initial burden hours for two market data aggregators would be 4,400
burden hours,\1444\ and that total initial external costs would be
$1,653,500 for two market data aggregators to modify their systems to
comply with Rules 614(d)(1) through (4).\1445\
---------------------------------------------------------------------------

    \1439\ The Commission estimated the monetized initial burden for
this requirement to be $697,150. These estimates were initially
based on discussions with a market participant, modified as
discussed above: [(Sr. Programmer at $332/hour for 1,050 hours) +
(Sr. Systems Analyst at $285/hour for 900 hours) + (Compliance
Manager at $310/hour for 100 hours) + (Director of Compliance at
$489/hour for 50 hours) + (Compliance Attorney at $366/hour for 100
hours)] = 2,200 initial burden hours to upgrade existing systems to
comply with Rules 614(d)(1) through (4). The Commission derived this
estimate based on per hour figures from SIFMA's Management &
Professional Earnings in the Securities Industry 2013, modified by
Commission staff to account for an 1,800-hour work-year and
inflation, and multiplied by 5.35 to account for bonuses, firm size,
employee benefits, and overhead.
    \1440\ This estimate was originally based on discussions with a
market participant and the Commission's understanding of hardware
costs. The Commission has increased this estimated cost by three
times because the Commission believes competing consolidators may
potentially build aggregation systems in three data centers.
    \1441\ This estimate is based on an estimated $48,500 in initial
co-location fees as calculated from NYSE Price List 2020, multiplied
by four exchange data centers. The Commission believes that the
market data aggregators would already be co-located at the four
exchange data centers, which may lower this estimate. See NYSE Price
List 2020, supra note 1434.
    \1442\ As it did in the Proposing Release, the Commission is
using the monthly market data access and redistribution fees charged
by the CTA/CQ SIP and Nasdaq UTP SIP as the basis of this estimate
($14,000).
    \1443\ The Commission estimated that each market data
aggregation firm would incur the following initial external costs:
[($618,750 to modify systems to comply with Rules 614(d)(1) through
(4)) + ($14,000 to purchase market data) + ($194,000 to establish
co-location connectivity within four exchange data centers)] =
$826,750.
    \1444\ The Commission estimated the monetized initial burden for
this requirement to be $1,394,300. These estimates were initially
based on discussions with a market participant, modified as
discussed above: [(Sr. Programmer at $332/hour for 1,050 hours) +
(Sr. Systems Analyst at $285/hour for 900 hours) + (Compliance
Manager at $310/hour for 100 hours) + (Director of Compliance at
$489/hour for 50 hours) + (Compliance Attorney at $366/hour for 100
hours)] x [(2 market data aggregation firms)] = 4,400 initial burden
hours across the market data aggregation firms.
    \1445\ The Commission estimated that market data aggregation
firms would incur the following initial external costs: [($618,750)
to modify systems to comply with Rules 614(d)(1) through (4)) +
($14,000 to purchase market data) + ($194,000 to establish co-
location connectivity within four exchange data centers)] x [(2
market data aggregation firms)] = $1,653,500.
---------------------------------------------------------------------------

(c) Initial Burden and Costs for Broker-Dealers That Aggregate Market
Data
(i) Proposed Estimates--Initial Burden and Costs
    In the Proposing Release, the Commission estimated that each
broker-dealer that aggregates market data for internal uses that
chooses to become a competing consolidator would incur burden hours to
upgrade its systems to comply with Rules 614(d)(1) through (4) as well
as external costs associated with such upgrades, including co-location
fees at the exchange data centers and the cost of market data.
Specifically, the Commission estimated that each broker-dealer would
incur 900 initial burden hours \1446\ and $206,250 in external costs
\1447\ to modify its systems to comply with Rules 614(d)(1) through
(4). Additionally, the Commission estimated that a broker-dealer would
incur initial external costs of $14,000 to purchase market data from
the SROs,\1448\ and an additional initial external cost of $194,000 to
co-locate itself at four exchange data centers,\1449\ for a total
initial external cost of $414,250 per broker-dealer,\1450\ and an
aggregate estimate of 1,800 initial burden hours \1451\ and $828,500 in
initial external costs.\1452\
---------------------------------------------------------------------------

    \1446\ The Commission estimated the monetized initial burden for
this requirement to be $293,750. The Commission reached the
following hourly estimates: [(Sr. Programmer at $332/hour for 350
hours) + (Sr. Systems Analyst at $285/hour for 300 hours) +
(Compliance Manager at $310/hour for 100 hours) + (Director of
Compliance at $489/hour for 50 hours) + (Compliance Attorney at
$366/hour for 100 hours)] = 6 months (900 burden hours) to upgrade
existing systems to comply with Rules 614(d)(1) through (4). The
Commission derived this estimate based on discussions with a market
participant and per hour figures from SIFMA's Management &
Professional Earnings in the Securities Industry 2013, modified by
Commission staff to account for a 1,800-hour work-year and
inflation, and multiplied by 5.35 to account for bonuses, firm size,
employee benefits, and overhead.
    \1447\ This estimate was based on discussions with a market
participant and the Commission's understanding of hardware costs.
    \1448\ The Commission used the monthly market data access and
redistribution fees currently charged by the CTA/CQ SIP and Nasdaq
UTP SIP as the basis of this estimate ($14,000).
    \1449\ This estimate was based on an estimated $48,500 in
initial co-location fees as calculated from NYSE Price List 2020,
multiplied by four exchange data centers. See NYSE Price List 2020,
supra note 1434.
    \1450\ $414,250 = [($206,250 in initial external costs to modify
systems to comply with Rules 614(d)(1) through (4)) + ($14,000 for
the first month of market data costs) + ($194,000 in initial co-
location costs at four exchange data centers)].
    \1451\ The Commission estimates the monetized initial burden for
this requirement to be $587,500. Based on discussions with a market
participant, the Commission reached the following estimates: [(Sr.
Programmer at $332/hour for 350 hours) + (Sr. Systems Analyst at
$285/hour for 300 hours) + (Compliance Manager at $310/hour for 100
hours) + (Director of Compliance at $489/hour for 50 hours) +
(Compliance Attorney at $366/hour for 100 hours)] x [(2 broker-
dealers)] = 1,800 initial burden hours across the broker-dealers.
    \1452\ The Commission preliminarily estimates that broker-
dealers would incur the following initial external costs: [($206,250
to modify systems to comply with Rules 614(d)(1) through (4)) +
($14,000 to purchase market data) + ($194,000 to co-locate within
four exchange data centers) x (2 broker-dealers)] = $828,500.
---------------------------------------------------------------------------

(ii) Comments/Responses on Initial Burden and Costs
    In response to the commenter that believed that the estimated costs
incurred by potential competing consolidators to build or upgrade
systems to comply with proposed Rules 614(d)(1) through (4) should be
increased,\1453\ the Commission is modifying its initial burden and
cost estimates for broker-dealers that aggregate market data, as
discussed below.
---------------------------------------------------------------------------

    \1453\ IDS Letter I at 13, n. 38.
---------------------------------------------------------------------------

(iii) Adopted Estimates--Initial Burden and Costs
    The Commission is increasing its estimated initial costs and
associated burden hours for broker-dealers that aggregate market data
for internal use to modify their systems comply with Rules 614(d)(1)
through (4). The Commission preliminarily believed that the initial
burden hour and external cost estimates for these broker-dealers to
modify their systems to comply with Rules 614(d)(1) through (4) would
be similar to market data aggregation firms because, for both types of
respondents, the scope of the systems changes and costs associated with
becoming competing consolidators would be comparable. The Commission
continues to believe this assumption is valid and is increasing its
estimates for these broker-dealers as it is doing for market data
aggregation firms. Most of these firms would have to spend substantial
time coding for the new technical changes and would likely not have all
of the components required to comply with Rules 614(d)(1) through (4).
Additionally, the Commission initially believed that competing
consolidators would build aggregation systems in a single data center;
however, the Commission now believes that competing consolidators may
build systems for aggregating data in more than one data center. The
Commission

believes broker-dealers that aggregate market data would likely incur
external costs greater than the Commission's estimate to buy new
technology (for example, hardware and network infrastructure). The
Commission is also revising its total initial burden hour and external
cost estimates across all broker-dealers that aggregate market data to
reflect a reduction in the number of potential competing consolidators
that are broker-dealers that aggregate market data.
    As it did for its market data aggregation firm estimates, the
Commission is increasing its estimated burden hours for Sr. Programmers
and Sr. Systems Analysts by three times as well as its estimated
external costs to be incurred by broker-dealers that aggregate market
data to purchase new technology to upgrade their systems to comply with
Rules 614(d)(1) through (4). The Commission estimates that each broker-
dealer that aggregates market data would incur 2,200 initial burden
hours to modify its systems to comply with Rules 614(d)(1) through
(4),\1454\ and initial external costs of $618,750 to purchase the
necessary technology to effect such modifications,\1455\ $194,000 to
establish co-location connectivity to the exchange data centers,\1456\
and $14,000 to purchase market data from the exchanges,\1457\ for a
total external cost to each broker-dealer that aggregates market data
of $826,750.\1458\ The Commission estimates that the total initial
burden hours for one broker-dealers that aggregates market data would
be 2,200 burden hours,\1459\ and that total initial external costs
would be $826,750 for one broker-dealer that aggregates market data to
modify its systems to comply with Rules 614(d)(1) through (4).\1460\
---------------------------------------------------------------------------

    \1454\ The Commission estimated the monetized initial burden for
this requirement to be $697,150. These estimates were initially
based on discussions with a market participant, modified as
discussed above: [(Sr. Programmer at $332/hour for 1,050 hours) +
(Sr. Systems Analyst at $285/hour for 900 hours) + (Compliance
Manager at $310/hour for 100 hours) + (Director of Compliance at
$489/hour for 50 hours) + (Compliance Attorney at $366/hour for 100
hours)] = 2,200 initial burden hours to upgrade existing systems to
comply with Rules 614(d)(1) through (4). The Commission derived this
estimate based on per hour figures from SIFMA's Management &
Professional Earnings in the Securities Industry 2013, modified by
Commission staff to account for an 1,800-hour work-year and
inflation, and multiplied by 5.35 to account for bonuses, firm size,
employee benefits, and overhead.
    \1455\ This estimate was originally based on discussions with a
market participant and the Commission's understanding of hardware
costs. The Commission has increased this estimated cost by three
times because the Commission believes competing consolidators may
potentially build aggregation systems in three data centers.
    \1456\ This estimate is based on an estimated $48,500 in initial
co-location fees as calculated from NYSE Price List 2020, multiplied
by four exchange data centers. See NYSE Price List 2020, supra note
1434.
    \1457\ As it did in the Proposing Release, the Commission is
using the monthly market data access and redistribution fees charged
by the CTA/CQ SIP and Nasdaq UTP SIP as the basis of this estimate
($14,000).
    \1458\ The Commission estimated that a broker-dealer that
aggregates market data would incur the following initial external
costs: [($618,750 to modify systems to comply with Rules 614(d)(1)
through (4)) + ($14,000 to purchase market data) + ($194,000 to
establish co-location connectivity within four exchange data
centers)] = $826,750.
    \1459\ The Commission estimated the monetized initial burden for
this requirement to be $697,150. These estimates were initially
based on discussions with a market participant, modified as
discussed above: [(Sr. Programmer at $332/hour for 1,050 hours) +
(Sr. Systems Analyst at $285/hour for 900 hours) + (Compliance
Manager at $310/hour for 100 hours) + (Director of Compliance at
$489/hour for 50 hours) + (Compliance Attorney at $366/hour for 100
hours)] x [(1 broker-dealer that aggregates market data)] = 2,200
total initial burden hours.
    \1460\ The Commission estimated that broker-dealers that
aggregate market data would incur the following total initial
external costs: [($618,750) to modify systems to comply with Rules
614(d)(1) through (4)) + ($14,000 to purchase market data) +
($194,000 to establish co-location connectivity within four exchange
data centers)] x [(1 broker-dealer that aggregates market data)] =
$826,750.
---------------------------------------------------------------------------

(d) Initial Burden and Costs for Exclusive SIPs
(i) Proposed Estimates--Initial Burden and Costs
    In the Proposing Release, the Commission estimated that the
exclusive SIPs may have to make a greater scope of changes to become
competing consolidators than market data aggregation firms. For this
reason, the Commission estimated initial burden hour and external cost
estimates that were higher than those estimated for market data
aggregation firms.\1461\ Specifically, the Commission estimated that
each exclusive SIP would incur 1,800 initial burden hours \1462\ and
$412,500 in external costs \1463\ to modify its systems to comply with
Rules 614(d)(1) through (4). Additionally, the Commission estimated
that an exclusive SIP would incur initial external costs of $14,000 to
purchase market data from the SROs,\1464\ and an additional initial
external cost of $194,000 to co-locate itself at four exchange data
centers,\1465\ for a total initial external cost of $620,500 per
existing exclusive SIP,\1466\ and an aggregate estimate of 3,600
initial burden hours \1467\ and $1,241,000 in initial external
costs.\1468\
---------------------------------------------------------------------------

    \1461\ In the Proposing Release, the Commission doubled its
initial burden hour and external cost estimates for a market data
aggregation firm to reach its initial burden hour and external cost
estimates for an exclusive SIP.
    \1462\ Based on discussions with a market participant, the
Commission reached the following estimates for a market data
aggregation firm: [(Sr. Programmer at $332/hour for 350 hours) +
(Sr. Systems Analyst at $285/hour for 300 hours) + (Compliance
Manager at $310/hour for 100 hours) + (Director of Compliance at
$489/hour for 50 hours) + (Compliance Attorney at $366/hour for 100
hours)] = 6 months (900 burden hours) to upgrade existing systems to
comply with Rules 614(d)(1) through (4). The Commission derived this
estimate based on per hour figures from SIFMA's Management &
Professional Earnings in the Securities Industry 2013, modified by
Commission staff to account for a 1,800-hour work-year and
inflation, and multiplied by 5.35 to account for bonuses, firm size,
employee benefits, and overhead. As noted above, the Commission
increased this initial burden hour estimate for the exclusive SIPs.
Therefore, the Commission estimated that each exclusive SIP will
incur 1,800 initial burden hours to upgrade its existing systems to
comply with Rules 614(d)(1) through (4) (or $587,500, as monetized).
    \1463\ As noted above, the Commission estimated the initial
external cost estimates to comply with Rules 614(d)(1) through (4)
to be higher for exclusive SIPs than for market data aggregation
firms. The Commission estimated that each exclusive SIP will incur
$412,500 in initial external costs to modify its systems to comply
with Rules 614(d)(1) through (4).
    \1464\ The Commission used the monthly market data access and
redistribution fees currently charged by the CTA/CQ SIP and Nasdaq
UTP SIP as the basis of this estimate ($14,000).
    \1465\ This estimate was based on an estimated $48,500 in
initial co-location fees as calculated from NYSE Price List 2020,
multiplied by four exchange data centers. See NYSE Price List 2020,
supra note 1434.
    \1466\ The Commission estimated that each exclusive SIP would
incur the following initial external costs: [($412,500 to modify
systems to comply with Rules 614(d)(1) through (4)) + ($14,000 to
purchase market data) + ($194,000 to co-locate within four exchange
data centers)] = $620,500.
    \1467\ Based on discussions with a market participant, the
Commission reached the following estimates for a market data
aggregation firm: [(Sr. Programmer at $332/hour for 350 hours) +
(Sr. Systems Analyst at $285/hour for 300 hours) + (Compliance
Manager at $310/hour for 100 hours) + (Director of Compliance at
$489/hour for 50 hours) + (Compliance Attorney at $366/hour for 100
hours)] = 900 initial burden hours across the market data
aggregation firms. As noted above, the Commission increased this
initial burden hour estimate to apply to the exclusive SIPs.
Therefore, the Commission preliminarily estimated that each
exclusive SIP will incur 1,800 initial burden hours to upgrade its
existing systems to comply with Rules 614(d)(1) through (4) (or
$587,500, as monetized). The aggregate initial burden hour estimate
for two exclusive SIPs would be [(1,800 initial burden hours) x (2
exclusive SIPs)] = 3,600 initial burden hours.
    \1468\ The Commission preliminarily estimated that the exclusive
SIPs would incur the following initial external costs: [($412,500 to
modify systems to comply with Rules 614(d)(1) through (4)) +
($14,000 to purchase market data) + ($194,000 to co-locate within
four exchange data centers)] x [(2 exclusive SIPs)] = $1,241,000.
---------------------------------------------------------------------------

(ii) Comments/Responses on Initial Burden and Costs
    In response to the commenter that believed that the estimated costs
incurred by potential competing consolidators to build or upgrade
systems to comply with proposed Rules 614(d)(1) through (4) should be
increased,\1469\ the Commission is

modifying its initial burden and cost estimates for the exclusive SIPs,
as discussed below.
---------------------------------------------------------------------------

    \1469\ IDS Letter I at 13, n. 38.
---------------------------------------------------------------------------

(iii) Adopted Estimates--Initial Burden and Costs
    The Commission is increasing its estimated initial costs and
associated burden hours for exclusive SIPs that choose to become
competing consolidators to upgrade their systems to comply with Rules
614(d)(1) through (4). The Commission preliminarily believed that the
exclusive SIPs would have to make a greater scope of changes to become
competing consolidators than market data aggregation firms. For this
reason, the Commission preliminarily estimated initial burden hour and
external cost estimates that were higher than those estimated for
market data aggregation firms.\1470\ The Commission continues to
believe that exclusive SIPs will have to make greater changes to their
systems than market data aggregation firms to comply with Rules
614(d)(1) through (4). However, like market data aggregation firms,
exclusive SIPs will have to spend substantial time coding for the new
technical changes and would likely not have all of the components
required to comply with Rules 614(d)(1) through (4). Additionally, the
Commission initially believed that competing consolidators would build
aggregation systems in a single data center; however, the Commission
now believes that competing consolidators may build systems for
aggregating data in more than one data center. The Commission believes
exclusive SIPs would likely incur external costs greater than the
Commission's estimate to buy new technology (for example, hardware and
network infrastructure).
---------------------------------------------------------------------------

    \1470\ See supra note 1461.
---------------------------------------------------------------------------

    As it did for its market data aggregation firm estimates, the
Commission is increasing its estimated burden hours for Sr. Programmers
and Sr. Systems Analysts employed by each exclusive SIP by three times,
as well as its estimated external costs to be incurred by the exclusive
SIPs to purchase new technology to upgrade their systems to comply with
Rules 614(d)(1) through (4). The Commission estimates that each
exclusive SIP would incur 4,400 initial burden hours to modify its
systems to comply with Rules 614(d)(1) through (4),\1471\ and initial
external costs of $1,237,500 to purchase the necessary technology to
effect such modifications,\1472\ $194,000 to establish co-location
connectivity to the exchange data centers,\1473\ and $14,000 to
purchase market data from the exchanges,\1474\ for a total external
cost to each exclusive SIP of $1,445,500.\1475\ The Commission
estimates that the total initial burden hours for two exclusive SIPs
would be 8,800 burden hours,\1476\ and that total initial external
costs would be $2,891,000 for two exclusive SIPs to modify their
systems to comply with Rules 614(d)(1) through (4).\1477\
---------------------------------------------------------------------------

    \1471\ The Commission estimated the monetized initial burden for
this requirement to be $1,394,300. These estimates were initially
based on discussions with a market participant, modified as
discussed above: [(Sr. Programmer at $332/hour for 2,100 hours) +
(Sr. Systems Analyst at $285/hour for 1,800 hours) + (Compliance
Manager at $310/hour for 200 hours) + (Director of Compliance at
$489/hour for 100 hours) + (Compliance Attorney at $366/hour for 200
hours)] = 4,400 initial burden hours to upgrade existing systems to
comply with Rules 614(d)(1) through (4). The Commission derived this
estimate based on per hour figures from SIFMA's Management &
Professional Earnings in the Securities Industry 2013, modified by
Commission staff to account for an 1,800-hour work-year and
inflation, and multiplied by 5.35 to account for bonuses, firm size,
employee benefits, and overhead.
    \1472\ This estimate was originally based on discussions with a
market participant and the Commission's understanding of hardware
costs. The Commission has increased this estimated cost by three
times because the Commission believes competing consolidators may
potentially build aggregation systems in three data centers.
    \1473\ This estimate is based on an estimated $48,500 in initial
co-location fees as calculated from NYSE Price List 2020, multiplied
by four exchange data centers. See NYSE Price List 2020, supra note
1434.
    \1474\ As it did in the Proposing Release, the Commission is
using the monthly market data access and redistribution fees charged
by the CTA/CQ SIP and Nasdaq UTP SIP as the basis of this estimate
($14,000).
    \1475\ The Commission estimated that each exclusive SIP would
incur the following initial external costs: [($1,237,500 to modify
systems to comply with Rules 614(d)(1) through (4)) + ($14,000 to
purchase market data) + ($194,000 to establish co-location
connectivity within four exchange data centers)] = $1,445,500.
    \1476\ The Commission estimated the monetized initial burden for
this requirement to be $1,394,300. These estimates were initially
based on discussions with a market participant, modified as
discussed above: [(Sr. Programmer at $332/hour for 2,100 hours) +
(Sr. Systems Analyst at $285/hour for 1,800 hours) + (Compliance
Manager at $310/hour for 200 hours) + (Director of Compliance at
$489/hour for 100 hours) + (Compliance Attorney at $366/hour for 200
hours)] x [(2 exclusive SIPs)] = 8,800 initial burden hours across
the exclusive SIPs.
    \1477\ The Commission estimated that the exclusive SIPs would
incur the following initial external costs: [($1,237,500 to modify
systems to comply with Rules 614(d)(1) through (4)) + ($14,000 to
purchase market data) + ($194,000 to establish co-location
connectivity within four exchange data centers)] x [(2 exclusive
SIPs)] = $2,891,000.
---------------------------------------------------------------------------

(e) Initial Burden and Costs for New Entrants
(i) Proposed Estimates--Initial Burden and Costs
    In the Proposing Release, the Commission estimated that each new
entrant would incur 3,600 initial burden hours \1478\ and $825,000 in
external costs \1479\ to build systems to comply with Rules 614(d)(1)
through (4). Additionally, the Commission estimated that a new entrant
would incur initial external costs of $14,000 to purchase market data
from the SROs,\1480\ and an additional initial external cost of
$194,000 to co-locate itself at four exchange data centers,\1481\ for a
total initial external cost of $1,033,000 per new entrant,\1482\ and an
aggregate estimate of 7,200 initial burden

hours \1483\ and $2,066,000 in initial external costs.\1484\
---------------------------------------------------------------------------

    \1478\ Based on discussions with a market participant, the
Commission reached the following estimates for a market data
aggregation firm: [(Sr. Programmer at $332/hour for 350 hours) +
(Sr. Systems Analyst at $285/hour for 300 hours) + (Compliance
Manager at $310/hour for 100 hours) + (Director of Compliance at
$489/hour for 50 hours) + (Compliance Attorney at $366/hour for 100
hours)] = 6 months (900 burden hours) to upgrade existing systems to
comply with Rules 614(d)(1) through (4). The Commission derived this
estimate based on per hour figures from SIFMA's Management &
Professional Earnings in the Securities Industry 2013, modified by
Commission staff to account for an 1,800-hour work-year and
inflation, and multiplied by 5.35 to account for bonuses, firm size,
employee benefits, and overhead. As noted above, the Commission
increased this initial burden hour estimate to apply to the new
entrants. Therefore, the Commission estimated that each new entrant
would incur 3,600 initial burden hours to build systems to comply
with Rules 614(d)(1) through (4) (or $1,175,000, as monetized).
    \1479\ As noted above, the Commission increased its initial
external cost estimates for market data aggregation firms to apply
to new entrants. In particular, the Commission estimated that each
new entrant will incur $825,000 in initial external costs to build
systems to comply with Rules 614(d)(1) through (4).
    \1480\ The Commission used the monthly market data access and
redistribution fees currently charged by the CTA/CQ SIP and Nasdaq
UTP SIP as the basis of this estimate ($14,000).
    \1481\ This estimate was based on an estimated $48,500 in
initial co-location fees as calculated from NYSE Price List 2020,
multiplied by four exchange data centers. See NYSE Price List 2020,
supra note 1434.
    \1482\ The Commission estimated that each new entrant would
incur the following initial external costs: [($825,000 to build
systems to comply with Rules 614(d)(1) through (4)) + ($14,000 to
purchase market data) + ($194,000 to co-locate within four exchange
data centers)] = $1,033,000.
    \1483\ Based on discussions with a market participant, the
Commission reached the following estimates for a market data
aggregation firm: [(Sr. Programmer at $332/hour for 350 hours) +
(Sr. Systems Analyst at $285/hour for 300 hours) + (Compliance
Manager at $310/hour for 100 hours) + (Director of Compliance at
$489/hour for 50 hours) + (Compliance Attorney at $366/hour for 100
hours)] = 900 initial burden hours. As noted above, the Commission
increased the per market data aggregation firm initial burden hour
estimate to apply to the new entrants. The Commission estimated that
each new entrant would incur 3,600 initial burden hours to build
systems to comply with Rules 614(d)(1) through (4) (or $1,175,000,
as monetized). [(3,600 burden hours) x (2 new entrants] = 7,200
hours (or $2,350,000 as monetized).
    \1484\ The Commission estimated that each new entrant would
incur the following initial external costs: [($825,000 to build
systems to comply with Rules 614(d)(1) through (d)(4)) + ($14,000 to
purchase market data) + ($194,000 to co-locate within four exchange
data centers) x (2 new entrants)] = $1,033,000. [($1,033,000 in
initial external costs) x (2 new entrants)] = $2,066,000.
---------------------------------------------------------------------------

(ii) Comments/Responses on Initial Burden and Costs
    In response to the commenter that believed that the estimated costs
incurred by potential competing consolidators to build or upgrade
systems to comply with proposed Rules 614(d)(1) through (4) should be
increased,\1485\ the Commission is modifying its initial burden and
cost estimates for new entrants, as discussed below.
---------------------------------------------------------------------------

    \1485\ IDS Letter I at 13, n. 38.
---------------------------------------------------------------------------

(iii) Adopted Estimates--Initial Burden and Costs
    The Commission is increasing its estimated initial costs and
associated burden hours for new entrants that choose to become
competing consolidators to build systems to comply with Rules 614(d)(1)
through (4). The Commission preliminarily estimated initial burden hour
and external cost estimates for new entrants that are higher than those
estimated for the potential entities, other than SROs, that may choose
to become competing consolidators. Because new entrants would be wholly
new to the business of consolidating market data, the Commission
continues to believe that new entrants would incur substantially higher
burden hours and external costs to build new systems to comply with
Rules 614(d)(1) through (4) than potential competing consolidators that
already collect and aggregate market data.\1486\ Additionally, the
Commission initially believed that competing consolidators would build
aggregation systems in a single data center; however, the Commission
now believes that competing consolidators may build systems for
aggregating data in more than one data center. The Commission is
increasing its estimated initial burden hours for new entrants to build
systems to comply with Rules 614(d)(1) through (4). The Commission also
believes new entrants would likely incur external costs greater than
the Commission's estimate to buy new technology (for example, hardware
and network infrastructure).
---------------------------------------------------------------------------

    \1486\ The Commission's assumption is supported by a commenter,
which stated, ``The incumbent SIPs, the Securities Industry
Automation Corporation (`SIAC') and Nasdaq UTP, will have a
significant competitive advantage over new entrants should they
chose [sic] to transition to Competing Consolidators. For example,
the incumbent SIPs will benefit from utilizing the existing
infrastructure, which was funded by industry participants, to
transform to a Competing Consolidator.'' MIAX Letter p. 2-3.
---------------------------------------------------------------------------

    As it did for its market data aggregation firm estimates, the
Commission is increasing its estimated burden hours for Sr. Programmers
and Sr. Systems Analysts by three times for new entrants, as well as
its estimated external costs to be incurred by new entrants to purchase
new technology to upgrade their systems to comply with Rules 614(d)(1)
through (4). The Commission estimates that each new entrant would incur
8,800 initial burden hours to build systems to comply with Rules
614(d)(1) through (4),\1487\ and initial external costs of $2,475,000
to purchase the necessary technology to build such systems,\1488\
$194,000 to establish co-location connectivity to the exchange data
centers,\1489\ and $14,000 to purchase market data from the
exchanges,\1490\ for a total external cost to each new entrant of
$2,683,000.\1491\ The Commission estimates that the total initial
burden hours for two new entrants would be 17,600 burden hours,\1492\
and that total initial external costs would be $5,366,000 for two new
entrants to build systems to comply with Rules 614(d)(1) through
(4).\1493\
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    \1487\ The Commission estimated the monetized initial burden for
this requirement to be $2,788,600. These estimates were initially
based on discussions with a market participant, modified as
discussed above: [(Sr. Programmer at $332/hour for 4,200 hours) +
(Sr. Systems Analyst at $285/hour for 3,600 hours) + (Compliance
Manager at $310/hour for 400 hours) + (Director of Compliance at
$489/hour for 200 hours) + (Compliance Attorney at $366/hour for 400
hours)] = 8,800 initial burden hours to build systems to comply with
Rules 614(d)(1) through (4). The Commission derived this estimate
based on per hour figures from SIFMA's Management & Professional
Earnings in the Securities Industry 2013, modified by Commission
staff to account for an 1,800-hour work-year and inflation, and
multiplied by 5.35 to account for bonuses, firm size, employee
benefits, and overhead.
    \1488\ This estimate was originally based on discussions with a
market participant and the Commission's understanding of hardware
costs. The Commission has increased this estimated cost by three
times because the Commission believes competing consolidators may
potentially build aggregation systems in three data centers.
    \1489\ This estimate is based on an estimated $48,500 in initial
co-location fees as calculated from NYSE Price List 2020, multiplied
by four exchange data centers. See NYSE Price List 2020, supra note
1434.
    \1490\ As it did in the Proposing Release, the Commission is
using the monthly market data access and redistribution fees charged
by the CTA/CQ SIP and Nasdaq UTP SIP as the basis of this estimate
($14,000).
    \1491\ The Commission estimated that each new entrant would
incur the following initial external costs: [($2,475,000 to build
systems to comply with Rules 614(d)(1) through (4)) + ($14,000 to
purchase market data) + ($194,000 to establish co-location
connectivity within four exchange data centers)] = $2,683,000.
    \1492\ The Commission estimated the monetized initial burden for
this requirement to be $5,577,200. These estimates were initially
based on discussions with a market participant, modified as
discussed above: [(Sr. Programmer at $332/hour for 4,200 hours) +
(Sr. Systems Analyst at $285/hour for 3,600 hours) + (Compliance
Manager at $310/hour for 400 hours) + (Director of Compliance at
$489/hour for 200 hours) + (Compliance Attorney at $366/hour for 200
hours)] x [(2 new entrants)] = 17,600 initial burden hours across
the new entrants.
    \1493\ The Commission estimated that the new entrants would
incur the following initial external costs: [($2,475,000 to build
systems to comply with Rules 614(d)(1) through (4)) + ($14,000 to
purchase market data) + ($194,000 to establish co-location
connectivity within four exchange data centers)] x [(2 new
entrants)] = $5,366,000.
---------------------------------------------------------------------------

(f) Initial Burden and Costs for SROs \1494\
---------------------------------------------------------------------------

    \1494\ See supra note 1394.
---------------------------------------------------------------------------

(i) Proposed Estimates--Initial Burden and Costs
    In the Proposing Release, the Commission estimated that each SRO
would incur 3,600 initial burden hours \1495\ and $825,000 in external
costs \1496\ to build systems to comply with Rules 614(d)(1) through
(4). Additionally, the Commission estimated

that an SRO would incur initial external costs of $14,000 to purchase
market data from the SROs,\1497\ and an additional initial external
cost of $194,000 to co-locate itself at four exchange data
centers,\1498\ for a total initial external cost of $1,033,000 per
SRO,\1499\ and an aggregate estimate of 14,400 initial burden hours
\1500\ and $4,132,000 in initial external costs.\1501\
---------------------------------------------------------------------------

    \1495\ Based on discussions with a market participant, the
Commission reached the following estimates for a market data
aggregation firm: [(Sr. Programmer at $332/hour for 350 hours) +
(Sr. Systems Analyst at $285/hour for 300 hours) + (Compliance
Manager at $310/hour for 100 hours) + (Director of Compliance at
$489/hour for 50 hours) + (Compliance Attorney at $366/hour for 100
hours)] = 6 months (900 burden hours) to upgrade existing systems to
comply with Rules 614(d)(1) through (4). The Commission derived this
estimate based on per hour figures from SIFMA's Management &
Professional Earnings in the Securities Industry 2013, modified by
Commission staff to account for an 1,800-hour work-year and
inflation, and multiplied by 5.35 to account for bonuses, firm size,
employee benefits, and overhead. As it did for its new entrant
estimates, the Commission increased this initial burden hour
estimate to apply to the SROs. Therefore, the Commission estimated
that each SRO will incur 3,600 initial burden hours to build systems
to comply with Rules 614(d)(1) through (4) (or $1,175,000, as
monetized).
    \1496\ As it did for its new entrant estimates, the Commission
increased its initial external cost estimates for market data
aggregation firms to apply to the SROs. Therefore, the Commission
estimated that each SRO will incur $825,000 in initial external
costs to build systems to comply with Rules 614(d)(1) through (4).
    \1497\ The Commission used the monthly market data access and
redistribution fees currently charged by the CTA/CQ SIP and Nasdaq
UTP SIP as the basis of this estimate ($14,000).
    \1498\ This estimate was based on an estimated $48,500 in
initial co-location fees as calculated from NYSE Price List 2020,
multiplied by four exchange data centers. See NYSE Price List 2020,
supra note 1434.
    \1499\ The Commission estimated that each SRO would incur the
following initial external costs: [($825,000 to build systems to
comply with Rules 614(d)(1) through (4)) + ($14,000 to purchase
market data) + ($194,000 to co-locate within four exchange data
centers)] = $1,033,000.
    \1500\ Based on discussions with a market participant, the
Commission reached the following estimates for a market data
aggregation firm: [(Sr. Programmer at $332/hour for 350 hours) +
(Sr. Systems Analyst at $285/hour for 300 hours) + (Compliance
Manager at $310/hour for 100 hours) + (Director of Compliance at
$489/hour for 50 hours) + (Compliance Attorney at $366/hour for 100
hours)] = 900 initial burden hours. As it did for its new entrant
estimates, the Commission increased the per market data aggregation
firm initial burden hour estimate to apply to the SROs. Therefore,
the Commission estimated that each SRO would incur 3,600 initial
burden hours to upgrade its existing systems to comply with Rules
614(d)(1) through (4) (or $1,175,000, as monetized). [(3,600 burden
hours) x (4 SROs)] = 14,400 hours (or $4,700,000 as monetized).
    \1501\ The Commission estimated that each SRO would incur the
following initial external costs: [($825,000 to build systems to
comply with Rules 614(d)(1) through (4)) + ($14,000 to purchase
market data) + ($194,000 to co-locate within four exchange data
centers)] = $1,033,000. [($1,033,000 in initial external costs) x (4
SROs)] = $4,132,000.
---------------------------------------------------------------------------

(ii) Comments/Responses on Initial Burden and Costs
    In response to the commenter that believed that the estimated costs
incurred by potential competing consolidators to build or upgrade
systems to comply with proposed Rules 614(d)(1) through (4) should be
increased,\1502\ the Commission is modifying its initial burden and
cost estimates for SROs, as discussed below.
---------------------------------------------------------------------------

    \1502\ IDS Letter I at 13.
---------------------------------------------------------------------------

(iii) Adopted Estimates--Initial Burden and Costs
    The Commission is increasing its estimated initial costs and
associated burden hours for SROs that choose to become competing
consolidators to build systems to comply with Rules 614(d)(1) through
(4).\1503\ The Commission initially believed and continues to believe
that these entities would have to build new systems to comply with
Rules 614(d)(1) through (4) and thus would incur initial burden hours
that are similar to new entrants. Because SROs that do not operate
exclusive SIPs would be wholly new to the business of consolidating
market data, these entities would likely incur substantially higher
burden hours and external costs to build new systems to comply with
Rules 614(d)(1) through (4) than potential competing consolidators that
already collect and aggregate market data. Additionally, the Commission
initially believed that competing consolidators would build aggregation
systems in a single data center; however, the Commission now believes
that competing consolidators may build systems for aggregating data in
more than one data center. The Commission is increasing its estimated
initial burden hours for SROs to build systems to comply with Rules
614(d)(1) through (4). The Commission also believes that SROs would
likely incur external costs greater than the Commission's estimate to
buy new technology (for example, hardware and network infrastructure).
The Commission is also revising its total initial burden hour and
external cost estimates across these entities to reflect a reduction in
the number of such competing consolidators.
---------------------------------------------------------------------------

    \1503\ See supra note 1394.
---------------------------------------------------------------------------

    As it did for its market data aggregation firm estimates, the
Commission is increasing its estimated burden hours for Sr. Programmers
and Sr. Systems Analysts by three times for SROs, as well as its
estimated external costs to be incurred by SROs to purchase new
technology to build systems to comply with Rules 614(d)(1) through (4).
The Commission estimates that each SRO would incur 8,800 initial burden
hours to build systems to comply with Rules 614(d)(1) through
(4),\1504\ and initial external costs of $2,475,000 to purchase the
necessary technology to build such systems,\1505\ $194,000 to establish
co-location connectivity to the exchange data centers,\1506\ and
$14,000 to purchase market data from the exchanges,\1507\ for a total
external cost to each SRO of $2,683,000.\1508\ The Commission estimates
that the total initial burden hours for one SRO would be 8,800 burden
hours \1509\ and that total initial external costs would be $2,683,000
for one SRO to build systems to comply with Rules 614(d)(1) through
(4).\1510\
---------------------------------------------------------------------------

    \1504\ The Commission estimates the monetized initial burden for
this requirement to be $2,788,600. These estimates were initially
based on discussions with a market participant, modified as
discussed above: [(Sr. Programmer at $332/hour for 4,200 hours) +
(Sr. Systems Analyst at $285/hour for 3,600 hours) + (Compliance
Manager at $310/hour for 400 hours) + (Director of Compliance at
$489/hour for 200 hours) + (Compliance Attorney at $366/hour for 400
hours)] = 8,800 initial burden hours to build systems to comply with
Rules 614(d)(1) through (4). The Commission derived this estimate
based on per hour figures from SIFMA's Management & Professional
Earnings in the Securities Industry 2013, modified by Commission
staff to account for an 1,800-hour work-year and inflation, and
multiplied by 5.35 to account for bonuses, firm size, employee
benefits, and overhead.
    \1505\ This estimate was originally based on discussions with a
market participant and the Commission's understanding of hardware
costs. The Commission has increased this estimated cost by three
times because the Commission believes competing consolidators may
potentially build aggregation systems in three data centers.
    \1506\ This estimate is based on an estimated $48,500 in initial
co-location fees as calculated from NYSE Price List 2020, multiplied
by four exchange data centers. See NYSE Price List 2020, supra note
1434.
    \1507\ As it did in the Proposing Release, the Commission is
using the monthly market data access and redistribution fees charged
by the CTA/CQ SIP and Nasdaq UTP SIP as the basis of this estimate
($14,000).
    \1508\ The Commission estimates that each SRO would incur the
following initial external costs: [($2,475,000 to build systems to
comply with Rules 614(d)(1) through (4)) + ($14,000 to purchase
market data) + ($194,000 to establish co-location connectivity
within four exchange data centers)] = $2,683,000.
    \1509\ The Commission estimates the total monetized initial
burden for this requirement to be $2,788,600. These estimates were
initially based on discussions with a market participant, modified
as discussed above: [(Sr. Programmer at $332/hour for 4,200 hours) +
(Sr. Systems Analyst at $285/hour for 3,600 hours) + (Compliance
Manager at $310/hour for 400 hours) + (Director of Compliance at
$489/hour for 200 hours) + (Compliance Attorney at $366/hour for 400
hours)] x [(1 SRO)] = 8,800 total initial burden hours.
    \1510\ The Commission estimates that SROs would incur the
following total initial external costs: [($2,475,000 to build
systems to comply with Rules 614(d)(1) through (4)) + ($14,000 to
purchase market data) + ($194,000 to establish co-location
connectivity within four exchange data centers)] x [(1 SRO)] =
$2,683,000.
---------------------------------------------------------------------------

(g) Ongoing Burden and Costs for Competing Consolidators
(i) Proposed Estimates--Ongoing Burden and Costs
    In the Proposing Release, the Commission estimated that once a
competing consolidator's system had been built, all types of entities
that could become a competing consolidators (i.e., existing market data
aggregation firms, broker-dealers that aggregate market data, exclusive
SIPs, new entrants, and SROs) would incur annual ongoing burden hours
and external costs to operate and maintain their systems to comply with
Rules 614(d)(1) through (4) and that the annual ongoing burdens would
be similar for all types of competing consolidators because such
systems would likely be similar in nature. Therefore, the Commission
estimated the same annual ongoing burden hours

and external costs for the five types of entities that the Commission
anticipated may choose to become competing consolidators.
    Competing consolidators would incur annual ongoing burden hours and
external costs to operate and maintain their modified systems to comply
with Rules 614(d)(1) through (4). Specifically, the Commission
estimated that each entity would incur 540 annual ongoing burden hours
\1511\ and $123,725 in annual ongoing external costs \1512\ to operate
and maintain its systems to comply with Rules 614(d)(1) through (4).
---------------------------------------------------------------------------

    \1511\ The Commission estimated that once a competing
consolidator's infrastructure was in place, the burden of operating
and maintaining the infrastructure would be less than the burdens
associated with establishing the infrastructure. The Commission
estimated the monetized initial burden for this requirement to be
$176,250. The Commission derived this estimate based on per hour
figures from SIFMA's Management & Professional Earnings in the
Securities Industry 2013, modified by Commission staff to account
for an 1,800-hour work-year and inflation, and multiplied by 5.35 to
account for bonuses, firm size, employee benefits, and overhead:
[(Sr. Programmer at $332 for 210 hours) + (Sr. Systems Analyst at
$285 for 180 hours) + (Compliance Manager at $310 for 60 hours) +
(Director of Compliance at $489 for 30 hours) + (Compliance Attorney
at $366 for 60 hours)] = 540 burden hours per entity and $176,250.
    \1512\ This estimate was based on the initial external cost
estimate for a market data aggregation firm to modify its systems to
comply with Rules 614(d)(1) through (4), but reduced because the
Commission estimated that once a competing consolidator's
infrastructure was in place, the burden of operating and maintaining
the infrastructure would be less than the burdens associated with
establishing the infrastructure.
---------------------------------------------------------------------------

    Further, the Commission estimated that each competing consolidator
would incur annual ongoing external costs of $168,000 to purchase
market data from the SROs,\1513\ and an additional annual ongoing
external cost of $4,602,720 to co-locate itself at four exchange data
centers,\1514\ for a total annual ongoing external cost of $4,894,445
per entity.\1515\ In the Proposing Release, the Commission estimated
that there would be two entities per category of potential competing
consolidators for existing market data aggregators, broker-dealers that
currently aggregate market data, exclusive SIPs, and new entrants, and
that for each of these categories, the aggregate estimates would amount
to estimate of 1,080 annual ongoing burden hours \1516\ and $9,797,530
in annual ongoing external costs.\1517\ In addition, the Commission
estimated that there would be four SROs that would become a competing
consolidator and that the SROs would incur an aggregate estimate of
2,160 annual ongoing burden hours \1518\ and $19,577,780 in annual
ongoing external costs.\1519\
---------------------------------------------------------------------------

    \1513\ The Commission used the monthly market data access and
redistribution fees currently charged by the CTA/CQ SIP and Nasdaq
UTP SIP as the basis of this estimate ($14,000), multiplied by 12
months.
    \1514\ This estimate was based on an estimated $95,890 in
monthly co-location fees as calculated from NYSE Price List 2020,
multiplied by four exchange data centers over 12 months. The
Commission estimated that the market data aggregators would already
be co-located at the four exchange data centers, which may lower
this estimate for this category of respondent. See NYSE Price List
2020, supra note 1434.
    \1515\ $4,894,445 = [($123,725 to operate and maintain systems
to comply with Rules 614(d)(1) through (4)) + ($168,000 in monthly
market data fees over 12 months) + ($4,602,720 to co-locate within
four exchange data centers over 12 months)].
    \1516\ The Commission estimated the monetized annual ongoing
burden for this requirement to be $352,500. The Commission derived
this estimate based on per hour figures from SIFMA's Management &
Professional Earnings in the Securities Industry 2013, modified by
Commission staff to account for an 1,800-hour work-year and
inflation, and multiplied by 5.35 to account for bonuses, firm size,
employee benefits, and overhead: [(Sr. Programmer at $332 for 210
hours) + (Sr. Systems Analyst at $285 for 180 hours) + (Compliance
Manager at $310 for 60 hours) + (Director of Compliance at $489 for
30 hours) + (Compliance Attorney at $366 for 60 hours)] x [(2 market
data aggregation firms/broker-dealers that currently aggregate
market data/exclusive SIPs/new entrants)] = 1,080 annual ongoing
burden hours and $352,500.
    \1517\ The Commission estimated that the market data aggregation
firms/broker-dealers that currently aggregate market data for their
own usage/exclusive SIPs/new entrants would incur the following
aggregate annual ongoing external costs: [($123,725 to operate and
maintain systems to comply with Rules 614(d)(1) through (4)) +
($168,000 in monthly market data fees over 12 months) + ($4,602,720
to co-locate within four exchange data centers over 12 months)] x
[(2 entities)] = $9,788,890.
    \1518\ The Commission estimated the monetized initial burden for
this requirement to be $353,500. The Commission derived this
estimate based on per hour figures from SIFMA's Management &
Professional Earnings in the Securities Industry 2013, modified by
Commission staff to account for an 1,800-hour work-year and
inflation, and multiplied by 5.35 to account for bonuses, firm size,
employee benefits, and overhead: [(Sr. Programmer at $332 for 210
hours) + (Sr. Systems Analyst at $285 for 180 hours) + (Compliance
Manager at $310 for 60 hours) + (Director of Compliance at $489 for
30 hours) + (Compliance Attorney at $366 for 60 hours)] x [(4 SROs)]
= 2,160 annual ongoing burden hours across the SROs and $705,000.
    \1519\ The Commission estimated that the SROs would incur the
following initial external costs: [($123,725 to operate and maintain
systems to comply with Rules 614(d)(1) through (4)) + ($168,000 in
monthly market data fees over 12 months) + ($4,602,720 to co-locate
within four exchange data centers over 12 months)] x [(4 SROs)] =
$19,577,780 across the SROs.
---------------------------------------------------------------------------

(ii) Comments/Responses on Ongoing Burden and Costs \1520\
---------------------------------------------------------------------------

    \1520\ One commenter stated that the costs to the industry may
be significantly higher than the ongoing annual costs incurred by
each competing consolidator because the proposal did not explain the
fees the competing consolidators would charge investors. See Cboe
Letter at 24.
---------------------------------------------------------------------------

    No commenters suggested changes to the Commission's estimated
ongoing burden hours and external costs that competing consolidators
would incur in maintaining and operating their systems to comply with
Rules 614(d)(1) through (4). However, one commenter noted that the
NYSE's ongoing costs associated with the NMS network are $215,000 per
year,\1521\ which is less than the burden hours and external costs the
Commission preliminarily estimated a competing consolidator would incur
for operating and maintaining a system to comply with Rules 614(d)(1)
through (4). As noted earlier, the Commission does not believe that the
NMS network costs are directly applicable to the burden hour and cost
estimates applicable to competing consolidators to build and operate
systems to comply with Rules 614(d)(1) through (4). However, the
Commission believes it is reasonable to increase its ongoing burden
hour and external cost estimates to operate systems to collect,
consolidate, and disseminate consolidated market data. As it did for
its initial burden hour and external cost estimates, the Commission is
increasing its estimated ongoing burden hours for Sr. Programmers and
Sr. Systems Analysts by three times because competing consolidators may
potentially build aggregation systems in three data centers, so they
consequently must maintain these systems, as well as its estimated
external costs associated with operating and maintaining systems by
three times, for the same reason.
---------------------------------------------------------------------------

    \1521\ IDS Letter I at 13, n. 38.
---------------------------------------------------------------------------

(iii) Adopted Estimates--Annual Ongoing and Costs
    The Commission continues to believe that all types of competing
consolidators would incur similar ongoing, annual burdens once their
systems have been built because such systems would likely be similar in
nature. As it did for its revised initial burden hour and external cost
estimates, the Commission is increasing by three times its estimated
ongoing burden hours for Sr. Programmers and Sr. Systems Analysts and
external ongoing technology cost estimates because competing
consolidators may potentially build aggregation systems in three data
centers, and would have to maintain these systems. The Commission is
also revising its total ongoing burden hour and external cost estimates
to reflect a reduction in the number of potential broker-dealers that
aggregate market data for internal uses and SRO competing
consolidators.
    The Commission estimates that each competing consolidator would
incur 1,320 ongoing, annual burden hours \1522\

and external costs of $371,175 to operate and maintain its systems to
comply with Rules 614(d)(1) through (4),\1523\ as well as external
ongoing, annual external costs of $4,602,720 for co-location
connectivity to the exchange data centers,\1524\ and $168,000 to
purchase market data from the exchanges,\1525\ for a total ongoing,
annual external cost to each competing consolidator of
$5,141,895.\1526\
---------------------------------------------------------------------------

    \1522\ The Commission estimates the monetized annual ongoing
burden for this requirement to be $418,290. These estimates were
based on discussions with a market participant, modified as
discussed above: [(Sr. Programmer at $332/hour for 630 hours) + (Sr.
Systems Analyst at $285/hour for 540 hours) + (Compliance Manager at
$310/hour for 60 hours) + (Director of Compliance at $489/hour for
30 hours) + (Compliance Attorney at $366/hour for 60 hours)] = 1,320
ongoing, annual burden hours per competing consolidator to operate
and maintain systems to comply with Rules 614(d)(1) through (4). The
Commission derived this estimate based on per hour figures from
SIFMA's Management & Professional Earnings in the Securities
Industry 2013, modified by Commission staff to account for an 1,800-
hour work-year and inflation, and multiplied by 5.35 to account for
bonuses, firm size, employee benefits, and overhead.
    \1523\ This estimate was originally based on discussions with a
market participant and the Commission's understanding of hardware
costs. The Commission has increased this estimated cost by three
times because the Commission believes that competing consolidators
would have to maintain aggregation systems in three data centers.
    \1524\ This estimate was based on an estimated $95,890 in
monthly co-location fees as calculated from NYSE Price List 2020,
multiplied by four exchange data centers over 12 months.
    \1525\ As it did in the Proposing Release, the Commission used
the monthly market data access and redistribution fees currently
charged by the CTA/CQ SIP and Nasdaq UTP SIP as the basis of this
estimate ($14,000), multiplied by 12 months.
    \1526\ The Commission estimates that each market data
aggregation firm/broker-dealer that aggregates market data/exclusive
SIP/new entrant/SRO would incur the following ongoing, annual
external costs: [($371,175 to operate and maintain systems to comply
with Rules 614(d)(1) through (4)) + ($168,000 to purchase market
data) + ($4,602,720 for co-location connectivity within four
exchange data centers)] = $5,141,895.
---------------------------------------------------------------------------

    The Commission estimates that the total ongoing, annual external
burden hours to be incurred by market data aggregation firms, exclusive
SIPs and new entrants would be 2,640 burden hours,\1527\ for each of
these categories of competing consolidator, as well as total ongoing,
annual external costs of $10,283,790,\1528\ for each of these
categories of competing consolidator.
---------------------------------------------------------------------------

    \1527\ The Commission estimates the total monetized annual
ongoing burden for this requirement to be $836,580. These estimates
were based on discussions with a market participant, modified as
discussed above: [(Sr. Programmer at $332/hour for 630 hours) + (Sr.
Systems Analyst at $285/hour for 540 hours) + (Compliance Manager at
$310/hour for 60 hours) + (Director of Compliance at $489/hour for
30 hours) + (Compliance Attorney at $366/hour for 60 hours)] x [(2
market data aggregation firms/exclusive SIPs/new entrants] = 2,640
total ongoing, annual burden hours to operate and maintain systems
to comply with Rules 614(d)(1) through (4) for each of these
categories of competing consolidator. The Commission derived this
estimate based on per hour figures from SIFMA's Management &
Professional Earnings in the Securities Industry 2013, modified by
Commission staff to account for an 1,800-hour work-year and
inflation, and multiplied by 5.35 to account for bonuses, firm size,
employee benefits, and overhead.
    \1528\ The Commission estimates the total annual ongoing
external cost for market data aggregation firms/exclusive SIPs/new
entrants would be: [($371,175 to operate and maintain systems to
comply with Rules 614(d)(1) through (4)) + ($168,000 to purchase
market data) + ($4,602,720 for co-location connectivity within four
exchange data centers)] x [(2 market data aggregation firms/
exclusive SIPs/new entrants)] = $10,283,790 for each of these
categories of competing consolidator.
---------------------------------------------------------------------------

    The Commission estimates that the total ongoing, annual external
burden hours to be incurred by broker-dealers that aggregate market
data and SROs would be 1,320 burden hours,\1529\ for each of these
categories of competing consolidator, as well as total ongoing, annual
external costs of $5,141,885,\1530\ for each of these categories of
competing consolidator.
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    \1529\ The Commission estimates the total monetized annual
ongoing burden for this requirement to be $418,290. These estimates
were based on discussions with a market participant, modified as
discussed above: [(Sr. Programmer at $332/hour for 630 hours) + (Sr.
Systems Analyst at $285/hour for 540 hours) + (Compliance Manager at
$310/hour for 60 hours) + (Director of Compliance at $489/hour for
30 hours) + (Compliance Attorney at $366/hour for 60 hours)] x [(1
broker-dealer that aggregates market data/SRO)] = 1,320 total
ongoing, annual burden hours to operate and maintain systems to
comply with Rules 614(d)(1) through (4) for each of these categories
of competing consolidator. The Commission derived this estimate
based on per hour figures from SIFMA's Management & Professional
Earnings in the Securities Industry 2013, modified by Commission
staff to account for an 1,800-hour work-year and inflation, and
multiplied by 5.35 to account for bonuses, firm size, employee
benefits, and overhead.
    \1530\ The Commission estimates the total annual ongoing
external cost for broker-dealers that aggregate market data/SROs
would be: [($371,175 to operate and maintain systems to comply with
Rules 614(d)(1) through (4)) + ($168,000 to purchase market data) +
($4,602,720 for co-location connectivity within four exchange data
centers)] x [(1 broker-dealer that aggregates market data/SRO)] =
$5,141,885 for each of these categories of competing consolidator.
---------------------------------------------------------------------------

4. Recordkeeping
    Rule 614(d)(7) requires each competing consolidator to keep and
preserve at least one copy of all documents made or received by it in
the course of its business and in the conduct of its business. These
documents must be kept for a period of no less than five years, the
first two years in an easily accessible place. Rule 614(d)(8) requires
each competing consolidator to furnish promptly these documents to any
representative of the Commission upon request.
(a) Initial Burden and Costs
(i) Proposed Estimates--Initial Burden and Costs
    In the Proposing Release, the Commission estimated that these
requirements would create an initial burden of 40 hours (for a total
cost of $8,720),\1531\ for a total initial burden of 480 hours for all
respondents (for a total cost of $104,640). These estimates were based
on the Commission's experience with recordkeeping costs and consistent
with prior burden estimates for similar provisions.\1532\
---------------------------------------------------------------------------

    \1531\ The Commission based this estimate on the $218 hourly
rate as of May 2019 for a paralegal x 40 hours. The Commission
derived this estimate based on per hour figures from SIFMA's
Management & Professional Earnings in the Securities Industry 2013,
modified by Commission staff to account for an 1,800-hour work-year
and inflation, and multiplied by 5.35 to account for bonuses, firm
size, employee benefits, and overhead.
    \1532\ See Security Based Swap Data Repository Registration,
Duties, and Core Principles, Securities Exchange Act Release No.
74246 (Feb. 11, 2015), 80 FR 14438 (Mar. 19, 2015) at 14541.
---------------------------------------------------------------------------

(ii) Comments/Responses on Initial Burden and Costs
    The Commission did not receive any comments on the estimated
initial burdens and costs of Rules 614(d)(7) and (8).
(iii) Adopted Estimates--Initial Burden and Costs
    The Commission is revising its preliminary estimates to account for
the downward estimate from 12 competing consolidators to 8 competing
consolidators. The Commission estimates that the initial burden of 40
hours (for a total cost of $8,720) for a total initial burden of 320
hours for all respondents (for a total cost of $69,760) is reasonable
based upon the Commission's experiences with estimating similar
provisions.
(b) Ongoing Burden and Costs
(i) Proposed Estimates--Ongoing Burden and Costs
    The Commission estimated that the ongoing annual burden of
recordkeeping in accordance with Rules 614(d)(7) and (8) would be 20
hours per respondent (for a total cost of $4,360) and a total ongoing
annual burden of 240 hours for all respondents (for a total cost of
$52,320).
(ii) Comments/Responses on Ongoing Burden and Costs
    The Commission did not receive any comments on the estimated
ongoing burdens and costs of Rules 614(d)(7) and (8).

(iii) Adopted Estimates--Ongoing Burden and Costs
    The Commission is revising its preliminary estimates to account for
the downward estimate from 12 competing consolidators to eight
competing consolidators. The Commission estimates that the ongoing
burden of 20 hours (for a total cost of $4,360) for a total initial
burden of 160 hours for all respondents (for a total cost of $34,880)
is reasonable based upon the Commission's experiences with estimating
similar provisions.
5. Reports and Reviews
    Rules 614(d)(5) and (6) requires competing consolidators to produce
monthly reports on performance metrics and systems issues.
(a) Initial Burden and Costs
(i) Proposed Estimates--Initial Burden and Costs
    The Commission estimated that the average one-time, initial burden
to program systems to produce the monthly reports required by Rules
614(d)(5) and (6), including keeping the information publicly posted
and free and accessible (in downloadable files under Rule 614(d)(5)),
would be 246 hours per competing consolidator (for a total cost of
$80,507) \1533\ and $800 in external costs.\1534\ The Commission
estimated that the total initial burden would be 2,952 hours (for a
total cost of $966,804) \1535\ and a total initial external cost of
$9,600.\1536\
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    \1533\ This figure was based on the estimated initial paperwork
burden for 17 CFR 242.606(a) (Rule 606(a)), which requires each
broker or dealer to make publicly available on a website a quarterly
report on its routing of non-directed orders in NMS stocks that are
submitted on a held basis and of non-directed orders that are
customer orders in NMS securities. See Securities Exchange Act
Release No. 84528 (Nov. 2, 2018), 83 FR 58338 (Nov. 19, 2018)
(``Order Handling Disclosure Release''). In the Proposing Release,
the Commission converted the 10 hour estimate for a quarterly report
to an estimate for a monthly report. In addition, the Commission
added the burden of posting the required information to the website.
The Commission estimated the monetized initial burden for this
requirement to be $80,507. The Commission derived this estimate
based on per hour figures from SIFMA's Management & Professional
Earnings in the Securities Industry 2013, modified by Commission
staff to account for an 1,800-hour work-year and inflation, and
multiplied by 5.35 to account for bonuses, firm size, employee
benefits, and overhead: [(Sr. Programmer at $332 per hour for 160
hours) + (Sr. Database Administrator at $342 per hour for 20 hours)
+ (Sr. Business Analyst at $275 per hour for 20 hours) + (Attorney
at $417 per hour for 4 hours) + (Sr. Operations Manager at $366 per
hour for 20 hours) + (Systems Analyst at $263 per hour for 16 hours)
+ ($308.50 blended rate for Sr. Systems Analyst and Sr. Programmer
for 6 hours)] = 246 initial burden hours per competing consolidator
and $80,507.
    \1534\ The Commission estimated that each competing consolidator
would incur an initial external cost of $800 for an external website
developer to create the website.
    \1535\ The Commission estimated the monetized initial aggregate
burden for this requirement to be $966,804. The Commission derived
this estimate based on per hour figures from SIFMA's Management &
Professional Earnings in the Securities Industry 2013, modified by
Commission staff to account for an 1,800-hour work-year and
inflation, and multiplied by 5.35 to account for bonuses, firm size,
employee benefits, and overhead: [(Sr. Programmer at $332 per hour
for 160 hours) + (Sr. Database Administrator at $342 per hour for 20
hours) + (Sr. Business Analyst at $275 per hour for 20 hours) +
(Attorney at $417 per hour for 4 hours) + (Sr. Operations Manager at
$366 per hour for 20 hours) + (Systems Analyst at $263 per hour for
16 hours) + ($308.50 blended rate for Sr. Systems Analyst and Sr.
Programmer for 6 hours)] x [(12 competing consolidators)] = 2,952
initial aggregate burden hours across the competing consolidators
and $966,804.
    \1536\ $9,600 = ($800 for an external website developer to
create the website) x (12 competing consolidators).
---------------------------------------------------------------------------

(ii) Comments/Responses on Initial Burden and Costs
    The Commission did not receive any comments on the estimated
initial burdens and costs of Rules 614(d)(5) and (6).
(iii) Adopted Estimates--Initial Burden and Costs
    The Commission is revising its preliminary estimates to account for
the downward estimate from 12 competing consolidators to eight
competing consolidators. The Commission estimates that the initial
burden of 246 hours per competing consolidator (for a total cost of
$80,507) \1537\ and $800 in external costs.\1538\ The Commission
estimates that the total initial burden would be 1,968 hours (for a
total cost of $644,056) \1539\ and a total initial external cost of
$6,400.\1540\
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    \1537\ This figure was based on the estimated initial paperwork
burden for Rule 606(a), which requires each broker or dealer to make
publicly available on a website a quarterly report on its routing of
non-directed orders in NMS stocks that are submitted on a held basis
and of non-directed orders that are customer orders in NMS
securities. See Order Handling Disclosure Release, supra note 1533.
In the Proposing Release, the Commission converted the 10 hour
estimate for a quarterly report to an estimate for a monthly report.
In addition, the Commission added the burden of posting the required
information to the website. The Commission estimated the monetized
initial burden for this requirement to be $80,507. The Commission
derived this estimate based on per hour figures from SIFMA's
Management & Professional Earnings in the Securities Industry 2013,
modified by Commission staff to account for an 1,800-hour work-year
and inflation, and multiplied by 5.35 to account for bonuses, firm
size, employee benefits, and overhead: [(Sr. Programmer at $332 per
hour for 160 hours) + (Sr. Database Administrator at $342 per hour
for 20 hours) + (Sr. Business Analyst at $275 per hour for 20 hours)
+ (Attorney at $417 per hour for 4 hours) + (Sr. Operations Manager
at $366 per hour for 20 hours) + (Systems Analyst at $263 per hour
for 16 hours) + ($308.50 blended rate for Sr. Systems Analyst and
Sr. Programmer for 6 hours)] = 246 initial burden hours per
competing consolidator and $80,507.
    \1538\ The Commission estimated that each competing consolidator
would incur an initial external cost of $800 for an external website
developer to create the website.
    \1539\ The Commission estimates the monetized initial aggregate
burden for this requirement to be $644,056. The Commission derived
this estimate based on per hour figures from SIFMA's Management &
Professional Earnings in the Securities Industry 2013, modified by
Commission staff to account for an 1,800-hour work-year and
inflation, and multiplied by 5.35 to account for bonuses, firm size,
employee benefits, and overhead: [(Sr. Programmer at $332 per hour
for 160 hours) + (Sr. Database Administrator at $342 per hour for 20
hours) + (Sr. Business Analyst at $275 per hour for 20 hours) +
(Attorney at $417 per hour for 4 hours) + (Sr. Operations Manager at
$366 per hour for 20 hours) + (Systems Analyst at $263 per hour for
16 hours) + ($308.50 blended rate for Sr. Systems Analyst and Sr.
Programmer for 6 hours)] x [(8 competing consolidators)] = 1,968
initial aggregate burden hours across the competing consolidators
and $644,056.
    \1540\ $6,400 = ($800 for an external website developer to
create the website) x (8 competing consolidators).
---------------------------------------------------------------------------

(b) Ongoing Burden and Costs
(i) Proposed Estimates--Ongoing Burden and Costs
    The Commission estimated that each competing consolidator would
incur an average burden of 11 hours to prepare and make publicly
available a monthly report in the format required by Rules 614(d)(5)
and (6) (for a total cost of $3,768.50), or a burden of 132 hours per
year (for a total cost of $45,222).\1541\ Once a report is posted on an
internet website, the Commission estimated that there would not be an
additional burden to allow the report to remain posted for the period
of time specified in the rules. The Commission estimated the total
burden per year for all competing consolidators to comply with the
monthly reporting requirement in Rules

614(d)(5) and (6) to be 1,584 hours (for a total cost of
$542,664).\1542\
---------------------------------------------------------------------------

    \1541\ This figure was based on the estimated ongoing paperwork
burden for Rule 606(a), which requires each broker or dealer to make
publicly available on a website a report on a quarterly basis. In
the Paperwork Reduction Act discussion for Rule 606(a), the
Commission established that the average annual burden for a broker-
dealer to comply with Rules 606(a)(1)(i) through (iii) would be 10
hours. See Order Handling Disclosure Release, supra note 1533. In
the Proposing Release, the Commission converted the 10 hour estimate
for a quarterly report to an estimate for a monthly report. In
addition, the Commission added the burden of updating the website.
The Commission estimated the monetized annual burden for this
requirement to be $3,768.50. The Commission derived this estimate
based on per hour figures from SIFMA's Management & Professional
Earnings in the Securities Industry 2013, modified by Commission
staff to account for an 1,800-hour work-year and inflation, and
multiplied by 5.35 to account for bonuses, firm size, employee
benefits, and overhead: [(Sr. Business Analyst at $275 per hour for
5 hours) + (Attorney at $417 per hour for 5 hours) + ($308.50
blended rate for Sr. Systems Analyst and Sr. Programmer for 1 hour)]
x [(12 months)] = 132 initial burden hours per competing
consolidator and $45,222.
    \1542\ The Commission estimated the monetized annual aggregate
burden for this requirement to be $542,664. The Commission derived
this estimate based on per hour figures from SIFMA's Management &
Professional Earnings in the Securities Industry 2013, modified by
Commission staff to account for an 1,800-hour work-year and
inflation, and multiplied by 5.35 to account for bonuses, firm size,
employee benefits, and overhead: [(Sr. Business Analyst at $275 per
hour for 5 hours) + (Attorney at $417 per hour for 5 hours) +
($308.50 blended rate for Sr. Systems Analyst and Sr. Programmer for
1 hour)] x [(12 competing consolidators)] x [(12 months)] = 1,584
aggregate burden hours across the competing consolidators and
$542,664.
---------------------------------------------------------------------------

(ii) Comments/Responses on Ongoing Burden and Costs
    The Commission did not receive any comments on the estimated
ongoing burdens and costs of Rules 614(d)(5) and (6).
(iii) Adopted Estimates--Ongoing Burden and Costs
    The Commission is revising its preliminary estimates to account for
the downward estimate from 12 competing consolidators to eight
competing consolidators. The Commission estimates that each competing
consolidator would incur an average burden of 11 hours to prepare and
make publicly available a monthly report in the format required by
Rules 614(d)(5) and (6) (for a total cost of $3,768.50), or a burden of
132 hours per year (for a total cost of $45,222).\1543\ Once a report
is posted on an internet website, the Commission estimates that there
would not be an additional burden to allow the report to remain posted
for the period of time specified in the rules. The Commission estimates
the total burden per year for all competing consolidators to comply
with the monthly reporting requirement in Rules 614(d)(5) and (6) to be
1,056 hours (for a total cost of $361,776).\1544\
---------------------------------------------------------------------------

    \1543\ This figure was based on the estimated ongoing paperwork
burden for Rule 606(a), which requires each broker or dealer to make
publicly available on a website a report on a quarterly basis. In
the Paperwork Reduction Act discussion for Rule 606(a), the
Commission established that the average annual burden for a broker-
dealer to comply with Rules 606(a)(1)(i) through (iii) would be 10
hours. See Order Handling Disclosure Release, supra note 1533, at
58388. In the Proposing Release, the Commission converted the 10
hour estimate for a quarterly report to an estimate for a monthly
report. In addition, the Commission added the burden of updating the
website. The Commission estimated the monetized annual burden for
this requirement to be $3,768.50. The Commission derived this
estimate based on per hour figures from SIFMA's Management &
Professional Earnings in the Securities Industry 2013, modified by
Commission staff to account for an 1,800-hour work-year and
inflation, and multiplied by 5.35 to account for bonuses, firm size,
employee benefits, and overhead: [(Sr. Business Analyst at $275 per
hour for 5 hours) + (Attorney at $417 per hour for 5 hours) +
($308.50 blended rate for Sr. Systems Analyst and Sr. Programmer for
1 hour)] x [(12 months)] = 132 initial burden hours per competing
consolidator and $45,222.
    \1544\ The Commission estimates the monetized annual aggregate
burden for this requirement to be $361,776. The Commission derived
this estimate based on per hour figures from SIFMA's Management &
Professional Earnings in the Securities Industry 2013, modified by
Commission staff to account for an 1,800-hour work-year and
inflation, and multiplied by 5.35 to account for bonuses, firm size,
employee benefits, and overhead: [(Sr. Business Analyst at $275 per
hour for 5 hours) + (Attorney at $417 per hour for 5 hours) +
($308.50 blended rate for Sr. Systems Analyst and Sr. Programmer for
1 hour)] x [(8 competing consolidators)] x [(12 months)] = 1,056
aggregate burden hours across the competing consolidators and
$361,776.
---------------------------------------------------------------------------

6. Amendment to the Effective National Market System Plan(s) for NMS
Stocks
    Rule 614(e) requires the participants to the effective national
market system plan(s) for NMS stocks to file an amendment with the
Commission, pursuant to Rule 608, that includes several specified
provisions, including an amendment that conforms the plan(s) to reflect
the provision of information necessary to generate consolidated market
data by the SROs to competing consolidators, the application of certain
timestamps by the SROs, assessment of competing consolidator
performance and the provision of an annual report, the development of a
list that identifies the primary listing exchange for each NMS stock
and the calculation and publication of gross revenues.
(a) Proposed Estimates--Initial Burden and Costs
    In the Proposing Release, the Commission estimated that the
amendment to the effective national market system plan(s) would impose
a one-time burden and cost. Specifically, the Commission estimated that
it would take the participants to the effective national market system
plan(s) approximately 420 hours to prepare the amendment. The
preliminary estimate included 210 hours for an SRO to comply with the
timestamps requirement, including a review and any applicable change to
technical systems and rules. Each SRO already employs some form of
timestamping, and the Commission did not necessarily expect that the
burden to comply with the timestamp requirement would be particularly
burdensome.\1545\ The preliminary estimate also included 105 hours for
the participants to compose the form of annual report on competing
consolidator performance. Finally, the preliminary estimate includes 20
hours for the participants to compile and confirm the primary listing
exchange for each NMS stock. The initial burden hours for all
respondents would be 420 hours x 17 (for a total cost of
$2,977,380).\1546\
---------------------------------------------------------------------------

    \1545\ Currently, under the Equity Data Plans, the SROs attach
timestamps to quotation information and transaction information
provided to the exclusive SIPs. See, e.g., Nasdaq UTP Plan, supra
note 10, at Section VIII; CQ Plan, supra note 10, at Section VI; CTA
Plan, supra note 10, at Section VI.
    \1546\ The Commission estimated the monetized burden for this
requirement to be $130,860. The Commission derived this estimate
based on per hour figures from SIFMA's Management & Professional
Earnings in the Securities Industry 2013, modified by Commission
staff to account for an 1,800-hour work-year and inflation, and
multiplied by 5.35 to account for bonuses, firm size, employee
benefits, and overhead: [(Attorney at $417 for (420 x 17) hours)].
---------------------------------------------------------------------------

(b) Comments/Responses on Initial Burden and Costs
    One commenter stated that the SROs would continue to incur costs
associated with the effective national market system plan, such as
implementing the application of timestamps and assessing competing
consolidators and developing an annual report.\1547\ This commenter,
however, did not provide comment on the Commission's preliminary
estimates.
---------------------------------------------------------------------------

    \1547\ See NYSE Letter II at 28.
---------------------------------------------------------------------------

(c) Adopted Estimates
    The Commission is modifying the estimates for the initial burden
and costs to the SROs to file the amendment required pursuant to Rule
614(e) to eliminate the multiplication of the burden by each SRO
because the respondents would file this amendment jointly, rather than
individually, in connection with their status as participants in the
effective national market system plan(s). Hence, the initial burden
hours for all respondents would be 420 hours (for a total cost of
$175,140).
    In addition, the Commission now believes that there would be
ongoing burden and costs related to the amendment, including 245 hours
for maintaining the required timestamps, conducting assessments of
competing consolidators, preparing an annual report, maintaining the
list of the primary listing exchange for each NMS stock, and
calculating gross revenues. For the required timestamps, the Commission
believes that the ongoing burden for such requirement to be minimal
once the initial timestamping process is established. The Commission
estimates that the ongoing burden for timestamping to be 50
hours.\1548\ The Commission estimates the ongoing burden for reviewing
competing

consolidator performance and developing the annual report to be 105
hours.\1549\ The Commission estimates the ongoing burden for
maintaining the list of the primary listing exchange for each NMS stock
to be 10 hours annually.\1550\ Finally, the Commission estimates the
ongoing burden for calculating gross plan revenues to be minimal. The
Equity Data Plans already calculate and publish revenue figures so the
Commission believes that establishing a new calculation and publication
process to be 80 hours.
---------------------------------------------------------------------------

    \1548\ The Commission reduced the initial burden hours by three-
fourths to develop this estimate.
    \1549\ The Commission estimates that the ongoing burden for
developing the annual report will be the same as the initial burden.
    \1550\ The Commission reduced the initial burden estimate by
half because the primary listing exchange for an NMS stock does not
typically change. Accordingly, the Commission believes that the
ongoing burden of monitoring and updating the list to be minimal.
---------------------------------------------------------------------------

7. Collection and Dissemination of Information by National Securities
Exchanges and National Securities Associations
    Rule 603(b) requires every national securities exchange on which an
NMS stock is traded and national securities association to make
available to all competing consolidators and self-aggregators all
information with respect to quotations for and transactions in NMS
stocks, including all data necessary to generate consolidated market
data, in the same manner and using the same methods, including all
methods of access and using the same formats, as such exchange or
association makes available any information with respect to quotations
for and transactions in NMS stocks to any person. Accordingly, the SROs
would be required to collect the information necessary to generate
proposed consolidated market data, which would be required to be made
available under proposed Rule 603(b). The respondents to this
collection of information are the 16 national securities exchanges on
which NMS stocks are traded and the one national securities
association. The new data elements of consolidated market data that the
national securities exchanges and national securities associations
collect and must make available include auction information, depth of
book data, round lot data, regulatory data (including LULD price
bands), and administrative data. The national securities exchanges and
national securities associations currently collect and/or calculate all
data necessary to generate consolidated market data and provide such
data necessary to the exclusive SIPs and to subscribers of the
proprietary data feeds.\1551\ Therefore, as discussed below, the
Commission believes that the amendments to 603(b) impose minimal
initial and ongoing burdens on these respondents, including any changes
to their systems, because they already collect such data.
---------------------------------------------------------------------------

    \1551\ For example, the primary listing exchanges currently
calculate LULD price bands and related information to generate
synthetic LULD price bands. See Nasdaq, Equity Trader Alert #2016-
79: NASDAQ Announces Improved Protections for Equity Markets Coming
Out of Halts (``Leaky Bands'') (Apr. 12, 2016), available at https://www.nasdaqtrader.com/TraderNews.aspx?id=ETA2016-79; NYSE, Trader
Update: NYSE and NYSE MKT: Enhanced Limit Up Limit Down Procedures
(Aug. 1, 2016), available at https://www.nyse.com/trader-update/history#110000029205; Securities Exchange Act Release No. 34-78435
(July 28, 2016), 81 FR 51239 (Aug. 3, 2016) (SR-FINRA-2016-028).
---------------------------------------------------------------------------

(a) Initial Burden and Costs
(i) Proposed Estimates--Initial Burden and Costs
    The Commission estimated that a national securities exchange on
which an NMS stock is traded or national securities association will
require an average of 220 \1552\ initial burden hours of legal,
compliance, information technology, and business operations personnel
time to prepare and implement a system to collect the information
necessary to generate consolidated market data (for a total cost per
exchange or association of $70,865).\1553\
---------------------------------------------------------------------------

    \1552\ The Commission based its estimate on the burden hour
estimate provided in connection with the adoption of Regulation SHO
because the requirements are similar to what a national securities
exchange or national securities association would need to do to
comply with proposed Rule 603(b). See Commission, Supporting
Statement for the Paperwork Reduction Act Information Collection
Submission for Rule 201 and Rule 200(g) of Regulation SHO (Sept. 5,
2019).
    \1553\ The Commission estimated the monetized initial burden for
this requirement to be $70,865. The Commission derived this estimate
based on per hour figures from SIFMA's Management & Professional
Earnings in the Securities Industry 2013, modified by Commission
staff to account for an 1,800-hour work-year and inflation, and
multiplied by 5.35 to account for bonuses, firm size, employee
benefits, and overhead: [(Compliance Manager at $310 for 105 hours)
+ (Attorney at $417 for 70 hours) + (Sr. Systems Analyst at $285 for
20 hours) + (Operations Specialist at $137 for 25 hours)] = 220
initial burden hours and $70,865.
---------------------------------------------------------------------------

(ii) Comments/Responses on Initial Burden and Costs
    One commenter noted that SROs could incur ``significant cost
increases'' to connect and transmit data to competing consolidators and
self-aggregators but did not provide specific comment on the
Commission's proposed estimates.\1554\ Another commenter argued that
the Commission did not consider how primary listing exchanges
responsible for calculating and disseminating certain regulatory data
(such as LULD bands) would obtain from the other exchanges the
information needed to perform these calculations, including failing to
consider the added costs to the exchanges.\1555\
---------------------------------------------------------------------------

    \1554\ See FINRA Letter at 3-4.
    \1555\ See NYSE Letter II at 20-21.
---------------------------------------------------------------------------

(iii) Adopted Estimates--Initial Burden and Costs
    The Commission continues to believe the initial burden and costs it
estimated in the Proposing Release are accurate based on the
information it has. First, the Commission does not agree that the costs
of transmitting data to competing consolidators and self-aggregators
that the SROs already generate and provide to proprietary subscribers
would be significant. Specifically, as explained above, the Commission
does not believe that the cost to provide connectivity to the ADF would
be significant because there is a low volume of trades and no quotes
reported to the ADF meaning the connectivity options would not need to
support much data capacity. Additionally, FINRA could seek to recoup
costs for connectivity by proposing connectivity fees pursuant to
Section 19(b) of the Exchange Act.\1556\ Furthermore, the Commission's
modification of certain elements of the definition of consolidated
market data,\1557\ the data necessary for the generation of which each
national securities exchange and national securities association will
need to make available to competing consolidators and self-aggregators,
will not increase costs because the national securities exchanges and
national securities association already collect and/or calculate all
data necessary to create the adopted definition of consolidated market
data. Therefore, the Commission is adopting the estimates for the
initial burden and costs as proposed.
---------------------------------------------------------------------------

    \1556\ See supra note 826 and accompanying text.
    \1557\ See supra Section II.B.
---------------------------------------------------------------------------

    Additionally, as explained in detail above,\1558\ the Commission
does not believe that collecting, calculating, or providing regulatory
data will impose significant burdens or costs on primary listing
exchanges, since primary listing exchanges already obtain the necessary
data from other exchanges and generate and provide certain regulatory
information today. In addition, they can be reimbursed for the costs of
providing regulatory data through fees established by the effective
national market system plan(s). Therefore, the Commission is

adopting the estimates for the initial burden and costs as proposed.
---------------------------------------------------------------------------

    \1558\ See supra Section II.H.2(a).
---------------------------------------------------------------------------

(b) Ongoing Burden and Costs
(i) Proposed Estimates--Ongoing Burden and Costs
    The Commission estimated that each national securities exchange on
which an NMS stock is traded and national securities association would
incur an annual average burden on an ongoing basis of 396 hours to
collect the information necessary to generate consolidated market data
required by Rule 603(b) (for a total cost per exchange or association
of $128,064).\1559\
---------------------------------------------------------------------------

    \1559\ The Commission estimated the monetized ongoing, annual
burden for this requirement to be $128,064. The Commission derived
this estimate based on per hour figures from SIFMA's Management &
Professional Earnings in the Securities Industry 2013, modified by
Commission staff to account for an 1,800-hour work-year and
inflation, and multiplied by 5.35 to account for bonuses, firm size,
employee benefits, and overhead: [(Compliance Manager at $310 for
192 hours) + (Attorney at $417 for 48 hours) + (Sr. Systems Analyst
at $285 for 96 hours)] = 336 initial burden hours and $128,064.
---------------------------------------------------------------------------

(ii) Comments/Responses on Ongoing Burden and Costs
    One commenter noted that SROs could incur ``significant cost
increases'' to maintain connectivity to competing consolidators and
self-aggregators but did not provided specific comment on the
Commission's proposed estimates.\1560\ Another commenter argued that
the Commission did not consider how primary listing exchanges
responsible for calculating and disseminating certain regulatory data
(such as LULD bands) would obtain from the other exchanges the
information needed to perform these calculations, including failing to
consider the added costs to the exchanges.\1561\
---------------------------------------------------------------------------

    \1560\ See FINRA Letter at 3-4.
    \1561\ See NYSE Letter II at 20-21.
---------------------------------------------------------------------------

(iii) Adopted Estimates--Ongoing Burden and Costs
    Similar to the initial burden and costs, the Commission continues
to believe the ongoing burden and costs are accurate based on the
information it has. First, the Commission does not agree that the costs
of maintaining connectivity to transmit data to competing consolidators
and self-aggregators that the SROs already generate and provide to
proprietary subscribers would be significant because the Commission
believes that many competing consolidators and self-aggregators will be
firms that already subscribe to SRO proprietary feeds, and thus, the
SROs will likely not have a large amount of new data connections to
service.\1562\ Specifically, as explained above, the Commission does
not believe that the cost to maintain connectivity to the ADF would be
significant because there is a low volume of trades and no quotes
reported to the ADF meaning the connectivity options would not need to
support much data capacity. Additionally, FINRA could seek to recoup
costs for maintaining connectivity by proposing connectivity fees
pursuant to Section 19(b) of the Exchange Act.\1563\ Furthermore, the
Commission's modification of certain elements of the definition of
consolidated market data,\1564\ the data necessary for the generation
of which each national securities exchange and national securities
association will need to make available to competing consolidators and
self-aggregators, will not increase ongoing costs because the national
securities exchanges and national securities association already
collect and/or calculate all data necessary to create the adopted
definition of consolidated market data. Therefore, the Commission is
adopting the estimates for the initial burden and costs as proposed.
---------------------------------------------------------------------------

    \1562\ See infra Section V.C.1(c)(iv).
    \1563\ See supra note 826 and accompanying text.
    \1564\ See supra Section II.B.
---------------------------------------------------------------------------

    Additionally, as explained in detail above,\1565\ the Commission
does not believe that collecting, calculating, or providing regulatory
data will impose significant ongoing burdens or costs on primary
listing exchanges, since primary listing exchanges already obtain the
necessary data from other exchanges and generate and provide certain
regulatory information today. In addition, they can be reimbursed for
the costs of providing regulatory data through fees established by the
effective national market system plan(s). Therefore, the Commission is
adopting the estimates for the ongoing burden and costs as proposed.
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    \1565\ See supra Section II.H.2(a).
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E. Collection of Information Is Mandatory

    The collection of information discussed above is a mandatory
collection of information.

F. Confidentiality

1. Registration Requirements and Form CC
    Pursuant to Rule 614(b)(2), the Commission would make public via
posting on the Commission's website each: (i) Effective initial Form
CC, as amended; (ii) order of ineffectiveness of a Form CC; (iii) filed
Form CC Amendment; and (iv) notice of cessation.
2. Competing Consolidator Duties and Data Collection and Maintenance
    The collection of information under Rules 614(d)(1) through (3)
would be public.
3. Competing Consolidators' Public Posting of Form CC
    The collection of information under Rule 614(c) would be available
to the public.
4. Recordkeeping
    The collection of information relating to recordkeeping would be
available to the Commission and its staff and to other regulators.
5. Reports and Reviews
    The collection of information regarding reports and reviews under
Rules 614(d)(5) and (6) relates to information that would be published
on competing consolidator websites.
6. Amendment to the Effective National Market System Plan(s) for NMS
Stocks
    The amendment to the effective national market system plan(s) for
NMS stocks would be required to be filed with the Commission pursuant
to Rule 608. Once filed, the Commission will publish the amendment for
public comment. The timestamps applied by the SROs would be made
available to competing consolidators and their subscribers. The annual
report of competing consolidator performance would be submitted to the
Commission. The list of the primary listing market for each NMS stock
would be available to the public.
7. Collection and Dissemination of Information by National Securities
Exchanges and National Securities Associations
    Rule 603(b) would require national securities exchanges and
national securities associations to collect and provide information to
the competing consolidators and self-aggregators, not to the
Commission. Therefore, no assurances of confidentiality are necessary
because the information will be made available to the public for a fee
from the competing consolidators.

G. Revisions to Current Regulation SCI Burden Estimates and Adoption of
Rule 614(d)(9)

1. Proposed Estimates--Burden and Costs
    The Commission proposed to expand the definition of ``SCI
entities'' under

Regulation SCI \1566\ to include competing consolidators, which would
subject them to the requirements of Regulation SCI. The rules under
Regulation SCI impose ``collection of information'' requirements within
the meaning of the PRA.\1567\
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    \1566\ See Rule 1000 of Regulation SCI.
    \1567\ Rule 1001(a) of Regulation SCI requires each SCI entity
to establish, maintain, and enforce written policies and procedures
for systems capacity, integrity, resiliency, availability, and
security. 17 CFR 242.1001(b) (Rule 1001(b)) requires each SCI entity
to establish, maintain, and enforce written policies and procedures
to ensure that its SCI systems operate in a manner that complies
with the Exchange Act, the rules and regulations thereunder, and the
SCI entity's rules and governing documents, as applicable. Rule
1001(c) requires each SCI entity to establish, maintain, and enforce
written policies and procedures for the identification, designation,
and documentation of responsible SCI personnel and escalation
procedures. Rule 1002(a) requires each SCI entity to begin to take
appropriate corrective action upon any responsible SCI personnel
having a reasonable basis to conclude that an SCI event has
occurred. 17 CFR 242.1002(b) (Rule 1002(b)) requires each SCI entity
to notify the Commission of certain SCI events. Rule 1002(c)
requires each SCI entity, with certain exceptions, to disseminate
information about SCI events to affected members or participants and
disseminate information about major SCI events to all members or
participants. 17 CFR 242.1003(a) (Rule 1003(a)) requires each SCI
entity to notify the Commission of material systems changes
quarterly. 17 CFR 242.1003(b) (Rule 1003(b)) requires each SCI
entity to conduct annual SCI reviews. Rule 1004 requires each SCI
entity to designate certain members or participants for
participation in functional and performance testing of the SCI
entity's business continuity and disaster recovery plans and to
coordinate such testing with other SCI entities. Rules 1005 and 1007
set forth recordkeeping requirements for SCI entities. Rule 1006
requires, with certain exceptions, that each SCI entity
electronically file required notifications, reviews, descriptions,
analysis, or reports to the Commission on Form SCI. For a complete
analysis of Regulation SCI under the PRA, see SCI Adopting Release,
supra note 1037, at 18141; Proposed Collection; Comment Request;
Extension: Regulation SCI, Form SCI; SEC File No. 270-653, OMB
Control No. 3235-0703, 83 FR 34179 (``2018 PRA Extension''). For
further details regarding the requirements of Regulation SCI, see
SCI Adopting Release, supra note 1233.
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    In 2018, there were an estimated 42 entities that met the
definition of SCI entity and were subject to the collection of
information requirements of Regulation SCI (``respondents'').\1568\ At
that time, an estimate of approximately two entities would become SCI
entities each year, one of which would be an SRO. Accordingly, under
these estimates, over the following three years, there would be an
average of approximately 44 SCI entities each year.\1569\
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    \1568\ See 2018 PRA Extension, supra note 1567, at 34180.
    \1569\ Id.
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    In the Proposing Release, the Commission estimated that there would
be 12 competing consolidators that would be subject to Regulation SCI
as SCI entities.\1570\ The Commission noted that some of these entities
may already be SCI entities and subject to the requirements of
Regulation SCI. While the Commission estimated that the number of
respondents would increase as a result of the proposal, the Commission
estimated that its prior paperwork burden estimates per entity under
Regulation SCI generally would be applicable to the new competing
consolidators because they would be subject to the same requirements
and burdens as other SCI entities.\1571\ At the same time, the
Commission acknowledged that burden estimates also should take into
account the extent to which the entities that may register to become
competing consolidators already comply with the requirements of
Regulation SCI.
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    \1570\ See Proposing Release, 85 FR at 16808.
    \1571\ See 2018 PRA Extension, supra note 1567. The Commission
estimated that six of the 12 entities that may register as competing
consolidators were already SCI entities. Thus, the Commission
estimated that there would be an average of approximately 50 SCI
entities each year.
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    In particular, the Commission estimated that two of the estimated
12 competing consolidators may be the existing exclusive SIPs, which
are currently subject to Regulation SCI as plan processors. Because
these entities are responsible for collecting, consolidating, and
disseminating proposed consolidated market data products to market
participants and thus would be operating a substantially similar
business and performing a similar function in their role as competing
consolidators, the Commission estimated that the current ongoing burden
estimates for existing SCI entities would be applicable and there would
be no material change in the estimated paperwork burdens for these
entities under Regulation SCI.\1572\
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    \1572\ Id. The burden estimates for SCI entity respondents
included initial burdens for new SCI entities and ongoing burdens
for all SCI entities.
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    The Commission also estimated that four of the entities that may
register to become competing consolidators may be either: (i) An SRO
currently subject to Regulation SCI; or (ii) an entity affiliated with
an SCI SRO, formerly subject to Regulation SCI. The burden estimates
for SCI entity respondents include both initial burdens for new SCI
entities and ongoing burdens for all SCI entities.\1573\ Because the
SRO entities that would become competing consolidators are current SCI
entities and are already required to implement the requirements of
Regulation SCI with regard to SCI systems that they operate in their
role as SCI SROs, the Commission estimated that these entities would
not have initial burdens equivalent to those estimated for new SCI
entities. At the same time, the Commission estimated that these SROs
may be a national securities association and/or equities national
securities exchanges that do not currently operate an exclusive SIP.
Because these entities would be entering an entirely new business and
performing a new function with new SCI systems, unlike the current
exclusive SIPs who may register to become competing consolidators, the
Commission estimated that the SRO entities would have some initial
burden that would be a percentage of that which entirely new SCI
entities would have. In particular, the Commission estimated that the
initial burdens for existing SCI SROs who register as competing
consolidators would be 50 percent of the estimated initial burdens for
entirely new SCI entities. The Commission also estimated that the
ongoing paperwork burden estimates for all SCI entities would be
applicable to these entities as well.\1574\
---------------------------------------------------------------------------

    \1573\ Id.
    \1574\ The ongoing paperwork burden estimates in the PRA
Extension do not distinguish between different categories of SCI
entities but rather provide an average for all SCI entities.
---------------------------------------------------------------------------

    The Commission estimated that the remaining six estimated competing
consolidators may be entities that are not currently subject to
Regulation SCI, such as market data aggregation firms, broker-dealers
that currently aggregate market data for internal uses, and entities
that would be entering the market data aggregation business for the
first time.\1575\ The Commission estimated that these entities would
have the same estimated initial paperwork burdens as those estimated
for new SCI entities and the same ongoing paperwork burdens as all
other SCI entities.\1576\
---------------------------------------------------------------------------

    \1575\ See Proposing Release, 85 FR at 16809.
    \1576\ See 2018 PRA Extension, supra note 1567.
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2. Comments/Responses on Burden and Costs
    Two commenters stated that the Commission underestimated the costs
of compliance with Regulation SCI.\1577\ One commenter stated that such
compliance would require the development of technology environments for
production, disaster recovery, development/quality assurance, and
customer testing, and as such, the initial costs would greatly exceed
the Commission's estimates, possibly by three to four times the
amount.\1578\ Competing consolidators

may choose to develop four separate environments in the interest of
resiliency and redundancy as suggested by this commenter, however,
Regulation SCI does not prescribe this approach. While Regulation SCI
does require SCI entities to maintain business continuity and disaster
recovery plans which would include the development of technology
environments for disaster recovery, the Commission included paperwork
burdens related to this requirement in its estimates. In contrast, non-
production systems are excluded from the scope of Regulation SCI \1579\
and as such, burden estimates related to such systems are excluded from
the Commission's burden estimates. Further, as discussed in the
Proposing Release, the Commission believes that the burdens for
competing consolidators that are subject to Regulation SCI would be the
same as those the Commission has previously estimated for other SCI
entities (or a percentage thereof if already an SCI entity or an
affiliate thereof as described above), as the requirements are the same
for all SCI entities. The Commission's 2018 burden estimates were based
on the Commission's experience over three years subsequent to
Regulation SCI's adoption in 2014 including, for example, Commission
staff's experience in conducting examinations of SCI entities and
receiving and reviewing notifications and reports required by
Regulation SCI. For these reasons, the Commission does not agree with
the assertions of this commenter that the estimates of initial burdens
were underestimated.
---------------------------------------------------------------------------

    \1577\ See IDS Letter I at 13 and STANY Letter II at 6-7. See
supra note 1572.
    \1578\ IDS Letter I at 13.
    \1579\ See SCI Adopting Release at 72273.
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    Another commenter stated that the Commission underestimated the
ongoing cost of compliance with Regulation SCI, citing a reference to
$68,710 of initial costs and $21,810 of ongoing costs.\1580\ These
estimates, however, were of non-paperwork related costs and were given
in regard to a potential alternative that the Commission had considered
of not extending all of the requirements of Regulation SCI to competing
consolidators, but instead only imposing a broad policies and
procedures requirement.
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    \1580\ See STANY Letter II at 6-7.
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3. Adopted Estimates--Burden and Costs
    As described above, while the Commission had proposed to apply the
requirements of Regulation SCI to all competing consolidators, it has
determined to adopt a two-pronged approach and, following the SCI CC
Phase-In Period, will apply the requirements of Regulation SCI to those
competing consolidators that meet the 5% gross revenue threshold (``SCI
competing consolidators'').\1581\ During the SCI CC Phase-In Period,
and subsequently, for those competing consolidators that do not meet
the 5% revenue threshold, a more tailored set of resiliency
requirements substantially similar to certain of the key provisions in
Regulation SCI will apply.
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    \1581\ As described in detail above, an ``SCI competing
consolidator'' means any competing consolidator, as defined in Sec.
242.600 which, during at least four of the preceding six calendar
months, accounted for five percent (5%) or more of consolidated
market data gross revenue paid to the effective national market
system plan or plans required under Sec.  242.603(b), for NMS stocks
(1) listed on the NYSE, (2) listed on Nasdaq, or (3) listed on
national securities exchanges other than the NYSE or Nasdaq.
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    As discussed above, the Commission now estimates that there would
be eight persons who could decide to perform the functions of a
competing consolidator. In the Proposing Release, the Commission
estimated that all 12 of the estimated competing consolidators would
subject to Regulation SCI as SCI entities.\1582\ However, in light of
the reduction of the estimated competing consolidators to eight and the
5% revenue threshold that the Commission is adopting in the definition
of ``SCI competing consolidator,'' the Commission now estimates that
seven competing consolidators will meet this definition and be subject
to the requirements of Regulation SCI. The Commission estimates that
one competing consolidator will not meet the 5% revenue threshold test
in the definition and will instead be subject to the streamlined
requirements of Rule 619(d)(9). Of the seven competing consolidators
subject to the requirements of Regulation SCI, the Commission believes:
Two may be the existing exclusive SIPs, which are currently subject to
Regulation SCI as plan processors; one may be an existing SCI SRO or
entity affiliated with an SCI SRO that is subject to Regulation SCI;
and four may be entities not currently subject to Regulation SCI, such
as market data aggregation firms, broker-dealers that currently
aggregate market data for internal uses, and entities that would be
entering the market data aggregation business for the first time. The
Commission is adopting the burden estimates as proposed for the seven
competing consolidators in these categories that will be subject to the
requirements of Regulation SCI.\1583\
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    \1582\ See supra note 1570.
    \1583\ While the burden estimates are not being revised, the
Commission notes that it has revised the number of entities that may
become competing consolidators that are not currently subject to
Regulation SCI. Specifically, the Commission estimates that there
will be 4 entities not currently subject to Regulation SCI that will
meet the definition of ``SCI competing consolidator'' and become
subject to Regulation SCI, as compared to the 6 that the Commission
estimated would become subject to Regulation SCI previously.
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    The Commission estimates that one of the eight competing
consolidators will not meet the definition of ``SCI competing
consolidator'' and will be subject to the requirements of paragraph
(d)(9) of Rule 619.
(a) Summary of Collection of Information
    The provisions under Rule 619(d)(9) impose ``collection of
information'' requirements within the meaning of the PRA. Paragraph
(d)(9)(ii) of Rule 614 requires competing consolidators to establish,
maintain, and enforce written policies and procedures reasonably
designed to ensure: That their systems involved in the collection,
consolidation, and dissemination of consolidated market data have
levels of capacity, integrity, resiliency, availability, and security
adequate to maintain the competing consolidator's operational
capability and promote the maintenance of fair and orderly markets; and
the prompt, accurate, and reliable dissemination of consolidated market
data.\1584\ Competing consolidators will also be required to
periodically review the effectiveness of the policies and procedures
required by paragraph (d)(9)(ii)(B) of Rule 614, and take prompt action
to remedy deficiencies in such policies and procedures. Paragraph
(d)(9)(ii)(C) of Rule 614 will require competing consolidators to
establish, maintain, and enforce reasonably designed written policies
and procedures that include the criteria for identifying responsible
personnel, the designation and documentation of responsible personnel,
and escalation procedures to quickly inform responsible personnel of
potential systems disruptions and systems intrusions; and periodically
review the effectiveness of the policies and procedures, and take
prompt action to remedy deficiencies.\1585\ Under paragraph
(d)(9)(iii)(A) of Rule 614, competing consolidators will be required
to, upon responsible personnel having a reasonable basis to conclude
that a systems disruption or systems intrusion of systems involved in
the collection, consolidation, and dissemination of consolidated market
data has occurred, begin to take

appropriate corrective action.\1586\ The Commission believes that
competing consolidators will likely work to develop a written process
for ensuring they are prepared to comply with the corrective action
requirement and are likely also to periodically review this process.
Rule 614(d)(9)(iii)(B) will require that promptly upon responsible
personnel having a reasonable basis to conclude that a systems
disruption (other than a de minimis system disruption) has occurred, a
competing consolidator will be required to publicly disseminate
information relating to the event; when known, promptly publicly
disseminate additional information relating to the event; and until
resolved, provide regular updates with respect to such
information.\1587\ Concurrent with public dissemination of information
relating to a systems disruption, competing consolidators will also be
required to provide the Commission notification of such event,
including the information required to be publicly disseminated.\1588\
In addition, competing consolidators will be required to notify the
Commission upon responsible personnel having a reasonable basis to
conclude that a systems intrusion (other than a de minimis system
intrusion) has occurred. Notifications regarding systems disruptions
and systems intrusions that competing consolidators must provide to the
Commission under this provision include information relating to the
event; when known, additional information relating to the event; and
until resolved, regular updates with respect to such information. Rule
614(d)(9)(iv) will require competing consolidators to participate in
the industry- or sector-wide coordinated testing of BC/DR plans
required of SCI entities pursuant to paragraph (c) of Rule 1004 of
Regulation SCI. The Commission believes this requirement will involve
notifying market participants and scheduling the coordinated testing.
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    \1584\ See Rule 614(d)(9)(ii)(A)(1) of Regulation NMS.
    \1585\ See Rule 614(d)(9)(ii)(B) of Regulation NMS.
    \1586\ See Rule 614(d)(9)(iii)(A) of Regulation NMS.
    \1587\ See Rule 614(d)(9)(iii)(B) of Regulation NMS.
    \1588\ See Rule 614(d)(9)(iii)(C) of Regulation NMS.
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(b) Use of Information
    Paragraph (d)(9)(ii) of Rule 614 should help to advance the goal of
promoting Commission review and oversight of market data infrastructure
by requiring a competing consolidator to have policies and procedures
that are reasonably designed to ensure its operational capability,
including the ability to maintain effective operations; minimize or
eliminate the effect of performance degradations; and help ensure the
prompt, accurate, and reliable dissemination of consolidated market
data. Because a competing consolidator's operational capability can
have the potential to impact market participants who rely on such
competing consolidators for market data, the Commission believes that
these policies and procedures will help promote the maintenance of fair
and orderly markets.
    The requirement in paragraph (d)(9)(ii)(C) of Rule 614 to establish
policies and procedures that include the designation and documentation
of responsible personnel should help make it clear to all employees of
the competing consolidator who the designated responsible personnel are
for purposes of the escalation procedures and so that Commission staff
can easily identify such responsible personnel in the course of its
inspections and examinations and other interactions with competing
consolidators. The Commission also believes that escalation procedures
to quickly inform responsible personnel of potential systems
disruptions and systems intrusions helps ensure that the appropriate
person(s) are provided notice of potential systems issues so that any
appropriate actions can be taken in accordance with the requirements of
Rule 614(d)(9) without unnecessary delay.
    Rule 614(d)(9)(iii)(A) should help facilitate competing
consolidators' responses to systems disruptions and systems intrusions,
including taking appropriate steps necessary to remedy the problem or
problems causing such event and mitigate the negative effects of the
event, if any, on market participants and the securities markets more
broadly.
    Rule 614(d)(9)(iii)(B) should help to advance the Commission's goal
of promoting fair and orderly markets by publicly disseminating
information about systems disruptions, allowing market participants to
use such information to evaluate the event's impact on their trading
and other activities and develop an appropriate response, as well as to
evaluate the performance of various competing consolidators.
    Rule 614(d)(9)(iii)(C) provides for a framework for reporting of
systems disruptions and systems intrusions, which ensures the
Commission's review and oversight of market data infrastructure and
fosters cooperation between the Commission and competing consolidators
in responding to such events. The Commission also believes that the
aggregated data from the reporting of systems disruptions and systems
intrusions, in combination with filings from SCI competing
consolidators under Regulation SCI, enhances its ability to
comprehensively analyze the nature and types of various systems issues
and identify more effectively areas of persistent or recurring problems
across the systems of all competing consolidators.
    Rule 614(d)(9)(iv) should assist the Commission in maintaining fair
and orderly markets in a BC/DR scenario following a wide-scale
disruption.
(c) Collection of Information Is Mandatory
    The collection of information discussed above is a mandatory
collection of information.
(d) Confidentiality
    The Commission expects that the written policies and procedures,
processes, criteria, standards, or other written documents developed or
revised by competing consolidators pursuant to Rule 614(d)(9) will be
retained by competing consolidators in accordance with, and for the
periods specified in, applicable recordkeeping requirements. Should
such documents be made available for examination or inspection by the
Commission and its representatives, they would be kept confidential
subject to the provisions of applicable law. In addition, the
information submitted to the Commission that is filed on Form CC is
public, as discussed in detail above. The information publicly