maker in its market making account for a security in which it is
registered,\27\ regardless of where the order is ultimately routed or
executed.\28\
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    \26\ See Proposed CAT Fee Plan Amendment at 21058.
    \27\ Note that Equity Market Makers do not have a quote sent
time exemption comparable to the Options Market Maker quote sent
time exemption, as discussed above.
    \28\ Under the current version of the IM Reporting Tech Specs,
the discount would apply to new order messages and all related
messages reported to the CAT by an Equity Market Maker with an
accountHolderType = O. See CAT FAQ C5 (available at
www.catnmsplan.com). The discount would not apply to messages by the
Industry Member that are associated with any other
accountHolderType. The IM Reporting Tech Specs may be amended from
time to time and this designation could be changed. See Proposed CAT
Fee Plan Amendment at 21058.
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    The relevant trade-to-quote ratio for the Equity Market Maker
discount would be calculated each quarter based on the prior quarter's
SIP Data that is included in CAT Data. The discount is calculated by
dividing the adjusted trade count (that is, the total number of trades
for the quarter minus the total number of trade busts) by the total
number of quotes received by the SIP. As an example, the trade-to-quote
ratio for NMS Stocks for the fourth quarter of 2020 was 4.77%.
    The Equity Market Maker CAT fee would be calculated in the same
manner as the Options Market Maker CAT fee. Each Equity Market Maker's
discounted message traffic count would be calculated by multiplying its
message traffic by the NMS Stock trade-to-quote ratio. The Equity
Market Maker CAT fee then would be calculated by-multiplying its
discounted percentage of the total message traffic of all Industry
Members during the relevant time period \29\ by the Industry Member
Allocation, subject to the Minimum Industry Member CAT Fee and the
Maximum Industry Member CAT Fee.
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    \29\ Note that the total message traffic of all Industry Members
during the relevant time period will be calculated using the
discounted total for all Equity Market Makers. See Proposed CAT Fee
Plan Amendment at 21058.
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    To implement the Equity Market Maker discount, the Exchanges
proposes to add paragraph (g)(2) to the fee schedule. Paragraph (g)(2)
would state that ``[w]hen calculating the message traffic of an
Industry Member that is an equity market maker in NMS Stocks (``Equity
Market Maker''), the Equity Market Maker's market making message
traffic would be a [sic] discounted by multiplying its market making
message traffic in NMS Stocks by the NMS Stock trade-to-quote ratio.''
In addition, proposed paragraphs (a)(2), (b)(2), (c)(2) and (d)(2) of
the fee schedule would state that the message traffic calculation would
be subject to applicable discounts for Equity Market Maker message
traffic for each of the four Industry Member CAT fees.
(E) Minimum Industry Member CAT Fee
    Each Industry Member would be required to pay a Minimum Industry
Member CAT Fee of $125 per quarter if its CAT fee would be less than
$125 per quarter when calculated based on message traffic.\30\ All
Industry Members required to report to the CAT, including those that
have not yet begun to report to the CAT due to the phased
implementation schedule for the CAT, would be subject to the Minimum
Industry Member CAT Fee. If any Industry Member is required to pay the
Minimum Industry Member CAT Fee, the total additional amount paid by
all such Industry Members over the amount they otherwise would have
paid as a result of their message traffic calculation would be
discounted from all Industry Members other than those that were subject
to a Minimum Industry Member

CAT Fee in accordance with their message traffic percentage.\31\
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    \30\ For additional discussions regarding the Minimum Industry
Member CAT Fee, see Proposed CAT Fee Plan Amendment at 21058-59.
    \31\ Options Market Makers and Equity Market Makers will be
required to pay the Minimum Industry Member CAT Fee if their
quarterly CAT fee calculated with the market maker discounts is less
than $125 per quarter.
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    To implement the Minimum Industry Member CAT Fee, the Exchange
proposes to add paragraph (h) to the fee schedule. Proposed paragraph
(h)(1) of the fee schedule would state that ``[t]he Minimum Industry
Member CAT Fee is $125 per quarter.'' Proposed paragraph (h)(2) of the
fee schedule would state that ``[i]f any Industry Member is required to
pay the Minimum Industry Member CAT Fee, the total additional amount
paid by all such Industry Members over the amount they otherwise would
have paid as a result of their message traffic calculation would be
discounted from all Industry Members other than those that were subject
to a Minimum Industry Member CAT Fee in accordance with their message
traffic percentage (``Minimum Industry Member CAT Fee Re-
Allocation'').'' In addition, proposed paragraphs (a)(2), (b)(2),
(c)(2) and (d)(2) of the fee schedule describes the Minimum Industry
Member CAT Fee Re-Allocation for each of the four Industry Member CAT
fees.
(F) Maximum Industry Member CAT Fee
    An Industry Member's CAT fee also would be subject to a Maximum
Industry Member CAT Fee.\32\ The Maximum Industry Member CAT Fee would
be the fee calculated based on 8% of the total message traffic for all
Industry Members. If an Industry Member's fee is subject to the Maximum
Industry Member CAT Fee, any excess amount which the Industry Member
would have paid as a fee above such Maximum Industry Member CAT Fee
will be re-allocated among all Industry Members (including any Industry
Members subject to the Maximum Industry Member CAT Fee and any Industry
Members subject to the Minimum Industry Member CAT Fee) in accordance
with each Industry Member's percentage of total message traffic.
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    \32\ For additional discussions regarding the Maximum Industry
Member CAT Fee, see Proposed CAT Fee Plan Amendment at 21058-59
[sic].
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    To implement the Maximum Industry Member CAT Fee, the Exchange
proposes to add proposed paragraph (f) to the ``Consolidated Audit
Trail Funding Fees'' section of its fee schedule. Proposed paragraph
(f)(1) would state that ``[t]he Maximum Industry Member CAT Fee for
each quarter is 8% of the total CAT costs for the relevant quarter.''
In addition, proposed paragraph (f)(2) would state that

    If an Industry Member's CAT Fee that is calculated pursuant to
paragraph (a)(2), (b)(2), (c)(2), (d)(2), as applicable, without
reference to the Maximum Industry Member CAT Fee and the Maximum
Industry Member CAT Fee Re-Allocation, is greater than the Maximum
Industry Member CAT Fee, then the Industry Member will be subject to
the Maximum Industry Member CAT Fee. If any Industry Member is
subject to the Maximum Industry Member CAT Fee, then any excess
amount which the Industry Member otherwise would have paid as a fee
above such Maximum Industry Member CAT Fee will be re-allocated
among all Industry Members, including any Industry Member that is
subject to the Maximum Industry Member CAT Fee or subject to the
Minimum Industry Member CAT Fee in accordance with their message
traffic percentage (``Maximum Industry Member CAT Fee Re-
Allocation'').

    Furthermore, proposed paragraphs (a)(1), (b)(1), (c)(1) and (d)(1)
would state that an Industry Member's CAT fee calculated pursuant to
(a)(1), (b)(1), (c)(1) and (d)(1) would include any applicable Maximum
Industry Member CAT Fee Re-Allocation. Finally, proposed paragraphs
(a)(2), (b)(2), (c)(2) and (d)(2) would state that an Industry Member's
CAT fee calculated pursuant to paragraph (a)(2), (b)(2), (c)(2) or
(d)(2) is subject to the Maximum Industry Member CAT Fee and the
Maximum Industry Member CAT Fee Re-Allocation.
(G) Total CAT Costs
    As set out in the Proposed CAT Fee Plan Amendment, the Total CAT
Costs for the year would be comprised of all fees, costs and expenses
incurred by or for the Company in connection with the development,
implementation and operation of the CAT during this period.\33\
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    \33\ See Proposed CAT Fee Plan Amendment at 21063.
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    For purposes of the Historical CAT Assessment, the Total CAT Costs
would be $193,273,342, as set forth in the Proposed CAT Fee Plan
Amendment. Accordingly, the quarterly CAT fee for the Historical CAT
Assessment will be calculated based on costs of $36,238,752, which is
1/4th of 75% of the Total CAT Costs. This amount is set forth in
proposed paragraph (b)(2) of the fee schedule.
    In addition, proposed paragraph (i) of the ``Consolidated Audit
Trail Funding Fees'' section of its fee schedule describes the Total
CAT Costs to be used in calculating the Period 3 CAT Fee, the Period 4
CAT Fee and the Quarterly CAT Fees. Proposed paragraph (i)(1) of the
fee schedule would state that ``[t]he Period 3 CAT Costs shall be the
total CAT costs set forth in the year-end financial statements of the
Consolidated Audit Trail, LLC for 2021.'' Proposed paragraph (i)(2) of
the fee schedule would state that ``[t]he Period 4 CAT Costs shall be
the total CAT costs set forth in the year-end financial statements of
the Consolidated Audit Trail, LLC for 2022.'' Proposed paragraph (i)(3)
of the fee schedule would state the following with regard to the
Quarterly CAT Fees:

    For purposes of the Quarterly CAT Fee, the budgeted Total CAT
Costs for the relevant year shall be the total CAT costs set forth
in the annual operating budget approved by the Operating Committee
pursuant to Section 11.1(a) of the CAT NMS Plan for the relevant
year. The budgeted Total CAT Costs for the relevant year may be
adjusted on a quarterly basis as the Operating Committee reasonably
deems appropriate for the prudent operation of the Company. To the
extent that the Operating Committee adjusts the total budgeted costs
for the CAT for the relevant year during its quarterly budget
review, the adjusted budgeted costs for the CAT will be used in
calculating the remaining CAT fees for that year.
(2) Proposed CAT Fees
    The Exchange proposes to charge its Industry Members fees related
to CAT costs. To implement these CAT fees, the Exchange proposes to add
a section entitled ``Consolidated Audit Trail Funding Fees'' to its fee
schedule, and to describe the CAT fees in that section.
(A) Historical CAT Assessment (for Pre-Period 1, Period 1 and Period 2)
    As set forth in the Proposed CAT Fee Plan Amendment, the Operating
Committee determined to charge Industry Members a historical assessment
(``Historical CAT Assessment'') to recover certain CAT costs incurred
prior to January 1, 2021 (``Historical CAT Assessment Costs'').\34\
Specifically, as detailed in the Proposed CAT Fee Plan Amendment, the
Historical CAT Assessment is intended to collect from Industry Members
75% of certain costs incurred through June 22, 2020, the effective date
for the Financial Accountability Milestones,\35\ certain costs from
Period 1 of the Financial Accountability Milestones (which covered the
period from June 22, 2020--July 31, 2020) and certain costs from Period
2 of the Financial

Accountability Milestones (which covered the period from August 1,
2020--December 31, 2020). The Total CAT Costs, excluding Excluded Costs
(as defined below) and certain costs related to the conclusion of the
relationship with Thesys CAT, LLC is $193,273,342. The Historical CAT
Assessment is designed to recover 75% of these CAT costs. Accordingly,
the Historical CAT Assessment Costs would be $144,955,006.
---------------------------------------------------------------------------

    \34\ See Proposed CAT Fee Plan Amendment at 21064-65.
    \35\ See Section 11.6 of the CAT NMS Plan; and Financial
Accountability Release.
---------------------------------------------------------------------------

    Using the Historical CAT Assessment Costs, as set forth in the
Proposed CAT Fee Plan Amendment, the Operating Committee will calculate
the Historical CAT Assessment owed by each Industry Member in
accordance with the CAT Funding Model. Per the Proposed CAT Fee Plan
Amendment, the Operating Committee plans to recover the Historical CAT
Assessment Costs over a period of four calendar quarters, commencing
upon the SEC's approval of the Historical CAT Assessment. Each quarter,
each Industry Member will pay the greater of the minimum fee of $125 or
the Industry Member's fee calculated based on message traffic (subject
to the market making discounts and the maximum fee). The message
traffic fee would be calculated by multiplying the percentage of the
Industry Member's message traffic of the total Industry Member message
traffic by $36,238,752, which is 1/4th of the Historical CAT Assessment
Costs (subject to applicable discounts for Options Market Maker message
traffic and Equity Market Maker message traffic, the Maximum Industry
Member CAT Fee, the Maximum Industry Member CAT Fee Re-Allocation, and
the Minimum Industry Member CAT Fee Re-Allocation). Each Industry
Member's message traffic would be calculated using CAT Data from the
prior quarter. Industry Members would be required to commence paying
the Historical CAT Assessment in the first quarter after SEC approval
of the Historical CAT Assessment, based on CAT Data from the quarter in
which the SEC approved the CAT fees.
    To implement the Historical CAT Assessment, the Exchange proposes
to add proposed paragraph (b) to the ``Consolidated Audit Trail Funding
Fees'' section of its fee schedule. Proposed paragraph (b) would state
that ``each Industry Member shall pay an Historical CAT Assessment in
the amount of the greater of the following each quarter for four
quarters commencing upon approval of the Historical CAT Assessment by
the SEC: (1) Minimum Industry Member CAT Fee (plus any applicable
Maximum Industry Member CAT Fee Re-Allocation); or (2) the amount
calculated by multiplying the percentage of the Industry Member's
message traffic of the total Industry Member message traffic based on
the prior quarter's message traffic by $36,238,752 (subject to
applicable discounts for Options Market Maker message traffic and
Equity Market Maker message traffic, the Maximum Industry Member CAT
Fee, the Maximum Industry Member CAT Fee Re-Allocation and the Minimum
Industry Member CAT Fee Re-Allocation).''
    In accordance with Section 11.6(b) of the CAT NMS Plan and as
provided in the Proposed CAT Fee Plan Amendment, the proposed
Historical CAT Assessment seeks to recover costs that are related to
Post-Amendment Expenses incurred during Period 1. Period 1 began on
June 22, 2020, the effective date of Section 11.6 of the CAT NMS Plan,
and concluded on July 31, 2020, the date of Initial Industry Member
Core Equity and Options Reporting. As indicated by the Participants'
Quarterly Progress Report,\36\ Initial Industry Member Core Equity and
Option Reporting was completed on schedule by July 31, 2020. As
discussed above, the Historical CAT Assessment Costs to be recovered
via the Historical CAT Assessment would include fees, costs and
expenses incurred by or for the Company in connection with the
development, implementation and operation of the CAT during the period
from June 22, 2020 through July 31, 2020.
---------------------------------------------------------------------------

    \36\ Q3 2020 Quarterly Progress Report (Oct. 30, 2020)
(available at www.catnmsplan.com).
---------------------------------------------------------------------------

    As provided in the Proposed CAT Fee Plan Amendment, the proposed
Historical CAT Assessment seeks to recover costs that are related to
Post-Amendment Expenses incurred during Period 2. Period 2 began on
August 1, 2020, and concluded on December 31, 2020, the date of the
Full Implementation of Core Equity Reporting. As indicated by the
Participants' Quarterly Progress Report,\37\ Full Implementation of
Core Equity Reporting was completed on schedule by December 31, 2020.
As discussed above, the Historical CAT Assessment Costs to be recovered
via the Historical CAT Assessment would include fees, costs and
expenses incurred by or for the Company in connection with the
development, implementation and operation of the CAT during the period
from August 1, 2020 through December 31, 2020. Accordingly, proposed
paragraph (b) of the ``Consolidated Audit Trail Funding Fees'' section
of its fee schedule would state that Industry Members will be required
to pay the Historical CAT Assessment ``[s]ubject to the requirements of
Section 11.6 of the CAT NMS Plan.''
---------------------------------------------------------------------------

    \37\ Q4 2020 Quarterly Progress Report (Jan. 29, 2021)
(available at www.catnmsplan.com).
---------------------------------------------------------------------------

    The following chart summarizes the imposition of the Historical CAT
Assessment:

----------------------------------------------------------------------------------------------------------------
                                                                    CAT data used for
           Quarterly CAT fee               Quarterly industry        message traffic            Payment due
                                           member allocation           calculation
----------------------------------------------------------------------------------------------------------------
Quarterly CAT Fee #1..................  $36,238,752............  Quarter of SEC approval  1st quarter after SEC
                                                                  of Historical CAT        approval of Industry
                                                                  Assessment.              Member CAT Fees as
                                                                                set forth in the CAT
                                                                                Fee Plan Amendment.
Quarterly CAT Fee #2..................  36,238,752.............  1st quarter after SEC    2nd quarter after SEC
                                                                  approval of Historical   approval of Industry
                                                                  CAT Assessment.          Member CAT Fees as
                                                                                set forth in the CAT
                                                                                Fee Plan Amendment.
Quarterly CAT Fee #3..................  36,238,752.............  2nd quarter after SEC    3rd quarter after SEC
                                                                  approval of Historical   approval of Industry
                                                                  CAT Assessment.          Member CAT Fees as
                                                                                set forth in the CAT
                                                                                Fee Plan Amendment.
Quarterly CAT Fee #4..................  36,238,752.............  3rd quarter after SEC    4th quarter after SEC
                                                                  approval of Historical   approval of Industry
                                                                  CAT Assessment.          Member CAT Fees as
                                                                                set forth in the CAT
                                                                                Fee Plan Amendment.
----------------------------------------------------------------------------------------------------------------

(B) Period 3 CAT Fee
    Per the Proposed CAT Fee Plan Amendment, the Operating Committee
also determined to charge Industry Members a quarterly fee to recover a
percentage of the Total CAT Costs incurred from January 1, 2021 through
December 31, 2021, referred to as the Period 3 CAT Fee.\38\ The Total
CAT Costs incurred from January 1, 2021 through December 31, 2021
(``Period 3 CAT Costs'') will be calculated at the completion of 2021.
Specifically, the Period 3 CAT Costs will be the total actual costs
incurred for the CAT for 2021 as set forth in the 2021 financial
statements for the Company.
---------------------------------------------------------------------------

    \38\ See Proposed CAT Fee Plan Amendment at 21065-66.
---------------------------------------------------------------------------

    Using the Period 3 CAT Costs, as set forth in the Proposed CAT Fee
Plan Amendment, the Operating Committee will calculate the Period 3 CAT
Fee owed by each Industry Member in accordance with the CAT Funding
Model. Per the Proposed CAT Fee Plan Amendment, the Operating Committee
plans to recover Period 3 CAT Costs over a period of four calendar
quarters, commencing in 2022. Each quarter, each Industry Member will
pay the greater of the minimum fee of $125 or the Industry Member's fee
calculated based on message traffic. The message traffic fee would be
calculated by multiplying the percentage of the Industry Member's
message traffic of the total Industry Member message by ROTFLth of 75%
of the Period 3 CAT Costs traffic (subject to applicable discounts for
Options Market Maker message traffic and Equity Market Maker message
traffic, the Maximum Industry Member CAT Fee, the Maximum Industry
Member CAT Fee Re-Allocation and the Minimum Industry Member CAT Fee
Re-Allocation). Each Industry Member's message traffic would be
calculated using CAT Data from the prior quarter. Industry Members
would be required to commence paying the Period 3 CAT Fee in the second
quarter of 2022, based on CAT Data from the first quarter of 2022.
    The Exchange understands that the Operating Committee will announce
via a CAT alert after the end of 2021 the Total CAT Costs for 2021 to
be used in calculating the quarterly Period 3 CAT Fees. Such Total CAT
Costs will be set forth in the year-end financial statements of the
Consolidated Audit Trail, LLC. Such financial statements are required
to be prepared in accordance with Section 9.2 of the CAT NMS Plan,
including requirements related to compliance with GAAP, auditing by an
independent public accounting firm and making the statements publicly
available.
    To implement the Period 3 CAT Fee, the Exchange proposes to add
proposed paragraph (c) to the ``Consolidated Audit Trail Funding Fees''
section of its fee schedule. Proposed paragraph (c) would state that
``each Industry Member shall pay a Period 3 CAT Fee in the amount of
the greater of the following each quarter for four quarters commencing
in the second quarter of 2022: (1) Minimum Industry Member CAT Fee
(plus any applicable Maximum Industry Member CAT Fee Re-Allocation); or
(2) the amount calculated by multiplying the percentage of the Industry
Member's message traffic of the total Industry Member message traffic
based on the prior quarter's message traffic by 1/4th of 75% of the
Period 3 Total CAT Costs (subject to applicable discounts for Options
Market Maker message traffic and Equity Market Maker message traffic,
the Maximum Industry Member CAT Fee, the Maximum Industry Member CAT
Fee Re-Allocation and the Minimum Industry Member CAT Fee Re-
Allocation).''
    Per the Proposed CAT Fee Plan Amendment, the proposed Period 3 CAT
Fee seeks to recover costs that will be related to Post-Amendment
Expenses incurred during Period 3. Period 3 began on January 1, 2021
and is expected to conclude on December 31, 2021, the date of Full
Availability and Regulatory Utilization of Transactional Database
Functionality. As discussed above, the Period 3 CAT Costs to be
recovered via the Period 3 CAT Fee would include fees, costs and
expenses incurred by or for the Company in connection with the
development, implementation and operation of the CAT during the period
from January 1, 2020 through December 31, 2021. The collection of the
full amount of the Period 3 CAT Fee will depend upon achievement of
Full Availability and Regulatory Utilization of Transaction Database
Functionality by December 31, 2021; if not, the amount of the Period 3
CAT Fee that may be collected from the Industry Members will depend
upon the fee limitations set forth in Section 11.6(a)(ii) of the CAT
NMS Plan. Accordingly, proposed paragraph (c) of the ``Consolidated
Audit Trail Funding Fees'' section of its fee schedule would state that
Industry Members will be required to pay the Period 3 CAT Fee
``[s]ubject to the requirements of Section 11.6 of the CAT NMS Plan.''
    The following chart summarizes the imposition of the Period 3 CAT
Fee:

----------------------------------------------------------------------------------------------------------------
                                                             CAT data used for
         Quarterly CAT fee            Quarterly industry      message traffic              Payment due
                                      member allocation         calculation
----------------------------------------------------------------------------------------------------------------
Quarterly CAT Fee #1..............  1/4th of 75% of the    CAT Data from first   2nd quarter of 2022.
                                     Period 3 CAT Costs     quarter of 2022.
                                     \39\.
Quarterly CAT Fee #2..............  1/4th of 75% of the    CAT Data from second  3rd quarter of 2022.
                                     Period 3 CAT Costs.    quarter of 2022.
Quarterly CAT Fee #3..............  1/4th of 75% of the    CAT Data from third   4th quarter of 2022.
                                     Period 3 CAT Costs.    quarter of 2022.
Quarterly CAT Fee #4..............  1/4th of 75% of the    CAT Data from fourth  1st quarter of 2023
                                     Period 3 CAT Costs.    quarter of 2022.
----------------------------------------------------------------------------------------------------------------

(C) Period 4 CAT Fee
---------------------------------------------------------------------------

    \39\ The Period 3 CAT Costs will be the total actual costs
incurred for the CAT for 2021 as set forth in the 2021 financial
statements for the Company.
---------------------------------------------------------------------------

    As set forth in the Proposed CAT Fee Plan Amendment, the Operating
Committee also determined to charge Industry Members a quarterly fee to
recover a percentage of the Total CAT Costs incurred from January 1,
2022 through December 30, 2022, referred to as the Period 4 CAT
Fee.\40\ The Total CAT Costs incurred from January 1, 2022 through
December 30, 2022 (``Period 4 CAT Costs'') will be calculated at the
completion of 2022. Specifically, the Period 4 CAT Costs will be the
total actual costs incurred for the CAT for 2022 as set forth in the
2022 financial statements of the Company.
---------------------------------------------------------------------------

    \40\ See Proposed CAT Fee Plan Amendment at 21066-67.
---------------------------------------------------------------------------

    Using the Period 4 CAT Costs, as set forth in the Proposed CAT Fee
Plan Amendment, the Operating Committee will calculate the Period 4 CAT
Fee

owed by each Industry Member in accordance with the CAT Funding Model.
Per the Proposed CAT Fee Plan Amendment, the Operating Committee plans
to recover Period 4 CAT Costs over a period of four calendar quarters,
commencing in 2023. Each quarter, each Industry Member will pay the
greater of the minimum fee of $125 or the Industry Member's fee
calculated based on message traffic. The message traffic fee would be
calculated by multiplying the percentage of the Industry Member's
message traffic of the total Industry Member message traffic by 1/4th
of 75% of the Period 4 CAT Costs (subject to applicable discounts for
Options Market Maker message traffic and Equity Market Maker message
traffic, the Maximum Industry Member CAT Fee, the Maximum Industry
Member CAT Fee Re-Allocation and the Minimum Industry Member CAT Fee
Re-Allocation). Each Industry Member's message traffic would be
calculated using CAT Data from the prior quarter. Industry Members will
be required to commence paying the Period 4 CAT Fee in the second
quarter of 2023, based on data from the first quarter of 2023.
    To implement the Period 4 CAT Fee, the Exchange proposes to add
proposed paragraph (d) to the ``Consolidated Audit Trail Funding Fees''
section of its fee schedule. Proposed paragraph (d) would state that
``each Industry Member shall pay a Period 4 CAT Fee in the amount of
the greater of the following each quarter for four quarters commencing
in the second quarter of 2023: (1) Minimum Industry Member CAT Fee
(plus any applicable Maximum Industry Member CAT Fee Re-Allocation); or
(2) the amount calculated by multiplying the percentage of the Industry
Member's message traffic of the total Industry Member message traffic
based on the prior quarter's message traffic by 1/4th of 75% of the
Period 4 CAT Costs (subject to applicable discounts for Options Market
Maker message traffic and Equity Market Maker message traffic, the
Maximum Industry Member CAT Fee, the Maximum Industry Member CAT Fee
Re-Allocation and the Minimum Industry Member CAT Fee Re-Allocation).''
    The Exchange understands that the Operating Committee will announce
via a CAT alert after the end of 2022 the Total CAT Costs for 2022 to
be used in calculating the quarterly Period 4 CAT Fees. Such Total CAT
Costs will be set forth in the year-end financial statements of the
Consolidated Audit Trail, LLC. As noted above, such financial
statements are required to be prepared in accordance with the
requirements set forth in Section 9.2 of the CAT NMS Plan.
    The Exchange indicates that the proposed Period 4 CAT Fee seeks to
recover costs that will be related to Post-Amendment Expenses incurred
during Period 4. Period 4 is expected to begin on January 1, 2022 and
conclude on December 30, 2022, the date of Full Implementation of CAT
NMS Plan Requirements. As discussed above, the Period 4 CAT Costs to be
recovered via the Period 4 CAT Fee would include fees, costs and
expenses incurred by or for the Company in connection with the
development, implementation and operation of the CAT during the period
from January 1, 2022 through December 30, 2022. The collection of the
full amount of the Period 4 CAT Fee will depend upon achievement of
Full Implementation of CAT NMS Plan Requirements by December 30, 2022;
if not, the amount of the Period 4 CAT Fee that may be collected from
the Industry Members will depend upon the fee limitations set forth in
Section 11.6(a)(ii) of the CAT NMS Plan. Accordingly, proposed
paragraph (e) of the ``Consolidated Audit Trail Funding Fees'' section
of its fee schedule would state that Industry Members will be required
to pay the Period 4 CAT Fee ``[s]ubject to the requirements of Section
11.6 of the CAT NMS Plan.''
    The following chart summarizes the imposition of the Period 4 CAT
Fee:
---------------------------------------------------------------------------

    \41\ The Period 4 CAT Costs will be the total actual costs
incurred for the CAT for 2022 as set forth in the 2022 financial
statements for the Company.

----------------------------------------------------------------------------------------------------------------
                                                             CAT data used for
         Quarterly CAT fee            Quarterly industry      message traffic              Payment due
                                      member allocation         calculation
----------------------------------------------------------------------------------------------------------------
Quarterly CAT Fee #1..............  1/4th of 75% of the    CAT Data from first   2nd quarter of 2023.
                                     Period 4 CAT Costs     quarter of 2023.
                                     \41\.
Quarterly CAT Fee #2..............  1/4th of 75% of the    CAT Data from second  3rd quarter of 2023.
                                     Period 4 CAT Costs.    quarter of 2023.
Quarterly CAT Fee #3..............  1/4th of 75% of the    CAT Data from third   4th quarter of 2023.
                                     Period 4 CAT Costs.    quarter of 2023.
Quarterly CAT Fee #4..............  1/4th of 75% of the    CAT Data from fourth  1st quarter of 2024.
                                     Period 4 CAT Costs.    quarter of 2023.
----------------------------------------------------------------------------------------------------------------

(D) Quarterly CAT Fee--Beginning 2023
    As provided in the Proposed CAT Fee Plan Amendment, to recover the
costs of the CAT going forward beginning in 2023, the Operating
Committee determined to charge Industry Members an ongoing quarterly
CAT fee calculated based on the allocation of Total CAT Costs pursuant
to the CAT Funding Model (``Quarterly CAT Fee'').\42\ The Operating
Committee will use the costs set forth in the annual operating budget
as the Total CAT Costs in the calculation of the Quarterly CAT Fee.
Specifically, the Total CAT Costs budgeted for the upcoming year for
the Company required pursuant to Section 11.1(a) of the CAT NMS Plan.
Using these estimated Total CAT Costs, the Operating Committee will
calculate the Quarterly CAT Fee owed by each Industry Member in
accordance with the CAT Funding Model. As provided in the Proposed CAT
Fee Plan Amendment, the Operating Committee proposes to seek to recover
the budgeted Total CAT Costs over the course of the year. Each quarter,
each Industry Member will pay the greater of the minimum fee of $125 or
the Industry Member's fee calculated based on message traffic.\43\ The
message traffic fee would be calculated by multiplying the

percentage of the Industry Member's message traffic of the total
Industry Member message traffic by 1/4th of 75% of the budgeted Total
CAT Costs for the year (subject to applicable discounts for Options
Market Maker message traffic and Equity Market Maker message traffic,
the Maximum Industry Member CAT Fee, the Maximum Industry Member CAT
Fee Re-Allocation and the Minimum Industry Member CAT Fee Re-
Allocation). Each Industry Member's message traffic would be calculated
using data from the prior calendar quarter. The Exchange proposes to
commence charging this CAT fee in the second quarter of 2023, based on
CAT Data from the first quarter of 2023.
---------------------------------------------------------------------------

    \42\ See Proposed CAT Fee Plan Amendment at 21067-68.
    \43\ To the extent that any two or more of the four categories
of Industry Member CAT fees (i.e., the Historical CAT Assessment,
Period 3 CAT Fee, Period 4 CAT Fee and the Quarterly CAT Fee) are
due during the same quarter, any Industry Member obligated to pay
one or more categories of fees is required to pay each category of
fee for that quarter. For example, if an Industry Member would be
subject to the Minimum Industry Member CAT Fee for the Period 4 CAT
Fee and the Minimum Industry Member CAT Fee for the Quarterly CAT
Fee during the same quarter, the Industry Member would be required
to pay two minimum $125 fees that quarter for a total of $250. As
another example, suppose that an Industry Member owed a CAT fee
(other than the minimum fee of $125) for both the Historical CAT
Assessment and the Period 3 CAT Fee, the Industry Member would be
required to pay both fees that quarter. See Proposed CAT Fee Plan
Amendment at 21067.
---------------------------------------------------------------------------

    To implement the Quarterly CAT Fee, the Exchange proposes to add
proposed paragraph (a) to the ``Consolidated Audit Trail Funding Fees''
section of its fee schedule. Proposed paragraph (a) would state that
``[e]ach Industry Member shall pay a Quarterly CAT Fee in the amount of
the greater of the following each quarter commencing in the second
quarter of 2023: (1) Minimum Industry Member CAT Fee (plus any
applicable Maximum Industry Member CAT Fee Re-Allocation); or (2) the
amount calculated by multiplying the percentage of the Industry
Member's message traffic of the total Industry Member message traffic
based on the prior quarter's message traffic by 1/4th of 75% of the
budgeted Total CAT Costs for the relevant year (subject to applicable
discounts for Options Market Maker message traffic and Equity Market
Maker message traffic, the Maximum Industry Member CAT Fee, the Maximum
Industry Member CAT Fee Re-Allocation and the Minimum Industry Member
CAT Fee Re-Allocation).''
    The Exchange understands the Operating Committee will announce at
the beginning of the relevant year via a CAT alert the budgeted Total
CAT Costs to be used in calculating the Quarterly CAT Fees for that
year. The budgeted Total CAT Costs will be the costs set forth in the
annual operating budget for the Company required pursuant to Section
11.1(a) of the CAT NMS Plan. As discussed above, CAT costs would
include, but not be limited to, Plan Processor costs, insurance costs,
third-party support costs and an operational reserve. As required by
Section 11.1(c) of the CAT NMS Plan, any surpluses collected will be
treated as an operational reserve to offset future fees and will not be
distributed to the Participants as profits.\44\ In addition, to address
potential changes in the budget during the year, the total budgeted
costs for the CAT for the relevant year may be adjusted on a quarterly
basis as the Operating Committee reasonably deems appropriate for the
prudent operation of the Company. To the extent that the Operating
Committee adjusts the total budgeted costs for the CAT for the relevant
year during its quarterly budget review, the adjusted total budgeted
costs for the CAT will be used in calculating the remaining quarterly
CAT fees for that year.
---------------------------------------------------------------------------

    \44\ CAT NMS Plan Approval Order at 84792.
---------------------------------------------------------------------------

    The following chart summarizes the imposition of the Quarterly CAT
Fee each year commencing in 2023 and continuing each year thereafter:

----------------------------------------------------------------------------------------------------------------
                                                                    CAT data used for
           Quarterly CAT fee               Quarterly industry        message traffic            Payment due
                                           member allocation           calculation
----------------------------------------------------------------------------------------------------------------
Quarterly CAT Fee #1..................  1/4th of 75% of the      CAT Data from first      2nd quarter of the
                                         budgeted annual CAT      quarter of the           relevant year
                                         costs for the relevant   relevant year.
                                         year.
Quarterly CAT Fee #2..................  1/4th of 75% of the      CAT Data from second     3rd quarter of the
                                         budgeted annual CAT      quarter of the           relevant year
                                         costs for the relevant   relevant year.
                                         year.
Quarterly CAT Fee #3..................  1/4th of 75% of the      CAT Data from third      4th quarter of the
                                         budgeted annual CAT      quarter of the           relevant year
                                         costs for the relevant   relevant year.
                                         year.
Quarterly CAT Fee #4..................  1/4th of 75% of the      CAT Data from fourth     1st quarter of year
                                         budgeted annual CAT      quarter of the           following the
                                         costs for the relevant   relevant year.           relevant year
                                         year.
----------------------------------------------------------------------------------------------------------------

(3) Time and Manner of Payment
    The Exchange proposes to add paragraph (e) to the ``Consolidated
Audit Trail Funding Fees'' section of its fee schedule to describe the
time and manner of the payment of the Industry Member CAT fees as
provided in the Proposed CAT Fee Plan Amendment.\45\ Proposed paragraph
(e)(1) would state that ``Consolidated Audit Trail, LLC will provide
each Industry Member with an invoice setting forth the Industry
Member's Historical CAT Assessment, Period 3 CAT Fee, Period 4 CAT Fee
and/or Quarterly CAT Fee (as applicable) (collectively, ``CAT Fees'')
for each payment period.'' Proposed paragraph (e)(2) would state that
``Consolidated Audit Trail, LLC will provide each Industry Member with
one invoice each payment period for its CAT Fees as determined pursuant
to paragraph (a)-(d) above, regardless of whether the Industry Member
is a member of multiple self-regulatory organizations.'' Proposed
paragraph (e)(3) would state that ``[e]ach Industry Member will pay its
CAT Fees to the Consolidated Audit Trail, LLC via the centralized
system for the collection of CAT Fees established by the Consolidated
Audit Trail, LLC in the manner prescribed by the Consolidated Audit
Trail, LLC.'' Finally, proposed paragraph (e)(4) would require that
Industry Members pay their CAT Fees within thirty days after receipt of
an invoice or other notice indicating payment is due (unless a longer
payment period is otherwise indicated). If an Industry Member fails to
pay any such fee when due, such Industry Member shall pay interest on
the outstanding balance from such due date until such fee is paid at a
per annum rate equal to the lesser of (i) the Prime Rate plus 300 basis
points, or (ii) the maximum rate permitted by applicable law.\46\
---------------------------------------------------------------------------

    \45\ See Proposed CAT Fee Plan Amendment at 21068.
    \46\ CAT Reporters will be responsible for each quarterly fee in
which they are a CAT Reporter. If a CAT Reporter ceases to the meet
the definition of a CAT Reporter during a quarter, the CAT Reporter
will still be responsible for CAT fees attributable to its message
traffic (or, the minimum fee in the alternative) during that
quarter. See Proposed CAT Fee Plan Amendment at 21068.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with
the requirements of the Exchange Act. The Exchange believes that the
proposed rule change is consistent with Section 6(b)(5) of the Act,\47\
which requires, among other things, that the Exchange's rules must be
designed to prevent fraudulent and manipulative acts and practices, to
promote just and equitable principles of trade, and, in general, to
protect investors and the public interest, and not designed to permit
unfair discrimination between customers, issuers, brokers and dealers.
The Exchange also believes that the proposed rule change is consistent
with the provisions of Section 6(b)(4) of the

Act,\48\ because it provides for the equitable allocation of reasonable
dues, fees and other charges among members and issuers and other
persons using its facilities. The Exchange further believes that the
proposed rule change is consistent with Section 6(b)(8) of the Act \49\
which requires that the Exchange's rules not impose any burden on
competition that is not necessary or appropriate in furtherance of the
purpose of the Exchange Act.
---------------------------------------------------------------------------

    \47\ 15 U.S.C. 78f(b)(6).
    \48\ 15 U.S.C. 78f(b)(4).
    \49\ 15 U.S.C. 78f(b)(8).
---------------------------------------------------------------------------

    Section 11.1(b) of the CAT NMS Plan states that ``[t]he
Participants shall file with the SEC under Section 19(b) of the
Exchange Act any such fees on Industry Members that the Operating
Committee approves.'' Per Section 11.1(b) of the CAT NMS Plan, the
Exchange has filed this proposed rule change to implement the Industry
Member CAT fees included in the CAT Funding Model approved by the
Operating Committee. The Exchange believes that this proposal is
consistent with the Exchange Act because it is consistent with, and
implements, the CAT Funding Model, and is designed to assist the
Exchange and its Industry Members in meeting regulatory obligations
pursuant to the CAT NMS Plan. In approving the CAT NMS Plan, the SEC
noted that the Plan ``is necessary and 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
mechanism of a national market system, or is otherwise in furtherance
of the purposes of the Act.'' \50\ To the extent that this proposal
implements the Plan, and applies specific requirements to Industry
Members, the Exchange believes that this proposal furthers the
objectives of the Plan, as identified by the SEC, and is therefore
consistent with the Exchange Act.
---------------------------------------------------------------------------

    \50\ CAT NMS Plan Approval Order at 84696.
---------------------------------------------------------------------------

    The Exchange further notes that, as provided in the Proposed CAT
Fee Plan Amendment, the Operating Committee determined that the
proposed Industry Member CAT fees comply with the requirements of the
Exchange Act and the CAT NMS Plan.\51\ The Operating Committee
determined that the Industry Member CAT fees provide for the
``equitable allocation of reasonable dues, fees, and other charges
among its members and issuers and other persons using its facilities
necessary or appropriate in furtherance of the purposes of this
chapter,'' \52\ as required by the Exchange Act. The Operating
Committee determined that the CAT fees equitably allocate CAT costs
between Participants and Industry Members, and among Industry Members,
as discussed in detailed [sic] above. For the reasons discussed above,
the Operating Committee determined that the 75%-25% allocation between
Industry Members and Participants in the CAT Funding Model as well as
the use of message traffic for allocating costs among Industry Members
provide for an equitable allocation of CAT costs among CAT Reporters.
In addition, as discussed above, the Operating Committee determined
that the imposition of minimum and maximum fees and market maker
discounts would operate to provide for an equitable allocation of CAT
costs among Industry Members.
---------------------------------------------------------------------------

    \51\ See Proposed CAT Fee Plan Amendment at 21068-70.
    \52\ Sections 6(b)(4) and 15A(b)(5) of the Exchange Act.
---------------------------------------------------------------------------

    As further provided in the Proposed CAT Fee Plan Amendment, the
Operating Committee also determined that the CAT Funding Model is ``not
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers,'' \53\ as required by the Exchange Act, as the CAT
Funding Model does not unfairly discriminate between Industry Members
and Participants, or among Industry Members. In making this
determination, the Operating Committee noted that all Industry Members
are grouped together for the purpose of determining CAT fees, and
Industry Members with similar levels of activity would pay similar
fees. For example, Industry Members with higher levels of message
traffic would pay higher fees, and those with lower levels of message
traffic would pay lower fees. With the elimination of tiers in the
Original Funding Model, fees for Industry Members are directly related
to their message traffic. With tiers, the relationship between message
traffic and the CAT fee would not have been as direct.
---------------------------------------------------------------------------

    \53\ Sections 6(b)(5) and 15A(b)(6) of the Exchange Act.
---------------------------------------------------------------------------

    In addition, as discussed in the Proposed CAT Fee Plan Amendment,
where the method of fee calculation may potentially affect certain
groups of CAT Reporters adversely, the Operating Committee sought to
limit such adverse effects. For example, the Operating Committee
proposed market maker discounts to address the high levels of message
traffic generally exhibited by market makers. As discussed above, the
SEC has recognized repeatedly that such favorable treatment for market
makers in other contexts was not unfairly discriminatory or a burden on
competition in light of its positive effects on market quality, nor was
it considered to involve an inequitable allocation of fees among
members.
    As also provided in the Proposed CAT Fee Plan Amendment, the
Operating Committee also proposed the Maximum Industry Member CAT Fee
to address the potential for significant fees based on outsized message
traffic for certain Industry Members. The Maximum Industry Member CAT
Fee would serve as a method to institute a cap on fees to fairly
allocate costs to Industry Members. Such a fee would prevent Industry
Members from paying significantly larger CAT fees than Participant
complexes.
    The Proposed CAT Fee Plan Amendment notes that Operating Committee
also determined that the proposed Industry Member CAT fees would
promote just and equitable principles of trade, and, in general,
protect investors and the public interest, as the fees would be
transparent and relate specifically to CAT activity. The Operating
Committee also determined that the proposed fees were reasonable
because they would provide ease of calculation, ease of billing and
other administrative functions. Such factors are crucial to estimating
a reliable revenue stream for the Company.

B. Self-Regulatory Organization's Statement on Burden on Competition

    Section 6(b)(8) of the Act \54\ requires that the Exchange's rules
not impose any burden on competition that is not necessary or
appropriate in furtherance of the purpose of the Exchange Act. The
Exchange does not believe that the proposed rule change will result in
any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act. The Exchange notes that the
proposed rule change implements provisions of the CAT NMS Plan that are
subject to approval by the Commission and is designed to assist the
Exchange in meeting its regulatory obligations pursuant to the Plan.
The Exchange also notes that the proposed rule changes will apply
equally to all Industry Members, including its GEMX members. In
addition, all national securities exchanges and FINRA are proposing a
similar proposed fee change to implement the requirements of the CAT
NMS Plan. Therefore, this is not a competitive fee filing, and,
therefore, it does not raise competition issues between and among the
exchanges and FINRA.
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    \54\ 15 U.S.C. 78f(b)(8).

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    Moreover, the Exchange notes that, as discussed in the Proposed CAT
Fee Plan Amendment, the Operating Committee determined that the
proposed fees do not impose an unnecessary or inappropriate burden on
competition as they fairly and equitably allocate costs among CAT
Reporters.\55\ The Operating Committee determined that the cost
allocation between Participants and Industry Members recognizes the
greater number of Industry Members as compared to the Participants and
the greater collective revenue of Industry Members as compared to
Participants. In addition, cost allocations among Industry Members
based on message traffic fairly and equitably distribute CAT costs.
Furthermore, the market maker discounts and the Maximum Industry Member
CAT Fee address the potential for burdens on market makers and Industry
Members with outsized message traffic potentially resulting from the
proposed fee calculations. Moreover, the Operating Committee determined
that the Minimum Industry Member CAT Fee would not act as a barrier to
entry for smaller Industry Member CAT Reporters.
---------------------------------------------------------------------------

    \55\ See Proposed CAT Fee Plan Amendment at 21070.
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C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others

    No written comments were either solicited or received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action

    The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act.\56\ At any time within 60 days of the
filing of the proposed rule change, the Commission summarily may
temporarily suspend such rule change if it appears to the Commission
that such action is: (i) Necessary or appropriate in the public
interest; (ii) for the protection of investors; or (iii) otherwise in
furtherance of the purposes of the Act. If the Commission takes such
action, the Commission shall institute proceedings to determine whether
the proposed rule should be approved or disapproved.
---------------------------------------------------------------------------

    \56\ 15 U.S.C. 78s(b)(3)(A)(ii).
---------------------------------------------------------------------------

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-GEMX-2021-03 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to File Number SR-GEMX-2021-03. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549 on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-GEMX-2021-03su>10 and should be
submitted on or before June 1, 2021.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\57\
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    \57\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-09784 Filed 5-7-21; 8:45 am]
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[Federal Register Volume 85, Number 48 (Wednesday, March 11, 2020)]
[Notices]
[Page 14286]
[FR Doc No: 2020-05100]

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SECURITIES AND EXCHANGE COMMISSION

Sunshine Act Meeting; Cancellation

FEDERAL REGISTER CITATION OF PREVIOUS ANNOUNCEMENT: 85 FR 12956, March
5, 2020.

PREVIOUSLY ANNOUNCED TIME AND DATE OF THE MEETING: Tuesday, March 10,
2020 at 9:30 a.m.

CHANGES IN THE MEETING: The Open Meeting scheduled for Tuesday, March
10, 2020 at 9:30 a.m., has been cancelled and will be rescheduled for a
future date.

CONTACT PERSON FOR MORE INFORMATION: For further information; please
contact Vanessa A. Countryman from the Office of the Secretary at (202)
551-5400.

    Dated: March 9, 2020
Vanessa A. Countryman,
Secretary.
[FR Doc. 2020-05100 Filed 3-9-20; 4:15 pm]
BILLING CODE 8011-01-P


[Federal Register Volume 87, Number 54 (Monday, March 21, 2022)]
[Notices]
[Pages 15988-15989]
[FR Doc No: 2022-05871]

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 ENVIRONMENTAL PROTECTION AGENCY

[FRL-9628-01-OA]

Request for Nominations for the Science Advisory Board
Radionuclide Cancer Risk Coefficients Review Panel

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice.

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SUMMARY: The Environmental Protection Agency (EPA) Science Advisory
Board (SAB) Staff Office requests public nominations of scientific
experts to form a Panel to review the draft EPA document titled Cancer
Risk Coefficients for Environmental Exposure to Radionuclides (Federal
Guidance Report No. 16). This draft document is an update to Federal
Guidance Report No. 13, and provides new radionuclide-specific cancer
risk coefficients for incidence and mortality associated with internal
radionuclide exposure from ingestion and inhalation, and external
exposure to radionuclides distributed in air, water, and soil.

DATES: Nominations should be submitted by April 11, 2022 per the
instructions below.

FOR FURTHER INFORMATION CONTACT: Any member of the public wishing
further information regarding this Notice and Request for Nominations
may contact Dr. Diana Wong, Designated Federal Officer (DFO), EPA
Science Advisory Board Staff Office by telephone/voice mail (202) 564-
2049, or email at [email protected]. General information concerning
the EPA SAB can be found at the EPA SAB website at https://sab.epa.gov.

SUPPLEMENTARY INFORMATION:
    Background: The SAB (42 U.S.C. 4365) is a chartered Federal
Advisory Committee that provides independent scientific and technical
peer review, advice, and recommendations to the EPA Administrator on
the technical basis for EPA actions. As a Federal Advisory Committee,
the SAB conducts business in accordance with the Federal Advisory
Committee Act (FACA) (5 U.S.C. App. 2) and related regulations. The SAB
Staff Office is forming an expert panel, the Radionuclide Cancer Risk
Coefficients (RCRC) Review Panel, under the auspices of the Chartered
SAB. The RCRC Review Panel will provide advice through the chartered
SAB. The SAB and the RCRC Review Panel will comply with the provisions
of FACA and all appropriate SAB Staff Office procedural policies.
    The Radionuclide Cancer Risk Coefficients (RCRC) Review Panel will
conduct the review of Cancer Risk Coefficients for Environmental
Exposure to Radionuclides (Federal Guidance Report No. 16) prepared by
the EPA's Office of Radiation and Indoor Air. Federal Guidance Report
No. 16 (FGR 16) is part of a series designed to provide technical
information for use in implementing radiation protection programs. FGR
16 provides radionuclide-specific cancer risk coefficients for
incidence and mortality associated with internal radionuclide exposure
from ingestion and inhalation, and external exposure to radionuclides
distributed in air, water, and soil.
    Federal Guidance Report No. 13 (1999) provided cancer risk
coefficients for environmental exposures to approximately 835
radionuclides. FGR 16 updates and expands the set of risk coefficients
to 1,252 radionuclides. FGR 16 includes updated dosimetric data,
biokinetic models, nuclear decay data, usage rates, U.S. population
statistics, and cancer models from EPA Radiogenic Cancer Risk Models
and Projections for the U.S. Population (2011), known as the ``Blue
Book.'' FGR 16 is intended for audiences who need to estimate risks to
the U.S. population from environmental exposures to radionuclides.
    Request for Nominations: The SAB Staff Office is seeking
nominations of nationally and internationally recognized scientists,
mathematicians, and engineers with demonstrated expertise and
experience in the following disciplines: Radionuclide biokinetic
modeling, radiation epidemiology, computational dosimetry,
radiobiology, and statistics/biostatistics.
    Process and Deadline for Submitting Nominations: Any interested
person or organization may nominate qualified individuals in the areas
of expertise described above for possible service on the SAB Panel.
Individuals may self-nominate. Nominations should be submitted in
electronic format (preferred) using the online nomination form on the
SAB website at https://sab.epa.gov (see the ``Public Input on
Membership'' list under ``Committees, Panels, and Membership''). To be
considered, nominations should include the information requested below.
EPA values and welcomes diversity. All qualified candidates are
encouraged to apply regardless of sex, race, disability or ethnicity.
Nominations should be submitted in time to arrive no later than April
11, 2022.
    The following information should be provided on the nomination
form: Contact information for the person making the nomination; contact
information for the nominee; and the disciplinary and specific areas of
expertise of the nominee. Nominees will be contacted by the SAB Staff
Office and will be asked to provide a recent curriculum vitae and a
narrative biographical summary that includes: Current position;
educational background; research activities; sources of research
funding for the last two years; and recent service on other national
advisory committees or national professional organizations. Persons
having questions about the nomination procedures, or who are unable to
submit nominations through the SAB website, should contact the DFO at
the contact information noted above. The names and biosketches of
qualified nominees identified by respondents to this Federal Register
notice, and additional experts identified by the SAB Staff Office, will
be posted in a List of Candidates for the Panel on the SAB website at
https://sab.epa.gov. Public comments on the List of Candidates will be
accepted for 21 days. The public will be requested to provide relevant
information or other documentation on nominees that the SAB Staff
Office should consider in evaluating candidates.
    For the EPA SAB Staff Office, a balanced review panel includes
candidates who possess the necessary domains of knowledge, the relevant
scientific perspectives (which, among other factors, can be influenced
by work history and affiliation), and the collective breadth of
experience to adequately address the charge. In forming the expert
panel, the SAB Staff Office will consider public comments on the Lists
of Candidates, information provided by the candidates themselves, and
background information independently gathered by the SAB Staff Office.
Selection criteria to be used for panel membership include: (a)
Scientific and/or technical expertise, knowledge, and experience
(primary factors); (b) availability and willingness

to serve; (c) absence of financial conflicts of interest; (d) absence
of an appearance of a loss of impartiality; (e) skills working in
committees, subcommittees and advisory panels; and (f) for the panel as
a whole, diversity of expertise and scientific points of view.
    The SAB Staff Office's evaluation of an absence of financial
conflicts of interest will include a review of the ``Confidential
Financial Disclosure Form for Environmental Protection Agency Special
Government Employees'' (EPA Form 3110-48). This confidential form is
required and allows government officials to determine whether there is
a statutory conflict between a person's public responsibilities (which
include membership on an EPA federal advisory committee) and private
interests and activities, or the appearance of a loss of impartiality,
as defined by federal regulation. The form may be viewed and downloaded
through the ``Ethics Requirements for Advisors'' link on the SAB
website at https://sab.epa.gov. This form should not be submitted as
part of a nomination.
    The approved policy under which the EPA SAB Office selects members
for subcommittees and review panels is described in the following
document: Overview of the Panel Formation Process at the Environmental
Protection Agency Science Advisory Board (EPA-SAB-EC-02-010), which is
posted on the SAB website at https://sab.epa.gov.

Thomas H. Brennan,
Director, Science Advisory Board Staff Office.
[FR Doc. 2022-05871 Filed 3-18-22; 8:45 am]
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