The CAT NMS Plan requires both Participants and Industry Members to fund the CAT. The
summary
The U.S. SEC approved an amendment to the CAT NMS Plan implementing a transparent, volume-based Executed Share Model to fund the Consolidated Audit Trail, charging industry members fees proportional to trade volume for both prospective and historical costs, with no fraud alleged.
paragraph
The SEC approved an amendment to the CAT NMS Plan establishing an Executed Share Model to fund the Consolidated Audit Trail, allocating costs to CAT Executing Brokers for buyers (CEBBs) and sellers (CEBSs) based on executed equivalent share volume. Fees are calculated by multiplying share volume by one-third and a fee rate, with NMS stocks counted as 1:1, listed options as 100:1, and OTC equities as 0.01:1. The model includes two fee categories—prospective costs for future expenses and historical assessments to recover past costs over a 2- to 5-year period—requiring SEC Section 19(b) filings for public comment before any fee rate changes take effect.
narrative
The U.S. Securities and Exchange Commission approved an amendment to the Consolidated Audit Trail (CAT) NMS Plan, implementing a new Executed Share Model to fund CAT development and maintenance through a transparent, volume-based fee structure. Fees are assessed on CAT Executing Brokers for buyers (CEBBs) and sellers (CEBSs), calculated by multiplying executed equivalent share volume by one-third and a fee rate, with NMS stocks counted as one share, listed options using their contract multiplier (typically 100), and OTC equity shares counted as 0.01 each. The funding model distinguishes between prospective CAT costs—covering future operational expenses—and historical CAT assessments, which recover previously incurred costs over a recovery period of 2 to 5 years determined by the CAT Operating Committee. All fee rates must be set reasonably, budgeted annually, and formally filed with the SEC via Section 19(b) notices, allowing for public comment before implementation. The amendment became effective immediately upon approval, replacing prior funding methods with a market-aligned system that ensures cost recovery is proportional to trading activity. No fraud, misconduct, or enforcement action is indicated; the document is purely a regulatory fact sheet outlining a structural funding change. The CAT Operating Committee is mandated to ensure all fees, costs, and expenses are reasonable and aligned with the approved annual budget.
Classified non-corporate(confidence 100%). No EDGAR filing fingerprint (criminal/DOJ-side scheme). detection rule →
Parties
cat nms plancat operating committeeSecurities and Exchange Commission
Keywords
catindustry membersexecuted equivalentparticipantscostsexecutedindustrymembersamendmentnmsfeesecuritiesequivalent shareshareplan
Extracted insights
Entities 3
- person cat nms plan
- person cat operating committee
- agency Securities and Exchange Commission
Triples 7
- Cat Nms Plan requires Participants and Industry Members to fund the Cat
- Securities And Exchange Commission approved an amendment to the Cat Nms Plan
- Amendment implements a revised funding model
- Amendment establishes a fee schedule for Cat fees
- Amendment sets forth a framework for the recovery of costs
- Cat Operating Committee would divide costs by the reasonably projected total executed equivalent share volume
- Participants would be required to file a Section 19(b) filing with the Commission
Text layers
Extracted body text (4,719c)
Warning: TT: undefined function: 32 FACT SHEET CAT NMS Plan Amendment: Funding Model U.S. SECURITIES AND EXCHANGE COMMISSION PAGE 1 OF 2 Why This Matters The CAT NMS Plan requires both Participants and Industry Members to fund the CAT. The purpose of the funding model is to provide a framework for the recovery of the Participants’ costs to create, develop, and maintain the CAT. The amendment sets forth the method for allocating the costs to fund CAT among Participants and the members of a national securities exchange or a members of a national securities association (“Industry Members”). How the Funding Amendment Works The amendment sets forth a new Executed Share Model that will: • Charge fees to Participants and Industry Members based on executed equivalent share volume: o Fees will be charged to each Industry Member that is a CAT Executing Broker for the buyer in a transaction (“CEBB”) and each Industry Member that is the CAT Executing Broker for the seller in a transaction (“CEBS”); o The CAT fee for each Participant, CEBB, and CEBS in a transaction will be calculated by multiplying the number of executed equivalent shares in the transaction by one-third and by a Fee Rate. • Calculate executed equivalent share volume based on whether securities being traded are NMS Stocks, Listed Options, and/or OTC Equity Securities, to account for differences in the trading characteristics of each of those securities. o NMS Stocks will be counted as one executed equivalent share; The Securities and Exchange Commission approved an amendment to the National Market System Plan for the Consolidated Audit Trail (“CAT NMS Plan”) that implements a revised funding model (“Executed Share Model”) for the Consolidated Audit Trail (“CAT”) and establishes a fee schedule for CAT fees for the self-regulatory organizations that are participants to the CAT NMS Plan (the “Participants”) in accordance with the Executed Share Model. The amendment also sets forth a framework for the recovery of the costs incurred by the Participants in developing and maintaining the CAT system. FACT SHEET | CAT NMS Plan Amendment: Funding Model U.S. SECURITIES AND EXCHANGE COMMISSION PAGE 2 of 2 o Each executed contract for a transaction in Listed Options will be counted using the contract multiplier applicable to the specific Listed Option in the relevant transaction (typically 100 shares); o Each executed share for a transaction in OTC Equity Securities would be counted as 0.01 executed equivalent shares. The amendment establishes two categories of fees: • CAT fees for CAT costs not previously paid by the Participants (“Prospective CAT Costs”). • CAT fees (“Historical CAT Assessments”) to be payable by Industry Members that are CAT Executing Brokers for the Buyer and for the Seller with regard to CAT costs previously paid by the Participants (“Past CAT Costs”). The Fee Rate for CAT fees related to Prospective CAT Costs would be determined by dividing the reasonably budgeted CAT costs for the upcoming year by the reasonably projected total executed equivalent share volume of all transactions for that year. To calculate the Fee Rate for the Historical CAT Assessment related to Past CAT Costs, the CAT Operating Committee would divide such costs (less any excluded amount) by the reasonably projected total executed equivalent share volume of all transactions during a projected recovery period. The projected recovery period would be determined by the CAT Operating Committee and must be no less than two years and no more than five years. The amendment further provides: • For every new Fee Rate and adjustment to the Fee Rate, the Participants would be required to file a Section 19(b) filing with the Commission to implement the Fee Rate on Industry Members. As with other Section 19(b) filings, these filings would be published for public comment and could likely take effect upon filing. Such a filing for a Fee Rate change would provide notice to Industry Members and the public of the Fee Rate change and permit such entities to provide comment on the change and on the effectiveness of the budget reconciliation. • The CAT LLC’s Operating Committee is required to set a “reasonable” operating budget for CAT LLC, as well as to make sure that fees, costs, and expenses are reasonable and that they are reasonably budgeted to be incurred by or for the Company in connection with the development, implementation, and operation of the CAT as set forth in the annual operating budget approved by the Operating Committee. What’s Next The amendment became effective upon Commission approval.
OCR text (4,758c · tika · 95% conf)
FACT SHEET CAT NMS Plan Amendment: Funding Model U.S. SECURITIES AND EXCHANGE COMMISSION PAGE 1 OF 2 Why This Matters The CAT NMS Plan requires both Participants and Industry Members to fund the CAT. The purpose of the funding model is to provide a framework for the recovery of the Participants’ costs to create, develop, and maintain the CAT. The amendment sets forth the method for allocating the costs to fund CAT among Participants and the members of a national securities exchange or a members of a national securities association (“Industry Members”). How the Funding Amendment Works The amendment sets forth a new Executed Share Model that will: • Charge fees to Participants and Industry Members based on executed equivalent share volume: o Fees will be charged to each Industry Member that is a CAT Executing Broker for the buyer in a transaction (“CEBB”) and each Industry Member that is the CAT Executing Broker for the seller in a transaction (“CEBS”); o The CAT fee for each Participant, CEBB, and CEBS in a transaction will be calculated by multiplying the number of executed equivalent shares in the transaction by one-third and by a Fee Rate. • Calculate executed equivalent share volume based on whether securities being traded are NMS Stocks, Listed Options, and/or OTC Equity Securities, to account for differences in the trading characteristics of each of those securities. o NMS Stocks will be counted as one executed equivalent share; The Securities and Exchange Commission approved an amendment to the National Market System Plan for the Consolidated Audit Trail (“CAT NMS Plan”) that implements a revised funding model (“Executed Share Model”) for the Consolidated Audit Trail (“CAT”) and establishes a fee schedule for CAT fees for the self-regulatory organizations that are participants to the CAT NMS Plan (the “Participants”) in accordance with the Executed Share Model. The amendment also sets forth a framework for the recovery of the costs incurred by the Participants in developing and maintaining the CAT system. FACT SHEET | CAT NMS Plan Amendment: Funding Model U.S. SECURITIES AND EXCHANGE COMMISSION PAGE 2 of 2 o Each executed contract for a transaction in Listed Options will be counted using the contract multiplier applicable to the specific Listed Option in the relevant transaction (typically 100 shares); o Each executed share for a transaction in OTC Equity Securities would be counted as 0.01 executed equivalent shares. The amendment establishes two categories of fees: • CAT fees for CAT costs not previously paid by the Participants (“Prospective CAT Costs”). • CAT fees (“Historical CAT Assessments”) to be payable by Industry Members that are CAT Executing Brokers for the Buyer and for the Seller with regard to CAT costs previously paid by the Participants (“Past CAT Costs”). The Fee Rate for CAT fees related to Prospective CAT Costs would be determined by dividing the reasonably budgeted CAT costs for the upcoming year by the reasonably projected total executed equivalent share volume of all transactions for that year. To calculate the Fee Rate for the Historical CAT Assessment related to Past CAT Costs, the CAT Operating Committee would divide such costs (less any excluded amount) by the reasonably projected total executed equivalent share volume of all transactions during a projected recovery period. The projected recovery period would be determined by the CAT Operating Committee and must be no less than two years and no more than five years. The amendment further provides: • For every new Fee Rate and adjustment to the Fee Rate, the Participants would be required to file a Section 19(b) filing with the Commission to implement the Fee Rate on Industry Members. As with other Section 19(b) filings, these filings would be published for public comment and could likely take effect upon filing. Such a filing for a Fee Rate change would provide notice to Industry Members and the public of the Fee Rate change and permit such entities to provide comment on the change and on the effectiveness of the budget reconciliation. • The CAT LLC’s Operating Committee is required to set a “reasonable” operating budget for CAT LLC, as well as to make sure that fees, costs, and expenses are reasonable and that they are reasonably budgeted to be incurred by or for the Company in connection with the development, implementation, and operation of the CAT as set forth in the annual operating budget approved by the Operating Committee. What’s Next The amendment became effective upon Commission approval. Why This Matters How the Funding Amendment Works What’s Next