[Federal Register Volume 82, Number 23 (Monday, February 6, 2017)]
[Notices]
[Pages 9464-9477]
[FR Doc No: 2017-02377]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-79909; File No. SR-NYSEARCA-2017-03]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
of Proposed Rule Change, as Modified by Amendment No. 1, To Adopt the
Rule 11.6800 Series To Implement the Compliance Rule Regarding the
National Market System Plan Governing the Consolidated Audit Trail

January 31, 2017.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that, on January 17, 2017, NYSE Arca, Inc. (the ``Exchange'' or
``NYSE Arca'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the self-regulatory
organization. On January 30, 2017, the Exchange filed Amendment No. 1
to the proposed rule change, which amended and replaced the proposed
rule change in its entirety. The Commission is publishing this notice
to solicit comments on the proposed rule change, as amended, from
interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposed rule change to adopt the Rule 11.6800 Series
to implement the compliance rule (``Compliance Rule'') regarding the
National Market System Plan Governing the Consolidated Audit Trail (the
``CAT

NMS Plan'' or ``Plan'').\4\ The proposed rule change is available on
the Exchange's Web site at www.nyse.com, at the principal office of the
Exchange, and at the Commission's Public Reference Room.
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    \4\ Unless otherwise specified, capitalized terms used in this
rule filing are defined as set forth herein or in the CAT NMS Plan.
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II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

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

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

1. Purpose
    This Amendment No. 1 amends and replaces in its entirety the
original proposal filed by the Exchange on January 17, 2017. The
Exchange submits this Amendment No. 1 in order to clarify certain
points and add additional details to the Compliance Rule as proposed
herein.
    Bats BYX Exchange, Inc., Bats BZX Exchange, Inc., Bats EDGA
Exchange, Inc., Bats EDGX Exchange, Inc., BOX Options Exchange LLC, C2
Options Exchange, Incorporated, Chicago Board Options Exchange,
Incorporated, Chicago Stock Exchange, Inc., Financial Industry
Regulatory Authority, Inc., International Securities Exchange, LLC,
Investors' Exchange LLC, ISE Gemini, LLC, ISE Mercury, LLC, Miami
International Securities Exchange LLC, MIAX PEARL, LLC, NASDAQ BX,
Inc., NASDAQ PHLX LLC, The NASDAQ Stock Market LLC, National Stock
Exchange, Inc., New York Stock Exchange LLC, NYSE MKT LLC, and NYSE
Arca, Inc. (collectively, the ``Participants'') filed with the
Commission, pursuant to Section 11A of the Exchange Act \5\ and Rule
608 of Regulation NMS thereunder,\6\ the CAT NMS Plan.\7\ The
Participants filed the Plan to comply with Rule 613 of Regulation NMS
under the Exchange Act. The Plan was published for comment in the
Federal Register on May 17, 2016,\8\ and approved by the Commission, as
modified, on November 15, 2016.\9\
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    \5\ 15 U.S.C. 78k-1.
    \6\ 17 CFR 242.608.
    \7\ See Letter from the Participants to Brent J. Fields,
Secretary, Commission, dated September 30, 2014; and Letter from
Participants to Brent J. Fields, Secretary, Commission, dated
February 27, 2015. On December 24, 2015, the Participants submitted
an amendment to the CAT NMS Plan. See Letter from Participants to
Brent J. Fields, Secretary, Commission, dated December 23, 2015.
    \8\ See Securities Exchange Act Release No. 77724 (April 27,
2016), 81 FR 30614 (May 17, 2016).
    \9\ See Securities Exchange Act Release No. 79318 (November 15,
2016), 81 FR 84696 (November 23, 2016) (``Order Approving the
National Market System Plan Governing the Consolidated Audit Trail)
(``Approval Order'').
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    The Plan is designed to create, implement and maintain a
consolidated audit trail (``CAT'') that would capture customer and
order event information for orders in NMS Securities and OTC Equity
Securities, across all markets, from the time of order inception
through routing, cancellation, modification, or execution in a single
consolidated data source. Each Participant is required to enforce
compliance by its Industry Member, as applicable, with the provisions
of the Plan, by adopting a Compliance Rule applicable to their Industry
Members.\10\ As is described more fully below, the proposed Rule
11.6800 Series sets forth the Compliance Rule to require Industry
Members to comply with the provisions of the CAT NMS Plan. The proposed
Rule 11.6800 Series includes twelve proposed rules covering the
following areas: (1) Definitions; (2) clock synchronization; (3)
Industry Member Data reporting; (4) Customer information reporting; (5)
Industry Member information reporting; (6) time stamps; (7) clock
synchronization rule violations; (8) connectivity and data
transmission; (9) testing; (10) recordkeeping; (11) timely, accurate
and complete data; and (12) compliance dates. Each of these proposed
rules is discussed in detail below.
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    \10\ See SEC Rule 613(g)(1). The proposed Rule 11.6800 Series
would be applicable to OTP Holders. Pursuant to Rule 1.1(q), an
``OTP Holder'' refers to a natural person, in good standing, who has
been issued an OTP. An OTP Holder must be a registered broker or
dealer pursuant to Section 15 of the Act. Rule 1.1(p) defines
``OTP'' as an Options Trading Permit issued by the Exchange for
effecting approved securities transactions on the Exchange.
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(i) Definitions
    Proposed Rule 11.6810 (Consolidated Audit Trail--Definitions) sets
forth the definitions for the terms used in the proposed Rule 11.6800
Series. Each of the defined terms in proposed Rule 11.6810 is discussed
in detail in this section.
(A) Account Effective Date
(I) Customer Information Approach
    SEC Rule 613 requires that numerous data elements be reported to
the CAT to ensure there is sufficient information to create the
lifecycle of an order, and provide regulators with sufficient detail
about an order to perform their regulatory duties. Certain required
elements are intended to ensure that the regulators can identify the
Customer's associated with orders. For example, SEC Rule
613(c)(7)(i)(A) requires an Industry Member to report the ``Customer-
IDs'' for each Customer for the original receipt or origination of an
order. ``Customer-ID'' is defined in SEC Rule 613(j)(5) to mean ``with
respect to a customer, a code that uniquely and consistently identifies
such customer for purposes of providing data to the Central
Repository.'' SEC Rule 613(c)(8) requires Industry Members to use the
same Customer-ID for each Customer. The SEC granted the Participants
exemptive relief to permit the use of an alternative approach to the
requirement that an Industry Member report a Customer-ID for every
Customer upon original receipt or origination.\11\ The alternative
approach is called the Customer Information Approach.
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    \11\ See Securities Exchange Act Release No. 77265 (March 1,
2016), 81 FR 11856 (March 7, 2016) (``Exemption Order''). See also
Letter from Participants to Brent J. Fields, Secretary, Commission,
dated January 30, 2015 at 12 (``Exemptive Request Letter''); and CAT
NMS Plan at Appendix C, Section A.1(a)(iii).
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    Under the Customer Information Approach, the CAT NMS Plan would
require each Industry Member to assign a unique Firm Designated ID to
each Customer. As the Firm Designated ID, Industry Members would be
permitted to use an account number or any other identifier defined by
the firm, provided each identifier is unique across the firm for each
business date (i.e., a single firm may not have multiple separate
customers with the same identifier on any given date). Prior to their
commencement of reporting to the CAT, Industry Members would submit an
initial set of Customer information to the Central Repository,
including the Firm Designated ID, Customer Identifying Information and
Customer Account Information (which may include, as applicable, the
Customer's name, address, date of birth, individual tax payer
identifier number (``ITIN'')/social security number (``SSN''),
individual's role in the account (e.g., primary holder, joint holder,
guardian, trustee, person with power of attorney) and LEI and/or Larger
Trader ID

(``LTID'')). This process is referred to as the customer definition
process.
    In accordance with the Customer Information Approach, Industry
Members would be required to report only the Firm Designated ID for
each new order submitted to the Central Repository, rather than the
``Customer-ID'' with individual order events. Within the Central
Repository, each Customer would be uniquely identified by identifiers
or a combination of identifiers such as ITIN/SSN, date of birth, and as
applicable, LEI and LTID. The Plan Processor would be required to use
these unique identifiers to map orders to specific Customers across all
Industry Members and Participants. To ensure information identifying a
Customer is up to date, Industry Members would be required to submit to
the Central Repository daily and periodic updates for reactivated
accounts, newly established accounts, and revised Firm Designated IDs
or associated reportable Customer information.
(II) Definition of Account Effective Date
    In connection with the Customer Information Approach, Industry
Members would be required to report Customer Account Information to the
Central Repository. ``Customer Account Information'' is defined in SEC
Rule 613(j)(4) to ``include, but not be limited to, account number,
account type, customer type, date account opened, and large trader
identifier (if applicable).'' Therefore, when reporting Customer
Account Information, and Industry Member is required to report the date
an account was opened. The Participants requested and received an
exemption to allow an ``Account Effective Date'' to be reported in lieu
of an account open date in certain limited circumstances. The
definition of ``Account Effective Date'' as set forth in paragraph (a)
of proposed Rule 11.6810 describes those limited circumstances in which
an Industry Member may report an ``Account Effective Date'' rather than
the account open date. The proposed definition is the same as the
definition of ``Account Effective Date'' set forth in Section 1.1 of
the CAT NMS Plan, provided, however, that specific dates have replaced
the descriptions of those dates set forth in Section 1.1 of the Plan.
    Specifically, Paragraph (a)(1) defines ``Account Effective Date''
to mean, with regard to those circumstances in which an Industry Member
has established a trading relationship with an institution but has not
established an account with that institution: (1) When the trading
relationship was established prior to November 15, 2018 for Industry
Members other than Small Industry Members, or prior to November 15,
2019 for Small Industry Members, either (a) the date the relationship
identifier was established within the Industry Member; (b) the date
when trading began (i.e., the date the first order was received) using
the relevant relationship identifier; or (c) if both dates are
available, the earlier date will be used to the extent that the dates
differ; or (2) when the trading relationship was established on or
after November 15, 2018 for Industry Members other than Small Industry
Members, or on or after November 15, 2019 for Small Industry Members,
the date the Industry Member established the relationship identifier,
which would be no later than the date the first order was received.
    Paragraph (a)(2) of proposed Rule 11.6810 states that an ``Account
Effective Date'' means, where an Industry Member changes back office
providers or clearing firms prior to November 15, 2018 for Industry
Members other than Small Industry Members, or prior to November 15,
2019 for Small Industry Members, the date an account was established at
the relevant Industry Member, either directly or via transfer.
    Paragraph (a)(3) states that an ``Account Effective Date'' means,
where an Industry Member acquires another Industry Member prior to
November 15, 2018 for Industry Members other than Small Industry
Members, or prior to November 15, 2019 for Small Industry Members, the
date an account was established at the relevant Industry Member, either
directly or via transfer.
    Paragraph (a)(4) states that ``Account Effective Date'' means,
where there are multiple dates associated with an account established
prior to November 15, 2018 for Industry Members other than Small
Industry Members, or prior to November 15, 2019 for Small Industry
Members, the earliest available date.
    Paragraph (a)(5) states that an ``Account Effective Date'' means,
with regard to Industry Member proprietary accounts established prior
to November 15, 2018 for Industry Members other than Small Industry
Members, or prior to November 15, 2019 for Small Industry Members: (1)
The date established for the account in the Industry Member or in a
system of the Industry Member or (2) the date when proprietary trading
began in the account (i.e., the date on which the first orders were
submitted from the account). With regard to paragraphs (a)(2)-(5), the
Account Effective Date will be no later than the date trading occurs at
the Industry Member or in the Industry Member's system.
(B) Active Account
    Under the Customer Information Approach, Industry Members are
required to report Customer Identifying Information and Customer
Account Information for only those accounts that are active. This will
alleviate the need for Industry Members to update such information for
non-active accounts, but still ensure that the Central Repository will
collect audit trail data for Customer accounts that have any Reportable
Events. Accordingly, paragraph (b) of proposed Rule 11.6810 defines an
``Active Account'' as an account that has had activity in Eligible
Securities within the last six months. This is the same definition as
set forth in Section 1.1 of the CAT NMS Plan.
(C) Allocation Report
(I) Allocation Report Approach
    SEC Rule 613(c)(7)(vi)(A) requires each Industry Member to record
and report to the Central Repository ``the account number for any
subaccounts to which the execution is allocated (in whole or in
part).'' The SROs requested and received from the SEC exemptive relief
from SEC Rule 613 for an alternative to this approach (``Allocation
Report Approach''). The Allocation Report Approach would permit
Industry Members to record and report to the Central Repository an
Allocation Report that includes, among other things, the Firm
Designated ID for any account(s) to which executed shares are allocated
when an execution is allocated in whole or part in lieu of requiring
the reporting of the account number for any subaccount to which an
execution is allocated, as is required by SEC Rule 613.\12\ Under SEC
Rule 613, regulators would be able to link the subaccount to which an
allocation was made to a specific order. In contrast, under the
Allocation Report Approach, regulators would only be able to link an
allocation to the account to which it was made, and not to a specific
order.
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    \12\ See Exemptive Request Letter, supra note 11, at 26-27; and
Exemption Order.
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(II) Definition of Allocation Report
    To assist in implementing the Allocation Report Approach, paragraph
(c) of proposed Rule 11.6810 defines an ``Allocation Report.''
Specifically, an ``Allocation Report'' means a report made to the
Central Repository by an Industry Member that identifies the Firm
Designated ID for any account(s), including subaccount(s), to which
executed shares are allocated and

provides the security that has been allocated, the identifier of the
firm reporting the allocation, the price per share of shares allocated,
the side of shares allocated, the number of shares allocated to each
account, and the time of the allocation; provided, for the avoidance of
doubt, any such Allocation Report shall not be required to be linked to
particular orders or executions. This is the same definition as set
forth in Section 1.1 of the CAT NMS Plan.
(D) Business Clock
    To create the required audit trail, Industry Members are required
to record the date and time of various Reportable Events to the Central
Repository. Industry Members will use ``Business Clocks'' to record
such dates and times. Accordingly, paragraph (d) of proposed Rule
11.6810 defines the term ``Business Clock'' as a clock used to record
the date and time of any Reportable Event required to be reported under
this Rule 11.6800 Series. This is the same definition as set forth in
Section 1.1 of the CAT NMS Plan, except the Exchange proposes to
replace the phrase ``under SEC Rule 613'' at the end of the definition
in Section 1.1 of the Plan with the phrase ``under this Rule Series.''
This change is intended to recognize that the Industry Members'
obligations with regard to the CAT are set forth in this Rule 11.6800
Series.
(E) CAT
    Paragraph (e) of proposed Rule 11.6810 defines the term ``CAT'' to
mean the consolidated audit trail contemplated by SEC Rule 613. This is
the same definition as set forth in Section 1.1 of the CAT NMS Plan.
(F) CAT NMS Plan
    Paragraph (f) of proposed Rule 11.6810 defines the term ``CAT NMS
Plan'' to mean the National Market System Plan Governing the
Consolidated Audit Trail, as amended from time to time.
(G) CAT-Order-ID
(I) Daisy Chain Approach
    Under the CAT NMS Plan, the Daisy Chain Approach is used to link
and reconstruct the complete lifecycle of each Reportable Event in CAT.
According to this Approach, Industry Members assign their own
identifiers to each order event. Within the Central Repository, the
Plan Processor later replaces the identifier provided by the Industry
Member for each Reportable Event with a single identifier, called the
CAT Order-ID, for all order events pertaining to the same order. This
CAT Order-ID is used to links the Reportable Events related to the same
order.
(II) Definition of CAT-Order-ID
    To implement the Daisy Chain Approach, paragraph (g) of proposed
Rule 11.6810 defines the term ``CAT-Order-ID.'' The term ``CAT-Order-
ID'' is defined to mean a unique order identifier or series of unique
order identifiers that allows the Central Repository to efficiently and
accurately link all Reportable Events for an order, and all orders that
result from the aggregation or disaggregation of such order. This is
the same definition as set forth in SEC Rule 613(j)(1), and Section 1.1
of the CAT NMS Plan defines ``CAT-Order-ID'' by reference to SEC Rule
613(j)(1).
(H) CAT Reporting Agent
    The CAT NMS Plan permits an Industry Member to use a third party,
such as a vendor, to report the required data to the Central Repository
on behalf of the Industry Member.\13\ Such a third party, referred to
in this proposed Rule 11.6800 Series as a ``CAT Reporting Agent,''
would be one type of a Data Submitter, that is, a party that submit
data to the Central Repository. Paragraph (h) of proposed Rule 11.6810
defines the term ``CAT Reporting Agent'' to mean a Data Submitter that
is a third party that enters into an agreement with an Industry Member
pursuant to which the CAT Reporting Agent agrees to fulfill such
Industry Member's obligations under this Rule 11.6800 Series.
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    \13\ See Appendix C, Section A.1(a) of the CAT NMS Plan.
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    This definition is based on FINRA's definition of a ``Reporting
Agent'' as set forth in FINRA's rule related to its Order Audit Trail
System (``OATS''). Specifically, FINRA Rule 7410(n) defines a
``Reporting Agent'' as a third party that enters into any agreement
with a member pursuant to which the Reporting Agent agrees to fulfill
such member's reporting obligations under FINRA Rule 7450. The
Reporting Agent for OATS fulfills a similar role to the CAT Reporting
Agent.
(I) Central Repository
    Paragraph (i) of proposed Rule 11.6810 defines the term ``Central
Repository'' to mean the repository responsible for the receipt,
consolidation, and retention of all information reported to the CAT
pursuant to SEC Rule 613 and the CAT NMS Plan. This is the same
definition as set forth in Section 1.1 of the CAT NMS Plan, except the
Exchange proposes to use the phrase ``CAT NMS Plan'' in place of the
phrase ``this Agreement.''
(J) Compliance Threshold
    Paragraph (j) of proposed Rule 11.6810 defines the term
``Compliance Threshold'' as having the meaning set forth in proposed
Rule 11.6893(d). This definition has the same substantive meaning as
the definition set forth in Section 1.1 of the CAT NMS Plan. As
discussed in detail below with regard to proposed Rule 11.6893(d), each
Industry Member is required to meet a separate compliance threshold
which will be an Industry Member-specific rate that may be used as the
basis for further review or investigation into the Industry Member's
performance with regard to the CAT. This Industry Member-specific rate
is the ``Compliance Threshold.''
(K) Customer
    Industry Members are required to submit to the Central Repository
certain information related to their Customers, including Customer
Identifying Information and Customer Account Information, as well as
data related to their Customer's Reportable Events. Accordingly,
paragraph (k) of proposed Rule 11.6810 proposes to define the term
``Customer.'' Specifically, the term ``Customer'' would be defined to
mean: (1) The account holder(s) of the account at an Industry Member
originating the order; and (2) any person from whom the Industry Member
is authorized to accept trading instructions for such account, if
different from the account holder(s). This is the same definition as
set forth in SEC Rule 613(j)(3), except the Exchange proposes to
replace the references to a registered broker-dealer or broker-dealer
with a reference to an Industry Member for consistency of terms used in
the proposed Rule 11.6800 Series. The Exchange also notes that Section
1.1 of the CAT NMS Plan defines ``Customer'' by reference to SEC Rule
613(j)(3).
(L) Customer Account Information
    As discussed above, under the Customer Information Approach,
Industry Members are required to report Customer Account Information to
the Central Repository as part of the customer definition process.
Accordingly, the Exchange proposes to define the term ``Customer
Account Information'' to clarify what customer information would need
to be reported to the Central Repository.
    Paragraph (l) of proposed Rule 11.6810 defines the term ``Customer
Account Information'' to include, in part, account number, account
type,

customer type, date account opened, and large trader identifier (if
applicable). Proposed Rule 11.6810(l), however, provides an alternative
definition of ``Customer Account Information'' in two limited
circumstances. First, in those circumstances in which an Industry
Member has established a trading relationship with an institution but
has not established an account with that institution, the Industry
Member will (1) provide the Account Effective Date in lieu of the
``date account opened''; (2) provide the relationship identifier in
lieu of the ``account number''; and (3) identify the ``account type''
as a ``relationship.'' Second, in those circumstances in which the
relevant account was established prior to November 15, 2018 for
Industry Members other than Small Industry Members, or prior to
November 15, 2019 for Small Industry Members, and no ``date account
opened'' is available for the account, the Industry Member will provide
the Account Effective Date in the following circumstances: (1) Where an
Industry Member changes back office providers or clearing firms and the
date account opened is changed to the date the account was opened on
the new back office/clearing firm system; (2) where an Industry Member
acquires another Industry Member and the date account opened is changed
to the date the account was opened on the post-merger back office/
clearing firm system; (3) where there are multiple dates associated
with an account in an Industry Member's system, and the parameters of
each date are determined by the individual Industry Member; and (4)
where the relevant account is an Industry Member proprietary account.
The proposed definition is the same as the definition of ``Customer
Account Information'' set forth in Section 1.1 of the CAT NMS Plan,
provided, however, that specific dates have replaced the descriptions
of those dates set forth in Section 1.1 of the Plan.
(M) Customer Identifying Information
    As discussed above, under the Customer Information Approach,
Industry Members are required to report Customer Identifying
Information to the Central Repository as part of the customer
definition process. Accordingly, SRO proposes to define the term
``Customer Account Information'' to clarify what Customer information
would need to be reported to the Central Repository.
    Paragraph (m) of proposed Rule 11.6810 defines the term ``Customer
Identifying Information'' to mean information of sufficient detail to
identify a Customer. With respect to individuals, ``Customer
Identifying Information'' includes, but is not limited to, name,
address, date of birth, individual tax payer identification number
(``ITIN'')/social security number (``SSN''), individual's role in the
account (e.g., primary holder, joint holder, guardian, trustee, person
with the power of attorney). With respect to legal entities, ``Customer
Identifying Information'' includes, but is not limited to, name,
address, Employer Identification Number (``EIN'')/Legal Entity
Identifier (``LEI'') or other comparable common entity identifier, if
applicable. The definition further notes that an Industry Member that
has an LEI for a Customer must submit the Customer's LEI in addition to
other information of sufficient detail to identify the Customer. This
is the same definition as set forth in Section 1.1 of the CAT NMS Plan.
(N) Data Submitter
    The CAT NMS Plan uses the term ``Data Submitter'' to refer to any
person that reports data to the Central Repository.\14\ Such Data
Submitters may include those entities that are required to submit data
to the Central Repository (e.g., national securities exchanges,
national securities associations and Industry Members), third-parties
that may submit data to the CAT on behalf of CAT Reporters (i.e., CAT
Reporting Agents), and outside parties that are not required to submit
data to the CAT but from which the CAT may receive data (e.g.,
securities information processors (``SIPs'')). To include this term in
the proposed Rule 11.6800 Series, the Exchange proposes to define
``Data Submitter'' in paragraph (n) of proposed Rule 11.6810.
Specifically, paragraph (n) of proposed Rule 11.6810 defines a ``Data
Submitter'' to mean any person that reports data to the Central
Repository, including national securities exchanges, national
securities associations, broker-dealers, the SIPs for the CQS, CTA, UTP
and Plan for Reporting of Consolidated Options Last Sale Reports and
Quotation Information (``OPRA'') Plans, and certain other vendors or
third parties that may submit data to the Central Repository on behalf
of Industry Members.
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    \14\ See Appendix C, Section A.1(a) of the CAT NMS Plan.
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(O) Eligible Security
    The reporting requirements of the proposed Rule 11.6800 Series only
apply to Reportable Events in Eligible Securities. Currently, an
Eligible Security includes NMS Securities and OTC Equity Securities.
Accordingly, paragraph (o) of proposed Rule 11.6810 defines the term
``Eligible Security'' to include: (1) All NMS Securities; and (2) all
OTC Equity Securities. The terms ``NMS Securities'' and ``OTC Equity
Securities'' are defined, in turn, below. This is the same definition
as set forth in Section 1.1 of the CAT NMS Plan.
(P) Error Rate
(I) Maximum Error Rate
    Under the CAT NMS Plan, the Operating Committee sets the maximum
Error Rate that the Central Repository would tolerate from an Industry
Member reporting data to the Central Repository.\15\ The Operating
Committee reviews and resets the maximum Error Rate, at least
annually.\16\ If an Industry Member reports CAT data to the Central
Repository with errors such that their error percentage exceeds the
maximum Error Rate, then such Industry Member would not be in
compliance with the CAT NMS Plan or Rule 613.\17\ As such, the Exchange
or the SEC ``may take appropriate action against an Industry Member for
failing to comply with its CAT reporting obligations.\18\ The CAT NMS
Plan sets the initial Error Rate at 5%.\19\ It is anticipated that the
maximum Error Rate will be reviewed and lowered by the Operating
Committee once Industry Members begin to report to the Central
Repository.\20\
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    \15\ See Section 6.5(d)(i) of the CAT NMS Plan.
    \16\ See Appendix C, Section A.3(b) of the CAT NMS Plan.
    \17\ See Appendix C, Section A.3(b) of the CAT NMS Plan; SEC
Rule 613(g)-(h).
    \18\ See Appendix C, Section A.3(b) of the CAT NMS Plan.
    \19\ See Section 6.5(d)(i) of the CAT NMS Plan.
    \20\ See Appendix C, Section A.3(b) of the CAT NMS Plan.
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    The CAT NMS Plan requires the Plan Processor to: (1) Measure and
report errors every business day; (2) provide Industry Members daily
statistics and error reports as they become available, including a
description of such errors; (3) provide monthly reports to Industry
Members that detail an Industry Member's performance and comparison
statistics; (4) define educational and support programs for Industry
Members to minimize Error Rates; and (5) identify, daily, all Industry
Members exceeding the maximum allowable Error Rate. To timely correct
data-submitted errors to the Central Repository, the CAT NMS Plan
requires that the Central Repository receive and process error
corrections at all times. Further, the CAT NMS Plan requires that
Industry Members be able to submit error corrections to the Central
Repository

through a web-interface or via bulk uploads or file submissions, and
that the Plan Processor, subject to the Operating Committee's approval,
support the bulk replacement of records and the reprocessing of such
records. The Participants, furthermore, require that the Plan Processor
identify Industry Member data submission errors based on the Plan
Processor's validation processes.\21\
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    \21\ See Approval Order, supra note 9, at 84718.
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(II) Definition of Error Rate
    To implement the requirements of the CAT NMS Plan related to the
Error Rate, the Exchange proposes to define the term ``Error Rate'' in
proposed Rule 11.6810. Paragraph (p) of proposed Rule 11.6810 defines
the term ``Error Rate'' to mean the percentage of Reportable Events
collected by the Central Repository in which the data reported does not
fully and accurately reflect the order event that occurred in the
market. This is the same definition as set forth in SEC Rule 613(j)(6),
and Section 1.1 of the CAT NMS Plan defines ``Error Rate'' by reference
to SEC Rule 613(j)(6).
(Q) Firm Designated ID
    As discussed above, under the Customer Information Approach, the
CAT NMS Plan would require each Industry Member to assign a unique Firm
Designated ID to each Customer. Industry Members would be permitted to
use as the Firm Designated ID an account number or any other identifier
defined by the firm, provided each identifier is unique across the firm
for each business date (i.e., a single firm may not have multiple
separate customers with the same identifier on any given date).
Industry members would be required to report only the Firm Designated
ID for each new order submitted to the Central Repository, rather than
the ``Customer-ID'' with individual order events. Accordingly, the
Exchange proposes to define the term ``Firm Designated ID'' in proposed
Rule 11.6810. Specifically, paragraph (q) of proposed Rule 11.6810
defines the term ``Firm Designated ID'' to mean a unique identifier for
each trading account designated by Industry Members for purposes of
providing data to the Central Repository, where each such identifier is
unique among all identifiers from any given Industry Member for each
business date. This is the same definition as set forth in Section 1.1
of the CAT NMS Plan. Industry Members would be permitted to use an
account number or any other identifier defined by the firm, provided
each identifier is unique across the firm for each business date (i.e.,
a single firm may not have multiple separate customers with the same
identifier on any given date).
(R) Industry Member
    Paragraph (r) of proposed Rule 11.6810 defines the term ``Industry
Member'' to mean a member of a national securities exchange or a member
of a national securities association.'' This is the same definition as
set forth in Section 1.1 of the CAT NMS Plan.
(S) Industry Member Data
    Paragraph (s) of proposed Rule 11.6810 states that the term
``Industry Member Data'' has the meaning set forth in Rule
11.6830(a)(2). This definition has the same substantive meaning as the
definition set forth in in Section 1.1 of the CAT NMS Plan. The
definition of ``Industry Member Data'' is discussed more fully in the
discussion below regarding proposed Rule 11.6830(a)(2).
(T) Initial Plan Processor
    Paragraph (t) of proposed Rule 11.6810 defines the term ``Initial
Plan Processor'' to mean the first Plan Processor selected by the
Operating Committee in accordance with SEC Rule 613, Section 6.1 of the
CAT NMS Plan and the National Market System Plan Governing the Process
for Selecting a Plan Processor and Developing a Plan for the
Consolidated Audit Trail. This is the same definition as set forth in
Section 1.1 of the CAT NMS Plan, although the proposed definition uses
the full name of the ``Selection Plan.''
(U) Listed Option or Option
    The CAT NMS Plan and this proposed Rule 11.6800 Series applies to
Eligible Securities, which includes NMS Securities, which, in turn,
includes Listed Options. Certain requirements of the proposed Rule
11.6800 Series apply specifically to Listed Options. Accordingly,
paragraph (u) of proposed Rule 11.6810 defines the term ``Listed
Option'' or ``Option.'' Specifically, paragraph (u) of proposed Rule
11.6810 states that the term ``Listed Option'' or ``Option'' has the
meaning set forth in SEC Rule 600(b)(35) of Regulation NMS. SEC Rule
600(b)(35), in turn, defines a listed option as ``any option traded on
a registered national securities exchange or automated facility of a
national securities association.'' The Exchange notes that the proposed
definition of ``Listed Option'' is the same definition as the
definition set forth in Section 1.1 of the CAT NMS Plan.
(V) Manual Order Event
(I) Manual Order Event Approach
    The CAT NMS Plan sets forth clock synchronization and timestamp
requirements for Industry Members which reflect exemptions for Manual
Order Events granted by the Commission.\22\ Specifically, the Plan
requires Industry Members to record and report the time of each
Reportable Event using timestamps reflecting current industry standards
(which must be at least to the millisecond) or, if an Industry Member's
order handling or execution system uses timestamps in increments finer
than milliseconds, such finer increments, when reporting to the Central
Repository. For Manual Order Events, however, the Plan provides that
such events must be recorded in increments up to and including one
second, provided that Industry Members record and report the time the
event is captured electronically in an order handling and execution
system (``Electronic Capture Time'') in milliseconds. In addition,
Industry Members are required to synchronize their respective Business
Clocks (other than such Business Clocks used solely for Manual Order
Events) at a minimum to within 50 milliseconds of the time maintained
by the National Institute of Standards and Technology (``NIST''), and
maintain such a synchronization. Each Industry Member is required to
synchronize their Business Clocks used solely for Manual Order Events,
however, at a minimum to within one second of the time maintained by
the NIST.
---------------------------------------------------------------------------

    \22\ See Exemption Order, supra note 11.
---------------------------------------------------------------------------

(II) Definition of Manual Order Event
    In order to clarify what a Manual Order Event is for clock
synchronization and time stamp purposes, the Exchange proposes to
define the term ``Manual Order Event'' in proposed Rule 11.6810.
Specifically, paragraph (v) of proposed Rule 11.6810 defines the term
``Manual Order Event'' to mean a non-electronic communication of order-
related information for which Industry Members must record and report
the time of the event. This is the same definition as set forth in
Section 1.1 of the CAT NMS Plan.
(W) Material Terms of the Order
    Proposed Rule 11.6830 requires Industry Members to record and
report to the Central Repository Material Terms of the Order with
certain Reportable Events (e.g., for the original receipt or
origination of an order, for the routing of an order). Accordingly, the

Exchange proposes to define the term ``Material Terms of the Order'' in
proposed Rule 11.6810. Specifically, paragraph (w) of proposed Rule
11.6810 defines the term ``Material Terms of the Order'' to include:
The NMS Security or OTC Equity Security symbol; security type; price
(if applicable); size (displayed and non-displayed); side (buy/sell);
order type; if a sell order, whether the order is long, short, short
exempt; open/close indicator (except on transactions in equities); time
in force (if applicable); if the order is for a Listed Option, option
type (put/call), option symbol or root symbol, underlying symbol,
strike price, expiration date, and open/close (except on market maker
quotations); and any special handling instructions. This is the same
definition as set forth in Section 1.1 of the CAT NMS Plan.
(X) NMS Security
    NMS Securities are one of the types of Eligible Securities for the
CAT. Therefore, the Exchange proposes to define the term ``NMS
Security'' in proposed Rule 11.6810. Specifically, paragraph (x) of
proposed Rule 11.6810 defines the term ``NMS Security'' to mean any
security or class of securities for which transaction reports are
collected, processed, and made available pursuant to an effective
transaction reporting plan, or an effective national market system plan
for reporting transactions in Listed Options. This is the same
definition as set forth in Section 1.1 of the CAT NMS Plan.
(Y) NMS Stock
    Under the CAT NMS Plan, the Operating Committee may establish
different Trading Days for NMS Stocks (as defined in SEC Rule
600(b)(47)), Listed Options, OTC Equity Securities, and any other
securities that are included as Eligible Securities from time to time.
Accordingly, the Exchange proposes to define the term ``NMS Stock'' in
Paragraph (y) of Proposed Rule 11.6810 to mean any NMS Security other
than an option. This is the same definition as set forth in SEC Rule
600(b)(47) of Regulation NMS.
(Z) Operating Committee
    Paragraph (z) of proposed Rule 11.6810 defines the term ``Operating
Committee'' to mean the governing body of the CAT NMS, LLC designated
as such and described in Article IV of the CAT NMS Plan. This is the
same definition as set forth in Section 1.1 of the CAT NMS Plan, except
the Exchange proposes to use the phrase ``CAT NMS LLC'' in place of the
phrase ``the Company'' for clarity.
(AA) Options Market Maker
(I) Options Market Maker Quote Exemption
    SEC Rule 613(c)(7) provides that the CAT NMS Plan must require each
Industry Member to record and electronically report to the Central
Repository details for each order and each reportable event, including
the routing and modification or cancellation of an order. SEC Rule
613(j)(8) defines ``order'' to include ``any bid or offer.'' Therefore,
under SEC Rule 613, the details for each Options Market Maker quotation
must be reported to the Central Repository by both the Options Market
Maker and the options exchange to which it routes its quote.
    The Exchange, however, requested and received exemptive relief from
SEC Rule 613 so that the CAT NMS Plan may permit Options Market Maker
quotes to be reported to the Central Repository by the relevant options
exchange in lieu of requiring that such reporting be done by both the
options exchange and the Options Market Maker, as is required by SEC
Rule 613.\23\ In accordance with the exemptive relief, Options Market
Makers would be required to report to the options exchange the time at
which a quote in a Listed Option is sent to the options exchange. Such
time information also will be reported to the Central Repository by the
options exchange in lieu of reporting by the Options Market Maker.
---------------------------------------------------------------------------

    \23\ See Exemptive Request Letter, supra note 11, at 2, and
Exemption Order.
---------------------------------------------------------------------------

(II) Definition of Options Market Maker
    To implement the requirements related to Options Market Maker
quotes, the Exchange proposes to define the term ``Options Market
Maker'' in proposed Rule 11.6810. Specifically, paragraph (aa) of
proposed Rule 11.6810 defines the term ``Options Market Maker'' to mean
a broker-dealer registered with an exchange for the purpose of making
markets in options contracts traded on the exchange. This is the same
definition as set forth in Section 1.1 of the CAT NMS Plan.
(BB) Order
    The proposed Rule 11.6800 Series requires each Industry Member to
record and electronically report to the Central Repository certain
details for each order. Accordingly, the Exchange proposes to define
the term ``Order'' in proposed Rule 11.6810. Specifically, paragraph
(bb) of proposed Rule 11.6810 defines the term ``Order'', with respect
to Eligible Securities, to include: (1) Any order received by an
Industry Member from any person; (2) any order originated by an
Industry Member; or (3) any bid or offer. This is the same definition
as set forth in SEC Rule 613(j)(8), except the Exchange proposes to
replace the phrase ``member of a national securities exchange or
national securities association'' with the term ``Industry Member.''
The Exchange notes that Section 1.1 of the CAT NMS Plan defines
``Order'' by reference to SEC Rule 613(j)(8).
(CC) OTC Equity Security
    OTC Equity Securities are one of the types of Eligible Securities
for the CAT. Therefore, the Exchange proposes to define the term ``OTC
Equity Security'' in proposed Rule 11.6810. Specifically, paragraph
(cc) of proposed Rule 11.6810 defines the term ``OTC Equity Security''
to mean any equity security, other than an NMS Security, subject to
prompt last sale reporting rules of a registered national securities
association and reported to one of such association's equity trade
reporting facilities. This is the same definition as set forth in
Section 1.1 of the CAT NMS Plan.
(DD) Participant
    Paragraph (dd) of proposed Rule 11.6810 defines the term
``Participant'' to mean each Person identified as such in Exhibit A of
the CAT NMS Plan, as amended, in such Person's capacity as a
Participant in CAT NMS, LLC. This is the same definition in substance
as set forth in Section 1.1 of the CAT NMS Plan.
(EE) Person
    Paragraph (ee) of proposed Rule 11.6810 defines the term ``Person''
to mean any individual, partnership, limited liability company,
corporation, joint venture, trust, business trust, cooperative or
association and any heirs, executors, administrators, legal
representatives, successors and assigns of such Person where the
context so permits. This is the same definition as set forth in Section
1.1 of the CAT NMS Plan.
(FF) Plan Processor
    Paragraph (ff) of proposed Rule 11.6810 defines the term ``Plan
Processor'' to mean the Initial Plan Processor or any other Person
selected by the Operating Committee pursuant to SEC Rule 613 and
Sections 4.3(b)(i) and 6.1 of the CAT NMS Plan, and with regard to the
Initial Plan Processor, the National Market System Plan Governing the
Process for Selecting a Plan Processor and Developing a Plan for the

Consolidated Audit Trail, to perform the CAT processing functions
required by SEC Rule 613 and set forth in the CAT NMS Plan.
(GG) Received Industry Member Data
    Paragraph (gg) of proposed Rule 11.6810 states that the term
``Received Industry Member Data'' has the meaning set forth in Rule
11.6830(a)(2). This definition has the same substantive meaning as the
definition set forth in Section 1.1 of the CAT NMS Plan. The definition
of ``Received Industry Member Data'' is discussed more fully in the
discussion below regarding proposed Rule 11.6830(a)(2).
(HH) Recorded Industry Member Data
    Paragraph (hh) of proposed Rule 11.6810 states that the term
``Recorded Industry Member Data'' has the meaning set forth in Rule
11.6830(a)(1). This definition has the same substantive meaning as the
definition set forth in in Section 1.1 of the CAT NMS Plan. The
definition of ``Recorded Industry Member Data'' is discussed more fully
in the discussion below regarding proposed Rule 11.6830(a)(1).
(II) Reportable Event
    The proposed Rule 11.6800 Series requires each Industry Member to
record and electronically report to the Central Repository certain
details for each Reportable Event. To clarify these requirements, the
Exchange proposes to define the term ``Reportable Event'' in proposed
Rule 11.6810. Specifically, paragraph (ii) of proposed Rule 11.6810
states that the term ``Reportable Event'' includes, but is not limited
to, the original receipt or origination, modification, cancellation,
routing, execution (in whole or in part) and allocation of an order, an
receipt of a routed order. This is the same definition as set forth in
Section 1.1 of the CAT NMS Plan.
(JJ) SRO
    Paragraph (jj) of proposed Rule 11.6810 defines the term ``SRO'' to
mean any self-regulatory organization within the meaning of Section
3(a)(26) of the Exchange Act. This is the same definition as set forth
in Section 1.1 of the CAT NMS Plan.
(KK) SRO-Assigned Market Participant Identifier
(I) Existing Identifier Approach
    The Exchange requested and received exemptive relief from SEC Rule
613 so that the CAT NMS Plan may permit the Existing Identifier
Approach, which would allow an Industry Member to report an existing
SRO-Assigned Market Participant Identifier in lieu of requiring the
reporting of a universal CAT-Reporter-ID (that is, a code that uniquely
and consistently identifies an Industry Member for purposes of
providing data to the Central Repository).\24\ The CAT NMS Plan
reflects the ``Existing Identifier Approach'' for purposes of
identifying each Industry Member associated with an order or Reportable
Event. Under the Existing Identifier Approach, Industry Members are
required to record and report to the Central Repository an SRO-Assigned
Market Participant Identifier for orders and certain Reportable Events
to be used by the Central Repository to assign a unique CAT-Reporter-ID
to identify Industry Members.
---------------------------------------------------------------------------

    \24\ See Exemptive Request Letter, supra note 11, at 19, and
Exemption Order.
---------------------------------------------------------------------------

    For the Central Repository to link the SRO-Assigned Market
Participant Identifier to the CAT-Reporter-ID, the Exchange will submit
to the Central Repository, on a daily basis, all SRO-Assigned Market
Participant Identifiers used by its Industry Members, as well as
information to identify each such Industry Member, including CRD number
and LEI, if the SRO has collected such LEI of the Industry Member.
Additionally, each Industry Member is required to submit to the Central
Repository the CRD number of the Industry Member as well as the LEI of
the Industry Member (if the Industry Member has an LEI). The Plan
Processor will use this information to assign a CAT-Reporter-ID to each
Industry Member for internal use within the Central Repository.
(II) Definition of SRO-Assigned Market Participant Identifier
    To implement the Existing Identifier Approach, the Exchange
proposes to define the term ``SRO-Assigned Market Participant'' in
proposed Rule 11.6810. Specifically, paragraph (kk) of proposed Rule
11.6810 defines the term ``SRO-Assigned Market Participant Identifier''
to mean an identifier assigned to an Industry Member by the Exchange or
an identifier used by a Participant. This is the same definition as set
forth in Section 1.1 of the CAT NMS Plan. For example, an Industry
Member would be permitted to use any existing SRO-Assigned Market
Participant Identifier (e.g., FINRA MPID, NASDAQ MPID, NYSE Mnemonic,
CBOE User Acronym and CHX Acronym) when reporting order information to
the Central Repository.
(LL) Small Industry Member
    The requirements of the proposed Rule 11.6800 Series differ to some
extent for Small Industry Members versus Industry Members other than
Small Industry Members. For example, the compliance dates for reporting
data to the CAT are different for Small Industry Members versus other
Industry Members. Accordingly, to clarify the requirements that apply
to which Industry Members, the Exchange proposes to define the term
``Small Industry Member'' in proposed Rule 11.6810. Specifically,
paragraph (ll) of proposed Rule 11.6810 defines the term ``Small
Industry Member'' to mean an Industry Member that qualifies as a small
broker-dealer as defined in Rule 0-10(c) under the Securities Exchange
Act of 1934, as amended. This is the same in substance as the
definition of ``Small Industry Member'' as set forth in Section 1.1 of
the CAT NMS Plan. Specifically, Section 1.1 of the CAT NMS Plan defines
a ``Small Industry Member'' as ``an Industry Member that qualifies as a
small broker-dealer as defined in SEC Rule 613.'' The definition of a
small broker-dealer under SEC Rule 613, in turn, is a small broker-
dealer as defined in SEC Rule 0-10(c).
(MM) Trading Day
    Proposed Rule 11.6830(b) establishes the deadlines for reporting
certain data to the Central Repository using the term ``Trading Day.''
Accordingly, the Exchange proposes to define the term ``Trading Day''
in proposed Rule 11.6810. Specifically, paragraph (mm) of proposed Rule
11.6810 states that the term ``Trading Day'' shall have the meaning as
is determined by the Operating Committee. For the avoidance of doubt,
the Operating Committee may establish different Trading Days for NMS
Stocks (as defined in SEC Rule 600(b)(47), Listed Options, OTC Equity
Securities, and any other securities that are included as Eligible
Securities from time to time.
(ii) Clock Synchronization
    SEC Rule 613(d)(1) under Regulation NMS requires Industry Members
to synchronize their Business Clocks to the time maintained by NIST,
consistent with industry standards. To comply with this provision,
Section 6.8 of the Plan sets forth the clock synchronization
requirements for Industry Members.\25\ To implement these provisions
with regard to Industry Members, the Exchange proposes new

Rule 11.6820 (Consolidated Audit Trail--Clock Synchronization) to
require Industry Members to comply with the clock synchronization
requirements of the Plan.
---------------------------------------------------------------------------

    \25\ In addition, Section 6.7(a)(ii) of the Plan sets forth the
timeline for CAT Reporters to comply with the clock synchronization
requirements.
---------------------------------------------------------------------------

    Paragraph (a) of proposed Rule 11.6820 sets forth the manner in
which Industry Members must synchronize their Business Clocks.
Paragraph (a)(1) of proposed Rule 11.6820 requires each Industry Member
to synchronize its Business Clocks, other than such Business Clocks
used solely for Manual Order Events or used solely for the time of
allocation on Allocation Reports, at a minimum to within a fifty (50)
millisecond tolerance of the time maintained by the NIST atomic clock,
and maintain such synchronization. This is the same requirement as set
forth in Section 6.8(a)(ii)(A) of the CAT NMS Plan.
    Paragraph (a)(2) of proposed Rule 11.6820 requires each Industry
Member to synchronize (1) its Business Clocks used solely for Manual
Order Events and (2) its Business Clocks used solely for the time of
allocation on Allocation Reports at a minimum to within a one second
tolerance of the time maintained by the NIST atomic clock, and maintain
such synchronization. This is the same requirement as set forth in
Section 6.8(a)(iii) and (iv) of the CAT NMS Plan.
    Paragraph (a)(3) of proposed Rule 11.6820 clarifies that the
tolerance described in paragraphs (a)(1) and (2) of the proposed Rule
11.6820 includes all of the following: (1) The time difference between
the NIST atomic clock and the Industry Member's Business Clock; (2) the
transmission delay from the source; and (3) the amount of drift of the
Industry Member's Business Clock. This description of the clock
synchronization tolerance is the same as set forth in paragraph (b) of
FINRA Rule 4590 (Synchronization of Member Business Clocks).
    Paragraph (a)(4) of proposed Rule 11.6820 requires Industry Members
to synchronize their Business Clocks every business day before market
open to ensure that timestamps for Reportable Events are accurate. In
addition, to maintain clock synchronization, Business Clocks must be
checked against the NIST atomic clock and re-synchronized, as
necessary, throughout the day. This description of the required
frequency of clock synchronization is the same as set forth in
paragraph (c) of FINRA Rule 4590 (Synchronization of Member Business
Clocks).
    Paragraph (b) of proposed Rule 11.6820 sets forth documentation
requirements with regard to clock synchronization. Specifically,
paragraph (b) requires Industry Members to document and maintain their
synchronization procedures for their Business Clocks. The proposed Rule
requires Industry Members to keep a log of the times when they
synchronize their Business Clocks and the results of the
synchronization process. This log is required to include notice of any
time a Business Clock drifts more than the applicable tolerance
specified in paragraph (a) of the proposed rule. Such logs must include
results for a period of not less than five years ending on the then
current date, or for the entire period for which the Industry Member
has been required to comply with this Rule if less than five years.
These documentation requirements are the same as those set forth in the
``Sequencing Orders and Clock Synchronization'' section of Appendix C
of the CAT NMS Plan. Moreover, these documentation requirements
regarding clock synchronization are comparable to those set forth in
Supplementary Material .01 of FINRA Rule 4590 (Synchronization of
Member Business Clocks).
    Paragraph (c) of proposed Rule 11.6820 sets forth certification
requirements with regard to clock synchronization. Specifically,
paragraph (c) of proposed Rule 11.6820 requires each Industry Member to
certify to the Exchange that its Business Clocks satisfy the
synchronization requirements set forth in paragraph (a) of proposed
Rule 11.6820 periodically in accordance with the certification schedule
established by the Operating Committee pursuant to the CAT NMS Plan.
This requirement is the same requirement as set forth in Section
6.8(a)(ii)(B), (iii) and (iv) of the CAT NMS Plan. The Exchange intends
to announce to its Industry Members the certification schedule
established by the Operating Committee via Trader Update.
    Paragraph (d) of proposed Rule 11.6820 establishes reporting
requirements with regard to clock synchronization. Paragraph (d) of
proposed Rule 11.6820 requires Industry Members to report to the Plan
Processor and the Exchange violations of paragraph (a) of this Rule
pursuant to the thresholds set by the Operating Committee pursuant to
the CAT NMS Plan. This requirement is the same requirement as set forth
in Section 6.8(a)(ii)(C), (iii) and (iv) of the CAT NMS Plan. The
Exchange intends to announce to its Industry Members the relevant
thresholds established by the Operating Committee via Trader Update.
(iii) Industry Member Data Reporting
    SEC Rule 613(c) under Regulation NMS requires the CAT NMS Plan to
set forth certain provisions requiring Industry Members to record and
report data to the CAT. To comply with this provision, Section 6.4 of
the CAT NMS Plan sets forth the data reporting requirements for
Industry Members. To implement these provisions with regard to its
Industry Members, the Exchange proposes Rule 11.6830 (Consolidated
Audit Trail--Industry Member Data Reporting) to require Industry
Members to comply with the Industry Member Data reporting requirements
of the Plan. Proposed Rule 11.6830 has six sections covering (1)
recording and reporting Industry Member Data, (2) timing of the
recording and reporting, (3) the applicable securities covered by the
recording and reporting requirements, (4) format, (5) the security
symbology to be used in the recording and reporting, and (6) error
correction requirements, each of which is described below.
(A) Recording and Reporting Industry Member Data
    Paragraph (a) of proposed Rule 11.6830 describes the recording and
reporting of Industry Member Data to the Central Repository. Paragraph
(a) consists of paragraphs (a)(1)-(a)(3), which cover Recorded Industry
Member Data, Received Industry Member Data and Options Market Maker
data, respectively. Paragraphs (a)(1)-(a)(3) of proposed Rule 11.6830
set forth the recording and reporting requirements required in Section
6.4(d)(i)-(iii) of the CAT NMS Plan, respectively.
    Paragraph (a)(1) requires, subject to paragraph (a)(3) regarding
Options Market Makers, each Industry Member to record and
electronically report to the Central Repository the following details
for each order and each Reportable Event, as applicable (``Recorded
Industry Member Data'') in the manner prescribed by the Operating
Committee pursuant to the CAT NMS Plan:
     For original receipt or origination of an order: (1) Firm
Designated ID(s) for each Customer; (2) CAT-Order-ID; (3) SRO-Assigned
Market Participant Identifier of the Industry Member receiving or
originating the order; (4) date of order receipt or origination; (5)
time of order receipt or origination (using timestamps pursuant to
proposed Rule 11.6860); and (6) Material Terms of the Order;
     for the routing of an order: (1) CAT-Order-ID; (2) date on
which the order is routed; (3) time at which the order is routed (using
timestamps pursuant to proposed Rule 11.6860); (4) SRO-

Assigned Market Participant Identifier of the Industry Member routing
the order; (5) SRO-Assigned Market Participant Identifier of the
Industry Member or Participant to which the order is being routed; (6)
if routed internally at the Industry Member, the identity and nature of
the department or desk to which the order is routed; and (7) Material
Terms of the Order;
     for the receipt of an order that has been routed, the
following information: (1) CAT-Order-ID; (2) date on which the order is
received; (3) time at which the order is received (using timestamps
pursuant to proposed Rule 11.6860); (4) SRO-Assigned Market Participant
Identifier of the Industry Member receiving the order; (5) SRO-Assigned
Market Participant Identifier of the Industry Member or Participant
routing the order; and (6) Material Terms of the Order;
     if the order is modified or cancelled: (1) CAT-Order-ID;
(2) date the modification or cancellation is received or originated;
(3) time at which the modification or cancellation is received or
originated (using timestamps pursuant to proposed Rule 11.6860); (4)
price and remaining size of the order, if modified; (5) other changes
in the Material Terms of the Order, if modified; and (6) whether the
modification or cancellation instruction was given by the Customer or
was initiated by the Industry Member;
     if the order is executed, in whole or in part: (1) CAT-
Order-ID; (2) date of execution; (3) time of execution (using
timestamps pursuant to proposed Rule 11.6860; (4) execution capacity
(principal, agency or riskless principal); (5) execution price and
size; (6) SRO-Assigned Market Participant Identifier of the Industry
Member executing the order; (7) whether the execution was reported
pursuant to an effective transaction reporting plan or the Plan for
Reporting of Consolidated Options Last Sale Reports and Quotation
Information; and
     other information or additional events as may be
prescribed pursuant to the CAT NMS Plan.
    Paragraph (a)(2) of proposed Rule 11.6830 requires, subject to
paragraph (a)(3) regarding Options Market Makers, each Industry Member
to record and report to the Central Repository the following, as
applicable (``Received Industry Member Data'' and collectively with the
information referred to in proposed Rule 11.6830(a)(1) ``Industry
Member Data'')) in the manner prescribed by the Operating Committee
pursuant to the CAT NMS Plan:
     If the order is executed, in whole or in part: (1) An
Allocation Report; (2) SRO-Assigned Market Participant Identifier of
the clearing broker or prime broker, if applicable; and (3) CAT-Order-
ID of any contra-side order(s);
     if the trade is cancelled, a cancelled trade indicator;
and
     for original receipt or origination of an order, the Firm
Designated ID for the relevant Customer, and in accordance with
proposed Rule 11.6840, Customer Account Information and Customer
Identifying Information for the relevant Customer.
    Paragraph (a)(3) of proposed Rule 11.6830 states that each Industry
Member that is an Options Market Maker is not required to report to the
Central Repository the Industry Member Data regarding the routing,
modification or cancellation of its quotes in Listed Options. Each
Industry Member that is an Options Market Maker, however, is required
to report to the Exchange the time at which its quote in a Listed
Option is sent to the Exchange (and, if applicable, any subsequent
quote modification time and/or cancellation time when such modification
or cancellation is originated by the Options Market Maker). This
paragraph implements the Options Market Maker Quote Exemption, as
discussed above.
(B) Timing of Recording and Reporting
    Paragraph (b) of proposed Rule 11.6830 describes the requirements
related to the timing of recording and reporting of Industry Member
Data. Paragraphs (b)(1)-(b)(3) of proposed Rule 11.6830 set forth the
requirements related to the timing of the recording and reporting
requirements required in Section 6.4(b)(i)-(ii) of the CAT NMS Plan.
    Paragraph (b)(1) of proposed Rule 11.6830 requires each Industry
Member to record Recorded Industry Member Data contemporaneously with
the applicable Reportable Event. Paragraph (b)(2) of proposed Rule
11.6830 requires each Industry Member to report: (1) Recorded Industry
Member Data to the Central Repository by 8:00 a.m. Eastern Time on the
Trading Day following the day the Industry Member records such Recorded
Industry Member Data; and (2) Received Industry Member Data to the
Central Repository by 8:00 a.m. Eastern Time on the Trading Day
following the day the Industry Member receives such Received Industry
Member Data. Paragraph (b)(3) of proposed Rule 11.6830 states that
Industry Members may, but are not required to, voluntarily report
Industry Member Data prior to the applicable 8:00 a.m. Eastern Time
deadline.
(C) Applicable Securities
    Paragraph (c) of proposed Rule 11.6830 describes the securities to
which the recording and reporting requirements of proposed Rule 11.6830
apply. Paragraphs (c)(1) and (c)(2) of proposed Rule 11.6830 set forth
the description of applicable securities as set forth in Section
6.4(c)(i) and (ii) of the CAT NMS Plan, respectively. Paragraph (c)(1)
of proposed Rule 11.6830 requires each Industry Member to record and
report to the Central Repository the Industry Member Data as set forth
in paragraph (a) of proposed Rule 11.6830 for each NMS Security
registered or listed for trading on such exchange or admitted to
unlisted trading privileges on such exchange. Paragraph (c)(2) of
proposed Rule 11.6830 requires each Industry Member to record and
report to the Central Repository the Industry Member Data as set forth
in paragraph (a) of this proposed Rule 11.6830 for each Eligible
Security for which transaction reports are required to be submitted to
FINRA.
(D) Security Symbology
    Paragraph (d) of proposed Rule 11.6830 describes the security
symbology that Industry Members are required to use when reporting
Industry Member Data to the Central Repository. Paragraph (d)(1) of
proposed Rule 11.6830 requires, for each exchange-listed Eligible
Security, each Industry Member to report Industry Member Data to the
Central Repository using the symbology format of the exchange listing
the security. This requirement implements the requirement set forth in
Section 2 of Appendix D of the CAT NMS Plan to use the listing exchange
symbology when reporting data to the Central Repository for exchange-
listed Eligible Securities.
    For each Eligible Security that is not exchange-listed, however,
there is no listing exchange to provide the symbology format. Moreover,
to date, the requisite symbology format has not been determined.
Therefore, paragraph (d)(2) of proposed Rule 11.6830 requires, for each
Eligible Security that is not exchange-listed, each Industry Member to
report Industry Member Data to the Central Repository using such
symbology format as approved by the Operating Committee pursuant to the
CAT NMS Plan. The Exchange intends to announce to its Industry Members
the relevant symbology formats established by the Operating Committee
via Trader Update.

(E) Error Correction
    To ensure that the CAT contains accurate data, the CAT NMS Plan
requires Industry Members to correct erroneous data submitted to the
Central Repository. Therefore, the Exchange proposes to adopt paragraph
(e) of proposed Rule 11.6830, which addresses the correction of
erroneous data reported to the Central Repository. Paragraph (e) of
proposed Rule 11.6830 requires, for each Industry Member for which
errors in Industry Member Data submitted to the Central Repository have
been identified by the Plan Processor or otherwise, that such Industry
Member submit corrected Industry Member Data to the Central Repository
by 8:00 a.m. Eastern Time on T+3. This requirement implements the error
correction requirement set forth in Section 6 of Appendix D of the CAT
NMS Plan.
(iv) Customer Information Reporting
    Section 6.4(d)(iv) of the CAT NMS Plan requires Industry Members to
submit to the Central Repository certain information related to their
Customers in accordance with the Customer Information Approach
discussed above. The Exchange proposes new Rule 11.6840 (Consolidated
Audit Trail--Customer Information Reporting) to implement this
provision of the CAT NMS Plan with regard to its Industry Members.
Specifically, paragraph (a) of proposed Rule 11.6840 requires each
Industry Member to submit to the Central Repository the Firm Designated
ID, Customer Account Information and Customer Identifying Information
for each of its Customers with an Active Account prior to such Industry
Member's commencement of reporting to the Central Repository and in
accordance with the deadlines set forth in proposed Rule 11.6880.
Paragraph (b) of proposed Rule 11.6840 requires each Industry Member to
submit to the Central Repository any updates, additions or other
changes to the Firm Designated ID, Customer Account Information and
Customer Identifying Information for each of its Customers with an
Active Account on a daily basis. Paragraph (c) of proposed Rule 11.6840
requires each Industry Member, on a periodic basis as designated by the
Plan Processor and approved by the Operating Committee, to submit to
the Central Repository a complete set of Firm Designated IDs, Customer
Account Information and Customer Identifying Information for each of
its Customers with an Active Account. This periodic refresh is intended
to ensure that the Central Repository has the most current information
identifying a Customer. The Exchange intends to announce to its
Industry Members when such a periodic refresh is required by the Plan
Processor and the Operating Committee via Trade Update.
    Paragraph (d) of proposed Rule 11.6840 addresses the correction of
erroneous Customer data reported to the Central Repository to ensure
and accurate audit trail. Paragraph (d) requires, for each Industry
Member for which errors in Firm Designated ID, Customer Account
Information and Customer Identifying Information for each of its
Customers with an Active Account submitted to the Central Repository
have been identified by the Plan Processor or otherwise, such CAT
Reporting Member to submit corrected data to the Central Repository by
5:00 p.m. Eastern Time on T+3. This requirements implements the error
correction requirement set forth in Appendix C of the CAT NMS Plan.
(v) Industry Member Information Reporting
    Section 6.4(d)(vi) of the CAT NMS Plan requires Industry Members to
submit to the Central Repository information sufficient to identify
such Industry Member, including CRD number and LEI, if such LEI has
been obtained in accordance with the Existing Identifier Approach
discussed above. The Exchange proposes Rule 11.6850 (Consolidated Audit
Trail--Industry Member Information Reporting) to implement this
provision of the CAT NMS Plan with regard to its Industry Members.
Specifically, proposed Rule 11.6850 requires each Industry Member to
submit to the Central Repository information sufficient to identify
such Industry Member, including CRD number and LEI, if such LEI has
been obtained prior to such Industry Member's commencement of reporting
to the Central Repository and in accordance with the deadlines set
forth in proposed Rule 11.6880, and keep such information up to date as
necessary.
(vi) Time Stamps
    SEC Rule 613(d)(3) under Regulation NMS sets forth requirements for
time stamps used by CAT Reporters in recording and reporting data to
the CAT.\26\ To comply with this provision, Section 6.8(b) of the Plan
sets forth time stamp requirements for Industry Members. To implement
this provision with regard to its Industry Members, the Exchange
proposes new Rule 11.6860 (Consolidated Audit Trail--Time Stamps) to
require its Industry Members to comply with the time stamp requirements
of the CAT NMS Plan.
---------------------------------------------------------------------------

    \26\ 17 CFR 242.613(d)(3).
---------------------------------------------------------------------------

    Paragraph (a) of proposed Rule 11.6860 sets forth the time stamp
increments to be used by Industry Members in their CAT reporting.
Paragraph (a)(1) of proposed Rule 11.6860 requires each Industry Member
to record and report Industry Member Data to the Central Repository
with time stamps in milliseconds, subject to paragraphs (a)(2) and (b)
of proposed Rule 11.6860. To the extent that any Industry Member's
order handling or execution systems utilize time stamps in increments
finer than milliseconds, paragraph (a)(2) of proposed Rule 11.6860
requires such Industry Member to record and report Industry Member Data
to the Central Repository with time stamps in such finer increment,
subject to paragraph (b) of proposed Rule 11.6860 regarding Manual
Order Events and Allocation Reports.
    Paragraph (b) of proposed Rule 11.6860 sets forth the permissible
time stamp increments for Manual Order Events and Allocation Reports.
Specifically, paragraph (b)(1) of proposed Rule 11.6860 permits each
Industry Member to record and report Manual Order Events to the Central
Repository in increments up to and including one second, provided that
each Industry Member is required to record and report the time when a
Manual Order Event has been captured electronically in an order
handling and execution system of such Industry Member (``Electronic
Capture Time'') in milliseconds. In addition, paragraph (b)(2) of
proposed Rule 11.6860 permits each Industry Member to record and report
the time of Allocation Reports in increments up to and including one
second.
(vii) Clock Synchronization Rule Violations
    Proposed Rule 11.6865 (Consolidated Audit Trail--Clock
Synchronization Rule Violations) describes potential violations of the
clock synchronization time period requirements set forth in the
proposed Rule 11.6800 Series. Proposed Rule 11.6865 states that an
Industry Member that engages in a pattern or practice of reporting
Reportable Events outside of the required clock synchronization time
period as set forth in this Rule Series without reasonable
justification or exceptional circumstances may be considered in
violation of this Rule. This provision implements the requirements of
Section 6.8 of the CAT NMS Plan which requires the Compliance Rule to
provide that a pattern or practice of reporting

events outside of the required clock synchronization time period
without reasonable justification or exceptional circumstances may be
considered a violation of SEC Rule 613 or the CAT NMS Plan.
(viii) Connectivity and Data Transmission
    Proposed Rule 11.6870 (Consolidated Audit Trail--Connectivity and
Data Transmission) addresses connectivity and data transmission
requirements related to the CAT. Paragraph (a) of proposed Rule 11.6870
describes the format(s) for reporting Industry Member Data to the
Central Repository, thereby implementing the formatting requirements as
set forth in Section 6.4(a) of the CAT NMS Plan. Specifically,
paragraph (a) of proposed Rule 11.6870 requires each Industry Member to
transmit data as required under the CAT NMS Plan to the Central
Repository utilizing such format(s) as may be provided by the Plan
Processor and approved by the Operating Committee.
    Paragraph (b) of proposed Rule 11.6870 addresses connectivity
requirements related to the CAT. Paragraph (b) of proposed Rule 11.6870
requires each Industry Member to connect to the Central Repository
using a secure method(s), including, but not limited to, private
line(s) and virtual private network connection(s). This provision
implements the connectivity requirements set forth in Section 4 of
Appendix D to the CAT NMS Plan.
    Paragraph (c) of proposed Rule 11.6870 permits Industry Members to
use CAT Reporting Agents to fulfill their data reporting obligations
related to the CAT. Paragraph (c) is based on FINRA Rule 7450(c), which
permits OATS Reporting Members to enter into agreements with Reporting
Agents to fulfill the OATS obligations of the OATS Reporting Member.
Specifically, Paragraph (c)(1) of proposed Rule 11.6870 states that any
Industry Member may enter into an agreement with a CAT Reporting Agent
pursuant to which the CAT Reporting Agent agrees to fulfill the
reporting obligations of such Industry Member under the proposed Rule
11.6800 Series. Any such agreement must be evidenced in writing, which
specifies the respective functions and responsibilities of each party
to the agreement that are required to effect full compliance with the
requirements of the proposed Rule 11.6800 Series. The Exchange notes
that, currently, no standardized form agreement for CAT Reporting Agent
arrangements has been adopted. Paragraph (c)(2) of proposed Rule
11.6870 requires that all written documents evidencing an agreement
with a CAT Reporting Agent be maintained by each party to the
agreement. Paragraph (c)(3) of proposed Rule 11.6870 states that each
Industry Member remains primarily responsible for compliance with the
requirements of the proposed Rule 11.6800 Series, notwithstanding the
existence of an agreement described in paragraph (c) of proposed Rule
11.6870.
(ix) Development and Testing
    The Exchange proposed Rule 11.6880 (Consolidated Audit Trail--
Development and Testing) to address requirements for Industry Members
related to CAT development and testing. Paragraph (a) of proposed Rule
11.6880 sets forth the testing requirements and deadlines for Industry
Members to develop and commence reporting to the Central Repository.
These requirements are set forth in Appendix C to the CAT NMS Plan.
    Paragraph (a)(1) sets forth the deadlines related to connectivity
and acceptance testing. Industry Members (other than Small Industry
Members) are required to begin connectivity and acceptance testing with
the Central Repository no later than August 15, 2018, and Small
Industry Members are required to begin connectivity and acceptance
testing with the Central Repository no later than August 15, 2019.
    Paragraph (a)(2) sets forth the deadlines related to reporting
Customer and Industry Member information. Paragraph (a)(2)(i) requires
Industry Members (other than Small Industry Members) to begin reporting
Customer and Industry Member information, as required by Rules
11.6840(a) and 11.6850, respectively, to the Central Repository for
processing no later than October 15, 2018. Paragraph (a)(2)(ii)
requires Small Industry Members to begin reporting Customer and
Industry Member information, as required by Rules 11.6840(a) and
11.6850, respectively, to the Central Repository for processing no
later than October 15, 2019.
    Paragraph (a)(3) sets forth the deadlines related to the submission
of order data. Under paragraph (a)(3)(i), Industry Members (other than
Small Industry Members) are permitted, but not required, to submit
order data for testing purposes beginning no later than May 15, 2018.
In addition, Industry Members (other than Small Industry Members) are
required to participate in the coordinated and structured testing of
order submission, which will begin no later than August 15, 2018. Under
paragraph (a)(3)(ii), Small Industry Members are permitted, but not
required, to submit order data for testing purposes beginning no later
than May 15, 2019. In addition, Small Industry Members are required to
participate in the coordinated and structured testing of order
submission, which will begin no later than August 15, 2019.
    Paragraph (a)(4) states that Industry Members are permitted, but
not required to, submit Quote Sent Times on Options Market Maker
quotes, beginning no later than October 15, 2018.
    Paragraph (b) of proposed Rule 11.6880 implements the requirement
under the CAT NMS Plan that Industry Members participate in required
industry testing with the Central Repository.\27\ Specifically,
proposed Rule 11.6880 requires that each Industry Member participate in
testing related to the Central Repository, including any industry-wide
disaster recovery testing, pursuant to the schedule established
pursuant to the CAT NMS Plan. The Exchange intends to announce to its
Industry Members the schedule established pursuant to the CAT NMS Plan
via Trader Update.
---------------------------------------------------------------------------

    \27\ See Approval Order, supra note 9, at 84725.
---------------------------------------------------------------------------

(x) Recordkeeping
    Proposed Rule 11.6890 (Consolidated Audit Trail--Recordkeeping)
sets forth the recordkeeping obligations related to the CAT for
Industry Members. Proposed Rule 11.6890 requires each Industry Member
to maintain and preserve records of the information required to be
recorded under the proposed Rule 11.6800 Series for the period of time
and accessibility specified in SEC Rule 17a-4(b). The records required
to be maintained and preserved under the proposed Rule 11.6800 Series
may be immediately produced or reproduced on ``micrographic media'' as
defined in SEC Rule 17a-4(f)(1)(i) or by means of ``electronic storage
media'' as defined in SEC Rule 17a-4(f)(1)(ii) that meet the conditions
set forth in SEC Rule 17a-4(f) and be maintained and preserved for the
required time in that form. Proposed Rule 11.6890 is based on FINRA
Rule 7440(a)(5), which sets forth the recordkeeping requirements
related to OATS.
(xi) Timely, Accurate and Complete Data
    SEC Rule 613 and the CAT NMS Plan emphasize the importance of the
timeliness, accuracy, completeness and integrity of the data submitted
to the

CAT.\28\ Accordingly, proposed Rule 11.6893 (Consolidated Audit Trail--
Timely, Accurate and Complete Data) implements this requirement with
regard to Industry Members. Paragraph (a) of proposed Rule 11.6893
requires that Industry Members record and report data to the Central
Repository as required by the proposed Rule 11.6800 Series in a manner
that ensures the timeliness, accuracy, integrity and completeness of
such data.
---------------------------------------------------------------------------

    \28\ See SEC Rule 613(e)(4)(i)(D)(ii); and Section 6.5(d) of the
CAT NMS Plan.
---------------------------------------------------------------------------

    In addition, without limiting the general requirement as set forth
in paragraph (a), paragraph (b) of proposed Rule 11.6893 requires
Industry Members to accurately provide the LEIs in their records as
required by the proposed Rule 11.6800 Series and states that Industry
Members may not knowingly submit inaccurate LEIs to the Central
Repository. Paragraph (b) notes, however, that this requirement does
not impose any additional due diligence obligations on Industry Members
with regard to LEIs for CAT purposes. Accordingly, this provision does
not impose any due diligence obligations beyond those that may exist
today with respect to information associated with an LEI. Although
Industry Members will not be required to perform additional with regard
to the LEIs for CAT purposes, Industry Members will be required to
accurately provide the LEIs in their records and may not knowingly
submit inaccurate LEIs to the CAT. Paragraph (b) is consistent with the
SEC's statements in the Approval Order for the CAT NMS Plan regarding
an Industry Member's obligations regarding LEIs.\29\
---------------------------------------------------------------------------

    \29\ See Approval Order, supra note 9, at 84745.
---------------------------------------------------------------------------

    Paragraph (c) of proposed Rule 11.6893 states that, if an Industry
Member reports data to the Central Repository with errors such that its
error percentage exceeds the maximum Error Rate established by the
Operating Committee pursuant to the CAT NMS Plan, then such Industry
Member would not be in compliance with the Rule 11.6800 Series. As
discussed above, the initial maximum Error Rate is 5%, although the
Error Rate is expected to be reduced over time. The Exchange intends to
announce to its Industry Members changes to the Error Rate established
pursuant to the CAT NMS Plan via Trader Update.
    Furthermore, paragraph (d) of proposed Rule 11.6893 addresses
Compliance Thresholds related to reporting data to the CAT. Paragraph
(c) of proposed Rule 11.6893 states that each Industry Member is
required to meet a separate compliance threshold which will be an
Industry Member-specific rate that may be used as the basis for further
review or investigation into the Industry Member's performance with
regard to the CAT (the ``Compliance Thresholds''). Compliance
Thresholds will compare an Industry Member's error rate to the
aggregate Error Rate over a period of time to be defined by the
Operating Committee. Compliance Thresholds will be set by the Operating
Committee, and will be calculated at intervals to be set by the
Operating Committee.\30\ Compliance Thresholds will include compliance
with the data reporting and clock synchronization requirements.
Proposed Rule 11.6893 states that an Industry Member's performance with
respect to its Compliance Threshold will not signify, as a matter of
law, that such Industry Member has violated this proposed Rule 11.6800
Series.
---------------------------------------------------------------------------

    \30\ See Appendix C of the CAT NMS Plan.
---------------------------------------------------------------------------

(xii) Compliance Dates
    Proposed Rule 11.6895 (Consolidated Audi Trail--Compliance Dates)
sets forth the compliance dates for the various provisions of proposed
Rules 11.6800 through 11.6895. Paragraphs (b) and (c) of this Rule set
forth the additional details with respect to the compliance date of the
proposed Rules 11.6800 through 11.6895. Unless otherwise noted,
proposed Rules 11.6800 through 11.6895 will be fully effective upon
approval by the Commission and OTP Holders must comply with their
terms.
    Paragraph (b) of proposed Rule 11.6895 establishes the compliance
dates for the clock synchronization requirements as set forth in
proposed Rule 11.6820. Paragraph (b)(1) of proposed Rule 11.6895 states
that each Industry Member shall comply with Rule 11.6820 with regard to
Business Clocks that capture time in milliseconds commencing on or
before March 15, 2017. Paragraph (b)(2) states that each Industry
Member shall comply with Rule 11.6820 with regard to Business Clocks
that do not capture time in milliseconds commencing on or before
February 19, 2018. The compliance date set forth in paragraph (b)(1)
reflects the exemptive relief requested by the Participants with regard
to the clock synchronization requirements related to Business Clocks
that do not capture time in milliseconds.\31\
---------------------------------------------------------------------------

    \31\ Concurrently with this filing, the Participants submitted a
request for exemptive relief from SEC Rule 613(a)(3)(ii) of
Regulation NMS under the Securities Exchange Act of 1934 and Section
6.7(a)(ii) of the CAT NMS Plan. See Letter from Participants to
Brent J. Fields, Secretary, Commission, dated January 17, 2017.
---------------------------------------------------------------------------

    Paragraph (c) of proposed Rule 11.6895 establishes the compliance
dates for the data recording and reporting requirements for Industry
Members. Paragraph (c)(1) of proposed Rule 11.6895 requires each
Industry Member (other than a Small Industry Members) to record and
report the Industry Member Data to the Central Repository by November
15, 2018. Paragraph (c)(2) of proposed Rule 11.6895 requires that each
Industry Member that is a Small Industry Member to record and report
the Industry Member Data to the Central Repository by November 15,
2019. Such compliance dates are consistent with the compliance dates
set forth in SEC Rule 613(a)(3)(v) and (vi), and Section 6.7(a)(v) and
(vi) of the CAT NMS Plan.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6(b)(5) of the Act,\32\ which require,
among other things, that the Exchange's rules must be designed to
prevent fraudulent and manipulative acts and practices, to promote just
and equitable principles of trade, and, in general, to protect
investors and the public interest, and Section 6(b)(8) of the Act,\33\
which requires that the Exchange's rules not impose any burden on
competition that is not necessary or appropriate.
---------------------------------------------------------------------------

    \32\ 15 U.S.C. 78f(b)(5).
    \33\ 15 U.S.C. 78f(b)(8).
---------------------------------------------------------------------------

    The Exchange believes that this proposal is consistent with the Act
because it implements, interprets or clarifies the provisions of the
Plan, and is designed to assist the Exchange and its Industry Members
in meeting regulatory obligations pursuant to the Plan. In approving
the Plan, the SEC noted that the Plan ``is necessary and appropriate in
the public interest, for the protection of investors and the
maintenance of fair and orderly markets, to remove impediments to, and
perfect the mechanism of a national market system, or is otherwise in
furtherance of the purposes of the Act.'' \34\ To the extent that this
proposal implements, interprets or clarifies the Plan and applies
specific requirements to Industry Members, the Exchange believes that
this proposal furthers the objectives of the Plan, as identified by the
SEC, and is therefore consistent with the Act.
---------------------------------------------------------------------------

    \34\ See Approval Order, supra note 9, at 84697.

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

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

    The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. The Exchange notes that the
proposed rule change implements provisions of the CAT NMS Plan, and is
designed to assist the Exchange in meeting its regulatory obligations
pursuant to the Plan. The Exchange also notes that the proposed Rule
Series implementing provisions of the CAT NMS Plan will apply equally
to all firms that trade NMS Securities and OTC Equity Securities. In
addition, all national securities exchanges and FINRA are proposing
this proposed Rule 11.6800 Series. Therefore, this is not a competitive
rule filing, and, therefore, it does not impose a burden on
competition.

C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others

    No written comments were solicited or received with respect to the
proposed rule change.

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

    Within 45 days of the date of publication of this notice in the
Federal Register or up to 90 days (i) as the Commission may designate
if it finds such longer period to be appropriate and publishes its
reasons for so finding or (ii) as to which the self-regulatory
organization consents, the Commission will:
    (A) By order approve or disapprove the proposed rule change, or
    (B) institute proceedings to determine whether the proposed rule
change should be disapproved.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-NYSEARCA-2017-03 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSEARCA-2017-03. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549 on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-NYSEARCA-2017-03 and should
be submitted on or before February 27, 2017.
---------------------------------------------------------------------------

    \35\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\35\
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-02377 Filed 2-3-17; 8:45 am]
 BILLING CODE 8011-01-P


Comment Info: =================

General Comment:The 75-day comment period does not allow sufficient time to develop meaningful or thoughtful responses to many of the questions raised in the proposed rule.  Accordingly, I respectfully urge the Agency extend the current comment period by, at the very least, an additional 105-days (so that comments would be due by October 22, 2014), to provide ample time for stakeholders to provide constructive and valuable feedback on the issues raised in the proposed rule.  I do not believe that such an extension would significantly delay any potential regulatory action on these important issues, and can only aid in providing the FDA with the information that it needs to regulate the growing refillable e-liquid industry in a responsible manner. Thank you.


[Federal Register Volume 85, Number 132 (Thursday, July 9, 2020)]
[Notices]
[Page 41237]
[FR Doc No: 2020-14812]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. EL20-54-000]

ISO New England Inc.; Notice of Institution of Section 206
Proceeding and Refund Effective Date

    On July 1, 2020, the Commission issued an order in Docket No. EL20-
54-000, pursuant to section 206 of the Federal Power Act (FPA), 16
U.S.C. 824e (2018), instituting an investigation into whether ISO-NE's
new entrant pricing rules may be unjust and unreasonable. ISO New
England Inc., 172 FERC ] 61,005 (2020).
    The refund effective date in Docket No. EL20-54-000, established
pursuant to section 206(b) of the FPA, will be the date of publication
of this notice in the Federal Register.
    Any interested person desiring to be heard in Docket No. EL20-54-
000 must file a notice of intervention or motion to intervene, as
appropriate, with the Federal Energy Regulatory Commission, 888 First
Street NE, Washington, DC 20426, in accordance with Rule 214 of the
Commission's Rules of Practice and Procedure, 18 CFR 385.214 (2019),
within 21 days of the date of issuance of the order.

    Dated: July 2, 2020.
Kimberly D. Bose,
Secretary.
[FR Doc. 2020-14812 Filed 7-8-20; 8:45 am]
BILLING CODE 6717-01-P