---------------------------------------------------------------------------

    Part III of proposed Form ATS-G requires a Government Securities
ATS to provide information similar to that in which an NMS Stock ATS is
currently required to provide under Part III of Form ATS-N with certain
exceptions. Unlike Form ATS-N, Part III, Item 15 of proposed Form ATS-G
does not ask whether the ATS is an Electronic Communication Network as
defined in Regulation NMS. Accordingly, the Commission believes that
Item 15 of proposed Form ATS-G would impose a lesser burden than the
approved estimated burden for Item 15 of Form ATS-N. The Commission
estimates that, on average, preparing Part III, Item 15 for Form ATS-G
would add 4.5 hours to the baseline, resulting in an aggregate initial
burden of 117 hours above the baseline for all Government Securities
ATSs.\467\
---------------------------------------------------------------------------

    \467\ (Attorney at 0.9 hours + Compliance Manager at 1.8 hours +
Sr. Systems Analyst at 1.8 hours) x 26 Government Securities ATSs =
117 burden hours. In contrast, the Commission estimated that Part
III, Item 5 of Form ATS-N would require 5 hours per ATS to complete.
See NMS Stock ATS Adopting Release, supra note 1, at n.1211.
---------------------------------------------------------------------------

    Part III, Item 16 of Form ATS-N asks about order routing; the
Commission is not including such a question in Form ATS-G. Instead,
Part III, Item 16 of Form ATS-G would require a Government Securities
ATS to disclose its functionalities or procedures to facilitate trading
on or source pricing for the Government Securities ATS using related
markets. As the broker-dealer operator controls all aspects of the
operation of the Government Securities ATS, the Commission believes
that the broker-dealer operator should already be aware of the ATS's
trading and pricing practices. Therefore, preparing this Item would not
impose a substantial burden on the respondents. The Commission
estimates that, on average, preparing Part III, Item 16 for Form ATS-G
would add a total of 6 hours to the baseline per respondent, resulting
in an aggregate initial burden of 156 hours above the baseline for all
Government Securities ATSs.\468\
---------------------------------------------------------------------------

    \468\ (Attorney at 2 hours + Compliance Manager at 2.5 hours +
Sr. Systems Analyst at 1.5 hours) x 26 Government Securities ATSs =
156 burden hours. This is an additional 4 hours per ATS from the
additional 2-hour burden for Part III, Item 16 estimated for Form
ATS-N. See NMS Stock ATS Adopting Release, supra note 1, at n.1212.
---------------------------------------------------------------------------

    As proposed, Form ATS-G would not, unlike Form ATS-N, include a
question pertaining to order display and execution access.\469\
However, similar to Part III, Item 25 of Form ATS-N, Part III, Item 24
of proposed Form ATS-G would require a Government Securities ATS to
disclose whether the ATS has triggered the proposed fair access
thresholds and, if applicable, describe the written standards for
granting access to trading on the ATS to comply with Rule
301(b)(5)(ii)(A) of Regulation ATS. Historically, Government Securities
ATSs have crossed these thresholds very rarely, with at most 3
Government Securities ATSs crossing either of the applicable thresholds
in any given year, and the Commission believes this would continue to
occur very infrequently. Consistent with the burden hours for
completing Part III, Item 25 of Form ATS-N, the Commission estimates
that preparing Part III, Item 24 in a proposed Form ATS-G would add 5
hours for each class of securities.\470\ Because Part III, Item 24 of
Form ATS-G requires the Government Securities ATS to provide the fair
access disclosures for two categories of government securities--U.S.
Treasury Securities and Agency Securities--the Commission estimates
that preparing this Item would add an additional 5 hours per respondent
and a total of 10 hours above the baseline for each respondent for
which both thresholds are applicable.\471\ The Commission believes that
3 ATSs crossed the proposed fair access threshold for U.S. Treasury
Securities, and 1 ATS crossed the proposed fair access threshold for
Agency Securities in four of the preceding six calendar months.
Accordingly, the Commission estimates that the preparing Part III, Item
24 for proposed Form ATS-G would result in an aggregate initial burden
of 20 hours above the baseline.\472\
---------------------------------------------------------------------------

    \469\ See Part III, Item 24 of Form ATS-N. In the NMS Stock ATS
Adopting Release, the Commission estimated this Item would impose a
5-hour additional burden per ATS. See NMS Stock ATS Adopting
Release, supra note 1, at n.1225.
    \470\ Attorney at 2 hours + Compliance Manager at 1 hour + Sr.
Systems Analyst at 2 hours = 5 burden hours. See NMS Stock ATS
Adopting Release, supra note 1, at 38880.
    \471\ (Attorney at 2 hours + Compliance Manager at 1 hour + Sr.
Systems Analyst at 2 hours) x 2 categories of government securities
= 10 burden hours.
    \472\ (5 hours x 3 Government Securities ATSs that crossed the
fair access threshold for U.S. Treasury Securities) + (5 hours x 1
Government Securities ATS that crossed the fair access threshold for
Agency Securities) = 20 burden hours.
---------------------------------------------------------------------------

    In total, Government Securities ATSs would incur the following
initial burden, on average, to prepare proposed Form ATS-G:

------------------------------------------------------------------------
                    Burden                           Initial burden
------------------------------------------------------------------------
Baseline for initial operation report on Form  Per ATS: 20 hours.
 ATS.                                          Industry: 520 hours.
Part I.......................................  Per ATS: 0.75 hours.\473\
                                               Industry: 19.5
                                                hours.\474\
Part II......................................  Per ATS: 31 hours.\475\
                                               Industry: 806 hours.\476\
Part III.....................................  Per ATS: 82.25
                                                hours.\477\
                                               Industry: 1,898.5
                                                hours.\478\
Access to EDGAR (applicable only to select     Per ATS: 0.15 hours.
 respondents).                                 Industry: 0.15. hours.
                                              --------------------------
    Total--Form ATS-G........................  Per ATS: 134.15 hours.
                                               Industry: 3,244.15 hours.
------------------------------------------------------------------------

ii. Estimated Burden Above the Current Baseline for a Form ATS-G, Form
ATS-G Amendment, and Notice of Cessation on Form ATS-G
---------------------------------------------------------------------------

    \473\ Per respondent burden hours to prepare all items in Part I
of Form ATS-G, except Part I, Item 5, would be identical to those of
Part I for Form ATS-N. Therefore, the burden hours to prepare all
items in Part I, except Part I, Item 5, would be: Compliance Clerk
at 0.5 hours = 0.5 burden hours. See NMS Stock ATS Adopting Release,
supra note 1, at 38869. In aggregate, burden hours per Government
Securities ATS to prepare Part I of Form ATS-G would be: Compliance
Clerk at 0.75 hours = 0.75 burden hours.
    \474\ Compliance Clerk at 0.75 hours x 26 Government Securities
ATSs = 19.5 burden hours.
    \475\ Per respondent burden hours to prepare all items in Part
II of Form ATS-G, excluding the narratives in Part II, Items 1(d)
and 2(d), would be identical to those of Part II for Form ATS-N.
Therefore, the burden hours to prepare all items in Part II of Form
ATS-G, except Part II, Items 1(d) and 2(d), would be: Attorney at 15
hours + Compliance Manager at 11 hours + Sr. Marketing Manager at 2
hours = 28 burden hours. See NMS Stock ATS Adopting Release, supra
note 1, at 38869-73. Per respondent burden hours to prepare Part II
of Form ATS-G, including the burden hours to prepare the narratives
for Items 1(d) and 2(d), supra note 466, would be: Attorney at 15.5
hours + Compliance Manager at 12.5 hours + Sr. Systems Analyst at 1
hour + Sr. Marketing Manager at 2 hours = 31 burden hours.
    \476\ 31 hours x 26 Government Securities ATSs = 806 burden
hours.
    \477\ In aggregate, burden hours per Government Securities ATS
to prepare Part III of Form ATS-G would be: Attorney at 23.5 hours +
Compliance Manager at 28.2 hours + Sr. Systems Analyst at 30.55
hours = 82.25 burden hours. This estimate takes into account Part
III, Items 24(a) and 24(b), which apply only to select respondents.
    \478\ (72.25 hours x 26 Government Securities ATSs subject to
Part III (other than Items 24(a) and 24(b))) + (5 hours x 3
Government Securities ATSs subject to Part III, Item 24(a)) + (5
hours x 1 Government Securities ATS subject to Part III, Item 24(b))
= 1,898.5 burden hours.
---------------------------------------------------------------------------

(a) Proposed Form ATS-G
    Based on the above analysis, the Commission estimates that proposed
Form ATS-G would, on average, require approximately 114.15 burden hours
above the baseline per respondent. This would result in an estimated
134.15 burden hours in total per respondent, including the
baseline.\479\ Government Securities ATSs vary in terms of their
structure and the manner in which they operate. Legacy Filers also vary
with respect to the depth and extent of their disclosures on Form ATS.
Consequently, the Commission believes that the estimated hour burdens
herein regarding proposed Form ATS-G would likely vary among both
Legacy Filers and Currently Exempted Government Securities ATSs,
depending on such factors as the extent of their current disclosures on
Form ATS (as applicable), the complexity and structure of their
systems, and the extent of their other broker-dealer operator or
affiliate activities.
---------------------------------------------------------------------------

    \479\ (Current Baseline at 20 hours) + (Part I at 0.75 hours) +
(Part II at 31 hours) + (Part III at an average of 82.25 hours) +
(Access to EDGAR at 0.15 hours, see infra Section IX.D.2.b.iv) =
134.15 burden hours. The aggregate totals by professionals,
including the baseline, are estimated to be approximately 55 hours
for an Attorney, 37.85 hours for a Compliance Manager, 31.55 hours
for a Sr. Systems Analyst, 2 hours for a Sr. Marketing Manager, and
7.75 hours for a Compliance Clerk. This estimated burden for a Form
ATS-G includes the hour burden associated with completing Part III,
Item 24 of proposed Form ATS-G. The Commission believes that the
majority of Government Securities ATSs would not be required to
complete these items of the proposed form.
---------------------------------------------------------------------------

(b) Form ATS-G Amendments
    As previously stated, the Commission estimates that Legacy Filers
submit 2 amendments to Form ATS, on average, each year.\480\ In
addition to the same three general categories of required amendments as
Rule 301(b)(2) of Regulation ATS currently requires for Form ATS,\481\
proposed Form ATS-G requires contingent amendments. Due to the greater
detail and number of disclosures required by proposed Form ATS-G, the
Commission believes that respondents may file more amendments to
proposed Form ATS-G than Legacy Filers currently do on Form ATS. For
example, proposed Form ATS-G requests information about the ATS-related
activities of the broker-dealer operator and its affiliates in Part II
of proposed Form ATS-G, which are not required disclosures under
current Form ATS. To the extent information provided in response to
these requests changes, a Government Securities ATS must file a Form
ATS-G amendment. As with amendments to Form ATS, the burden on
Government Securities ATS associated with updating From ATS-G to
reflect current ATS functionality will vary depending on the frequency
and scope of changes made by the ATS. Making complete and
comprehensible disclosures of material changes to the Government
Securities ATS's operations, such as the introduction of a new order
type and its attributes or changes to segmentation procedures and
parameters, would require more time and resources from a Government
Securities ATS than providing complete and comprehensible disclosures
of a simple change to the physical or website address of the ATS.
Accordingly, the Commission is estimating that Government Securities
ATSs will file 3 amendments to Form ATS-G per year. The Commission
estimates that Government Securities ATSs would incur the following
annual burdens to amend their Form ATS-G:
---------------------------------------------------------------------------

    \480\ See supra note 448.
    \481\ See 17 CFR 242.301(b)(2).
    \482\ Current ATSs file approximately 2 amendments per year, for
a total burden of 12 hours. See note 449 and accompanying text. To
calculate the total burden imposed by Form ATS-G amendment
requirements, the Commission is estimating a baseline filing
requirement for each Form ATS-G amendment equivalent to 6 hours per
amendment x 3 Form ATS-G amendments = 18 total baseline burden
hours.
    \483\ This would result in a total estimated hourly burden,
including the baseline, of 9.4 hours for a Form ATS-G amendment. The
annual burden per ATS would be: 9.4 hours x 3 amendments per year =
28.2 burden hours. The aggregate total by professional would be:
16.5 hours for an Attorney, 6 hours for a Compliance Manager, and
5.7 hours for a Compliance Clerk.
    \484\ 78 Form ATS-G amendments per year x 9.4 hours = 733.2
burden hours.

------------------------------------------------------------------------
                    Burden                           Annual burden
------------------------------------------------------------------------
Baseline burden related to Form ATS amendment  Per ATS: 18 hours (6
                                                hours x 3 Form ATS
                                                amendments).\482\
                                               Industry: 468 hours.
Form ATS-G amendment above the baseline......  Per ATS: 9 hours (3 hours
                                                x 3 Form ATS-G
                                                amendments).
                                               Industry: 234 hours.
Preparing a brief summary and Exhibit 3......  Per ATS: 1.2 hours (0.4
                                                hours x 3 Form ATS-G
                                                amendments).
                                               Industry: 31.2 hours.
                                              --------------------------
    Total--Form ATS-G amendment..............  Per ATS: 28.2 hours.\483\
                                               Industry: 733.2
                                                hours.\484\
------------------------------------------------------------------------

    As stated above, the Commission estimates that the hourly burden
related to an amendment to Form ATS is 6 hours and that Currently
Exempted Government Securities ATSs would have a baseline hourly burden
of 6 hours to put them in the same position as Legacy Filers.\485\ The
Commission estimates that the average hourly burden above this baseline
of 6 hours for each Form ATS-G amendment would be 3 hours to
accommodate the more voluminous and detailed disclosures required by
Form ATS-G as compared to Form ATS.\486\ The Commission estimates that
the 26 Government Securities ATSs will file 3 Form ATS-G amendments
each year, for a total of 78 Form ATS-G amendments. In addition, a
Government Securities ATS would also be required to provide a brief
summary of the amendment at the top of Form ATS-G \487\ and submit as
Exhibit 3 one marked document that indicates changes to ``yes'' or
``no'' answers or additions to or deletions to Parts I, II, and III.
The Commission estimates that drafting the summary and preparing the
marked documents showing the amendments the Government Securities ATS
is making would add an additional burden of 0.4 hours.\488\
---------------------------------------------------------------------------

    \485\ See supra note 449.
    \486\ Attorney at 1 hour + Compliance Manager at 2 hours = 3
burden hours. The Commission believes that information required
under Form ATS-N amendment is similar to that required under
proposed Form ATS-G amendment and, therefore, estimates that the
burden for Form ATS-G amendment would be the same as the approved
estimated burden for Form ATS-N amendment. See NMS Stock ATS
Adopting Release, supra note 1, at 38881.
    \487\ See Exhibit 3 to Form ATS-G.
    \488\ Compliance Clerk at 0.4 hours = 0.4 burden hours. The
Commission believes that most word processing software provides for
this functionality. See NMS Stock ATS Adopting Release, supra note
1, at 38882.
---------------------------------------------------------------------------

(c) Notice of Cessation on Proposed Form ATS-G
    As previously noted, from 2015 through 2019, there has been an
average of 1 Legacy Government Securities ATS that ceased operations
each year.\489\ Although it is unclear how many Government Securities
ATSs might cease operations each year going forward, for purposes of
making a PRA burden estimate, the Commission is estimating that this
average would generally remain the same for Government Securities ATSs
using Form ATS-G because economic conditions, business reasons, and
other factors may cause some Government Securities ATSs to cease
operations. Accordingly, the Commission estimates that 1 Government
Securities ATS may file a cessation of operation report on proposed
Form ATS-G each year. The Commission believes that the burden for
filing a cessation of operation report on proposed Form ATS-G would not
be significantly greater than that for filing a cessation of operation
report on current Form ATS. Both Form ATS and proposed Form ATS-G
require that the ATS check the appropriate box indicating that the ATS
is ceasing operations; however, proposed Form ATS-G also requires that
the Government Securities ATS provide the date that the ATS expects to
cease operating. The Commission therefore estimates that Government
Securities ATSs that file a cessation of operation report would incur
the following annual burden:
---------------------------------------------------------------------------

    \489\ See supra Section IX.C.
    \490\ Attorney at 1.5 hours + Compliance Clerk at 0.5 hours = 2
burden hours. See supra note 450.
    \491\ 2 hours x 1 Government Securities ATS = 2 burden hours.

------------------------------------------------------------------------
                    Burden                           Annual burden
------------------------------------------------------------------------
Cessation of operation report on Form ATS-G..  Per ATS: 2 hours.\490\
                                               Industry: 2 hours.\491\
------------------------------------------------------------------------

iii. Estimated Burden for Legacy Filers To File a Form ATS To Disclose
Information Related to Trading Activity in Other Securities on an ATS
    A broker-dealer that operates an ATS that currently trades
government securities or repos and securities other than government
securities or repos would incur: (1) The above baseline burdens related
to filing a Form ATS-G and Form ATS-G amendments; \492\ (2) the
additional burden of filing an amendment to Form ATS to only disclose
information related to trading activity in securities other than
government securities or repos on an ATS \493\ and amending the Form
ATS on an ongoing basis; \494\ and (3) the burden of completing and
filing 2 Forms ATS-R--one disclosing trading volume in government
securities or repos and one disclosing trading volume in securities
other than government securities or repos.\495\ As of July 1, 2020, of
the 19 Legacy Filers, 17 ATSs trade, or have indicated that they expect
to trade, in Exhibit B to their Form ATS, both government securities or
repos and non-government securities on the ATS.\496\

Broker-dealers that operate Legacy Filers would incur the following
initial and annual burdens to disclose information related to trading
activity in securities other than government securities or repos on the
ATS:
---------------------------------------------------------------------------

    \492\ See supra Section IX.D.2.b.ii.A and B.
    \493\ See supra note 151 and accompanying text.
    \494\ See supra Section IX.D.2.a and accompanying text for the
baseline estimates for submitting an IOR for Form ATS and amendments
to Form ATS.
    \495\ See supra Section IX.D.2.a and accompanying text for the
baseline estimate for submitting a Form ATS-R.
    \496\ One of the 2 Legacy Filers also trade, or have indicated
that it expects to trade, government securities in addition to repos
and non-government securities. Therefore, 17 broker-dealers, each of
which is a Legacy Filer, are subject to the burden in this section.
The broker-dealer for 1 Legacy Filer currently also operates an NMS
Stock ATS that files a Form ATS-N and a Form ATS-R to report
transactions in NMS stocks. As proposed, this broker-dealer would be
required to file 3 Forms ATS-R and maintain a Form ATS-G, Form ATS-
N, and Form ATS for its transactions in government securities and
repos, NMS stocks, and other securities, respectively. The burden
related to the NMS Stock ATS filings was reflected in the NMS Stock
ATS Adopting Release. See NMS Stock ATS Adopting Release, supra note
1, at 38882-83.

----------------------------------------------------------------------------------------------------------------
                      Burden                                Initial burden                 Annual burden
----------------------------------------------------------------------------------------------------------------
Form ATS amendment to remove references to          Per Broker-Dealer: 10 hours    N/A.
 government securities and repos.                    \497\.
                                                    Industry: 170 hours..........
Form ATS-G (excluding access to EDGAR)............  Per Broker-Dealer: 134 hours.  N/A.
                                                    Industry: 2,278 hours........
Form ATS amendment for non-Government Securities    N/A..........................  Per Broker-Dealer: 13
 ATS.                                                                               hours.\498\
                                                                                Industry: 221 hours.
Form ATS-G amendment..............................  N/A..........................  Per Broker-Dealer: 28.2
                                                                                hours.\499\
                                                                                Industry: 479.4 hours.
Two Forms ATS-R (one for Government Securities ATS  N/A..........................  Per Broker-Dealer: 21
 and one for non-Government Securities ATS).                                        hours.\500\
                                                                                Industry: 357 hours.
                                                   -------------------------------------------------------------
    Total--burden for broker-dealers that operate   Per Broker-Dealer: 144 hours.  Per Broker-Dealer: 62.2
     Legacy Filers that trade securities other      Industry: 2,448 hours \501\..   hours.
     than government securities or repos.                                          Industry: 1,057.4 hours.
----------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------

    \497\ In the NMS Stock ATS Adopting Release, the Commission
estimated that the burden for an ATS to separately file a Form ATS
for its non-NMS stock trading activity and Form ATS-N for its NMS
stock trading activity will be 20 burden hours to amend its initial
operation report on Form ATS for its non-NMS stock trading activity.
See NMS Stock ATS Adopting Release, supra note 1, at 38882. In the
Commission's experience implementing Form ATS-N, it found that the
actual burden for a broker-dealer to amend the initial operation
report on Form ATS to remove references to NMS stocks was much less
than the estimated 20 hour burden. The Commission believes that this
burden would be similar for broker-dealers operating Government
Securities ATSs. Accordingly, the Commission is estimating that
filing a Form ATS amendment to remove references to government
securities or repos would be 10 hours. Attorney at 6.5 hours +
Compliance Clerk at 3.5 hours = 10 burden hours. Such estimated
hourly burden may be less than the estimated 10 burden hours, as the
description of such ATS's trading activity in securities other than
government securities or repos should already be contained in the
existing Form ATS.
    \498\ 2 Form ATS amendments per year x 6.5 hours = 13 burden
hours. The Commission estimates that, as proposed, the burden to
file a Form ATS amendment is 6.5 hours, including the baseline
burden and additional burden discussed in Section X.D.4. See supra
note 449 and infra note 524.
    \499\ 3 Form ATS-G amendments per year x 9.4 hours = 28.2 burden
hours.
    \500\ In addition, the Commission estimates that the total
burden for a broker-dealer to complete Forms ATS-R for both its
Government Securities ATS and non-Government Securities ATS would be
5.25 hours per quarter (Attorney at 3.5 hours + Compliance Manager
at 0.25 hours + Compliance Clerk at 1.5 hours = 5.25 burden hours),
which is 1.25 hours above the baseline burden of 4 hours for
currently filing a Form ATS-R (Attorney at 0.5 hours + Compliance
Manager at 0.25 hours + Compliance Clerk at 0.5 hours = 1.25 burden
hours). See infra notes 525, 526, and 528. See supra note 452 and
accompanying text for the baseline estimate for submitting a Form
ATS-R. The Commission believes that broker-dealers required to file
two Forms ATS-R would incur an additional burden of 0.5 hours above
the baseline because they would be required to divide their trading
statistics between two forms and file each form separately (Attorney
at 0.5 hours = 0.5 burden hours). The Commission does not believe
that those broker-dealers would incur any additional burden to
collect the required information because they currently assemble
that information when preparing the current Form ATS-R filings.
    \501\ (Form ATS amendment at 10 hours + Form ATS-G at 134 hours)
x 17 broker-dealers = 2,448 aggregate burden hours. Broker-dealers
that operate Legacy Filers do not have burden associated with
gaining access to EDGAR, and therefore, burden for gaining access to
EDGAR is not accounted for in the burden to complete Form ATS-G. See
infra text accompanying note 505.
---------------------------------------------------------------------------

iv. Access to EDGAR
    Government Securities ATSs would be required to submit Form ATS-G
filings through the Commission's EDGAR system. Based on the widespread
use and availability of the internet, the Commission believes that
filing Form ATS-G in an electronic format would be a less burdensome
and more efficient filing process for Government Securities ATSs and
the Commission, as it is likely to be less expensive and cumbersome
than mailing and filing paper forms to the Commission.\502\ For a Form
ATS-G filer to gain access to submit filings on the EDGAR system, the
filer must submit a Form ID as required by Rule 10(b) of Regulation S-T
\503\ and following the processes detailed in Volume I of the EDGAR
Filer Manual. Once a Form ID has been successfully completed and
processed, EDGAR will establish a Central Index Key (``CIK'') number,
which permits each authorized user to create EDGAR access code, which
will enable the Government Securities ATS to use EDGAR.
---------------------------------------------------------------------------

    \502\ All estimated burden hours with regard to completing Parts
I through IV of proposed Form ATS-G include the estimated burden
associated with the requirement that Government Securities ATSs file
Form ATS-G in a structured XML format on EDGAR, including narrative
responses that are block-text tagged, or use the web-fillable form.
    \503\ 17 CFR 232.10(b).
---------------------------------------------------------------------------

    All registered broker-dealers have been assigned a CIK number and
do not need to submit a Form ID to access EDGAR.\504\ Because all
Legacy Filers and Currently Exempted Government Securities ATSs other
than those that are operated by banks are operated by either registered
broker-dealers under Section 15 or government securities brokers or
dealers under Section 15C(a)(1)(A), the Commission estimates that there
will be no burden associated with gaining access to EDGAR for Legacy
Filers and Currently Exempted Government Securities ATSs that are not
operated by banks.\505\
---------------------------------------------------------------------------

    \504\ A broker-dealer that has never used EDGAR to make
electronic submissions may use its assigned CIK number to receive
access codes that will allow that broker-dealer operator to submit
Form ATS-G filings on EDGAR without needing to apply for a Form ID.
    \505\ The Commission further believes that 1 of the 19 Legacy
Filers is operated by a broker-dealer that also operates an NMS
Stock ATS, and therefore, the broker-dealer currently has access to
and files through EDGAR.
---------------------------------------------------------------------------

    Based on the number of initial filings and cessation of operations
reports on current Form ATS for Legacy Filers, the Commission estimates
that 1 to 2 new entities would file proposed Form ATS-G to become a
Government Securities ATS in each of the next three years. The
Commission estimates that among these new entities, 1 new entity per
year will be operated by an entity that has not previously registered
as a broker-dealer, a government securities broker, or a government
securities dealer or that does not otherwise already have access to
EDGAR. The Commission therefore estimates that an estimated 1 bank-
operated Currently Exempted Government Securities ATS and 1 new entity
would incur the following initial and annual burdens, respectively, by

submitting a Form ID to gain access to the EDGAR system:

----------------------------------------------------------------------------------------------------------------
                      Burden                                Initial burden                 Annual burden
----------------------------------------------------------------------------------------------------------------
Access to EDGAR...................................  Per ATS: 0.15 hours \506\....  Per ATS: 0.15 hours.\508\
                                                    Industry: 0.15 hours \507\...  Industry: 0.15 hours.\509\
----------------------------------------------------------------------------------------------------------------

v. Public Posting on Covered ATS's Website
---------------------------------------------------------------------------

    \506\ Compliance Manager at 0.15 hours = 0.15 burden hours. See
FR Doc. 2019-04008, 84 FR 8126 (March 6, 2019) (Submission for OMB
Review, Extension: Form ID; SEC File No. 270-291; OMB Control No.
3235-0328).
    \507\ Compliance Manager at 0.15 hours x 1 bank-operated
Currently Exempted Government Securities ATS = 0.15 burden hours.
    \508\ See supra note 506.
    \509\ Compliance Manager at 0.15 hours x 1 new entity that has
not previously registered as a broker-dealer, a government
securities broker, or a government securities dealer or that does
not otherwise already have access to EDGAR = 0.15 burden hours.
---------------------------------------------------------------------------

    Proposed Rule 304(b)(3)(i) would require each Government Securities
ATS to make public via posting on the ATS's website a direct URL
hyperlink to the Commission's website that contains the documents
enumerated in proposed Rule 304(b)(2).\510\ Proposed Rule 304(b)(3)(ii)
would require each Covered ATS to make public via posting on its
website the most recently disseminated Covered Form. The Commission
estimates that Government Securities ATSs and NMS Stock ATSs would
incur the following initial and annual burdens to comply with the
proposed requirements to program and configure their websites to post
the required direct URL hyperlink and the most recently disseminated
Covered Form pursuant to proposed Rule 304(b)(3):
---------------------------------------------------------------------------

    \510\ NMS Stock ATSs are already required to comply with Rule
304(b)(3)(i).

----------------------------------------------------------------------------------------------------------------
                      Burden                                Initial burden                 Annual burden
----------------------------------------------------------------------------------------------------------------
Public posting of hyperlink to the Commission's     Per ATS: 2 hours.............  N/A.
 website on Government Securities ATS's website.    Industry: 52 hours \511\.....
Public posting of the most recently disseminated    Per ATS: 4 hours.............  Per ATS: 12 hours.
 Covered Form on Covered ATS's website.             Industry: 240 hours \512\....  Industry: 720 hours.\513\
----------------------------------------------------------------------------------------------------------------

vi. Recordkeeping Requirements
---------------------------------------------------------------------------

    \511\ Sr. Systems Analyst at 2 hours x 26 Government Securities
ATSs = 52 burden hours. The Commission estimates that this initial,
one-time burden would be 2 hours, in part because many broker-dealer
operators currently maintain a website for their Government
Securities ATSs.
    \512\ The Commission estimates that Covered ATSs would each
incur an initial burden of 4 hours to post its Covered Form on its
website. The initial burden would be: Sr. Systems Analyst at 4 hours
x (26 Government Securities ATSs + 34 NMS Stock ATSs) = 240 burden
hours.
    \513\ The Commission estimates that the ongoing burden would be
4 hours for each amendment to Covered Form and that Covered ATSs
would each file 3 amendments to Covered Form per year. See supra
Section IX.D.2.b.ii.(b). See also NMS Stock ATS Adopting Release,
supra note 1, at 38881. Therefore, the annual burden would be: Sr.
Systems Analyst at 4 hours x 3 amendments x (26 Government
Securities ATSs + 34 NMS Stock ATSs) = 720 burden hours.
---------------------------------------------------------------------------

    Rule 303(a)(2)(ii) requires an ATS to preserve copies of reports
filed pursuant to Rule 301(b)(2) or 304, which includes all Form ATS
filings, and, as proposed, all Form ATS-G filings, for the life of the
enterprise and any successor enterprise. Because Legacy Filers that
trade only government securities or repos would file Form ATS-G in lieu
of Form ATS under this proposal, the Commission believes that Rule
303(a)(2)(ii) would not result in any burden for those ATSs that is not
already accounted for under the baseline burden estimate for Rule
303.\514\ For the 17 Legacy Filers that trade, or have indicated that
they expect to trade in Exhibit B to their Form ATS, government
securities or repos and securities other than government securities or
repos, the Commission estimates that the annual burden above the
baseline estimate for preserving records relating to compliance with
Rule 303(a)(2)(ii) would be the following:
---------------------------------------------------------------------------

    \514\ To comply with all of the record preservation requirements
of Rule 303, the Commission currently estimates that ATSs spend
approximately 1,380 hours per year. See supra note 436, 78 FR 43943.
At an average cost per burden hour of $104.20, the resultant total
related cost of compliance is $143,796 per year (1,380 burden hours
x $104.20/hour). See id.
    \515\ Compliance Clerk at 3 hours x 17 Legacy Filers = 51
aggregate burden hours.

------------------------------------------------------------------------
                    Burden                           Annual burden
------------------------------------------------------------------------
Record preservation requirement under Rule     Per ATS: 3 hours.
 303(a)(2)(ii).                                Industry: 51 hours.\515\
------------------------------------------------------------------------

3. Proposed Amendments to Rule 301(b)(5) of Regulation ATS
    The Commission recognizes that applying the Fair Access Rule to the
trading of U.S. Treasury Securities and Agency Securities would impose
certain burdens upon the respondents. Currently, Rule 301(b)(5) only
applies to the trading of NMS stocks, equity securities that are not
NMS stocks and for which transactions are reported to an SRO, municipal
securities, and corporate debt securities, and therefore, it currently
imposes no burden on Government Securities ATSs.\516\ The Commission
estimates that 3 Government Securities ATSs would meet the volume
thresholds that trigger fair access obligations for U.S. Treasury
Securities and Agency Securities, and that the average compliance
burden of establishing written fair access standards for each entity
would be 10 hours. As a result of the proposed amendments to Rule
301(b)(5), certain Government Securities ATSs would incur the following
annual burden: \517\
---------------------------------------------------------------------------

    \516\ 17 CFR 242.301(b)(5).
    \517\ These estimated burdens are the same as the Commission's
currently approved estimates for compliance with Rule 301(b)(5)
because the requirements of the Fair Access Rule would be identical
for Government Securities ATSs and ATSs that are currently subject
to Rule 301(b)(5). See Rule 301 OMB Update, supra note 419, at 3238.

------------------------------------------------------------------------
                    Burden                           Annual burden
------------------------------------------------------------------------
Establishing written standards for granting    Per ATS: 10 hours.
 access under Rule 301(b)(5).                  Industry: 30 hours.\518\
Making and keeping records of grants and       Per ATS: 10 hours.
 denials of access under Rule 301(b)(5).       Industry: 30 hours.\519\
                                              --------------------------
    Total--Rule 301(b)(5)....................  Per ATS: 20 hours.
                                               Industry: 60 hours.
------------------------------------------------------------------------

4. Proposed Amendments to Rule 301(b)(2), Form ATS, and Form ATS-R
---------------------------------------------------------------------------

    \518\ Attorney at 10 hours x 3 responses = 30 burden hours.
    \519\ Attorney at 10 hours x 3 responses = 30 burden hours.
---------------------------------------------------------------------------

    The Commission believes that the proposed amendments to Rule
301(b)(2), Form ATS, and Form ATS-R would impose the following initial
and annual burden to applicable respondents described further below:
\520\
---------------------------------------------------------------------------

    \520\ The Commission notes that it is proposing changes to Form
ATS-N to delete a question related to legacy status, and to include
a checkbox asking if the registered broker-dealer is authorized by a
national securities association to operate an ATS. See supra Section
V.D. The Commission believes that because this information should be
readily available to a filer and requires only marking a checkbox,
this will have no impact on the estimated burden of Form ATS-N.

----------------------------------------------------------------------------------------------------------------
                      Burden                                Initial burden                 Annual burden
----------------------------------------------------------------------------------------------------------------
Electronic filing (access to EDGAR)...............  Per ATS: 0.15 hours..........  N/A.
                                                    Industry: 0.15 hours.........
Initial operation report on Form ATS:
    Current approved burden for initial Form ATS..  Per ATS: 20 hours............  N/A.
                                                    Industry: 1,020 hours........
    Changes to Part I on Form ATS.................  Per ATS: 0.5 hours...........  N/A.
                                                    Industry: 25.5 hours.........
    Total for initial Form ATS, as proposed to be   Per ATS: 20.5 hours..........  N/A.
     amended.                                       Industry: 1,045.5 hours......
                                                   -------------------------------------------------------------
Amendment on Form ATS:
    Current approved burden for Form ATS amendment  N/A..........................  Per ATS: 12 hours.
                                                                                Industry: 612 hours.
    Changes to Part I on Form ATS.................  N/A..........................  Per ATS: 1 hour.
                                                                                Industry: 51 hours.
                                                   -------------------------------------------------------------
        Total for amendment to Form ATS, as         N/A..........................  Per ATS: 13 hours.
         proposed to be amended.                                                   Industry: 663 hours.
Form ATS-R:
    Current approved burden for Form ATS-R (4 per   N/A..........................  Per ATS: 16 hours.
     year).                                                                        Industry: 1,504 hours.
    Changes to Part I on Form ATS-R...............  N/A..........................  Per ATS: 2 hours.
                                                                                Industry: 188 hours.
    Indicating the type of filing and whether the   N/A..........................  Per ATS: 0.4 hours.
     ATS is subject to the fair access                                             Industry: 37.6 hours.
     requirements on Form ATS-R.
    Providing additional detail (e.g., trading      N/A..........................  Per ATS: 0.6 hours.
     volume and types of securities/options) on                                    Industry: 36 hours.
     Form ATS-R.
                                                   -------------------------------------------------------------
        Total burden for filing Form ATS-R, as      N/A..........................  Per ATS: 19 hours.
         proposed to be amended.                                                   Industry: 1,766 hours.
----------------------------------------------------------------------------------------------------------------

    The Commission is proposing that Form ATS and Form ATS-R would be
filed electronically. However, the Commission believes that electronic
submission of Form ATS and Form ATS-R would impose no additional burden
on existing ATSs. All ATSs that file a Form ATS or Form ATS-R are
registered broker-dealers and therefore do not need to submit a Form ID
to access EDGAR.
    The Commission estimates that the burden associated with receiving
access to EDGAR by submitting a Form ID is 0.15 burden hours per
response. Based on the number of initial filings and cessation of
operations reports on current Form ATS for by existing ATSs, the
Commission estimates that 4 new entities would file a new Form ATS in
each of the next three years. The Commission estimates that among these
new entities, 1 new entity per year will be operated by an entity that
has not previously registered as a broker-dealer, a government
securities broker, or a government securities dealer or that does not
otherwise already have access to EDGAR. The total estimated hourly
burden and aggregate initial burden for new ATSs gaining access to
EDGAR is therefore 0.15 hours.\521\
---------------------------------------------------------------------------

    \521\ Compliance Manager at 0.15 hours x 1 ATS = 0.15 burden
hours.
---------------------------------------------------------------------------

    The Commission is also proposing changes to Part I of Form ATS and
Form ATS-R. As stated above, Legacy Filers are subject to a baseline
burden of 20 hours for filing Form ATS, a baseline burden of 6 hours
for amending Form ATS per filing, and a baseline burden of 4 hours per
quarter for filing Form ATS-R. The proposed changes contain
substantially the same information as current Form ATS and Form ATS-R.
However, the proposed changes would not include several information
requests that appear on the current forms, and would include additional
information requests, such as the website of the ATS, the MPID of the
ATS, and information related to the national securities association of
the broker-dealer operator. The Commission estimates that the changes
to Part I on Form ATS-R and Form ATS will add an additional burden of
0.5 hours above the baseline burden \522\ and an aggregate burden of
25.5 additional initial burden hours for ATSs filing Form ATS,\523\ 51
additional annual burden hours for amending Form ATS,\524\ and 188
additional annual burden hours for ATSs filing Form ATS-R.\525\
---------------------------------------------------------------------------

    \522\ The Commission notes that the additional disclosures are
substantially similar to those on Form ATS-N and the additional
burden is the same as estimated in the NMS Stock ATS Adopting
Release. See NMS Stock ATS Adopting Release, supra note 1, at 38869.
    \523\ Compliance Clerk at 0.5 hours x 51 ATSs filing Form ATS =
25.5 burden hours.
    \524\ Compliance Clerk at 0.5 hours x 2 average amendments filed
on Form ATS per year x 51 ATSs filing Form ATS = 51 burden hours.
    \525\ Compliance Clerk at 0.5 hours x 4 filings annually x 94
ATSs filing Form ATS-R = 188 burden hours.
---------------------------------------------------------------------------

    In addition, the Commission is proposing that ATSs provide
additional detail on Form ATS-R. The Commission is proposing that ATSs
differentiate trading volume in U.S. Treasury Securities and Agency
Securities on Form ATS-R. The Commission believes that ATSs will be
aware which of the securities they trade are U.S. Treasury Securities
and which are Agency Securities, and that this requirement will impose
no additional burden on Government Securities ATSs, but rather
eliminate the need for ATSs to combine all of its trading in government
securities in a single category. The Commission is also proposing that
ATSs provide total dollar volume in transactions in repos. In the
Commission's experience, ATSs currently provide this detail on Form
ATS-R, but the Commission would include a new item requiring this
disclosure. The Commission would require ATSs to provide a list of the
types of securities subject to such repurchase and reverse repurchase
agreements, as well as to provide a list of the types of listed options
they trade. The Commission believes that ATSs are aware of this
information and that this should impose very little burden on the

ATSs. The Commission estimates that checking these boxes would impose
an additional burden of 0.15 hours for an aggregate additional annual
burden of 36 hours.\526\
---------------------------------------------------------------------------

    \526\ Compliance Manager at 0.15 hours x 4 filings annually x 60
non-NMS Stock ATSs that file Form ATS-R = 36 burden hours.
---------------------------------------------------------------------------

    The Commission is also proposing changes to Form ATS-R to require
an ATS to indicate the type of the filing (and if applicable the date
of cessation) and whether the ATS is subject to fair access
obligations.\527\ The ATS would be aware of the type of filing it is
making and whether it is subject to the fair access requirements, so
this requirement will impose very little additional burden. The
Commission estimates that checking these boxes would impose an
additional burden of 0.1 hours for an aggregate additional annual
burden of 37.6 hours.\528\
---------------------------------------------------------------------------

    \527\ See supra Section V.C.
    \528\ Compliance Manager at 0.1 hours x 4 filings annually x 94
ATSs that file Form ATS-R = 37.6 burden hours.
---------------------------------------------------------------------------

    The Commission is also proposing changes to Form ATS to specify the
type of amendment that the ATS is filing. The Commission believes this
will create no additional burden as ATSs currently have to check what
type of filing they are submitting. This proposed change would merely
change which box the ATS would have to check. In the case of a
cessation of operations filing, the Commission is proposing that the
ATS would need to provide the date of cessation. The Commission
believes that providing this information would impose minimal burden
because this is information of which the ATS will be aware and will
take little time to input on Form ATS.
5. Proposed Amendments to Regulation SCI
    Currently, Regulation SCI imposes no burden on Government
Securities ATSs. The Commission believes that the approved paperwork
burden estimates per entity under Regulation SCI generally would be
applicable to these Government Securities ATSs, because they would be
subject to the same requirements and burdens as other SCI
entities.\529\ At the same time, the Commission believes that the
burden estimates also should take into account the extent to which
Government Securities ATSs may already be SCI entities or may be
affiliated with SCI entities that already comply with the requirements
of Regulation SCI. The Commission estimates that proposed amendments to
Regulation SCI would impose the following initial and annual burdens to
certain (1) Government Securities ATSs that are existing SCI entities
or affiliated with SCI entities and (2) Government Securities ATSs that
are not currently SCI entities or affiliated with existing SCI
entities:
---------------------------------------------------------------------------

    \529\ See Proposed Collection; Comment Request; Extension:
Regulation SCI, Form SCI; SEC File No. 270-653, OMB Control No.
3235-0703, 83 FR 34179 (``2018 SCI PRA Extension'').
    \530\ (1,017.15 initial burden hours for compliance with
Regulation SCI x 1 Government Securities ATS affiliated with a
current SCI entity) + (2,034.3 initial burden hours for compliance
with Regulation SCI x 2 Government Securities ATSs not affiliated
with current SCI entities) = 5,085.75 burden hours. In the
Supporting Statement for the Paperwork Reduction Act Information
Collection Submission for Regulation SCI, the Commission estimated
that the total one-time initial burden for an SCI entity that is not
an SRO or a plan processor to comply with Regulation SCI would be
2,034.3 hours. See Extension Without Change of a Currently Approved
Collection: Regulation SCI and Form SCI; ICR Reference No. 201807-
3235-001; OMB Control No. 3235-0703 (September 26, 2018) available
at: https://www.reginfo.gov/public/do/PRAViewDocument?ref_nbr=201807-3235-001 (``2018 SCI PRA Supporting
Statement'').
    \531\ 2,458.65 ongoing burden hours for compliance with
Regulation SCI x 3 Government Securities ATSs = 7,375.95 burden
hours. In the Supporting Statement for the Paperwork Reduction Act
Information Collection Submission for Regulation SCI, the Commission
estimated that the total ongoing annual burden for an SCI entity
that is not an SRO or a plan processor to comply with Regulation SCI
would be 2458.65 hours. See 2018 SCI PRA Supporting Statement, supra
note 530.

----------------------------------------------------------------------------------------------------------------
                      Burden                                Initial burden                 Annual burden
----------------------------------------------------------------------------------------------------------------
Compliance with Regulation SCI (existing SCI        Per ATS: 1,017.15 hours......  Per ATS: 2,458.65 hours.
 entities).                                         Industry: 1,017.15 hours.....  Industry: 2,458.65 hours.
Compliance with Regulation SCI (not existing SCI    Per ATS: 2,034.3 hours.......  Per ATS: 2,458.65 hours.
 entities).                                         Industry: 4,068.6 hours......  Industry: 4,917.3 hours.
                                                   -------------------------------------------------------------
    Total--compliance with Regulation SCI.........  Industry: 5,085.75 hours       Industry: 7,375.95 hours
                                                     \530\.                         \531\.
----------------------------------------------------------------------------------------------------------------

    The Commission estimates that 3 Government Securities ATSs would be
subject to these requirements, including 1 Government Securities ATS
that is an existing SCI entity. In particular, the Commission believes
that the 2 entities that are not currently SCI entities would have the
same estimated initial paperwork burdens as those estimated for new SCI
entities and the same ongoing paperwork burdens as all other SCI
entities.\532\ The Commission also believes that because 1 of these
ATSs is an existing SCI entity or affiliated with an SCI entity that is
already required to implement the requirements of Regulation SCI, this
entity would not have initial burdens equivalent to those estimated for
new SCI entities. At the same time, because this entity would be
trading securities in a different segment of the securities market and
is likely to have new or distinct SCI systems for government
securities, the Commission believes that this ATS would have some
initial burden that would be a percentage of that which entirely new
SCI entities have. In particular, the Commission estimates that the
initial burdens for a Government Securities ATS that is currently an
SCI entity or affiliated with an SCI entity would be 50 percent of the
estimated initial burdens for entirely new SCI entities. For example,
the Commission believes that such ATS would need to develop and draft
the policies and procedures required by Rule 1001(a) for new SCI
systems utilized for the trading of government securities, but unlike
completely new SCI entities, this entity would already have Rule
1001(a) policies and procedures in place for other types of SCI systems
that it could utilize as a model and modify as needed for new SCI
systems.\533\ The Commission also believes that the estimated ongoing
paperwork burden estimates for all SCI entities would be applicable to
this entity as well.\534\
---------------------------------------------------------------------------

    \532\ See 2018 SCI PRA Extension, supra note 529.
    \533\ As an example, the estimate of an initial recordkeeping
burden was 694 hours per new respondent to comply with the policies
and procedures requirement of Rule 1001(a). Id. at 34180. The
Commission estimates that, for a Government Securities ATS that is
already an SCI entity or affiliated with an SCI entity, the initial
burden for Rule 1001(a) would be 50 percent of this estimated
amount, or 347 hours.
    \534\ The ongoing paperwork burden estimates in the 2018 SCI PRA
Extension do not distinguish among different categories of SCI
entities, but rather provide an average for all SCI entities.
---------------------------------------------------------------------------

E. Collection of Information Is Mandatory

    All collections of information pursuant to the proposed rules would
be mandatory for entities that meet the definition of ATS.

F. Confidentiality of Responses to Collection of Information

    With respect to the proposed amendments to Rules 301(b)(2)(viii)
and 304 of Regulation ATS, including proposed Form ATS-G, the
Commission would make publicly available on its website all effective
Forms ATS-G, all properly filed Form ATS-G amendments to effective
Forms ATS-G, and notices of cessation on Forms ATS-G.\535\ The
Commission would not make publicly available on its website Forms ATS-G
that the Commission has declared ineffective, but these forms would be
available for examination by the Commission and its staff, state
securities authorities, and SRO(s) of which the Government Securities
ATS's broker-dealer operator is a member. The other collections of
information required by the proposed application of Rules 301(b) to
Currently Exempted Government Securities ATSs and the proposed
amendments to Rule 301(b)(2), Form ATS, Form ATS-R, the Fair Access
Rule, and Regulation SCI would not be made public, but would be used
for regulatory purposes by the Commission and the SRO(s) of which the
ATS's broker-dealer operator is a member. In Part III, Item 24 of
proposed Form ATS-G, however, Government Securities ATSs subject to the
Fair Access Rule would be required to describe the written standards
for granting access to trading on the ATS pursuant to Rule
301(b)(5)(ii)(A). To the extent that the Commission receives
confidential information pursuant to this collection of information,
such information would be kept confidential, subject to the provisions
of applicable law.
---------------------------------------------------------------------------

    \535\ See supra Section II.G.
---------------------------------------------------------------------------

G. Retention Period for Recordkeeping Requirements

    All reports required to be made under Rules 301(b)(2)(viii),
301(b)(9), and 304 of Regulation ATS, including proposed Form ATS-G,
will be required to be preserved during the life of the enterprise and
any successor enterprise. As proposed, Currently Exempted Government
Securities ATSs would also be required to preserve a copy of their
written safeguards and written procedures to protect subscribers'
confidential trading information under Rule 301(b)(10) of Regulation
ATS for not less than three years, the first two years in an easily
accessible place, pursuant to Rule 303(a)(1)(v) of Regulation ATS.\536\
Currently Exempted Government Securities ATSs would be required to
preserve for not less than three years, the first two years in an
easily accessible place, a copy of all records required to be made
pursuant to Rule 302, all notices provided by such ATSs to subscribers
generally, and at least one copy of its standards for access to
trading, all documents relevant to its decision to grant, deny, or
limit access to any person, and all other documents made or received in
the course of complying with Rule 301(b)(5).\537\ An SCI entity must
keep all documents relating to compliance with Regulation SCI for a
period of not less than five years, the first two years in a place that
is readily accessible by the Commission or its representatives for
inspection and examination.\538\
---------------------------------------------------------------------------

    \536\ Legacy Filers are currently subject to the recordkeeping
requirements of Rule 301(b)(10). See supra Section IX.A.
    \537\ See supra Section II.C.
    \538\ See 17 CFR 242.1005(b)(2).
---------------------------------------------------------------------------

H. Request for Comments

    Pursuant to 44 U.S.C. 3506(c)(2)(B), the Commission solicits
comments to:
    167. Evaluate whether the proposed collection of information is
necessary for the proper performance of the Commission's functions,
including whether the information shall have practical utility;
    168. Evaluate the accuracy of the Commission's estimates of the
burden of the proposed collection of information;
    169. Determine whether there are ways to enhance the quality,
utility, and clarity of the information to be collected;
    170. Evaluate whether there are ways to minimize the burden of
collection of information on those who are to respond, including
through the use of automated collection techniques or other forms of
information technology; and
    171. Evaluate whether the proposed amendments would have any
effects on any other collection of information not previously
identified in this section.
    Persons submitting comments on the collection of information
requirements should direct them to the Office of Management and Budget,
Attention: Desk Officer for the Securities and Exchange Commission,
Office of Information and Regulatory Affairs, Washington, DC 20503, and
should also send a copy of their comments to Vanessa Countryman,
Secretary, Securities and Exchange Commission, 100 F Street NE,
Washington, DC 20549-1090, with reference to File Number S7-12-20.
Requests for materials submitted to OMB by the Commission with regard
to this collection of information should be in writing, with reference
to File Number S7-12-20 and be submitted to the Securities and Exchange
Commission, Office of FOIA/PA Services, 100 F Street NE, Washington, DC
20549-2736. As OMB is required to make a decision concerning the
collection of information between 30 and 60 days after publication, a
comment to OMB is best assured of having its full effect if OMB
receives it within 30 days of publication.

X. Economic Analysis

    The Commission is sensitive to the economic consequences and
effects, including the costs and benefits, of its rules. The following
economic analysis identifies and considers the costs and benefits--
including the effects on efficiency, competition, and capital
formation--that may result from, among other things, (i) the proposed
amendments to Regulation ATS to require Government Securities ATSs to
publicly disclose on Form ATS-G their manner of operations and the ATS-
related activities of the broker-dealer operator and its affiliates,
(ii) the proposed amendments to Regulation ATS to apply the Fair Access
Rule to Government Securities ATSs that meet certain volume thresholds
in U.S. Treasury Securities or Agency Securities, and (iii) the
proposal to amend Regulation SCI to apply its requirements to ATSs that
meet certain volume thresholds in U.S. Treasury Securities or Agency
Securities.\539\
---------------------------------------------------------------------------

    \539\ Exchange Act Section 3(f) requires the Commission, when it
is engaged in rulemaking pursuant to the Exchange Act and is
required to consider or determine whether an action is necessary or
appropriate in the public interest, to consider, in addition to the
protection of investors, whether the action will promote efficiency,
competition, and capital formation. See 15 U.S.C. 78c(f). In
addition, Exchange Act Section 23(a)(2) requires the Commission,
when making rules pursuant to the Exchange Act, to consider among
other matters the impact that any such rule would have on
competition and not to adopt any rule that would impose a burden on
competition that is not necessary or appropriate in furtherance of
the purposes of the Exchange Act. See 15 U.S.C. 78w(a)(2).
---------------------------------------------------------------------------

    This discussion of the economic effects of the proposed amendments
to Regulation ATS and Regulation SCI (collectively referred to as
``proposed amendments'') begins with a baseline analysis of the market
for government securities and the current regulations that apply to
ATSs that trade government securities or repos. The economic analysis
then discusses the likely economic effects of the proposed amendments,
including the costs and benefits as well as their effects on
efficiency, competition, and capital formation. The economic analysis
also includes a discussion of the potential

costs and benefits of reasonable alternatives to the proposed
amendments. The Commission requests comment on all aspects of the
economic effects of the proposed amendments and of reasonable
alternatives.

A. Introduction

    Government Securities ATSs have grown to levels of sophistication
similar to those of NMS Stock ATSs, but Regulation ATS currently only
applies in a limited manner--if at all--to Government Securities
ATSs.\540\ The Commission believes that removing the exemption for
Currently Exempted Government Securities ATSs and amending Regulation
ATS for Government Securities ATSs would: (1) Extend the investor
protections of Regulation ATS to subscribers of Currently Exempted
Government Securities ATSs; (2) enhance the regulatory oversight of
Government Securities ATSs and allow the Commission to better monitor
trading and their role in the government securities and repo market;
(3) enhance the operational transparency of Government Securities ATSs
through public disclosures on Form ATS-G and; and (4) help ensure the
fair treatment of potential and current subscribers to Government
Securities ATSs with significant volume in U.S. Treasury Securities and
Agency Securities.
---------------------------------------------------------------------------

    \540\ See supra Section I.B for a discussion of the current
regulatory framework for Government Securities ATSs.
---------------------------------------------------------------------------

    The Commission believes that the proposed amendments to Regulation
SCI for Government Securities ATSs would help address technological
vulnerabilities and reduce the chance of a system issue disrupting
trading on a significant government securities platform.\541\ The
proposed amendments would also help improve system up-time and would
reduce the frequency, severity, and duration of systems issues that
directly inhibit execution facilities or order matching, which could
help prevent interruptions in the price discovery process and liquidity
flows and, thus may help prevent periods with pricing inefficiencies
from occurring.
---------------------------------------------------------------------------

    \541\ See infra Section X.C.1.b.
---------------------------------------------------------------------------

    The Commission believes that the proposed amendments would enhance
the operational transparency and the Commission's oversight of ATSs
that trade U.S. Treasury Securities. As described in the October 15
Staff Report, on July 13, 2015, the market for U.S. Treasury securities
and futures experienced an unprecedented round-trip in prices between
9:33 a.m. and 9:45 a.m., resulting in a 37 basis point trading range
for the day.\542\ The market continued to function with high volatility
and trading volumes, but liquidity conditions became significantly
strained. After this event, the Treasury Department issued a Request
for Information on the evolution of the U.S. Treasury market
structure.\543\ In response to the Treasury Request for Information,
many entities called for greater transparency and public access to data
regarding the functioning of U.S. Treasury markets.\544\ Enhancing
operational transparency and public disclosures is expected to improve
market efficiency, which should help address concerns raised by the
``flash rally.'' Enhancing the Commission's ability to monitor
transactions volume at a detailed level would permit more focused
surveillance to address potential concerns about market function.
---------------------------------------------------------------------------

    \542\ See October 15 Staff Report, supra note 14.
    \543\ See Treasury Request for Information, supra note 10.
    \544\ See Press Release, U.S. Securities and Exchange
Commission, Statement on Trade Reporting in the U.S. Treasury Market
(May 16, 2016), available at https://www.sec.gov/news/pressrelease/2016-90.html. See also Michael J. Fleming, Advent of Trade Reporting
for U.S. Treasury Securities (January 17, 2017), Federal Reserve
Bank of New York, Liberty Street Economics, available at https://libertystreeteconomics.newyorkfed.org/2017/01/advent-of-trade-reporting-for-us-treasury-securities.html.
---------------------------------------------------------------------------

    The Commission recognizes that Government Securities ATSs would
incur implementation and ongoing compliance costs as a result of the
proposed amendments, which require Government Securities ATSs to
establish and update policies and procedures, gather information for
new disclosures, update systems to comply with recordkeeping
requirements, and make other adjustments to comply with the
requirements of the proposed amendments.\545\ The Commission recognizes
that the proposed amendments could have effects on competition for
order flow in the market for government securities and repo execution
services, the efficiency with which market participants achieve their
trading objectives, and capital formation.\546\ The Commission believes
that the enhancement in operational transparency of Government
Securities ATSs could promote competition for order flow and
incentivize Government Securities ATSs to innovate.\547\ The Commission
also believes that the proposed amendments could lower search costs and
increase trading venue options for market participants resulting in
lower trading costs and better efficiency with which they achieve their
trading objectives.\548\ Furthermore, the Commission believes that
extending Regulation SCI to include Government Securities ATSs with
significant volume in U.S. Treasury Securities and Agency Securities
would reduce the frequency, severity, and duration of such effects
resulting from systems issues, thereby enhancing price efficiency of
government securities and promoting capital formation.\549\
---------------------------------------------------------------------------

    \545\ See infra Section X.C.2.
    \546\ See infra Section X.C.3.
    \547\ See supra note 546.
    \548\ See id.
    \549\ See infra Section X.C.3.c for a discussion about the price
discovery and price efficiency of U.S. Treasury Securities, risk-
free rate benchmarks, pricing of risky securities, and capital
formation. See also October 15 Staff Report, supra note 14, for a
discussion about price discovery being especially important in the
secondary market for on-the-run U.S. Treasury Securities because the
transaction prices are used as risk-free rate benchmarks to price
other securities transactions.
---------------------------------------------------------------------------

B. Baseline

    The baseline against which economic costs and benefits, as well as
the impact of the proposed amendments on efficiency, competition, and
capital formation, are measured is the current market and regulatory
framework for the market for government securities and repo execution
services. The baseline describes how ATSs play an important role in the
current state of competition in the market for trading government
securities. Competition among ATSs is influenced by current reporting
requirements for Government Securities ATSs, including operational and
transaction reporting requirements, which creates a potentially uneven
competitive landscape. Similarly, the limited public information about
Government Securities ATSs' operations results in information
asymmetries. Current regulation of Government Securities ATSs'
treatment of subscriber confidential trading information could lead to
potential abuse of such information.
    The Fair Access Rule of Regulation ATS does not currently apply to
ATSs that trade government securities, and there is no mechanism to
prevent Government Securities ATSs from unreasonably denying or
limiting subscribers' access to an ATS that is a significant market for
government securities, which could increase their trading costs.\550\
Furthermore, Regulation SCI does not currently apply to the government
securities activities of

an ATS. The Commission believes that, without appropriate safeguards in
place for these Government Securities ATSs, technological
vulnerabilities could lead to the potential for failures, disruptions,
delays, and intrusions, which could place government securities market
participants at risk, harm price discovery, and reduce price
efficiency.\551\ In Section X.B.7, we discuss the current regulatory
framework and competition for order flow in the market for government
securities and their implications on market efficiency.
---------------------------------------------------------------------------

    \550\ See supra Sections I.B and II.D discussing the Fair Access
Rule requirements. See infra Section X.B.5 discussing why market
forces alone may not be sufficient to prevent a Government
Securities ATS from unreasonably denying access to some market
participants.
    \551\ See supra Section VI.
---------------------------------------------------------------------------

    The economic analysis that follows is based only on transactions
reported to TRACE.\552\ Due to the lack of data on activities of ATSs
operated by non-FINRA members, the quantitative analysis of
transactional activity does not include ATSs that are not FINRA
members.\553\ Furthermore, the economic analysis does not include repo
transactions and activities of options on government securities because
there is a lack of available data.\554\
---------------------------------------------------------------------------

    \552\ Transaction data is based on available information that is
currently reported to FINRA.
    \553\ See infra Section X.B.2.b.
    \554\ Based on information provided to the Commission on Form
ATS filings as of July 1, 2020, three ATSs have noticed their
intention to trade repos on government securities while no ATS has
noticed its intention to trade options on government securities.
---------------------------------------------------------------------------

    The parties that would be affected by the proposed amendments
include: Existing Government Securities ATSs, which comprise Legacy
Filers and Currently Exempted Government Securities ATSs; potential new
Government Securities ATSs; broker-dealers that operate or are
affiliated with Government Securities ATSs; non-ATS trading venues that
compete for order flow in the electronic market with Government
Securities ATSs and the broker-dealers that operate these non-ATS
trading venues. The proposed amendments would also affect current and
potential subscribers of Government Securities ATSs including: Primary
dealers in government securities, non-primary broker-dealers in
government securities, PTFs that trade on Government Securities ATSs,
and institutional investors that directly trade in the electronic
market for government securities; and institutional investors that
transact in the dealer-to-customer market.\555\
---------------------------------------------------------------------------

    \555\ PTFs refers to principal trading firms. See supra Section
I.A.
---------------------------------------------------------------------------

1. Current State of Competition in the Market for Trading Government
Securities
    Government Securities ATSs play a significant competitive role in
the market for government securities execution services as Government
Securities ATSs account for approximately 43 percent and 13 percent of
overall trading volume in the U.S. Treasury and Agency Securities
market, respectively.\556\ Government Securities ATSs compete on fees
and technological features for subscribers and, ultimately, customer
order flow through interdealer transactions. Government Securities ATSs
account for 57 percent of overall trading volume in the on-the-run U.S.
Treasury Securities market.\557\ In the off-the-run Treasury Securities
market, Government Securities ATSs account for 20 percent of trading
volume.\558\
---------------------------------------------------------------------------

    \556\ Based on the regulatory version of TRACE for U.S. Treasury
and Agency Securities from 7/1/2019 to 12/31/2019.
    \557\ On-the-run Treasury Securities have much more trading
activity than off-the-run Treasury Securities. See supra note 10.
    \558\ Based on the regulatory version of TRACE for U.S. Treasury
Securities from 7/1/2019 to 12/31/2019.
---------------------------------------------------------------------------

    Government securities represent a large proportion of the entire
U.S. fixed income market in terms of outstanding debt and daily trading
volume.\559\ According to the United States Treasury, as of the end of
2019, the total amount outstanding of marketable Treasury Securities is
approximately $17 trillion.\560\ Furthermore, the Financial Accounts of
the United States Z.1 released by the Federal Reserve Board show that
the amount outstanding of Agency- and GSE-Backed Securities is about
$9.4 trillion, collectively accounting for approximately 60 percent of
the $47.386 trillion U.S. fixed income market.\561\ According to data
published by SIFMA, over the last six months of 2019, the average daily
trading volume in government securities was about $835 billion, or
roughly 95 percent of all fixed income trading volume in the U.S.\562\
---------------------------------------------------------------------------

    \559\ See supra note 6.
    \560\ See Monthly Statement of the Public Debt of the United
States, dated December 31, 2019, available at https://www.treasurydirect.gov/govt/reports/pd/mspd/2019/opds122019.pdf.
    \561\ See Federal Reserve Board L.208 Debt Securities, available
at https://www.federalreserve.gov/releases/z1/20200611/html/l208.htm.
    \562\ See SIFMA Fixed Income Trading Volume, available at
https://www.sifma.org/resources/research/us-fixed-income-trading-volume/. The stated figures include Treasury Securities, Agency MBS,
and Federal Agency Securities. The six-month average is the mean of
the average daily trading volume for these instruments over the
period from July to December 2019.
---------------------------------------------------------------------------

    The most actively traded government securities are U.S. Treasury
Securities. U.S. Treasury Securities serve many important roles,
including as a means of financing the U.S. federal government, as
instruments for monetary policy implementation, as hedging and
collateral instruments, as a liquid asset used to satisfy regulatory
requirements, and as risk-free benchmarks for pricing other financial
instruments. In December 2019, the average daily trading in U.S.
government securities totaled $754.3 billion, which is further broken
down as follows: $523.2 billion in U.S. Treasury Securities; $227.1
billion in Agency Mortgage-Backed Securities (MBSs); and $4.0 billion
in other Agency Securities.\563\
---------------------------------------------------------------------------

    \563\ Based on the regulatory version of TRACE for U.S. Treasury
Securities and TRACE for Agency Securities. Trading volume is
reported as par volume in dollars. Par volume is the volume measured
in the face value ($100) of bond in dollars. See also FINRA TRACE
Fact Book, available at https://www.finra.org/filing-reporting/trace/trace-fact-book.
---------------------------------------------------------------------------

    Overall, trading in the market for government securities is
characterized by many competing trading venues with various trading
functionalities, order types, and trading venue fees. However, the
Commission believes that lack of public disclosure about the operations
and potential conflicts of interest of Government Securities ATSs could
hinder competition among these ATSs and between the Government
Securities ATSs and non-ATS trading venues in the market for government
securities and repo execution services. Although the Commission
recognizes that non-ATS trading venues compete with Government
Securities ATSs in the market for government securities and repo
execution services, non-ATS trading venues, unlike ATSs, cannot offer
certain execution protocols, such as crossing mechanisms, auctions, and
central limit order books, which generally meet the definition of an
exchange.\564\
---------------------------------------------------------------------------

    \564\ See supra Section I.B. ATS and non-ATS trading venues both
offer execution services. Orders matched on non-ATS trading venues
generally result from a broker-dealer exercising discretionary
activity while an ATS, which is an exchange, matches the orders of
multiple buyers and sellers in securities using established non-
discretionary methods.
---------------------------------------------------------------------------

    Government Securities ATSs compete with other Government Securities
ATSs, non-ATS interdealer broker trading platforms, and dealers that
operate various trading protocols for order flow in the market for
government securities and repo execution services. Trading of
government securities occurs on a diverse set of trading venues--such
as

ATSs and non-ATS interdealer brokers--and directly between market
participants, including bilateral dealer-to-dealer (interdealer) and
dealer-to-customer transactions. Participants in the government
securities market include dealers, PTFs, hedge funds, and large
institutional investors. In the dealer-to-dealer market, trading
platforms offer a variety of trading protocols, for example, central
limit order books, quote streaming, and request for quotes.
    Government Securities ATSs play an important role in the U.S.
Treasury Securities market.\565\ Government Securities ATSs facilitate
significant liquidity provision for U.S. Treasury and Agency Securities
markets, particularly those that operate in the secondary interdealer
markets for on-the-run U.S. Treasury Securities.\566\ The majority of
trading in on-the-run markets occurs on Government Securities
ATSs.\567\ Although Government Securities ATSs trade a significant
share of volume in off-the-run U.S. Treasury Securities, their share of
trading volume in the off-the-run U.S. Treasury Securities is smaller
than their share of on-the-run U.S. Treasury Securities trading.\568\
Traditionally, participation in the interdealer trading market is open
to only bank- and non-bank dealers; however, the interdealer trading
market now includes non-dealer participants, most notably PTFs in the
on-the-run U.S. Treasury Securities market.\569\
---------------------------------------------------------------------------

    \565\ See infra Section X.B.1.a for a discussion of the on-the-
run U.S. Treasury Securities market and infra Section X.B.1.b for a
discussion of the off-the-run U.S. Treasury Securities market. See
supra notes 9 and 10 for the definition of the on-the-run and the
off-the-run U.S. Treasury Securities, respectively.
    \566\ See supra Section I.B.
    \567\ See infra Section X.B.1.a for a discussion of the on-the-
run U.S. Treasury Securities market.
    \568\ See infra Section X.B.1.b for a discussion of the off-the-
run U.S. Treasury Securities market.
    \569\ See infra Section X.B.1.a for a discussion about PTF
participation in the on-the-run U.S. Treasury Securities market.
---------------------------------------------------------------------------

    In the dealer-to-customer market, customers (e.g., investment
companies, pension funds, insurance companies, corporations, or retail
investors) \570\ trade with dealers either through traditional voice-
assisted brokers or through electronic systems.\571\ Customers submit
orders either over the phone via an electronic voice system or on
trading platforms that facilitate matching buy and sell orders through
single or multi-dealer electronic systems, such as RFQ platforms.\572\
The Commission understands that in the dealer-to-customer market for
government securities, dealers do not usually redirect customer order
flow to Government Securities ATSs.\573\ Instead, the dealers cross or
fill the orders internally and they trade on ATSs to manage their
inventory levels. Due to a lack of available data, the extent to which
dealers internalize customer orders is unclear.
---------------------------------------------------------------------------

    \570\ See Treasury Request for Information, supra note 10, at
3928.
    \571\ See October 15 Staff Report, supra note 14, at 11, 55.
    \572\ See id. at 36, n.31; Treasury Request for Information,
supra note 10, at 3928.
    \573\ In Tables X.2, X.3, and X.4, dealer transactions on
Government Securities ATSs represent a significant portion of
overall Government Securities ATS trading volume, whereas customer
transactions account for a small portion of overall Government
Securities ATS trading volume. The Commission understands that some
portion of dealer transactions on Government Securities ATSs
represents customer orders because dealers may fill customer orders
internally and trade on ATSs to manage their inventory levels.
---------------------------------------------------------------------------

    Competition among dealers for customer order flow happens in
multiple ways. One of the clearest ways that dealers compete with each
other is via their quotes. One comment letter submitted in response to
the Treasury Request for Information said that dealers in the U.S.
Treasury Securities market also compete along other dimensions such as
by offering: Better customer service, better allocations on the
issuance of other securities, access to research, and favorable
financing terms.\574\
---------------------------------------------------------------------------

    \574\ See Letter from Jim Greco, CEO, Direct Match, to David R.
Pearl, Office of the Executive Secretary, U.S. Department of the
Treasury, dated April 22, 2016, at 5, available at https://www.treasurydirect.gov/instit/statreg/gsareg/RFIcommentletterDirectMatch.pdf (``Direct Match Letter'').
---------------------------------------------------------------------------

    Some Government Securities ATSs are operated by, or affiliated
with, multi-service broker-dealers that also fill customer orders for
dealer-to-customer trades. These broker-dealer operators or their
affiliates may compete for customer order flow along with subscribers
to their own Government Securities ATSs.
    Competition among Government Securities ATSs and between Government
Securities ATSs and non-ATS trading venues could affect market
participants' trading costs in the government securities market.
Trading costs may include bid-ask spreads,\575\ search costs in the
selection of trading venues, and trading venue fees. When deciding
which trading venue most suits their trading purposes, market
participants may consider various ATS operational facets, such as order
handling, order types, order segmentation, trading functionalities, and
any potential conflicts of interest that may arise from the ATS-related
activities of the broker-dealer operator or its affiliates. Trading
venue fees could be a primary factor for market participants in
deciding to which trading venue to send their orders.\576\ The
Commission recognizes that the fee structures of ATSs can vary and may
depend on, among other things, the types of subscribers and
services.\577\ In the selection of trading venues, market participants
may consider which ATS fee structure offers the best pricing according
to order flow and market participant characteristics.\578\
---------------------------------------------------------------------------

    \575\ The estimated average daily relative quoted spread for
interdealer transactions for on-the-run U.S. Treasury Securities is
small, approximately 0.8 bps for 2-year Treasury Securities and 2.4
bps for 10-year Treasury Securities. The estimated average daily
relative quoted spread for interdealer transactions for off-the-run
U.S. Treasury Securities, approximately 1.7 bps for 2-year Treasury
Securities and 5.4 bps for 10-year Treasury Securities, is larger
compared to that of on-the-run Treasury Securities. Though, spreads
have narrowed in the past couple of years with a change to a smaller
minimum trading increment of \1/8\ of \1/32\ of $1. The average
daily relative quoted spread is computed as the daily average of the
difference between the intraday offer and bid prices divided by the
corresponding price mid-quote. See also Paolo Pasquariello & Clara
Vega, The On-the-Run Liquidity Phenomenon, 92 J. Fin. Econ. 1
(2009); Tobias Adria, Michael Fleming, & Or Shachar, Market
Liquidity after the Financial Crisis (June, 28, 2017), Federal
Reserve Bank of New York, Liberty Street Economics, available at
https://libertystreeteconomics.newyorkfed.org/2017/06/market-liquidity-after-the-financial-crisis.html.
    \576\ See supra Section III.C.19.
    \577\ See id.
    \578\ See id.

                                      Table X.1--ATS Market Share Analysis
----------------------------------------------------------------------------------------------------------------
                                                                     Treasury         Agency         Number of
                                                                    securities      securities      unique ATSs
----------------------------------------------------------------------------------------------------------------
    Num. of Gov. Sec. ATS.......................................              19               6              19
    Gov. Sec. ATS volume share..................................           43.1%           13.1%
Above 10% Market Share:
    Num. of Gov. Sec. ATS.......................................               1               1               2

    Gov. Sec. ATS volume share..................................           24.1%           12.7%
Above 5% Market Share:
    Num. of Gov. Sec. ATS.......................................               3               1               3
    Gov. Sec. ATS volume share..................................           35.0%           12.7%
Above 4% Market Share:
    Num. of Gov. Sec. ATS.......................................               3               1               3
    Gov. Sec. ATS volume share..................................           35.0%           12.7%
Above 3% Market Share:
    Num. of Gov. Sec. ATS.......................................               4               1               4
    Gov. Sec. ATS volume share..................................           38.1%           12.7%
Above 2% Market Share:
    Num. of Gov. Sec. ATS.......................................               5               1               5
    Gov. Sec. ATS volume share..................................           40.5%           12.7%
----------------------------------------------------------------------------------------------------------------
Each panel reports the volume share (%) for Government Securities ATSs and the number of Government Securities
  ATSs above the specified market share level. Treasury Securities include nominal bonds, TIPS and STRIPS.
  Agency Securities include Agency Debentures, Agency Collateralized Mortgage Obligations, and Agency Pass-
  Through Mortgage Backed Securities.\579\ Trading volume is measured in dollar volume in par value. Data is
  based on the regulatory version of TRACE for U.S. Treasury Securities and TRACE for Agency Securities from
  July 1, 2019 to December 31, 2019.

---------------------------------------------------------------------------

    \579\ Agency Pass-through Mortgage Backed Securities include
those traded in specified pool transactions and those to be
announced.
---------------------------------------------------------------------------

    The Commission estimates that 19 Legacy Filers \580\ and 7
Currently Exempted Government Securities ATSs \581\ would be subject to
the proposed amendments to Regulation ATS. However, only 19 of these 26
Government Securities ATSs reported transactions on government
securities to TRACE over the six-month period between July and December
2019.
---------------------------------------------------------------------------

    \580\ Based on data compiled from Form ATS filed with the
Commission as of July 1, 2020, the Commission has 19 Form ATSs on
file from Legacy Filers.
    \581\ The Commission believes that 7 Currently Exempted
Government Securities ATSs transact exclusively in government
securities or repos, and are not required to file a Form ATS. See
also supra Section IX.C for the estimated number or respondents to
the ``collection of information'' requirements.
---------------------------------------------------------------------------

    Of the 19 Government Securities ATSs that report transactions to
TRACE, the volume is concentrated in only a few ATSs, and predominantly
in one ATS. Table X.1 reports the number of Government Securities ATSs
and the trading volume share of Government Securities ATSs for multiple
volume share levels, using government securities transactions reported
to TRACE during the six-month period between July and December 2019.
Over the six-month period in 2019, 19 Government Securities ATSs
accounted for approximately 43 percent of overall U.S. Treasury
Securities trading volume. In the market for U.S. Treasury Securities,
3 Government Securities ATSs each have at least five percent of overall
U.S. Treasury Securities trading volume. The Government Securities ATS
with the largest market volume in U.S. Treasury Securities has
approximately 24 percent of total U.S. Treasury Securities trading
volume, whereas each of the Government Securities ATSs with the second
and third largest market volume has a trading volume that is slightly
above five percent of total U.S. Treasury Securities. In the market for
Agency Securities, 6 Government Securities ATSs accounted for 13
percent of overall Agency Securities trading volume. One Government
Securities ATS has at least five percent of overall Agency Securities
trading volume.
    In the subsections below, Section X.B.1.a and Section X.B.1.b
discuss competition among trading venues and market participants in the
on-the-run and off-the-run U.S. Treasury Securities market,
respectively. Section X.B.1.c discusses competition among trading
venues and market participants in the Agency Securities market.
a. On-the-Run U.S. Treasury Securities
    In the on-the-run U.S. Treasury Securities market, Government
Securities ATSs compete with other Government Securities ATSs and non-
ATS trading venues for PTF, dealer, and ultimately, customer order
flows.\582\ While there are multiple avenues to trade on-the-run
government securities, the majority of trading goes through Government
Securities ATSs. Table X.2 reports the trading volume shares for
Government Securities ATSs, non-ATS interdealer brokers, and bilateral
secondary market transactions over the six month period between July
and December 2019. As shown in Table X.2, 19 Government Securities ATSs
and 24 non-ATS interdealer brokers reported on-the-run U.S. Treasury
Securities transactions to TRACE during the six month period in 2019.
Government Securities ATSs accounted for approximately 57 percent of
total trading volume and approximately 67 percent of total interdealer
trading volume in the on-the-run U.S. Treasury Securities market over
the six month period in 2019.\583\ A substantial amount of trading is
concentrated on the largest Government Securities ATS in terms of
trading volume, accounting for approximately 64 percent of the total
Government Securities ATS trading volume and approximately 37 percent
of the total trading volume for on-the-run U.S. Treasury Securities.
This largest Government Securities ATS in terms of trading volume
serves as the primary location for price discovery in the cash market
for on-the-run U.S. Treasury Securities. This ATS's transaction prices,
along with prices in the U.S. Treasury Securities futures market, are
used by many market participants to determine risk-free benchmarks for
pricing other financial products.\584\
---------------------------------------------------------------------------

    \582\ In Table X.2, the reported trading volume share of
Government Securities ATSs in the secondary market trading for on-
the-run U.S. Treasury Securities is small. Government Securities
ATSs compete for customer order flow through interdealer
transactions on ATSs. The Commission understands that dealers fill
customer trades internally and trade on Government Securities ATSs
to manage their inventory levels. See supra note 9.
    \583\ (ATS dealer volume/(dealer volume from ATS + dealer volume
from non-ATS interdealer brokers + bilateral dealer-to-dealer
volume) x 100) = ATS share of dealer volume (%).
    \584\ See October 15 Staff Report, supra note 14, at 15, 17-18,
45.

                          Table X.2--On-the-Run U.S. Treasury Securities Trading Volume
----------------------------------------------------------------------------------------------------------------
                                                                     Number of                     Volume share
                                                                      venues          Volume            (%)
----------------------------------------------------------------------------------------------------------------
ATSs............................................................              19         995,669            57.4
    Customer trades.............................................              12          74,094             4.3
    Dealer trades...............................................              18         377,166            21.7
    PTF trades..................................................              13         544,409            31.4
Non-ATS Interdealer Brokers.....................................              24          72,963             4.2
    Customer trades.............................................              22          31,389             1.8
    Dealer trades...............................................              23          41,574             2.4
Bilateral dealer-to-dealer trades...............................             422         145,734             8.4
Bilateral dealer-to-customer trades.............................             348         520,818            30.0
----------------------------------------------------------------------------------------------------------------
This table reports trading volume and volume share for ATSs, Non-ATS interdealer brokers, bilateral dealer-to-
  dealer transactions, and bilateral dealer-to-customer transactions for on-the-run U.S. Treasury Securities. On-
  the-run U.S. Treasury Securities are the most recently issued nominal coupon securities. Nominal coupon
  securities pay a fixed semi-annual coupon and are currently issued at original maturities of 2, 3, 5, 7, 10,
  20, and 30 years. Treasury Bills and Floating Rate Notes are excluded. For bilateral transactions, the number
  of venues denotes the number of distinct MPIDs.\585\ Volume is the average weekly dollar volume in par value
  (in millions of dollars) over the 6-month period, from July 1, 2019 to December 31, 2019.\586\ Number of
  Venues is the number of different trading venues in each category and the number of MPIDs for bilateral
  transactions. Market Share (%) is the measure of the dollar volume as a percent of total dollar volume.\587\
  The volume of ATSs and non-ATS interdealer brokers are broken out by Customer trades, Dealer trades, and PTF
  trades within each group.\588\ Data is based on the regulatory version of TRACE for U.S. Treasury Securities
  from July 1, 2019 to December 31, 2019.

    In addition to competing for subscribers through the fees they
charge, Government Securities ATSs also compete with each other via the
technological features and order options they offer to subscribers. As
highlighted in the October 15 Staff Report,\589\ Government Securities
ATSs in the secondary electronic cash market for on-the-run U.S.
Treasury Securities have evolved such that they operate with a
complexity in terms of automation and speed of trading that is similar
to that observed on NMS Stock ATSs. Four Government Securities ATSs
operate as anonymous central limit order book systems and offer
features to allow participants to interact with specific counterparty
groups on the ATS, such as low latency and high-speed connectivity via
direct market data feeds and co-location services, a variety of order
types and algorithms to pursue aggressive and passive trading
strategies, and order flow segmentation. Unlike NMS Stock ATSs, whose
broker-dealer operators connect to national securities exchanges to
route orders, broker-dealer operators of Government Securities ATSs
usually do not offer to route subscribers' orders to other trading
venues.
---------------------------------------------------------------------------

    \585\ Dealers are counted using the number of distinct MPIDs.
See also supra Section III.A.2.
    \586\ FINRA reports volume as par volume, where par volume is
the volume measured by the face value of the bond, in dollars. See
also FINRA TRACE Fact Book, available at https://www.finra.org/filing-reporting/trace/trace-fact-book.
    \587\ Total dollar volume (in par value) is calculated as the
sum of dollar volume for ATSs, non-ATS interdealer brokers,
bilateral dealer-to-dealer transactions, and bilateral dealer-to-
customer transactions.
    \588\ We identify ATS trades and non-ATS interdealer broker
trades using MPID in the regulatory version of TRACE for U.S.
Treasury Securities. The regulatory version of TRACE for U.S.
Treasury Securities includes an identifier for customer and
interdealer trades. Furthermore, we use MPID for non-FINRA member
subscriber counterparties in the regulatory version of TRACE for
U.S. Treasury Securities to identify PTF trades on ATSs.
    \589\ See October 15 Staff Report, supra note 14, at 35-36.
---------------------------------------------------------------------------

    Historically, Government Securities ATSs in the market for on-the-
run U.S. Treasury Securities only allowed bank and non-bank dealers to
trade. Dealers had primarily traded directly with customers in the
dealer-to-customer market and traded with other broker-dealers on
Government Securities ATSs as a source of orders and trading interest
or to balance their inventory risk. However, beginning in 2003,
Government Securities ATSs started allowing firms that were neither
banks nor dealers, such as hedge funds, insurance companies and PTFs to
trade directly in interdealer transactions on Government Securities
ATSs.\590\ This change has allowed some traders who were previously
restricted to the dealer-to-customer trading venues to access
Government Securities ATSs, where they can trade anonymously.
---------------------------------------------------------------------------

    \590\ See Direct Match Letter, supra note 574, at 6-7.
---------------------------------------------------------------------------

    With the growth of high-speed electronic trading, the presence of
PTFs has greatly increased in the secondary cash market for on-the-run
U.S. Treasury Securities. In 2008, PTFs accounted for 25 percent of the
trading volume on ATSs.\591\ Based on Table X.2, over the six month
period in 2019, PTFs traded on 13 Government Securities ATSs accounting
for approximately 55 percent \592\ of total Government Securities ATS
trading volume. PTFs have also become the primary liquidity
providers.\593\ As of the end of 2019, there are over 100 PTFs
operating on ATSs that trade U.S. Treasury Securities, primarily on
four Government Securities ATSs.\594\ Similar to HFTs in the equity
markets, PTFs trading on the electronic market for U.S. Treasury
Securities often employ automated algorithmic trading strategies that
rely on speed and allow the PTFs to quickly execute trades, or cancel
or modify quotes in response to perceived market events.\595\
Furthermore, most PTFs trading U.S. Treasury Securities on electronic
trading venues also restrict their activities to principal trading and
do not hold positions long term.\596\
---------------------------------------------------------------------------

    \591\ See Alexandra Scaggs & Susanne Barton, Treasuries Wilder
Than Ever as Ultrafast Bond Traders Rise Up, Bloomberg, October 12,
2015, https://www.bloomberg.com/news/articles/2015-10-12/treasuries-wilder-than-ever-as-ultra-fast-bond-traders-rise-up (citing the Tabb
Group Report).
    \592\ (ATS PTF volume/ATS volume) x 100 = PTF share of ATS
volume (%).
    \593\ TRACE for Treasury data. See also October 15 Staff Report,
supra note 14, at 21, 23, 38-39.
    \594\ FINRA PTF participant list as of 12/31/2019.
    \595\ See October 15 Staff Report, supra note 14, at 32, 35-36,
39.
    \596\ See id. at 38.
---------------------------------------------------------------------------

    In the secondary markets for on-the-run U.S. Treasury Securities,
dealer transactions account for a significant portion of overall
Government Securities ATS trading volume. In Table X.2, dealers account
for approximately 38 percent \597\ of overall Government Securities ATS
trading volume. The Commission understands that some portion of dealer
transactions on Government Securities ATSs represents customer orders
because dealers may fill customer trades internally and trade on
Government Securities ATSs to manage their inventory levels.
---------------------------------------------------------------------------

    \597\ (ATS dealer volume/ATS volume) x 100 = dealer volume share
of ATS volume (%).

---------------------------------------------------------------------------

b. Off-the-Run U.S. Treasury Securities
    Government Securities ATSs play a significant role in secondary
market trading for off-the-run U.S. Treasury Securities.\598\
Government Securities ATSs account for approximately 51 percent \599\
and 20 percent of the total interdealer trading volume and the total
trading volume, respectively, in the off-the-run U.S. Treasury
Securities market. However, Government Securities ATSs' share of
trading volume in the off-the-run U.S. Treasury Securities market is
smaller than that of Government Securities ATSs in the on-the-run U.S.
Treasury Securities market. As U.S. Treasury Securities transition from
on-the-run status to off-the-run, their trading activity shifts away
from electronic venues, such as Government Securities ATSs, and toward
the bilateral secondary trading market.
---------------------------------------------------------------------------

    \598\ See supra note 10.
    \599\ (ATS dealer volume/(dealer volume from ATS + dealer volume
from non-ATS interdealer brokers + bilateral dealer-to-dealer
volume) x 100) = ATS share of dealer volume (%).
---------------------------------------------------------------------------

    In the off-the-run U.S. Treasury Securities market, Government
Securities ATSs compete with other Government Securities ATSs and non-
ATS trading venues for PTF, dealer, and ultimately, customer order
flows.\600\ Table X.3 reports the trading volume shares for Government
Securities ATSs, non-ATS interdealer brokers, and bilateral secondary
market transactions in the off-the-run Treasury Securities market over
the six month period between July and December 2019. Based on Table
X.3, 19 Government Securities ATSs and 24 non-ATS interdealer brokers
reported off-the-run U.S. Treasury Securities transactions to TRACE
during the six month period in 2019. Although Government Securities
ATSs' share of trading volume in the off-the-run U.S. Treasury
Securities market is smaller than that of Government Securities ATSs in
the on-the-run U.S. Treasury Securities market, Government Securities
ATSs still play a significant role in the trading of off-the-run U.S.
Treasury Securities, accounting for approximately 20 percent of the
overall trading volume and 51 percent \601\ of overall interdealer
trading volume. Furthermore, in the secondary trading market for off-
the-run U.S. Treasury Securities, dealers account for approximately 80
percent \602\ of Government Securities ATS trading volume whereas PTFs
account for approximately 7 percent \603\ of Government Securities ATS
trading volume. The Commission understands that some portion of dealer
transactions on Government Securities ATSs represents customer orders
because dealers may fill customer trades internally and trade on
Government Securities ATSs to manage their inventory levels.
---------------------------------------------------------------------------

    \600\ In Table X.3, the reported trading volume share of
Government Securities ATSs in the secondary market trading for off-
the-run U.S. Treasury Securities is small. See also supra note 582.
    \601\ (ATS dealer volume/(dealer volume from ATS + dealer volume
from non-ATS interdealer brokers + bilateral dealer-to-dealer
volume) x 100) = ATS share of dealer volume (%).
    \602\ (ATS dealer volume/ATS volume) x 100 = dealer volume share
of ATS volume (%).
    \603\ (ATS PTF volume/ATS volume) x 100 = PTF share of ATS
volume (%).

                         Table X.3--Off-the-Run U.S. Treasury Securities Trading Volume
----------------------------------------------------------------------------------------------------------------
                                                                     Number of                     Volume share
                                                                      venues          Volume            (%)
----------------------------------------------------------------------------------------------------------------
ATSs............................................................              19         121,601            20.2
    Customer trades.............................................              11          15,813             2.6
    Dealer trades...............................................              16          96,994            16.1
    PTF trades..................................................              11           8,794             1.5
Non-ATS Interdealer Brokers.....................................              24          35,932             6.0
    Customer trades.............................................              22           7,160             1.2
    Dealer trades...............................................              23          28,773             4.8
Bilateral dealer-to-dealer trades...............................             684          62,899            10.5
Bilateral dealer-to-customer trades.............................             628         381,009            63.3
----------------------------------------------------------------------------------------------------------------
This table reports trading volume and volume share for ATSs, Non-ATS interdealer brokers, bilateral dealer-to-
  dealer transactions, and bilateral dealer-to-customer transactions for off-the-run U.S. Treasury Securities.
  Off-the-run or ``seasoned'' U.S. Treasury Securities include TIPS, STRIPS, and nominal coupon securities
  issues that preceded the current on-the-run nominal coupon securities. Number of Venues is the number of
  different trading venues in each category and the number of MPIDs for bilateral transactions.\604\ Volume is
  the average weekly dollar volume in par value (in millions of dollars) over the 6-month period, from July 1,
  2019 to December 31, 2019.\605\ Market Share (%) is the measure of the dollar volume as a percent of the total
  dollar volume.\606\ The volume of ATSs and non-ATS interdealer brokers are broken out by Customer trades,
  Dealer trades, and PTF trades within each group.\607\ Data is based on the regulatory version of TRACE for
  U.S. Treasury Securities from July 1, 2019 to December 31, 2019.

c. Agency Securities
---------------------------------------------------------------------------

    \604\ See supra note 585.
    \605\ See supra note 586.
    \606\ See supra note 587.
    \607\ We identify ATS trades and non-ATS interdealer broker
trades using MPID in the regulatory version of TRACE for U.S.
Treasury Securities. The regulatory version of TRACE for U.S.
Treasury Securities includes an identifier for customer and
interdealer trades. Furthermore, we use MPID for non-FINRA member
subscriber counterparties in the regulatory version of TRACE for
U.S. Treasury Securities to identify PTF trades on ATSs.
---------------------------------------------------------------------------

    Government Securities ATSs play a significant role in secondary
market trading for Agency Securities.\608\ However, Government
Securities ATSs' share of trading volume in Agency Securities market is
smaller than that of Government Securities ATSs in the U.S. Treasury
Securities market. Government Securities ATSs account for approximately
45 percent \609\ and 13 percent of the total interdealer trading volume
and the total trading volume, respectively, in the Agency Securities
market.
---------------------------------------------------------------------------

    \608\ Agency Securities are those issued by U.S. Government
sponsored enterprises (``GSEs'') such as Federal Home Loan Banks
(``FHLBs''), the Federal National Mortgage Association (``Fannie
Mae''), and the Federal Home Loan Mortgage Corporation (``Freddie
Mac''). See supra Section I.A.
    \609\ (ATS dealer volume/(dealer volume from ATS + dealer volume
from non-ATS interdealer brokers + bilateral dealer-to-dealer
volume) x 100) = ATS share of dealer volume (%).
---------------------------------------------------------------------------

    In the Agency Securities market, Government Securities ATSs compete
with other Government Securities ATSs and non-ATS trading venues for
dealer and ultimately, customer order flows.\610\ Table X.4 reports the
trading volume shares for Government Securities ATSs, non-ATS
interdealer brokers, and bilateral secondary market transactions in the
Agency Securities market over the six month period between July and

December 2019. As shown in Table X.4, 6 Government Securities ATSs and
10 non-ATS interdealer brokers reported Agency Securities transactions
to TRACE during the six month period in 2019. Although Government
Securities ATSs' share of trading volume in the Agency Securities
market is smaller than that of Government Securities ATSs in the U.S.
Treasury Securities market, Government Securities ATSs still play a
significant role in trading of Agency Securities, accounting for
approximately 13 percent of the overall trading volume and 45 percent
\611\ of overall interdealer trading volume. In the secondary market
trading of Agency Securities, dealers account for approximately 87
percent \612\ of overall Government Securities ATS trading volume. The
Commission understands that some portion of dealer transactions on
Government Securities ATSs represents customer orders because dealers
may fill customer trades internally and trade on Government Securities
ATSs to manage their inventory levels.
---------------------------------------------------------------------------

    \610\ The trading volume share of Government Securities ATSs in
the secondary market trading for Agency Securities is small. See
infra Table X.4. See also supra note 582.
    \611\ (ATS dealer volume/(dealer volume from ATS + dealer volume
from non-ATS interdealer brokers + bilateral dealer-to-dealer
volume) x 100) = ATS share of dealer volume (%).
    \612\ (ATS dealer volume/ATS volume) x 100 = dealer volume share
of ATS volume (%).

                                   Table X.4--Agency Securities Trading Volume
----------------------------------------------------------------------------------------------------------------
                                                                     Number of                     Volume share
                                                                      venues          Volume            (%)
----------------------------------------------------------------------------------------------------------------
ATSs............................................................               6          35,063            13.1
    Customer trades.............................................               5           4,462             1.7
    Dealer trades...............................................               6          30,601            11.4
Non-ATS Interdealer Brokers.....................................              10          10,967             4.1
    Customer trades.............................................               9           1,169             0.4
    Dealer trades...............................................              10           9,798             3.7
Bilateral dealer-to-dealer trades...............................             552          27,229            10.2
Bilateral dealer-to-customer trades.............................             551         194,143            72.6
----------------------------------------------------------------------------------------------------------------
This table reports trading volume and volume share for ATSs, Non-ATS interdealer brokers, bilateral dealer-to-
  dealer transactions, and bilateral dealer-to-customer transactions for U.S. Agency Securities. Agency
  Securities include Agency Debentures, Agency Collateralized Mortgage Obligations, and Agency Pass-Through
  Mortgage Backed Securities.\613\ Number of Venues is the number of different trading venues in each category
  and the number of MPIDs for bilateral transactions.\614\  Volume is the average daily dollar volume in par
  value (in millions of dollars) over the 6-month period, from July 1, 2019 to December 31, 2019.\615\ Market
  Share (%) is the measure of the dollar volume as a percent of the total dollar volume.\616\ The volume of ATSs
  and non-ATS interdealer brokers are broken out by Customer trades and Dealer trades within each group.\617\
  Data is based on the regulatory version of TRACE for Agency Securities from July 1, 2019 to December 31, 2019.

2. Reporting Requirements for Government Securities ATSs
---------------------------------------------------------------------------

    \613\ See supra note 579.
    \614\ See supra note 585.
    \615\ See supra note 586.
    \616\ See supra note 587.
    \617\ We identify ATS trades and non-ATS interdealer broker
trades using MPID in the regulatory version of TRACE for Agency
Securities. The regulatory version of TRACE for Agency Securities
includes an identifier for customer and interdealer trades.
---------------------------------------------------------------------------

a. Operational Reporting Requirements
    All 19 Legacy Filers are subject to the requirements of Regulation
ATS, whereas the seven Currently Exempted Government Securities ATSs
are not. These differences in reporting requirements can lead to an
uneven competitive landscape for Government Securities ATSs. For
instance, Currently Exempted Government Securities ATSs are not
required to file Form ATS or Form ATS-R with the Commission or comply
with certain recordkeeping requirements.\618\ In contrast, ATSs that
trade government securities or repos as well as non-government
securities--such as corporate or municipal fixed income securities--
must either register as a national securities exchange or comply with
Regulation ATS pursuant to the exemption provided under Exchange Act
Rule 3a1-1(a)(2).\619\ These Legacy Filers must also comply with
certain reporting requirements, such as updating the Form ATS pursuant
to Rule 301(b)(2) of Regulation ATS, and recordkeeping requirements
pursuant to Rule 301(b)(8).\620\
---------------------------------------------------------------------------

    \618\ See supra Section I.B (discussing regulatory framework for
Government Securities ATSs).
    \619\ See id. NMS Stock ATSs also must file Form ATS-N. See also
supra Section V.D.
    \620\ See id.
---------------------------------------------------------------------------

    The Commission recognizes that all of the 19 Legacy Filers
currently incur reporting costs to comply with Regulation ATS.\621\
These costs include filing Form ATS as both an initial operation report
and, whenever there is a material change in operations, as a
confidential filing with the Commission. The Commission may use this
information in monitoring, examinations and enforcement. These
reporting requirements for Legacy Filers (which do not apply to the
Currently Exempted Government Securities ATSs) may contribute to an
uneven competitive landscape. Furthermore, all but one of the Currently
Exempted Government Securities ATSs and all of the Legacy Filers are
registered broker-dealers that incur costs of registering with the
Commission as well as SRO membership and face operational regulatory
reporting requirements. The Commission estimates that one of the
Currently Exempted Government Securities ATSs is bank-operated.\622\
This bank-operated Currently Exempted Government Securities ATS is not
required to register as a broker-dealer with the Commission and thus,
does not have to file Form BD with the Commission or be subject to
FINRA rules. As a result, the bank-operated Currently Exempted
Government Securities ATS incurs different regulatory compliance costs,
which may contribute to the uneven competitive landscape.
---------------------------------------------------------------------------

    \621\ See supra Sections IX.C and IX.D.1.b.
    \622\ See supra Section IX.C.
---------------------------------------------------------------------------

b. Transaction Reporting Requirements
    Currently Exempted Government Securities ATSs are not required to
report their transaction volume in government securities to the
Commission on a quarterly basis via Form ATS-R. However, Legacy Filers
are required to confidentially report their transaction dollar volume
in government securities to the Commission on a quarterly basis via
Form ATS-R within 30 days after the end of each calendar quarter.
Trading volume on Currently Exempted Government Securities ATSs is not
reported to the Commission. However, all transactions in government
securities

by ATSs operated by FINRA-members are reported to TRACE.\623\
---------------------------------------------------------------------------

    \623\ See supra notes 50-51 and accompanying text discussing
TRACE reporting requirements for Government Securities ATSs.
---------------------------------------------------------------------------

    However, the transaction reporting requirements to TRACE do not
apply to transactions executed by non-FINRA members, such as some
primary dealer banks, and the information on those U.S. Treasury
Securities transactions is not disseminated publicly via TRACE. The
estimated one bank-operated Currently Exempted Government Securities
ATS does not currently report government securities transactions to
TRACE. Nevertheless, starting in March 2020, FINRA has published
aggregated market volume in U.S. Treasury Securities on a weekly
basis.\624\ Monthly volume reports for other TRACE-Eligible Securities,
including Agency Securities, are also available from FINRA since
2013.\625\ These two publicly available aggregate market statistics for
trading in U.S. Treasury Securities and Agency Securities,
respectively, can provide a common source of information to determine
the market share of Government Securities ATSs in the relevant market.
---------------------------------------------------------------------------

    \624\ The weekly TRACE Treasury aggregate trading statistics are
available at https://www.finra.org/filing-reporting/trace/data/trace-treasury-aggregates.
    \625\ These reports are available at https://www.finra.org/filing-reporting/trace/content-licensing/volume-reports. FINRA also
publishes more detailed breakdowns of trading volume in MBSs into
agency and non-agency categories. These reports are available at
http://tps.finra.org/idc-index.html.
---------------------------------------------------------------------------

    In addition to TRACE reporting, which applies to broker-dealers who
are FINRA members, government securities primary dealers are required
to report their positions and cumulative transaction volumes in
government securities to the Federal Reserve Bank of New York on a
weekly basis via Form FR2004.\626\ Based on comment letters received in
response to the Treasury Request for Information, certain Government
Securities ATSs also make real-time U.S. Treasury Securities
transactions data on their platforms available to subscribers and to
other market participants through subscriptions to third party data
vendors.\627\
---------------------------------------------------------------------------

    \626\ The data is aggregated and published weekly in the Federal
Reserve Bank of New York's press release, ``Weekly Release of
Primary Dealer Transactions.''
    \627\ See BrokerTec/ICAP Letter, supra note 238, at 7.
---------------------------------------------------------------------------

3. Information Asymmetries Due to Limited Public Information About
Operations of Government Securities ATSs
    Market participants do not receive a complete snapshot of the
operations and activities of all ATSs that trade government securities
because a Currently Exempted Government Securities ATS is not required
to file a Form ATS or Form ATS-G and a Legacy Filer is not required to