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SECURITIES AND EXCHANGE COMMISSION

17 CFR Parts 240 and 242

[Release No. 34-105251; File No. S7-2026-12]

RIN 3235-AN54

Concept Release on Consolidated Audit Trail and Other Audit Trails and Data Sources

AGENCY: Securities and Exchange Commission.

ACTION: Concept release; request for comments.

SUMMARY: The Securities and Exchange Commission (the “Commission”) is publishing this

concept release to solicit comments in support of a comprehensive review of the Consolidated

Audit Trail and other audit trails and related data sources currently used in the regulation of U.S.

securities markets, including comments regarding the funding mechanisms for these audit trails

and/or related data sources. There have been several developments since the Commission last

evaluated the scope and sufficiency of these audit trails and related data sources. These

developments have prompted the Commission to consider whether changes should be made to

the rules and regulations governing existing audit trails and related data sources to better respond

to and reflect current market conditions; demonstrated regulatory needs; civil liberty, privacy,

and confidentiality concerns; cost-efficient technology solutions; and cybersecurity

considerations.

DATES: Comments should be received on or before June 22, 2026.

ADDRESSES: Comments may be submitted by any of the following methods:

Electronic Comments:

•

Use the Commission’s internet comment form

(https://www.sec.gov/rules/submitcomments.htm); or

•

Send an email to rule-comments@sec.gov. Please include File Number S7-2026-12 on

the subject line.

Paper Comments:

•

Send paper comments to Secretary, Securities and Exchange Commission, 100 F Street

NE, Washington, DC 20549-1090.

All submissions should refer to File Number S7-2026-12. This file number should be included

on the subject line if e-mail is used. To help the Commission process and review your comments

more efficiently, please use only one method of submission. The Commission will post all

comments on the Commission’s website (https://www.sec.gov/rules-regulations/rulemakingactivity). All comments received will be posted without change. Do not include personally

identifiable information in submissions; you should submit only information that you wish to

make available publicly. The Commission may redact in part or withhold entirely from

publication submitted material that is obscene or subject to copyright protection.

Studies, memoranda, or other substantive items may be added by the Commission or staff

to the comment file during this rulemaking. A notification of the inclusion in the comment file

of any such materials will be made available on the Commission’s website. To ensure direct

electronic receipt of such notifications, sign up through the “Stay Connected” option at

www.sec.gov to receive notifications by email.

FOR FURTHER INFORMATION CONTACT: David Hsu, Assistant Director, and Erika

Berg, Special Counsel, at (202) 551-5500, Office of Market Supervision, Division of Trading

and Markets, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549.

TABLE OF CONTENTS

Introduction ....................................................................................................................... 5

II.

Current Audit Trails and Data Sources Utilized by Regulators ................................ 12

The CAT .......................................................................................................................... 13

EBS System ...................................................................................................................... 15

Other Audit Trails and Related Data Sources ............................................................. 16

III.

Request for Comment ..................................................................................................... 18

Regulatory Purpose of the CAT .................................................................................... 19

Structure and Governance of the CAT ......................................................................... 19

CAT NMS Plan ............................................................................................................... 20

Operating Committee ..................................................................................................... 21

Advisory Committee ....................................................................................................... 23

CAT Funding and Cost Management ........................................................................... 26

Cost Management ........................................................................................................... 27

Funding Model and Allocation of Fees ......................................................................... 28

Reserve Funds ................................................................................................................. 30

Section 31 Fees and Alternative Methods of Funding the CAT ................................. 31

CAT Design and Scope ................................................................................................... 33

Scope ................................................................................................................................. 36

General Functionality ..................................................................................................... 37

Lifecycle Linkage and Processing Timelines ................................................................ 39

Data Storage and Retention ........................................................................................... 42

CCID Generation ............................................................................................................ 43

Previous Changes to CAT Requirements ..................................................................... 45

Verbal Activity on Exchange Floors ............................................................................. 46

Not Immediately Actionable Electronic Requests for Quotes .................................... 48

Port-Level Settings .......................................................................................................... 49

Representative Order Linkage ...................................................................................... 53

Potential Changes to Other Data Sources and Related Rules .................................... 54

Retirement of Partially Duplicative Systems ................................................................ 56

Modification and/or Replacement of the EBS System ................................................. 57

LTID ................................................................................................................................. 64

Civil Liberties and Privacy Considerations .................................................................. 67

Cybersecurity .................................................................................................................. 69

The CAT .......................................................................................................................... 69

EBS ................................................................................................................................... 74

R&R System .................................................................................................................... 76

LOPR ............................................................................................................................... 79

Other Audit Trails and/or Related Data Sources ........................................................ 80

Transparency and Process of Comprehensive Review ................................................ 80

IV.

General Request for Comment ...................................................................................... 81

Other Matters .................................................................................................................. 82

VI.

Conclusion ....................................................................................................................... 82

Introduction

The Securities and Exchange Act of 1934 (the “Exchange Act”), as amended, 1 tasks the

Commission with overseeing the U.S. securities markets, including supervising certain market

participants such as broker-dealers, clearing agencies, and national securities exchanges. 2 The

Exchange Act further provides that specified entities, including national securities exchanges and

registered securities associations, fall within the definition of a self-regulatory organization

(“SRO”). 3 As an SRO, each national securities exchange and national securities association

must comply, and enforce the compliance by its members and associated persons, with the

Exchange Act, the Commission’s rules and regulations thereunder, and the SRO’s own rules. 4

Effective market oversight by the Commission and SROs relies on, among other things,

access by regulatory users at the Commission and the SROs to accurate and timely market data.

Because the vast majority of securities transactions in modern markets occur electronically, at

high speeds and volumes and across trading venues, cross-market audit trails and related data

sources have come to play an important role in the oversight of securities markets. Such audit

trails and related data sources aid regulators in conducting robust cross-market surveillances,

15 U.S.C. 78a et seq.

See, e.g., 15 U.S.C. 78b, 78f, 78i, 78j, 78k, 78k-1, 78o, 78o-3, and 78s.

15 U.S.C. 78c(a)(26). The national securities exchange and registered securities association SROs, also

referred to herein as “the Participants,” include 24X National Exchange, BOX Exchange LLC, Cboe BYX

Exchange, Inc., Cboe BZX Exchange, Inc., Cboe C2 Exchange, Inc., Cboe EDGA Exchange, Inc., Cboe

EDGX Exchange, Inc., Cboe Exchange, Inc. (“Cboe”), Financial Industry Regulatory Authority, Inc.

(“FINRA”), Investors Exchange LLC, Long-Term Stock Exchange, Inc., MEMX LLC, Miami International

Securities Exchange LLC, MIAX Emerald, LLC, MIAX PEARL, LLC, MIAX Sapphire, LLC, Nasdaq

GEMX, LLC, Nasdaq ISE, LLC, Nasdaq MRX, LLC, Nasdaq PHLX LLC, The Nasdaq Stock Market LLC

(“Nasdaq”), Nasdaq Texas, LLC, New York Stock Exchange LLC (“NYSE”), NYSE American LLC,

NYSE Arca, Inc., NYSE National, Inc., and NYSE Texas, Inc.

15 U.S.C. 78f(b)(1); 15 U.S.C. 78o-3(b)(2); 15 U.S.C. 78s(g)(1). FINRA currently is the only national

securities association. As a national securities association, FINRA is also responsible for enforcing

compliance by its members and associated persons with the rules of the Municipal Securities Rulemaking

Board (“MSRB”).

investigations, enforcement activities, and engaging in cross-market reconstructions and

analyses, as appropriate.

For several decades, broker-dealers furnished information to the Commission and the

SROs through questionnaires known as “blue sheets” due to the color on which the forms were

printed. In the late 1980s, as the volume of trading and securities transactions dramatically

increased, the Commission and the SROs worked together to develop and implement a requestand-response system with a universal electronic format, commonly known as the “electronic blue

sheet” or “EBS” system, to replace the paper-based process. 5 The Commission and the SROs

also obtained data through other methods—including manual requests to market participants,

daily reports produced by clearing agencies that provide aggregated information to the SROs and

the Commission, market-specific matching engines and/or order book feeds, market-specific

audit trails, trade reporting facilities, proprietary data feeds made available by SROs and/or offexchange trading venues, and publicly-available consolidated data feeds provided by securities

information processors. 6

Regulators also obtained data through audit trails. For example, in 1996, the National

Association of Securities Dealers (n/k/a FINRA) was required, pursuant to a settled order, to

design and implement an audit trail to provide an accurate, time-sequenced record of orders and

transactions on Nasdaq-listed equities, which came to be known as the Order Audit Trail System

See Securities Exchange Act Release No. 44494 (June 29, 2001), 66 FR 35836 (July 9, 2001) (“EBS

Adopting Release”).

See 15 U.S.C. 78c(a)(22)(A) (“The term ‘securities information processor’ means any person engaged in

the business of (i) collecting, processing, or preparing for distribution or publication, or assisting,

participating in, or coordinating the distribution or publication of, information with respect to transactions

in or quotations for any security (other than an exempted security) or (ii) distributing or publishing

(whether by means of a ticker tape, a communications network, a terminal display device, or otherwise) on

a current and continuing basis, information with respect to such transactions or quotations.”).

(“OATS”). 7 OATS was later expanded to include over-the-counter equity securities 8 and all

NMS stocks. 9 FINRA also created an internal process by which it augmented the data it

collected via OATS with order and trade execution data collected from other SROs with which it

had regulatory services agreements. 10 Similarly, in 2000, a group of options exchanges was

required, pursuant to a settled order, to design and implement an audit trail to provide an

accurate, time-sequenced record of orders, quotations, and transactions on those options

exchanges. 11 That audit trail became known as the Consolidated Options Audit Trail System

(“COATS”) and was later expanded to incorporate reporting for activity on additional options

exchanges. 12

Although these audit trails and related data sources were useful, they did not produce a

comprehensive cross-market audit trail. Even with augmented OATS data, assembling a

consolidated audit trail from the various data sources described above was a cumbersome,

In the Matter of National Association of Securities Dealers, Inc., Administrative Proceeding File No. 39056, Securities Exchange Act Release No. 37358 (Aug. 8, 1996), available at

https://www.sec.gov/files/litigation/admin/3437538.txt.

See Securities Exchange Act Release No. 67457 (July 18, 2012), 77 FR 45722, 45728 (Aug. 1, 2012)

(“Rule 613 Adopting Release”); see also Securities Exchange Act Release No. 62174 (May 26, 2010), 75

FR 32556, 32558-59 (June 8, 2010) (“Rule 613 Proposing Release”).

To avoid duplicative reporting requirements after OATS expansion to all NMS stocks, NYSE-affiliated

exchanges replaced their market-specific audit trail requirements for members that were also members of

either FINRA or Nasdaq—and therefore already reporting to OATS—with rules that allowed these

members to satisfy their reporting obligations by meeting the new OATS reporting requirements in 2011.

See, e.g., Rule 613 Adopting Release, supra note 8, at 45728; 17 CFR 242.600(65) (defining “NMS stock”

as “any NMS security other than an option”).

See, e.g., Rule 613 Adopting Release, supra note 8, at 45729.

See In the Matter of Certain Activities of Options Exchanges, Administrative Proceeding File No. 3-10282,

Securities Exchange Act Release No. 43268 (Sept. 11, 2000), available at

https://www.sec.gov/enforcement-litigation/administrative-proceedings/34-43268.

See Staff Paper on Cross-Market Regulatory Coordination, available at

https://www.sec.gov/about/divisions-offices/division-trading-markets/staff-paper-cross-market-regulatorycoordination.

complex, and time-consuming process that was prone to error. 13

To improve the accuracy, completeness, accessibility, and timeliness of the data available

to regulators, in 2012, the Commission adopted Rule 613 to require the SROs to jointly develop

and submit to the Commission a national market system plan to create, implement, and maintain

a consolidated audit trail (the “CAT”). 14 In proposing and adopting Rule 613, the Commission

stated that the increasingly high-speed, electronic, and widely dispersed markets had given rise

to a need for efficient access to a more robust and comprehensive, cross-market audit trail,

explaining that existing audit trails and/or data sources were otherwise limited in their scope and

effectiveness. 15 The national market system plan submitted by the SROs—the CAT NMS

Plan—was approved by the Commission in 2016.16 On July 15, 2024, the SROs represented to

the Commission that the CAT had been fully implemented. 17

See, e.g., Rule 613 Adopting Release, supra note 8, at 45728 (“Although these developments with respect

to the scope of FINRA’s OATS rules reduce the number of audit trails with disparate requirements, they

still do not result in a comprehensive audit trail that provides regulators with accurate, complete, accessible,

and timely data on the overall markets for which regulators have oversight responsibilities.”); see also, e.g.,

Securities Exchange Act Release No. 77724 (Apr. 27, 2016), 81 FR 30614, 30670 (May 17, 2016)

(“Regardless of whether order lifecycle reports are reflected in the same or different data sources, the

process of linking lifecycle events is complex and can create inaccuracies. Merging different data sources

often involves translating the data sources into the same format, which can be a complex process that is

prone to error. Linking records within or across data sources also requires the sources to share ‘key fields’

that facilitate linkage, along with a successful linking algorithm. Regulators may be unable to link some

data source combinations accurately because the data sources do not have key fields in common or the key

fields are not sufficiently granular. . . . The inability to link all records affects the accuracy of the resulting

data and can force an inefficient manual linkage process that would delay the completion of the data

collection and analysis portion of the examination, investigation, or reconstruction.” (citations omitted)).

See Rule 613 Adopting Release, supra note 8; 17 CFR 242.613.

See, e.g., Rule 613 Adopting Release, supra note 8, at 25722-23.

See Securities Exchange Act Release No. 79318 (Nov. 15, 2016), 81 FR 84696 (Nov. 23, 2016) (“CAT

NMS Plan Approval Order”). The CAT NMS Plan is Exhibit A to the CAT NMS Plan Approval Order.

See CAT NMS Plan Approval Order, at 84943-85034.

See CAT Q2 & Q3 2024 Quarterly Progress Report (July 29, 2024), available at

https://catnmsplan.com/sites/default/files/2024-07/CAT_Q2-and-Q3-2024-QPR.pdf. On April 20, 2020,

the Commission granted conditional exemptive relief to allow for the implementation of phased Industry

Member reporting to the CAT across five phases. See Securities Exchange Act Release No. 88702, 85 FR

23075 (Apr. 24, 2020) (“Phased Reporting Exemptive Relief Order”).

There have been a number of developments in the nearly ten years since the Commission

approved the CAT NMS Plan. Chief amongst these developments is the implementation and

operation of the CAT itself in accordance with the CAT NMS Plan and its amendments. Once it

was able to determine that its members were effectively reporting to the CAT and that the CAT’s

accuracy and reliability met certain standards, FINRA retired OATS, effective as of September

1, 2021. 18 Other data sources, such as the EBS system, remain operational. The Commission

has also provided exemptive relief and approved amendments to the CAT NMS Plan to enable

the SROs to remove personally-identifiable information (“PII”) from the CAT, meaning that

regulators have continued to rely on alternative data sources (including the EBS system) for

fulfilling their regulatory obligations compared to what was contemplated by the Commission

when it approved the CAT NMS Plan in 2016. 19

Importantly, the annual costs of maintaining and operating the CAT have grown well

beyond the Commission’s 2016 estimate of approximately $55.8 million,20 increasing to over

See, e.g., FINRA Regulatory Notice 21-21, “FINRA Eliminates the Order Audit Trail System (OATS)

Rules” (June 17, 2021), available at https://www.finra.org/rules-guidance/notices/21-21. The CAT is

currently the only audit trail and/or data source that provides cross-market order-level information to

regulators.

See, e.g., Securities Exchange Act Release No. 88393 (Mar. 17, 2020), 85 FR 16152 (Mar. 20, 2020) (the

“2020 PII Exemptive Relief Order”) (providing conditional exemptive relief from CAT NMS Plan

requirements obligating the SROs to collect social security numbers (“SSNs”) and/or individual tax payer

identification numbers (“ITINs”), dates of birth, and account numbers associated with natural persons);

Securities Exchange Act Release No. 102386 (Feb. 10, 2025), 90 FR 9642, 9643 (Feb. 14, 2025) (the

“2025 PII Exemptive Relief Order”) (providing conditional exemptive relief from CAT NMS Plan

requirements obligating the SROs to collect names, addresses, and years of birth for U.S. natural persons);

Securities Exchange Act Release No. 104586 (Jan. 13, 2026), 91 FR 2164 (Jan. 16, 2026) (the “CAIS

Order”) (codifying the 2020 PII Exemptive Relief Order and the 2025 PII Exemptive Relief Order and,

among other things, enabling the SROs to eliminate: (1) historical customer and account-level data,

including, among other things, names, addresses, and years of birth, (2) names, addresses, and years of

birth (where applicable) for foreign natural persons, for legal entities, and for authorized traders, and (3)

employer identification numbers).

See, e.g., CAT NMS Plan Approval Order, supra note 16, at 84918-20.

$248 million per year in the 2025 budget initially approved by the SROs. 21 Markets have

experienced much higher volumes and more trading activity than the Commission anticipated in

2016, which has contributed to increased costs associated with storage, data processing, and

message traffic. 22 Recently, trading venues have also pushed to extend trading hours, 23 which

could further increase trading volumes. 24 Although steps have been taken by the Commission

and the SROs to manage and contain costs, 25 the 2026 budget approved by the SROs of

See https://catnmsplan.com/sites/default/files/2024-11/11.20.24-CAT-LLC-2025Financial_and_Operating-Budget.pdf.

For example, the CAT NMS Plan approved in 2016 anticipates that the CAT will process and load more

than 58 billion records a day, or approximately 14.6 trillion records a year. (58,000,000,000 x 252 trading

days = 14,616,000,000,000). See CAT NMS Plan, supra note 16, at Appendix D, Section 1.3 n.262.

However, current CAT data volumes are and have been significantly higher than this initial estimate. See

e.g., Securities Exchange Act No. 103960 (Sept. 12, 2025), 90 FR 44910 (Sept. 17, 2025) (“2025 Funding

Model Amendment”) (stating that CAT data volumes have grown 41% over a three-year period – 109

trillion events in 2022, 116 trillion events in 2023, and 154 trillion events in 2024); Cboe, “Growth of U.S.

Equities Volumes and Rise of Retail” (Nov. 14, 2024), available at:

https://www.cboe.com/insights/posts/growth-of-u-s-equities-volumes-and-rise-of-retail (stating that U.S.

equities average daily volume has grown steadily since 2018, and that the average daily volume is at a new

norm of over 10 billion shares post-COVID-19 pandemic). There have also been dramatic increases in

quoting activity on Listed Options. See 17 CFR 242.600(b)(52) of Regulation NMS (defining “Listed

Option” as “any option traded on a registered national securities exchange or automated facility of a

national securities association”); see also CAT NMS Plan, supra note 16, at Section 1.1. (defining a “Listed

Option” as having “the meaning set forth in Rule 600(b)(35) of Regulation NMS,” which provision has

been redesignated as Rule 600(b)(52) without any changes to its terms). According to SEC staff

calculations, the median daily Options Price Reporting Authority (“OPRA”) quote count in January 2017

was approximately 8.8 billion, whereas the median daily OPRA quote count by March 2025 was

approximately 243.8 billion—an increase of approximately 2,670 percent.

See, e.g., Securities Exchange Act Release No. 101777 (Nov. 27, 2024), 89 FR 97092, 97104-06 (Dec. 6,

2024) (order approving 24X National Exchange’s Form 1 application, but stating that a proposed rule

change must be filed with the Commission pursuant to Section 19(b) of the Exchange Act and approved

before 24X National Exchange can provide the 24X Market Session); Securities Exchange Act Release No.

102400 (Feb. 11, 2025), 90 FR 9794 (Feb. 18, 2025) (order approving proposal by NYSE Arca, Inc. to

lengthen the hours of its extended trading sessions, but stating that a proposed rule change must be filed

with the Commission pursuant to Section 19(b) of the Exchange Act and approved before such changes can

be made); DTCC, “DTCC’s NSCC to Increase Clearing Hours to Support Extended Trading” (Mar. 18,

2025), available at https://www.dtcc.com/news/2025/march/18/dtccs-nscc-to-increase-clearing-hours-tosupport-extended-trading (stating that NSCC will increase clearing hours to support overnight trading

activity from alternative trading systems and exchanges, with implementation targeted for Q2 2026).

See, e.g., Letter from Stephen John Berger, Managing Director, Global Head of Government & Regulatory

Policy, Citadel Securities LLC (“Citadel”), to Vanessa A. Countryman, Secretary, Commission (Oct. 17,

2025), at 5, available at https://www.sec.gov/comments/4-698/4698-669947-2018874.pdf (“Citadel Letter

I”).

See Part III.D infra for further discussion of these steps.

approximately $156 million 26 remains significantly in excess of the operational costs estimated

by the Commission when it approved the CAT NMS Plan in 2016.27

In addition, the Commission has received suggestions from the SROs and other market

participants about potential considerations for, and improvements to, audit trails and/or related

data sources, 28 including petitions for rulemaking related to the operation and funding of the

CAT. 29

See https://catnmsplan.com/sites/default/files/2025-12/12.08.25-CAT-LLC-2026Financial_and_Operating_Budget.pdf.

See Securities Exchange Act Release No. 105003 (Mar. 16, 2026), 91 FR 13410 (Mar. 19, 2026) (the

“2026 Funding Model Order”), at Part IV. A.1, for a full discussion of realized costs to build and operate

the CAT.

See, e.g., Letter from Joanna Mallers, Secretary, FIA Principal Traders Group (“PTG”), to Hon. Paul S.

Atkins, Chairman, Commission (June 26, 2025), available at https://www.sec.gov/comments/4-853/4853618547-1815754.pdf (“PTG Letter I”); Letter from James Toes, President and CEO, Security Traders

Association, to Hon. Paul S. Atkins, Chairman, Commission (June 25, 2025), available at

https://www.sec.gov/comments/4-853/4853-616887-1809874.pdf (“STA Letter”); Letter from Joseph

Corcoran, Managing Director and Associate General Counsel, and Gerald O’Hara, Vice President and

Assistant General Counsel, Securities Industry and Financial Markets Association (“SIFMA”), to Hon. Paul

S. Atkins, Chairman, Commission (June 6, 2025), available at https://www.sec.gov/comments/4-698/4698610487-1785814.pdf (“SIFMA Letter I”); Letter from Howard Meyerson, Managing Director, Financial

Information Forum (“FIF”), to Commission (July 14, 2025), available at https://www.sec.gov/comments/4698/4698-625367-1847814.pdf (“FIF Letter I”); Letter from Jaime Klima, General Counsel, New York

Stock Exchange, to Hon. Paul S. Atkins, Chairman, Commissioner (Apr. 24, 2025), available at

https://www.sec.gov/comments/4-698/4698-598195-1737842.pdf. See also, e.g., Securities Exchange Act

Release No. 104504 (Dec. 23, 2025), 90 FR 61506, 61553-36 (Dec. 31, 2025) (identifying, without

formally proposing, two potential cost-savings measures for the Commission’s consideration). Although

some suggestions were beyond the scope of the Commission’s consideration in other contexts, nothing

precludes the Commission from evaluating such suggestions in the context of this review.

See, e.g., Letter from Stephen John Berger, Managing Director, Global Head of Government & Regulatory

Policy, Citadel, to Vanessa A. Countryman, Secretary, Commission (Jan. 15, 2026), available at

https://www.sec.gov/files/rules/petitions/2026/petn4-878.pdf (“Citadel Petition”); Letter from J. Matthew

DeLesDernier, Deputy Secretary, Commission, to Stephen John Berger, Global Head of Government and

Regulatory Policy, Citadel (Feb. 18, 2026), available at https://www.sec.gov/files/rules/petitions/2026/4878_rulemaking-petition-letter.pdf (“Response to Citadel Petition”). See also, e.g., Letter from Tyler

Gellasch, President and CEO, Healthy Markets Association, to Hon. Gary Gensler, Chair, Commission

(Sept. 19, 2024), available at https://www.sec.gov/files/rules/petitions/2024/petn4-843.pdf (“Healthy

Markets Petition”); Letter from John A. Zecca, Executive Vice President, Global Chief Legal, Risk &

Regulatory Officer, Nasdaq, and J. Patrick Sexton, Executive Vice President, General Counsel & Corporate

Secretary, Cboe, to Hon. Paul S. Atkins, Chairman, Commission (Apr. 24, 2025), available at

https://www.sec.gov/comments/4-698/4698-598775-1738922.pdf. There have also been legal challenges to

the CAT, including to the Commission’s authority to require the SROs to implement and operate the CAT.

See, e.g., Amended Class-Action Compliant for Declaratory, Injunctive, and Mandamus Relief, Davidson

et al. v. Atkins, No. 6:24-cv-00197 (W.D. Tex. Jan. 13, 2025). On February 4, 2026, the Court granted the

To further consider these market developments, as well as suggestions received from and

concerns raised by the SROs and other market participants, the Commission has determined to

conduct a comprehensive review of the CAT and other audit trails and related data sources

currently used by securities regulators, including regulatory users at the SROs. This review will

allow the Commission to examine the effectiveness, regulatory use, and costs of these data

sources and to obtain crucial feedback regarding whether changes should be made to their

structure, scope, functionality, and security, including changes that would strike a different

balance between privacy considerations and regulatory need.

This concept release begins with a brief overview of the audit trails and data sources used

by the Commission and the SROs to meet market oversight responsibilities. The release then

solicits comments on whether changes should be made to the rules and regulations governing

existing audit trails and related data sources to better respond to and reflect current market

conditions, demonstrated regulatory needs, civil liberty and privacy concerns, cost-efficient

technology solutions, and cybersecurity considerations.

II.

Current Audit Trails and Data Sources Utilized by Regulators

Pursuant to Section 17 of the Exchange Act, 30 the Commission can request books and

Commission’s motion to continue to hold the case in abeyance until July 15, 2026. Text Order, Davidson

et al. v. Atkins, No. 6:24-cv-00197 (W.D. Tex. Feb. 4, 2026). In addition, market participants have

challenged the CAT’s funding model. See Am. Sec. Ass’n et al. v. SEC, No. 26-10936 (11th Cir. Mar. 24,

2026); see also Am. Sec. Ass’n v. SEC, 147 F.4th 1264 (11th Cir. 2025) (11th Cir. 2025) (vacating an order

that implemented a modified funding model for the CAT and remanding the matter to the Commission for

further proceedings consistent with its opinion).

15 U.S.C. 78q(a)(1) (requiring every national securities exchange, member thereof, broker or dealer who

transacts a business in securities through the medium of any such member, registered securities association,

and registered broker or dealer, among other parties, to make and keep for prescribed periods such records,

furnish such copies thereof, and make and disseminate such reports as the Commission, by rule, prescribes

as necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance

of the purposes of this chapter). Specific books and records requirements, including storage and retention

requirements, are set forth for the SROs and broker-dealers in rules promulgated by the Commission. See,

e.g., 17 CFR 240.17a-1; 17 CFR 240.17a-3; 17 CFR 240.17a-4; 17 CFR 240.17a-6; 17 CFR 240.17a-7.

records to monitor and oversee trading in the securities markets under its jurisdiction. Each SRO

has its own recordkeeping rules and similarly can request books and records from its members. 31

The Commission and the SROs have used these powers to create audit trails and/or data sources

and/or to obtain data for market oversight purposes as follows.

The CAT

The CAT is intended to furnish both the Commission and the SROs with timely access to

a comprehensive, uniform, accurate, and linked set of trading data that allows them to efficiently

retrieve relevant information about the full lifecycle of all orders in NMS and OTC Equity

Securities 32 across the markets and trading centers that comprise the national market system. 33

The CAT collects data from both SROs and Industry Members 34 about the original receipt or

origination of an order, the routing of an order and the receipt of an order that has been routed,

executions, modifications, and cancellations. 35 The Plan Processor, 36 FINRA CAT, LLC

See, e.g., Nasdaq Options 6E, Section 1; Cboe Rule 7.1; NYSE Rule 440. Under Section 19(b) of the

Exchange Act, SROs generally must file proposed rule changes with the Commission for notice, public

comment, and Commission review, prior to implementation. See 15 U.S.C. 78s; 17 CFR 240.19b-4.

An “NMS Security” means “any security or class of securities for which transaction reports are collected,

processed, and made available pursuant to an effective transaction reporting plan, or an effective national

market system plan for reporting transactions in Listed Options.” An “OTC Equity Security” means “any

equity security, other than an NMS Security, subject to prompt last sale reporting rules of a registered

national securities association and reported to one of such association’s equity trade reporting facilities.”

See CAT NMS Plan, supra note 16, at Section 1.1.

See, e.g., Rule 613 Adopting Release, supra note 8, at 45723, 45726.

See also CAT NMS Plan, supra note 16, at Section 1.1 (defining “Industry Member” as “a member of a

national securities exchange or a member of a national securities association”).

Rule 613 and the CAT NMS Plan identify the information that must be reported by the SROs and the

information that the SROs must obligate their members to report through compliance rules. See, e.g., 17

CFR 242.613(c)(7); CAT NMS Plan, supra note 16, at Sections 6.3-6.4. Further guidance about how to

report to the CAT is provided by detailed technical specifications available on the CAT NMS Plan website.

See https://catnmsplan.com/specifications/participants; https://catnmsplan.com/specifications/im.

“Plan Processor” means “the Initial Plan Processor or any other Person selected by the Operating

Committee pursuant to SEC Rule 613 and Sections 4.3(b)(i) and 6.1, and with regard to the Initial Plan

Processor, the Selection Plan, to perform the CAT processing functions required by SEC Rule 613 and set

forth in this Agreement.” See CAT NMS Plan, supra note 16, at Section 1.1; see also id. (defining

“Operating Committee” as “the governing body of the Company designated as such and described in

Article IV”).

(“FINRA CAT”), uses this data to “link and create the order lifecycle” using a “daisy chain

approach,” in which “a series of unique order identifiers, assigned to all order events handled by

CAT Reporters[,] are linked together by the Central Repository[ 37] and assigned a single CATgenerated CAT-Order-ID that is associated with each individual order event and used to create

the complete lifecycle of an order.” 38 In addition to this linked data, the CAT is required to

provide regulators with SIP Data. 39

Although the CAT is no longer required to collect customer and account-level

information pursuant to an amendment to the CAT NMS Plan approved by the Commission on

January 13, 2026, 40 the CAT’s architecture of identifiers and lifecycle linkage enables regulators

with a specific regulatory purpose to analyze a particular customer’s trading activity for Eligible

Securities 41 across markets, brokers, and/or accounts through generation of a CAT Customer ID

(“CCID”). 42 This transactional data may only be associated with customer and account-level

information if such information is obtained separately from Industry Members through a manual

“Central Repository” means “the repository responsible for the receipt, consolidation, and retention of all

information reported to the CAT pursuant to SEC Rule 613 and this Agreement.” Id. at Section 1.1.

Id. at Appendix D, Section 3. The “CAT-Order-ID” is “a unique order identifier or series of unique order

identifiers that allows the central repository to efficiently and accurately link all reportable events for an

order, and all orders that result from the aggregation or disaggregation of such order.” See also 17 CFR

242.613(j)(1).

“SIP Data” means: “(A) information, including the size and quote condition, on quotes including the

National Best Bid and National Best offer for each NMS Security; (B) Last Sale Reports and transaction

reports reported pursuant to an effective transaction reporting plan filed with the SEC pursuant to, and

meeting the requirements of, SEC Rules 601 and 608; (C) trading halts, Limit Up/Limit Down price bands,

and Limit Up/Limit Down indicators; and (D) summary data or reports described in the specifications for

each of the SIPs and disseminated by the respective SIP.” Id. at Section 6.5(a)(ii); see also 17 CFR

242.613(e)(7). Although the CAT was originally required to link SIP Data with other transactional data

reported to the CAT, the Commission has granted exemptive relief from that requirement. See, e.g., 2025

Cost Savings Exemptive Relief Order, supra note 25, at 47856-57.

See CAIS Order, supra note 19.

“Eligible Security” includes “(a) all NMS Securities and (b) all OTC Equity Securities.” See CAT NMS

Plan, supra note 16, at Section 1.1.

See 2020 PII Exemptive Relief Order, supra note 19, for further explanation of how CCIDs are generated.

request. 43

EBS System

Requests for data outside of the CAT system are predominantly made through the EBS

system. In 2001, the Commission adopted Rule 17a-25 under the Exchange Act to codify and

enhance the EBS system. 44 Rule 17a-25 requires firms to report to the Commission standard

data elements for proprietary securities transactions such as security symbol, date executed,

amount traded, type of transaction, transaction price, account number, execution venue, and

identification information for the parties on either side of the transaction. 45 For customer

securities transactions, Rule 17a-25 further requires firms to include the customer name, address,

branch office number, registered representative number, type of order, date account opened,

taxpayer identification number, employer name, and the role of the intermediary (agent or

principal) if any. 46 This kind of customer information is no longer required to be collected or

stored by the CAT and is therefore only accessible through the EBS system or manual requests. 47

The EBS system is also used to process requests made by the Commission for accountlevel information and transactional data pursuant to Rule 13h-1, 48 which sets forth broker-dealer

record-keeping, reporting, and monitoring requirements for large traders. 49 This rule is designed

See Part III.F, Modification and/or Replacement of the EBS System infra for further discussion of this

process.

See EBS Adopting Release, supra note 5, at 35837; 17 CFR 240.17a-25.

17 CFR 240.17a-25(a)(1).

Id. at (a)(2). Rule 17a-25 also requires certain prime brokerage identifiers, average price account

identifiers, and identifiers used by depository institutions to be reported upon request. Id. at (b).

See CAIS Order, supra note 19.

See 17 CFR 240.13h-1.

Id. at (a)(1) (defining “large trader” as “any person that: (i) [d]irectly or indirectly, including through other

persons controlled by such person, exercises investment discretion over one or more accounts and effects

transactions for the purchase or sale of any NMS security for or on behalf of such accounts, by or through

one or more registered broker-dealers, in an aggregate amount equal to or greater than the identifying

to enable the Commission to promptly and efficiently identify significant market participants and

to collect data on their trading activity so that Commission staff can reconstruct market events

and conduct investigations. 50 Under Rule 13h-1, large traders are required to identify themselves

to the Commission and to make certain disclosures on Form 13H. 51 Upon receipt of Form 13H,

the Commission issues a unique identification number to the large trader (“LTID”), which the

large trader is then required to provide to those broker-dealers through which it trades. 52 Rule

13h-1 enables the Commission to request account-level information and transactional data from

broker-dealers for large traders (as well as Unidentified Large Traders 53) via the EBS system and

using the EBS reporting template.

Information retrievable through the EBS system is limited to executed trades and does

not contain information on orders or quotes, and thus does not contain information on routes,

modifications, and cancellations. 54 Such information is available through the CAT and is used

to investigate various forms of potential market manipulation like layering and spoofing.

Other Audit Trails and Related Data Sources

Regulators may make manual requests for books and records information—for example,

activity level; or (ii) [v]oluntarily registers as a large trader by filing electronically with the Commission

Form 13H”); id. at (a)(7) (defining “identifying activity level” as “aggregate transactions in NMS securities

that are equal to or greater than: (i) [d]uring a calendar day, either two million shares or shares with a fair

market value of $20 million; or (ii) [d]uring a calendar month, either twenty million shares or shares with a

fair market value of $200 million”).

See, e.g., Rule 613 Adopting Release, supra note 8, at 45733.

17 CFR 240.13h-1(b).

Id. at (b)(2).

Id. at (a)(9) (“Unidentified Large Trader” means “each person who has not complied with the identification

requirements” of Rule 13h-1(b)(1) and (b)(2) “that a registered broker-dealer knows or has a reason to

know is a large trader”).

See also notes 183-192 and associated text infra for additional discussion of the data accessible through the

EBS system.

by sending emails to broker-dealers requesting the relevant data. 55 In addition, the Commission

and the SROs also rely on other data sources to fulfill their regulatory obligations.

One such data source is the National Securities Clearing Corporation’s (“NSCC”) equity

cleared report, 56 which is generated on a daily basis by the SROs and provided to the NSCC in a

database accessible by the Commission. It shows the number of trades and daily volume of all

equity securities transacted, sorted by clearing member and searchable by security name and

CUSIP number. 57 The Options Clearing Corporation (“OCC”) 58 provides several other reports

to regulators, including: (1) the OCC Trades report, which provides similar data as the NSCC’s

equity cleared report for options securities; (2) the OCC End-of-Day Positions File, which

provides the current aggregate position for customer, firm, and market-maker clearing ranges;

and (3) the Large Options Position Report (“LOPR”), which provides start-of-day and end-ofday positions per option security on a customer and account-level basis, along with several other

reports. OCC generates these reports on a daily basis and provides them to the SROs; the

Commission then accesses OCC reports through the FINRA regulatory portal. 59

Regulators may also obtain data from privately- and publicly-available market data feeds.

Specifically, SROs may leverage data feeds from their own, market-specific matching engines

See notes 30-31 and associated text supra.

NSCC is a subsidiary of the Depository Trust and Clearing Corporation and provides centralized clearing

information and settlement services to broker-dealers for trades involving equities, corporate and municipal

debt, American depository receipts, exchange traded funds, and unit investment trusts.

A CUSIP number is a unique alphanumeric identifier assigned to a security.

OCC provides clearing and settlement services for equity derivatives, options, futures, and securities

lending transactions.

The high-level, end-of-day, and often netted nature of these NSCC and OCC reports, and the limited

information they provide, means that they typically serve only as a starting point for certain types of

investigations—a tool that regulators use to narrow down the parties to contact for additional information

on certain transactions.

and/or order book feeds, data from their own audit trails 60 or other trade reporting or display

facilities, 61 data from proprietary feeds made available by other SROs and/or off-exchange

execution venues, and/or publicly-available consolidated data feeds provided by various

securities information processors that provide top-of-the-book information like quotes, National

Best Bid and Offer (“NBBO”), and trade- or last sale-data. 62 The Commission maintains a tool

called the Market Information Data Analytics System (“MIDAS”) that similarly collects and

processes equity data from the consolidated data feeds as well as from separate proprietary

feeds. 63 Even when combined in a tool like MIDAS, though, these data feeds do not provide a

comprehensive, cross-market audit trail that would enable regulators to track an order through its

entire lifecycle, from order origination through routing and on to execution, modification, or

cancellation, because each of the above-described audit trails and/or related data sources has its

own limitations.

III.

Request for Comment

The Commission encourages comment from all interested parties, including, but not

limited to, SROs, broker-dealers, retail and institutional investors and those who represent their

interests, academics, economists, technology experts and service providers, trade associations,

and civil liberties groups. While the release poses a number of general and specific questions,

In addition to market-specific audit trails, the SROs have maintained COATS. OATS, however, was

retired as of September 1, 2021. See note 18 and associated text supra.

FINRA maintains trade reporting facilities that provide a mechanism for the reporting of transactions in

listed equity securities effected otherwise than on a national securities exchange, as well as an over-thecounter reporting facility and an alternative display facility (collectively, “FINRA Facilities”). See, e.g.,

FINRA Rules 6200, 6300, 6600, 7100, 7200, and 7300.

These consolidated data feeds include: (1) the Consolidated Tape System (“CTS”) and the Consolidated

Quote System (“CQS”) (Tape A and Tape B); the UTP Quotation Data Feed (“UQDF”) and the UTP Trade

Data Feed (“UTDF”) (Tape C); and OPRA.

See https://www.sec.gov/securities-topics/market-structure-analytics/midas-market-information-dataanalytics-system.

the Commission also welcomes comments on any other aspects of the audit trails and related

data sources currently in use (or comments on any potential audit trails and related data sources

that should be created), particularly on any costs, burdens, or benefits that may result from the

possible regulatory responses identified in this release or otherwise proposed by commenters.

Regulatory Purpose of the CAT

What are the regulatory use cases that must be enabled for the Commission and the SROs

to fulfill their statutory obligations? Is the CAT necessary to enable those use cases? For

example, is the CAT necessary to inform any regulatory decision-making and/or policy-making?

Are other audit trails and/or related data sources sufficient to enable necessary regulatory use

cases? Why or why not?

Are there features of the CAT that could be eliminated because they are unnecessary or

because they could be replaced by other currently-existing audit trails and/or related data sources

in an efficient and/or cost-effective manner? If so, please identify such features, explain why

they could be eliminated, and, if relevant, identify the alternative data sources that could replace

such features.

Should the Commission eliminate the CAT in favor of developing a different audit trail

and/or data source to enable necessary regulatory use cases? Why or why not? How should a

new audit trail and/or data source differ from the CAT? What improvements could be gained by

developing a new audit trail and/or data source that could not be achieved through incremental

improvement to the CAT?

Structure and Governance of the CAT

Historically, the structure and governance of audit trails and/or related data sources has

varied. OATS and COATS, for example, were owned, implemented, and operated by the SROs.

Commission staff could obtain access to the data supplied by these systems through ad hoc

requests. With respect to the EBS system, the Commission promulgated a rule to require brokerdealers to electronically submit specified data to the Commission upon request, in a format set by

the SROs, 64 but did not otherwise specify how systems that collect EBS data from broker-dealers

should be structured. Currently, Commission staff access EBS data through a system owned,

implemented, and operated by FINRA, which licenses use of the system to the Commission.

Rule 613 of Regulation NMS, 65 on the other hand, is more specific about the structure of the

CAT. It requires the SROs to act jointly to develop a national market system plan to implement

the CAT to collect specified data from the SROs and their members 66 and to provide access to

such data to each SRO and the Commission “for the purpose of performing . . . regulatory and

oversight responsibilities pursuant to the federal securities laws, rules, and regulations.” 67 The

rule further requires that each SRO be a sponsor of the CAT NMS Plan 68 and that the CAT NMS

Plan “include a governance structure to ensure fair representation of the plan sponsors, and

administration of the central repository, including the selection of the plan processor.” 69

CAT NMS Plan

Under the CAT NMS Plan developed by the SROs and approved by the Commission, the

CAT collects data that can be accessed by authorized regulatory users from the SROs and the

Commission in a system that is jointly owned by the SROs, 70 but implemented and operated by

See, e.g., 17 CFR 240.17a-25. As discussed above, the SROs have similar rules that enable them to obtain

data from their members. See, e.g., note 31 supra.

See 17 CFR 242.613

Id. at (a)(1), (c).

Id. at (e)(1).

Id. at (a)(4).

Id. at (b)(1).

The CAT NMS Plan functions as the limited liability company agreement of Consolidated Audit Trail,

LLC, the jointly owned limited liability company formed under Delaware state law through which the

the Plan Processor. FINRA CAT—a subsidiary of FINRA—is the current Plan Processor and, as

such, acts as a vendor to the SROs.

What are the advantages and disadvantages of structuring the CAT as a national market

system plan (an “NMS plan”)? Should the CAT continue to be structured as an NMS plan?

Does the fact that both the SROs and the Commission rely on the CAT to fulfill their regulatory

functions counsel for or against structuring the CAT as an NMS Plan?

If the CAT should not continue to be structured as an NMS plan, how should the

Commission and/or the SROs direct and oversee the operation of the CAT? 71 What specific

benefits, actions, and costs would be associated with transitioning to an alternative structure?

Would transitioning to an alternative structure for the CAT provide offsetting benefits to the

costs of transitioning? For example, would replacing the CAT NMS Plan with an SEC rule

requiring the reporting of certain information to the Commission and/or the SROs strengthen the

Commission’s ability to control the scope and associated costs of the CAT?

Operating Committee

The CAT is governed by the Operating Committee, which is composed of one voting

member for each SRO. 72 The CAT NMS Plan, however, does not specify or provide any

SROs conduct the activities of the CAT (“CAT LLC” or the “Company”). Each SRO is a member of the

Company and jointly owns the Company on an equal basis. See CAT NMS Plan, supra note 16.

See, e.g., Healthy Markets Petition, supra note 29, at 2 n.2 (suggesting that the Commission “end the CAT

NMS Plan” and instead “contract with a third party, including FINRA CAT, LLC, to continue to develop,

maintain, and operate the CAT”); Letter from Katie Kolchin, CFA, Managing Director, Head of Equity &

Options Market Structure, and Joseph Corcoran, Managing Director & Associate General Counsel, SIFMA,

to Vanessa A. Countryman, Secretary, Commission (Mar. 12, 2026), at 7-8, available at

https://www.sec.gov/comments/4-698/4698-722187-2261374.pdf (“SIFMA Letter II”) (“SIFMA continues

to believe that the CAT structure as an NMS plan is a very inefficient way to manage the equity and listed

options audit trail that CAT represents. . . . We continue to believe that the audit trail the CAT represents

can be run more efficiently by the Commission.”).

See CAT NMS Plan, supra note 16, at Section 4.1; see also id. at Section 4.2(a) (stating that one voting

member may have the right to vote on behalf of multiple affiliated SROs and that an alternate voting

member representing each SRO shall have a right to vote in the absence of that SRO’s voting member).

constraints on who each SRO may choose as its voting member. The Operating Committee

generally meets on a bi-weekly basis; except as otherwise provided in the CAT NMS Plan, the

Operating Committee makes all decisions and authorizes all actions taken by the Company. 73

Because the CAT NMS Plan allocates votes on the Operating Committee by SRO, affiliated

SRO groups may exert a level of control over the operations of the CAT that is not required to be

correlated with their market share or their share of operating expenses. 74

Should the Commission amend the CAT NMS Plan to implement a different voting

structure? If so, what should this voting structure be and why? What are the advantages and

disadvantages, for example, of allocating one vote to each affiliated SRO group and each nonaffiliated SRO, 75 as opposed to the current structure of allocating one vote to each SRO

regardless of affiliation? 76 If votes should be allocated to each affiliated SRO group and each

non-affiliated SRO, are there any circumstances in which an affiliated SRO group or nonaffiliated SRO should be given extra votes? 77 If so, please explain what these circumstances are

Id.

For instance, FINRA “has repeatedly questioned the voting structure that governs the CAT NMS Plan,”

which it states allows “large voting blocks for affiliated exchanges to impose costs on other SROs.”

According to FINRA, “four blocks of affiliated exchanges together represent 21 out of 27 votes, resulting

in voting dynamics that are susceptible to outcomes that favor some Participants at the expense of the

broader securities industry.” See Letter from Steffen N. Johnson, Wilson Sonsini Goodrich & Rosati P.C.,

to Vanessa Countryman, Secretary, Commission (Oct. 17, 2025), at 16, available at

https://www.sec.gov/comments/4-698/4698-670027-2019234.pdf.

The national market system plan regarding the consolidated equity market data (the “CT Plan”) takes a

similar approach, stating that the CT Plan operating committee “shall include one Voting Representative

Non-Affiliated SRO” and that “[e]ach Voting Representative shall be authorized to cast one vote on behalf

of the SRO Group or Non-Affiliated SRO that he or she represents . . . .” See Securities Exchange Act

Release No. 101672 (Nov. 20, 2024), 89 FR 94924 (Nov. 29, 2024), at Sections 4.2(a) and 4.3(a).

See, e.g., Letter from Stephen John Berger, Managing Director, Global Head of Government & Regulatory

Policy, Citadel, to Vanessa A. Countryman, Secretary, Commission (July 14, 2023), at 3, available at

https://www.sec.gov/comments/4-698/4698-224499-470142.pdf (“Citadel Letter II”) (recommending that

the Commission “[a]llocate voting rights similar to the NMS Plan for consolidated equity market data”).

See, e.g., CT Plan, supra note 75, at Section 4.3(a) (“[E]ach Voting Representative representing an SRO

Group or Non-Affiliated SRO whose combined market center(s) have consolidated equity market share of

and why they should affect the voting structure of the CAT NMS Plan.

Action of the Operating Committee is authorized either by a Majority Vote 78 or a

Supermajority Vote 79 of these voting members, as specified by the CAT NMS Plan. 80 Should

the Commission amend the CAT NMS Plan to require a different vote threshold—for example, a

Majority Vote, Supermajority Vote, or a unanimous vote—for any specific action? 81 If so, what

should that vote threshold be, for which actions, and why?

Are there measures that could increase transparency and accountability around CAT

NMS Plan voting while protecting sensitive information? For example, should more information

be made public about the Operating Committee’s deliberations? Are there any privacy or

security concerns regarding disclosure of such information?

Advisory Committee

Rule 613 requires that the CAT NMS Plan “include an Advisory Committee,” whose

purpose “shall be to advise the plan sponsors on the implementation, operation, and

more than fifteen (15) percent during four of the six calendar months preceding an Operating Committee

vote shall be authorized to cast two votes.”).

“Majority Vote” is defined as “the affirmative vote of at least a majority of all of the members of the

Operating Committee or any Subcommittee, as applicable, authorized to cast a vote with respect to a matter

presented for a vote (whether or not such a member is present at any meeting at which a vote is taken) by

the Operating Committee or any Subcommittee, as applicable (excluding, for the avoidance of doubt, any

member of the Operating Committee or any Subcommittee, as applicable, that is recused or subject to a

vote to recuse from such matter pursuant to Section 4.3(d)).” See CAT NMS Plan, supra note 16, at

Section 1.1.

“Supermajority Vote” is defined as “the affirmative vote of at least two-thirds of all of the members of the

Operating Committee or any Subcommittee, as applicable, authorized to cast a vote with respect to a matter

presented for a vote (whether or not such a member is present at any meeting at which a vote is taken) by

the Operating Committee or any Subcommittee, as applicable (excluding, for the avoidance of doubt, any

member of the Operating Committee or any Subcommittee, as applicable, that is recused or subject to a

vote to recuse from such matter pursuant to Section 4.3(d)); provided that if two-thirds of all of such

members authorized to cast a vote is not a whole number then that number shall be rounded up to the

nearest whole number.” Id.

Id. at Section 4.3.

See, e.g., Citadel Letter II, supra note 76, at 3 (“All actions relating to funding should require authorization

by a Supermajority vote.”).

administration of the central repository.” 82 The rule states that “[m]embers of the Advisory

Committee shall have the right to attend any meetings of the plan sponsors, to receive

information concerning the operation of the central repository, and to provide their views to the

plan sponsors; provided, however, that the plan sponsors may meet without the Advisory

Committee members in executive session if, by affirmative vote of a majority of the plan

sponsors, the plan sponsors determine that such an executive session is required.” 83 Members of

the Advisory Committee do not have the right to vote, 84 which market participants have stated

limits their ability to influence CAT operations. 85 However, in addressing the questions below,

commenters are requested to take notice of a decision of the United States Court of Appeals for

the District of Columbia Circuit, 86 which held that Section 11A of the Exchange Act 87 does not

allow non-SRO representatives to serve as voting representatives on the operating committee of

an NMS plan.

What powers, responsibilities, or rights should be given to the CAT Advisory

Committee? How would such powers, responsibilities, or rights affect the SROs’ ability to

govern the CAT? Would such powers, responsibilities, or rights raise concerns about conflicts of

interest, given that the members of the CAT Advisory Committee are parties regulated by the

See 17 CFR 242.613(b)(7).

Id. at (b)(7)(ii).

Id. at Section 4.13(d).

See, e.g., PTG Letter I, supra note 28, at 2 (“[M]arket participants have no meaningful representation on the

Operating Committee charged with designing and operating the CAT and, thus, have been excluded from

key decisions regarding design, scope, and budget.”); Citadel Letter II, supra note 76, at 6. (“Industry

Members lack even a single representative on the CAT Operating Committee and, therefore, cannot vote on

the design, implementation, or funding of CAT. While there is a separate Advisory Committee that

contains industry representation, its recommendations are non-binding and thus can be (and have been)

completely ignored by the CAT Operating Committee.”).

See Nasdaq Stock Mkt. LLC v. SEC, 38 F.4th 1126 (D.C. Cir. 2022).

15 U.S.C. 78k-1.

SROs?

10.

Should the membership of the CAT Advisory Committee be reserved for representatives

of certain interests or individuals with specific experience? Should the membership of the CAT

Advisory Committee be expanded to include any other market participants not currently

represented, such as operators of alternative trading systems (“ATSs”), technology experts, or

those with technical and operational expertise related to the management of trading, trade

processing, and/or trade data management systems? If so, in what way should representation be

apportioned?

11.

While the CAT Advisory Committee is entitled to “receive the same information

concerning the operation of the Central Repository as the Operating Committee,” the Operating

Committee “may withhold information it reasonably determines requires confidential

treatment.” 88 What non-public information should the CAT Advisory Committee have access to

and how should confidentiality of this information be maintained? What is the correct balance

between providing the public with transparency into the recommendations of the CAT Advisory

Committee (and the Operating Committee’s responses to these recommendations) and

maintaining the confidentiality of potentially sensitive information about CAT operations?

12.

Should additional information about the operation of the CAT, including security

measures taken by the SROs to protect CAT Data, 89 be provided to Industry Members beyond

those representatives that sit on the Advisory Committee? If so, what information should be

provided? How would disclosure of such information affect the security of the CAT?

Id. at Section 4.13(e).

“CAT Data” means “data derived from Participant Data, Industry Member Data, SIP Data, and such other

data as the Operating Committee may designate as “CAT Data” from time to time.” See CAT NMS Plan,

supra note 16, at Section 1.1.

13.

Should the Commission form a separate advisory committee to provide advice and

recommendations to it on topics related to the CAT? If so, what are appropriate topics for the

advisory committee to consider? For example, should the advisory committee counsel the

Commission on matters relating to the CAT’s scope, functionality, design, security, cost

management, and/or civil liberties and privacy protections? Who should participate as members

of this advisory committee? Should it include market participants and others with technical and

operational expertise related to the management of trading, trade processing, and/or trade data

management systems? Should it include civil liberty and privacy advocates? Should it include

representatives of other relevant constituencies? What non-public information should such an

advisory committee have access to and how should the confidentiality of this information be

maintained?

CAT Funding and Cost Management

The CAT is funded by both SROs and Industry Members, in accordance with the funding

model recently approved by the Commission (the “2026 Funding Model Order”). 90 There have

been legal challenges to the CAT and its funding model, 91 but the Commission has taken the

position that it has the requisite authority under Section 17 and Section 11A of the Exchange Act

to direct the creation of the CAT. 92 It also maintains that the CAT funding model approved by

the 2026 Funding Model Order is a reasonable approach that satisfies the relevant standards set

forth in federal statutes, rules, and regulations.

The funding model approved by the 2026 Funding Model Order is based on executed

equivalent share volumes of transactions in Eligible Securities. Fees would be paid evenly by

See 2026 Funding Model Order, supra note 27.

See, e.g., note 29 supra.

15 U.S.C. 78k-1; 15 U.S.C. 78q.

the SROs, executing brokers representing buyers, and executing brokers representing sellers. 93

Pursuant to this funding model, no Participant may file with the Commission a proposed rule

change under Section 19(b) of the Exchange Act 94 and Rule 19b-4 95 thereunder that would

establish a new fee for directly passing through to its members the CAT fee charged to such

Participant. 96 This funding model also includes a sunset provision, stating that the Plan

Processor and the Participants will not be permitted to bill or otherwise request CAT fees from

Industry Members after March 31, 2028. 97 In approving this sunset provision, the Commission

explained that it would be premature to adopt a permanent funding model while engaged in a

comprehensive review of the CAT and that ensuring the continued existence and funding of the

CAT during this interim period would avoid potential destabilization. 98

Cost Management

14.

Is there sufficient transparency with respect to CAT costs and expenses? If not, what

additional information should be made public? What is the correct balance between providing

public transparency into CAT costs and expenses and protecting potentially sensitive information

about CAT operations?

15.

The Commission has recently approved amendments to the CAT NMS Plan that would

implement a spending cap. 99 Are there any additional cost management controls that should be

required for the CAT? If so, please describe such controls and explain why they would be

See id.

15 U.S.C. 78s(b).

17 CFR 240.19b-4.

See, e.g., 2026 Funding Model Order, supra note 27, at 13412-13.

Id. at 13412-14.

Id. at 13412.

See Securities Exchange Act Release No. 105107 (Mar. 27, 2026), 91 FR 16284, 16307 (Apr. 1, 2026)

(“2026 Cost Savings Order”).

appropriate. 100 Does the answer depend on how the CAT is structured and/or funded? For

example, are there any aspects of CAT operations that could be performed more cost-effectively

by SRO staff instead of by the Plan Processor or other third-party service providers? If so,

please identify those tasks, explain why it would be more cost effective for such tasks to be

performed by SRO staff, and describe reasonable costs for those tasks.

Funding Model and Allocation of Fees

16.

Should the Commission set fees for the SROs and Industry Members? Would a different

funding model help the Commission to weigh more carefully the costs and benefits associated

with the CAT? What features should a new funding model have? Does the answer depend on

whether or not the CAT should continue to be structured as an NMS plan?

17.

The 2026 Funding Model Order approves a CAT funding model which provides that no

SRO will file with the Commission a proposed rule change pursuant to Section 19(b) of the

Exchange Act 101 and Rule 19b-4 102 thereunder that would establish a new fee for directly passing

through to its members the CAT fee charged to each SRO. 103 Should a new funding model

explicitly allow the SROs to directly pass through the fees allocated to the SROs that are related

to the build or operation of the CAT to their members, subject to Commission review of Rule

19b-4 fee filings? 104 Why or why not?

100

See, e.g., Citadel Letter II, supra note 76, at 3 (setting forth proposed independent cost review

mechanisms).

101

See 15 U.S.C. 78s(b).

102

See 17 CFR 240.19b-4.

103

See, e.g., 2026 Funding Model Order, supra note 27, at 13412-13.

104

As discussed in the 2026 Funding Model Order, the Exchange Act already expressly contemplates the

ability of the SROs to recoup the costs of fulfilling their statutory obligations by indirectly passing costs

associated with regulatory activities through to their members. This process is cabined by the Rule 19b-4

fee filing process and the necessity for a SRO to establish that an increase in any existing fee is, among

other things, reasonable, equitable, and not unfairly discriminatory. See, e.g., id. at 13422; 17 CFR

240.19b-4.

18.

How should fees be allocated to and among SROs and/or Industry Members? Is there a

specific percentage of cost that the SROs should bear? Does the answer depend on whether the

SRO is a non-profit or for-profit entity? Does the answer depend on whether the SRO is a

national securities exchange for equities or options? If so, please explain how these factors and

any other such factors should be taken into account. Is there a specific percentage of cost that

Industry Members should bear? Does the answer depend on whether the Industry Member is

facilitating or engaging in trading with respect to equities or options? Does the answer depend

on the business model of the Industry Member – for example, whether the Industry Member is

acting as a market maker? If so, please explain how these and any other such factors should be

taken into account. Should ATSs be treated like execution venues or Industry Members for

purposes of establishing CAT fees? Why?

19.

Should fees be based on the burden that each party places on the CAT system? If so,

what is the appropriate way to calculate the burden that each party places on the CAT system?

Market share? Message traffic? Regulatory use? Are there other appropriate measures of

burden? If so, please identify such measures and explain why they would provide an appropriate

metric to calculate the burden that each party places on the CAT. For example, should CAT

Reporters be charged for late reporting, given the costs associated with re-processing latereceived data? If fees should not be based on the burden that each party places on the CAT

system, what are other guiding principles that should be used to create an appropriate funding

model for the CAT? Should fees continue to be based on executed equivalent share volumes of

transactions in Eligible Securities, for example? Would executed notional value be a better

measure? Why? Please identify any appropriate guiding principles and explain why those

principles should inform the structure of a CAT funding model.

Reserve Funds

On September 6, 2023, the Commission approved a proposal that amended the method by

which CAT fees would be calculated and implemented a funding model to allocate costs between

SROs and Industry Members (the “2023 Funding Model Order”). 105 On July 25, 2025, however,

the United States Court of Appeals for the Eleventh Circuit issued an opinion vacating the 2023

Funding Model Order and remanding the matter to the Commission for further proceedings

consistent with its opinion. 106 After the 2023 Funding Model Order was vacated, the SROs

determined to use liquidity reserve funds previously collected pursuant to that Order to fund the

continued operations of the CAT. 107

On January 15, 2026, Citadel submitted a rule-making petition to the Commission raising

concerns about and requesting amendments to the CAT NMS Plan to address CAT LLC’s

accumulation and use of these reserve funds. 108 On February 18, 2026, the Commission

responded to the petition, stating that it raised important questions as to whether additional limits

on the accumulation and use of any operational reserve may be appropriate and that the

Commission would specifically consider those issues in its ongoing review of the CAT. 109 But

the Commission stated that it would not engage in an immediate rulemaking focused on the use

of the current reserve. 110 The Commission subsequently stated, in the 2026 Funding Model

Order, that it does not agree that the SROs were prohibited from using the reserve funds to fund

105

See Securities Exchange Act Release No. 98290 (Sept. 6, 2023), 88 FR 62628 (Sept. 12, 2023).

106

See Opinion, ASA v. Commission, No. 23-113396 (11th Cir. July 25, 2025).

107

See https://catnmsplan.com/sites/default/files/2025-12/12.08.25-CAT-LLC-2026Financial_and_Operating_Budget.pdf.

108

See Citadel Petition, supra note 29.

109

See Response to Citadel Petition, supra note 29.

110

Id.

the continued operations of the CAT either by the Eleventh Circuit’s decision vacating the 2023

Funding Model Order or by the terms of the CAT NMS Plan. 111 While the reserve provisions

approved in the 2026 Funding Model Order are reasonable and satisfy the relevant standards set

forth in federal statutes, rules, and regulations, to the extent that the Commission should establish

a new funding model for the CAT, the Commission seeks additional feedback regarding the

accumulation and use of reserve funds.

20.

Should the SROs be allowed to collect a reserve to fund CAT operations? For what

purposes should the SROs be able to use CAT reserves?

21.

What are appropriate controls to place around the amount of reserve funds that the SROs

may collect? Should the Commission require that the SROs seek and obtain Commission

approval before using the CAT reserves?

22.

Under what circumstances should CAT reserves be returned to Industry Members and

SROs? Explain what processes should be used to return funds to Industry Members and SROs.

Section 31 Fees and Alternative Methods of Funding the CAT

Several market participants have suggested that the Commission should include the CAT

in its budget, because the CAT “is a regulatory system used by the SEC.” 112 These market

participants believe that the CAT “should be subject to the checks and balances of the

Congressional appropriations process used to fund the SEC’s budget,” which would “serve to

better align incentives to control CAT costs and address longstanding concerns about ineffective

111

See 2026 Funding Model Order, supra note 27, at 13444.

112

See SIFMA Letter I, supra note 28, at 6. See also, e.g., Letter from Joanna Mallers, Secretary, PTG, to

Vanessa A. Countryman, Secretary, Commission (Nov. 24, 2025), at 3, available at

https://www.sec.gov/comments/4-698/4698-678568-2084374.pdf (“PTG Letter II”); Citadel Letter I, supra

note 24, at 3; Healthy Market Petition, supra note 29, at 2-3.

CAT governance.” 113

The Commission is interested in exploring further the advantages or disadvantages of the

Commission using appropriated funds to cover costs with respect to the CAT. Section 31(a) of

the Exchange Act states that the Commission shall “collect transaction fees and assessments that

are designed to recover the costs to the Government of the annual appropriation to the

Commission by Congress.” 114 These Section 31 fees are imposed on SROs, 115 and Section 31

does not address the manner or extent to which covered SROs may seek to recover the costs of

their Section 31 obligations from their members or to which members of the SROs may seek to

pass on these costs to their customers. “In practice,” the Commission has previously observed,

“the covered SROs obtain the funds for these fees and assessments by assessing charges on their

members, and the members in turn pass these charges to their customers.” 116

23.

What are the advantages and disadvantages, relative to the funding model approved by

the 2026 Funding Model Order, of the Commission being appropriated additional funds to cover

costs with respect to the CAT?

24.

Should the Commission own and operate the CAT itself? If the Commission were to

113

See SIFMA Letter I, supra note 28, at 6. See also, e.g., PTG Letter II, supra note 112, at 3 (“Rearchitecting CAT’s budget in this way would be significant improvement from the status quo, addressing

many of the governance failures and conflicts of interest that persist under the current structure.”); Citadel

Letter I, supra note 24, at 13 (stating that the Commission “must include the CAT in its appropriated

budget” to provide “meaningful checks and balances as part of the governance process – the Commission

will be incentivized to carefully oversee the size of the CAT budget and carefully weigh the costs and

benefits of required functionality, while Congress will have a clear role in order to protect against waste

and regulatory overreach”); Healthy Markets Petition, supra note 29, at 2 (“[E]nsure that the funding for

this essential governmental tool would be subject to Congressional appropriations[.]”).

114

See 15 U.S.C. 78ee(a) (“The Commission shall, in accordance with this section, collect transaction fees and

assessments that are designed to recover the costs to the Government of the annual appropriation to

the Commission by Congress.”).

115

17 CFR 240.31.

116

See Securities Exchange Act Release No. 49928 (June 28, 2004), 69 FR 41060, 41072 (July 7, 2004)

(further stating that “Section 31 places no obligation on members of covered SROs or their customers, and

it is misleading to suggest that a customer or an SRO member incurs an obligation to the Commission

under Section 31”).

own the CAT, what changes would the Commission need to make to the CAT’s structure,

governance, and operations? Please discuss ownership structures the Commission should

consider for the CAT. If the Commission were to own the CAT, how would the roles, rights, and

responsibilities of the Operating Committee and/or the Advisory Committee need to evolve?

Are there any alternative methods by which the Commission and/or the SROs could direct and

oversee the operation of the CAT if the Commission were to request additional appropriated

funds to cover costs with respect to the CAT? Please identify such alternative methods and

explain, in detail, how the CAT would be owned, operated, and funded pursuant to such

alternative methods. For example, could an SRO assume sole ownership of the CAT and

contract with regulators to provide regulatory services and/or access to the CAT?

25.

If the Commission were appropriated funds to cover costs with respect to the CAT, what

constraints could be used to protect against cost overruns and budget inflation?

26.

If the Commission owned and operated the CAT, how would that affect the contractual

relationship between FINRA CAT and the SROs?

27.

If the Commission owned and operated the CAT, would that affect the SROs’ ability to

access the system? Would it be appropriate for the SROs, most of which are for-profit entities

with their own regulatory obligations, to have cost-free access to a system that is owned and

operated by the Commission and funded in full through appropriated funds? Should the

Commission instead license use of the CAT to the SROs if the CAT is owned and operated by

the Commission? Would such a structure raise any conflicts of interest concerns, given that the

SROs are parties that the Commission regulates?

CAT Design and Scope

Both the Commission and the SROs have taken steps to manage and contain CAT costs.

For instance, on December 12, 2024, the Commission approved an amendment to the CAT NMS

Plan proposed by the SROs that was designed to cut costs by relaxing certain CAT functionality

and storage requirements (the “2024 Cost Savings Order”). 117 Specifically, the 2024 CAT Cost

Savings Order approved: (1) provisions that changed processing, query, and storage

requirements for Options Market Maker quotes in Listed Options (“OMM Quotes”); 118 (2)

provisions that permitted the Plan Processor to move raw unprocessed data and interim

operational copies of CAT Data older than 15 days to more cost-effective storage tiers; and (3)

provisions that codified and expanded exemptive relief previously provided by the Commission

related to certain recordkeeping and data retention requirements for industry testing data. 119

Additional cost savings measures were enabled by certain conditional exemptive relief

issued by the Commission sua sponte on September 30, 2025 (the “2025 Cost Savings

Exemptive Relief Order”). 120 The 2025 Cost Savings Exemptive Relief Order was designed to

further reduce CAT costs by enabling the SROs to relax requirements related to: (1) deadlines

for the creation of lifecycle linkages; (2) re-processing of late records; (3) the online targeted

query tool (“OTQT”); and (4) data storage and retention. 121

These steps have reduced CAT costs significantly. The CAT budget initially approved

117

See Securities Exchange Act Release No. 101901 (Dec. 12, 2024), 89 FR 103033 (Dec. 18, 2024).

118

An “Options Market Maker” is a “broker-dealer registered with an exchange for the purpose of making

markets in options contracts on the exchange.” See CAT NMS Plan, supra note 16, at Section 1.1. Each

Participant has also promulgated rules for its members that generally govern what constitutes a “market

maker quote” and/or “market maker quotation” for that Participant. See, e.g., The Nasdaq Stock Market

LLC Rules, Options 2, Section 5, “Market Maker Quotations”; Cboe Exchange, Inc. Rule 5.52, “Market

Maker Quotes”; NYSE Arca, Inc. Rule 6.37AP-O, “Market Maker Quotations.” See also note 22 supra.

119

2024 CAT Cost Savings Amendment, supra note 117.

120

See Securities Exchange Act Release No. 104144 (Sept. 30, 2025), FR 90 47853, 47854-55 (Oct. 2, 2025).

121

Id.

by the SROs for 2025 exceeded $248 million. 122 This budget was reduced to approximately

$228 million in May 2025 123 and then again to approximately $188 million in November 2025 124

due to the implementation of cost savings measures approved by the Commission and other

optimizations made by the SROs and the Plan Processor. The CAT budget approved for 2026 is

approximately $156 million 125—a decrease of approximately $92 million from the budget

originally approved for 2025.

Furthermore, in early 2026, the Commission approved certain proposed amendments to

the CAT NMS Plan submitted by the SROs to codify and expand exemptive relief previously

granted by the Commission, including amendments that would implement a spending cap

provision. 126 These cost savings measures have not been fully implemented yet, but the SROs

have estimated that such measures will generate additional savings on top of the reduced costs

already enabled by the 2024 Cost Savings Order and the 2025 Cost Savings Exemptive Relief

Order. 127 The recent cost savings achieved are important first steps to creating a more efficient

and cost-effective CAT, but the costs of operating the CAT remain significantly higher than

originally estimated by the Commission. The Commission therefore seeks feedback regarding

additional changes that could be made to the design and scope of the CAT to make it more

efficient and cost-effective.

122

See https://catnmsplan.com/sites/default/files/2024-11/11.20.24-CAT-LLC-2025Financial_and_Operating-Budget.pdf.

123

See https://catnmsplan.com/sites/default/files/2025-05/05.19.25-CAT-LLC-2025Financial_and_Operating-Budget.pdf.

124

See https://catnmsplan.com/sites/default/files/2025-11/11.07.25-CAT-LLC-2025-Finacial_and_OperatingBudget.pdf.

125

See https://catnmsplan.com/sites/default/files/2025-12/12.08.25-CAT-LLC-2026Financial_and_Operating_Budget.pdf.

126

See 2026 Cost Savings Order, supra note 99; see also CAIS Order, supra note 19.

127

See Securities Exchange Act Release No. 104504 (Dec. 23, 2025), 90 FR 61506, 61506-08 (Dec. 31, 2025)

(“2025 Cost Savings Amendment”); see also, e.g., CAIS Order, supra note 19, at 2186-88.

Scope

28.

From which market participants should the CAT collect information? Should

information be provided by parties who originate, route, and/or send orders, as well as parties

that receive and/or execute orders? Please explain whether the CAT should maintain two-sided

reporting requirements, whether the application of two-sided reporting requirements should

depend on the underlying product and/or asset class, and from which parties the CAT should

require reporting if two-sided reporting is eliminated. 128 What are the costs and benefits

associated with one-sided reporting versus two-sided reporting? Is there a material difference in

accuracy between one-sided reporting and two-sided reporting? Are there regulatory use cases

enabled by two-sided reporting that would not be possible with one-sided reporting?

29.

What quote, order origination, routing, request, modification, cancellation, reject, trade,

and/or allocation events should be captured by the CAT? What features or data elements of a

quote, order origination, routing, request, modification, cancellation, reject, trade, and/or

allocation event should be captured by the CAT? What level of detail should be reported for

each kind of event? Are certain kinds of events costly, burdensome, or otherwise difficult to

collect? What are material terms for quote, order origination, routing, request, modification,

cancellation, reject, trade, and/or allocation events?

30.

Should the Commission optimize and/or simplify CAT reporting requirements? 129 Please

specifically identify any proposed optimizations, describe the costs and benefits associated with

such optimizations (including any potential impact on data accuracy and/or regulatory use),

128

See, e.g., PTG Letter I, supra note 28, at 3 (urging the Commission to “[e]liminate duplicative reporting of

orders and cancellations sent to exchanges”); Citadel Letter I, supra note 24, at 13 (“Reduce, simplify, and

streamline the data fields required to be reported, rely on TRF or exchange-reported data when possible,

and eliminate unnecessary records.”).

129

See, e.g., PTG Letter I, supra note 28, at 3 (“Optimize overall reporting requirements.”); SIFMA Letter I,

supra note 28, at 6 (“Optimize CAT Reporting.”).

explain whether such optimizations would require changes to existing trading workflows and/or

reporting processes, and explain how such optimizations should be developed and/or

implemented. What are the current costs for Industry Members to report to the CAT? What are

the current costs for SROs to report to the CAT?

31.

Should any changes be made to the CAT Reporting Technical Specifications for Industry

Members? 130 Should any changes be made to the CAT Industry Member Reporting

Scenarios? 131 Should any changes be made to the CAT Reporting Technical Specifications for

Plan Participants? 132 If so, please specifically identify changes to the technical specifications

and/or reporting scenarios that should be made, describe the costs and benefits associated with

those changes (including any potential impact on data accuracy and/or regulatory use), explain

how those changes could affect existing reporting processes and/or trading workflows, and

explain how those changes should be developed and/or implemented. If the recommended

changes involve eliminating transaction, error, and/or data fields or elements, please explain

whether such fields and/or elements can be obtained from an alternative source, identify that

alternative source, and describe any costs or burdens associated with obtaining such fields and/or

elements from that alternative source.

General Functionality

32.

Would structural and/or architectural changes to the CAT enhance its efficiency and/or

130

See note 35 supra; see also, e.g., See SIFMA Letter I, supra note 28, at 6 (“CAT transaction technical

specifications and resulting database are unnecessarily large and complex. They could be scaled back to

include only essential transactions, errors, and data elements.”); PTG Letter I, supra note 28, at 3 (“The

CAT database (and associated technical specifications) can be optimized and should only include essential

transaction, error, and data elements to reduce compute and storage costs.”); Citadel Letter I, supra note 24,

at 13 (“Reduce, simplify, and streamline the data fields required to be reported, rely on TRF or exchangereported data when possible, and eliminate unnecessary records.”).

131

See Industry Member Reporting Scenarios, available at

https://catnmsplan.com/specifications/imreportingscenarios.

132

See note 35 supra.

reduce costs? What information would be helpful to help commenters analyze measures that

could enhance efficiency and/or reduce costs?

33.

How frequently should market participants be required to report data to the CAT? Does

the answer depend on the product and/or asset class? What are the costs and benefits associated

with altering the CAT’s current reporting requirements? What are the potential regulatory

impacts of collecting data on a less-than-daily basis? Would reporting data less often reduce

costs?

34.

FINRA CAT currently accepts data from CAT Reporters in a range of formats, meaning

that FINRA CAT must expend computing power to normalize the data for regulatory use. In the

experience of Commission staff, this can create downstream issues for processing and

interpreting data, which makes regulatory use less efficient. Should a common and/or unified

industry data standard with a common data taxonomy be used for submission of data to the CAT

and/or pre-submission data quality validations? For example, should the CAT leverage the

Financial Information eXchange (“FIX”) protocol or another industry data standard? If so, how?

35.

Are there transaction, error, or data fields and/or elements that are currently reported to

the CAT that are not captured by the FIX protocol or other industry data standards? If so, please

identify these fields and/or elements and explain how such fields and/or elements would be

captured if the FIX protocol or another industry data standard was used for CAT reporting.

Should the FIX protocol or another industry data standard only be leveraged with respect to

some events? If so, which events? Should the FIX protocol or another industry data standard

only be leveraged with respect to some underlying products and/or asset classes? If so, which

products and/or asset classes? What are the costs and benefits associated with leveraging the

FIX protocol or another industry data standard for CAT reporting? 133 Would the CAT Reporter

Portal need to be altered in any way to enable a different reporting regime? What changes would

be required to FINRA CAT’s processes to accommodate a different reporting regime? What

changes to the existing trading workflows and/or reporting processes of CAT Reporters would be

required to accommodate a different reporting regime? Would leveraging the FIX protocol or

another industry data standard reduce or increase the costs to operate the Central Repository? By

how much? How would such an approach affect data accuracy and/or regulatory use?

36.

Should the CAT be required to comply with a specified error rate? If so, what is an

appropriate error rate and how should that error rate be calculated? Do the answers depend on

the kind of data collected and/or from whom the data is collected?

37.

What kind of validations, linkages, corrections, or other processing should be performed

on data reported to the CAT? Should data be validated, linked, and/or processed centrally by the

Plan Processor for the CAT or should that task be left to individual regulatory users? Does the

answer depend on the completeness of the data contained in the CAT? Should data that is

received after the deadline for corrections be validated, linked, and/or processed in the same

manner as data that is timely received? If not, what manner of validation, linkage, and/or

processing should be performed, and what are the costs and benefits associated with that choice?

Lifecycle Linkage and Processing Timelines

The CAT NMS Plan requires the Plan Processor to “link and create the order lifecycle”

133

See, e.g., Letter from Joseph Corcoran, Managing Director, Associate General Counsel, SIFMA, Ellen

Greene, Managing Director, Equities & Options Market Structure, SIFMA, and Howard Meyerson,

Managing Director, FIF, to Commission (July 31, 2023), at 17, available at

https://www.sec.gov/comments/4-698/4698-238359-498762.pdf (“SIFMA and FIF Letter”) (indicating that

the use of “common FIX standards as the data format, and deriving industry members’ CAT reports from

their FIX engines, rather than their downstream “ticket” systems” may have better enabled two-sided

reporting).

using a “daisy chain approach,” in which “a series of unique order identifiers, assigned to all

order events handled by CAT Reporters[,] are linked together by the Central Repository and

assigned a single CAT-generated CAT-Order-ID that is associated with each individual order

event and used to create the complete lifecycle of an order.” 134 The CAT NMS Plan further sets

forth a linkage and processing timeline. Data for each CAT Trading Day 135 is required to be

reported to the CAT by T+1 (transaction date + one day) at 8 a.m. Eastern Time (“ET”). 136 The

Plan Processor must perform initial validations and provide error feedback to CAT Reporters by

T+1 at 12 p.m. ET. 137 Prior to 8:00 a.m. ET on T+2 (transaction date + two days), raw

unprocessed data must be made available to regulators. 138 CAT Reporters must resubmit

corrected data to the CAT by 8 a.m. ET on T+3 (transaction date + three days). 139 Corrected and

linked data is then required to be made available to regulators by 8 a.m. ET on T+6 (transaction

day + six days). 140

38.

How quickly should regulators be able to access raw, unlinked data? How quickly

should regulators be able to access data that has been validated, processed, and linked, but not

corrected? How quickly should regulators be able to access validated, processed, linked, and

134

See CAT NMS Plan, supra note 16, at Appendix D, Section 3; see also id. at Section 1.1 (defining “CAT

Reporter” as “each national securities exchange, national securities association and Industry Member that is

required to record and report information to the Central Repository pursuant to SEC Rule 613(c)”).

135

According to the CAT NMS Plan, “Trading Day” shall “have such meaning as is determined by the

operating Committee. For the avoidance of doubt, the Operating Committee may establish different

Trading Days for NMS Stocks . . ., Listed Options, OTC Equity Securities, and any other securities that are

included as Eligible Securities from time to time.” See id. at Section 1.1. Currently, the Trading Day for

Industry Members runs from 4:15 p.m. ET on one trade to 4:15 pm on the next trade date, and the Trading

Day for Participants runs from midnight on one trade date to midnight on the next trade date. See

https://catnmsplan.com/specifications/participants; https://catnmsplan.com/specifications/im.

136

See CAT NMS Plan, supra note 16, at Appendix D, Section 6.1.

137

Id. at Appendix D, Section 6.1.

138

Id. at Appendix D, Section 6.2; see also 2026 Cost Savings Order, supra note 99, at 16300-01.

139

See CAT NMS Plan, supra note 16, at Appendix D, Section 6.1.

140

Id.; see also 2026 Cost Savings Order, supra note 99, at 16300-01.

corrected data? How much time should market participants have to correct data that has been

reported to the CAT? What are the costs and benefits of altering these requirements?

39.

In the 2025 Cost Savings Amendment, the SROs sought public comment on, but did not

formally propose, changes that would reduce the amount of linkage processing performed by the

Plan Processor. Under this approach, error feedback would only be provided twice to Industry

Members—once on T+2 at 8:00 a.m. ET for linkage errors discovered for on-time submissions

and again on T+3 at 8:00 a.m. ET for later-discovered errors. 141 The SROs stated that “Industry

Members would be permitted to submit corrections outside of this 24-hour window and would

receive reconciliation credit. However, these submissions would be marked late and would not

receive any feedback indicating whether the correction was successful.” 142 In seeking public

comment, the SROs stated that “members of the CAT Advisory Committee and other Industry

Member groups had previously raised issues with the shortened amount of time that would be

available to Industry Members to review and provide corrected data under the reduced linkage

timeline,” which they were concerned may increase regulatory compliance risks and costs for

Industry Members and reduce the accuracy of CAT Data. 143 These concerns were duly reflected

in a comment letter that the Commission subsequently received in connection with the 2025 Cost

Savings Amendment. 144 However, the Commission is interested in gathering feedback from

market participants as to whether there may be other ways to alter the CAT’s existing processing

and/or linkage timelines that would both preserve core regulatory functionality and achieve cost

savings. Should the Commission extend or otherwise alter the processing and/or linkage

141

See 2025 Cost Savings Amendment, supra note 127, at 61535-36.

142

Id. at 61535 n.139.

143

Id. at 61535.

144

See, e.g., Letter from Howard Meyerson, Managing Director, FIF, to Commission (Feb. 10, 2026), at 4,

available at https://www.sec.gov/comments/4-698/4698-702007-2205454.pdf (“FIF Letter III”).

timelines set forth in the CAT NMS Plan? If so, how? Are there other ways to reduce or

optimize the amount of linkage processing performed by the Plan Processor? 145

40.

SIFMA has requested that the SROs work with Industry Members with the “goal of

reducing ‘late to the lifecycle’ linkage errors . . . while still allowing for firms to confirm

successful repairs within a reasonable window.” 146 Are there changes that could be made to the

CAT Reporting Technical Specifications and/or the CAT NMS Plan to reduce “late to the

lifecycle” linkage errors? Alternatively, or in addition, should the CAT NMS Plan and/or other

compliance rules, regulations, standards, and/or guidance regarding error thresholds, error

corrections, and/or reconciliation credits be amended to relax requirements relating to correction

and/or accuracy of late-submitted historical data? Would such amendments require increased

reliance on other audit trails and/or data sources for corrected historical data? If so, what are the

costs associated with that increased reliance?

Data Storage and Retention

41.

How should the Plan Processor store historical data? How quickly should data be moved

to medium- and long-term storage? For how long should data be stored? Does the answer

depend on how and/or what kind of data is stored?

42.

The 2026 Cost Savings Order approved amendments to the CAT NMS Plan that would

reduce data storage and retention requirements. Specifically, the amendments permit the SROs

to: (1) delete all CAT Data older than three years; (2) delete OMM Quotes older than six months;

145

See, e.g., PTG Letter I, supra note 28, at 3 (“The CAT linkage processes are overly complex and costly.

We recommend optimizing the linkage process and extending associated timelines to reduce costs and

increase efficiency.”); SIFMA Letter I, supra note 28, at 6 (“We recommend a set of detailed changes that

would optimize linkage processing based on regulatory utility and need, resulting in significantly decreased

processing times and costs.”); Citadel Letter I, supra note 24, at 14 (“Optimize the linkage process,

including by eliminating the production of all interim linkage data by FINRA CAT.”).

146

See SIFMA Letter I, supra note 28, at 5 n.18.

(3) delete Interim Operational Data 147 older than 15 days; and (4) delete Options SIP Data 148

older than six months. 149 Are there further optimizations that should be made to the CAT NMS

Plan data storage and retention requirements to reduce costs? If so, please identify those

optimizations, explain why such optimizations are appropriate, describe the costs and/or benefits

associated with such optimizations (including any impact on data accuracy and/or regulatory

use), and, if such optimizations involve eliminating requirements to collect and/or store certain

kinds of data, explain whether such optimizations would require increased reliance on other audit

trails and/or data sources for those kinds of data and describe any costs associated with that

increased reliance.

CCID Generation

Currently, a CCID is generated for each customer using a two-phase transformation

process that was developed by the SROs in consultation with Commission staff and security

experts from SIFMA members to avoid the collection by and storage in CAT of social security

numbers (“SSNs”) and/or individual tax payer identification numbers (“ITINs”) that was

originally required by the CAT NMS Plan. 150 In the first phase, a CAT Reporter transforms an

SSN and/or ITIN into an interim value known as a Transformed Identifier or “TID.” The TID,

and not the SSN and/or ITIN, is reported to and stored in an isolated, secure database called the

147

“Interim Operational Data” means “all processed, validated and unlinked data made available to regulators

by T+2 at 8:00 a.m. ET and all iterations of processed data made available to regulators between T+2 and

T+6, but excludes the final version of corrected data that is made available at T+6 at 8:00 a.m. ET” as well

as processed data relating to OMM Quotes that is made available to regulators by T+2 at 8:00 a.m. ET. See

CAT NMS Plan, supra note 16, at Appendix D, Section 6.4.

148

“Options SIP Data” means “quote and NBBO data included in the SIP Data from the OPRA Plan or any

successor SIP for Listed Options.” See id.

149

See 2026 Cost Savings Order, supra note 99, at 16288-92.

150

See, e.g., Letter from Michael Simon, CAT NMS Plan Operating Committee Chair, to Vanessa

Countryman, Secretary, Commission (Jan. 29, 2020), available at

https://catnmsplan.com/sites/default/files/2020-02/Amended-Exemptive-Request-CCID-and-Modified-PIIApproaches%28Final%29.pdf.

CCID Subsystem, separate from any other information reported to the CAT. 151 In the second

phase, the CCID Subsystem again transforms the TID to create a unique CCID for each

customer. 152

In the 2025 Cost Savings Amendment, the SROs sought public comment on, but did not

formally propose, changes that would fully eliminate requirements related to the generation of

CCIDs. 153 In seeking public comment, the SROs stated that “members of the Advisory

Committee and members of other Industry Member groups had previously raised concerns

regarding this alternative, including the potential for increased Electronic Blue Sheet and other

inquiries from the Participants and the SEC that may occur without the ability to track Customer

activity across market, brokers, accounts using the CCID, and the increased costs related to such

requests.” 154 These concerns were duly reflected in a comment letter that the Commission

subsequently received in connection with the 2025 Cost Savings Amendment. 155 However, the

Commission is interested in gathering feedback from market participants as to whether there may

be ways to enhance or improve the current process of generating CCIDs and/or alternative

151

See, e.g., 2020 PII Exemptive Relief Order, supra note 19, at 16152; see also Letter from Brandon Becker,

CAT NMS Plan Operating Committee Chair, to Vanessa Countryman, Secretary, Commission (July 25,

2025), at 8 n.30, available at https://www.sec.gov/comments/4-698/4698-632107-1870294.pdf.

152

See, e.g., 2020 PII Exemptive Relief Order, supra note 19, at 16152-53. The Commission has recognized

that “there is a risk that the CAT may not reliably generate unique CCIDs for foreign Customers, as a

unique foreign Customer may have multiple government issued IDs used across multiple broker-dealers to

generate . . . multiple CCIDs.” See CAIS Order, supra note 19, at 2174. The “potential existence of

multiple CCIDs for one customer may make it more difficult for regulators to identify the full extent of

such persons’ trading activity . . . .” Id. at 2174-75.

153

See 2025 Cost Savings Amendment, supra note 127, at 61534-35.

154

Id. at 61534.

155

See, e.g., FIF Letter III, supra note 144, at 2-3. See also, e.g., Letter from Jaime Klima, General Counsel,

NYSE, to Vanessa Countryman, Secretary, Commission (July 22, 2025), available at

https://www.sec.gov/comments/4-698/4698-598195-1737842.pdf (“At this time, CCIDs are needed for the

NYSE Exchanges to comply effectively with their SRO obligations, and we presume the same holds true

for other exchange and association SROs. Transitioning to a CAT without CCIDs would bring further

increased costs to both the SROs and the industry to allow for changes to the CAT system and to meet new

reporting requirements.”).

methods of generating unique customer identifiers that could be used to track a particular

customer’s trading activity across markets, brokers, and/or accounts that would be more costeffective.

43.

Are there enhancements or improvements that could be made to the current process of

generating CCIDs? Please identify such enhancements or improvements with specificity,

describe the costs and benefits associated with the implementation of such enhancements or

improvements, and describe any privacy, confidentiality, and security measures or controls that

should be implemented in connection with enhancements and improvements.

44.

Are there any alternative methods of generating unique customer identifiers that could be

used to analyze a particular customer’s trading activity across markets, brokers, and/or accounts,

when regulatory users have a specific regulatory purpose? Please identify such alternative

methods, describe the costs and benefits associated with the implementation of such alternative

methods, explain what information would need to be gathered from market participants to enable

the generation of the alternative unique customer identifier, and describe any privacy,

confidentiality, and security measures or controls that should be implemented to protect that

information and the alternative unique customer identifiers generated.

45.

Are there different considerations the Commission should take into account with respect

to the generation of unique customer identifiers for non-US persons and/or legal entities?

Previous Changes to CAT Requirements

The Commission has previously acted to change certain requirements of the CAT NMS

Plan, both by approving proposed amendments to the CAT NMS Plan and by issuing orders

providing exemptive relief to the SROs. The Commission seeks comment as to whether and how

such previous amendments and/or exemptive relief orders should be expanded and/or codified in

the CAT NMS Plan. 156

Verbal Activity on Exchange Floors

On June 16, 2025, the Commission approved amendments to the CAT NMS Plan that

provided that “floor broker verbal announcements of firm orders on an exchange that are

otherwise reported as systematized orders” and “market maker verbal announcements of firm

quotes on an exchange trading floor”—collectively referred to herein as “verbal activity on

exchange floors”—were not reportable to the CAT under Section 6.3(d) and Section 6.4(d) of the

CAT NMS Plan until July 31, 2030. 157 Although the SROs had proposed to permanently

exclude verbal activity on exchange floors from CAT reporting requirements, the Commission

modified the amendments after determining that the SROs had not met their burden to “establish

that providing a permanent exception to reporting obligations for verbal activity on exchange

floors is necessary or appropriate.” 158

The Commission explained, in the Verbal Quotes Order, that the cost estimates provided

by commenters in connection with the amendments proposed by the SROs had been based not

only on verbal activity on exchange floors, but also on upstairs verbal and manual activity. 159

156

Some market participants have already generally urged the Commission to “codify its orders granting

temporary exemptive relief for certain CAT requirements that are unreasonable and burdensome,” but such

comments were received before the most recent exemptive relief was granted by the Commission. See

PTG Letter I, supra note 28, at 4; see also, e.g., SIFMA Letter I, supra note 28, at 5 (“The SEC should

review all of its orders granting temporary exemptive relief from CAT reporting requirements with a view

to making them permanent (e.g., representative order, verbal quotes).”).

157

See Securities Exchange Act Release No. 103275 (June 16, 2025), 90 FR 26337 (June 20, 2025) (the

“Verbal Quotes Order”). In issuing the Verbal Quotes Order, the Commission recognized that CAT LLC

disputes that verbal activity on exchange floors is required to be reported under Section 6.3(d) of the CAT

NMS Plan. The Commission stated that it did not intend the Verbal Quotes Order to “establish any new

Plan requirements or to resolve any dispute over whether [verbal activity on exchange floors] is required

under the Plan.” Rather, the Commission stated its understanding that the Verbal Quotes Order excluded

verbal activity on exchange floors until July 31, 2030, to the extent that such data is reportable under

Section 6.3(d) of the CAT NMS Plan. See id. at 26341 n.63.

158

See id. at 26342.

159

Id.

The Commission stated that costs for upstairs verbal and manual activity were distinct, because

“much of the relevant information that would be reported to CAT” for verbal activity on

exchange floors “is already systematized, floor brokers and floor market makers have handheld

and other electronic devices to facilitate the open outcry process, and floor verbal activity is

governed by exchange rules.” 160 The Commission also stated its view that the SROs and

Industry Members “could establish methods for capturing verbal order and quote information

communicated on exchange floors that are more cost-effective and efficient than the proposal

that each floor participant be required to hire a full-time employee solely for CAT reporting.” 161

46.

Should the Commission permanently exclude information about verbal activity on

exchange floors from CAT reporting requirements? Should the Commission extend the deadline

set forth in the CAT NMS Plan for reporting such activity past July 31, 2030?

47.

What are the benefits and/or regulatory value provided by collecting information about

verbal activity on exchange floors? What is the additive value of collecting information about

verbal activity on exchange floors when certain order information is already required to be

systematized pursuant to SRO rules? Would it be duplicative to require market participants to

report information about verbal activity on exchange floors to the CAT?

48.

What are the costs associated with reporting information about verbal activity on

exchange floors to the CAT? Please provide specific data. Should the Commission conduct an

industry survey to obtain this information?

49.

Other than requiring each floor participant to hire a full-time employee solely for CAT

reporting, are there alternative data sources and/or alternative methods of surveilling verbal

160

Id.

161

Id. at 26342-43.

activity on exchange floors, including, if applicable, any artificial intelligence or algorithmic

technology solutions? 162 Are those data sources and/or methods more cost-effective or efficient

than requiring that such data be reported to the CAT? Is it possible to develop and implement

such methods before July 31, 2030? If not, please explain how long it would take to develop and

implement such methods. Would these methods necessarily collect information beyond

reportable verbal activity on exchange floors and, if so, what measures could be introduced to

prevent the storage, reporting, and/or use of such information?

Not Immediately Actionable Electronic Requests for Quotes

On January 23, 2026, the Commission provided exemptive relief from certain reporting

requirements in Section 6.4(d) of the CAT NMS Plan relating to the reporting of bids and/or

offers made in response to a request for quote (“RFQ”) or other form of solicitation response

provided in standard electronic format (e.g., FIX) that is not “immediately actionable” (i.e.,

further action is required by the responder providing the quote to execute or cause a trade to be

executed) (the “NIA Electronic RFQ Exemptive Relief Order”). 163 This relief was granted

without conditions and without an expiration date. 164 In granting such relief, the Commission

stated that “the regulatory value of this information does not justify the difficulty and costs

associated with collecting and reporting such information.” 165

In addition, the Commission stated that “regulators will still have insight into the RFQ

process, because any follow-up order activity subsequent to the transmission of NIA Electronic

162

In the Verbal Quotes Order, the Commission observed that the “scenarios, examples, and discussion of the

challenges of natural language processing” provided by commenters had all related to upstairs verbal and

manual activity. Id. at 26342.

163

See Securities Exchange Act Release No. 104662 (Jan. 23, 2026), 91 FR 3572 (Jan. 27, 2026).

164

Id.

165

Id. at 3573.

RFQ Responses that results in an execution[] will be reported to the CAT.” 166 The Commission

stated that the NIA Electronic RFQ Responses that are subject to this exemptive relief are: (1)

“those that satisfy the definition of an ‘order’ as defined in Rule 613(j)(8) and the CAT NMS

Plan”; (2) those that “do not include RFQ responses that were required to be reported

commencing in Phase 2c and Phase 2d” of CAT implementation; 167 and (3) those that “do not

include activity that is subject to section 6.3(g) of the CAT NMS Plan.” 168

50.

Do market participants agree that the regulatory value of NIA Electronic RFQ Responses

does not justify the difficulty and costs associated with collecting and reporting such

information? Are there any alternative data sources for such information, or, if not, is it

sufficient that regulators will still have insight into the RFQ process through any follow-up order

activity? Are there any technology solutions in use and/or in development that would make it

easier for Industry Members to capture and report NIA Electronic RFQ Responses?

51.

Should the Commission codify the NIA Electronic RFQ Exemptive Relief Order? If so,

should any changes be made to its scope?

Port-Level Settings

Port-level settings are used by Industry Members and the SROs as one method of

communicating various Material Terms of the Order, including, in some cases, special handling

instructions. 169 When port-level settings are used to communicate Material Terms of the Order,

166

Id. at 3573-74.

167

Pursuant to the Phased Reporting Exemptive Relief Order, any bid or offer in response to a request for

quote or other form of solicitation response provided in standard electronic format (e.g., FIX) that required

no further action by the responder providing the quote to execute or cause a trade to be executed was

reportable in Phase 2c for equities and in Phase 2d for options. Phased Reporting Exemptive Relief Order,

supra note 17, at 23079. The exemption did not specifically address NIA Electronic RFQ Responses.

168

See NIA Electronic RFQ Exemptive Relief Order, supra note 163, at 3574.

169

“Material Terms of the Order” includes “the NMS Security or OTC Equity Security symbol; security type;

price (if applicable); size (displayed and non-displayed); side (buy/sell); order type; if a sell order, whether

Rule 613 and the CAT NMS Plan require those port-level settings to be reported for that order by

both senders and receivers. 170

On November 2, 2023, the Commission issued an order that granted conditional

exemptive relief from several requirements of the CAT NMS Plan (the “November 2023

Order”), 171 including, among other things, the requirements as applied to port-level settings that

are set forth in Rule 613(c)(7) and the CAT NMS Plan for six specific handling instructions (the

“Exempted Port-Level Settings”). 172 The November 2023 Order stated that the SROs would

“not be required to obligate Industry Members to report these six special handling instructions

when an Industry Member routes an order to a national securities exchange over an exchange

port that is configured for one of these special handling instructions,” 173 on the condition that the

SROs report the Exempted Port-Level Settings in the order receipt record, regardless of whether

such Exempted Port-Level Settings are “triggered” or “applied.” 174

The conditional exemptive relief granted by the November 2023 Order was limited to the

Exempted Port-Level Settings and did not extend exemptive relief to port-level settings on ATSs

or broker-dealer port-level settings – or to any other special handling instructions that may be set

the order is long, short, short exempt; open/close indicator (except on transactions in equities); time in force

(if applicable); if the order is for a Listed Option, option type (put/call), option symbol or root symbol,

underlying symbol, strike price, expiration date, and open/close (except on market maker quotations); and

any special handling instructions.” See CAT NMS Plan, supra note 16, at Section 1.1.

170

See 17 CFR 242.613(c)(7); CAT NMS Plan, supra note 16, at Sections 6.3(d)(i)(F), 6.3(d)(ii)(G),

6.3(d)(iii)(F), 6.3(d)(iv)(E), and 6.4(d)(i).

171

See Securities Exchange Act Release No. 98848 (Nov. 2, 2023), 88 FR 77128, 77131-32 (Nov. 8, 2023).

172

These settings included: (1) ATT – Attributable; (2) DNI – Do Not Increase; (3) DNR – Do Not Reduce;

(4) DNRT – Do Not Route; (5) RLO – Retail Liquidity Order; and (6) STP – Self Trade Prevention. Id.

173

Id. at 77131.

174

Id. at 77132. In addition, the exemptive relief was subject to a condition that the SROs maintain and

communicate to Industry Members via a CAT Alert a mapping of each exchange-specific port-level setting

related to the Exempted Port-Level Settings, substantially in the form of the draft mapping that the SROs

had previously provided to the Commission. Id.

at the port-level at a national securities exchange and that may constitute Material Terms of the

Order. 175 Accordingly, to supplement the November 2023 Order, the Commission granted

additional exemptive relief on January 23, 2026 from the requirements as applied to port-level

settings that are set forth in Rule 613 and the CAT NMS Plan (the “Port-Level Settings

Exemptive Relief Order”). 176 Pursuant to the Port-Level Settings Exemptive Relief Order, the

SROs are no longer required to obligate Industry Members to report port-level settings that are

used to communicate Material Terms when an Industry Member routes an order through a port

that is configured to apply port-level settings, regardless of whether the port is an exchange or a

port maintained by an ATS or a broker-dealer. 177 The Commission stated, however, that such

relief did not “alter the obligation of the recipient of the order that utilizes a port-level setting to

communicate a Material Term of the Order to report the port-level setting as part of the same

order receipt record.” 178

52.

Does the regulatory value of two-sided reporting for port-level settings that communicate

Material Terms of the Order justify the difficulty and costs associated with collecting and

reporting such information? What are the costs and benefits of collecting such information on a

two-sided basis? Is it sufficient that regulators will still have insight into port-level settings that

communicate Material Terms of the Order from order receipt records? Why or why not?

175

Id. at 77131.

176

See Securities Exchange Act Release No. 104664 (Jan. 23, 2026), 91 FR 3557 (Jan. 27, 2026).

177

Id. at 3559.

178

Id. In issuing the Port-level Settings Exemptive Relief Order, the Commission stated that “the regulatory

benefits” of two-sided reporting of port-level settings that communicate Material Terms of the Order “are

not sufficient to justify the implementation costs and technical difficulty of accurate reporting of port-level

settings by both the sender and receiver of an Order.” Id. The Commission observed that port-level

settings are not generally part of standard order messages (e.g., FIX messages) sent by firms, that firms do

not have the relevant data in their books and records, and that implementing reporting of port-level settings

would likely require a costly industry-wide effort. Id.

53.

Are there any technology solutions in use and/or in development that would make it

easier for Industry Members and/or SROs to capture and report port-level settings? If so, please

identify such technology solutions, describe the costs associated with implementation of such

solutions, and explain when they would be expected to become available to market participants.

54.

Should the Commission align the conditions attached to the exemptive relief granted in

the November 2023 Order with the conditions attached to the exemptive relief granted in the

Port-Level Settings Exemptive Relief Order? If so, please explain which features of each order

should be retained, why those features are appropriate, and what costs and benefits would be

associated with retaining those features and discarding others. For example, should all port-level

settings that communicate Material Terms of the Order be reported by recipients of an order,

regardless of whether such port-level settings are “triggered” or “applied”?

55.

Should the Commission amend the CAT NMS Plan to make permanent and codify all or

part of the November 2023 Order and/or the Port-Level Settings Exemptive Relief Order? If so,

please explain which features of each order should be codified, why those features are

appropriate, and what costs and benefits would be associated with retaining those features and

discarding others.

56.

The Commission understands that some SROs and Industry Members may disagree with

the Commission’s position that port-level settings are required to be reported to the CAT NMS

Plan. 179 Should the CAT NMS Plan be amended to eliminate the requirement that SROs and

Industry Members report Material Terms of the Order that are set at the port-level? What are the

179

See, e.g., November 2023 Order, supra note 171, at 77131 n.26; PTG Letter I, supra note 28, at 3 (“The

Commission should confirm that port-level settings are not required CAT records.”); SIFMA Letter I, supra

note 28, at 5 (“The SEC should issue immediate permanent exemptive relief related to the reporting of socalled “Port Settings,” which, despite the SEC staff’s historical insistence, the industry does not believe is

required to be reported under the CAT NMS Plan.”).

costs and benefits associated with reporting such information? Can regulators sufficiently and

accurately understand trading activity if certain (and potentially unknown) Material Terms of the

Order have been excluded from the data set? Are there any alternative data sources that would

provide regulators with insight into Material Terms of the Order that are set at the port level?

Representative Order Linkage

On January 23, 2026, the Commission granted temporary conditional exemptive relief

until January 1, 2028 from certain reporting requirements set forth in Appendix D, Section 3 of

the CAT NMS Plan regarding lifecycle linkages between customer orders and representative

orders for scenarios in which Industry Members do not have a systematic or direct link between

their order management systems and execution management systems (the “Representative Order

Exemptive Relief Order”). 180 In granting such relief, the Commission acknowledged that some

market participants believed there were “unresolved issued related to reporting these orders,

including, but not limited to, the absence of a method to report linkage for some specific types of

representative orders.” 181 The Commission therefore determined that “additional time is needed

to identify and evaluate appropriate long-term solutions for certain trading scenarios.” 182

57.

Should the Commission extend the exemptive relief already granted and, if so, for how

much longer should exemptive relief be provided? Should the Commission instead amend the

CAT NMS Plan to make permanent and codify the Representative Order Exemptive Relief

Order?

58.

If the Commission should either codify or extend the Representative Order Exemptive

180

See Securities Exchange Act Release No. 104663 (Jan. 23, 2026), 91 FR 3601 (Jan. 27, 2026). The

Commission clarified that such relief was not limited to any specific type of CAT-reportable security. Id.

at 3602 n.23.

181

Id. at 3602. See also SIFMA and FIF Letter, supra note 133, at 20-23.

182

See Representative Order Exemptive Relief Order, supra note 180, at 3602.

Relief Order, should any changes be made to its scope? For example, are there specific trading

workflows and/or linkage scenarios involving representative orders, beyond those workflows

and/or scenarios in which Industry Members do not have a systematic or direct link between

their order management systems and execution management systems, that should be exempted or

excluded from the reporting and linkage requirements of the CAT NMS Plan?

Potential Changes to Other Data Sources and Related Rules

The Commission stated in the CAT NMS Plan Approval Order that duplicative reporting

through systems like EBS would “impose significant burdens and costs on broker-dealers, that

certain SEC rules require the reporting of some information that will also be collected through

CAT, and that certain SEC rules may need to be modified or eliminated in light of CAT” when it

approved the CAT NMS Plan in 2016. 183 However, consideration of retiring EBS, as a practical

matter, was not timely until the CAT’s Customer and Account Information System (the “CAIS”)

was fully implemented to provide an alternative source for the customer and account-level data

that regulators can otherwise request through the EBS system. The Commission, the SROs, and

market participants also required time to develop familiarity with the full scope of the CAT’s

functionality, including the CAIS, before EBS could be retired. Because the SROs did not

represent to the Commission that the CAIS was fully implemented until July 15, 2024, 184 the

Commission, the SROs, and market participants were not previously able to review whether the

data provided by the CAT meets minimum standards of accuracy and reliability. 185

183

See CAT NMS Plan Approval Order, supra note 16, at 84777.

184

See, e.g., note 17 supra.

185

The Commission directed staff to develop a proposal for Commission consideration, within six months of

the effective date of the CAT NMS Plan Approval Order, to amend Rule 17a-25 and Rule 13h-1 to

eliminate the components of EBS that are redundant of CAT, among other things, at such time as CAT

Data meets minimum standards of accuracy and reliability. See CAT NMS Plan Approval Order, supra

note 16, at 84777. The SROs’ Plan to Eliminate Existing Rules and Systems, set forth in Appendix C of

The EBS system provides regulators at the Commission and the SROs with access to

certain data that is not captured by the CAT. Retiring EBS requires consideration of how

transactional and customer and account-level information accessible through EBS, but not

collected by or stored in the CAT, could be obtained by regulators. With respect to transactional

information, the EBS system provides access to transactional information for Eligible Securities

that is either not reported to CAT in the first place 186 or that is older than the data stored in the

CAT. 187 This data is otherwise accessible only through manual requests for books and records.

While there is some transactional information in the CAT that overlaps with transactional

information that can also be requested through the EBS system, the way that EBS data and CAT

Data are used by regulators differs. This is, in large part, the case because the EBS system

provides access not only to transactional information, but also to customer and account-level

information that is no longer required to be reported to the CAT. The EBS system also provides

access to customer and account-level information about transactions in fixed income securities

that are otherwise reported to FINRA’s Trade Reporting and Compliance Engine (“TRACE”) 188

the CAT NMS Plan, stated that, to the extent the Commission modified or eliminated Commission rules

that require information that is duplicative of information available through the Central Repository, such as

Rule 17a-25 and Rule 13h-1, each SRO would analyze its own rules and systems to determine whether any

modifications are necessary. See CAT NMS Plan, supra note 16, at Appendix C, Section 9. This Plan

further provided that each SRO should complete its analysis within three months and that the SROs would

coordinate with the Commission regarding modification of the CAT NMS Plan to include information

sufficient to eliminate or modify Commission rules or systems that the Commission deemed appropriate.

Id.

186

As one example, Rule 13h-1(d) sets forth record-keeping and reporting requirements with respect to certain

information regarding primary offerings. See 17 CFR 240.13h-1(a)(6)(ii). Such information is not

currently reported to the CAT.

187

See 2025 Cost Savings Exemptive Relief Order, supra note 120, at 47857-58 (permitting the SROs to

delete all CAT Data older than five years and other changes to data retention requirements); see also, e.g.,

17 CFR 240.17a-4 (requiring broker-dealers to preserve certain records that could be requested via EBS for

six years).

188

TRACE facilitates the mandatory reporting of over-the-counter transactions in eligible fixed income

securities. See FINRA Rule 6700.

or the MSRB’s Real-Time Transaction Reporting System. 189

Additionally, pursuant to recent Commission action, the CAT is no longer required to

collect certain customer and account-level information, including, among other things,

SSNs/ITINS, names, addresses, dates and years of birth, and LTIDs. 190 The loss of the abovedescribed data from the CAT means that regulators will need to rely on other methods of

obtaining customer and account-level information from broker dealers—namely, the EBS system

and/or manual requests for books and records data. As this information is still necessary to

conduct market oversight, examinations, and enforcement, continued and/or increased regulatory

reliance on the EBS system and/or manual requests for books-and-records data could, in turn,

impose certain reporting costs on broker-dealers beyond those anticipated by the Commission

when it evaluated and approved the CAT NMS Plan in 2016, 191 although the Commission did

consider such costs in approving the CAIS Order, the 2026 Cost Savings Order, and other related

exemptive relief, as well as measures that could potentially mitigate such costs, like the

development of a more efficient request-and-response system. 192

Retirement of Partially Duplicative Systems

189

Municipal securities dealers submit data about all transactions to the MSRB. Transaction information

collected by the MSRB is made public on its website and is available on a subscription basis. See MSRB

Rule G-14; see also https://www.msrb.org/Trade-Data.

190

See note 19 supra; see also 2026 Cost Savings Order, supra note 99, at 16301-07. The SROs are still in the

process of implementing the changes to the CAT made possible by the CAIS Order and the 2026 Cost

Savings Order.

191

See, e.g., CAT NMS Plan Notice, supra note 13, at 30728 (estimating that a period of duplicative reporting

would last for up to 2.5 years); CAT NMS Plan Approval Order, supra note 16, at 84865-66 (estimating

that a period of duplicative reporting would last less than 2.5 years). The Commission did not anticipate

that CAT implementation would take 8 years. Nor did the Commission anticipate that the CAT would not

contain customer and account-level information. However, while costs associated with reporting this

information through the EBS system may increase due to the implementation of the CAIS Order, costs

associated with maintaining and operating the CAIS will decrease. See, e.g., CAIS Order, supra note 19, at

2186-88.

192

See, e.g., CAIS Order, supra note 19, at 2169, 2179-93; 2026 Cost Savings Order, supra note 99, at 16308;

2025 PII Exemptive Relief Order, supra note 19, at 9645.

59.

Are there audit trails and/or related data sources that contain partially duplicative

information to the CAT, such that overlapping requirements should be eliminated, modified, or

replaced? If so, please explain why or under what circumstances those requirements should be

eliminated, modified, or replaced and identify any potential costs and benefits associated with

such elimination, modification, or replacement. 193

Modification and/or Replacement of the EBS System

CCIDs, once generated, are associated with transactional data through the use of

FDIDs 194—persistent identifiers that are reported by each individual broker-dealer for its

transactional records. 195 Regulators can thus use CCIDs to identify all of the FDIDs associated

with a particular customer and then make manual requests to broker-dealers for information

associated with a particular set of FDIDs to obtain customer and account-level data. 196

Some market participants have explicitly recognized that the “removal of PII from CAIS

raises the question of how regulators can link transactional data to the associated customer

193

See, e.g., PTG Letter I, supra note 28, at 3 (suggesting that the Commission “[e]liminate overlapping

requirements such as . . . reporting regulatory information to the FINRA Trade Reporting Facilities”).

194

“FDID” or “Firm Designated ID” means “(1) a unique and persistent identifier for each trading account

designated by Industry Members for purposes of providing data to the Central Repository provided,

however, such identifier may not be the account number for such trading account if the trading account is

not a proprietary account; (2) a unique and persistent relationship identifier when an Industry Member does

not have an account number available to its order handling and/or execution system at the time of order

receipt, provided, however, such identifier must be masked; or (3) a unique and persistent entity identifier

when an employee of an Industry Member is exercising discretion over multiple client accounts and creates

an aggregated order for which a trading account number of the Industry Member is not available at the time

of order origination, where each such identifier is unique among all identifiers from any given Industry

Member.” See CAT NMS Plan, supra note 16, at Section 1.1. Unlike CCIDs, FDIDs are not designed or

intended to be consistent values across broker-dealers.

195

See 2025 PII Exemptive Relief Order, supra note 19, at 9643.

196

Broker-dealers do not have access to CCIDs; moreover, the EBS system does not require broker-dealers to

report FDIDs. See, e.g., FINRA Rule 8211 (“Automated Submission of Trading Data Requested by

FINRA”); FINRA Regulatory Notice 20-19, FINRA and ISG Announce the Update of Blue Sheet Data

Elements and Repositioning of Exchange Code Field (June 23, 2020), available at

https://www.finra.org/rules-guidance/notices/20-19.

information going forward . . . because EBS does not contain FDIDs or CCIDs . . . .” 197 FIF

proposed that EBS therefore be “replaced by a process and system that is specifically focused on

enabling regulators to link FDIDs and CCIDs to customer information.” 198 The Commission

agrees that a request-and-response system (an “R&R System”) “could decrease regulators’

reliance on EBS, which could facilitate the eventual elimination of EBS and could reduce the

cost and burdens to Industry Members and increase efficiencies.” 199

Market participants have suggested different methods of implementing an R&R System.

FIF, for example, suggested that “the Commission and the SROs, in consultation with Industry

Members, should implement a request and response system operated by FINRA that the

Commission and the SROs would use to request from Industry Members customer data

associated to specified FDIDs. FINRA would direct the Industry Member responses to the

requesting party, and the responses would be stored by the requesting party. This system should

use the data format of the CAIS system (prior to the removal of PII).” 200 SIFMA, on the other

hand, suggested that an R&R System could be part of the CAT System 201 and facilitated by the

Plan Processor. Specifically, SIFMA proposed that “a regulatory user that wanted to know the

197

See FIF Letter I, supra note 28, at 2. According to FIF, its participants include broker-dealers, exchanges,

back office service bureaus, and market data, regulatory reporting and other technology vendors in the

securities industry. Id. at 1 n.1.

198

Id. at 2, 4. See also, e.g., PTG Letter II, supra note 112, at 3 (“The Commission should also retire

duplicative and costly legacy reporting systems, including the electronic blue sheets system (‘EBS’).”);

Citadel Letter I, supra note 24, at 14 (“Retire the Electronic Blue Sheets system.”).

199

See CAIS Order, supra note 19, at 2169.

200

Id. at 3. See also, e.g., FINRA Blog, supra note 221 (“[O]ver the years there have been concerns about the

efficiency and design of Blue Sheets, and consideration could be given to creating a new request and

response utility operated in conjunction with CAT to facilitate and streamline the information collection

process for both regulators and the impacted broker-dealers.”).

201

“CAT System” means “all data processing equipment, communications facilities, and other facilities,

including equipment, utilized by the Company or any third parties acting on the Company’s behalf in

connection with operation of the CAT and any related information or relevant systems pursuant to this

Agreement.” See CAT NMS Plan, supra note 16, at Section 1.1.

identity of a customer to a trade” could “submit a FDID and trade date(s) request through the

CAT Processor into a secure file transfer protocol (FTP) that would in turn direct the PII request

to an Industry Member acting as a CAT Reporter. . . . The Industry Member would then direct

the encrypted data through the FTP back into the CAT control environment for the requesting

regulatory user to analyze and use the data.” 202

Previously, the Commission has urged the SROs to “work with industry members to

establish such a request-response system by taking advantage of the systems industry members

have already established to format and submit customer information consistent with CAT

specifications,” 203 and the Commission understands that such efforts are currently underway. 204

60.

Will CAT data be sufficiently accurate and reliable to prove an adequate substitute data

source for transactional data otherwise obtainable through the EBS system? What criteria should

the Commission use to evaluate this question?

61.

Should an R&R System be implemented? If so, what functionality should an R&R

System have? Does the answer depend on which regulators have access to the system? Does the

answer depend on how the system is funded? Does the answer depend on the extent to which an

R&R System is intended to replace the EBS system? Does the answer depend on whether an

R&R System should be part of the CAT System or separate from it?

202

See Letter from Joseph Corcoran, Managing Director & Associate General Counsel, and Gerald O’Hara,

Vice President and Assistant General Counsel, to Vanessa Countryman, Secretary, Commission (May 30,

2025), at 3 n.11, available at https://www.sec.gov/comments/4-698/4698-608327-1776534.pdf (“SIFMA

Letter III”); see also, e.g., SIFMA Letter II, supra note 71, at 5 (suggesting that an R&R System “rely on

the systems and processes used by Industry Members to previously report PII to the CAIS database in

CAT”).

203

See CAIS Order, supra note 19, at n.83.

204

See, e.g., Letter from Robert Walley, CAT NMS Plan Operating Committee Chair, to Vanessa

Countryman, Secretary, Commission (Mar. 10, 2026), at 8, available at https://www.sec.gov/comments/4698/4698-721247-2258814.pdf (“FINRA is currently considering how such a request-response system

might be developed and has stated during recent meetings with industry that their input would be

welcomed.”).

62.

Should the Commission direct the creation of an R&R System? If it should be separate

from the CAT System, should the creation and implementation of an R&R System be structured

as a national market system plan and, if so, how should it be funded and governed?

63.

If an R&R System should not be structured as a national market system plan or included

as part of the CAT System, is there another method by which the Commission should direct the

creation of such a system? Should the Commission, for example, promulgate a data collection

rule that leaves the SROs with discretion as to how to structure and fund an R&R System? If so,

please explain what requirements should be included in such a rule and why those requirements

are appropriate. Does the answer depend on the parties that would own and/or operate the

system? Does the answer depend on the parties that would use the system? Does the answer

depend on which parties would fund the system?

64.

If an R&R System should be implemented separate from the CAT System, who should

own and/or operate the system? What kind of staff and/or expertise is needed to own, operate, or

maintain such a system? What kinds of technological capabilities are needed to own, operate, or

maintain such a system? Should the Commission license use of a Commission-owned R&R

System to the SROs? If so, how should the Commission determine the rates at which an R&R

System is licensed out to the SROs? How would such a licensing arrangement work? Would the

SROs seek to recoup any of those licensing costs from their members? Would this approach

raise any conflicts of interest concerns, given that the SROs are parties that the Commission

regulates?

65.

If an R&R System should be implemented separate from the CAT System, should the

Commission and/or one or more SROs contract with a third-party service provider to create and

develop an R&R System? If so, how should decisions on an R&R System’s functionality,

funding, and other items be made?

66.

What are the advantages and disadvantages if the Commission were appropriated funds to

cover costs with respect to an R&R System? Does the answer depend on which parties would

have access to the system?

67.

If an R&R System should be implemented separate from the CAT System, should the

SROs and/or their members fund part or all of the costs associated with an R&R System?

Should the Commission establish a funding model that allocates fees amongst the SROs and their

members? Does the answer depend on how the R&R System is structured and/or governed? If

the Commission should establish a funding model that allocates fees amongst the SROs and their

members, what features should that model have? How should fees be allocated to and amongst

SROs and/or their members?

68.

Is it feasible to link CAT Data with customer and account information obtained from an

R&R System in the manner that market participants have suggested – i.e., using the CAT to

identify relevant CCIDs and related FDIDs, populating an R&R System’s request form with

those FDIDs, sending that request through an R&R System to the appropriate broker-dealers, and

then associating any customer and account-level information received from those broker-dealers

with CAT transactional data? Would it be beneficial to automate the process for receiving and

responding to regulatory requests for customer and account information? For instance, is it

possible to automate regulator queries to an R&R System and in what fashion? Is it possible for

broker-dealers to automate their responses to an R&R System? What technology build would be

required at the broker-dealer level? What technology build would be required for regulators at

the Commission and/or the SROs? What issues does an automated response process create or

solve?

69.

What data should be accessible through an R&R System? Should an R&R System only

cover the securities currently required to be reported to the CAT 205 or should it also cover other

types of securities currently accessible through EBS (e.g., fixed income)? Are there customer

and account fields from the existing EBS template that should be accessible through an R&R

System? Are there any fields from the existing CAIS template (or from a previous CAIS

template) that should be accessible through an R&R System? Should SSNs, ITINs, and/or legal

entity identifiers be accessible through an R&R System? Should names, addresses, dates of

birth, and employer names be accessible through an R&R System? Should information about

authorized traders be accessible through an R&R System? Should FDIDs be accessible through

an R&R System? Should the large trader identification numbers assigned by the Commission

pursuant to Rule 13h-1 206 be accessible through an R&R System? Do the answers depend on the

security measures put in place for an R&R System? Are there any data elements that are not

currently included in an existing audit trail and/or data source that should be accessible through

an R&R System? What data elements would be required to properly enable customer and

account information accessible through an R&R System to be linked to transactional CAT Data?

70.

How should data be requested and provided through an R&R System? Does the answer

depend on whether an R&R System is part of the CAT System?

71.

How should regulators at the Commission and the SROs be able to submit requests for

data through an R&R System? For example, should an R&R System provide regulators with a

web interface or an application programming interface? What are the advantages and

disadvantages associated with either approach? What kinds of queries should regulators be able

205

See note 32 supra.

206

See 17 CFR 240.13h-1.

to submit through an R&R System?

72.

How should requests for data be communicated to responding broker-dealers? How

should broker-dealers be able to respond to requests received through an R&R System? For

example, should an R&R System provide broker-dealers with a web interface or an application

programming interface? What are the advantages and disadvantages associated with either

approach? Should broker-dealers receive email alerts or other reminders regarding the existence

of requests made via an R&R System? What format should data accessible through an R&R

System be provided in? Is there a specific template that should be used by broker-dealers? How

long should broker-dealers be given to respond to a request received through an R&R System? 207

73.

What are the costs and benefits associated with implementing an R&R System? Please

provide specific estimates of any cost savings or burdens that would flow from the

implementation of an R&R System, explain whether those estimates are premised on full or

partial retirement of the EBS system, and the extent to which the EBS system would have to be

retired and/or modified to align with those estimates. To what extent would broker-dealers have

to re-program their systems to report through an R&R System? How long would it take brokerdealers to re-program their systems? To what extent would regulators have to adjust their

regulatory programs to use an R&R System instead of the EBS system? Are there use cases

made possible by the EBS system that would not be possible through linking CAT Data with

customer data retrieved from an R&R System? Please identify these use cases and explain why

they would not be possible utilizing the R&R system approach suggested by market participants.

What costs are associated with the development of new workflows to properly link CAT Data

207

With respect to EBS requests, firms submit requested information to the Commission and/or FINRA within

10 business days of the request. See, infra, note 232 and accompanying text.

with customer data that may be reported to an R&R System? How long would it take regulators

to make any necessary adjustments?

LTID

Rule 13h-1 currently sets forth certain record-keeping and reporting requirements for

large traders. When it approved the CAT NMS Plan in 2016, the Commission stated that it

believed the CAT would provide “the additional transaction data captured in connection with

Rule 13h-1 concerning large traders,” which data can otherwise be requested by regulators via

the EBS system. 208 The transaction reporting aspects of Rule 13h-1 are not independent of EBS,

as they were implemented through the addition of new fields in the EBS reporting template to

capture the LTID number and the time of execution. Relatedly, Rule 13h-1 involves periodic

monitoring of customer activity by broker-dealers to alert customers when trading in their

accounts may indicate large trader status.

74.

Should the Commission amend Rule 13h-1 to eliminate and/or modify any of its

transaction reporting and/or record-keeping requirements or the customer monitoring safe

harbor? If so, please specifically identify the reporting, record-keeping, and/or monitoring

requirements that should be eliminated and/or modified, explain why it is appropriate to

eliminate and/or modify those requirements, explain whether the data provided by those

requirements is otherwise contained in or ascertainable from the CAT, and describe any costs

and/or benefits associated with the recommended amendments. 209

75.

Will CAT data be sufficiently accurate and reliable to prove an adequate substitute data

208

See 17 CFR 240.13h-1.

209

See FIF Letter II, supra note 144, at 6 (recommending that the Commission “engage in a cost-benefit

analysis as to whether to retain, modify or retire large trader reporting in light of CAT and CAIS data now

being available,” including a consideration of “any current reliance on EBS and whether and how the

replacement of EBS would impact the Commission’s current use of large trader reporting data”).

source for Rule 13h-1 transaction data otherwise obtainable via EBS? What criteria should the

Commission use to evaluate this question?

76.

In the CAT NMS Plan Approval Order, the Commission stated that “Form 13H collects

information to identify a large trader, its securities affiliates, and its operations, and does not

collect audit trail data on effected transactions.” 210 The Commission therefore stated that the

“self-identification and other Form 13H filing requirements of Rule 13h-1” would not be

“duplicated by or redundant of CAT.” 211 Nevertheless, to achieve cost savings in connection

with Form 13H, should the identifying activity levels of Rule 13h-1 be increased to classify

fewer persons as large traders? For example, should the current thresholds be increased from 2

million shares or $20 million per day to 10 million shares or $100 million per day; and from 20

million shares or $200 million per month to 100 million shares or $1 billion per month? If so,

please explain by how much the current thresholds should be increased, explain how those

higher thresholds would be more appropriate given recent market developments, and explain

whether those higher thresholds would continue to appropriately identify persons whose trading

activity in NMS securities merits classification as a large trader. Should additional exceptions be

considered from large trader status, such as one-time or infrequent transactions? Are there other

elements of Form 13H that could be eliminated and/or modified to achieve cost savings? If so,

please specifically identify the elements that should be eliminated and/or modified, explain why

it is appropriate to eliminate and/or modify those elements, explain whether the data provided by

those elements is otherwise contained in the CAT or available via an alternative data source, and

describe any costs and/or benefits associated with the recommended modifications to Form 13H.

210

See CAT NMS Plan Approval Order, supra note 16, at 84778.

211

Id.

Is the information provided by the CAT or the alternative data source sufficiently accurate and

reliable to prove an adequate substitute data source for the information provided on Form 13H?

What criteria should the Commission use to evaluate this question?

77.

Rule 13h-1 sets forth record-keeping and reporting requirements not only for large

traders, but also for “Unidentified Large Traders” – i.e. a person who has not complied with the

identification requirements for large traders, but who “a registered broker-dealer knows or has

reason to know is a large trader.” 212 Rule 13h-1 further specifies that a “registered broker-dealer

shall be deemed not to know or have reason to know that a person is a large trader if it does not

have actual knowledge that a person is a large trader and it establishes policies and procedures

reasonably designed to: (1) [i]dentify persons who have not complied with the identification

requirements [for large traders] but whose transactions effected through an account or a group of

accounts carried by such broker-dealer or through which such broker-dealer executes

transactions, as applicable (and considering account name, tax identification number, or other

identifying information available on the books and records of such broker-dealer) equal or

exceed the identifying activity level; (2) [t]reat any persons identified in [item 1] as an

Unidentified Large Trader for purposes of this section; and (3) [i]nform any person identified in

[item 1] of its potential obligation under this section.” 213 For the purposes of Rule 13h-1, “a

registered broker-dealer need take into account only transactions in NMS securities effected by

or through such broker-dealer.” 214 One commenter has stated that the “approach for monitoring

large trader reporting adopted by the Commission is ineffective because a broker-dealer would

212

See 17 240.13h-1(a)(9); see also id. at (d)-(e) for the record-keeping and reporting requirements of Rule

13h-1.

213

Id. at (f).

214

Id. at (a)(9).

not know about a customer’s trading activity at other broker-dealers.” 215 This commenter

believed that the Commission, using information already reported to the CAT, could “readily

determine if any CCID has exceeded the applicable trading thresholds for large trader reporting

and an LTID has not been reported for the FDIDs to which the CCID is associated.” 216 The

commenter stated that the availability of such data through the CAT “obviates the need for

broker-dealers to create identifiers for unidentified large traders and to report them to CAT.” 217

Should the Commission eliminate record-keeping, reporting, and/or monitoring requirements

from Rule 13h-1 for Unidentified Large Traders? What costs do broker-dealers incur to monitor

for and comply with Rule 13h-1 requirements for Unidentified Large Traders? Please provide

specific data. Could the Commission surveil for Unidentified Large Traders by determining

whether any CCID has exceeded the applicable trading thresholds for large trader reporting and

whether an LTID has been reported for the FDIDs to which that CCID is associated now that

LTIDs have been removed from the CAT by the amendments approved in the 2026 Cost Savings

Order? 218 Is there an alternative method of finding Unidentified Large Traders using CAT Data?

Civil Liberties and Privacy Considerations

Market participants have questioned whether the scope of the CAT’s collection of market

data raises privacy and civil liberties concerns. 219 For example, one commenter asserts that the

215

See FIF Letter II, supra note 144, at 3.

216

Id. at 5.

217

Id.

218

See, e.g., 2026 Cost Savings Order, supra note 99, at 16302; see also, e.g., FIF Letter II, supra note 144, at

4-5.

219

See, e.g., Letter from Christopher A. Iacovella, President & Chief Executive Officer, American Securities

Association, to Vanessa Countryman, Secretary, Commission (Oct. 31, 2025), at 2, available at

https://www.sec.gov/comments/4-698/4698-672447-2037474.pdf.

CAT’s previous collection of PII violates Americans’ Fourth Amendment right to privacy. 220

The Commission is committed to ensuring that the CAT and other audit trails and related data

sources used by regulators comply with all relevant constitutional and statutory limits and takes

seriously concerns related to the appropriateness of government surveillance.

78.

Does the CAT’s collection and/or transmission of transactional information without

associated customer and account-level information raise confidentiality, privacy, and/or civil

liberties concerns? If so, what are they, and how should those concerns be addressed?

79.

Does enabling the transmission of customer and account-level information to regulators

through the EBS System or an R&R System raise confidentiality, privacy, and/or civil liberties

concerns? If so, what are those concerns, and how should they be addressed? Does the answer

depend on the type of interface that enables the transmission of this data—for instance, whether a

request for specific information from a regulator is required before such data is requested,

transmitted, and/or collected? Does the answer depend on the scope of the data requested,

transmitted, and/or collected? Does the answer depend on the purpose for which the data is

requested, transmitted, and/or collected? Does the answer depend on the extent of automation

involved in requesting, transmitting and/or collecting the data?

80.

To the extent that imposing additional limits on the collection and/or transmission of

market data to address potential confidentiality, privacy, and/or civil liberties concerns creates

trade-offs with costs, efficiency, and data security, such as any additional burdens that would be

imposed if data was p

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