Securities and Exchange Commission v. Cat Nms Plan, et al.

SECURITIES AND EXCHANGE COMMISSION 
(Release No. 34-88702) 
 
April 20, 2020 
 
Order Granting Conditional Exemptive Relief, Pursuant to Section 36 of the Securities Exchange 
Act of 1934 (“Exchange Act”) and Rule 608(e) of Regulation NMS Under the Exchange Act, 
from Sections 6.4, 6.7(a)(v) and 6.7(a)(vi) of the National Market System Plan Governing the 
Consolidated Audit Trail 
 
I. Introduction 
 By letter dated February 19, 2020, 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., Financial Industry Regulatory Authority, Inc., Investors 
Exchange LLC, Long Term Stock Exchange, Inc., Miami International Securities Exchange 
LLC, MIAX Emerald, LLC; MIAX Pearl, LLC, Nasdaq BX, Inc., Nasdaq GEMX, LLC, Nasdaq 
ISE, LLC, Nasdaq MRX, LLC, Nasdaq PHLX LLC, The NASDAQ Stock Market LLC, New 
York Stock Exchange LLC, NYSE American LLC, NYSE Arca, Inc., NYSE Chicago, Inc., and 
NYSE National, Inc. (collectively, the “Participants”) to the National Market System Plan 
Governing the Consolidated Audit Trail (“CAT NMS Plan” or “Plan”),
1
 requested that the 
Securities and Exchange Commission (“Commission” or “SEC”) grant exemptive relief from 
certain requirements in the CAT NMS Plan pursuant to Section 36 of the Securities Exchange 
                                                            
1
  The CAT NMS Plan was published for comment in the Federal Register on May 17, 
2016, and approved by the Commission, as modified, on November 15, 2016.  See 
Securities Exchange Act Release Nos. 77724 (April 27, 2016), 81 FR 30614 (May 17, 
2016) (“Notice of Filing of the CAT NMS Plan”); 79318 (November 15, 2016), 81 FR 
84696 (November 23, 2016) (“CAT NMS Plan Approval Order”).  The CAT NMS Plan 
is Exhibit A of the CAT NMS Plan Approval Order.  See CAT NMS Plan Approval 
Order, at 84943-85034. 

 2  
 
Act of 1934 (“Exchange Act”)
2
 and Rule 608(e) of Regulation NMS under the Exchange Act.
3
  
Specifically, the Participants seek exemptive relief from requirements in Sections 6.4, 6.7(a)(v) 
and 6.7(a)(vi) of the CAT NMS Plan related to Industry Member
4
 reporting of Industry Member 
                                                            
2
  15 U.S.C. 78mm(a)(1). 
3
  17 CFR 242.608(e). 
4
  The CAT NMS Plan defines “Industry Member” as a member of a national securities 
exchange or a member of a national securities association.  See CAT NMS Plan Approval 
Order, supra note 1, at 84946, Ex. A, Section 1.1.  The CAT NMS Plan defines “Small 
Industry Member” as an Industry Member that qualifies as a small broker-dealer as 
defined in Rule 613.  See id. at 84947, Ex. A, Section 1.1.  Rule 613(a)(3)(v) uses the 
definition of “small broker-dealer” contained in Exchange Act Rule 0–10, “Small entities 
under the Securities Exchange Act for purposes of the Regulatory Flexibility Act.’’  
Exchange Rule 0–10(c) defines a ‘‘small broker-dealer’’ as a broker or dealer that: (1) 
had total capital (net worth plus subordinated liabilities) of less than $500,000 on the date 
in the prior fiscal year as of which its audited financial statements were prepared pursuant 
to 240.17a5(d) or, if not required to file such statements, a broker or dealer that had total 
capital (net worth plus subordinated liabilities) of less than $500,000 on the last business 
day of the preceding fiscal year (or in the time that it has been in business, if shorter); and 
(2) is not affiliated with any person (other than a natural person) that is not a small 
business or small organization as defined in this section.  See 17 CFR 242.613(a)(3)(v); 
see also 17 CFR 240.0–10(c).  In a separate order, the Commission granted the 
Participants’ request for exemptive relief from enforcing compliance with certain 
provisions of the CAT NMS Plan with respect to broker-dealers that do not qualify as 
Small Industry Members solely because they satisfy Rule 0-10(i)(2) under the Exchange 
Act, and as a result, are deemed to be affiliated with an entity that is not a small business 
or a small organization (“Introducing Industry Member”).  See Order Granting Limited 
Exemptive Relief, Pursuant to Section 36 of the Securities Exchange Act of 1934 
(“Exchange Act”) and Rule 608(e) of Regulation NMS Under the Exchange Act, Related 
to Certain Introducing Brokers, From the Requirements of the National Market System 
Plan Governing the Consolidated Audit Trail, Securities Exchange Act Release No. 34-
88703 (dated April 20, 2020).  Under that Order, the Participants will be exempted from 
requiring compliance with the requirements of the CAT NMS Plan that apply to Large 
Industry Members with respect to Introducing Industry Members that meet the capital 
standard in Rule 0-10(c)(1) and that are Small Industry Non-OATS Reporters, provided 
that each Participant requires such Introducing Industry Members, through its 
Compliance Rule, to comply with the requirements of the CAT NMS Plan applicable to 
Small Industry Members.     

 3  
 
Data
5
 to the Central Repository
6
 t o allow for the implementation of phased reporting for Industry 
Members to the Consolidated Audit Trail (“CAT”) as described below.   
 Rule 608(c) of Regulation NMS under the Exchange Act requires that each self-
regulatory organization (“SRO”) comply with and, absent reasonable justification or excuse, 
enforce compliance by its members with, the terms of any effective NMS plan of which it is a 
sponsor or a participant.
7
  Section 6.4 of the CAT NMS Plan, which governs data reporting and 
recording by Industry Members, provides that the requirements for Industry Members under that 
section shall become effective on the second anniversary of the Effective Date in the case of 
Industry Members other than Small Industry Members, or the third anniversary of the Effective 
Date in the case of Small Industry Members.
8
  Section 6.7(a)(v) of the CAT NMS Plan provides 
that each Participant, through its Compliance Rule,
9
 shall require its Industry Members (other 
                                                            
5
  Industry Member Data is the data specified in Sections 6.4(d)(i)-(ii) of the CAT NMS 
Plan, which includes customer information.  See CAT NMS Plan Approval Order, supra 
note 1, at 84961, Ex. A, Sections 6.4(d)(i)-(ii). 
6
  See L etter from Michael Simon, Chair, CAT NMS Plan Operating Committee, to 
Vanessa Countryman, Secretary, Securities and Exchange Commission, dated February 
19, 2020 (“February 19, 2020 Exemption Request”).  Unless otherwise noted, capitalized 
terms are used as defined in Rule 613 or in the CAT NMS Plan. The Participants state 
that this letter amends and replaces in its entirety the original exemptive request letter 
submitted to the Commission on September 26, 2019.  See Letter from Michael Simon, 
Chair, CAT NMS Plan Operating Committee, to Vanessa Countryman, Secretary, 
Securities and Exchange Commission, dated September 26, 2019. 
7
  17 CFR 242.608(c). 
8
  See CAT NMS Plan Approval Order, supra note 1, at 84960, Ex. A, Section 6.4.  The 
Effective Date of the CAT NMS Plan was November 15, 2016.  See supra note 1.  
Therefore, two years after the Effective Date is November 15, 2018, and three years after 
the Effective Date is November 15, 2019. 
9
  The CAT NMS Plan defines “Compliance Rule” as, with respect to a Participant, the 
rule(s) promulgated by such Participant as contemplated by Section 3.11 of the CAT 
NMS Plan.  See CAT NMS Plan, supra note 1, at Section 1.1.  Section 3.11, “Compliance 
Undertaking,” requires each Participant to promulgate consistent rules requiring 
compliance by their respective Industry Members with the provisions of Rule 613 and the 
CAT NMS Plan.  See CAT NMS Plan Approval Order, supra note 1, at 84945, 84950, 

 4  
 
than Small Industry Members) to report Industry Member Data to the Central Repository within 
two years after the Effective Date.
10
  Section 6.7(a)(vi) of the CAT NMS Plan provides that each 
Participant, through its Compliance Rule, shall require its Small Industry Members to report 
Industry Member Data to the Central Repository within three years after the Effective Date.
11
   
 For the reasons set forth below, this Order grants the Participants’ request for exemptions 
from specified provisions of the CAT NMS Plan as set forth in the February 19, 2020 Exemption 
Request, subject to certain conditions. 
II.  Description     
 The Participants state that under the CAT NMS Plan, the Participants are required, 
through their Compliance Rules, to require their Industry Members (other than Small Industry 
Members) (“Large Industry Members”) to commence reporting Industry Member Data to the 
Central Repository by November 15, 2018, and to require their Small Industry Members to 
                                                            
Ex. A, Section 3.11.  Between January 17, 2017 and February 2, 2017, each Participant 
filed a Compliance Rule reflecting the requirements in Section 6.7(a)(v) of the CAT 
NMS Plan that each Participant require its Industry Members (other than Small Industry 
Members) to report Industry Member Data to the Central Repository by November 15, 
2018, and in Section 6.7(a)(vi) of the CAT NMS Plan that each Participant require its 
Small Industry Members to report Industry Member Data to the Central Repository by 
November 15, 2019.  See Securities Exchange Act Release Nos. 80256 (March 15, 2017), 
82 FR 14526 (March 21, 2017) ("CAT Compliance Rule Joint Approval Order"); 80255 
(March 15, 2017), 82 FR 14563, (March 21, 2017) ("FINRA CAT Compliance Rule 
Approval Order").     
10
  See CAT NMS Plan Approval Order, supra note 1, at 84963, Ex. A, Section 6.7(a)(v).  
Section 1.1 of the CAT NMS Plan defines “Effective Date” as “the date of approval of 
this Agreement by the Commission.”  Id. at 84946, Ex. A, Section 1.1.  The Effective 
Date of the CAT NMS Plan was November 15, 2016.  Therefore, two years after the 
Effective Date is November 15, 2018.  
11
  See CAT NMS Plan Approval Order, supra note 1, at 84963, Ex. A, Section 6.7(a)(vi). 
The Effective Date of the CAT NMS Plan was November 15, 2016.  See id. at 84946, Ex. 
A, Section 1.1.  Therefore, three years after the Effective Date is November 15, 2019.   

 5  
 
commence reporting Industry Member Data to the Central Repository by November 15, 2019.
12
  
As set forth in the February 19, 2020 Exemption Request, the Participants propose to implement 
phased reporting for Industry Member reporting to the CAT (“Phased Reporting”) in place of the 
CAT reporting schedule for Industry Members set forth in the CAT NMS Plan.
13
  The 
Participants state that Phased Reporting would have five phases, Phases 2a through 2e, and 
further represent that the full scope of CAT Data
14
 required under the CAT NMS Plan will be 
available when all five phases of Phased Reporting are complete, subject to any applicable 
exemptive relief or amendments to the CAT NMS Plan.
15
  The Participants state that each phase 
of Phased Reporting is described in the Technical Specifications for Industry Members, which 
provide detailed guidance regarding the data to be reported for each phase.
16
  The Participants 
                                                            
12
  See February 19, 2020 Exemption Request at 2.  The Participants state that Section 3.11 
of the CAT NMS Plan requires the Participants to “endeavor to promulgate consistent 
rules . . .requiring compliance by their respective Industry Members with the provisions 
of SEC Rule 613” and the CAT NMS Plan.  See id. at n.7  
13
  See February 19, 2020 Exemption Request at 2.  The Participants represent that they 
engaged in in-depth discussions with the industry and FINRA CAT, LLC, the Plan 
Processor, regarding the scope and timing of Industry Member reporting, prior to the 
exemption request.  See id.  The Participants plan to file revisions to their Compliance 
Rules consistent with the exemptive relief requested in the February 19, 2020 Exemption 
Request, including revisions to testing and related dates associated with Industry Member 
CAT reporting.  See id.  
14
  “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 Section 1.1 of the CAT NMS Plan. 
15
  See February 19, 2020 Exemption Request at 2.   
16
  See February 19, 2020 Exemption Request at 2 n.10.  Specifically, the Participants state 
that Phases 2a-2e of the Phased Reporting are described in Table 1: Industry 
Specifications Phased Approach in the CAT Reporting Technical Specifications for 
Industry Members (version 2.2.1 r3) (Jan. 31, 2020); Table 1: Industry Specifications 
Phased Approach, CAT Reporting Technical Specifications for Industry Member 
(version 3.0.0) (Jan. 31, 2020); and Table 1: Industry Customer & Account Specifications 
Phased Approach, CAT Reporting Customer & Account Technical Specifications for 
Industry Members (Version 1.0) (Jan. 23, 2020) (collectively with amendments, 

 6  
 
believe that Phased Reporting “would facilitate significant Industry Member reporting as quickly 
as possible by leaving certain complex reporting requirements to later phases.”
17
 
A. Phase 2a Scope  
The Participants state that in the first phase of Phased Reporting (“Phase 2a”), Large 
Industry Members and Small Industry OATS Reporters
18
 would be required to report “Phase 2a 
Industry Member Data” to the Central Repository by April 20, 2020.
19
  The Participants state 
that Large Industry Members and Small Industry OATS Reporters would be required to submit 
data to the CAT for the same events and scenarios during Phase 2a.
20
   
The Participants state that “Phase 2a Industry Member Data” would be Industry Member 
Data that is required to be reported to the Central Repository commencing in Phase 2a as set 
forth in the Industry Member Technical Specifications, and that Phase 2a Industry Member Data 
would include Industry Member Data solely related to Eligible Securities that are equities.
21
  
                                                            
“Industry Member Technical Specifications”), each of which is available at 
www.catnmsplan.com.   
17
  February 19, 2020 Exemption Request at 2. 
18
  “Small Industry OATS Reporters” are Industry Members that are currently required to 
record and report information to FINRA’s Order Audit Trail System pursuant to 
applicable self-regulatory organization (“SRO”) rules.  See February 19, 2020 Exemption 
Request at 3. 
19
  See February 19, 2020 Exemption Request at 3. The Participants state that Small Industry 
Members that are not required to record and report information to FINRA’s OATS 
pursuant to applicable SRO rules (“Small Industry Non-OATS Reporters”) would not be 
required to report Phase 2a Industry Member Data to the Central Repository until 
December 13, 2021, which is twenty months after Large Industry Members and Small 
Industry OATS Reporters would begin reporting. See February 19, 2020 Exemption 
Request at 3. 
20
  See February 19, 2020 Exemption Request at 3. 
21
  See February 19, 2020 Exemption Request at 3.  The Participants state that the items 
required to be reported commencing in Phase 2a do not include the items required to be 
reported in Phase 2c or Phase 2d.  While the following summarizes the categories of 
Industry Member Data to be reported for Phase 2a, the Participants state that the Industry 

 7  
 
Specifically, the Participants state that Phase 2a Industry Member Data would include all events 
and scenarios covered by OATS,
22
 which includes information related to the receipt or 
origination of orders, order transmittal, and order modifications, cancellations and executions.
23
  
The Participants also state that Phase 2a Industry Member Data would include Reportable Events 
for: 
• proprietary orders, including market maker orders, for Eligible Securities that are 
equities;  
• electronic quotes in listed equity Eligible Securities (i.e., NMS stocks) sent to a national 
securities exchange or FINRA’s Alternative Display Facility (“ADF”); 
• electronic quotes in unlisted Eligible Securities (i.e., OTC Equity Securities) received by 
an Industry Member operating an interdealer quotation system (“IDQS”); and 
• electronic quotes in unlisted Eligible Securities sent to an IDQS or other quotation system 
not operated by a Participant or Industry Member.
24
 
 According to the Participants, Phase 2a Industry Member Data would include Firm 
Designated IDs (“FDIDs”), which Industry Members must report to the CAT as required by 
Sections 6.3(d)(i)(A) and 6.4(d)(ii)(C) of the CAT NMS Plan.
25
  The Participants state that in 
                                                            
Member Technical Specifications provide detailed guidance regarding the data to be 
reported for each Phase.  See id. at 2-3.  In addition, the Participants state that they plan 
to file revisions to their Compliance Rules consistent with the exemptive relief requested 
in the February 19, 2020 Exemption Request.  See id.   
22
  See FINRA Rule 7440. 
23
  See February 19, 2020 Exemption Request at 3. 
24
  See February 19, 2020 Exemption Request at 3-4. 
25
  See February 19, 2020 Exemption Request at 4.  Section 6.3(d)(i)(A) of the CAT NMS 
Plan, as applied by Section 6.4(d)(i), requires Industry Members to submit the Firm 
Designated ID for the original receipt or origination of an order.  Section 6.4(d)(ii)(C) of 

 8  
 
Phase 2a, Industry Members would be required to report all street side representative orders,
26
 
including both agency and proprietary orders and mark such orders as representative orders, 
except in certain limited exceptions as described in the Industry Member Technical 
Specifications.
27
  The Participants state that in Phase 2a, Industry Members would be required to 
report the link between the street side representative order and the order being represented when: 
(1) the representative order was originated specifically to represent a single order received either 
from a customer or another broker-dealer; and (2) there is (a) an existing direct electronic link in 
the Industry Member’s system between the order being represented and the representative order 
and (b) any resulting executions are immediately and automatically applied to the represented 
order in the Industry Member’s system.
28
 
 The Participants state that Phase 2a Industry Member Data also would include the manual 
and Electronic Capture Time for Manual Order Events.
29
  The Participants state that specifically, 
for each Reportable Event in Section 6.3(d) of the CAT NMS Plan, Industry Members would be 
required to provide a timestamp pursuant to Section 6.8(b) of the CAT NMS Plan.
30
  The 
                                                            
the CAT NMS Plan requires Industry Members to record and report to the Central 
Repository, for original receipt and origination of an order, the Firm Designated ID. 
26
  See February 19, 2020 Exemption Request at 4.  The Participants state that a 
representative order is an order originated in a firm owned or controlled account, 
including principal, agency average price and omnibus accounts, by an Industry Member 
for the purpose of working one or more customer or client orders.  See id. 
27
  See February 19, 2020 Exemption Request at 4.   
28
  See February 19, 2020 Exemption Request at 4.   
29
  See February 19, 2020 Exemption Request at 4.   
30
  See February 19, 2020 Exemption Request at 4.  The Participants state that Section 6.8(b) 
of the CAT NMS Plan states that Industry Members shall be permitted to record and 
report: (i) Manual Order Events to the Central Repository in increments up to and 
including one second, provided that . . . Industry Members shall be required to record and 
report the time when a Manual Order Event has been captured electronically in an order 

 9  
 
Participants explain that accordingly, for Phase 2a, Industry Members would be required to 
provide both the manual and Electronic Capture Time for Manual Order Events.
31
  The 
Participants state that Industry Members would be required to report special handling 
instructions for the original receipt or origination of an order during Phase 2a.
32
  In addition, 
during Phase 2a, the Participants state that Industry Members will be required to report, when 
routing an order, whether the order was routed as an intermarket sweep order (“ISO”).
33
    
The Participants state that in Phase 2a, Industry Members would not be required to report 
modifications of a previously routed order in certain limited instances.
34
  The Participants 
explain that specifically, if a trader or trading software modifies a previously routed order, the 
routing firm is not required to report the modification of an order route if the destination to 
which the order was routed is a CAT Reporter that is required to report the corresponding order 
activity.
35
  The Participants state that if, however, the order was modified by a Customer or other 
non-CAT Reporter, and subsequently the routing Industry Member sends a modification to the 
destination to which the order was originally routed, then the routing Industry Member must 
                                                            
handling and execution system of such . . . Industry Member (“Electronic Capture Time”) 
in milliseconds.   
31
  See February 19, 2020 Exemption Request at 5.  The Participants state that Industry 
Members would be required to provide an Electronic Capture Time following the manual 
capture time only for new orders that are Manual Order Events and, in certain instances, 
routes that are Manual Order Events. The Participants state that the Electronic Capture 
Time would not be required for other Manual Order Events.  See id. at n.14.  
32
  See February 19, 2020 Exemption Request at 5.   
33
  See February 19, 2020 Exemption Request at 5.  The Participants state that Industry 
Members would be required to report special handling instructions on routes other than 
ISOs in Phase 2c, rather than Phase 2a.  See id.  
34
  See February 19, 2020 Exemption Request at 5. 
35
  See February 19, 2020 Exemption Request at 5. 

 10  
 
report the modification of the order route.
36 
 In addition, the Participants state that in Phase 2a, 
Industry Members would not be required to report a cancellation of an order received from a 
Customer after the order has been executed.
37 
 
For Phase 2a, Participants would require Small Industry OATS Reporters to begin 
reporting to the Central Repository at the same time as Large Industry Members.
38
  The 
Participants state that aligning the start of CAT reporting for Small Industry OATS Reporters 
with that of Large Industry Members under the Phased Reporting approach is designed to 
accelerate the retirement of OATS, and that having data from the Small Industry Members 
currently reporting to OATS available when Large Industry Members begin reporting would 
substantially facilitate a more expeditious retirement of OATS.
39
  The Participants further state 
that the retirement of OATS would lead to a significant cost savings for the industry by 
eliminating the need to maintain two duplicative reporting systems, as described in the CAT 
NMS Plan and as noted by the industry.
40
   
 In addition, the Participants state that commencing Phase 2a CAT reporting for Small 
Industry OATS Reporters and Large Industry Members simultaneously should not create 
significant burdens for Small Industry OATS Reporters because the additional year allotted to 
Small Industry Members under the CAT NMS Plan was intended to give Small Industry 
                                                            
36
  See February 19, 2020 Exemption Request at 5.  The Participants represent that this 
approach is comparable to the approach set forth in OATS Compliance FAQ 35.  See id. 
at n.15.  
37
  See February 19, 2020 Exemption Request at 5.   
38
  See February 19, 2020 Exemption Request at 5.   
39
  See February 19, 2020 Exemption Request at 5.   
40
  See February 19, 2020 Exemption Request at 6.   

 11  
 
Members additional time to comply with the new reporting requirements.
41
  The Participants 
believe this contention is supported by language in the Rule 613 Adopting Release indicating 
that small broker-dealers were provided with an additional year to begin reporting because 
“small broker-dealers, particularly those that operate manual systems, might be particularly 
impacted because of their more modest financial resources and may need additional time to 
upgrade to an electronic method of reporting audit trail data to the central repository.”
42
 
However, the Participants state that they do not believe that this concern applies to small broker-
dealers that are OATS Reporters.
43
  The Participants explain that while their proposed exemption 
would accelerate CAT reporting obligations for approximately 230 Small Industry Members, 220 
of those firms already report to OATS through clearing firms or other third-party providers, all of 
which will begin reporting to the CAT at the same time as Large Industry Members.
44
  As a 
result, the Participants believe that (1) additional technical requirements or costs to accelerate 
reporting requirements for these firms should be limited, and (2) that this change would allow 
introducing and clearing firms to avoid the costs associated with maintaining two systems during 
the additional transition year otherwise provided to Small Industry Members.
45
  Of the ten Small 
Industry Members that report to OATS on their own behalf, the Participants state that eight have 
very few reportable events and, consequently, the Participants believe that these Industry 
                                                            
41
  See February 19, 2020 Exemption Request at 6.  
42
  See February 19, 2020 Exemption Request at 6; see also Securities Exchange Act Rel. 
No. 67457 (July 18, 2012), 77 FR 45722, 45749 (August 1, 2012) (“Rule 613 Adopting 
Release”).  
43
  See February 19, 2020 Exemption Request at 6.  
44
  See February 19, 2020 Exemption Request at 6.  
45
  See February 19, 2020 Exemption Request at 6.  

 12  
 
Members would not have significant burdens reporting to the CAT rather than continuing to 
report to OATS.
46
 
 The Participants also believe that Phase 2a will serve as a substantial step forward for 
CAT reporting because it will cover not only all OATS events and scenarios from all OATS 
reporters, but will also include a variety of data not covered by OATS or other SRO systems.
47
  
In addition, the Participants state that Large Industry Members and Small Industry OATS 
Reporters would be required to report the FDID during Phase 2a, and that the FDID will allow 
regulators to identify that the same account is trading within a single broker-dealer.
48
  
Furthermore, the Participants state that during Phase 2a, certain linkages between street side 
representative orders and the related customer order will be enabled, which will provide 
significant benefits to regulators using the data, and that these linkages are not required under the 
OATS rules.
49
   
 In regard to Small Industry Non-OATS Reporters, the Participants do not propose to 
require these reporters to commence CAT reporting at the same time as Large Industry Members 
on April 20, 2020.
50
  Instead, the Participants propose to require Small Industry Non-OATS 
                                                            
46
  See February 19, 2020 Exemption Request at 6.  The Participants state that in one recent 
month, five of the ten firms submitted fewer than 100 reports during the month, with four 
submitting fewer than 50.  See id. at n.19. 
47
  See February 19, 2020 Exemption Request at 6.  For example, the Participants state that 
during Phase 2a, Large Industry Members and Small Industry OATS Reporters will be 
required to report all proprietary orders, including market maker orders, whereas market 
making and representative proprietary orders are not required to be captured under the 
OATS rules.  See id. 
48
  See February 19, 2020 Exemption Request at 7.  The Participants state that when the 
Customer information reporting begins, the Firm Designated ID will be used to link 
accounts to specific customers.  See id. at n.20. 
49
  See February 19, 2020 Exemption Request at 7.  
50
  See February 19, 2020 Exemption Request at 7. 

 13  
 
Reporters to begin reporting Phase 2a Industry Member Data by December 13, 2021, twenty 
months after Large Industry Members and Small Industry OATS Reporters begin reporting 
Phase 2a Industry Member Data to the Central Repository.
51
  The Participants determined not to 
accelerate Phase 2a CAT reporting for Small Industry Non-OATS Reporters because unlike 
Small Industry OATS Reporters, the burdens of CAT reporting are significantly greater for those 
firms that are not currently reporting to OATS.
52
  In addition, because Small Industry Non-
OATS Reporters do not report to OATS, the Participants state that accelerating their reporting 
would not have any effect on the retirement of OATS.
53
  
B. Phase 2b Scope 
 The Participants state that in the second phase of Phased Reporting (“Phase 2b”), Large 
Industry Members would be required to report to the Central Repository “Phase 2b Industry 
Member Data” by May 18, 2020.
54
  Small Industry Members, however, would not be required to 
report Phase 2b Industry Member Data to the Central Repository until December 13, 2021, 
which is nineteen months after Large Industry Members begin reporting such data to the Central 
Repository.
55
 
The Participants state that “Phase 2b Industry Member Data” would be Industry Member 
Data required to be reported to the Central Repository commencing in Phase 2b as set forth in 
the Industry Member Technical Specifications.
56
  Specifically, the Participants state that Phase 
                                                            
51
  See February 19, 2020 Exemption Request at 7. 
52
  See February 19, 2020 Exemption Request at 7. 
53
  See February 19, 2020 Exemption Request at 7. 
54
  See February 19, 2020 Exemption Request at 7.  
55
  See February 19, 2020 Exemption Request at 7. 
56
  See February 19, 2020 Exemption Request at 7.  The Participants state that while the 
following summarizes the categories of Industry Member Data to be reported for Phase 

 14  
 
2b Industry Member Data would include Industry Member Data related to Eligible S ecurities 
that are options and related to simple electronic option orders, excluding electronic paired option 
orders.
57
  The Participants explain that a simple electronic option order is an order to buy or sell 
a single option that is not related to or dependent on any other transaction for pricing and timing 
of execution that is either received or routed electronically by an Industry Member.
58
  The 
Participants state that electronic receipt of an order is defined as the initial receipt of an order by 
an Industry Member in electronic form in standard format directly into an order handling or 
execution system.
59
  The Participants state that electronic routing of an order is the routing of an 
order via electronic medium in standard format from one Industry Member’s order handling or 
execution system to an exchange or another Industry Member.
60
  The Participants further explain 
that an   electronic paired option order is an electronic option order that contains both the buy and 
sell side that is routed to another Industry Member or exchange for crossing and/or price 
improvement as a single transaction on an exchange.
61
  The Participants add that responses to 
auctions of simple orders and paired simple orders would be reportable in Phase 2b.
62
 
                                                            
2b, the Industry Member Technical Specifications provide detailed guidance regarding 
the data to be reported for each Phase.  See id. at 7, 2-3.   
57
  See February 19, 2020 Exemption Request at 7.  The Participants state that the items 
required to be reported in Phase 2b do not include the items required to be reported in 
Phase 2d, as discussed below.  See id. at n.21.  
58
  See February 19, 2020 Exemption Request a 7-8.  
59
  See February 19, 2020 Exemption Request at 8.  
60
  See February 19, 2020 Exemption Request at 8. 
61
  See February 19, 2020 Exemption Request at 8. 
62
  See February 19, 2020 Exemption Request at 8. 

 15  
 
 Furthermore, the Participants state that combined orders in options would be treated in 
Phase 2b in the same way as equity representative orders are treated in Phase 2a.
63
  The 
Participants state that a combined order would mean, as permitted by SRO rules, a single, simple 
order in Listed Options created by combining individual, simple orders in Listed Options from a 
customer with the same exchange origin code before routing to an exchange.
64
  The Participants 
state that during Phase 2b, the single combined order sent to an exchange must be reported and 
marked as a combined order, but the linkage to the underlying orders is not required to be 
reported until Phase 2d.
65
 
C. Phase 2c Scope 
 The Participants state that in the third phase of Phased Reporting (“Phase 2c”), Large 
Industry Members would be required to report to the Central Repository “Phase 2c Industry 
Member Data” by April 26, 2021.
66
  Small Industry Members would be required to report to the 
Central Repository “Phase 2c Industry Member Data” by December 13, 2021, which is seven 
months after Large Industry Members begin reporting such data to the Central Repository.
67
 
The Participants state that “Phase 2c Industry Member Data” would be Industry Member 
Data related to Eligible Securities that are equities other than Phase 2a Industry Member Data, 
Phase 2d Industry Member Data, or Phase 2e Industry Member Data.
68
  Specifically, the 
                                                            
63
  See February 19, 2020 Exemption Request at 8. 
64
  See February 19, 2020 Exemption Request at 8. 
65
  See February 19, 2020 Exemption Request at 8. 
66
  See February 19, 2020 Exemption Request at 8.   
67
  See February 19, 2020 Exemption Request at 8.   
68
  See February 19, 2020 Exemption Request at 8.  The Participants state that while the 
following summarizes the categories of Industry Member Data to be reported for Phase 
2c, the Industry Member Technical Specifications provide detailed guidance regarding 
the data to be reported for each Phase.  See id. at 8, 2-3. 

 16  
 
Participants state that Phase 2c Industry Member Data would include Industry Member Data that 
is related to Eligible Securities that are equities and that is related to: (1) Allocation Reports as 
required to be recorded and reported to the Central Repository pursuant to Section 
6.4(d)(ii)(A)(1) of the CAT NMS Plan; (2) quotes in unlisted Eligible Securities sent to an IDQS 
operated by a CAT Reporter (reportable by the Industry Member sending the quotes) (except for 
quotes reportable in Phase 2d, as discussed below); (3) electronic quotes in listed equity Eligible 
Securities (i.e ., NMS stocks) that are not sent to a national securities exchange or FINRA’s 
Alternative Display Facility; (4) reporting changes to client instructions regarding modifications 
to algorithms; (5) marking as a representative order any order originated to work a customer 
order in price guarantee scenarios, such as a guaranteed VWAP; (6) flagging rejected external 
routes to indicate a route was not accepted by the receiving destination; (7) linkage of duplicate 
electronic messages related to a Manual Order Event between the electronic event and the 
original manual route; (8) special handling instructions on order route reports (other than the 
ISO, which is required to be reported in Phase 2a); (9) quote identifier on trade events; (10) 
reporting of large trader identifiers
69
 (“LTID”) (if applicable) for accounts with Reportable 
Events that are reportable to CAT as of and including Phase 2c;
70
 (11) reporting of date account 
                                                            
69
  See definition of “Customer Account Information” in Section 1.1 of the CAT NMS Plan. 
See also Rule 13h-1 under the Exchange Act. 
70
  The CAT NMS Plan requires LTID to be reported to the CAT as part of Customer 
Account Information.  As set forth in the February 19, 2020 Exemption Request, the 
Participants propose to require the reporting of LTID to the CAT in Phases 2c and 2d, 
instead of with the rest of Customer Account Information in Phase 2e, which potentially 
could result in an earlier elimination of broker-dealer recordkeeping, reporting and 
monitoring requirements of the Large Trader Rule.  See February 19, 2020 Exemption 
Request at 9 -11. 

 17  
 
opened or Account Effective Date
71
 (as applicable) for accounts and reporting of a flag 
indicating the Firm Designated ID type as account or relationship; (12) order effective time for 
orders that are received by an Industry Member and do not become effective until a later time; 
(13) the modification or cancellation of an internal route of an order; and (14) linkages to the 
customer orders(s) being represented for representative order scenarios, including agency 
average price trades, net trades, aggregated orders, and disconnected Order Management System 
(“OMS”) – Execution Management System (“EMS”) scenarios, as required in the Industry 
Member Technical Specifications.
72
 
 The Participants state that Phase 2c Industry Member Data also includes electronic quotes 
that are provided by or received in a CAT Reporter’s order/quote handling or execution systems 
in Eligible Securities that are equities and are provided by an Industry Member to other market 
participants off a national securities exchange under the following conditions: (1) an equity bid 
or offer is displayed publicly or has been communicated (a) for listed securities to the Alternative 
Display Facility (ADF) operated by FINRA; or (b) for unlisted equity securities to an “inter-
dealer quotation system” as defined in FINRA Rule 6420(c); or (2) an equity bid or offer which 
is accessible electronically by customers or other market participants and is immediately 
actionable for execution or routing; i.e., no further manual or electronic action is required by the 
responder providing the quote in order to execute or cause a trade to be executed).
73
  The 
                                                            
71
  See definition of “Customer Account Information” and “Account Effective Date” in 
Section 1.1 of the CAT NMS Plan. 
72
  See February 19, 2020 Exemption Request at 8-9.  The Participants state that in Phase 2c, 
for any scenarios that involve orders originated in different systems that are not directly 
linked, such as a customer order originated in an OMS and represented by a principal 
order originated in an EMS that is not linked to the OMS, marking and linkages must be 
reported as required in the Industry Member Technical Specifications.  See id. at n.24. 
73
  See February 19, 2020 Exemption Request at 9.  

 18  
 
Participants state that with respect to OTC Equity Securities, OTC Equity Securities quotes sent 
by an Industry Member to an IDQS operated by an Industry Member CAT Reporter (other than 
such an IDQS that does not match and execute orders) are reportable by the Industry Member 
sending them in Phase 2c.
74
  The Participants explain that accordingly, any response to a request 
for quote or other form of solicitation response provided in a standard electronic format (e.g., 
FIX) that meets this quote definition (i.e., an equity bid or offer which is accessible electronically 
by customers or other market participants and is immediately actionable for execution or routing) 
would be reportable in Phase 2c.
75
 
D. Phase 2d Scope 
 The Participants state that in the fourth phase of Phased Reporting (“Phase 2d”), Large 
Industry Members and Small Industry Members would be required to report to the Central 
Repository “Phase 2d Industry Member Data” by December 13, 2021.
76
  The Participants state 
that the full scope of CAT Data other than Phase 2e Industry Member Data will be required to be 
reported to the CAT when Phase 2d has been implemented, subject to any applicable exemptive 
relief or amendments to the CAT NMS Plan.
77
   
The Participants state that “Phase 2d Industry Member Data” is Industry Member Data 
that is related to Eligible Securities that are options other than Phase 2b Industry Member Data, 
Industry Member Data that is related to Eligible Securities that are equities other than Phase 2a 
                                                            
74
  See February 19, 2020 Exemption Request at 9. 
75
  See February 19, 2020 Exemption Request at 9. 
76
  See February 19, 2020 Exemption Request at 9. 
77
  See February 19, 2020 Exemption Request at 10. 

 19  
 
Industry Member Data or Phase 2c Industry Member Data, and Industry Member Data other than 
Phase 2e Industry Member Data.
78
   
 The Participants state that Phase 2d Industry Member Data includes with respect to the 
Eligible Securities that are options: (1) simple manual orders; (2) electronic and manual paired 
orders; (3) all complex orders with linkages to all CAT-reportable legs; (4) LTIDs (if applicable) 
for accounts with Reportable Events for Phase 2d; (5) date account opened or Account Effective 
Date (as applicable) for accounts with an LTID and flag indicating the Firm Designated ID type 
as account or relationship for such accounts; (6) Allocation Reports as required to be recorded 
and reported to the Central Repository pursuant to Section 6.4(d)(ii)(A)(1) of the CAT NMS 
Plan; (7) the modification or cancellation of an internal route of an order; and (8) linkage 
between a combined order and the original customer orders.
79
  The Participants state that Phase 
2d Industry Member Data also would include electronic quotes that are provided by or received 
in a CAT Reporter’s order/quote handling or execution systems in Eligible Securities that are 
options and are provided by an Industry Member to other market participants off a national 
securities exchange under the following conditions: a listed option bid or offer which is 
accessible electronically by customers or other market participants and is immediately actionable 
(i.e., no further action is required by the responder providing the quote in order to execute or 
                                                            
78
  See February 19, 2020 Exemption Request at 9-10.  The Participants state that reporting 
information regarding the modification or cancellation of a route is necessary to create 
the full lifecycle of an order.  Accordingly, the reporting of information related to the 
modification or cancellation of a route (similar to the data required for the routing of an 
order and modification and cancellation of an order) is required pursuant to Sections 
6.3(d)(ii) and (iv) of the CAT NMS Plan.  See id. at 10 n.25.  The Participants state that 
while the following summarizes the categories of Industry Member Data to be reported 
for Phase 2d, the Industry Member Technical Specifications provide detailed guidance 
regarding the data to be reported for each Phase.  See id. at 10, 2-3.   
79
  See February 19, 2020 Exemption Request at 10.  

 20  
 
cause a trade to be executed).
80
  The Participants state that accordingly, any response to a request 
for quote or other form of solicitation response provided in standard electronic format (e.g., FIX) 
that meets this definition would be reportable in Phase 2d for options.
81
 
 The Participants state that Phase 2d Industry Member Data also would include with 
respect to Eligible Securities that are options or equities (1) receipt time of cancellation and 
modification instructions through Order Cancel Request and Order Modification Request events; 
(2) modifications of previously routed orders in certain instances; and (3) OTC Equity Securities 
quotes sent by an Industry Member to an IDQS operated by an Industry Member CAT Reporter 
that does not match and execute orders.  In addition, the Participants state that subject to any 
exemptive or other relief, Phase 2d Industry Member Data will include verbal or manual quotes 
on an exchange floor or in the over-the-counter market, where verbal quotes and manual quotes 
are defined as bids or offers in Eligible Securities provided verbally or that are provided or 
received other than via a CAT Reporter’s order handling and execution system (e.g., quotations 
provided via email or instant messaging).
82
 
E. Phase 2e Scope 
 The Participants state that in the fifth phase of Phased Reporting (“Phase 2e”), both Large 
Industry Members and Small Industry Members would be required to report to the Central 
Repository “Phase 2e Industry Member Data” by July 11, 2022.
83
  The Participants state that 
“Phase 2e Industry Member Data” includes Customer Account Information and Customer 
Identifying Information, other than LTIDs, date account opened/Account Effective Date and 
                                                            
80
  See February 19, 2020 Exemption Request at 10. 
81
  See February 19, 2020 Exemption Request at 10. 
82
  See February 19, 2020 Exemption Request at 10. 
83
  See February 19, 2020 Exemption Request at 11; see supra note 16.  

 21  
 
Firm Designated ID type flag previously reported to the CAT.
84
  The Participants state that 
LTIDs and Account Effective Date are both provided in Phases 2c and 2d in certain 
circumstances, as discussed above.
85
  The Participants state that the terms “Customer Account 
Information” and “Customer Identifying Information” are defined in Section 1.1 of the CAT 
NMS Plan.
86
  The Participants represent that the full scope of CAT Data will be required to be 
reported to the CAT when Phase 2e has been implemented, subject to any applicable exemptive 
relief or amendments to the CAT NMS Plan.
87
 
F. Industry Member Testing Requirements 
 The Participants state that the CAT NMS Plan sets forth certain timelines for testing for 
various aspects of the implementation of Industry Member reporting to the CAT.
88
  The 
                                                            
84
  See February 19, 2020 Exemption Request at 11. 
85
  See February 19, 2020 Exemption Request at 11. 
86
  See February 19, 2020 Exemption Request at 11.  The term “Customer Account 
Information” includes account numbers, and the term “Customer Identifying 
Information” includes, with respect to individuals, dates of birth and individual tax payer 
identification numbers and social security numbers (collectively, “SSNs”).  See Section 
1.1 of the CAT NMS Plan.  The Participants state that they requested exemptive relief 
from the requirements for the Participants to require their members to provide dates of 
birth, account numbers and social security numbers for individuals to the CAT.  See 
Letter from Michael Simon, CAT NMS Plan Operating Committee Chair, to Vanessa 
Countryman, SEC, Request for Exemptive Relief from Certain Provisions of the CAT 
NMS Plan related to Social Security Numbers, Dates of Birth and Account Numbers 
(Jan. 29, 2020).  On March 17, 2020, the Commission granted conditional exemptive 
relief to allow for an alternative approach to generating a CAT Customer ID without 
requiring Industry Members
 
to report individual social security numbers or tax payer 
identification numbers and (2) to allow for an alternative approach that exempts the 
reporting of dates of birth and account numbers associated with natural person retail 
Customers to the CAT, and instead will require Industry Members to report the year of 
birth associated with natural person retail Customers and the FDID
 
for each trading 
account associated with the Customer.  See Securities Exchange Act Release No. 88393, 
85 FR 16152, 16152 (March 20, 2020).  
87
  See February 19, 2020 Exemption Request at 11.  
88
  See February 19, 2020 Exemption Request at 11. 

 22  
 
Participants elaborate that specifically, Section 10 of Appendix C of the CAT NMS Plan sets 
forth testing timelines for Large and Small Industry Members involving, in relevant part, the 
publication and implementation of the methods for providing information to the Customer-ID 
database, the submission of order and market maker quote data to Central Repository, and the 
linkage of the lifecycle of order events.
89
  Given the Participants’ proposal to shift from two 
specified dates for the commencement of CAT reporting for Large and Small Industry Members 
to Phased Reporting, which features varying commencement dates according to each Phase for 
Large Industry Members, Small Industry OATS Reporters, and Small Industry Non-OATS 
Reporters,  as described above, the Participants recognize that the testing milestones set forth in 
Appendix C of the CAT NMS Plan do not easily correspond to Phased Reporting.
90
  
Accordingly, the Participants propose to replace the Industry Member testing milestones in 
Appendix C with the following testing milestones.
91
  The Participants represent that in each case, 
the proposed testing timeline would provide ample testing time for Industry Members.
92
  The 
proposed testing timeline is as follows: 
• Industry Member file submission and data integrity testing for Phases 2a and 2b begins in 
December 2019; 
                                                            
89
  See February 19, 2020 Exemption Request at 11. 
90
  See February 19, 2020 Exemption Request at 11.  
91
  See February 19, 2020 Exemption Request at 11.  The Participants state that each of the 
testing milestones has been set forth in the updated master plan provided to the SEC.  See 
id.  The Division of Trading and Markets requested a master plan from the Participants 
detailing all the material steps necessary to fully implement both Participant and Industry 
Member reporting as part of completing the CAT, among other items.  See Securities 
Exchange Act Release No. 86901, 84 FR 48458, 48460 (September 13, 2019) (“Proposed 
Transparency and Financial Accountability Amendments”).  
92
  See February 19, 2020 Exemption Request at 11.  See Section 10.1, Appendix D of the 
CAT NMS Plan. 

 23  
 
• Industry Member testing of the Reporter Portal, including data integrity error correction 
tools and data submissions, begins in February 2020; 
• The Industry Member test environment will be open with intra-firm linkage validations to 
Industry Members for both Phases 2a and 2b in April 2020; 
• The Industry Member test environment will be open to Industry Members with inter-firm 
linkage validations for both Phases 2a and 2b in July 2020; 
• The Industry Member test environment will be open to Industry Members with Phase 2c 
functionality (full representative order linkages) in January 2021; 
• The Industry Member test environment will be open to Industry Members with Phase 2d 
functionality (manual options orders, complex options orders, and options allocations) in 
June 2021; 
• Participant exchanges that support options market making quoting will begin accepting 
Quote Sent Time on quotes from Industry Members no later than April 2020; 
• The Industry Member test environment (customer and account information) will be open 
to Industry Members in January 2022.
93
 
III. Request for Relief  
 In order to allow for the implementation of Phased Reporting, the Participants request, in 
the February 19, 2020 Exemption Request, that the Commission grant each Participant 
exemptive relief from the requirement in Section 6.4 of the CAT NMS Plan that “[t]he 
requirements for Industry Members under this Section 6.4 shall become effective on the second 
anniversary of the Effective Date in the case of Industry Members other than Small Industry 
Members, or the third anniversary of the Effective Date in the case of Small Industry Members” 
                                                            
93
  See February 19, 2020 Exemption Request at 11-12. 

 24  
 
(i.e., November 15, 2018 and November 15, 2019, respectively).
94
  The Participants also request 
that the Commission grant each Participant exemptive relief from the requirement in Section 
6.7(a)(v) of the CAT NMS Plan for each Participant, through its Compliance Rule, to require its 
Industry Members (other than Small Industry Members) to report to the Central Repository 
Industry Member Data within two 2 years after the Effective Date (i.e., by November 15, 2018); 
and the requirement in Section 6.7(a)(vi) of the CAT NMS Plan for each Participant, through its 
Compliance Rule, to require its Small Industry Members to report to the Central Repository 
Industry Member Data within three 3 years after the Effective Date (i.e., by November 15, 
2019).
95
   
 In support of their request for an exemption, the Participants state that Industry Members 
have expressed concern about being out of compliance with the reporting deadlines as currently 
set forth in the Compliance Rules, and have indicated that there is a need for formal guidance as 
to the revised CAT reporting schedule for Industry Members.
96
  The Participants state that such 
certainty would assist Industry Members in their efforts to ensure compliance with the regulatory 
requirements related to the CAT.
97
  The Participants state that the full scope of CAT Data will be 
required to be reported when all five phases of Phased Reporting have been implemented, 
subject to any applicable exemptive relief or amendments to the CAT NMS Plan.
98
  
                                                            
94
  See February 19, 2020 Exemption Request at 12. 
95
  See February 19, 2020 Exemption Request at 12. 
96
  See February 19, 2020 Exemption Request at 2. The Participants state that they plan to 
file revisions to their Compliance Rules consistent with the exemptive relief requested in 
the February 19, 2020 Exemption Request, including revisions to testing and related dates 
associated with Industry Member CAT reporting.  See id.    
97
  See February 19, 2020 Exemption Request at 2. 
98
  See February 19, 2020 Exemption Request at 13.   

 25  
 
The Participants also state that, as a condition to the exemption, each Participant would 
implement the Phased Reporting described above through its Compliance Rule by requiring:  
• For Phase 2a Industry Member Data: its Large Industry Members and its Small Industry 
OATS Reporters to commence reporting to the Central Repository Phase 2a Industry 
Member Data by April 20, 2020, and its Small Industry Non-OATS Reporters to 
commence reporting to the Central Repository Phase 2a Industry Member Data by 
December 13, 2021; 
• For Phase 2b Industry Member Data: its Large Industry Members to commence reporting 
to the Central Repository Phase 2b Industry Member Data by May 18, 2020, and its 
Small Industry Members to commence reporting to the Central Repository Phase 2b 
Industry Member Data by December 13, 2021; 
• For Phase 2c Industry Member Data: its Large Industry Members to commence reporting 
to the Central Repository Phase 2c Industry Member Data by April 26, 2021, and its 
Small Industry Members to commence reporting to the Central Repository Phase 2c 
Industry Member Data by December 13, 2021; 
• For Phase 2d Industry Member Data: its Large Industry Members and Small Industry 
Members to commence reporting to the Central Repository Phase 2d Industry Member 
Data by December 13, 2021; and 
• For Phase 2e Industry Member Data: its Large Industry Members and Small Industry 
Members to commence reporting to the Central Repository Phase 2e Industry Member 
Data by July 11, 2022.
99
  
                                                            
99
  See February 19, 2020 Exemption Request at 12-13.   

 26  
 
 The Participants also state that, as a further condition to the exemption, each Participant 
would implement the testing timelines described above through its Compliance Rule by requiring 
the following:  
• Industry Member file submission and data integrity testing for Phases 2a and 2b to begin 
in December 2019. 
• Industry Member testing of the Reporter Portal, including data integrity error correction 
tools and data submissions, to begin in February 2020. 
• The Industry Member test environment will be open with intra-firm linkage validations to 
Industry Members for both Phases 2a and 2b in April 2020. 
• The Industry Member test environment will be open to Industry Members with inter-firm 
linkage validations for both Phases 2a and 2b in July 2020. 
• The Industry Member test environment will be open to Industry Members with 
 Phase 2c functionality (full representative order linkages) in January 2021. 
• The Industry Member test environment will be open to Industry Members with  
 Phase 2d functionality (manual options orders, complex options orders, and options 
 allocations) in June 2021. 
• Participant exchanges that support options market making quoting will begin accepting 
Quote Sent Time on quotes from Industry Members no later than April 2020. 
• The Industry Member test environment (customer and account information) will be open 
to Industry Members in January 2022.
100
 
IV.  Discussion 
                                                            
100
  See February 19, 2020 Exemption Request at 13.    

 27  
 
 Section 36 of the Exchange Act grants the Commission the authority, with certain 
limitations, to “conditionally or unconditionally exempt any person, security, or transaction . . . 
from any provision or provisions of [the Exchange Act] or of any rule or regulation thereunder, 
to the extent that such exemption is necessary or appropriate in the public interest, and is 
consistent with the protection of investors.”
101
  Rule 608(e) of Regulation NMS under the 
Exchange Act authorizes the Commission to exempt, either unconditionally or on specified terms 
and conditions, any self-regulatory organization, member thereof, or specified security, from the 
provisions of the rule if the Commission determines that such exemption is consistent with the 
public interest, the protection of investors, the maintenance of fair and orderly markets and the 
removal of impediments to, and perfection of the mechanisms of, a national market system.
102
 
The Commission believes that exemptive relief pursuant to Section 36 of the Exchange 
Act to allow for the implementation of Phased Reporting for Industry Members is appropriate in 
the public interest, and is consistent with the protection of investors and that, pursuant to Rule 
608(e), such relief is consistent with the public interest, the protection of investors, the 
maintenance of fair and orderly markets and the removal of impediments to, and perfection of 
the mechanisms of, a national market system.  In accordance with the CAT NMS Plan, the 
Participants adopted Compliance Rules to require their Industry Members to commence 
reporting Industry Member Data by November 15, 2018 for Large Industry Members, and 
November 15, 2019 for Small Industry Members, respectively.
103
  Industry Members, however, 
                                                            
101 
 15 U.S.C. 78mm(a)(1). 
102
  17 CFR 242.608(e). 
103
  See FINRA CAT Compliance Rule Approval Order, supra note 9; CAT Compliance Rule 
Joint Approval Order, supra note 9.  

 28  
 
have not been able to commence reporting Industry Member Data to the CAT because there has 
not been a system in place capable of accepting the required Industry Member Data.   
 Allowing the Participants to revise the Industry Member CAT reporting requirements in 
the Compliance Rules to be consistent with Phased Reporting as described in this Order will 
facilitate an incremental approach to CAT implementation.  Such an approach could contribute 
to more efficient development of the overall CAT system, which has been subject to delays, and 
could provide certainty to Industry Members as they implement their regulatory data collection 
systems and make any necessary adjustments.  
Although the Participants proposed in the February 19, 2020 Exemption Request that 
Phase 2a reporting would commence on April 20, 2020 and Phase 2b reporting would commence 
on May 18, 2020,
104
 in light of COVID-19 and the Participants’ subsequent March 19, 2020 No 
Action Request,
105
 the Commission believes that the Participants should be granted an 
exemption from the CAT NMS Plan so that the Compliance Rules may require Phase 2a 
                                                            
104
  See February 19, 2020 Exemption Request at 3, 7. 
105
  On March 19, 2020 the Participants requested additional time for Industry Members to 
prepare for the commencement of reporting and stated that Phase 2a and Phase 2b 
reporting would commence on June 22, 2020 and July 20, 2020, respectively.  The 
Participants stated that industry groups have requested extensions of CAT 
implementation dates for at least 60 days.  See Letter from Michael Simon, Chair, CAT 
NMS Plan Operating Committee, to Brett Redfearn, Director, Division of Trading and 
Markets, U.S. Securities and Exchange Commission, dated March 19, 2020 (“March 19, 
2020 No Action Request”) available at 
https://www.catnmsplan.com/sites/default/files/2020-
03/Plan%20Participant%27s%20Request%20for%20No%20Action%20Relief.pdf; see 
also Letter from Christopher Bok, Esq., Director, Financial Information Forum, to 
Michael Simon, Chair, CAT NMS Plan Operating Committee, dated March 16, 2020 
available at 
https://fif.com/comment-letters/category/?download=2129:fif-request-for-
immediate-phase-2a-and-phase-2b-relief (requesting an immediate pause of at least 60 
days from near term CAT Phase 2a and Phase 2b milestones in response to COVID-19, 
one of the effects of which would be to shift the Phase 2a and Phase 2b compliance dates 
to June 22, 2020 and July 20, 2020, respectively).  

 29  
 
reporting to commence on June 22, 2020 and Phase 2b reporting to commence on July 20, 2020, 
provided that Industry Members who elect to report to the CAT prior to such dates be permitted 
to report to the CAT as early as April 20, 2020 for Phase 2a reporting and as early as May 18, 
2020 for Phase 2b reporting.  The Participants represented in their March 19, 2020 No Action 
Request that the CAT will be ready to accept CAT reports from Industry Members as of April 
20, 2020
106
 and that the Participants understand that the Plan Processor for the CAT will be able 
to meet its upcoming system build and production dates.
107
   
The Commission believes that separating the reporting dates for OATS reporting firms 
from those that have no OATS reporting obligations is appropriate because firms that do not 
currently report to OATS will face a different range of costs and tasks to implement and maintain 
CAT reporting, since these firms are likely to have little to no regulatory data reporting 
infrastructure in place.
108
  Unlike these firms, Small Industry OATS Reporters already have 
regulatory data reporting infrastructure in place to support OATS reporting, and because Phase 
2a reporting would include all events and scenarios covered by OATS,
109
 the Commission 
believes that it should be less costly for Small Industry OATS Reporters to comply with the 
Large Industry Member reporting deadline than it would be for Small Industry Non-OATS 
Reporters.  In addition, Small Industry OATS Reporters, as Small Industry Members, have had 
notice that they were going to be required to start reporting to the CAT on November 15, 2019 
since the CAT NMS Plan was approved on November 15, 2016.
110
  Therefore, the Phase 2a start 
                                                            
106
  See March 19, 2020 No Action Request at 1. 
107
  See id. at 2.  
108
  See CAT NMS Plan Approval Order, supra note 1, at 84860.  
109
  See February 19, 2020 Exemption Request at 3. 
110
  The Effective Date of the CAT NMS Plan was November 15, 2016.  See supra note 1. 
Section 6.4 of the CAT NMS Plan, which governs data reporting and recording by 

 30  
 
date associated with accelerating the CAT reporting obligations for Small Industry OATS 
Reporters so that they report on the same date as Large Industry Members would still serve to 
extend their reporting deadline by seven months beyond the compliance date in the CAT NMS 
Plan.  Moreover, while this exemption allows the Participants’ Compliance Rules to require the 
CAT reporting date for Small Industry OATS Reporters to be the same as that for Large Industry 
Members in Phase 2a, the reporting deadline for Small Industry OATS Reporters would remain 
the same as for Small Industry Non-OATS Reporters for Phases 2b, 2c, and 2d—i.e., Small 
Industry Members would not be required to report Industry Member Data associated with Phases 
2b, 2c, and 2d until December 13, 2021.  Thus, all Small Industry Members could gain an 
additional 24 months beyond the compliance date in the CAT NMS Plan to prepare for CAT 
Reporting for Phases 2b, 2c, and 2d via the Phased Reporting schedule. 
The Commission’s exemption is limited to Sections 6.4, 6.7(a)(v) and 6.7(a)(vi) of the 
CAT NMS Plan related to Industry Member reporting of Industry Member Data to the Central 
Repository.  The Commission’s exemption does not extend to any other dates or obligations in 
the CAT NMS Plan.  In addition, even though the Commission is permitting the start dates for 
Phase 2a and Phase 2b Industry Member reporting to be extended compared to what was in the 
February 19, 2020 Exemption Request as discussed above,
111
 the exemption is conditioned upon 
the Participants complying with all other dates that are a part of Phased Reporting, as announced 
in the published timeline that has already been communicated to broker-dealers, given that 
                                                            
Industry Members, provides that the requirements for Industry Members under that 
section shall become effective on the third anniversary of the Effective Date in the case 
of Small Industry Members.  See id.  Therefore, November 15, 2019 is three years after 
the Effective Date of the CAT NMS Plan. 
111
  See supra note 104. 

 31  
 
Industry Member reporting was required to begin over a year ago per the CAT NMS Plan.
112
  
The Commission believes it is appropriate to impose such a condition because the Participants 
have stated that FINRA CAT has been very clear that it will be prepared to accept data from any 
Industry Member that has completed onboarding and certification testing by April 20, 2020 for 
Phase 2a reporting, and will similarly be ready by May 18, 2020 for Phase 2b reporting as 
described on www.catnmsplan.com.
113
 
Based on the foregoing, the Commission is granting this conditional exemptive relief 
from Sections 6.4, 6.7(a)(v) and 6.7(a)(vi) of the CAT NMS Plan related to Industry Member 
reporting of Industry Member Data to the Central Repository to allow for the implementation of 
                                                            
112
  See CAT NMS Plan website, Timeline, https://catnmsplan.com/timelines/ (last visited 
March 26, 2020).  For example, for Phases 2a and 2b, Industry Members must comply 
with the full functionality associated with Production Environment Go-Live for intrafirm 
linkage validations (Release 2 – Intrafirm Linkage) on July 27, 2020, and August 24, 
2020, respectively, and Industry Members must comply with the full functionality 
associated with Production Environment Go-Live for firm-to-firm linkage validations 
(Release 3 – Interfirm Linkage) on October 26, 2020, and January 4, 2021, respectively.  
See id.   
 Industry Members were required to start reporting to the CAT on November 15, 2018, 
according to Section 6.4 of the CAT NMS Plan, which governs data reporting and 
recording by Industry Members.  See s upra note 8. 
113
  On March 27, 2020, the Participants submitted a letter to further the discussion regarding 
the timeline for Industry Member reporting.  See Letter from Michael Simon, Chair, CAT 
NMS Plan Operating Committee, to Brett Redfearn, Director, Division of Trading and 
Markets, U.S. Securities and Exchange Commission, dated March 27, 2020 available at 
https://www.catnmsplan.com/sites/default/files/2020-03/03.27.20-
%20Participant%27s%20Relief%20Request.pdf.  The Participants stated that the 
reporting dates included in the February 19, 2020 Exemption Request remain operable 
from the Participants’ and Plan Processor’s perspective and provide a clear path for 
Industry Members that have completed certification testing and are prepared to meet 
those deadlines.  See id. at 1-2. The Participants also stated that the Participants and 
FINRA CAT have been communicating to the industry since last fall that the CAT 
system will be ready to receive Industry Member Data on April 20, 2020, and that this 
date remains operative from the perspective of both FINRA CAT and the Participants.  
See id. at 1. 

 32  
 
Phased Reporting for Industry Members to the CAT.  This order granting exemptive relief is 
conditioned upon each Participant implementing the Phased Reporting described above, in a 
manner consistent with the February 19, 2020 Exemption Request, including each of the 
representations made in the February 19, 2020 Exemption Request, as modified by the 
discussion in Section IV of this Order.  As noted above, the Participants have represented in their 
February 19, 2020 Exemption Request that the full scope of CAT Data required under the CAT 
NMS Plan will be available when all five phases of Phased Reporting are complete, subject to 
any applicable exemptive relief or amendments to the CAT NMS Plan.
114
  
Accordingly, IT IS HEREBY ORDERED, pursuant to Section 36 of the Exchange Act
115
 
and Rule 608(e) of Regulation NMS,
116
 that the Commission grants the Participants’ request for 
exemptive relief, as set forth in the February 19, 2020 Exemption Request from the requirements 
in Sections 6.4, 6.7(a)(v) and 6.7(a)(vi) of the CAT NMS Plan related to Industry Member 
reporting of Industry Member Data to the Central Repository to allow for the implementation of 
Phased Reporting, subject to the conditions described above. 
By the Commission. 
 
 
      Vanessa A. Countryman 
Secretary  
 
 
                                                            
114
  See February 19, 2020 Exemption Request at 2. 
115
  15 U.S.C. 78mm(a)(1). 
116
  17 CFR 242.608(e). 

SECURITIES AND EXCHANGE COMMISSION 
(Release No. 34-88702) 
 
April 20, 2020 
 
Order Granting Conditional Exemptive Relief, Pursuant to Section 36 of the Securities Exchange 
Act of 1934 (“Exchange Act”) and Rule 608(e) of Regulation NMS Under the Exchange Act, 
from Sections 6.4, 6.7(a)(v) and 6.7(a)(vi) of the National Market System Plan Governing the 
Consolidated Audit Trail 
 
I. Introduction 

 By letter dated February 19, 2020, 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., Financial Industry Regulatory Authority, Inc., Investors 

Exchange LLC, Long Term Stock Exchange, Inc., Miami International Securities Exchange 

LLC, MIAX Emerald, LLC; MIAX Pearl, LLC, Nasdaq BX, Inc., Nasdaq GEMX, LLC, Nasdaq 

ISE, LLC, Nasdaq MRX, LLC, Nasdaq PHLX LLC, The NASDAQ Stock Market LLC, New 

York Stock Exchange LLC, NYSE American LLC, NYSE Arca, Inc., NYSE Chicago, Inc., and 

NYSE National, Inc. (collectively, the “Participants”) to the National Market System Plan 

Governing the Consolidated Audit Trail (“CAT NMS Plan” or “Plan”),1 requested that the 

Securities and Exchange Commission (“Commission” or “SEC”) grant exemptive relief from 

certain requirements in the CAT NMS Plan pursuant to Section 36 of the Securities Exchange 

                                                            
1  The CAT NMS Plan was published for comment in the Federal Register on May 17, 

2016, and approved by the Commission, as modified, on November 15, 2016.  See 
Securities Exchange Act Release Nos. 77724 (April 27, 2016), 81 FR 30614 (May 17, 
2016) (“Notice of Filing of the CAT NMS Plan”); 79318 (November 15, 2016), 81 FR 
84696 (November 23, 2016) (“CAT NMS Plan Approval Order”).  The CAT NMS Plan 
is Exhibit A of the CAT NMS Plan Approval Order.  See CAT NMS Plan Approval 
Order, at 84943-85034. 



 2  
 

Act of 1934 (“Exchange Act”)2 and Rule 608(e) of Regulation NMS under the Exchange Act.3  

Specifically, the Participants seek exemptive relief from requirements in Sections 6.4, 6.7(a)(v) 

and 6.7(a)(vi) of the CAT NMS Plan related to Industry Member4 reporting of Industry Member 

                                                            
2  15 U.S.C. 78mm(a)(1). 
3  17 CFR 242.608(e). 
4  The CAT NMS Plan defines “Industry Member” as a member of a national securities 

exchange or a member of a national securities association.  See CAT NMS Plan Approval 
Order, supra note 1, at 84946, Ex. A, Section 1.1.  The CAT NMS Plan defines “Small 
Industry Member” as an Industry Member that qualifies as a small broker-dealer as 
defined in Rule 613.  See id. at 84947, Ex. A, Section 1.1.  Rule 613(a)(3)(v) uses the 
definition of “small broker-dealer” contained in Exchange Act Rule 0–10, “Small entities 
under the Securities Exchange Act for purposes of the Regulatory Flexibility Act.’’  
Exchange Rule 0–10(c) defines a ‘‘small broker-dealer’’ as a broker or dealer that: (1) 
had total capital (net worth plus subordinated liabilities) of less than $500,000 on the date 
in the prior fiscal year as of which its audited financial statements were prepared pursuant 
to 240.17a5(d) or, if not required to file such statements, a broker or dealer that had total 
capital (net worth plus subordinated liabilities) of less than $500,000 on the last business 
day of the preceding fiscal year (or in the time that it has been in business, if shorter); and 
(2) is not affiliated with any person (other than a natural person) that is not a small 
business or small organization as defined in this section.  See 17 CFR 242.613(a)(3)(v); 
see also 17 CFR 240.0–10(c).  In a separate order, the Commission granted the 
Participants’ request for exemptive relief from enforcing compliance with certain 
provisions of the CAT NMS Plan with respect to broker-dealers that do not qualify as 
Small Industry Members solely because they satisfy Rule 0-10(i)(2) under the Exchange 
Act, and as a result, are deemed to be affiliated with an entity that is not a small business 
or a small organization (“Introducing Industry Member”).  See Order Granting Limited 
Exemptive Relief, Pursuant to Section 36 of the Securities Exchange Act of 1934 
(“Exchange Act”) and Rule 608(e) of Regulation NMS Under the Exchange Act, Related 
to Certain Introducing Brokers, From the Requirements of the National Market System 
Plan Governing the Consolidated Audit Trail, Securities Exchange Act Release No. 34-
88703 (dated April 20, 2020).  Under that Order, the Participants will be exempted from 
requiring compliance with the requirements of the CAT NMS Plan that apply to Large 
Industry Members with respect to Introducing Industry Members that meet the capital 
standard in Rule 0-10(c)(1) and that are Small Industry Non-OATS Reporters, provided 
that each Participant requires such Introducing Industry Members, through its 
Compliance Rule, to comply with the requirements of the CAT NMS Plan applicable to 
Small Industry Members.     



 3  
 

Data5 to the Central Repository6 to allow for the implementation of phased reporting for Industry 

Members to the Consolidated Audit Trail (“CAT”) as described below.   

 Rule 608(c) of Regulation NMS under the Exchange Act requires that each self-

regulatory organization (“SRO”) comply with and, absent reasonable justification or excuse, 

enforce compliance by its members with, the terms of any effective NMS plan of which it is a 

sponsor or a participant.7  Section 6.4 of the CAT NMS Plan, which governs data reporting and 

recording by Industry Members, provides that the requirements for Industry Members under that 

section shall become effective on the second anniversary of the Effective Date in the case of 

Industry Members other than Small Industry Members, or the third anniversary of the Effective 

Date in the case of Small Industry Members.8  Section 6.7(a)(v) of the CAT NMS Plan provides 

that each Participant, through its Compliance Rule,9 shall require its Industry Members (other 

                                                            
5  Industry Member Data is the data specified in Sections 6.4(d)(i)-(ii) of the CAT NMS 

Plan, which includes customer information.  See CAT NMS Plan Approval Order, supra 
note 1, at 84961, Ex. A, Sections 6.4(d)(i)-(ii). 

6  See Letter from Michael Simon, Chair, CAT NMS Plan Operating Committee, to 
Vanessa Countryman, Secretary, Securities and Exchange Commission, dated February 
19, 2020 (“February 19, 2020 Exemption Request”).  Unless otherwise noted, capitalized 
terms are used as defined in Rule 613 or in the CAT NMS Plan. The Participants state 
that this letter amends and replaces in its entirety the original exemptive request letter 
submitted to the Commission on September 26, 2019.  See Letter from Michael Simon, 
Chair, CAT NMS Plan Operating Committee, to Vanessa Countryman, Secretary, 
Securities and Exchange Commission, dated September 26, 2019. 

7  17 CFR 242.608(c). 
8  See CAT NMS Plan Approval Order, supra note 1, at 84960, Ex. A, Section 6.4.  The 

Effective Date of the CAT NMS Plan was November 15, 2016.  See supra note 1.  
Therefore, two years after the Effective Date is November 15, 2018, and three years after 
the Effective Date is November 15, 2019. 

9  The CAT NMS Plan defines “Compliance Rule” as, with respect to a Participant, the 
rule(s) promulgated by such Participant as contemplated by Section 3.11 of the CAT 
NMS Plan.  See CAT NMS Plan, supra note 1, at Section 1.1.  Section 3.11, “Compliance 
Undertaking,” requires each Participant to promulgate consistent rules requiring 
compliance by their respective Industry Members with the provisions of Rule 613 and the 
CAT NMS Plan.  See CAT NMS Plan Approval Order, supra note 1, at 84945, 84950, 



 4  
 

than Small Industry Members) to report Industry Member Data to the Central Repository within 

two years after the Effective Date.10  Section 6.7(a)(vi) of the CAT NMS Plan provides that each 

Participant, through its Compliance Rule, shall require its Small Industry Members to report 

Industry Member Data to the Central Repository within three years after the Effective Date.11   

 For the reasons set forth below, this Order grants the Participants’ request for exemptions 

from specified provisions of the CAT NMS Plan as set forth in the February 19, 2020 Exemption 

Request, subject to certain conditions. 

II.  Description    

 The Participants state that under the CAT NMS Plan, the Participants are required, 

through their Compliance Rules, to require their Industry Members (other than Small Industry 

Members) (“Large Industry Members”) to commence reporting Industry Member Data to the 

Central Repository by November 15, 2018, and to require their Small Industry Members to 

                                                            
Ex. A, Section 3.11.  Between January 17, 2017 and February 2, 2017, each Participant 
filed a Compliance Rule reflecting the requirements in Section 6.7(a)(v) of the CAT 
NMS Plan that each Participant require its Industry Members (other than Small Industry 
Members) to report Industry Member Data to the Central Repository by November 15, 
2018, and in Section 6.7(a)(vi) of the CAT NMS Plan that each Participant require its 
Small Industry Members to report Industry Member Data to the Central Repository by 
November 15, 2019.  See Securities Exchange Act Release Nos. 80256 (March 15, 2017), 
82 FR 14526 (March 21, 2017) ("CAT Compliance Rule Joint Approval Order"); 80255 
(March 15, 2017), 82 FR 14563, (March 21, 2017) ("FINRA CAT Compliance Rule 
Approval Order").     

10  See CAT NMS Plan Approval Order, supra note 1, at 84963, Ex. A, Section 6.7(a)(v).  
Section 1.1 of the CAT NMS Plan defines “Effective Date” as “the date of approval of 
this Agreement by the Commission.”  Id. at 84946, Ex. A, Section 1.1.  The Effective 
Date of the CAT NMS Plan was November 15, 2016.  Therefore, two years after the 
Effective Date is November 15, 2018.  

11  See CAT NMS Plan Approval Order, supra note 1, at 84963, Ex. A, Section 6.7(a)(vi). 
The Effective Date of the CAT NMS Plan was November 15, 2016.  See id. at 84946, Ex. 
A, Section 1.1.  Therefore, three years after the Effective Date is November 15, 2019.   



 5  
 

commence reporting Industry Member Data to the Central Repository by November 15, 2019.12  

As set forth in the February 19, 2020 Exemption Request, the Participants propose to implement 

phased reporting for Industry Member reporting to the CAT (“Phased Reporting”) in place of the 

CAT reporting schedule for Industry Members set forth in the CAT NMS Plan.13  The 

Participants state that Phased Reporting would have five phases, Phases 2a through 2e, and 

further represent that the full scope of CAT Data14 required under the CAT NMS Plan will be 

available when all five phases of Phased Reporting are complete, subject to any applicable 

exemptive relief or amendments to the CAT NMS Plan.15  The Participants state that each phase 

of Phased Reporting is described in the Technical Specifications for Industry Members, which 

provide detailed guidance regarding the data to be reported for each phase.16  The Participants 

                                                            
12  See February 19, 2020 Exemption Request at 2.  The Participants state that Section 3.11 

of the CAT NMS Plan requires the Participants to “endeavor to promulgate consistent 
rules . . .requiring compliance by their respective Industry Members with the provisions 
of SEC Rule 613” and the CAT NMS Plan.  See id. at n.7  

13  See February 19, 2020 Exemption Request at 2.  The Participants represent that they 
engaged in in-depth discussions with the industry and FINRA CAT, LLC, the Plan 
Processor, regarding the scope and timing of Industry Member reporting, prior to the 
exemption request.  See id.  The Participants plan to file revisions to their Compliance 
Rules consistent with the exemptive relief requested in the February 19, 2020 Exemption 
Request, including revisions to testing and related dates associated with Industry Member 
CAT reporting.  See id.  

14  “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 Section 1.1 of the CAT NMS Plan. 

15  See February 19, 2020 Exemption Request at 2.   
16  See February 19, 2020 Exemption Request at 2 n.10.  Specifically, the Participants state 

that Phases 2a-2e of the Phased Reporting are described in Table 1: Industry 
Specifications Phased Approach in the CAT Reporting Technical Specifications for 
Industry Members (version 2.2.1 r3) (Jan. 31, 2020); Table 1: Industry Specifications 
Phased Approach, CAT Reporting Technical Specifications for Industry Member 
(version 3.0.0) (Jan. 31, 2020); and Table 1: Industry Customer & Account Specifications 
Phased Approach, CAT Reporting Customer & Account Technical Specifications for 
Industry Members (Version 1.0) (Jan. 23, 2020) (collectively with amendments, 



 6  
 

believe that Phased Reporting “would facilitate significant Industry Member reporting as quickly 

as possible by leaving certain complex reporting requirements to later phases.”17 

A. Phase 2a Scope  

The Participants state that in the first phase of Phased Reporting (“Phase 2a”), Large 

Industry Members and Small Industry OATS Reporters18 would be required to report “Phase 2a 

Industry Member Data” to the Central Repository by April 20, 2020.19  The Participants state 

that Large Industry Members and Small Industry OATS Reporters would be required to submit 

data to the CAT for the same events and scenarios during Phase 2a.20   

The Participants state that “Phase 2a Industry Member Data” would be Industry Member 

Data that is required to be reported to the Central Repository commencing in Phase 2a as set 

forth in the Industry Member Technical Specifications, and that Phase 2a Industry Member Data 

would include Industry Member Data solely related to Eligible Securities that are equities.21  

                                                            
“Industry Member Technical Specifications”), each of which is available at 
www.catnmsplan.com.   

17  February 19, 2020 Exemption Request at 2. 
18  “Small Industry OATS Reporters” are Industry Members that are currently required to 

record and report information to FINRA’s Order Audit Trail System pursuant to 
applicable self-regulatory organization (“SRO”) rules.  See February 19, 2020 Exemption 
Request at 3. 

19  See February 19, 2020 Exemption Request at 3. The Participants state that Small Industry 
Members that are not required to record and report information to FINRA’s OATS 
pursuant to applicable SRO rules (“Small Industry Non-OATS Reporters”) would not be 
required to report Phase 2a Industry Member Data to the Central Repository until 
December 13, 2021, which is twenty months after Large Industry Members and Small 
Industry OATS Reporters would begin reporting. See February 19, 2020 Exemption 
Request at 3. 

20  See February 19, 2020 Exemption Request at 3. 
21  See February 19, 2020 Exemption Request at 3.  The Participants state that the items 

required to be reported commencing in Phase 2a do not include the items required to be 
reported in Phase 2c or Phase 2d.  While the following summarizes the categories of 
Industry Member Data to be reported for Phase 2a, the Participants state that the Industry 

http://www.catnmsplan.com/


 7  
 

Specifically, the Participants state that Phase 2a Industry Member Data would include all events 

and scenarios covered by OATS,22 which includes information related to the receipt or 

origination of orders, order transmittal, and order modifications, cancellations and executions.23  

The Participants also state that Phase 2a Industry Member Data would include Reportable Events 

for: 

• proprietary orders, including market maker orders, for Eligible Securities that are 

equities;  

• electronic quotes in listed equity Eligible Securities (i.e., NMS stocks) sent to a national 

securities exchange or FINRA’s Alternative Display Facility (“ADF”); 

• electronic quotes in unlisted Eligible Securities (i.e., OTC Equity Securities) received by 

an Industry Member operating an interdealer quotation system (“IDQS”); and 

• electronic quotes in unlisted Eligible Securities sent to an IDQS or other quotation system 

not operated by a Participant or Industry Member.24 

 According to the Participants, Phase 2a Industry Member Data would include Firm 

Designated IDs (“FDIDs”), which Industry Members must report to the CAT as required by 

Sections 6.3(d)(i)(A) and 6.4(d)(ii)(C) of the CAT NMS Plan.25  The Participants state that in 

                                                            
Member Technical Specifications provide detailed guidance regarding the data to be 
reported for each Phase.  See id. at 2-3.  In addition, the Participants state that they plan 
to file revisions to their Compliance Rules consistent with the exemptive relief requested 
in the February 19, 2020 Exemption Request.  See id.   

22  See FINRA Rule 7440. 
23  See February 19, 2020 Exemption Request at 3. 
24  See February 19, 2020 Exemption Request at 3-4. 
25  See February 19, 2020 Exemption Request at 4.  Section 6.3(d)(i)(A) of the CAT NMS 

Plan, as applied by Section 6.4(d)(i), requires Industry Members to submit the Firm 
Designated ID for the original receipt or origination of an order.  Section 6.4(d)(ii)(C) of 



 8  
 

Phase 2a, Industry Members would be required to report all street side representative orders,26 

including both agency and proprietary orders and mark such orders as representative orders, 

except in certain limited exceptions as described in the Industry Member Technical 

Specifications.27  The Participants state that in Phase 2a, Industry Members would be required to 

report the link between the street side representative order and the order being represented when: 

(1) the representative order was originated specifically to represent a single order received either 

from a customer or another broker-dealer; and (2) there is (a) an existing direct electronic link in 

the Industry Member’s system between the order being represented and the representative order 

and (b) any resulting executions are immediately and automatically applied to the represented 

order in the Industry Member’s system.28 

 The Participants state that Phase 2a Industry Member Data also would include the manual 

and Electronic Capture Time for Manual Order Events.29  The Participants state that specifically, 

for each Reportable Event in Section 6.3(d) of the CAT NMS Plan, Industry Members would be 

required to provide a timestamp pursuant to Section 6.8(b) of the CAT NMS Plan.30  The 

                                                            
the CAT NMS Plan requires Industry Members to record and report to the Central 
Repository, for original receipt and origination of an order, the Firm Designated ID. 

26  See February 19, 2020 Exemption Request at 4.  The Participants state that a 
representative order is an order originated in a firm owned or controlled account, 
including principal, agency average price and omnibus accounts, by an Industry Member 
for the purpose of working one or more customer or client orders.  See id. 

27  See February 19, 2020 Exemption Request at 4.   
28  See February 19, 2020 Exemption Request at 4.   
29  See February 19, 2020 Exemption Request at 4.   
30  See February 19, 2020 Exemption Request at 4.  The Participants state that Section 6.8(b) 

of the CAT NMS Plan states that Industry Members shall be permitted to record and 
report: (i) Manual Order Events to the Central Repository in increments up to and 
including one second, provided that . . . Industry Members shall be required to record and 
report the time when a Manual Order Event has been captured electronically in an order 



 9  
 

Participants explain that accordingly, for Phase 2a, Industry Members would be required to 

provide both the manual and Electronic Capture Time for Manual Order Events.31  The 

Participants state that Industry Members would be required to report special handling 

instructions for the original receipt or origination of an order during Phase 2a.32  In addition, 

during Phase 2a, the Participants state that Industry Members will be required to report, when 

routing an order, whether the order was routed as an intermarket sweep order (“ISO”).33    

The Participants state that in Phase 2a, Industry Members would not be required to report 

modifications of a previously routed order in certain limited instances.34  The Participants 

explain that specifically, if a trader or trading software modifies a previously routed order, the 

routing firm is not required to report the modification of an order route if the destination to 

which the order was routed is a CAT Reporter that is required to report the corresponding order 

activity.35  The Participants state that if, however, the order was modified by a Customer or other 

non-CAT Reporter, and subsequently the routing Industry Member sends a modification to the 

destination to which the order was originally routed, then the routing Industry Member must 

                                                            
handling and execution system of such . . . Industry Member (“Electronic Capture Time”) 
in milliseconds.   

31  See February 19, 2020 Exemption Request at 5.  The Participants state that Industry 
Members would be required to provide an Electronic Capture Time following the manual 
capture time only for new orders that are Manual Order Events and, in certain instances, 
routes that are Manual Order Events. The Participants state that the Electronic Capture 
Time would not be required for other Manual Order Events.  See id. at n.14.  

32  See February 19, 2020 Exemption Request at 5.   
33  See February 19, 2020 Exemption Request at 5.  The Participants state that Industry 

Members would be required to report special handling instructions on routes other than 
ISOs in Phase 2c, rather than Phase 2a.  See id.  

34  See February 19, 2020 Exemption Request at 5. 
35  See February 19, 2020 Exemption Request at 5. 



 10  
 

report the modification of the order route.36  In addition, the Participants state that in Phase 2a, 

Industry Members would not be required to report a cancellation of an order received from a 

Customer after the order has been executed.37  

For Phase 2a, Participants would require Small Industry OATS Reporters to begin 

reporting to the Central Repository at the same time as Large Industry Members.38  The 

Participants state that aligning the start of CAT reporting for Small Industry OATS Reporters 

with that of Large Industry Members under the Phased Reporting approach is designed to 

accelerate the retirement of OATS, and that having data from the Small Industry Members 

currently reporting to OATS available when Large Industry Members begin reporting would 

substantially facilitate a more expeditious retirement of OATS.39  The Participants further state 

that the retirement of OATS would lead to a significant cost savings for the industry by 

eliminating the need to maintain two duplicative reporting systems, as described in the CAT 

NMS Plan and as noted by the industry.40   

 In addition, the Participants state that commencing Phase 2a CAT reporting for Small 

Industry OATS Reporters and Large Industry Members simultaneously should not create 

significant burdens for Small Industry OATS Reporters because the additional year allotted to 

Small Industry Members under the CAT NMS Plan was intended to give Small Industry 

                                                            
36  See February 19, 2020 Exemption Request at 5.  The Participants represent that this 

approach is comparable to the approach set forth in OATS Compliance FAQ 35.  See id. 
at n.15.  

37  See February 19, 2020 Exemption Request at 5.   
38  See February 19, 2020 Exemption Request at 5.   
39  See February 19, 2020 Exemption Request at 5.   
40  See February 19, 2020 Exemption Request at 6.   



 11  
 

Members additional time to comply with the new reporting requirements.41  The Participants 

believe this contention is supported by language in the Rule 613 Adopting Release indicating 

that small broker-dealers were provided with an additional year to begin reporting because 

“small broker-dealers, particularly those that operate manual systems, might be particularly 

impacted because of their more modest financial resources and may need additional time to 

upgrade to an electronic method of reporting audit trail data to the central repository.”42 

However, the Participants state that they do not believe that this concern applies to small broker-

dealers that are OATS Reporters.43  The Participants explain that while their proposed exemption 

would accelerate CAT reporting obligations for approximately 230 Small Industry Members, 220 

of those firms already report to OATS through clearing firms or other third-party providers, all of 

which will begin reporting to the CAT at the same time as Large Industry Members.44  As a 

result, the Participants believe that (1) additional technical requirements or costs to accelerate 

reporting requirements for these firms should be limited, and (2) that this change would allow 

introducing and clearing firms to avoid the costs associated with maintaining two systems during 

the additional transition year otherwise provided to Small Industry Members.45  Of the ten Small 

Industry Members that report to OATS on their own behalf, the Participants state that eight have 

very few reportable events and, consequently, the Participants believe that these Industry 

                                                            
41  See February 19, 2020 Exemption Request at 6.  
42  See February 19, 2020 Exemption Request at 6; see also Securities Exchange Act Rel. 

No. 67457 (July 18, 2012), 77 FR 45722, 45749 (August 1, 2012) (“Rule 613 Adopting 
Release”).  

43  See February 19, 2020 Exemption Request at 6.  
44  See February 19, 2020 Exemption Request at 6.  
45  See February 19, 2020 Exemption Request at 6.  



 12  
 

Members would not have significant burdens reporting to the CAT rather than continuing to 

report to OATS.46 

 The Participants also believe that Phase 2a will serve as a substantial step forward for 

CAT reporting because it will cover not only all OATS events and scenarios from all OATS 

reporters, but will also include a variety of data not covered by OATS or other SRO systems.47  

In addition, the Participants state that Large Industry Members and Small Industry OATS 

Reporters would be required to report the FDID during Phase 2a, and that the FDID will allow 

regulators to identify that the same account is trading within a single broker-dealer.48  

Furthermore, the Participants state that during Phase 2a, certain linkages between street side 

representative orders and the related customer order will be enabled, which will provide 

significant benefits to regulators using the data, and that these linkages are not required under the 

OATS rules.49   

 In regard to Small Industry Non-OATS Reporters, the Participants do not propose to 

require these reporters to commence CAT reporting at the same time as Large Industry Members 

on April 20, 2020.50  Instead, the Participants propose to require Small Industry Non-OATS 

                                                            
46  See February 19, 2020 Exemption Request at 6.  The Participants state that in one recent 

month, five of the ten firms submitted fewer than 100 reports during the month, with four 
submitting fewer than 50.  See id. at n.19. 

47  See February 19, 2020 Exemption Request at 6.  For example, the Participants state that 
during Phase 2a, Large Industry Members and Small Industry OATS Reporters will be 
required to report all proprietary orders, including market maker orders, whereas market 
making and representative proprietary orders are not required to be captured under the 
OATS rules.  See id. 

48  See February 19, 2020 Exemption Request at 7.  The Participants state that when the 
Customer information reporting begins, the Firm Designated ID will be used to link 
accounts to specific customers.  See id. at n.20. 

49  See February 19, 2020 Exemption Request at 7.  
50  See February 19, 2020 Exemption Request at 7. 



 13  
 

Reporters to begin reporting Phase 2a Industry Member Data by December 13, 2021, twenty 

months after Large Industry Members and Small Industry OATS Reporters begin reporting 

Phase 2a Industry Member Data to the Central Repository.51  The Participants determined not to 

accelerate Phase 2a CAT reporting for Small Industry Non-OATS Reporters because unlike 

Small Industry OATS Reporters, the burdens of CAT reporting are significantly greater for those 

firms that are not currently reporting to OATS.52  In addition, because Small Industry Non-

OATS Reporters do not report to OATS, the Participants state that accelerating their reporting 

would not have any effect on the retirement of OATS.53  

B. Phase 2b Scope 

 The Participants state that in the second phase of Phased Reporting (“Phase 2b”), Large 

Industry Members would be required to report to the Central Repository “Phase 2b Industry 

Member Data” by May 18, 2020.54  Small Industry Members, however, would not be required to 

report Phase 2b Industry Member Data to the Central Repository until December 13, 2021, 

which is nineteen months after Large Industry Members begin reporting such data to the Central 

Repository.55 

The Participants state that “Phase 2b Industry Member Data” would be Industry Member 

Data required to be reported to the Central Repository commencing in Phase 2b as set forth in 

the Industry Member Technical Specifications.56  Specifically, the Participants state that Phase 

                                                            
51  See February 19, 2020 Exemption Request at 7. 
52  See February 19, 2020 Exemption Request at 7. 
53  See February 19, 2020 Exemption Request at 7. 
54  See February 19, 2020 Exemption Request at 7.  
55  See February 19, 2020 Exemption Request at 7. 
56  See February 19, 2020 Exemption Request at 7.  The Participants state that while the 

following summarizes the categories of Industry Member Data to be reported for Phase 



 14  
 

2b Industry Member Data would include Industry Member Data related to Eligible Securities 

that are options and related to simple electronic option orders, excluding electronic paired option 

orders.57  The Participants explain that a simple electronic option order is an order to buy or sell 

a single option that is not related to or dependent on any other transaction for pricing and timing 

of execution that is either received or routed electronically by an Industry Member.58  The 

Participants state that electronic receipt of an order is defined as the initial receipt of an order by 

an Industry Member in electronic form in standard format directly into an order handling or 

execution system.59  The Participants state that electronic routing of an order is the routing of an 

order via electronic medium in standard format from one Industry Member’s order handling or 

execution system to an exchange or another Industry Member.60  The Participants further explain 

that an electronic paired option order is an electronic option order that contains both the buy and 

sell side that is routed to another Industry Member or exchange for crossing and/or price 

improvement as a single transaction on an exchange.61  The Participants add that responses to 

auctions of simple orders and paired simple orders would be reportable in Phase 2b.62 

                                                            
2b, the Industry Member Technical Specifications provide detailed guidance regarding 
the data to be reported for each Phase.  See id. at 7, 2-3.   

57  See February 19, 2020 Exemption Request at 7.  The Participants state that the items 
required to be reported in Phase 2b do not include the items required to be reported in 
Phase 2d, as discussed below.  See id. at n.21.  

58  See February 19, 2020 Exemption Request a 7-8.  
59  See February 19, 2020 Exemption Request at 8.  
60  See February 19, 2020 Exemption Request at 8. 
61  See February 19, 2020 Exemption Request at 8. 
62  See February 19, 2020 Exemption Request at 8. 



 15  
 

 Furthermore, the Participants state that combined orders in options would be treated in 

Phase 2b in the same way as equity representative orders are treated in Phase 2a.63  The 

Participants state that a combined order would mean, as permitted by SRO rules, a single, simple 

order in Listed Options created by combining individual, simple orders in Listed Options from a 

customer with the same exchange origin code before routing to an exchange.64  The Participants 

state that during Phase 2b, the single combined order sent to an exchange must be reported and 

marked as a combined order, but the linkage to the underlying orders is not required to be 

reported until Phase 2d.65 

C. Phase 2c Scope 

 The Participants state that in the third phase of Phased Reporting (“Phase 2c”), Large 

Industry Members would be required to report to the Central Repository “Phase 2c Industry 

Member Data” by April 26, 2021.66  Small Industry Members would be required to report to the 

Central Repository “Phase 2c Industry Member Data” by December 13, 2021, which is seven 

months after Large Industry Members begin reporting such data to the Central Repository.67 

The Participants state that “Phase 2c Industry Member Data” would be Industry Member 

Data related to Eligible Securities that are equities other than Phase 2a Industry Member Data, 

Phase 2d Industry Member Data, or Phase 2e Industry Member Data.68  Specifically, the 

                                                            
63  See February 19, 2020 Exemption Request at 8. 
64  See February 19, 2020 Exemption Request at 8. 
65  See February 19, 2020 Exemption Request at 8. 
66  See February 19, 2020 Exemption Request at 8.   
67  See February 19, 2020 Exemption Request at 8.   
68  See February 19, 2020 Exemption Request at 8.  The Participants state that while the 

following summarizes the categories of Industry Member Data to be reported for Phase 
2c, the Industry Member Technical Specifications provide detailed guidance regarding 
the data to be reported for each Phase.  See id. at 8, 2-3. 



 16  
 

Participants state that Phase 2c Industry Member Data would include Industry Member Data that 

is related to Eligible Securities that are equities and that is related to: (1) Allocation Reports as 

required to be recorded and reported to the Central Repository pursuant to Section 

6.4(d)(ii)(A)(1) of the CAT NMS Plan; (2) quotes in unlisted Eligible Securities sent to an IDQS 

operated by a CAT Reporter (reportable by the Industry Member sending the quotes) (except for 

quotes reportable in Phase 2d, as discussed below); (3) electronic quotes in listed equity Eligible 

Securities (i.e., NMS stocks) that are not sent to a national securities exchange or FINRA’s 

Alternative Display Facility; (4) reporting changes to client instructions regarding modifications 

to algorithms; (5) marking as a representative order any order originated to work a customer 

order in price guarantee scenarios, such as a guaranteed VWAP; (6) flagging rejected external 

routes to indicate a route was not accepted by the receiving destination; (7) linkage of duplicate 

electronic messages related to a Manual Order Event between the electronic event and the 

original manual route; (8) special handling instructions on order route reports (other than the 

ISO, which is required to be reported in Phase 2a); (9) quote identifier on trade events; (10) 

reporting of large trader identifiers69 (“LTID”) (if applicable) for accounts with Reportable 

Events that are reportable to CAT as of and including Phase 2c;70 (11) reporting of date account 

                                                            
69  See definition of “Customer Account Information” in Section 1.1 of the CAT NMS Plan. 

See also Rule 13h-1 under the Exchange Act. 
70  The CAT NMS Plan requires LTID to be reported to the CAT as part of Customer 

Account Information.  As set forth in the February 19, 2020 Exemption Request, the 
Participants propose to require the reporting of LTID to the CAT in Phases 2c and 2d, 
instead of with the rest of Customer Account Information in Phase 2e, which potentially 
could result in an earlier elimination of broker-dealer recordkeeping, reporting and 
monitoring requirements of the Large Trader Rule.  See February 19, 2020 Exemption 
Request at 9-11. 



 17  
 

opened or Account Effective Date71 (as applicable) for accounts and reporting of a flag 

indicating the Firm Designated ID type as account or relationship; (12) order effective time for 

orders that are received by an Industry Member and do not become effective until a later time; 

(13) the modification or cancellation of an internal route of an order; and (14) linkages to the 

customer orders(s) being represented for representative order scenarios, including agency 

average price trades, net trades, aggregated orders, and disconnected Order Management System 

(“OMS”) – Execution Management System (“EMS”) scenarios, as required in the Industry 

Member Technical Specifications.72 

 The Participants state that Phase 2c Industry Member Data also includes electronic quotes 

that are provided by or received in a CAT Reporter’s order/quote handling or execution systems 

in Eligible Securities that are equities and are provided by an Industry Member to other market 

participants off a national securities exchange under the following conditions: (1) an equity bid 

or offer is displayed publicly or has been communicated (a) for listed securities to the Alternative 

Display Facility (ADF) operated by FINRA; or (b) for unlisted equity securities to an “inter-

dealer quotation system” as defined in FINRA Rule 6420(c); or (2) an equity bid or offer which 

is accessible electronically by customers or other market participants and is immediately 

actionable for execution or routing; i.e., no further manual or electronic action is required by the 

responder providing the quote in order to execute or cause a trade to be executed).73  The 

                                                            
71  See definition of “Customer Account Information” and “Account Effective Date” in 

Section 1.1 of the CAT NMS Plan. 
72  See February 19, 2020 Exemption Request at 8-9.  The Participants state that in Phase 2c, 

for any scenarios that involve orders originated in different systems that are not directly 
linked, such as a customer order originated in an OMS and represented by a principal 
order originated in an EMS that is not linked to the OMS, marking and linkages must be 
reported as required in the Industry Member Technical Specifications.  See id. at n.24. 

73  See February 19, 2020 Exemption Request at 9.  



 18  
 

Participants state that with respect to OTC Equity Securities, OTC Equity Securities quotes sent 

by an Industry Member to an IDQS operated by an Industry Member CAT Reporter (other than 

such an IDQS that does not match and execute orders) are reportable by the Industry Member 

sending them in Phase 2c.74  The Participants explain that accordingly, any response to a request 

for quote or other form of solicitation response provided in a standard electronic format (e.g., 

FIX) that meets this quote definition (i.e., an equity bid or offer which is accessible electronically 

by customers or other market participants and is immediately actionable for execution or routing) 

would be reportable in Phase 2c.75 

D. Phase 2d Scope 

 The Participants state that in the fourth phase of Phased Reporting (“Phase 2d”), Large 

Industry Members and Small Industry Members would be required to report to the Central 

Repository “Phase 2d Industry Member Data” by December 13, 2021.76  The Participants state 

that the full scope of CAT Data other than Phase 2e Industry Member Data will be required to be 

reported to the CAT when Phase 2d has been implemented, subject to any applicable exemptive 

relief or amendments to the CAT NMS Plan.77   

The Participants state that “Phase 2d Industry Member Data” is Industry Member Data 

that is related to Eligible Securities that are options other than Phase 2b Industry Member Data, 

Industry Member Data that is related to Eligible Securities that are equities other than Phase 2a 

                                                            
74  See February 19, 2020 Exemption Request at 9. 
75  See February 19, 2020 Exemption Request at 9. 
76  See February 19, 2020 Exemption Request at 9. 
77  See February 19, 2020 Exemption Request at 10. 



 19  
 

Industry Member Data or Phase 2c Industry Member Data, and Industry Member Data other than 

Phase 2e Industry Member Data.78   

 The Participants state that Phase 2d Industry Member Data includes with respect to the 

Eligible Securities that are options: (1) simple manual orders; (2) electronic and manual paired 

orders; (3) all complex orders with linkages to all CAT-reportable legs; (4) LTIDs (if applicable) 

for accounts with Reportable Events for Phase 2d; (5) date account opened or Account Effective 

Date (as applicable) for accounts with an LTID and flag indicating the Firm Designated ID type 

as account or relationship for such accounts; (6) Allocation Reports as required to be recorded 

and reported to the Central Repository pursuant to Section 6.4(d)(ii)(A)(1) of the CAT NMS 

Plan; (7) the modification or cancellation of an internal route of an order; and (8) linkage 

between a combined order and the original customer orders.79  The Participants state that Phase 

2d Industry Member Data also would include electronic quotes that are provided by or received 

in a CAT Reporter’s order/quote handling or execution systems in Eligible Securities that are 

options and are provided by an Industry Member to other market participants off a national 

securities exchange under the following conditions: a listed option bid or offer which is 

accessible electronically by customers or other market participants and is immediately actionable 

(i.e., no further action is required by the responder providing the quote in order to execute or 

                                                            
78  See February 19, 2020 Exemption Request at 9-10.  The Participants state that reporting 

information regarding the modification or cancellation of a route is necessary to create 
the full lifecycle of an order.  Accordingly, the reporting of information related to the 
modification or cancellation of a route (similar to the data required for the routing of an 
order and modification and cancellation of an order) is required pursuant to Sections 
6.3(d)(ii) and (iv) of the CAT NMS Plan.  See id. at 10 n.25.  The Participants state that 
while the following summarizes the categories of Industry Member Data to be reported 
for Phase 2d, the Industry Member Technical Specifications provide detailed guidance 
regarding the data to be reported for each Phase.  See id. at 10, 2-3.   

79  See February 19, 2020 Exemption Request at 10.  



 20  
 

cause a trade to be executed).80  The Participants state that accordingly, any response to a request 

for quote or other form of solicitation response provided in standard electronic format (e.g., FIX) 

that meets this definition would be reportable in Phase 2d for options.81 

 The Participants state that Phase 2d Industry Member Data also would include with 

respect to Eligible Securities that are options or equities (1) receipt time of cancellation and 

modification instructions through Order Cancel Request and Order Modification Request events; 

(2) modifications of previously routed orders in certain instances; and (3) OTC Equity Securities 

quotes sent by an Industry Member to an IDQS operated by an Industry Member CAT Reporter 

that does not match and execute orders.  In addition, the Participants state that subject to any 

exemptive or other relief, Phase 2d Industry Member Data will include verbal or manual quotes 

on an exchange floor or in the over-the-counter market, where verbal quotes and manual quotes 

are defined as bids or offers in Eligible Securities provided verbally or that are provided or 

received other than via a CAT Reporter’s order handling and execution system (e.g., quotations 

provided via email or instant messaging).82 

E. Phase 2e Scope 

 The Participants state that in the fifth phase of Phased Reporting (“Phase 2e”), both Large 

Industry Members and Small Industry Members would be required to report to the Central 

Repository “Phase 2e Industry Member Data” by July 11, 2022.83  The Participants state that 

“Phase 2e Industry Member Data” includes Customer Account Information and Customer 

Identifying Information, other than LTIDs, date account opened/Account Effective Date and 

                                                            
80  See February 19, 2020 Exemption Request at 10. 
81  See February 19, 2020 Exemption Request at 10. 
82  See February 19, 2020 Exemption Request at 10. 
83  See February 19, 2020 Exemption Request at 11; see supra note 16.21  
 

Firm Designated ID type flag previously reported to the CAT.84  The Participants state that 

LTIDs and Account Effective Date are both provided in Phases 2c and 2d in certain 

circumstances, as discussed above.85  The Participants state that the terms “Customer Account 

Information” and “Customer Identifying Information” are defined in Section 1.1 of the CAT 

NMS Plan.86  The Participants represent that the full scope of CAT Data will be required to be 

reported to the CAT when Phase 2e has been implemented, subject to any applicable exemptive 

relief or amendments to the CAT NMS Plan.87 

F. Industry Member Testing Requirements 

 The Participants state that the CAT NMS Plan sets forth certain timelines for testing for 

various aspects of the implementation of Industry Member reporting to the CAT.88  The 

                                                            
84  See February 19, 2020 Exemption Request at 11. 
85  See February 19, 2020 Exemption Request at 11. 
86  See February 19, 2020 Exemption Request at 11.  The term “Customer Account 

Information” includes account numbers, and the term “Customer Identifying 
Information” includes, with respect to individuals, dates of birth and individual tax payer 
identification numbers and social security numbers (collectively, “SSNs”).  See Section 
1.1 of the CAT NMS Plan.  The Participants state that they requested exemptive relief 
from the requirements for the Participants to require their members to provide dates of 
birth, account numbers and social security numbers for individuals to the CAT.  See 
Letter from Michael Simon, CAT NMS Plan Operating Committee Chair, to Vanessa 
Countryman, SEC, Request for Exemptive Relief from Certain Provisions of the CAT 
NMS Plan related to Social Security Numbers, Dates of Birth and Account Numbers 
(Jan. 29, 2020).  On March 17, 2020, the Commission granted conditional exemptive 
relief to allow for an alternative approach to generating a CAT Customer ID without 
requiring Industry Members to report individual social security numbers or tax payer 
identification numbers and (2) to allow for an alternative approach that exempts the 
reporting of dates of birth and account numbers associated with natural person retail 
Customers to the CAT, and instead will require Industry Members to report the year of 
birth associated with natural person retail Customers and the FDID for each trading 
account associated with the Customer.  See Securities Exchange Act Release No. 88393, 
85 FR 16152, 16152 (March 20, 2020).  

87  See February 19, 2020 Exemption Request at 11.  
88  See February 19, 2020 Exemption Request at 11. 



 22  
 

Participants elaborate that specifically, Section 10 of Appendix C of the CAT NMS Plan sets 

forth testing timelines for Large and Small Industry Members involving, in relevant part, the 

publication and implementation of the methods for providing information to the Customer-ID 

database, the submission of order and market maker quote data to Central Repository, and the 

linkage of the lifecycle of order events.89  Given the Participants’ proposal to shift from two 

specified dates for the commencement of CAT reporting for Large and Small Industry Members 

to Phased Reporting, which features varying commencement dates according to each Phase for 

Large Industry Members, Small Industry OATS Reporters, and Small Industry Non-OATS 

Reporters, as described above, the Participants recognize that the testing milestones set forth in 

Appendix C of the CAT NMS Plan do not easily correspond to Phased Reporting.90  

Accordingly, the Participants propose to replace the Industry Member testing milestones in 

Appendix C with the following testing milestones.91  The Participants represent that in each case, 

the proposed testing timeline would provide ample testing time for Industry Members.92  The 

proposed testing timeline is as follows: 

• Industry Member file submission and data integrity testing for Phases 2a and 2b begins in 

December 2019; 

                                                            
89  See February 19, 2020 Exemption Request at 11. 
90  See February 19, 2020 Exemption Request at 11.  
91  See February 19, 2020 Exemption Request at 11.  The Participants state that each of the 

testing milestones has been set forth in the updated master plan provided to the SEC.  See 
id.  The Division of Trading and Markets requested a master plan from the Participants 
detailing all the material steps necessary to fully implement both Participant and Industry 
Member reporting as part of completing the CAT, among other items.  See Securities 
Exchange Act Release No. 86901, 84 FR 48458, 48460 (September 13, 2019) (“Proposed 
Transparency and Financial Accountability Amendments”).  

92  See February 19, 2020 Exemption Request at 11.  See Section 10.1, Appendix D of the 
CAT NMS Plan. 



 23  
 

• Industry Member testing of the Reporter Portal, including data integrity error correction 

tools and data submissions, begins in February 2020; 

• The Industry Member test environment will be open with intra-firm linkage validations to 

Industry Members for both Phases 2a and 2b in April 2020; 

• The Industry Member test environment will be open to Industry Members with inter-firm 

linkage validations for both Phases 2a and 2b in July 2020; 

• The Industry Member test environment will be open to Industry Members with Phase 2c 

functionality (full representative order linkages) in January 2021; 

• The Industry Member test environment will be open to Industry Members with Phase 2d 

functionality (manual options orders, complex options orders, and options allocations) in 

June 2021; 

• Participant exchanges that support options market making quoting will begin accepting 

Quote Sent Time on quotes from Industry Members no later than April 2020; 

• The Industry Member test environment (customer and account information) will be open 

to Industry Members in January 2022.93 

III. Request for Relief  

 In order to allow for the implementation of Phased Reporting, the Participants request, in 

the February 19, 2020 Exemption Request, that the Commission grant each Participant 

exemptive relief from the requirement in Section 6.4 of the CAT NMS Plan that “[t]he 

requirements for Industry Members under this Section 6.4 shall become effective on the second 

anniversary of the Effective Date in the case of Industry Members other than Small Industry 

Members, or the third anniversary of the Effective Date in the case of Small Industry Members” 

                                                            
93  See February 19, 2020 Exemption Request at 11-12. 



 24  
 

(i.e., November 15, 2018 and November 15, 2019, respectively).94  The Participants also request 

that the Commission grant each Participant exemptive relief from the requirement in Section 

6.7(a)(v) of the CAT NMS Plan for each Participant, through its Compliance Rule, to require its 

Industry Members (other than Small Industry Members) to report to the Central Repository 

Industry Member Data within two 2 years after the Effective Date (i.e., by November 15, 2018); 

and the requirement in Section 6.7(a)(vi) of the CAT NMS Plan for each Participant, through its 

Compliance Rule, to require its Small Industry Members to report to the Central Repository 

Industry Member Data within three 3 years after the Effective Date (i.e., by November 15, 

2019).95   

 In support of their request for an exemption, the Participants state that Industry Members 

have expressed concern about being out of compliance with the reporting deadlines as currently 

set forth in the Compliance Rules, and have indicated that there is a need for formal guidance as 

to the revised CAT reporting schedule for Industry Members.96  The Participants state that such 

certainty would assist Industry Members in their efforts to ensure compliance with the regulatory 

requirements related to the CAT.97  The Participants state that the full scope of CAT Data will be 

required to be reported when all five phases of Phased Reporting have been implemented, 

subject to any applicable exemptive relief or amendments to the CAT NMS Plan.98  

                                                            
94  See February 19, 2020 Exemption Request at 12. 
95  See February 19, 2020 Exemption Request at 12. 
96  See February 19, 2020 Exemption Request at 2. The Participants state that they plan to 

file revisions to their Compliance Rules consistent with the exemptive relief requested in 
the February 19, 2020 Exemption Request, including revisions to testing and related dates 
associated with Industry Member CAT reporting.  See id.    

97  See February 19, 2020 Exemption Request at 2. 
98  See February 19, 2020 Exemption Request at 13.   



 25  
 

The Participants also state that, as a condition to the exemption, each Participant would 

implement the Phased Reporting described above through its Compliance Rule by requiring:  

• For Phase 2a Industry Member Data: its Large Industry Members and its Small Industry 

OATS Reporters to commence reporting to the Central Repository Phase 2a Industry 

Member Data by April 20, 2020, and its Small Industry Non-OATS Reporters to 

commence reporting to the Central Repository Phase 2a Industry Member Data by 

December 13, 2021; 

• For Phase 2b Industry Member Data: its Large Industry Members to commence reporting 

to the Central Repository Phase 2b Industry Member Data by May 18, 2020, and its 

Small Industry Members to commence reporting to the Central Repository Phase 2b 

Industry Member Data by December 13, 2021; 

• For Phase 2c Industry Member Data: its Large Industry Members to commence reporting 

to the Central Repository Phase 2c Industry Member Data by April 26, 2021, and its 

Small Industry Members to commence reporting to the Central Repository Phase 2c 

Industry Member Data by December 13, 2021; 

• For Phase 2d Industry Member Data: its Large Industry Members and Small Industry 

Members to commence reporting to the Central Repository Phase 2d Industry Member 

Data by December 13, 2021; and 

• For Phase 2e Industry Member Data: its Large Industry Members and Small Industry 

Members to commence reporting to the Central Repository Phase 2e Industry Member 

Data by July 11, 2022.99  

                                                            
99  See February 19, 2020 Exemption Request at 12-13.   



 26  
 

 The Participants also state that, as a further condition to the exemption, each Participant 

would implement the testing timelines described above through its Compliance Rule by requiring 

the following:  

• Industry Member file submission and data integrity testing for Phases 2a and 2b to begin 

in December 2019. 

• Industry Member testing of the Reporter Portal, including data integrity error correction 

tools and data submissions, to begin in February 2020. 

• The Industry Member test environment will be open with intra-firm linkage validations to 

Industry Members for both Phases 2a and 2b in April 2020. 

• The Industry Member test environment will be open to Industry Members with inter-firm 

linkage validations for both Phases 2a and 2b in July 2020. 

• The Industry Member test environment will be open to Industry Members with 

 Phase 2c functionality (full representative order linkages) in January 2021. 

• The Industry Member test environment will be open to Industry Members with  

 Phase 2d functionality (manual options orders, complex options orders, and options 

 allocations) in June 2021. 

• Participant exchanges that support options market making quoting will begin accepting 

Quote Sent Time on quotes from Industry Members no later than April 2020. 

• The Industry Member test environment (customer and account information) will be open 

to Industry Members in January 2022.100 

IV.  Discussion 

                                                            
100  See February 19, 2020 Exemption Request at 13.    



 27  
 

 Section 36 of the Exchange Act grants the Commission the authority, with certain 

limitations, to “conditionally or unconditionally exempt any person, security, or transaction . . . 

from any provision or provisions of [the Exchange Act] or of any rule or regulation thereunder, 

to the extent that such exemption is necessary or appropriate in the public interest, and is 

consistent with the protection of investors.”101  Rule 608(e) of Regulation NMS under the 

Exchange Act authorizes the Commission to exempt, either unconditionally or on specified terms 

and conditions, any self-regulatory organization, member thereof, or specified security, from the 

provisions of the rule if the Commission determines that such exemption is consistent with the 

public interest, the protection of investors, the maintenance of fair and orderly markets and the 

removal of impediments to, and perfection of the mechanisms of, a national market system.102 

The Commission believes that exemptive relief pursuant to Section 36 of the Exchange 

Act to allow for the implementation of Phased Reporting for Industry Members is appropriate in 

the public interest, and is consistent with the protection of investors and that, pursuant to Rule 

608(e), such relief is consistent with the public interest, the protection of investors, the 

maintenance of fair and orderly markets and the removal of impediments to, and perfection of 

the mechanisms of, a national market system.  In accordance with the CAT NMS Plan, the 

Participants adopted Compliance Rules to require their Industry Members to commence 

reporting Industry Member Data by November 15, 2018 for Large Industry Members, and 

November 15, 2019 for Small Industry Members, respectively.103  Industry Members, however, 

                                                            
101  15 U.S.C. 78mm(a)(1). 
102  17 CFR 242.608(e). 
103  See FINRA CAT Compliance Rule Approval Order, supra note 9; CAT Compliance Rule 

Joint Approval Order, supra note 9.  



 28  
 

have not been able to commence reporting Industry Member Data to the CAT because there has 

not been a system in place capable of accepting the required Industry Member Data.   

 Allowing the Participants to revise the Industry Member CAT reporting requirements in 

the Compliance Rules to be consistent with Phased Reporting as described in this Order will 

facilitate an incremental approach to CAT implementation.  Such an approach could contribute 

to more efficient development of the overall CAT system, which has been subject to delays, and 

could provide certainty to Industry Members as they implement their regulatory data collection 

systems and make any necessary adjustments.  

Although the Participants proposed in the February 19, 2020 Exemption Request that 

Phase 2a reporting would commence on April 20, 2020 and Phase 2b reporting would commence 

on May 18, 2020,104 in light of COVID-19 and the Participants’ subsequent March 19, 2020 No 

Action Request,105 the Commission believes that the Participants should be granted an 

exemption from the CAT NMS Plan so that the Compliance Rules may require Phase 2a 

                                                            
104  See February 19, 2020 Exemption Request at 3, 7. 
105  On March 19, 2020 the Participants requested additional time for Industry Members to 

prepare for the commencement of reporting and stated that Phase 2a and Phase 2b 
reporting would commence on June 22, 2020 and July 20, 2020, respectively.  The 
Participants stated that industry groups have requested extensions of CAT 
implementation dates for at least 60 days.  See Letter from Michael Simon, Chair, CAT 
NMS Plan Operating Committee, to Brett Redfearn, Director, Division of Trading and 
Markets, U.S. Securities and Exchange Commission, dated March 19, 2020 (“March 19, 
2020 No Action Request”) available at 
https://www.catnmsplan.com/sites/default/files/2020-
03/Plan%20Participant%27s%20Request%20for%20No%20Action%20Relief.pdf; see 
also Letter from Christopher Bok, Esq., Director, Financial Information Forum, to 
Michael Simon, Chair, CAT NMS Plan Operating Committee, dated March 16, 2020 
available at https://fif.com/comment-letters/category/?download=2129:fif-request-for-
immediate-phase-2a-and-phase-2b-relief (requesting an immediate pause of at least 60 
days from near term CAT Phase 2a and Phase 2b milestones in response to COVID-19, 
one of the effects of which would be to shift the Phase 2a and Phase 2b compliance dates 
to June 22, 2020 and July 20, 2020, respectively).  

https://www.catnmsplan.com/sites/default/files/2020-03/Plan%20Participant%27s%20Request%20for%20No%20Action%20Relief.pdf
https://www.catnmsplan.com/sites/default/files/2020-03/Plan%20Participant%27s%20Request%20for%20No%20Action%20Relief.pdf
https://fif.com/comment-letters/category/?download=2129:fif-request-for-immediate-phase-2a-and-phase-2b-relief
https://fif.com/comment-letters/category/?download=2129:fif-request-for-immediate-phase-2a-and-phase-2b-relief


 29  
 

reporting to commence on June 22, 2020 and Phase 2b reporting to commence on July 20, 2020, 

provided that Industry Members who elect to report to the CAT prior to such dates be permitted 

to report to the CAT as early as April 20, 2020 for Phase 2a reporting and as early as May 18, 

2020 for Phase 2b reporting.  The Participants represented in their March 19, 2020 No Action 

Request that the CAT will be ready to accept CAT reports from Industry Members as of April 

20, 2020106 and that the Participants understand that the Plan Processor for the CAT will be able 

to meet its upcoming system build and production dates.107   

The Commission believes that separating the reporting dates for OATS reporting firms 

from those that have no OATS reporting obligations is appropriate because firms that do not 

currently report to OATS will face a different range of costs and tasks to implement and maintain 

CAT reporting, since these firms are likely to have little to no regulatory data reporting 

infrastructure in place.108  Unlike these firms, Small Industry OATS Reporters already have 

regulatory data reporting infrastructure in place to support OATS reporting, and because Phase 

2a reporting would include all events and scenarios covered by OATS,109 the Commission 

believes that it should be less costly for Small Industry OATS Reporters to comply with the 

Large Industry Member reporting deadline than it would be for Small Industry Non-OATS 

Reporters.  In addition, Small Industry OATS Reporters, as Small Industry Members, have had 

notice that they were going to be required to start reporting to the CAT on November 15, 2019 

since the CAT NMS Plan was approved on November 15, 2016.110  Therefore, the Phase 2a start 

                                                            
106  See March 19, 2020 No Action Request at 1. 
107  See id. at 2.  
108  See CAT NMS Plan Approval Order, supra note 1, at 84860.  
109  See February 19, 2020 Exemption Request at 3. 
110  The Effective Date of the CAT NMS Plan was November 15, 2016.  See supra note 1. 

Section 6.4 of the CAT NMS Plan, which governs data reporting and recording by 



 30  
 

date associated with accelerating the CAT reporting obligations for Small Industry OATS 

Reporters so that they report on the same date as Large Industry Members would still serve to 

extend their reporting deadline by seven months beyond the compliance date in the CAT NMS 

Plan.  Moreover, while this exemption allows the Participants’ Compliance Rules to require the 

CAT reporting date for Small Industry OATS Reporters to be the same as that for Large Industry 

Members in Phase 2a, the reporting deadline for Small Industry OATS Reporters would remain 

the same as for Small Industry Non-OATS Reporters for Phases 2b, 2c, and 2d—i.e., Small 

Industry Members would not be required to report Industry Member Data associated with Phases 

2b, 2c, and 2d until December 13, 2021.  Thus, all Small Industry Members could gain an 

additional 24 months beyond the compliance date in the CAT NMS Plan to prepare for CAT 

Reporting for Phases 2b, 2c, and 2d via the Phased Reporting schedule. 

The Commission’s exemption is limited to Sections 6.4, 6.7(a)(v) and 6.7(a)(vi) of the 

CAT NMS Plan related to Industry Member reporting of Industry Member Data to the Central 

Repository.  The Commission’s exemption does not extend to any other dates or obligations in 

the CAT NMS Plan.  In addition, even though the Commission is permitting the start dates for 

Phase 2a and Phase 2b Industry Member reporting to be extended compared to what was in the 

February 19, 2020 Exemption Request as discussed above,111 the exemption is conditioned upon 

the Participants complying with all other dates that are a part of Phased Reporting, as announced 

in the published timeline that has already been communicated to broker-dealers, given that 

                                                            
Industry Members, provides that the requirements for Industry Members under that 
section shall become effective on the third anniversary of the Effective Date in the case 
of Small Industry Members.  See id.  Therefore, November 15, 2019 is three years after 
the Effective Date of the CAT NMS Plan. 

111  See supra note 104. 



 31  
 

Industry Member reporting was required to begin over a year ago per the CAT NMS Plan.112  

The Commission believes it is appropriate to impose such a condition because the Participants 

have stated that FINRA CAT has been very clear that it will be prepared to accept data from any 

Industry Member that has completed onboarding and certification testing by April 20, 2020 for 

Phase 2a reporting, and will similarly be ready by May 18, 2020 for Phase 2b reporting as 

described on www.catnmsplan.com.113 

Based on the foregoing, the Commission is granting this conditional exemptive relief 

from Sections 6.4, 6.7(a)(v) and 6.7(a)(vi) of the CAT NMS Plan related to Industry Member 

reporting of Industry Member Data to the Central Repository to allow for the implementation of 

                                                            
112  See CAT NMS Plan website, Timeline, https://catnmsplan.com/timelines/ (last visited 

March 26, 2020).  For example, for Phases 2a and 2b, Industry Members must comply 
with the full functionality associated with Production Environment Go-Live for intrafirm 
linkage validations (Release 2 – Intrafirm Linkage) on July 27, 2020, and August 24, 
2020, respectively, and Industry Members must comply with the full functionality 
associated with Production Environment Go-Live for firm-to-firm linkage validations 
(Release 3 – Interfirm Linkage) on October 26, 2020, and January 4, 2021, respectively.  
See id.   

 Industry Members were required to start reporting to the CAT on November 15, 2018, 
according to Section 6.4 of the CAT NMS Plan, which governs data reporting and 
recording by Industry Members.  See supra note 8. 

113  On March 27, 2020, the Participants submitted a letter to further the discussion regarding 
the timeline for Industry Member reporting.  See Letter from Michael Simon, Chair, CAT 
NMS Plan Operating Committee, to Brett Redfearn, Director, Division of Trading and 
Markets, U.S. Securities and Exchange Commission, dated March 27, 2020 available at 
https://www.catnmsplan.com/sites/default/files/2020-03/03.27.20-
%20Participant%27s%20Relief%20Request.pdf.  The Participants stated that the 
reporting dates included in the February 19, 2020 Exemption Request remain operable 
from the Participants’ and Plan Processor’s perspective and provide a clear path for 
Industry Members that have completed certification testing and are prepared to meet 
those deadlines.  See id. at 1-2. The Participants also stated that the Participants and 
FINRA CAT have been communicating to the industry since last fall that the CAT 
system will be ready to receive Industry Member Data on April 20, 2020, and that this 
date remains operative from the perspective of both FINRA CAT and the Participants.  
See id. at 1. 

https://catnmsplan.com/timelines/
https://www.catnmsplan.com/sites/default/files/2020-03/03.27.20-%20Participant%27s%20Relief%20Request.pdf
https://www.catnmsplan.com/sites/default/files/2020-03/03.27.20-%20Participant%27s%20Relief%20Request.pdf


 32  
 

Phased Reporting for Industry Members to the CAT.  This order granting exemptive relief is 

conditioned upon each Participant implementing the Phased Reporting described above, in a 

manner consistent with the February 19, 2020 Exemption Request, including each of the 

representations made in the February 19, 2020 Exemption Request, as modified by the 

discussion in Section IV of this Order.  As noted above, the Participants have represented in their 

February 19, 2020 Exemption Request that the full scope of CAT Data required under the CAT 

NMS Plan will be available when all five phases of Phased Reporting are complete, subject to 

any applicable exemptive relief or amendments to the CAT NMS Plan.114  

Accordingly, IT IS HEREBY ORDERED, pursuant to Section 36 of the Exchange Act115 

and Rule 608(e) of Regulation NMS,116 that the Commission grants the Participants’ request for 

exemptive relief, as set forth in the February 19, 2020 Exemption Request from the requirements 

in Sections 6.4, 6.7(a)(v) and 6.7(a)(vi) of the CAT NMS Plan related to Industry Member 

reporting of Industry Member Data to the Central Repository to allow for the implementation of 

Phased Reporting, subject to the conditions described above. 

By the Commission. 

  

      Vanessa A. Countryman 
Secretary  

 
 

                                                            
114  See February 19, 2020 Exemption Request at 2. 
115  15 U.S.C. 78mm(a)(1). 
116  17 CFR 242.608(e).