2024-01-02 SEC Press pdf 252 KB 4,568 chars

Notice of the Text of the Amendment to the National Market System Plan Governing the

Exhibit of SEC Adopts Rule to Increase Transparency Into Short Selling and Amendment to CAT NMS Plan for Purposes of Short Sale Data Collection

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summary

The SEC amended the Consolidated Audit Trail (CAT) NMS Plan to require market makers to report reliance on the bona fide market making exception in Regulation SHO for short sales, enhancing transparency without imposing fraud charges or penalties.

paragraph

The Securities and Exchange Commission (SEC) adopted an amendment to the CAT NMS Plan effective January 2, 2024, requiring market makers to report whether short sale orders are executed under the bona fide market making exception in Regulation SHO. This change, with a compliance deadline of July 1, 2025, enhances regulatory oversight of short-selling activity but does not impose new reporting obligations on institutional investment managers, which are covered separately under Rule 13f-2. No fraud, misconduct, or monetary penalties are involved, as the amendment is purely procedural and technical, and the SEC declined to require marking of 'buy to cover' orders.

narrative

The Securities and Exchange Commission (SEC) published a notice of an amendment to the Consolidated Audit Trail (CAT) National Market System Plan to improve transparency in short-selling activities by requiring market makers to report whether they are relying on the bona fide market making exception under Regulation SHO. This change, effective January 2, 2024, with compliance required by July 1, 2025, is part of broader efforts to enhance regulatory oversight of market activity, as outlined in Release No. 34-98738. The amendment specifically targets market maker reporting and does not impose new short position reporting obligations on institutional investment managers, which are addressed separately under newly adopted Rule 13f-2. The SEC explicitly decided not to adopt a proposed requirement to mark 'buy to cover' orders, narrowing the scope of the amendment to focus solely on the market making exception. No individuals, firms, or entities are accused of fraud or misconduct; this is a purely procedural and technical update to the CAT NMS Plan. The amendment was adopted under statutory authority granted by Sections 2, 3, 5, 6, 11A, 15, 15A, 17, 19, and 23(a) of the Securities Exchange Act of 1934. The goal is to provide regulators with better data to monitor legitimate market making versus potential abusive short-selling practices, without introducing new enforcement actions or penalties.

Enriched metadata

Scheme: non-corporate (100%)

Classified non-corporate(confidence 100%). No EDGAR filing fingerprint (criminal/DOJ-side scheme). detection rule →

Extracted insights

Entities 2

person cat nms plan
agency Securities and Exchange Commission

Triples 7

Securities and Exchange Commission is publishing Notice of the Text of the Amendment to the National Market System Plan
The Commission is adopting New 17 CFR 240.13f-2
Rule 13f-2 requires Institutional Investment Managers to Report Short Position Data
The Commission is not adopting Proposed Amendment to the CAT NMS Plan
The Commission is adopting Amendment to the CAT NMS Plan
The Commission is setting Compliance Date of July 1, 2025
The Commission is amending CAT NMS Plan

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Notice of the Text of the Amendment to the National Market System Plan Governing the · Source

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Extracted body text (4,568c)


Conformed to Federal Register version 
SECURITIES AND EXCHANGE COMMISSION 
[Release No. 34-98739; File No. S7-08-22] 
Notice of the Text of the Amendment to the National Market System Plan Governing the 
Consolidated Audit Trail for Purposes of Short Sale-Related Data Collection 
AGENCY: Securities and Exchange Commission. 
ACTION: Notice of the text of amendment to national market system plan. 
SUMMARY: The Securities and Exchange Commission (“Commission”) is publishing notice of 
the text of the adopted amendment to the National Market System Plan Governing the 
Consolidated Audit Trail (“CAT NMS Plan”) in connection with the Commission’s issuance of 
Release No. 34-98738, “Short Position and Short Activity Reporting by Institutional Investment 
Managers” (“Adopting Release”), published elsewhere in this issue of the Federal Register. 
DATES: Effective date: January 2, 2024. 
Compliance date: The compliance date for the amendment to the CAT NMS Plan is July 1, 2025. 
FOR FURTHER INFORMATION CONTACT: Timothy M. Riley, Branch Chief; Patrice M. 
Pitts, Special Counsel; James R. Curley, Special Counsel; Jessica Kloss, Attorney-Advisor; 
Brendan McLeod, Attorney-Advisor; Roland Lindmayer, Attorney-Advisor; and Josephine Tao, 
Assistant Director, Office of Trading Practices, Division of Trading and Markets, Securities and 
Exchange Commission, 100 F Street NE, Washington, D.C. 20549, at (202) 551-5777. 
SUPPLEMENTARY INFORMATION: 
I. Background 
 In the Adopting Release, the Commission is adopting new 17 CFR 240.13f-2 (“Rule 
13f-2) and related Form SHO (referenced in 17 CFR 249.332) under the Securities Exchange Act 
of 1934 (“Exchange Act”). Rule 13f-2 requires certain institutional investment managers to 

2 
report, on a monthly basis on new Form SHO, certain prescribed short position data and short 
activity data for certain equity securities. The Commission is not adopting the proposed 
amendment to the CAT NMS Plan that would have required the reporting to the Consolidated 
Audit Trail of “buy to cover” order marking. The Commission is adopting an amendment to the 
CAT NMS Plan, pursuant to 17 CFR 242.608(a)(2) and (b)(2), to require the reporting to the 
Consolidated Audit Trail of reliance on the bona fide market making exception in Regulation 
SHO, with some non-substantive, technical changes with regard to the wording of the rule text.
1
 
This Notice is being given of the text of the adopted amendment to the CAT NMS Plan. For a 
full discussion of the adopted amendment to the CAT NMS Plan, see the Adopting Release. 
II. Compliance Date 
 The Commission is setting a compliance date of
 20 months from publication in the 
Federal Register, which is 18 months after the effective date of the Adopting Release.
2
 
III. Statutory Authority and Text of the Amendment to the CAT NMS Plan 
Pursuant to the Exchange Act and, particularly, Sections 2,    3,    5,    6,    11A(a)(3)(B), 15, 15A, 
17(a) and (b), 19, and 23(a) thereof, 15 U.S.C. 78b, 78c, 78e, 78f, 78k-1, 78o, 78o-3, 78q(a) and 
(b), 78s, and 78w(a), and pursuant to Rules 608(a)(2) and (b)(2) thereunder, the Commission is 
amending the CAT NMS Plan in the manner set forth below. 
Amend Section 6.4 of the CAT NMS Plan by modifying paragraphs (d)(ii)(B) and (C) 
and adding paragraph (d)(ii)(D).   
 The revisions read as follows. Additions are italicized; deletions are [bracketed]. 
* * * * * 
 
1
 See Short Position and Short Activity Reporting by Institutional Investment Managers, Exchange Act 
Release No. 34-98738 (Oct. 13, 2023), at n. 38 and accompanying text. 
2 
 Id. at 141 (discussing compliance date for amendment to the CAT NMS Plan). 

3 
Section 6.4. Data Reporting and Recording by Industry Members. 
* * * * * 
(d) Required Industry Member Data 
(i) No change. 
(ii) No change. 
(A) No change. 
(1) – (3) No change. 
(B) if the trade is cancelled, a cancelled trade indicator; [and] 
(C) for original receipt or origination of an order, the Firm 
Designated ID for the relevant Customer, and in accordance with 
Section 6.4(d)(iv), Customer Account Information and Customer 
Identifying Information for the relevant Customer[.]; and 
(D) for the original receipt or origination of an order to sell 
an equity security, whether the order is  for a    short sale effected by a 
market maker in connection with bona fide market making activities in 
the security for which the exception in Rule 203(b)(2)(iii) of Regulation 
SHO is claimed. 
By the Commission. 
Dated: October 13, 2023. 
 
J. Matthew DeLesDernier, 
Deputy Secretary.

OCR text (4,614c · tika · 95% conf)

Conformed to Federal Register version 

SECURITIES AND EXCHANGE COMMISSION 

[Release No. 34-98739; File No. S7-08-22] 

Notice of the Text of the Amendment to the National Market System Plan Governing the 

Consolidated Audit Trail for Purposes of Short Sale-Related Data Collection 

AGENCY: Securities and Exchange Commission. 

ACTION: Notice of the text of amendment to national market system plan. 

SUMMARY: The Securities and Exchange Commission (“Commission”) is publishing notice of 

the text of the adopted amendment to the National Market System Plan Governing the 

Consolidated Audit Trail (“CAT NMS Plan”) in connection with the Commission’s issuance of 

Release No. 34-98738, “Short Position and Short Activity Reporting by Institutional Investment 

Managers” (“Adopting Release”), published elsewhere in this issue of the Federal Register. 

DATES: Effective date: January 2, 2024. 

Compliance date: The compliance date for the amendment to the CAT NMS Plan is July 1, 2025. 

FOR FURTHER INFORMATION CONTACT: Timothy M. Riley, Branch Chief; Patrice M. 

Pitts, Special Counsel; James R. Curley, Special Counsel; Jessica Kloss, Attorney-Advisor; 

Brendan McLeod, Attorney-Advisor; Roland Lindmayer, Attorney-Advisor; and Josephine Tao, 

Assistant Director, Office of Trading Practices, Division of Trading and Markets, Securities and 

Exchange Commission, 100 F Street NE, Washington, D.C. 20549, at (202) 551-5777. 

SUPPLEMENTARY INFORMATION: 

I. Background 

 In the Adopting Release, the Commission is adopting new 17 CFR 240.13f-2 (“Rule 

13f-2) and related Form SHO (referenced in 17 CFR 249.332) under the Securities Exchange Act 

of 1934 (“Exchange Act”). Rule 13f-2 requires certain institutional investment managers to 



2 

report, on a monthly basis on new Form SHO, certain prescribed short position data and short 

activity data for certain equity securities. The Commission is not adopting the proposed 

amendment to the CAT NMS Plan that would have required the reporting to the Consolidated 

Audit Trail of “buy to cover” order marking. The Commission is adopting an amendment to the 

CAT NMS Plan, pursuant to 17 CFR 242.608(a)(2) and (b)(2), to require the reporting to the 

Consolidated Audit Trail of reliance on the bona fide market making exception in Regulation 

SHO, with some non-substantive, technical changes with regard to the wording of the rule text.1 

This Notice is being given of the text of the adopted amendment to the CAT NMS Plan. For a 

full discussion of the adopted amendment to the CAT NMS Plan, see the Adopting Release. 

II. Compliance Date 

 The Commission is setting a compliance date of 20 months from publication in the 

Federal Register, which is 18 months after the effective date of the Adopting Release.2 

III. Statutory Authority and Text of the Amendment to the CAT NMS Plan 

Pursuant to the Exchange Act and, particularly, Sections 2, 3, 5, 6, 11A(a)(3)(B), 15, 15A, 

17(a) and (b), 19, and 23(a) thereof, 15 U.S.C. 78b, 78c, 78e, 78f, 78k-1, 78o, 78o-3, 78q(a) and 

(b), 78s, and 78w(a), and pursuant to Rules 608(a)(2) and (b)(2) thereunder, the Commission is 

amending the CAT NMS Plan in the manner set forth below. 

Amend Section 6.4 of the CAT NMS Plan by modifying paragraphs (d)(ii)(B) and (C) 

and adding paragraph (d)(ii)(D).   

 The revisions read as follows. Additions are italicized; deletions are [bracketed]. 

* * * * * 

 
1 See Short Position and Short Activity Reporting by Institutional Investment Managers, Exchange Act 

Release No. 34-98738 (Oct. 13, 2023), at n. 38 and accompanying text. 
2  Id. at 141 (discussing compliance date for amendment to the CAT NMS Plan). 



3 

Section 6.4. Data Reporting and Recording by Industry Members. 

* * * * * 

(d) Required Industry Member Data 

(i) No change. 

(ii) No change. 

(A) No change. 

(1) – (3) No change. 

(B) if the trade is cancelled, a cancelled trade indicator; [and] 

(C) for original receipt or origination of an order, the Firm 

Designated ID for the relevant Customer, and in accordance with 

Section 6.4(d)(iv), Customer Account Information and Customer 

Identifying Information for the relevant Customer[.]; and 

(D) for the original receipt or origination of an order to sell 

an equity security, whether the order is for a short sale effected by a 

market maker in connection with bona fide market making activities in 

the security for which the exception in Rule 203(b)(2)(iii) of Regulation 

SHO is claimed. 

By the Commission. 

Dated: October 13, 2023. 

 

J. Matthew DeLesDernier, 

Deputy Secretary.