Animal and Plant Health Inspection Service
International Trade Administration
National Oceanic and Atmospheric Administration
Federal Energy Regulatory Commission
Centers for Disease Control and Prevention
Centers for Medicare & Medicaid Services
Food and Drug Administration
National Institutes of Health
Fish and Wildlife Service
Land Management Bureau
Drug Enforcement Administration
Mine Safety and Health Administration
Federal Aviation Administration
Maritime Administration
Foreign Assets Control Office
Internal Revenue Service
Consult the Reader Aids section at the end of this issue for phone numbers, online resources, finding aids, and notice of recently enacted public laws.
To subscribe to the Federal Register Table of Contents electronic mailing list, go to https://public.govdelivery.com/accounts/USGPOOFR/subscriber/new, enter your e-mail address, then follow the instructions to join, leave, or manage your subscription.
Grid Deployment Office, Department of Energy.
Direct final rule; delay of effective date.
Due to the receipt of significant adverse comments, the U.S. Department of Energy (DOE) is extending the effective date of the direct final rule “Application for Presidential Permit Authorizing the Construction, Connection, Operation and Maintenance of Facilities for Transmission of Electric Energy at International Boundaries,” published on May 16, 2025.
As of July 14, 2025, the effective date of the direct final rule published May 16, 2025, at 90 FR 20753, is delayed until September 12, 2025.
Mr. Jeffrey Novak, U.S. Department of Energy, Office of the General Counsel, GC-1, 1000 Independence Avenue SW, Washington, DC 20585; (202) 586-5281 or
On May 16, 2025, DOE published a direct final rule. (90 FR 20753). DOE stated in that direct final rule that if significant adverse comments were received by June 16, 2025, DOE would withdraw the direct final rule or issue a new final rule which responds to the significant adverse comments.
Because DOE subsequently received significant adverse comments on that direct final rule, DOE is extending the effective date to consider the comments submitted in response to the direct final rule.
To the extent that 5 U.S.C. 553 applies to this action, it is exempt from notice and comment because it constitutes a rule of procedure under 5 U.S.C. 553(b)(A) and for which no notice or hearing is required by statute. Additionally, this action is not a “substantive rule” for which a 30-day delay in effective date is required under 5 U.S.C. 553(d).
This document of the Department of Energy was signed on July 9, 2025, by Chris Wright, the Secretary of Energy. That document with the original signature and date is maintained by DOE. For administrative purposes only, and in compliance with requirements of the Office of the Federal Register, the undersigned DOE Federal Register Liaison Officer has been authorized to sign and submit the document in electronic format for publication, as an official document of the Department of Energy. This administrative process in no way alters the legal effect of this document upon publication in the
U.S. Energy Information Administration, Department of Energy.
Direct final rule; delay of effective date; response to comments.
The Department of Energy (DOE) is publishing this document to respond to comments received on the direct final rule “Collection of Information Under the Energy Supply and Environmental Coordination Act of 1974,” published on May 16, 2025. As a result, DOE delays the effective date of the direct final rule.
As of July 14, 2025, the effective date of the direct final rule published May 16, 2025, at 90 FR 20755, is delayed until August 13, 2025.
Mr. Jeffrey Novak, U.S. Department of Energy, Office of the General Counsel, Acting General Counsel, 1000 Independence Avenue SW, Washington, DC 20585-0121; (202) 586-5281 or
On May 16, 205, DOE published a direct final rule that amended the Code of Federal Regulations by rescinding the provisions directed to the Collection of Information Under the Energy Supply and Environmental Coordination Act of 1974 (ESECA), codified in 10 CFR part 207, subpart A. 90 FR 20755 (“May 2025 DFR”) ESECA, as codified, aimed to meet the Nation's then growing energy crisis and includes detailed provisions as to the collection of energy information and the development of corresponding reports. Aside from obvious and unnecessary additions as to the format of reports in 10 CFR part 207, the provisions of the ESECA in 15 U.S.C. 796 are largely recycled and repeated in 10 CFR part 207, subpart A, at least in §§ 207.2 and 207.3. Therefore, these superfluous sections are unnecessary and merely enlarge an already bloated CFR.
DOE received two substantive comments, in response to its May 2025 DFR: one from Professor Bridget C.E. Dooling, and one from the Center for Biological Diversity.
DOE received two comments that raised several procedural matters for DOE's consideration and also incorporated another comment by reference. (EERE-2025-OT-0033-0002; EERE-2025-OT-0033-0003).
In response, DOE notes that the APA requires that agencies provide all interested persons with fair notice and an opportunity to comment on the rulemaking.
Finally, contrary to the comments, Dooling cannot argue they were denied fair notice and an opportunity to comment solely based on how the notice was labeled.
Responding to the Center for Biological Diversity's comment concerning differences between the ESECA and current supplementary regulatory requirement, the Department maintains that it has the right to amend and rescind regulations pursuant to changing policy so long as such changes are permissible under the applicable statute, there are good reasons for change, and the agency believes that the change would have a better result than the existing policy. In the present matter, removing duplicative regulations and additional requirements not mandated by statute both ease regulatory burden and serve to reduce potential points of conflict and confusion. As such, DOE believes that this change does not run afoul of applicable statutes, and the Department believes that the change is in the public's best interest.
Additionally, concerning internal consistency within the regulations under this section, the Department would like to note that by amending the language of § 207.5 to adopt the statute by reference, §§ 207.3 and 207.4 become entirely superfluous. Any violation of the statute could still reasonably result in notices of violations, enforcement, appeals, penalties and exemptions, all repeatedly refer to companies' compliance as detailed by §§ 207.7 through 207.9.
For the reasons discussed in the May 2025 DFR and reiterated in the preceding sections of this document, DOE is not withdrawing the May 2025 DFR, which amends regulations regarding the collection of information under the Energy Supply and Environmental Coordination Act of 1974.
DOE also notes, to the extent that 5 U.S.C. 553 applies to the delay of effective date, it is exempt from notice and comment because it constitutes a rule of procedure under 5 U.S.C. 553(b)(A) and for which no notice or hearing is required by statute. Additionally, this action is not a “substantive rule” for which a 30-day delay in effective date is required under 5 U.S.C. 553(d).
This document of the Department of Energy was signed on July 9, 2025, by Chris Wright, Secretary of Energy. That document with the original signature and date is maintained by DOE. For administrative purposes only, and in compliance with requirements of the Office of the Federal Register, the undersigned DOE Federal Register Liaison Officer has been authorized to sign and submit the document in electronic format for publication, as an official document of the Department of Energy. This administrative process in no way alters the legal effect of this document upon publication in the
Office of Fossil Energy, Department of Energy.
Direct final rule; delay of effective date; response to comments.
The Department of Energy (DOE) is publishing this document to respond to comments received on the May 16, 2025, direct final rule. As a result, DOE delays the effective date of the direct final rule on the administrative procedures regarding the Office of Fossil Energy's (FE) filing requirements for the import and export of natural gas.
As of July 14, 2025, the effective date of the direct final rule published May 16, 2025, at 90 FR 20758, is delayed until August 13, 2025.
The docket for this rule, which includes the
Mr. Jeffrey Novak, U.S. Department of Energy, Office of the General Counsel, Acting General Counsel, 1000 Independence Avenue SW, Washington, DC 20585-0121; (202) 586-5281 or
On May 16, 205, DOE published a direct final rule amending part 590 regulations to remove antiquated references and update submission processes to reduce the burden on the public. 90 FR 20758.
DOE received three comments in response to the direct final rule published on May 16, 2025. 90 FR 20758 (“May 2025 DFR”).
All three commenters had procedural objections to DOE's use of a direct final rule. For example, Dooling stated that the May 2025 DFR did not satisfy the good cause exemption from notice and comment rulemaking under the Administrative Procedure Act (“APA”). (Dooling, No. 4 at p. 4). CBD also stated that DOE should have engaged in a full notice-and-comment rulemaking process. (CBD, No. 3 at p. 1).
In response, DOE notes that the APA requires that agencies provide all interested persons with fair notice and an opportunity to comment on the rulemaking.
For the reasons discussed in the preceding sections of this document, DOE is not withdrawing the May 2025 DFR, which finalizes amendments to its administrative procedures to update and streamline the general requirements for filing documents with FE for the import and export of natural gas.
DOE also notes, to the extent that 5 U.S.C. 553 applies to the delay of effective date, it is exempt from notice and comment because it constitutes a rule of procedure under 5 U.S.C. 553(b)(A) and for which no notice or hearing is required by statute. Additionally, this action is not a “substantive rule” for which a 30-day delay in effective date is required under 5 U.S.C. 553(d).
This document of the Department of Energy was signed on July 09, 2025, by Chris Wright, Secretary of Energy. That document with the original signature and date is maintained by DOE. For administrative purposes only, and in compliance with requirements of the Office of the Federal Register, the undersigned DOE Federal Register Liaison Officer has been authorized to sign and submit the document in electronic format for publication, as an official document of the Department of Energy. This administrative process in no way alters the legal effect of this document upon publication in the
Office of Management, Department of Energy.
Direct final rule; delay of effective date; response to comments.
The Department of Energy (“DOE”) is publishing this document to respond to comments received on the direct final rule on the recission of the Department's outdated Financial Assistance Rules that published on May 16, 2025. As a result, DOE delays the effective date of the direct final rule, and is responding to the comment it received on the direct final rule.
As of July 14, 2025, the effective date of the direct final rule published May 16, 2025, at 90 FR 20761, is delayed until August 13, 2025.
Mr. Jeffrey Novak, U.S. Department of Energy, Office of the General Counsel, GC-1, 1000 Independence Avenue SW, Washington, DC 20585-0121; (202) 586-5281 or
On May 16, 2025, DOE published a direct final rule rescinding part 600 of title 10, Code of Federal Regulations (“CFR”). 90 FR 20761 (“May 2025 DFR”). Part 600 contains regulations that governed DOE financial assistance awards prior to December 26, 2014. Effective December 26, 2014, DOE adopted the Uniform Administrative Requirements, Cost Principles, and
DOE received one comment in response to the May 2025 DFR.
Dooling stated that the May 2025 DFR did not satisfy the good cause exemption from notice and comment rulemaking under the Administrative Procedure Act (“APA”). (Dooling, No. 2 at p. 3).
In response, DOE notes that the APA requires that agencies provide all interested persons with fair notice and an opportunity to comment on the rulemaking. See 5 U.S.C. 553(b) & (c). The May 2025 DFR provided the public with fair notice of DOE's changes to obsolete financial assistance regulations.
Finally, contrary to the comment from Dooling (Dooling, No. 2 at p. 4), Dooling cannot argue commenters were denied fair notice and an opportunity to comment solely based on how the notice was labeled.
For the reasons discussed in the preceding sections of this document, DOE is not withdrawing the May 2025 DFR, which finalizes the recission of part 600 in its entirety.
DOE also notes, to the extent that 5 U.S.C. 553 applies to the delay of effective date, it is exempt from notice and comment because it constitutes a rule of procedure under 5 U.S.C. 553(b)(A) and for which no notice or hearing is required by statute. Additionally, this action is not a “substantive rule” for which a 30-day delay in effective date is required under 5 U.S.C. 553(d).
This document of the Department of Energy was signed on July 9, 2025, by Chris Wright, Secretary of Energy. That document with the original signature and date is maintained by DOE. For administrative purposes only, and in compliance with requirements of the Office of the Federal Register, the undersigned DOE Federal Register Liaison Officer has been authorized to sign and submit the document in electronic format for publication, as an official document of the Department of Energy. This administrative process in no way alters the legal effect of this document upon publication in the
Office of Cybersecurity, Energy Security, and Emergency Response, Department of Energy.
Direct final rule; delay of effective date; response to comments.
The Department of Energy (“DOE”) is publishing this document to respond to comments received on the May 16, 2025, direct final rule. As a result, DOE delays the effective date of the direct final rule on the procedures for acquisition of petroleum for the Strategic Petroleum Reserve (SPR) to require index-priced contracts.
As of July 14, 2025, the effective date of the direct final rule published May 16, 2025, at 90 FR 20764, is delayed until August 13, 2025.
Mr. Jeffrey Novak, U.S. Department of Energy, Office of the General Counsel, Acting General Counsel, 1000 Independence Avenue SW, Washington, DC 20585-0121; (202) 586-5281 or
DOE is amending part 626 of title 10 of the Code of Federal Regulations in this rule. Part 626 contains rules that govern the procedures for acquiring petroleum products for, and deferring contractually scheduled deliveries to, the SPR. On October 25, 2022, DOE amended the part 626 regulations for the first time since being promulgated by DOE in 2006.
DOE received four comments
Employ America, Dooling, and CBD all had procedural objections to DOE's use of a direct final rule. Employ America and Dooling stated that the May 2025 DFR did not satisfy the good cause exemption from notice and comment rulemaking under the Administrative Procedure Act (“APA”). (Employ America, No. 5 at pp. 10-11; Dooling, No. 6 at pp. 3-4). CBD also stated that DOE should have engaged in a full notice-and-comment rulemaking process. (CBD, No. 3 at p. 1).
In response, DOE notes that the APA requires that agencies provide all interested persons with fair notice and an opportunity to comment on the rulemaking.
In addition to its procedural comment, Employ America also urged the Department to withdraw the direct final rule and leave the existing rule in place. (Employ America, No. 5 at p. 2). DOE has properly considered the comment from Employ America and provides the following response. The Department notes that on October 25, 2022, DOE amended the part 626 regulations expressly to include the ability to allow fixed-price contracts. At that time, Employ America provided the only comment within the scope of the proposed rule. In 2025, Employ America's comment mirrors its 2022 comment that DOE should utilize fixed-price contracts with sufficient flexibility to achieve the objectives and procedural needs defined in the SPR's governing statute.
Significantly, outside of the procedural questions, the difference between the 2022 and 2025 comments is that Employ America now bases much of its comments on a misunderstanding of DOE's recent use of the fixed-price and index-based methods. In its argument that requiring index-price contracts for all acquisitions would undermine statutory objectives and procedural requirements, it states that index-based pricing introduces budgetary and operational risks for DOE, alternative methods can deliver more certainty, and that logistical and infrastructure constraints require contractual flexibility. It further states in its argument that the justification for the direct final rule does not hold up to scrutiny that the direct final rule is unnecessary because DOE retains the ability to utilize index-price contracts under the existing regulation, DOE acquired over 60 million barrels of crude oil through fixed-price contracting, undermining claims it created confusion, and it is incorrect that the industry only uses index-price contracts; contracts with fixed prices are used to hedge or minimize exposure to price risk. However, to support their arguments, Employ America relies on an inaccurate claim that recent SPR contracts have been based on fixed pricing. For example, in its argument that the justification for the direct final rule does not hold up to scrutiny, it notes that “given successful fixed-price contracts executed to acquire over sixty million barrels, the evidence that it created sufficient confusion to warrant the change is weak.” Further, it states that that “DOE acquired over 60 million barrels of crude oil though fixed-price contracting, undermining claims it created confusion,” and although a “pilot acquisition to test the fixed-price failed to result in successful bids, . . . the problems were recognizable and were ultimately corrected.” They also state that “DOE issued 20 successful solicitations, for which they received over 500 responses, and ultimately acquired over 60 million barrels of oil. . . . Any initial confusion was rectified by subsequent solicitations.” However, DOE utilized the index-based pricing method in the referenced purchase of 60 million barrels of crude oil. While changes to permit the use of fixed-price contracts were added under claims of increased flexibility, it only served to unnecessarily create confusion in industry, which uses index-price contracts. The use of fixed-price contracts provided no recognizable benefit, as the only attempt by DOE to use the fixed-price method failed to obtain bids. Further, Employ America admits in its comment that index-based pricing is the norm. Thus, Employ America's above arguments and endorsement of the use of fixed-pricing
Finally, DOE received a comment from a member of the public (Comment DOE-HQ-2025-0009-0003) that raises procedural objections regarding Executive Order 14192 requiring identification of 10 regulations to be repealed and an analysis of such repeal and a claim that the rulemaking is subject to the National Environmental Policy Act (NEPA). However, as discussed in the May 2025 DFR, this rule is an E.O. 14192 deregulatory action, and therefore, the repeal of additional regulations is not required. 90 FR 20764, 20766. Further, this rule is a procedural rule that is excepted from NEPA review under appendix A to subpart D of 10 CFR part 1021.
For the reasons discussed in the preceding sections of this document, DOE is not withdrawing the May 2025 DFR, which finalizes an amendment to part 626 of title 10 of the Code of Federal Regulations to require index-priced contracts.
DOE also notes, to the extent that 5 U.S.C. 553 applies to the delay of effective date, it is exempt from notice and comment because it constitutes a rule of procedure under 5 U.S.C. 553(b)(A) and for which no notice or hearing is required by statute. Additionally, this action is not a “substantive rule” for which a 30-day delay in effective date is required under 5 U.S.C. 553(d)
This document of the Department of Energy was signed on July 9, 2025, by Chris Wright, the Secretary of Energy. That document with the original signature and date is maintained by DOE. For administrative purposes only, and in compliance with requirements of the Office of the Federal Register, the undersigned DOE Federal Register Liaison Officer has been authorized to sign and submit the document in electronic format for publication, as an official document of the Department of Energy. This administrative process in no way alters the legal effect of this document upon publication in the
Signed in Washington, DC, on July 10, 2025.
Office of Hearings and Appeals, Department of Energy.
Direct final rule; delay of effective date; response to comments.
The Department of Energy (“DOE”) is publishing this document to respond to comments received on the direct final rule to rescind an unnecessary regulation encouraging alternative dispute resolution to resolve complaints under the DOE Contractor Employee Protection Program that published on May 16, 2025. As a result, DOE delays the effective date of the direct final rule, and is responding to the comment it received on the direct final rule.
As of July 14, 2025, the effective date of the direct final rule published May 16, 2025, at 90 FR 20766, is delayed until August 13, 2025.
Mr. Jeffrey Novak, U.S. Department of Energy, Office of the General Counsel, GC-1, 1000 Independence Avenue SW, Washington, DC 20585-0121; (202) 586-5281 or
On May 16, 2025, DOE published a direct final rule rescinding § 708.10 of title 10, Code of Federal Regulations (“CFR”). 90 FR 20766 (“May 2025 DFR”) Section 708.10 contains a statement that encourages the use of alternative dispute resolution (“ADR”) for resolving complaints under the DOE Contractor Employee Protection Program. The regulation does not confer any substantive right or obligation on DOE or any party and is not required by statute.
DOE received three comments in response to the May 2025 DFR.
Dooling stated that the May 2025 DFR did not satisfy the good cause exemption from notice and comment rulemaking under the Administrative Procedure Act (“APA”). (Dooling, No. 3 at p. 4).
In response, DOE notes that the APA requires that agencies provide all interested persons with fair notice and an opportunity to comment on the rulemaking. See 5 U.S.C. 553(b) & (c). The May 2025 DFR provided the public with fair notice of DOE's changes to its own administrative procedures regarding ADR in the DOE Contractor Employee Protection Program. See 90 FR 20766, 20767 (discussing specific administrative changes encouraging ADR). DOE also requested comments on the May 2025 DFR, and stated, if the
Finally, contrary to the comment from Dooling (Dooling, No. 3 at p. 5), Dooling cannot argue commenters were denied fair notice and an opportunity to comment solely based on how the notice was labeled.
DOE received two comments, which stated (1) that parties benefit from ADR and the rescission of this regulation would make complainants less aware of this cost-saving service; and (2) that this regulation was required by the Administrative Dispute Resolution Act (“ADRA”), 5 U.S.C. 573. (Anonymous, No. 2 at p. 1; Anonymous, No. 4 at p. 1) In response to the first point, DOE notes that it will continue to advise all parties to disputes under the DOE Contractor Employee Protection Program as to the availability of ADR services in order to promote cost-efficient methods of problem solving pursuant to 10 CFR 708.18 and 10 CFR 708.27. In light of DOE's direct outreach to parties who might benefit from ADR, there is no evidence that parties rely on this regulation to learn of the availability of ADR, and, therefore, there is no evidence that the rescission of this regulation will reduce the use of ADR in any meaningful way. And in response to the second point, ADRA does not require the DOE to maintain specific regulations encouraging the use of ADR; rather it requires generally that agencies “encourage and facilitate agency use of alternative means of dispute resolution.” (5 U.S.C. 573(c)(1)) DOE will continue to encourage and facilitate the use of ADR when appropriate regardless of any specific regulation, and, thus, will adhere to the requirements of ADRA.
For the reasons discussed in the preceding sections of this document, DOE is not withdrawing the May 2025 DFR, which rescinds the regulation encouraging the use of ADR for resolving complaints under the DOE Contractor Employee Protection Program.
DOE also notes, to the extent that 5 U.S.C. 553 applies to the delay of effective date, it is exempt from notice and comment because it constitutes a rule of procedure under 5 U.S.C. 553(b)(A) and for which no notice or hearing is required by statute. Additionally, this action is not a “substantive rule” for which a 30-day delay in effective date is required under 5 U.S.C. 553(d).
This document of the Department of Energy was signed on July 9, 2025, by Chris Wright, Secretary of Energy. That document with the original signature and date is maintained by DOE. For administrative purposes only, and in compliance with requirements of the Office of the Federal Register, the undersigned DOE Federal Register Liaison Officer has been authorized to sign and submit the document in electronic format for publication, as an official document of the Department of Energy. This administrative process in no way alters the legal effect of this document upon publication in the
Office of Civil Rights and EEO, Department of Energy.
Direct final rule; delay of effective date.
Due to the receipt of significant adverse comments, the U.S. Department of Energy (DOE) is extending the effective date of the direct final rule “Rescinding Regulations for Loans for Minority Business Enterprises Seeking DOE Contracts and Assistance,” published on May 16, 2025.
As of July 14, 2025, the effective date of the direct final rule published May 16, 2025, at 90 FR 20769, is extended to September 12, 2025.
Mr. Jeffrey Novak, U.S. Department of Energy, Office of the General Counsel, GC-1, 1000 Independence Avenue SW, Washington, DC 20585; (202) 586-5281 or
On May 16, 2025, DOE published a direct final rule (90 FR 20769). DOE stated in that direct final rule that if significant adverse comments were received by June 16, 2025, DOE would withdraw the direct final rule or issue a new final rule which responds to the significant adverse comments.
Because DOE subsequently received significant adverse comments on that direct final rule, DOE is extending the effective date to consider comments submitted in response to the direct final rule.
To the extent that 5 U.S.C. 553 applies to this action, it is exempt from notice and comment because it constitutes a rule of procedure under 5 U.S.C. 553(b)(A) and for which no notice or hearing is required by statute. Additionally, this action is not a “substantive rule” for which a 30-day delay in effective date is required under 5 U.S.C. 553(d).
This document of the Department of Energy was signed on June 9, 2025, by Chris Wright, the Secretary of Energy. That document with the original signature and date is maintained by DOE. For administrative purposes only, and in compliance with requirements of the Office of the Federal Register, the undersigned DOE Federal Register Liaison Officer has been authorized to sign and submit the document in electronic format for publication, as an official document of the Department of Energy. This administrative process in no way alters the legal effect of this document upon publication in the
Office of the General Counsel, Department of Energy (DOE).
Direct final rule; delay of effective date; response to comments.
The Department of Energy (“DOE”) is publishing this document to respond to comments received on the direct final rule rescinding regulations outlining the 1977 transfer of proceedings to DOE from its predecessor agencies that published on May 16, 2025. As a result, DOE delays the effective date of the direct final rule.
As of July 14, 2025, the effective date of the direct final rule published May 16, 2025, at 90 FR 20772, is delayed until August 13, 2025.
Mr. Jeffrey Novak, U.S. Department of Energy, Office of the General Counsel, General Counsel, 1000 Independence Avenue SW, Washington, DC 20585-0121; (202) 586-5281 or
DOE is rescinding part 1000 of title 10, Code of Federal Regulations by this rule. In 1977, the Department of Energy Organization Act (Pub. L. 95-91) consolidated certain functions previously performed by several Federal agencies within DOE, including the Federal Energy Regulatory Commission (FERC). Part 1000 outlined which certain of these functions and proceedings would be transferred to the jurisdiction of the Secretary of Energy and which would be transferred to the jurisdiction of FERC. Section 1000.1 lists certain categories of proceedings as well as specific then-pending proceedings to be transferred to DOE or FERC. These transfers of functions occurred over 47 years ago. This part is now obsolete. DOE therefore rescinds part 1000 in its entirety. The authority for this rule is the Department of Energy Organization Act, Public Law 95-91, 91 Stat. 567.
On May 16, 2025, DOE published a direct final rule rescinding 10 CFR part 1000 and sought comments on the rescission. 90 FR 20772 (May 2025 DFR). In response, DOE received two comments from members of the public but only one comment was relevant to the May 2025 DFR.
DOE received one significant adverse comment from Bridget C.E. Dooling, which raised several procedural matters for DOE's consideration and also incorporated another comment by reference. (DOE-HQ-2025-0018-0002).
In response, DOE notes that the APA requires that agencies provide all interested persons with fair notice and an opportunity to comment on the rulemaking.
Finally, contrary to the comments, Dooling cannot argue they were denied fair notice and an opportunity to comment solely based on how the notice was labeled.
While adverse, DOE has determined that this comment does not prevent DOE from finalizing this rule and rescinding 10 CFR part 1000 as discussed previously.
DOE also received an anonymous comment in response to the direct final rule, which was outside the scope of the topics at issue for this rulemaking. (DOE-HQ-2025-0018-0003). As such, DOE is not required to prepare a response to this comment.
For the reasons discussed in the May 2025 DFR and reiterated in the preceding sections of this document, DOE is not withdrawing the May 2025 DFR, which finalizes a rescission of 10 CFR part 1000.
DOE also notes, to the extent that 5 U.S.C. 553 applies to the delay of effective date, it is exempt from notice and comment because it constitutes a rule of procedure under 5 U.S.C. 553(b)(A) and for which no notice or hearing is required by statute. Additionally, this action is not a “substantive rule” for which a 30-day delay in effective date is required under 5 U.S.C. 553(d).
This document of the Department of Energy was signed on July 9, 2025, by Chris Wright, Secretary of Energy. That document with the original signature and date is maintained by DOE. For administrative purposes only, and in compliance with requirements of the Office of the Federal Register, the undersigned DOE Federal Register Liaison Officer has been authorized to sign and submit the document in electronic format for publication, as an official document of the Department of Energy. This administrative process in no way alters the legal effect of this document upon publication in the
Office of Hearings and Appeals, Department of Energy.
Direct final rule; delay of effective date; response to comments.
The U.S. Department of Energy (“DOE”) is publishing this document to respond to comments received on the direct final rule “Revisions to the Office of Hearings and Appeals Procedural Regulations,” published on May 16, 2025. As a result, DOE delays the effective date of the direct final rule.
As of July 14, 2025, the effective date of the direct final rule published May 16, 2025, at 90 FR 20774, is delayed until August 13, 2025.
Mr. Jeffrey Novak, U.S. Department of Energy, Office of the General Counsel, GC-1, 1000 Independence Avenue SW, Washington, DC 20585-0121; (202) 586-5281 or
On May 16, 2025, DOE published a direct final rule rescinding § 1003.13 of title 10, Code of Federal Regulations (“CFR”). 90 FR 20774 (“May 2025 DFR”) This regulation contains a statement that encourages the use of alternative dispute resolution (“ADR”) for parties appearing before the OHA and advises that participation in ADR is voluntary. It does not confer any substantive right or obligation on the Agency or any party and is not required by statute.
DOE received three comments in response to the May 2025 DFR.
Dooling stated that the May 2025 DFR did not satisfy the good cause exemption from notice and comment rulemaking under the Administrative Procedure Act (“APA”). (Dooling, No. 4 at p. 3).
In response, DOE notes that the APA requires that agencies provide all interested persons with fair notice and an opportunity to comment on the rulemaking. See 5 U.S.C. 553(b) & (c). The May 2025 DFR provided the public with fair notice of DOE's changes to its own administrative procedures regarding ADR for parties appearing before the OHA. See 90 FR 20774, 20775 (discussing specific administrative changes encouraging ADR). DOE also requested comments on the May 2025 DFR, and stated, if the Department received significant adverse comments, the Department would withdraw the rule or issue a new final rule which responds to such comments.
Finally, contrary to the comment from Dooling (Dooling, No. 4 at p. 4), Dooling cannot argue commenters were denied fair notice and an opportunity to comment solely based on how the notice was labeled.
DOE received two comments, which stated (1) that parties benefit from ADR and the rescission of this regulation would make parties less aware of this cost-saving service; and (2) that this regulation was required by the Administrative Dispute Resolutions Act (“ADRA”), 5 U.S.C. 573. (Anonymous, No. 3 at p. 1; Anonymous, No. 2 at p. 1) In response to the first point, there is no evidence that parties decide to utilize ADR because of this regulation, and, therefore, there is no evidence that the rescission of this regulation will reduce the use of ADR in any meaningful way. The OHA will continue to advise parties as to the availability of ADR services when appropriate in order to promote cost-efficient methods of problem solving. In response to the second point, ADRA does not require the DOE to maintain specific regulations encouraging the use of ADR; rather it requires generally that agencies “encourage and facilitate agency use of alternative means of dispute resolution.” (5 U.S.C. 573(c)(1)) DOE will continue to encourage and facilitate the use of ADR when appropriate regardless of any specific regulation, and, thus, will adhere to the requirements of ADRA.
For the reasons discussed in the preceding sections of this document, DOE is not withdrawing the May 2025 DFR, which rescinds the regulation encouraging the use of ADR by parties appearing before the OHA.
DOE also notes, to the extent that 5 U.S.C. 553 applies to the delay of effective date, it is exempt from notice and comment because it constitutes a rule of procedure under 5 U.S.C. 553(b)(A) and for which no notice or hearing is required by statute. Additionally, this action is not a “substantive rule” for which a 30-day delay in effective date is required under 5 U.S.C. 553(d).
This document of the Department of Energy was signed on July 9, 2025, by Chris Wright, Secretary of Energy. That document with the original signature
Office of Civil Rights and EEO, Department of Energy.
Direct final rule; delay of effective date.
Due to the receipt of significant adverse comments, the U.S. Department of Energy (DOE) is extending the effective date of the direct final rule “Rescinding Regulations Related to Nondiscrimination in Federally Assisted Programs or Activities (General Provisions),” published on May 16, 2025.
As of July 14, 2025, the effective date of the direct final rule published May 16, 2025, at 90 FR 20777, is delayed until September 12, 2025.
Mr. Jeffrey Novak, U.S. Department of Energy, Office of the General Counsel, GC-1, 1000 Independence Avenue SW, Washington, DC 20585; (202) 586-5281 or
On May 16, 2025, DOE published a direct final rule. (90 FR 20777). DOE stated in that direct final rule that if significant adverse comments were received by June 16, 2025, DOE would withdraw the direct final rule or issue a new final rule which responds to the significant adverse comments.
Because DOE subsequently received significant adverse comments on that direct final rule, DOE is extending the effective date to consider comments submitted in response to the direct final rule.
To the extent that 5 U.S.C. 553 applies to this action, it is exempt from notice and comment because it constitutes a rule of procedure under 5 U.S.C. 553(b)(A) and for which no notice or hearing is required by statute. Additionally, this action is not a “substantive rule” for which a 30-day delay in effective date is required under 5 U.S.C. 553(d).
This document of the Department of Energy was signed on July 9, 2025, by Chris Wright, the Secretary of Energy. That document with the original signature and date is maintained by DOE. For administrative purposes only, and in compliance with requirements of the Office of the Federal Register, the undersigned DOE Federal Register Liaison Officer has been authorized to sign and submit the document in electronic format for publication, as an official document of the Department of Energy. This administrative process in no way alters the legal effect of this document upon publication in the
Office of Civil Rights and EEO, Department of Energy.
Direct final rule; delay of effective date.
Due to the receipt of significant adverse comments, the U.S. Department of Energy (DOE) is extending the effective date of the direct final rule “Rescinding New Construction Requirements Related to Nondiscrimination in Federally Assisted Programs or Activities,” published on May 16, 2025.
As of July 14, 2025, the effective date of the direct final rule published May 16, 2025, at 90 FR 20783, is delayed until September 12, 2025.
Mr. Jeffrey Novak, U.S. Department of Energy, Office of the General Counsel, GC-1, 1000 Independence Avenue SW, Washington, DC 20585; (202) 586-5281 or
On May 16, 2025, DOE published a direct final rule. (90 FR 20783). DOE stated in that direct final rule that if significant adverse comments were received by June 16, 2025, DOE would withdraw the direct final rule or issue a new final rule which responds to the significant adverse comments.
Because DOE subsequently received significant adverse comments on that direct final rule, DOE is extending the effective date to consider comments submitted in response to the direct final rule.
To the extent that 5 U.S.C. 553 applies to this action, it is exempt from notice and comment because it constitutes a rule of procedure under 5 U.S.C. 553(b)(A) and for which no notice or hearing is required by statute. Additionally, this action is not a “substantive rule” for which a 30-day delay in effective date is required under 5 U.S.C. 553(d).
This document of the Department of Energy was signed on July 9, 2025, by Chris Wright, the Secretary of Energy. That document with the original signature and date is maintained by DOE. For administrative purposes only, and in compliance with requirements of the Office of the Federal Register, the undersigned DOE Federal Register Liaison Officer has been authorized to sign and submit the document in electronic format for publication, as an official document of the Department of Energy. This administrative process in no way alters the legal effect of this document upon publication in the
Office of Civil Rights and EEO, Department of Energy.
Direct final rule; delay of effective date.
Due to the receipt of significant adverse comments, the U.S. Department of Energy (DOE) is extending the effective date of the direct final rule “Nondiscrimination on the Basis of Sex in Sports Programs Arising Out of Federal Financial Assistance,” published on May 16, 2025.
As of July 14, 2025, the effective date of the direct final rule published May 16, 2025, at 90 FR 20786, is delayed until September 12, 2025.
Mr. Jeffrey Novak, U.S. Department of Energy, Office of the General Counsel, GC-1, 1000 Independence Avenue SW, Washington, DC 20585; (202) 586-5281 or
On May 16, 2025, DOE published a direct final rule. (90 FR 20786). DOE stated in that direct final rule that if significant adverse comments were received by June 16, 2025, DOE would withdraw the direct final rule or issue a new final rule which responds to the significant adverse comments.
Because DOE subsequently received significant adverse comments on that direct final rule, DOE is extending the effective date to consider comments submitted in response to the direct final rule.
To the extent that 5 U.S.C. 553 applies to this action, it is exempt from notice and comment because it constitutes a rule of procedure under 5 U.S.C. 553(b)(A) and for which no notice or hearing is required by statute. Additionally, this action is not a “substantive rule” for which a 30-day delay in effective date is required under 5 U.S.C. 553(d).
This document of the Department of Energy was signed on July 9, 2025, by Chris Wright, the Secretary of Energy. That document with the original signature and date is maintained by DOE. For administrative purposes only, and in compliance with requirements of the Office of the Federal Register, the undersigned DOE Federal Register Liaison Officer has been authorized to sign and submit the document in electronic format for publication, as an official document of the Department of Energy. This administrative process in no way alters the legal effect of this document upon publication in the
Office of Civil Rights and EEO, Department of Energy.
Direct final rule; delay of effective date.
Due to the receipt of significant adverse comments, the U.S. Department of Energy (DOE) is extending the effective date of the direct final rule “Rescinding Regulations Related to Nondiscrimination on the Basis of Sex in Education Programs or Activities Receiving Federal Financial Assistance,” published on May 16, 2025.
As of July 14, 2025, the effective date of the direct final rule published May 16, 2025, at 90 FR 20788, is delayed until September 12, 2025.
Mr. Jeffrey Novak, U.S. Department of Energy, Office of the General Counsel, GC-1, 1000 Independence Avenue SW, Washington, DC 20585; (202) 586-5281 or
On May 16, 2025, DOE published a direct final rule. (90 FR 20788). DOE stated in that direct final rule that if significant adverse comments were received by June 16, 2025, DOE would withdraw the direct final rule or issue a new final rule which responds to the significant adverse comments.
Because DOE subsequently received significant adverse comments on that direct final rule, DOE is extending the effective date to consider comments submitted in response to the direct final rule.
To the extent that 5 U.S.C. 553 applies to this action, it is exempt from notice and comment because it constitutes a rule of procedure under 5 U.S.C. 553(b)(A) and for which no notice or hearing is required by statute. Additionally, this action is not a “substantive rule” for which a 30-day delay in effective date is required under 5 U.S.C. 553(d).
This document of the Department of Energy was signed on July 9, 2025, by Chris Wright, the Secretary of Energy. That document with the original signature and date is maintained by DOE. For administrative purposes only, and in compliance with requirements of the Office of the Federal Register, the undersigned DOE Federal Register Liaison Officer has been authorized to sign and submit the document in electronic format for publication, as an official document of the Department of Energy. This administrative process in no way alters the legal effect of this document upon publication in the
Federal Aviation Administration (FAA), DOT.
Final rule.
This action revokes Colored Federal Airway Green 6 (G-6) and Alaskan Very High Frequency Omnidirectional Range (VOR) Federal Airways V-459 and V-496 in Alaska. The identifier V-459 is also used for a VOR Federal Airway in California. This action revokes the Alaskan V-459, not
Effective date 0901 UTC, October 2, 2025. The Director of the Federal Register approves this incorporation by reference action under 1 CFR part 51, subject to the annual revision of FAA Order JO 7400.11 and publication of conforming amendments.
A copy of the notice of proposed rulemaking (NPRM), all comments received, this final rule, and all background material may be viewed online at
FAA Order JO 7400.11J, Airspace Designations and Reporting Points, and subsequent amendments can be viewed online at
Steven Roff, Rules and Regulations Group, Policy Directorate, Federal Aviation Administration, 600 Independence Avenue SW, Washington, DC 20597; telephone: (202) 267-8783.
The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of the airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it modifies the Air Traffic Service (ATS) route structure as necessary to preserve the safe and efficient flow of air traffic within the National Airspace System.
The FAA published an NPRM for Docket No. FAA-2024-2679 in the
The FAA recognizes the need to maintain a reliable source of navigation to aviation-dependent Alaskan villages and is developing a resiliency plan to support navigation in the event of GPS unreliability. The concerns raised by the comment received are recognized as legitimate, but are not applicable to this rulemaking action as non-GPS mitigations are in place in the area and at the affected airports.
The planned decommissioning of Aniak (PANI) and St. Mary's (PASM) NDBs caused the revocation of G-6, V-459, and V-496; however, there are adequate remaining navigational aid (NAVAID)-based airways in the area (V-480, V-350, and V-496) for use by aircraft not equipped with GPS. Non-GPS instrument approach procedures also are in place at PASM and PANI and will remain after the decommissioning of the St. Marys and Aniak NDBs. Specifically, decommissioning the NDBs will cause amendments to the PASM localizer (LOC) Runway 17 and the PANI instrument landing system (ILS) or LOC Runway 11 procedures, but not cancellation. Therefore, the decommissioning of St. Marys and Aniak NDBs and the revocation of G-6, V-459, and V-496 will have no impact to non-GPS flights in the area.
Colored Federal Airways are published in paragraph 6009 and Alaskan VOR Federal Airways are published in paragraph 6010 of FAA Order JO 7400.11, Airspace Designations and Reporting Points, which is incorporated by reference in 14 CFR 71.1 on an annual basis. This document amends the current version of that order, FAA Order JO 7400.11J, dated July 31, 2024, and effective September 15, 2024. These amendments will be published in the next update to FAA Order JO 7400.11. FAA Order JO 7400.11J, which lists Class A, B, C, D, and E airspace areas, air traffic service routes, and reporting points, is publicly available as listed in the
The FAA is amending 14 CFR part 71 by revoking Colored Federal Airway Green (G-6) and Alaskan VOR Federal Airways V-459 and V-496 in Alaska. The FAA is proposing these actions due to the pending decommissioning of the St. Marys, AK, NDB and the Aniak, AK, NDB.
The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore: (1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that only affects air traffic procedures and air navigation, it is certified that this rule, when promulgated, does not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
The FAA has determined that this action of revoking Colored Federal Airway G-6 and Alaskan VOR Federal Airways V-459 and V-496 in Alaska qualifies for categorical exclusion under the National Environmental Policy Act (42 U.S.C. 4321,
Airspace, Incorporation by reference, Navigation (air).
In consideration of the foregoing, the Federal Aviation Administration amends 14 CFR part 71 as follows:
49 U.S.C. 106(f), 106(g), 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p.389.
Federal Aviation Administration (FAA), DOT.
Final rule.
This action subdivides restricted area R-6606 vertically into two sub areas by removing restricted area R-6606 and establishing R-6606A and R-6606B Pendleton, VA. This change creates an internal altitude sub-division to match daily mission requirements and allows more efficient use of the airspace. These changes do not add additional designated restricted area airspace.
Effective date 0901 UTC, October 2, 2025.
A copy of this final rule, and all background material may be viewed online at
Brian Vidis, Rules and Regulations Group, Policy Directorate, Federal Aviation Administration, 600 Independence Avenue SW, Washington, DC 20597; telephone: (202) 267-8783.
The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of the airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it amends restricted area airspace at Pendleton, VA, to enhance aviation safety and align with essential United States (U.S.) Navy activities.
Washington Air Route Traffic Control Center (ARTCC) submitted a request in concurrence with the Commander, Fleet Area Control and Surveillance Facility, Virginia Capes, Virginia Beach, VA, to effectively create a vertical internal subdivision of restricted area R-6606 to align with daily mission requirements. Creating this subdivision allows for greater flexibility to schedule the use of the restricted area in accordance with common usage and accommodate aircraft transiting the area when it is not in use.
Restricted area R-6606 was designated from the surface to 51,000 feet mean sea level (MSL). This action revokes R-6606 and replaces it with R-6606A and R-6606B which share the same external boundary as restricted area R-6606. Restricted areas R-6606A and R-6606B overlay each other laterally. Restricted area R-6606A has designated altitudes from the surface to but not including 23,000 feet MSL and restricted area R-6606B has designated altitudes from 23,000 feet MSL to 51,000 feet MSL. Establishing the vertical subdivision of these restricted area airspaces allows for maximum joint use of the airspace by non-participant aircraft when U.S. Navy training does not require all designated altitudes.
Upon review of the restricted area R-6606, the FAA identified two boundary points used in the boundary descriptions that required technical amendment to accurately align with the shoreline used in the description. This action includes these geographic coordinate technical amendments to align with the shoreline, as originally intended.
These changes do not represent any changes in lateral or vertical boundaries (aside from the subdivision), operations, or new equipment being utilized in the airspace; nor does it reflect any increase in the number of operations that would be conducted.
This action amends 14 CFR part 73 by removing restricted area R-6606 and in its place establishing R-6606A and R-6606B Pendleton, VA, to match daily mission requirements and maximize public use of the airspace.
Restricted area R-6606 is revoked. Restricted areas R-6606A and R-6606B are established and share common boundaries that overlay each other. The designated altitudes for R-6606A are “surface to but not including 23,000 feet MSL”. The designated altitudes for R-6606B are “23,000 feet MSL to 51,000 feet MSL”.
The FAA also makes a technical amendment to two geographic points in the description of restricted areas R-6606A and R-6606B. These minor amendments to the geographic coordinates more accurately describe the intersection of each restricted area where it meets the shoreline. Updating these coordinates does not change the boundaries of the restricted areas, but rather increases the accuracy of the shoreline due to digital precision survey. The point “lat. 36°51′01″ N, long. 75°54′29″ W” is changed to “lat. 36°51′01″ N, long. 75°54′34″ W”; and the point “lat. 36°34′34″ N, long. 75°48′23″ W” is changed to “lat. 36°34′54″ N, long. 75°48′40″ W”.
The Administrative Procedure Act (APA) authorizes agencies to dispense with ordinary notice and comment requirements for rules when the agency for “good cause” finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” 5 U.S.C. 553(b)(B). This action consists of administrative internal altitude amendments and technical amendments to two geographic points only and does not affect the boundaries, total volume of airspace, time of designation, or activities conducted in the airspace. This amendment will not impose any additional substantive restrictions or requirements on the persons affected by these regulations as it does not affect the airspace boundaries or operating requirements. Therefore, the FAA finds that notice and public procedure under 5 U.S.C. 553(b) is unnecessary.
The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore: (1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that only affects air traffic procedures and air navigation, it is certified that this rule, when promulgated, does not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
The FAA has determined that this action of revocation of restricted area R-6606, establishment of restricted areas R-6606A and R-6606B (an internal altitude sub-division of R-6606), and technical amendments to geographic coordinates, qualifies for categorical exclusion under the National Environmental Policy Act (42 U.S.C. 4321,
Airspace, Prohibited areas, Restricted areas.
In consideration of the foregoing, the Federal Aviation Administration amends 14 CFR part 73 as follows:
49 U.S.C. 106(f), 106(g); 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p.389.
Federal Communications Commission.
Final rule.
In this document, the Federal Communications Commission (FCC) eliminates unnecessary cable rate regulation forms and rules; deregulates cable equipment not used exclusively to receive the basic cable service tier; deregulates small cable systems serving 15,000 or fewer subscribers that are owned by small cable companies serving 400,000 or fewer subscribers; declines to extend rate regulation to commercial establishments; and modifies rules to account for the sunset of CPST regulation and clarifies their application. This action is necessary because many of the FCC's rules governing cable rate regulation have been rendered obsolete or unworkable due to the sunset of cable programming service tier (CPST) rate regulation and the passage of time. In addition, in this document, the FCC closes several moot proceedings and dockets which are either resolved by this document or have become obsolete or irrelevant due to regulatory updates, technology advances, marketplace changes, or have been addressed in other FCC orders. The actions taken in this document by the FCC will have the effect of streamlining the cable television rate regulations, unleashing prosperity through deregulation, and reducing the administrative burdens on the cable industry, franchising authorities, and the FCC, while continuing to fulfill the statutory obligation to subscribers to ensure reasonable rates for cable service and equipment.
Effective August 13, 2025, except the amendments to §§ 1.1204 (amendatory instruction 2), 1.1206 (amendatory instruction 3), 76.911 (amendatory instruction 5), 76.922 (amendatory instruction 6), 76.923 (amendatory instruction 7), 76.934 (amendatory instruction 10), 76.944 (amendatory instruction 15), and 76.990 (amendatory instruction 21), which are delayed. The FCC will publish a document in the
For additional information on this proceeding, contact Katie Costello, Policy Division, Media Bureau at
This is a summary of the Commission's Report and Order, in MB Docket Nos. 02-144; MM Docket Nos. 92-266, 93-215; CS Docket No. 94-28; FCC 25-33, adopted on June 26, 2025 and released on June 27, 2025. The full text of this document is available via FCC website at
Accordingly,
Administrative practice and procedure.
Television.
For the reasons discussed in the preamble, the Federal Communications Commission amends 47 CFR parts 1 and 76 as follows:
47 U.S.C. chs. 2, 5, 9, 13; 28 U.S.C. 2461 note; 47 U.S.C. 1754, unless otherwise noted.
47 U.S.C. 151, 152, 153, 154, 301, 302, 302a, 303, 303a, 307, 308, 309, 312, 315, 317, 325, 335, 338, 339, 340, 341, 503, 521, 522, 531, 532, 534, 535, 536, 537, 543, 544, 544a, 545, 548, 549, 552, 554, 556, 558, 560, 561, 562, 571, 572, 573.
(b) * * *
(3) In any case in which a stay of rate regulation has been granted, if the petition for reconsideration is denied, the cable operator may be required to refund any rates or portion of rates above the permitted basic service tier charge or permitted equipment charge in accordance with § 76.942.
(a)
(b)
(2)
(c)
(2)
(i)
(ii)
(B) In all events, a system must adjust its rates every twelve months to reflect any net decreases in external costs that have not previously been accounted for in the system's rates.
(C) Any rate increase made to reflect increases or projected increases in external costs must also fully account for all other changes and projected changes in external costs, inflation and the number of channels on a regulated basic service tier that occurred or will occur during the same period. Rate adjustments made to reflect changes in external costs shall be based on any changes, plus projections, in those external costs that occurred or will occur in the relevant time periods since the periods used in the operator's most recent previous FCC Form 1240.
(iii)
(B) An operator may make rate adjustments for the addition of required channels to the basic service tier that are required under Federal or local law at any time such additions occur, subject to the filing requirements of § 76.933(c)(5), regardless of whether such additions occur outside of the annual filing cycle. Required channels may include must-carry, local origination, public, educational and governmental access and leased access channels. Should the operator elect not to pass through the costs immediately, it may accrue the costs of the additional channels plus interest, as described in paragraph (c)(3) of this section.
(3)
(i) Where an operator has underestimated costs, future rates may be increased to permit recovery of the accrued costs plus 11.25% interest between the date the costs are incurred and the date the operator is entitled to make its rate adjustment.
(ii) If an operator has underestimated its cost changes and elects not to recover these accrued costs with interest on the date the operator is entitled to make its annual rate adjustment, the interest will cease to accrue as of the date the operator is entitled to make the annual rate adjustment, but the operator will not lose its ability to recover such costs and interest. An operator may recover accrued costs between the date such costs are incurred and the date the operator implements its rate adjustment.
(d)
(i) State and local taxes applicable to the provision of cable television service;
(ii) Franchise fees;
(iii) Costs of complying with franchise requirements, including costs of providing public, educational, and governmental access channels as required by the franchising authority;
(iv) Retransmission consent fees and copyright fees incurred for the carriage of broadcast signals;
(v) Other programming costs;
(vi) Commission cable television system regulatory fees imposed pursuant to 47 U.S.C. 159; and
(vii) Headend equipment costs necessary for the carriage of digital broadcast signals.
(2) The permitted charge for a regulated basic service tier shall be adjusted on account of programming costs, copyright fees and retransmission consent fees only for the program channels or broadcast signals offered on that tier.
(3) Adjustments for external costs in the true-up portion of the FCC Form 1240 may be made on the basis of actual changes in external costs only. The starting date for adjustments to external costs for newly regulated systems shall be the implementation date of the initial maximum permitted rate established in paragraph (b)(1) of this section.
(4) Changes in franchise fees shall not result in an adjustment to permitted charges, but rather shall be calculated separately as part of the maximum monthly charge per subscriber for a regulated basic service tier.
(5) Adjustments to permitted charges to reflect changes in the costs of programming purchased from affiliated programmers, as defined in § 76.901, shall be permitted as long as the price charged to the affiliated system reflects either prevailing company prices offered in the marketplace to third parties (where the affiliated program supplier has established such prices) or the fair market value of the programming.
(i) For purposes of this section, entities are affiliated if either entity has an attributable interest in the other or if a third party has an attributable interest in both entities.
(ii) Attributable interest shall be defined by reference to the criteria set forth in notes 1 through 5 to § 76.501 provided, however, that:
(A) The limited partner and LLC/LLP/RLLP insulation provisions of note 2(f) shall not apply; and
(B) The provisions of note 2(a) regarding five (5) percent interests shall include all voting or nonvoting stock or limited partnership equity interests of five (5) percent or more.
(6) Adjustments to permitted charges on account of increases in costs of programming shall be further adjusted to reflect any revenues received by the operator from the programmer. Such adjustments shall apply on a channel by channel basis.
(7) In calculating programming expense, operators may add a mark-up of 7.5% for increases in programming costs. Operators shall reduce rates to reflect decreases in programming costs and remove the 7.5% mark-up, if any, taken on the removed costs.
(e)
(2)
(ii) When the removal of channels results in a reduction of the total basic service tier channel count that existed when the initial maximum permitted rate was established (Initial Channel Count), an operator shall also reduce the price of the basic service tier by any “residual” associated with the removed channels. For subsequent Form 1240 updates, if the number of channels included in the current maximum permitted rate on the Form 1240 is less than the Initial Channel Count, the operator shall reduce the price of the basic service tier by any “residual” associated with the subsequently removed channels. For purposes of this calculation, the per channel residual is the permitted charge for the basic service tier, minus the external costs, divided by the total number of channels on the basic service tier.
(3)
(4)
(f)
(g)
(1) Total revenues from cable operations, measured at the highest level of the cable operator's cable service organization, will not be sufficient to enable the operator to attract capital or maintain credit necessary to enable the operator to continue to provide cable service;
(2) The cable operator has prudent and efficient management; and
(3) Adjusted charges on account of hardship will not result in total charges for regulated cable services that are excessive in comparison to charges of similarly situated systems.
(a) * * *
(1) The equipment regulated under this section consists of all equipment in a subscriber's home, provided and maintained by the operator, that is used to receive the basic service tier and video programming offered on a per channel or per program basis, if any, except if such equipment is additionally used by that subscriber to receive other tiers of programming service. Such equipment shall include, but is not limited to:
(n)
(1) When the operator sets its initial regulated equipment rates;
(2) On the same date it files its FCC Form 1240. If an operator elects not to file an FCC Form 1240 for a particular year, the operator must file a Form 1205 on the anniversary date of its last Form 1205 filing; and
(3) When seeking to adjust its rates to reflect the offering of new types of customer equipment other than in conjunction with an annual filing of Form 1205, 60 days before it seeks to adjust its rates to reflect the offering of new types of customer equipment.
(a)
(c)
(d)
(e)
(i)
(ii)
(iii)
(2) Cable operators seeking an adjustment due to changes in external costs identified in FCC Form 1240 shall allocate such costs among the equipment basket, as specified in § 76.923, and the following service cost categories:
(i) The basic service category as defined by paragraph (e)(1)(i) of this section;
(ii) The cable programming services category as defined by paragraph (e)(1)(ii) of this section;
(iii) The all other services cost category as defined by paragraph (e)(1)(iii) of this section.
A cable operator shall file its rate justifications for the basic service tier and associated equipment with a franchising authority within 30 days of receiving written notification from the franchising authority that the franchising authority has been certified by the Commission to regulate rates for the basic service tier, or within 30 days from the date the franchising authority notifies the operator that the operator will be subject to the generally applicable rate rules because the operator's regulatory status has changed. Basic service tier filings for proposed rate increases and equipment rate filings for existing rates or proposed rate increases (including increases that result from reductions in the number of channels on a tier) must use the appropriate official FCC form, a copy thereof, or a copy generated by FCC software. Failure to file on the official FCC form, a copy thereof, or a copy generated by FCC software, may result in the imposition of sanctions specified in § 76.937(d). A cable operator shall include rate cards and channel line-ups with its filing and include an explanation of any discrepancy in the figures provided in these documents and its rate filing.
(a) A cable operator that submits for review its existing rates for equipment may continue the existing rates in effect pending franchising authority review and subject to the refund liability provisions of § 76.942.
(b) A cable operator that submits for review a proposed change in its existing rates for the basic service tier and associated equipment costs shall do so no later than 90 days prior to the effective date of the proposed rates.
(c)(1) The franchising authority will have 90 days from the date of the rate filing to review it. However, if the franchising authority or its designee concludes that the operator has submitted a facially incomplete filing, the franchising authority's deadline for issuing a decision, the date on which a rate increase may go into effect if no decision is issued, and the period for which refunds are payable will be tolled while the franchising authority is waiting for this information, provided that, in order to toll these effective dates, the franchising authority or its designee must notify the operator of the incomplete filing within 45 days of the date the filing is made.
(2) If there is a material change in an operator's circumstances during the 90 day review period and the change affects the operator's rate filing, the operator may file an amendment to its rate filing prior to the end of the 90 day review period. If the operator files such an amendment, the franchising authority will have at least 30 days to review the filing. Therefore, if the amendment is filed more than 60 days after the operator made its initial filing, the operator's proposed rate change may not go into effect any earlier than 30 days after the filing of its amendment. However, if the operator files its amended application on or prior to the sixtieth day of the 90 day review period, the operator may implement its proposed rate adjustment, as modified by the amendment, 90 days after its initial filing.
(3) If a franchising authority has taken no action within the 90 day review period, then the existing rates may continue in effect or the proposed rates may go into effect at the end of the review period, subject to a prospective rate reduction and refund if the franchising authority subsequently issues a written decision disapproving any portion of such rates, provided,
(4) At the time an operator files its rate justifications with the franchising authority, the operator may give customers notice of the proposed rate changes. Such notice should state that the proposed rate change is subject to approval by the franchising authority. If the operator is only permitted a smaller increase than was provided for in the notice, the operator must provide an explanation to subscribers on the bill in which the rate adjustment is implemented. If the operator is not permitted to implement any of the rate increase that was provided for in the notice, the operator must provide an explanation to subscribers within 60 days of the date of the franchising authority's decision. Additional advance notice is required if the rate to be implemented exceeds the previously noticed rate.
(5) If an operator files for a rate adjustment for the addition of channels to the basic service tier that the operator is required by Federal or local law to carry, the franchising authority has 60 days to review the requested rate. The proposed rate shall take effect at the end of this 60 day period unless the franchising authority rejects the proposed rate as unreasonable. The franchising authority shall be subject to the requirements described in paragraphs (c)(1) through (3) of this section for ordering refunds and prospective rate reductions, except that the initial review period is 60 rather than 90 days.
(6) When the franchising authority is regulating basic service tier rates, a cable operator may increase its rates for basic service to reflect the imposition of, or increase in, franchise fees or cable television system regulatory fees imposed pursuant to 47 U.S.C. 159. The increased rate attributable to Commission cable television system regulatory fees or franchise fees shall be subject to subsequent review and refund if the franchising authority determines that the increase in basic tier rates exceeds the increase in regulatory fees or in franchise fees allocable to the basic tier. This determination shall be appealable to the Commission pursuant to § 76.944. When the Commission is regulating basic service tier rates pursuant to § 76.945, an increase in those rates resulting from franchise fees or Commission regulatory fees shall be reviewed by the Commission pursuant to the mechanisms set forth in § 76.945.
(d) If an operator files an FCC Form 1205 for the purpose of setting the rate for a new type of equipment under § 76.923(o), the franchising authority has 60 days to review the requested rate. The proposed rate shall take effect at the end of this 60 day period unless the franchising authority rejects the proposed rate as unreasonable. The franchising authority shall be subject to the requirements described in paragraphs (c)(1) through (3) of this section for ordering refunds and prospective rate reductions, except that the initial review period is 60 rather than 90 days.
(a)
(b)
(c)
(d)
(e)
(f)
In order to regulate basic service tier rates or associated equipment costs, a franchising authority must have procedural laws or regulations applicable to rate regulation proceedings that provide a reasonable opportunity for consideration of the views of interested parties. Such rules must take into account the time periods that franchising authorities have to review rates under § 76.933.
The revision reads as follows:
(d) A franchising authority or the Commission may order a cable operator that has filed a facially incomplete form to file supplemental information, and the franchising authority's deadline to rule on the reasonableness of the proposed rates will be tolled pending the receipt of such information. A franchising authority may set reasonable
A franchising authority may require the production of proprietary information to make a rate determination in those cases where cable operators have submitted initial rates for review or have proposed rate increases. The franchising authority shall state a justification for each item of information requested and, where related to an FCC form filing, indicate the question or section of the form to which the request specifically relates. Upon request to the franchising authority, the parties to a rate proceeding shall have access to such information, subject to the franchising authority's procedures governing non-disclosure by the parties. Public access to such proprietary information shall be governed by applicable state or local law.
Cable operators shall comply with franchising authorities' and the Commission's requests for information, orders, and decisions. Any information submitted to a franchising authority or the Commission in making a rate determination pursuant to an FCC form filing is subject to the provisions of § 1.17 of this chapter.
(a) A franchising authority (or the Commission, pursuant to § 76.945) may order a cable operator to refund to subscribers that portion of previously paid rates determined to be in excess of the permitted basic service tier charge or above the actual cost of equipment. Before ordering a cable operator to refund previously paid rates to subscribers, a franchising authority (or the Commission) must give the operator notice and opportunity to comment.
(b) The refund period shall run as follows:
(1) From the date the operator implements the rate under review until it reduces the rate in compliance with a valid rate order or justifies that rate or a higher rate in its next rate filing, whichever is sooner, however, the refund period shall not begin before the effective date of regulation.
(2) For rates in effect and justified on rate forms filed before August 13, 2025 as amended, the refund period shall be determined by the rules in this part in effect at the time of filing.
(3) Refund liability shall be calculated on the reasonableness of the rates as determined by the rules in this part in effect during the period under review by the franchising authority or the Commission.
(c) The cable operator, in its discretion, may implement a refund in the following manner:
(1) By returning overcharges to those subscribers who actually paid the overcharges, either through direct payment or as a specifically identified credit to those subscribers' bills; or
(2) By means of a prospective percentage reduction in the rates for the basic service tier or associated equipment to cover the cumulative overcharge. The refund shall be reflected as a specifically identified, one-time credit on prospective bills to the class of subscribers that currently subscribe to the cable system.
(d) Refunds shall include interest computed at applicable rates published by the Internal Revenue Service for tax refunds and additional tax payments.
(e) Once an operator has implemented a rate refund to subscribers in accordance with a refund order by the franchising authority (or the Commission pursuant to paragraph (a) of this section), the franchising authority must return to the cable operator an amount equal to that portion of the franchise fee that was paid on the total amount of the refund to subscribers. The franchising authority must promptly return the franchise fee overcharge either in an immediate lump sum payment, or the cable operator may deduct it from the cable system's future franchise fee payments. The franchising authority has the discretion to determine a reasonable repayment period, but interest shall accrue on any outstanding portion of the franchise fee starting on the date the operator has completed implementation of the refund order. In determining the amount of the refund, the franchise fee overcharge should be offset against franchise fees the operator holds on behalf of the franchising authority for lump sum payment. The interest rate on any refund owed to the operator presumptively shall be 11.25%.
(c) An operator that uses the annual rate adjustment method under § 76.922(c) may include in its next true up under § 76.922(c)(3) any amounts to which the operator would have been entitled but for a franchising authority decision that is not upheld on appeal.
(a) Upon assumption of rate regulation authority, the Commission will notify the cable operator and require the cable operator to file its basic service tier rate schedule with the Commission within 30 days, with a copy to the local franchising authority.
(b) Basic service tier and equipment rate schedule filings for existing rates or proposed rate increases or adjustments (including increases that result from reductions in the number of channels in a tier) must use the official FCC form, a copy thereof, or a copy generated by FCC software. Failure to file on the official FCC form or a copy may result in the imposition of sanctions specified in § 76.937(c).
(c) Filings for proposed rate increases or adjustments must be made 90 days prior to the proposed effective date and can become effective on the proposed effective date unless the Commission issues an order deferring the effective date or denying the rate proposal. Petitions filed in accordance with §§ 76.6 and 76.7, that oppose such filings must be filed within 15 days of public notice of the filing by the cable operator and be accompanied by a certificate that service was made on the cable operator and the local franchising authority. A cable operator opposing such petition must file its opposition within five days of the filing of the petition, certifying to service on both the petitioner and the local franchising authority.
(a) This section shall govern charges for any changes in service tiers or equipment provided to the subscriber that are initiated at the request of a subscriber after initial service installation and that result in the
(e) Cable operators must also notify subscribers of potential charges for customer service changes, as provided in § 76.1604.
The revision and addition read as follows:
(a) The rates charged by cable operators for basic service and associated equipment and installation shall be provided pursuant to a rate structure that is uniform throughout each franchise area in which cable service is provided.
(c) * * *
(4) Requests for discovery for predatory pricing complaints will be addressed pursuant to the procedures specified in § 76.7(f). Parties submitting confidential material believed to be exempt from disclosure pursuant to the Freedom of Information Act (FOIA), 5 U.S.C. 552(b), and the Commission's rules at § 0.457 of this chapter, should follow the procedures in § 0.459 of this chapter and § 76.9.
The revisions read as follows:
(a)
(b) * * *
(2) Once the operator has certified its eligibility for deregulation on the basic service tier, the local franchising authority shall not prohibit the operator from taking a rate increase and shall not order the operator to make any refunds unless and until the local franchising authority has rejected the operator's certification in a final order that is no longer subject to appeal or that the Commission has affirmed. The operator shall be liable for refunds for revenues gained (beyond revenues that could be gained under regulation) as a result of any rate increase taken during the period in which it erroneously claimed to be deregulated, plus interest, in the event the operator is later found not to be deregulated. The limits on refund liability will not be applicable during that period to ensure that the filing of an invalid small operator certification does not reduce any refund liability that the operator would otherwise incur.
(c)
Postal Regulatory Commission.
Notice of proposed rulemaking.
The Commission is acknowledging a recent Postal Service filing requesting the Commission initiate a rulemaking proceeding to consider changes to analytical principles relating to periodic reports. This document informs the public of the filing, invites public comment, and takes other administrative steps.
Submit comments electronically via the Commission's Filing Online system at
David A. Trissell, General Counsel, at 202-789-6820.
On July 1, 2025, the Postal Service filed a petition pursuant to 39 CFR 3050.11 requesting that the Commission initiate a rulemaking proceeding to consider changes to analytical principles relating to periodic reports.
For flat-shaped and parcel-shaped USPS Marketing Mail pieces above the respective breakpoints, the passthrough calculation used at the time divided the discount by the avoided cost per pound for all pieces above and below the breakpoint.
The Postal Service states that because the passthrough percentages depended on the actual volume and weights shipped there was substantial variation in the calculated passthrough percentages. Petition, Proposal at 3. This variation culminated in Docket No. R2023-1, where the Postal Service found that it was mathematically impossible for passthrough calculations for a subset of USPS Marketing Mail flat-shaped pieces to comply with the Commission's workshare discount regulations.
In Docket No. RM2023-4, the Postal Service proposed a revised methodology for USPS Marketing Mail flat-shaped pieces to address the anomaly. Petition, Proposal at 4. Under the proposed methodology, USPS Marketing Mail flat-shaped pieces would be charged a fixed per-piece price, and pieces heavier than the breakpoint weight would also be charged a per-pound price for the weight above the breakpoint.
The Postal Service found that the new methodology reduced incentives for mailers to dropship flat-shaped pieces weighing more than the breakpoint close to their delivery destinations, provided workshare discounts too low relative to avoided costs for flat-shaped pieces weighing more than the breakpoint, and provided workshare discounts too high relative to avoided costs for flat-shaped pieces weighing less than the breakpoint.
In Docket No. RM2024-3, the Postal Service therefore proposed separate workshare discount passthrough calculations for USPS Marketing Mail flat-shaped lightweight (pieces weighing up to the breakpoint) and heavyweight (pieces weighing more than the breakpoint) pieces.
The Postal Service additionally notes that the Proposal creates the possibility for irrational pricing—specifically, of a pricing discontinuity at the breakpoint between lightweight and heavyweight USPS Marketing Mail parcel-shaped pieces. Petition, Proposal at 16-18. The Postal Service states that it will avoid proposing irrational prices and believes that the improvement in dropshipping price signals from the Proposal outweighs any such discontinuity.
The Commission establishes Docket No. RM2025-12 for consideration of matters raised by the Petition. More information on the Petition may be accessed via the Commission's website at
1. The Commission establishes Docket No. RM2025-12 for consideration of the matters raised by the Petition of the United States Postal Service for the Initiation of a Proceeding to Consider Proposed Changes in Analytical Principles, filed July 1, 2025.
2. Comments by interested persons in this proceeding are due no later than August 1, 2025.
3. Pursuant to 39 U.S.C. 505, the Commission appoints Katalin K. Clendenin to serve as an officer of the Commission (Public Representative) to represent the interests of the general public in this docket.
4. The Secretary shall arrange for the publication of this order in the
By the Commission.
The Department of Agriculture has submitted the following information collection requirement(s) to OMB for review and approval under the Paperwork Reduction Act of 1995, Public Law 104-13. Comments are requested regarding: whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; the accuracy of the agency's estimate of burden including the validity of the methodology and assumptions used; ways to enhance the quality, utility and clarity of the information to be collected; and ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology Comments regarding these information collections are best assured of having their full effect if received by August 13, 2025. Written comments and recommendations for the proposed information collection should be submitted within 30 days of the publication of this notice on the following website
An agency may not conduct or sponsor a collection of information unless the collection of information displays a currently valid OMB control number and the agency informs potential persons who are to respond to the collection of information that such persons are not required to respond to the collection of information unless it displays a currently valid OMB control number.
The Regional Food Business Centers will be the backbone for local and regional supply chain development and will offer coordination, technical assistance, and capacity building support to small and mid-sized food and farm businesses which will lead to more resilient, diverse, and connected supply chains. This program will provide a way for geographic regions to tailor development and investment to fit their needs, while recognizing that resilient supply chains are built upon strong relationships between individuals, communities, regions, sectors, and institutions. The RFBCs will support coordination in their region, fund technical assistance (TA) providers to offer business technical assistance to food and farm businesses and provide small grants to food businesses looking to expand or start in their region.
The data collection will include the collection of application information, quarterly reports, in addition to biannual interviews and quantitative information related to RFBCs (awardees), the TA providers (sub-awardees) and the businesses they fund.
The Department of Agriculture has submitted the following information collection requirement(s) to OMB for review and clearance under the Paperwork Reduction Act of 1995, Public Law 104-13. Comments are required regarding; whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; the accuracy of the agency's estimate of burden including the validity of the methodology and assumptions used; ways to enhance the quality, utility and clarity of the information to be collected; and ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology.
Comments regarding this information collection received by August 13, 2025 will be considered. Written comments and recommendations for the proposed information collection should be submitted within 30 days of the publication of this notice on the following website
An agency may not conduct or sponsor a collection of information unless the collection of information displays a currently valid OMB control number and the agency informs potential persons who are to respond to the collection of information that such persons are not required to respond to the collection of information unless it displays a currently valid OMB control number.
Animal and Plant Health Inspection Service, USDA.
Notice.
We are advising the public that the USDA Animal and Plant Health Inspection Service (APHIS), Veterinary Services has prepared a record of decision (ROD) for the final programmatic environmental impact statement (EIS) titled “Outbreak Response Activities for Highly Pathogenic Avian Influenza Outbreaks in Poultry in the United States and U.S. Territories”.
The USDA APHIS Administrator signed the ROD on May 23, 2025.
You may read the final programmatic EIS and ROD at:
•
• In our reading room, located in Room 1620 of the USDA South Building, 14th Street and Independence Avenue SW, Washington, DC 20250. Normal reading room hours are 8 a.m. to 4:30 p.m., Monday through Friday, except holidays. To be sure someone is there to help you, please call (202) 799-7039 before coming.
Ms. Chelsea Bare, Chief of Staff, Veterinary Services, APHIS, U.S. Department of Agriculture, 1400 Independence Avenue SW, Whitten Building Room 318-E, Washington, DC 20250; (515) 337-6128;
On January 18, 2023, the United States Department of Agriculture (USDA), Animal and Plant Health Inspection Service (APHIS), Veterinary Services (VS) published in the
On August 16, 2024, USDA APHIS VS published in the
On April 18, 2025, USDA APHIS VS published in the
USDA APHIS has reviewed the final programmatic EIS and has concluded that the document fully analyzes the issues covered by the draft programmatic EIS and addresses the comments and suggestions submitted by commenters. This notice advises the public that the waiting period has elapsed, and USDA APHIS has issued a Record of Decision (ROD) to implement the preferred alternative described in the final programmatic EIS. The APHIS Administrator signed the ROD on May 23, 2025.
The ROD has been prepared in accordance with: (1) NEPA of 1969, as amended (42 U.S.C. 4321
United States Commission on Civil Rights.
Notice of Commission public business meeting.
Friday, July 18, 2025, 10:00 a.m. EST.
Meeting to take place virtually and is open to the public via
Joe Kim: 202-499-0263.
In accordance with the Government in Sunshine Act (5 U.S.C. 552b), the Commission on Civil Rights is holding a meeting to discuss the Commission's business for the month of July. This business meeting is open to the public. Computer assisted real-time transcription (CART) will be provided. The web link to access CART (in English) on Friday, July 18, 2025, is
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The U.S. Department of Commerce (Commerce) determines countervailable subsidies were provided to producers and exporters of certain aluminum foil (aluminum foil) from the Republic of Türkiye (Türkiye) during the period of review (POR) January 1, 2022, through December 31, 2022.
Applicable July 14, 2025.
Ian Riggs or Caroline Carroll, AD/CVD Operations, Office IX, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-3810 or (202) 482-4948, respectively.
On December 13, 2024, Commerce published the
The merchandise covered by this
All issues raised in interested parties' case briefs are addressed in the Issues and Decision Memorandum. A list of the issues addressed in the Issues and Decision Memorandum is attached as an appendix to this notice. The Issues and Decision Memorandum is a public document and is on file electronically via Enforcement and Compliance's Antidumping and Countervailing Duty Centralized Electronic Service System (ACCESS). ACCESS is available to registered users at
Commerce conducted this review in accordance with section 751(a)(1)(A) of the Tariff Act of 1930, as amended (the Act). For each of the subsidy programs found countervailable, we find that there is a subsidy,
Based on comments received from interested parties, we made certain changes to the subsidy rate calculations for Assan Aluminyum Sanayi ve Ticaret A.S. (Assan) and Panda Aluminyum A.S. (Panda) from the
We determine that, for the period January 1, 2022, through December 31, 2022, the following total net countervailable subsidy rates exist:
Commerce intends to disclose the calculations performed for these preliminary results to interested parties within five days after public announcement, or if there is no public announcement, within five days of the date of publication of this notice in the
Pursuant to section 751(a)(2)(C) of the Act and 19 CFR 351.212(b)(2), Commerce has determined, and CBP shall assess, countervailing duties on all appropriate entries of subject merchandise in accordance with the final results of this review, for the above-listed companies at the applicable
In accordance with section 751(a)(1) of the Act, Commerce intends to instruct CBP to collect cash deposits of estimated countervailing duties in the amounts shown for the companies listed above for shipments of the subject merchandise entered, or withdrawn from warehouse, for consumption on or after the date of publication of the final results of this administrative review. For all non-reviewed firms, we will instruct CBP to continue to collect cash deposits of estimated countervailing duties at the most recent company-specific or all-others rate (
This notice also serves as a final reminder to parties subject to an APO of their responsibility concerning the return or destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3). Timely written notification of the return/destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and terms of an APO is a sanctionable violation.
These final results are issued and published in accordance with sections 751(a)(1) and 777(i)(1) of the Act, and 19 CFR 351.221(b)(5).
Enforcement and Compliance, International Trade Administration, Department of Commerce.
Applicable July 14, 2025.
Christopher Maciuba or Kayden Jenson, AD/CVD Operations, Office II, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-0413 or (202) 482-0967, respectively.
On March 4, 2025, the U.S. Department of Commerce (Commerce) initiated a less-than-fair-value (LTFV) investigation of imports of methylene diphenyl diisocyanate (MDI) from the People's Republic of China (China).
Section 733(b)(1)(A) of the Tariff Act of 1930, as amended (the Act), requires Commerce to issue the preliminary determination in an LTFV investigation within 140 days after the date on which Commerce initiated the investigation. However, section 733(c)(1)(A)(b)(1) of the Act permits Commerce to postpone the preliminary determination until no later than 190 days after the date on which Commerce initiated the investigation if: (A) the petitioner makes a timely request for a postponement; or (B) Commerce concludes that the parties concerned are cooperating, that the investigation is extraordinarily complicated, and that additional time is necessary to make a preliminary determination. Under 19 CFR 351.205(e), the petitioner must submit a request for postponement 25 days or more before the scheduled date of the preliminary determination and must state the reasons for the request. Commerce will grant the request unless it finds compelling reasons to deny the request.
On June 24, 2025, the petitioner
For the reasons stated above and because there are no compelling reasons to deny the request, in accordance with section 733(c)(1)(A) of the Act, Commerce is postponing the deadline for the preliminary determination by 50
This notice is issued and published pursuant to section 733(c)(2) of the Act and 19 CFR 351.205(f)(1).
National Oceanic & Atmospheric Administration (NOAA), Commerce.
Notice of information collection, request for comment.
The Department of Commerce, in accordance with the Paperwork Reduction Act of 1995 (PRA), invites the general public and other Federal agencies to comment on proposed, and continuing information collections, which helps us assess the impact of our information collection requirements and minimize the public's reporting burden. The purpose of this notice is to allow for 60 days of public comment preceding submission of the collection to OMB.
To ensure consideration, comments regarding this proposed information collection must be received on or before September 12, 2025.
Interested persons are invited to submit written comments to Adrienne Thomas, NOAA PRA Officer, at
Requests for additional information or specific questions related to collection activities should be directed to Matthew Rigdon, Fishery Management Specialist, Greater Atlantic Regional Fisheries Office, 55 Great Republic Dr., Gloucester, MA 01930, 978-281-9336 or
This request is for an extension of a currently approved collection associated with the Atlantic surfclam and ocean quahog fisheries. National Marine Fisheries Service (NMFS) Greater Atlantic Region manages these fisheries in the Exclusive Economic Zone (EEZ) of the Northeastern United States through the Atlantic Surfclam and Ocean Quahog Fishery Management Plan (FMP). The Mid-Atlantic Fishery Management Council prepared the FMP pursuant to the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act). The regulations implementing the FMP are specified at 50 CFR part 648.
The recordkeeping and reporting requirements at §§ 648.74, 648.75, and 648.76 form the basis for this collection of information. We request information from surfclam and ocean quahog individual transferable quota (ITQ) permit holders to issue ITQ permits and to process and track requests from permit holders to transfer quota share or cage tags. We also request information from surfclam and ocean quahog ITQ permit holders to track and properly account for surfclam and ocean quahog harvest shucked at sea. Because there is not a standard conversion factor for estimating unshucked product from shucked product, NMFS requires vessels that shuck product at sea to carry on board the vessel a NMFS-approved observer to certify the amount of these clams harvested. This information, upon receipt, results in an efficient and accurate database for management and monitoring of fisheries of the Northeastern U.S. EEZ.
Georges Bank has been closed to the harvest of surfclams and ocean quahogs since 1990 due to red tide blooms that cause paralytic shellfish poisoning (PSP). We reopened a portion of the Georges Bank Closed Area starting in 2012 under certain conditions. We request information from surfclam and ocean quahog ITQ permit holders who fish in the reopened area to ensure compliance with the Protocol for Onboard Screening and Dockside Testing in Molluscan Shellfish. The U.S. Food and Drug Administration, the commercial fishing industry, and NMFS developed the PSP protocol to test and verify that clams harvested from Georges Bank continue to be safe for human consumption. The National Shellfish Sanitation Program adopted the PSP protocol at the October 2011 Interstate Shellfish Sanitation Conference.
Forms are online at
We are soliciting public comments to permit the Department/Bureau to: (a) Evaluate whether the proposed information collection is necessary for the proper functions of the Department, including whether the information will have practical utility; (b) Evaluate the accuracy of our estimate of the time and cost burden for this proposed collection, including the validity of the methodology and assumptions used; (c) Evaluate ways to enhance the quality, utility, and clarity of the information to be collected; and (d) Minimize the reporting burden on those who are to respond, including the use of automated collection techniques or other forms of information technology.
Comments that you submit in response to this notice are a matter of public record. We will include or summarize each comment in our request to OMB to approve this information collection request. Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you may ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.
Office for Coastal Management, National Ocean Service, National Oceanic and Atmospheric Administration, Department of Commerce.
Notice of public meeting; opportunity to comment.
The National Oceanic and Atmospheric Administration's (NOAA) Office for Coastal Management will hold a virtual public meeting to solicit input on the performance evaluation of Minnesota's Lake Superior Coastal Program. NOAA also invites the public to submit written comments.
NOAA will hold a virtual public meeting at 3 p.m. Central Time (CT) on Wednesday, August 20, 2025. NOAA may close the meeting 10 minutes after the conclusion of public testimony and after responding to any clarifying questions from hearing participants. NOAA will consider all relevant written comments received by Friday, August 29, 2025.
Comments may be submitted:
•
•
Kathleen Leyden, evaluator, NOAA Office for Coastal Management, by email at
Section 312 of the Coastal Zone Management Act (CZMA) requires NOAA to conduct periodic evaluations of federally approved coastal management programs. The evaluation process includes holding one or more public meetings, considering public comments, and consulting with interested Federal, State, and local agencies and members of the public. During the evaluation, NOAA will consider the extent to which the State of Minnesota has met the national objectives, adhered to the management program approved by the Secretary of Commerce, and adhered to the terms of financial assistance under the CZMA. When the evaluation is complete, NOAA's Office for Coastal Management will place a notice in the
National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of information collection, request for comment.
The Department of Commerce, in accordance with the Paperwork Reduction Act of 1995 (PRA), invites the general public and other Federal agencies to comment on proposed, and continuing information collections, which helps us assess the impact of our information collection requirements and minimize the public's reporting burden. The purpose of this notice is to allow for 60 days of public
Written comments must be submitted on or September 12, 2025.
Interested persons are invited to submit written comments to Adrienne Thomas, NOAA PRA Officer, at
Requests for additional information or specific questions related to collection activities should be directed to Scott A. Miller, Economist, Sustainable Fisheries Division, P.O. Box 21668, Juneau, AK 99802-1668, 907-586-7228,
The National Marine Fisheries Service (NMFS), Alaska Regional Office, is requesting renewal of the currently approved information collection for the Economic Data Reporting for the Bering Sea and Aleutian Island Crab Rationalization Program (CR Program). The CR Program is a limited access privilege program managed under the authority of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act), the Consolidated Appropriations Act of 2004 (Pub. L. 108-199, Sec. 801), and the Fishery Management Plan for Bering Sea/Aleutian Islands King and Tanner Crab (FMP). The CR Program allocates crab among harvesters, processors, Western Alaska Community Development Quota groups, and coastal communities for nine crab fisheries. The CR Program also includes a comprehensive economic data collection program requiring participants to complete annual Economic Data Reports (EDRs). These EDRs are intended to aid the North Pacific Fishery Management Council (Council) and NOAA's National Marine Fisheries Service (NMFS) to assess the performance of the CR Program and to develop amendments to the FMP or regulations to mitigate any unintended consequences of the CR Program.
NMFS has designated Pacific States Marine Fisheries Commission (PSMFC) as the Data Collection Agent for the CR Program. NMFS and PSMFC administer the crab EDR program under the guidance of the Council. The crab EDR program collects annually reported cost, revenue, ownership, and employment data from harvest and processing sector participants in the CR Program fisheries. This information is necessary to monitor and assess the economic effects of the CR Program and support rigorous economic analysis to promote the goals and objectives of the Magnuson-Stevens Act and the FMP. Participation in the crab EDR program is mandatory under Federal fisheries regulations at 50 CFR 680.6 for all active vessel and processing sector participants in the CR Program fisheries.
This information collection contains the three EDRs used by participants in the CR Program: (1) Catcher Vessel Crab EDR, (2) Catcher/Processor Crab EDR, and (3) Processor Crab EDR. An EDR is required from any owner or leaseholder of a vessel or processing plant, or a holder of a registered crab receiver permit that harvested, processed, custom processed, or obtained custom processing for CR Program crab in specified Bering Sea and Aleutian Islands crab fisheries during the prior calendar year. The EDRs are submitted annually and are due on or before July 31 of the following year. Additional information on the crab EDR program is available on the PSFMC website at
The EDRs may be submitted online, by mail, or by fax. PSMFC mails EDR announcements and filing instructions to respondents by the end of May each year. Respondents are encouraged to complete the forms online on the PSMFC website at
We are soliciting public comments to permit the Department/Bureau to: (a) Evaluate whether the proposed information collection is necessary for the proper functions of the Department, including whether the information will have practical utility; (b) Evaluate the accuracy of our estimate of the time and cost burden for this proposed collection, including the validity of the methodology and assumptions used; (c) Evaluate ways to enhance the quality, utility, and clarity of the information to be collected; and (d) Minimize the reporting burden on those who are to respond, including the use of automated collection techniques or other forms of information technology.
Comments that you submit in response to this notice are a matter of public record. We will include or summarize each comment in our request to OMB to approve this Information Collection. Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you may ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.
Commodity Futures Trading Commission.
Notice.
In compliance with the Paperwork Reduction Act of 1995 (“PRA”), this notice announces that the Information Collection Request (“ICR”) abstracted below has been forwarded to the Office of Information and Regulatory Affairs (“OIRA”), of the Office of Management and Budget (“OMB”), for review and comment. The ICR describes the nature of the information collection and its expected costs and burden.
Comments must be submitted on or before August 13, 2025.
Written comments and recommendations for the proposed information collection should be submitted within 30 days of this notice's publication to OIRA, at
In addition to the submission of comments to
Or by either of the following methods:
•
•
All comments must be submitted in English, or if not, accompanied by an English translation. Comments submitted to the Commission should include only information that you wish to make available publicly. If you wish the Commission to consider information that you believe is exempt from disclosure under the Freedom of Information Act, a petition for confidential treatment of the exempt information may be submitted according to the procedures established in § 145.9 of the Commission's regulations.
Owen J. Kopon, Division of Market Oversight, at (202) 418-5360 or
In 2020, the Commission amended part 43 by issuing the Real-Time Public Reporting Requirements final rule (“2020 RTR Final Rule”).
On June 10, 2022, the Commission staff issued a Staff Advisory on Reporting of Errors and Omissions in Previously Reported Data (“Advisory”),
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number.
Office of the Secretary of Defense, Department of Defense (DoD).
Notice of a modified system of records.
In accordance with the Privacy Act of 1974, the DoD is modifying and reissuing a current system of records titled, Military Spouse Education and Career Opportunities (SECO) and My Career Advancement Account Scholarship (MyCAA) Programs, DPR 46. This system of records was originally established by the Office of the Secretary of Defense for Personnel and Readiness to collect and maintain records on the SECO and MyCAA Programs, which make resources and tools available to help military spouses with career exploration and discovery, career education and training, employment readiness, and career connections at any point within the military spouse's career. This system of records notice (SORN) is being renamed Military Spouse Education, Career Opportunities, and Employment Partnership. This SORN modification consolidates and rescinds DPR 47 DoD, Military Spouse Employment Partnership (MSEP) Career Portal. DoD is publishing a separate notice to rescind DPR 47 elsewhere in today's issue of the
This system of records is effective upon publication; however, comments on the Routine Uses will be accepted on or before August 13, 2025. The Routine Uses are effective at the close of the comment period.
You may submit comments, identified by docket number and title, by either of the following methods:
*
*
Jessica Levin, Privacy and Civil Liberties Officer, Office of the Secretary of Defense for Personnel and Readiness, 703-697-2121, 4000 Defense Pentagon, Washington, DC 20301, email:
The Military Spouse Education, Career Opportunities, and Employment Partnership system of records is used to support the operation of the SECO, MyCAA, and MSEP Programs. The records maintained within this system of records are used to assist military spouses with career exploration/discovery, career education and training, employment readiness, career coaching and connections, and financial assistance (education, training, testing, fees, etc). This SORN modification consolidates and rescinds DPR 47 DoD, Military Spouse Employment Partnership (MSEP) Career Portal (March 19, 2018, 83 FR 11994). A separate notice formally rescinding DPR 47 will be published elsewhere in today's issue of the
Subject to public comment, the DoD is updating this SORN to add the standard DoD routine uses (routine uses A through J) and to allow for additional disclosures outside DoD related to the purpose of this system of records. Additionally, the following sections of this SORN are being modified as follows: system name and number to better reflect all records maintained within the system of records, system location to reflect system modernization and cloud maintenance, system manager to reflect latest organizational titles and structure, authority for maintenance of the system to add additional authorities, purpose(s) of the system to reflect incorporation of MSEP program records, categories of records in the system to reflect the incorporation of MSEP program records and better explain the types of information collected, record source categories to reflect system updates, routine uses of records maintained in the system to account for the sharing of MSEP records, policies and practices for retrieval of records to update the information needed to retrieve a record to reflect the incorporation of MSEP program records, policies and practices for retention and disposal of records, administrative, technical, and physical safeguards, and notification procedures to update the individual safeguards protecting the personal information.
DoD SORNs have been published in the
Under the Privacy Act, a “system of records” is a group of records under the control of an agency from which information is retrieved by the name of an individual or by some identifying number, symbol, or other identifying particular assigned to the individual. In the Privacy Act, an individual is defined as a U.S. citizen or lawful permanent resident.
In accordance with 5 U.S.C. 552a(r) and Office of Management and Budget (OMB) Circular No. A-108, OATSD(PCLT) has provided a report of this system of records to the OMB and to Congress.
Military Spouse Education, Career Opportunities, and Employment Partnership, DPR 46 DoD.
Unclassified.
Information is stored within a government-certified cloud, implemented and overseen by the Department's Chief Information Officer (CIO), 6000 Defense Pentagon, Washington, DC 20301-6000.
A. Under Secretary of Defense for Personnel and Readiness (USD/P&R), Office of the Deputy Assistant Secretary of Defense (DASD) for Military Community and Family Policy (MC&FP), Director, Office of Military Family Readiness Policy (OMFRP), 4800
B. Under Secretary of Defense for Personnel and Readiness (USD/P&R), Office of the Deputy Assistant Secretary of Defense (DASD) for Military Community and Family Policy (MC&FP), Director, Military Community Outreach (MCO) Directorate, 4800 Mark Center Drive, Alexandria, VA 22350-2300, email:
10 U.S.C. 136, Under Secretary of Defense for Personnel and Readiness; 10 U.S.C. 1144, Employment Assistance, Job Training Assistance, and Other Transitional Services: Department Of Labor; 10 U.S.C. 1782, Surveys of Military Families; 10 U.S.C. 1784, Employment opportunities for military spouses; 10 U.S.C. 1784a, Education and training opportunities for military spouses to expand employment and portable career opportunities; E.O. 13607, Establishing Principles of Excellence for Educational Institutions Serving Service members, Veterans, Spouses, and Other Family Members; and DoD Instruction 1342.22, Military Family Readiness.
A. To support the operation of the Spouse Education and Career Opportunities (SECO) program, which is the primary source of education, career, employment counseling, and scholarship financial assistance for all military spouses, and the SECO website, which delivers the resources and tools necessary to assist military spouses with career exploration/discovery, career education and training, employment readiness, and career coaching and connections.
B. To support the operation of the My Career Advancement Account Scholarship (MyCAA) program, which provides a record of educational endeavors and progress of military spouses participating in education services and manages tuition assistance scholarship, tracks enrollments and funding, and facilitates communication with participants and educational/training institutions.
C. To support the operation of the Military Spouse Employment Partnership (MSEP) program, which connects military spouses with employers seeking to hire military spouse employees, via comprehensive information, tools, and resources. The information provided by military spouses allows MSEP Partner employers to fill available positions with their company with skilled military spouses.
D. To support statistical analysis, tracking, reporting, program effectiveness evaluations, research, and surveys to inform departmental decisions on military support and benefits policy.
Participating spouses of members of the United States Armed Forces (military spouses); and educational/training institution and employer partner points of contact.
A. Biographic, demographic, and other information to include: Name, DoD ID number, date of birth, race/ethnicity, contact information such as address, email address, and phone numbers; marital status and years as a military spouse; user account information and any unique identifying user number assigned to the military spouse.
B. Educational information to include: Education (degree level, additional degree details, field of study, dates, institution name, summary); certificates, credentials, and licenses (credential/certification name, date of receipt, state of receipt, institution name, summary); skills, abilities, and competencies; education training plan, career goal, and course/educational institution enrollment and status information; financial assistance information; academic evaluations and/or transcripts from schools, and education test results from testing agencies.
C. Employment information to include: Current job type, salary, and hourly wage; current pay grade; security clearance information; previous work experience; preferred job type, preferred industry of work, minimum desired salary and hourly wage; date planned to begin work; work experience (job title, company name, industry, employment dates, job description and duties, personal experience and achievements).
D. Military sponsor information to include: Name, DoD ID number, pay grade, current projected date of separation, branch of service, duty status and duty status end date, permanent change of station (PCS) location and dates, and time in service.
E. Employer and educational/training institution points of contact information to include: Name, telephone number, email address, physical address.
Records and information stored in this system of records are obtained from: Individual, Defense Enrollment Eligibility System (DEERS), Academic Institution Portal (AI Portal), schools, and testing agencies.
In addition to those disclosures generally permitted under 5 U.S.C. 552a(b) of the Privacy Act of 1974, as amended, all or a portion of the records or information contained herein may specifically be disclosed outside the DoD as a routine use pursuant to 5 U.S.C. 552a(b)(3) as follows:
A. To contractors, grantees, experts, consultants, students, and others performing or working on a contract, service, grant, cooperative agreement, or other assignment for the Federal Government when necessary to accomplish an agency function related to this system of records.
B. To the appropriate Federal, State, local, territorial, tribal, foreign, or international law enforcement authority or other appropriate entity where a record, either alone or in conjunction with other information, indicates a violation or potential violation of law, whether criminal, civil, or regulatory in nature.
C. To any component of the Department of Justice for the purpose of representing the DoD, or its components, officers, employees, or members in pending or potential litigation to which the record is pertinent.
D. In an appropriate proceeding before a court, grand jury, or administrative or adjudicative body or official, when the DoD or other Agency representing the DoD determines that the records are relevant and necessary to the proceeding; or in an appropriate proceeding before an administrative or adjudicative body when the adjudicator determines the records to be relevant to the proceeding.
E. To the National Archives and Records Administration for the purpose of records management inspections conducted under the authority of 44 U.S.C. 2904 and 2906.
F. To a Member of Congress or staff acting upon the Member's behalf when the Member or staff requests the information on behalf of, and at the request of, the individual who is the subject of the record.
G. To appropriate agencies, entities, and persons when (1) the DoD suspects or confirms a breach of the system of records; (2) the DoD determines as a result of the suspected or confirmed breach there is a risk of harm to individuals, the DoD (including its
H. To another Federal agency or Federal entity, when the DoD determines that information from this system of records is reasonably necessary to assist the recipient agency or entity in (1) responding to a suspected or confirmed breach or (2) preventing, minimizing, or remedying the risk of harm to individuals, the recipient agency or entity (including its information systems, programs and operations), the Federal Government, or national security, resulting from a suspected or confirmed breach.
I. To another Federal, State or local agency for the purpose of comparing to the agency's system of records or to non-Federal records, in coordination with an Office of Inspector General in conducting an audit, investigation, inspection, evaluation, or some other review as authorized by the Inspector General Act of 1978, as amended.
J. To such recipients and under such circumstances and procedures as are mandated by Federal statute or treaty.
K. To authorized DoD contractors and grantees for the purpose of supporting research studies concerned with the education of military spouses participating in DoD-funded spousal education programs in non-identifiable form.
L. To civilian educational institutions where the participant is enrolled for the purposes of ensuring correct enrollment and billing information.
M. To MSEP Partners for the purpose of searching for military spouse employment candidates.
N. To the Department of Veterans Affairs, Department of Education, Consumer Financial Protection Bureau, and Department of Justice for the purpose of ensuring prospective students are provided appropriate information regarding their options under, eligibility for, and costs associated with Federal military and veterans' educational benefits programs.
Records may be stored electronically or on paper in secure facilities in a locked drawer behind a locked door. The records may be stored on magnetic disc, tape, or digital media; in agency-owned cloud environments; or in vendor Cloud Service Offerings certified under the Federal Risk and Authorization Management Program (FedRAMP).
Records may be retrieved by full name, email address, DoD ID, and/or username/profile number.
A. SECO user accounts and records are deleted 5 years after notification of separation, retirement, or discharge of the spouse's sponsor/service member.
B. MyCAA records are destroyed 10 years after notification of separation, retirement, or discharge of the spouse's sponsor/service member.
C. MSEP records are destroyed or deleted when 5 years old or when no longer needed for operational purposes, whichever is later.
The DoD safeguards records in this system of records according to applicable rules, policies, and procedures, including all applicable DoD automated systems security and access policies. DoD policies require the use of controls to minimize the risk of compromise of personally identifiable information (PII) in paper and electronic form and to enforce access by those with a need to know and with appropriate clearances. Additionally, the DoD established security audit and accountability policies and procedures which support the safeguarding of PII and detection of potential PII incidents. The DoD routinely employs safeguards such as the following to information systems and paper recordkeeping systems: Multifactor log-in authentication including Common Access Card (CAC) authentication and password; physical token as required; physical and technological access controls governing access to data; network encryption to protect data transmitted over the network; disk encryption securing disks storing data; key management services to safeguard encryption keys; masking of sensitive data as practicable; mandatory information assurance and privacy training for individuals who will have access; identification, marking, and safeguarding of PII; physical access safeguards including multifactor identification physical access controls, detection and electronic alert systems for access to servers and other network infrastructure; and electronic intrusion detection systems in DoD facilities.
Individuals seeking access to their records should address written inquiries to the Office of the Secretary of Defense/Joint Staff Freedom of Information Act Requester Service Center, 1155 Defense Pentagon, Washington, DC 20301-1155. Signed written requests should contain the name and number of this system of records notice along with full name, DoD ID number, current address, telephone number, and email address of the individual
If executed outside the United States: “I declare (or certify, verify, or state) under penalty of perjury under the laws of the United States of America that the foregoing is true and correct. Executed on (date). (Signature).”
If executed within the United States, its territories, possessions, or commonwealths: “I declare (or certify, verify, or state) under penalty of perjury that the foregoing is true and correct. Executed on (date). (Signature).”
The DoD rules for accessing records, contesting contents, and appealing initial Component determinations are contained in 32 CFR part 310, or may be obtained from the system manager.
Individuals seeking to determine whether information about themselves is contained in this system of records should follow the instructions for Record Access Procedures above.
None.
July 8, 2021, 86 FR 36124; May 21, 2018; 83 FR 23438.
Department of Defense (DoD).
Rescindment of a system of records notice (SORN).
In accordance with the Privacy Act of 1974, the DoD is providing notice to rescind a SORN titled Military Spouse Employment
The rescindment of this SORN is effective upon publication; however, comments will be accepted on or before August 13, 2025.
You may submit comments, identified by docket number and title, by either of the following methods:
*
*
Ms. Rahwa Keleta, Privacy and Civil Liberties Division, Directorate for Privacy and Civil Liberties, Office of the Assistant to the Secretary of Defense for Privacy, Civil Liberties, and Transparency, Department of Defense, 4800 Mark Center Drive, Mailbox #24, Suite 05F16, Alexandria, VA 22350-1700,
Pursuant to the provisions of the Privacy Act of 1974, 5 U.S.C. 552a, the DoD is rescinding the Military Spouse Employment Partnership (MSEP) Career Portal, DPR 47 DoD system of records from its inventory. This system of records is being rescinded because the records are now maintained as part of the Military Spouse Education, Career Opportunities, and Employment Partnership, DPR 46 DoD, published elsewhere in today's issue of the
Office of Postsecondary Education, Department of Education.
Notice.
The Department of Education (Department) is issuing a notice inviting applications (NIA) for a new award for fiscal year (FY) 2025 for the TPSID-CC program, Assistance Listing Number 84.407B. This notice relates to the approved information collection under OMB control number 1840-0825 for this program.
For the addresses for obtaining and submitting an application, please refer to our Common Instructions for Applicants to Department of Education Discretionary Grant Programs, published in the
Shedita Alston, U.S. Department of Education, 400 Maryland Avenue SW, Floor 5, Washington, DC 20202-4260. Telephone: (202) 453-7090.
If you are deaf, hard of hearing, or have a speech disability and wish to access telecommunications relay services, please dial 7-1-1.
This priority is:
The eligible entity entering into a cooperative agreement under this subsection shall establish and maintain a Coordinating Center that shall—
(1) Serve as the technical assistance entity for all comprehensive transition and postsecondary programs for students with intellectual disabilities;
(2) Provide technical assistance regarding the development, evaluation, and continuous improvement of such programs;
(3) Develop an evaluation protocol for such programs that includes qualitative and quantitative methodologies for measuring student outcomes and program strengths in the areas of academic enrichment, socialization, independent living, and competitive or supported employment;
(4) Assist recipients of grants under TPSID in efforts to award a meaningful credential to students with
intellectual disabilities upon the completion of such programs, which credential must take into consideration unique State factors;
(5) Develop recommendations for the necessary components of such programs, such as—
(i) Academic, vocational, social, and independent living skills;
(ii) Evaluation of student progress;
(iii) Program administration and evaluation;
(iv) Student eligibility; and
(v) Issues regarding the equivalency of a student's participation in such programs to semester, trimester, quarter, credit, or clock hours at an institution of higher education (as defined in section 101 of the HEA), as the case may be;
(6) Analyze possible funding streams for such programs and provide recommendations regarding the funding streams;
(7) Develop model memoranda of agreement for use between or among institutions of higher education and State and local agencies providing funding for such programs;
(8) Develop mechanisms for regular communication, outreach, and dissemination of information about comprehensive transition and postsecondary programs for students with intellectual disabilities under subpart 2 between or among such programs and to families and prospective students;
(9) Host a meeting of all recipients of grants authorized under subpart 2 not less often than once each year; and
(10) Convene a workgroup to develop and recommend model criteria, standards, and components of such programs as described in subparagraph (E), that are appropriate for the development of accreditation standards, which workgroup shall include—
(i) An expert in higher education;
(ii) An expert in special education;
(iii) A disability organization that represents students with intellectual disabilities;
(iv) A representative from the National Advisory Committee on Institutional Quality and Integrity; and
(v) A representative of a regional or national accreditation agency or association.
This invitational priority is:
Priority for projects designed to translate and disseminate research and best practices for improving inclusive postsecondary education for SWIDs to IHEs that are not participating in the Transition and Postsecondary Programs for Students with Intellectual Disabilities to IHEs and that do not currently offer Comprehensive Transition Programs, for improving inclusive postsecondary education for students with intellectual disabilities.
(1) Is offered by an IHE;
(2) Is designed to support SWIDs who are seeking to continue academic, career and technical, and independent living instruction at an IHE in order to prepare for gainful employment;
(3) Includes an advising and curriculum structure;
(4) Requires SWIDs to participate on not less than a half-time basis as determined by the institution, with such participation focusing on academic components, and occurring through one or more of the following activities:
(i) Regular enrollment in credit-bearing courses with nondisabled students offered by the institution.
(ii) Auditing or participating in courses with nondisabled students offered by the institution for which the student does not receive regular academic credit.
(iii) Enrollment in noncredit-bearing, nondegree courses with nondisabled students.
(iv) Participation in internships or work-based training in settings with nondisabled individuals; and
(5) Requires SWIDs to be socially and academically integrated with non-disabled students to the maximum extent possible.
(1) Is used to enter into a relationship the principal purpose of which is to transfer anything of value to carry out a public purpose authorized by a law of the United States (see 31 U.S.C. 6101(3)); and not to acquire property or services for the Federal Government or pass-through entity's direct benefit or use;
(2) Is distinguished from a grant in that it provides for substantial involvement of the Federal awarding agency in carrying out the activity contemplated by the Federal award.
(3) The term does not include:
(i) A cooperative research and development agreement as defined in 15 U.S.C. 3710a; or
(ii) An agreement that provides only:
(A) Direct United States Government cash assistance to an individual;
(B) A subsidy;
(C) A loan;
(D) A loan guarantee; or
(E) Insurance.
(1) With a cognitive impairment, characterized by significant limitations in—
(i) Intellectual and cognitive functioning; and (ii) Adaptive behavior as expressed in conceptual, social, and practical adaptive skills; and
(2) Who is currently, or was formerly, eligible for a free appropriate public education under the Individuals with Disabilities Education Act.
Contingent upon the availability of funds and the quality of applications, we may make additional awards in subsequent years from the list of unfunded applications from this competition.
1.
(1) Higher education;
(2) The education of students with intellectual disabilities;
(3) The development of comprehensive transition and postsecondary programs for students with intellectual disabilities; and
(4) Evaluation and technical assistance.
2. a.
b.
b.
3.
1.
2.
3.
4.
• A “page” is 8.5″ x 11″, on one side only, with 1″ margins at the top, bottom, and both sides.
• Double space (no more than three lines per vertical inch) all text in the application narrative, excluding titles, headings, footnotes, quotations, references, and captions as well as all text in charts, tables, figures, and graphs.
• Use a font that is either 12 point or larger, and no smaller than 10 pitch (characters per inch).
• Use one of the following fonts: Times New Roman, Courier, Courier New, or Arial.
The recommended 60-page limit does not apply to the Application for Federal Assistance cover sheet (SF 424); The Budget Information Summary form (ED Form 524) section, the budget section, including the narrative budget justification; the assurances and certifications; or the one-page project abstract. The project abstract also does not apply to a table of contents, which you should include in the application narrative. You must include your complete response to the selection criteria in the application narrative. However, the recommended 60-page limit does apply to all the application narrative.
We recommend that any application addressing the invitational priority be
1.
(a)
(1) The Secretary considers the need for the proposed project.
(2) In determining the need for the proposed project, the Secretary considers the following factors:
(i) The extent to which the proposed project demonstrates the magnitude of the need for the services to be provided or the activities to be carried out by the proposed project. (10 points)
(b)
(1) The Secretary considers the significance of the proposed project.
(2) In determining the significance of the proposed project, the Secretary considers the following factors:
(i) The extent to which the resources, tools, and implementation lessons of the proposed project will be disseminated in ways to the target population and local community that will enable them and others (including practitioners, researchers, education leaders, and partners) to implement similar strategies. (5 points)
(ii) The extent to which the proposed project involves the development or demonstration of innovative and effective strategies that build on, or are alternatives to, existing strategies. (5 points)
(c)
(2) In determining the quality of the design of the proposed project, the Secretary considers the following factors:
(i) The extent to which the proposed project demonstrates that it is designed to build capacity and yield sustainable results that will extend beyond the project period. (5 points)
(ii) The extent to which the design of the proposed project includes a thorough, high-quality review of the relevant literature, a high-quality plan for project implementation, and the use of appropriate methodological tools to ensure successful achievement of project objectives. (5 points)
(iii) The extent to which the design of the proposed project reflects the most recent and relevant knowledge and practices from research and effective practice. (5 points)
(iv) The likelihood that the services to be provided by the proposed project will lead to meaningful improvements in the skills and competencies necessary to gain employment in high-quality jobs, careers, and industries or build capacity for independent living. (10 points)
(v) The extent to which the services to be provided by the proposed project involve the use of efficient strategies, including the use of technology, as appropriate, and the leveraging of non-project services. (5 points)
(vi) The extent to which the project director or principal investigator, when hired, has the qualifications required for the project, including formal training or work experience in fields related to the objectives of the project and experience in designing, managing, or implementing similar projects for the target population to be served by the project. (10 points)
(d)
(1) The Secretary considers the adequacy of resources for the proposed project.
(2) In determining the adequacy of resources for the proposed project, the Secretary considers one or more of the following factors:
(i) The adequacy of support for the project, including facilities, equipment, supplies, and other resources, from the applicant or the lead applicant organization. (5 points)
(ii) The extent to which the budget is adequate to support the proposed project and the costs are reasonable in relation to the objectives, design, and potential significance of the proposed project. (5 points)
(iii) The extent to which the costs are reasonable in relation to the number of persons to be served, the depth and intensity of services, and the anticipated results and benefits. (5 points)
(iv) The level of initial matching funds or other commitment from partners, indicating the likelihood for potential continued support of the project after Federal funding ends. (5 points)
(e)
(1) The Secretary considers the quality of the management plan for the proposed project.
(2) In determining the quality of the management plan for the proposed project, the Secretary considers one or more of the following factors:
(i) The feasibility of the management plan to achieve project objectives and goals on time and within budget, including clearly defined responsibilities, timelines, and milestones for accomplishing project tasks. (5 points)
(ii) The extent to which the time commitments of the project director and principal investigator and other key project personnel are appropriate and adequate to meet the objectives of the proposed project. (5 points)
(f)
(1) The Secretary considers the quality of the evaluation or other evidence-building of the proposed project.
(2) In determining the quality of the evaluation or other evidence-building, the Secretary considers one or more of the following factors:
(i) The extent to which the methods of evaluation or other evidence-building are thorough, feasible, relevant, and appropriate to the goals, objectives, and outcomes of the proposed project. (5 points)
(ii) The extent to which the evaluator has the qualifications, including relevant training, experience, and independence, required to conduct an evaluation of the proposed project, including experience conducting evaluations of similar methodology as proposed and with evaluations for the proposed population and setting. (5 points)
2.
In addition, in making a competitive grant award, the Secretary requires various assurances including those applicable to Federal civil rights laws that prohibit discrimination in programs or activities receiving Federal financial assistance from the Department (34 CFR 100.4, 104.5, 106.4, 108.8, and 110.23).
For this competition, a panel of non-Federal reviewers will review each application in accordance with the selection criteria in 34 CFR 75.210. The individual scores of the reviewers will be added and the sum divided by the number of reviewers to determine the
In a tie-breaking situation under this program, preference will be given to the applicant with the highest score under the “Quality of the Project Design” criterion. If there is still a tie after implementing the first tiebreaker, preference will be given to the applicant with the highest score under the “Quality of the Project Evaluation” criterion. If there is still a tie after applying the secondary tiebreaker, preference will be given to the applicant with the highest score on the “Quality of Management Plan” selection criterion.
3.
4.
Please note that, if the total value of your currently active grants, cooperative agreements, and procurement contracts from the Federal Government exceeds $10,000,000, the reporting requirements in 2 CFR part 200, Appendix XII, require you to report certain integrity information to FAPIIS semiannually. Please review the requirements in 2 CFR part 200, Appendix XII, if this grant plus all the other Federal funds you receive exceed $10,000,000.
5.
(a) Selecting recipients most likely to be successful in delivering results based on the program objectives through an objective process of evaluating Federal award applications (2 CFR 200.205);
(b) Prohibiting the purchase of certain telecommunication and video surveillance services or equipment in alignment with section 889 of the National Defense Authorization Act of 2019 (Pub. L. 115-232) (2 CFR 200.16);
(c) Providing a preference, to the extent permitted by law, to maximize use of goods, products, and materials produced in the United States (2 CFR 200.322); and
(d) Terminating agreements in whole or in part pursuant to the terms and conditions of the Federal award, including, to the extent authorized by law, if an award no longer effectuates the program goals and agency priorities (2 CFR 200.340).
5.
If your application is not evaluated or not selected for funding, we notify you.
2.
We reference the regulations outlining the terms and conditions of an award in the
3.
Additionally, a grantee or subgrantee that is awarded competitive grant funds must have a plan to disseminate these public grant deliverables. This dissemination plan can be developed and submitted after your application has been reviewed and selected for funding. For additional information on the open licensing requirements please refer to 2 CFR 3474.20.
4.
(b) At the end of your project period, you must submit a final performance report, including financial information, as directed by the Secretary. If you receive a multiyear award, you must submit an annual performance report that provides the most current performance and financial expenditure information as directed by the Secretary under 34 CFR 75.118. The Secretary may also require more frequent performance reports under 34 CFR 75.720(c). For specific requirements on reporting, please go to
(c) Under 34 CFR 75.250 (b), the Secretary may provide a grantee with additional funding for data collection analysis and reporting. In this case the Secretary establishes a data collection period.
5.
(a) The percentage of inclusive comprehensive transition and postsecondary programs assisted by the TPSID-CC that meet evidence-based,
(b) The percentage of students with intellectual disabilities who are enrolled in programs assisted by the TPSID-CC who complete the programs and obtain a meaningful credential, as defined by the TPSID-CC and supported through empirical evidence; and
(c) The percentage of inclusive comprehensive transition and postsecondary programs SWIDs assisted by the Center that use the technical assistance and/or best practices knowledge disseminated by the Center.
In addition, the TPSID-CC will work closely with the federal project officer to develop additional performance measures, performance targets, and data collection methodologies that are aligned with this work. Data must be collected by the TPSID-CC on accreditation standards and communications with recognized accrediting agencies, descriptions and analyses of funding streams, and the impact of the TPSID-CC's technical assistance activities related to outreach and dissemination. These additional performance measures will capture formative data about the quality, usefulness, relevance, and efficiency of the TPSID-CC's technical assistance and evaluation services.
(6)
In making a continuation award, the Secretary also considers whether the grantee is operating in compliance with assurances in its approved application, including those applicable to Federal civil rights laws that prohibit discrimination in programs or activities receiving Federal financial assistance from the Department (34 CFR 100.4, 104.5, 106.4, 108.8, and 110.23).
You may also access Department documents published in the
This document of the U.S. Department of Education was signed on July 9, 2025, by Christopher J. McCaghren, ED.D,
Office of Postsecondary Education, Department of Education.
Notice.
The Department of Education (Department) is issuing a notice inviting applications for new awards for fiscal year (FY) 2025 for the Native American-Serving Nontribal Institutions (NASNTI) Program, Assistance Listing Number 84.031X. This notice relates to the approved information collection under OMB control number 1840-0816.
For the addresses for obtaining and submitting an application, please refer to our Common Instructions for Applicants to Department of Education Discretionary Grant Programs, published in the
Everardo Gil, U.S. Department of Education, 400 Maryland Avenue SW, 5th Floor, Washington, DC 20202-4260. Telephone: (202) 987-0431. Email:
If you are deaf, hard of hearing, or have a speech disability and wish to access telecommunications relay services, please dial 7-1-1.
The priorities are:
Expand access to postsecondary distance education, competency-based or skills-based education, pre-apprenticeships, apprenticeships, part-time coursework and career preparation, work-based learning or shortened time-to-degree models, and programs or coursework that lead to high-wage, high-skilled, or in-demand, industry recognized credentials.
Projects that implement or promote greater understanding of Artificial Intelligence (AI) through one or both of the following: (1) supporting the integration of AI tools into the institution's pedagogy or student support services to improve postsecondary educational outcomes for students; or (2) expanding students' understanding of artificial intelligence by (a) expanding offerings of AI and computer science courses as part of an institution of higher education's general education curriculum, (b) embedding AI and computer science into an institution of higher education's general preservice or in-service teacher professional development or teacher preparation programs, or (c) targeting additional support to teacher preparation programs that are preparing future computer science educators in K-12 education.
Computer science often includes computer programming or coding as a tool to create software, including applications, games, websites, and tools to manage or manipulate data; or development and management of computer hardware and the other electronics related to sharing, securing, and using digital information. In addition to coding, the expanding field of computer science emphasizes computational thinking and interdisciplinary problem-solving to equip students with the skills and abilities necessary to apply computation to the digital world.
Computer science does not involve using computers for everyday tasks, such as browsing the internet or using tools like word processors, spreadsheets, or presentation software. Instead, it focuses on creating and developing technology, not just utilizing it.
Contingent upon the availability of funds and the quality of applications, we may make additional awards in subsequent years from the list of unfunded applications from this competition.
1.
To qualify as an eligible institution under the NASNTI Program, an institution must—
(i) Be accredited or preaccredited by a nationally recognized accrediting agency or association that the Secretary has determined to be a reliable authority as to the quality of education or training offered;
(ii) Be legally authorized by the State in which it is located to be a junior or community college or to provide an educational program for which it awards a bachelor's degree; and
(iii) Be designated as an “eligible institution,” by demonstrating that it: (A) has an enrollment of needy students as described in 34 CFR 607.3; and (B) has low average education and general expenditures per full-time equivalent (FTE) undergraduate student as described in 34 CFR 607.4.
An eligible IHE that submits applications for an Individual Development Grant and a Cooperative Arrangement Development Grant in this competition may be awarded both in the same fiscal year. A grantee with an Individual Development Grant or a Cooperative Arrangement Development Grant may be a partner in one or more Cooperative Arrangement Development Grants. The lead institution in a Cooperative Arrangement Development Grant must be an eligible institution. Partners are not required to be eligible institutions. Tribally Controlled Colleges and Universities, as authorized by title III of the HEA, may participate in more than one Cooperative Arrangement Development Grant as a partner.
A grantee under the DHSI program, which is authorized under title V of the HEA, may not receive a grant under any HEA, title III, part A program. The title III, part A programs are: Strengthening Institutions Program; the Tribally Controlled Colleges and Universities Program; the Alaska Native and Native Hawaiian-Serving Institutions Program; the Asian American and Native American Pacific Islander-Serving Institutions Program; and the NASNTI Program. Furthermore, a current DHSI program grantee may not give up its HSI grant to receive a grant under any title III, part A program as described in 34 CFR 607.2(g)(1).
An eligible HSI that is not a current grantee under the DHSI program may apply for a FY 2025 grant under all title III, part A programs for which it is eligible, as well as receive consideration for a grant under the DHSI program. However, a successful applicant may receive only one grant as described in 34 CFR 607.2(g)(1).
2. a.
b.
c.
d.
3.
4.
Applicants must include a logic model (as defined in 34 CFR 77.1(c)) or other conceptual framework.
1.
2.
3.
4.
• A “page” is 8.5″ × 11″, on one side only, with 1″ margins at the top, bottom, and both sides.
• Double-space (no more than three lines per vertical inch) all text in the
• Use a font that is either 12 point or larger, and no smaller than 10 pitch (characters per inch).
• Use one of the following fonts: Times New Roman, Courier, Courier New, or Arial.
The recommended page limit does not apply to the cover sheet; the budget section, including the narrative budget justification; the assurances and certifications; or the one-page abstract and the bibliography. However, the recommended page limit does apply to all of the application narrative.
1.
(a)
The extent to which—
(1) The strengths, weaknesses, and significant problems of the institution's academic programs, institutional management, and fiscal stability are clearly and comprehensively analyzed and result from a process that involved major constituencies of the institution. (5 points)
(2) The goals for the institution's academic programs, institutional management, and fiscal stability are realistic and based on comprehensive analysis. (5 points)
(3) The objectives stated in the plan are measurable, related to institutional goals, and, if achieved, will contribute to the growth and self-sufficiency of the institution. (5 points)
(4) The plan clearly and comprehensively describes the methods and resources the institution will use to institutionalize practice and improvements developed under the proposed project, including, in particular, how operational costs for personnel, maintenance, and upgrades of equipment will be paid with institutional resources. (5 points)
(b)
The extent to which the objectives for each activity are—
(1) Realistic and defined in terms of measurable results. (8 points)
(2) Directly related to the problems to be solved and to the goals of the comprehensive development plan. (8 points)
(c)
The extent to which—
(1) The implementation strategy for each activity is comprehensive. (4 points)
(2) The rationale for the implementation strategy for each activity is clearly described and is supported by the results of relevant studies or projects. (4 points)
(3) The timetable for each activity is realistic and likely to be attained. (4 points)
(4) The quality of the logic model or other conceptual framework underlying the proposed project, including how inputs are related to outcomes. (4 points)
(d)
The extent to which—
(1) The past experience and training of key professional personnel are directly related to the stated activity objectives. (4 points)
(2) The time commitment of key personnel is realistic. (4 points)
(e)
The extent to which—
(1) Procedures for managing the project are likely to ensure efficient and effective project implementation. (8 points)
(2) The project coordinator and activity directors have sufficient authority to conduct the project effectively, including access to the president or chief executive officer. (8 points)
(f)
The extent to which—
(1) The data elements and the data collection procedures are clearly described and appropriate to measure the attainment of activity objectives and to measure the success of the project in achieving the goals of the comprehensive development plan. (8 points)
(2) The data analysis procedures are clearly described and are likely to produce formative and summative results on attaining activity objectives and measuring the success of the project on achieving the goals of the comprehensive development plan. (8 points)
(g)
The extent to which the proposed costs are necessary and reasonable in relation to the project's objectives and scope.
2.
In addition, in making a competitive grant award, the Secretary requires various assurances, including those applicable to Federal civil rights laws that prohibit discrimination in programs or activities receiving Federal financial assistance from the Department (34 CFR 100.4, 104.5, 106.4, 108.8, and 110.23).
A panel of two non-Federal reviewers will review and score each application in accordance with the selection criteria. The applications will be put in a rank order based on the average scores received from the peer review. In tie-breaking situations for development grants, under 34 CFR 607.23(b), we award one additional point to an application from an IHE that has an endowment fund of which the current market value, per FTE enrolled student, is less than the average current market value of the endowment funds, per FTE enrolled student, at comparable type institutions that offer similar instruction. We award one additional point to an application from an IHE that has expenditures for library materials per FTE enrolled student that are less than the average expenditure for library materials per FTE enrolled student at similar type institutions. We also add one additional point to an application from an IHE that proposes to carry out one or more of the following activities:
(1) Faculty development.
(2) Funds and administrative management.
(3) Development and improvement of academic programs.
(4) Acquisition of equipment for use in strengthening management and academic programs.
(5) Joint use of facilities.
(6) Student services.
If a tie remains after applying the tie-breaker mechanism above, priority will be given to applicants that have the lowest endowment values per FTE enrolled student.
3.
4.
Please note that, if the total value of your currently active grants, cooperative agreements, and procurement contracts from the Federal Government exceeds $10,000,000, the reporting requirements in 2 CFR part 200, Appendix XII, require you to report certain integrity information to FAPIIS semiannually. Please review the requirements in 2 CFR part 200, Appendix XII, if this grant plus all the other Federal funds you receive exceed $10,000,000.
5.
(a) Selecting recipients most likely to be successful in delivering results based on the program objectives through an objective process of evaluating Federal award applications (2 CFR 200.205);
(b) Prohibiting the purchase of certain telecommunication and video surveillance services or equipment in alignment with section 889 of the National Defense Authorization Act of 2019 (Pub. L. 115—232) (2 CFR 200.216);
(c) Providing a preference, to the extent permitted by law, to maximize use of goods, products, and materials produced in the United States (2 CFR 200.322); and
(d) Terminating agreements in whole or in part to the greatest extent authorized by law if an award no longer effectuates the program goals or agency priorities (2 CFR 200.340).
1.
If your application is not evaluated or not selected for funding, we notify you.
2.
We reference the regulations outlining the terms and conditions of an award in the
3.
4.
(b) At the end of your project period, you must submit a final performance report, including financial information, as directed by the Secretary. If you receive a multiyear award, you must submit an annual performance report that provides the most current performance and financial expenditure information as directed by the Secretary under 34 CFR 75.118. The Secretary may also require more frequent performance reports under 34 CFR 75.720(c). For specific requirements on reporting, please go to
5.
(a) The percentage of first-time, full-time, degree-seeking undergraduate students at 4-year NASNTIs who were in their first year of postsecondary enrollment in the previous year and are enrolled in the current year at the same NASNTI;
(b) The percentage of first-time, full-time, degree-seeking undergraduate students at 2-year NASNTIs who were in their first year of postsecondary enrollment in the previous year and are enrolled in the current year at the same NASNTI;
(c) The percentage of first-time, full-time, degree-seeking undergraduate students enrolled at 4-year NASNTIs who graduate within 6 years of enrollment; and
(d) The percentage of first-time, full-time, degree-seeking undergraduate students enrolled at 2-year NASNTIs who graduate within 3 years of enrollment.
6.
In making a continuation award, the Secretary also considers whether the grantee is operating in compliance with the assurances in its approved application, including those applicable to Federal civil rights laws that prohibit discrimination in programs or activities receiving Federal financial assistance from the Department (34 CFR 100.4, 104.5, 106.4, 108.8, and 110.23).
You may also access documents of the Department published in the
This document of the U.S. Department of Education was signed on July 9, 2025, by Christopher J. McCaghren, ED.D,
Office of Postsecondary Education, Department of Education.
Notice.
The Department of Education (Department) is issuing a notice inviting applications for new awards for fiscal year (FY) 2025 for the Asian American and Native American Pacific Islander-Serving Institutions (AANAPISI) Program, Assistance Listing Number 84.031L. This notice relates to the approved information collection under OMB control number 1840-0798.
For the addresses for obtaining and submitting an application, please refer to our Common Instructions for Applicants to Department of Education Discretionary Grant Programs, published in the
Pearson Owens, U.S. Department of Education, 400 Maryland Avenue SW, 5th Floor, Washington, DC 20202-4260. Telephone: (202) 987-1866. Email:
If you are deaf, hard of hearing, or have a speech disability and wish to access telecommunications relay services, please dial 7-1-1.
The priorities are:
Applicants should demonstrate how their projects, institutions, or proposals are designed to promote education choice in one or more of the following ways:
Expand access to postsecondary distance education, competency-based or skills-based education, pre-apprenticeships, apprenticeships, part-time coursework and career preparation, work-based learning or shortened time-to-degree models, and programs or coursework that lead to high-wage, high-skilled, or in-demand, industry recognized credentials.
Projects that implement or promote greater understanding of Artificial Intelligence (AI) through one or both of the following: (1) supporting the integration of AI tools into the institution's pedagogy or student support services to improve postsecondary educational outcomes for students or (2) expanding students' understanding of artificial intelligence by (a) expanding offerings of AI and computer science courses as part of an institution of higher education's general education curriculum; (b) embedding AI and computer science into an institution of higher education's general preservice or in-service teacher professional development or teacher preparation programs, or (c) targeting additional support to teacher preparation programs that are preparing future computer science educators in K-12 education.
Computer science often includes computer programming or coding as a tool to create software, including applications, games, websites, and tools to manage or manipulate data; or development and management of computer hardware and the other electronics related to sharing, securing, and using digital information. In addition to coding, the expanding field of computer science emphasizes computational thinking and interdisciplinary problem-solving to equip students with the skills and abilities necessary to apply computation to the digital world.
Computer science does not involve using computers for everyday tasks, such as browsing the internet or using tools like word processors, spreadsheets, or presentation software. Instead, it focuses on creating and developing technology, not just utilizing it.
Contingent upon the availability of funds and the quality of applications, we may make additional awards in subsequent years from the list of unfunded applications from this competition.
1. (a)
(i) Accredited or pre-accredited by a nationally recognized accrediting agency or association that the Secretary has determined to be a reliable authority as to the quality of education or training offered;
(ii) Legally authorized by the State in which it is located to be a junior or community college or to provide an educational program for which it awards a bachelor's degree; and
(iii) Designated as an “eligible institution,” as defined in 34 CFR 600.2, by demonstrating that it has (1) an enrollment of needy students as described in 34 CFR 607.3, and (2) low average educational and general expenditures per full-time equivalent (FTE) undergraduate student as described in 34 CFR 607.4.
At the time of submission of their applications, applicants must certify their total undergraduate headcount enrollment and that 10 percent of the IHE's enrollment is Asian American or Native American Pacific Islander. An assurance form, which is included in the application materials for this competition, must be signed by an official for the applicant and submitted.
b.
A grantee under the Developing HSI Program, which is authorized under title V of the HEA, may not receive a grant under any HEA, title III, part A program. The title III, part A programs are the Strengthening Institutions Program, the Tribally Controlled Colleges and Universities Program, the AANAPISI Program, the Alaska Native and Native
An eligible HSI that is not a current grantee under the Developing HSI Program may apply for a FY 2025 grant under all title III, part A programs for which it is eligible, as well as receive consideration for a grant under the Developing HSI Program. However, a successful applicant may receive only one grant as described in 34 CFR 607.2(g)(1).
c.
An eligible IHE that submits applications for an Individual Development Grant and a Cooperative Arrangement Development Grant in this competition may be awarded both in the same fiscal year. However, we will not award a second Cooperative Arrangement Development Grant to an otherwise eligible IHE for an award year for which the IHE already has a Cooperative Arrangement Development Grant under the AANAPISI Program. A grantee with an Individual Development Grant or a Cooperative Arrangement Development Grant may be a subgrantee in one or more Cooperative Arrangement Development Grants. The lead institution in a Cooperative Arrangement Development Grant must be an eligible institution. Partners or subgrantees are not required to be eligible institutions.
2. a.
b.
c.
d.
3.
4.
Applicants must include a logic model (as defined in 34 CFR 77.1(c)) or other conceptual framework.
1.
Applicants are required to follow the Common Instructions for Applicants to Department of Education Discretionary Grant Programs, published in the
2.
3.
4.
• A “page” is 8.5″ x 11″, on one side only, with 1″ margins at the top, bottom, and both sides.
• Double-space (no more than three lines per vertical inch) all text in the application narrative, including titles, headings, footnotes, quotations, references, and captions as well as all text in charts, tables, figures, and graphs.
• Use a font that is either 12 point or larger, and no smaller than 10 pitch (characters per inch).
• Use one of the following fonts: Times New Roman, Courier, Courier New, or Arial.
The recommended page limit does not apply to the cover sheet; the budget section, including the narrative budget justification; the assurances and certifications; or the one-page abstract and the bibliography. However, the recommended page limit does apply to all of the application narrative.
1.
(a)
The extent to which—
(1) The strengths, weaknesses, and significant problems of the institution's academic programs, institutional management, and fiscal stability are clearly and comprehensively analyzed and result from a process that involved major constituencies of the institution;(5 points)
(2) The goals for the institution's academic programs, institutional management, and fiscal stability are realistic and based on comprehensive analysis; (5 points)
(3) The objectives stated in the plan are measurable, related to institutional goals, and, if achieved, will contribute to the growth and self-sufficiency of the institution; and (5 points)
(4) The plan clearly and comprehensively describes the methods and resources the institution will use to institutionalize practice and improvements developed under the proposed project, including, in particular, how operational costs for personnel, maintenance, and upgrades of equipment will be paid with institutional resources. (5 points)
(b)
The extent to which the objectives for each activity are—
(1) Realistic and defined in terms of measurable results; and (8 points)
(2) Directly related to the problems to be solved and to the goals of the comprehensive development plan. (8 points)
(c)
The extent to which—
(1) The implementation strategy for each activity is comprehensive; (4 points)
(2) The rationale for the implementation strategy for each activity is clearly described and is supported by the results of relevant studies or projects; and (4 points)
(3) The timetable for each activity is realistic and likely to be attained. (4 points)
(4) The quality of the logic model or other conceptual framework underlying the proposed project, including how inputs are related to outcomes. (4 points)
(d)
The extent to which—
(1) The past experience and training of key professional personnel are directly related to the stated activity objectives; and (4 points)
(2) The time commitment of key personnel is realistic. (4 points)
(e)
The extent to which—
(1) Procedures for managing the project are likely to ensure efficient and effective project implementation; and (8 points)
(2) The project coordinator and activity directors have sufficient authority to conduct the project effectively, including access to the president or chief executive officer. (8 points)
(f)
The extent to which—
(1) The data elements and the data collection procedures are clearly described and appropriate to measure the attainment of activity objectives and to measure the success of the project in achieving the goals of the comprehensive development plan; and (8 points)
(2) The data analysis procedures are clearly described and are likely to produce formative and summative results on attaining activity objectives and measuring the success of the project on achieving the goals of the comprehensive development plan. (8 points)
(g)
The extent to which the proposed costs are necessary and reasonable in relation to the project's objectives and scope.
2.
In addition, in making a competitive grant award, the Secretary requires various assurances, including those applicable to Federal civil rights laws that prohibit discrimination in programs or activities receiving Federal financial assistance from the Department (34 CFR 100.4, 104.5, 106.4, 108.8, and 110.23).
A panel of three non-Federal reviewers will review and score each application in accordance with the selection criteria. The applications will be put in a rank order based on the average scores received from the peer review.
In tiebreaking situations for development grants, under 34 CFR 607.23(b), among the tied applications, we award 1 additional tiebreaker point to an application from an IHE that has an endowment fund of which the current market value, per FTE enrolled student, is less than the average current market value of the endowment funds, per FTE enrolled student, at comparable type institutions that offer similar instruction. We award 1 additional tiebreaker point to an application from an IHE that has expenditures for library materials per FTE enrolled student that are less than the average expenditure for library materials per FTE enrolled student at similar type institutions. We also add 1 additional tiebreaker point to an application from an IHE that proposes to carry out one or more of the following activities:
(1) Faculty development.
(2) Funds and administrative management.
(3) Development and improvement of academic programs.
(4) Acquisition of equipment for use in strengthening management and academic programs.
(5) Joint use of facilities.
(6) Student services.
For the purpose of these funding considerations, we use 2022-2023 data.
If a tie remains after applying the tiebreaker mechanism above, priority will be given to applicants that have the lowest endowment values per FTE enrolled student.
3.
4.
Please note that, if the total value of your currently active grants, cooperative agreements, and procurement contracts from the Federal Government exceeds $10,000,000, the reporting requirements in 2 CFR part 200, Appendix XII, require you to report certain integrity information to FAPIIS semiannually. Please review the requirements in 2 CFR part 200, Appendix XII, if this grant plus all the other Federal funds you receive exceed $10,000,000.
5.
(a) Selecting recipients most likely to be successful in delivering results based on the program objectives through an objective process of evaluating Federal award applications (2 CFR 200.205);
(b) Prohibiting the purchase of certain telecommunication and video surveillance services or equipment in alignment with section 889 of the National Defense Authorization Act of 2019 (Pub. L. 115-232) (2 CFR 200.216);
(c) Providing a preference, to the extent permitted by law, to maximize use of goods, products, and materials produced in the United States (2 CFR 200.322); and
(d) Terminating agreements in whole or in part to the greatest extent authorized by law if an award no longer effectuates the program goals or agency priorities (2 CFR 200.340).
1.
If your application is not evaluated or not selected for funding, we notify you.
2.
We reference the regulations outlining the terms and conditions of an award in the
3.
4.
(b) At the end of your project period, you must submit a final performance report, including financial information, as directed by the Secretary. If you receive a multiyear award, you must submit an annual performance report that provides the most current performance and financial expenditure information as directed by the Secretary under 34 CFR 75.118. The Secretary may also require more frequent performance reports under 34 CFR 75.720(c). For specific requirements on reporting, please go to
5.
(a) The percentage of first-time, full-time degree-seeking undergraduate students at 4-year AANAPISIs who were in their first year of postsecondary enrollment in the previous year and are enrolled in the current year at the same AANAPISI.
(b) The percentage of first-time, full-time degree-seeking undergraduate students at 2-year AANAPISIs who were in their first year of postsecondary enrollment in the previous year and are enrolled in the current year at the same AANAPISI.
(c) The percentage of first-time, full-time degree-seeking undergraduate students enrolled at 4-year AANAPISIs who graduate within 6 years of enrollment.
(d) The percentage of first-time, full-time degree-seeking undergraduate students enrolled at 2-year AANAPISIs who graduate within 3 years of enrollment.
6.
In making a continuation award, the Secretary also considers whether the grantee is operating in compliance with the assurances in its approved application, including those applicable to Federal civil rights laws that prohibit discrimination in programs or activities receiving Federal financial assistance from the Department (34 CFR 100.4, 104.5, 106.4, 108.8, and 110.23).
You may also access documents of the Department published in the
This document of the U.S. Department of Education was signed on July 9, 2025, by Christopher J. McCaghren, ED.D,
Office of Postsecondary Education, Department of Education.
Notice.
The Department of Education (Department) is issuing a notice inviting applications (NIA) for new awards for fiscal year (FY) 2025 for the Model Comprehensive Transition and Postsecondary Programs for Students with Intellectual Disabilities Program (TPSID), Assistance Listing Number (ALN) number 84.407A. This notice relates to the approved information collection under OMB control number 1840-0825.
For the addresses for obtaining and submitting an application, please refer to our Common Instructions for Applicants to Department of Education Discretionary Grant Programs, published in the
Shedita Alston, U.S. Department of Education, 400 Maryland Avenue SW, Floor 5, Washington, DC 20202-4260. Telephone: (202) 453-7090. Email:
If you are deaf, hard of hearing, or have a speech disability and wish to access telecommunications relay services, please dial 7-1-1.
This priority is:
A grant recipient must use grant funds to establish a model comprehensive transition and postsecondary program for students with intellectual disabilities that—
(1) Serves students with intellectual disabilities;
(2) Provides individual supports and services for the academic and social inclusion of students with intellectual disabilities in academic courses, extracurricular activities, and other aspects of the IHE's regular postsecondary program;
(3) Provides a focus on academic enrichment, socialization, independent living skills, including self-advocacy, and integrated work experiences and career skills that lead to gainful employment;
(4) Integrates person-centered planning in the development of the course of study for each student with an intellectual disability participating in the model program;
(5) Participates with the coordinating center established under section 777(b) of the HEA in the evaluation of the components of the model program;
(6) Partners with one or more local educational agencies to support students with intellectual disabilities participating in the model program who are still eligible for special education and related services under the Individuals with Disabilities Education Act (IDEA), including the use of funds available under part B of IDEA to support the participation of such students in the model program;
(7) Plans for the sustainability of the model program after the end of the grant period; and
(8) Creates and offers a meaningful credential for students with intellectual disabilities upon the completion of the model program.
(9) Incorporates into the model comprehensive transition and postsecondary program for students with intellectual disabilities carried out under the grant one or more of the following elements:
(A) The formation of a partnership with any relevant agency serving students with intellectual disabilities, such as a vocational rehabilitation agency.
(B) In the case of an institution of higher education that provides institutionally owned or operated housing for students attending the institution, the integration of students with intellectual disabilities into the housing offered to nondisabled students.
(C) The involvement of students attending the institution of higher education who are studying special education, general education, vocational rehabilitation, assistive technology, or related fields in the model program.
(1) Is offered by an IHE;
(2) Is designed to support students with intellectual disabilities who are seeking to continue academic, career and technical, and independent living instruction at an IHE in order to prepare for gainful employment;
(3) Includes an advising and curriculum structure;
(4) Requires students with intellectual disabilities to participate on not less than a half-time basis as determined by the institution, with such participation focusing on academic components, and occurring through one or more of the following activities:
(i) Regular enrollment in credit-bearing courses with nondisabled students offered by the institution.
(ii) Auditing or participating in courses with nondisabled students offered by the institution for which the student does not receive regular academic credit.
(iii) Enrollment in noncredit-bearing, nondegree courses with nondisabled students.
(iv) Participation in internships or work-based training in settings with nondisabled individuals; and
(E) Requires students with intellectual disabilities to be socially and academically integrated with non-disabled students to the maximum extent possible.
(A) With a cognitive impairment, characterized by significant limitations in—
(i) Intellectual and cognitive functioning; and
(ii) Adaptive behavior as expressed in conceptual, social, and practical adaptive skills; and
(B) Who is currently, or was formerly, eligible for a free appropriate public education under the IDEA.
Contingent upon the availability of funds and the quality of applications, we may make additional awards in subsequent fiscal years from the list of unfunded applications from this competition.
1.
2.
3.
1.
2.
3.
4.
5.
• A “page” is 8.5″ x 11″, on one side only, with 1″ margins at the top, bottom, and both sides.
• Double-space (no more than three lines per vertical inch) all the text in the application narrative, including titles, headings, footnotes, quotations, references, captions, as well as all text in charts, tables, figures, and graphs.
• Use a font that is either 12 point or larger, and no smaller than 10-pitch (characters per inch).
• Use one of the following fonts: Times New Roman, Courier, Courier New, or Arial.
The recommended page limit does not apply to the cover sheet; the budget section; including the budget narrative; the assurances and certifications or the one-page abstract. However, the recommended page limit does apply to all of the application narrative. Please include a separate heading when responding to the absolute priority.
1.
(a)
(1) The Secretary considers the need for the proposed project.
(2) In determining the need for the proposed project, the Secretary considers the following factors:
(i) The extent to which the proposed project demonstrates the magnitude of the need for the services to be provided or the activities to be carried out by the proposed project (5 points);
(ii) The extent to which the proposed project will provide support, resources, or services; or otherwise address the needs of the target population, including addressing the needs of underserved populations most affected by the issue, challenge, or opportunity, to be addressed by the proposed project and close gaps in educational opportunity. (5 points)
(b)
(1) The Secretary considers the significance of the proposed project.
(2) In determining the significance of the proposed project, the Secretary considers the following factors:
(i) The importance or magnitude of the results or outcomes likely to be attained by the proposed project, especially improvements in employment, independent living services, or both, as appropriate. (10 points)
(ii) The extent to which the proposed project involves the development or demonstration of innovative and effective strategies that build on, or are alternatives to, existing strategies. (5 points)
(c)
(1) The Secretary considers the quality of the design of the proposed project.
(2) In determining the quality of the design of the proposed project, the Secretary considers the following factors:
(i) The extent to which the proposed project demonstrates that it is designed to build capacity and yield sustainable results that will extend beyond the project period. (5 points)
(ii) The extent to which the design of the proposed project reflects the most recent and relevant knowledge and practices from research and effective practice. (5 points)
(iii) The extent to which the design of the proposed project includes a thorough, high-quality review of the relevant literature, a high-quality plan for project implementation, and the use of appropriate methodological tools to enable successful achievement of project objectives. (5 points)
(iv) The extent to which performance feedback and formative data are integral to the design of the proposed project and will be used to inform continuous improvement. (5 points)
(v) The extent to which the training or professional development services to be provided by the proposed project are of sufficient quality, intensity, and duration to build recipient and project capacity in ways that lead to improvements in practice among the recipients of those services. (5 points)
(vi) The likelihood that the services to be provided by the proposed project will lead to meaningful improvements in the skills and competencies necessary to gain employment in high-quality jobs, careers, and industries or build capacity for independent living. (10 points)
(vii) The extent to which the services to be provided by the proposed project involve the use of efficient strategies, including the use of technology, as appropriate and the leveraging of non-project resources. (5 points)
(viii) The extent to which the project director or principal investigator, when hired, has the qualifications required for the project, including formal training or work experience in fields related to the objectives of the project and experience in designing, managing, or implementing similar projects for the target population to be served by the project. (5 points)
(d)
(1) The Secretary considers the adequacy of resources for the proposed project.
(2) In determining the adequacy of resources for the proposed project, the Secretary considers one or more of the following factors:
(i) The adequacy of support for the project, including facilities, equipment, supplies, and other resources, from the applicant or the lead applicant organization. (5 points)
(ii) The relevance and demonstrated commitment of each partner in the proposed project to the implementation and success of the project. (5 points)
(iii) The extent to which the budget is adequate to support the proposed project and the costs are reasonable in relation to the objectives, design, and potential significance of the proposed project. (5 points)
(e)
(1) The Secretary considers the quality of the evaluation or other evidence-building of the proposed project.
(2) In determining the quality of the evaluation or other evidence-building, the Secretary considers one or more of the following factors:
(i) The extent to which the methods of evaluation or other evidence-building are thorough, feasible, relevant, and appropriate to the goals, objectives, and outcomes of the proposed project. (5 points)
(ii) The extent to which the methods of evaluation or other evidence-building include the use of objective performance measures that are clearly related to the intended outcomes of the project and will produce quality data that are quantitative and qualitative. (5 points)
(iii) The extent to which the evaluation will provide guidance about effective strategies suitable for replication or testing and potential implementation in other settings. (5 points)
2.
In addition, in making a competitive grant award, the Secretary requires various assurances including those applicable to Federal civil rights laws that prohibit discrimination in programs or activities receiving Federal financial assistance from the Department of Education (34 CFR 100.4, 104.5, 106.4, 108.8, and 110.23).
For this competition, a panel of non-Federal reviewers will review each application in accordance with the selection criteria in 34 CFR 75.210. The individual scores of the reviewers will be added and the sum divided by the number of reviewers to determine the peer review score received in the review process.
In a tie-breaking situation under this program, preference will be given to the applicant with the highest score under “Quality of the Project Design” criterion. If there is still a tie after implementing the first tie-breaker, preference will be given to the applicant with the highest score under the “Quality of the Management Plan”
3.
4.
Please note that, if the total value of your currently active grants, cooperative agreements, and procurement contracts from the Federal Government exceeds $10,000,000, the reporting requirements in 2 CFR part 200, Appendix XII, require you to report certain integrity information to FAPIIS semiannually. Please review the requirements in 2 CFR part 200, Appendix XII, if this grant plus all the other Federal funds you receive exceed $10,000,000.
5.
(a) Selecting recipients most likely to be successful in delivering results based on the program objectives through an objective process of evaluating Federal award application (2 CFR 200.205);
(b) Prohibiting the purchase of certain telecommunication and video surveillance services or equipment in alignment with section 889 of the National Defense Authorization Act of 2019 (Pub. L. 115-232) (2 CFR 200.16);
(c) Providing a preference, to the extent permitted by law, to maximize use of goods, products, and materials produced in the United States (2 CFR 200.322); and
(d) Terminating agreements in whole or in part pursuant to the terms and conditions of the Federal award, including, to the extent authorized by law, if an award no longer effectuates the program goals and agency priorities (2 CFR 200.340).
1.
If your application is not evaluated or not selected for funding, we notify you.
2.
We reference the regulations outlining the terms and conditions of an award in the
3.
Additionally, a grantee or subgrantee that is awarded competitive grant funds must have a plan to disseminate these public grant deliverables. This dissemination plan can be developed and submitted after your application has been reviewed and selected for funding. For additional information on the open licensing requirements please refer to 2 CFR 3474.20.
4.
(b) At the end of your project period, you must submit a final performance report, including financial information, as directed by the Secretary. If you receive a multiyear award, you must submit an annual performance report that provides the most current performance and financial expenditure information as directed by the Secretary under 34 CFR 75.118. The Secretary may also require more frequent performance reports under 34 CFR 75.720(c). For specific requirements on reporting, please go to
(c) Under 34 CFR 75.250 (b), the Secretary may provide a grantee with additional funding for data collection analysis and reporting. In this case the Secretary establishes a data collection period.
5.
Additionally, grantees will be required to participate in evaluation activities conducted by the coordinating center established under section 777(b) of the HEA. As part of these reports and evaluation activities, grantees will be expected to work closely with the coordinating center to develop performance measures most closely aligned with activities that promote the successful transition of students with disabilities into higher education. Grantees will be asked to provide to the coordinating center information such as: (1) a description of the population of students targeted to receive assistance under the grant; (2) evidence of academic and social inclusion of students with intellectual disabilities in academic courses, extracurricular activities, and other aspects of the IHE's regular postsecondary program; (3) a description of how the model program addresses individualized student needs and improvement through person-centered planning, academic enrichment, socialization, independent living skills, and integrated work experiences and career skills; (4) a description of how the model program's partnership with one or more LEAs supports students with intellectual disabilities participating in the model program who are still eligible for funds under the IDEA; (5) plans for program sustainability beyond the grant period; (6) a detailed description of the credential offered to students with intellectual disabilities; (7) data regarding the change in enrollment of students with intellectual disabilities at the IHE; (8) data regarding persistence and completion of students with intellectual disabilities; and (9) a detailed description of measurable goals for the individual project, planned methods of achieving those goals, and progress towards meeting the goals.
6.
In making a continuation award, the Secretary also considers whether the grantee is operating in compliance with the assurances in its approved application, including those applicable to Federal civil rights laws that prohibit discrimination in programs or activities receiving Federal financial assistance from the Department (34 CFR 100.4, 104.5, 106.4, 108.8, and 110.23).
You may also access Department documents published in the
This document of the U.S. Department of Education was signed on July 9, 2025, by Christopher J. McCaghren, ED.D,
Office of Postsecondary Education, Department of Education.
Notice.
The Department of Education (Department) is issuing a notice inviting applications for new awards for fiscal year (FY) 2025 for the Alaska Native and Native Hawaiian-Serving Institutions (ANNH) Program, Part A Grants.
For the addresses for obtaining and submitting an application, please refer to our Common Instructions for Applicants to Department of Education Discretionary Grant Programs, published in the
Robyn Wood, U.S. Department of Education, 400 Maryland Avenue SW, 5th Floor, Washington, DC 20202-4260. Telephone: (202) 987-1577. Email:
If you are deaf, hard of hearing, or have a speech disability and wish to access telecommunications relay services, please dial 7-1-1.
The priorities are:
Expand access to postsecondary distance education, competency-based or skills-based education, pre-apprenticeships, apprenticeships, part-time coursework and career preparation, work-based learning or shortened time-to-degree models, and programs or coursework that lead to high-wage, high-skilled, or in-demand, industry recognized credentials.
Computer science often includes computer programming or coding as a tool to create software, including applications, games, websites, and tools to manage or manipulate data; or development and management of computer hardware and the other electronics related to sharing, securing, and using digital information. In addition to coding, the expanding field of computer science emphasizes computational thinking and interdisciplinary problem-solving to equip students with the skills and abilities necessary to apply computation to the digital world.
Computer science does not involve using computers for everyday tasks, such as browsing the internet or using tools like word processors, spreadsheets, or presentation software. Instead, it focuses on creating and developing technology, not just utilizing it.
(1) Is an eligible institution under section 1058(b) of title 20; and
(2) At the time of application, has an enrollment of undergraduate students that is at least 20 percent Alaska Native students. (20 U.S.C. 1059d)
(1) A citizen of the United States; and
(2) A descendant of the aboriginal people who, prior to 1778, occupied and exercised sovereignty in the area that now comprises the State of Hawaii, as evidenced by—
(i) Genealogical records;
(ii) Kupuna (elders) or Kamaaina (long-term community residents) verification; or
(iii) Certified birth records. (20 U.S.C. 7517)
(1) Is an eligible institution under section 1058(b) of title 20; and
(2) At the time of application, has an enrollment of undergraduate students that is at least 10 percent Native Hawaiian students. (20 U.S.C. 1059d)
Contingent upon the availability of funds and the quality of applications, we may make additional awards in subsequent years from the list of unfunded applications from this competition.
1. a.
(i) Be accredited or preaccredited by a nationally recognized accrediting agency or association that the Secretary has determined to be a reliable authority as to the quality of education or training offered;
(ii) Be legally authorized by the State in which it is located to be a junior or community college or to provide an educational program for which it awards a bachelor's degree;
(iii) Demonstrate that it (1) has an enrollment of needy students as described in 34 CFR 607.3; and (2) has low average education and general expenditures per full-time equivalent (FTE) undergraduate student as described in 34 CFR 607.4.
To qualify as an eligible institution under the ANNH Program at the time of submission of their applications, an institution also must—
Certify that an Alaska Native-serving institution has an enrollment of undergraduate students that are at least 20 percent Alaska Native students or that a Native Hawaiian-serving institution has an enrollment of undergraduate students that is at least 10 percent Native Hawaiian students. An assurance form, which is included in the application materials for this competition, must be signed by an official for the applicant and submitted with this application.
An eligible IHE may only submit one Individual Development Grant application. However, an eligible IHE may submit one application for an Individual Development Grant and a Cooperative Arrangement Development Grant. Both may be awarded in the same fiscal year. A grantee with an Individual Development Grant or a Cooperative Arrangement Development Grant may be a partner in one or more Cooperative Arrangement Development Grants. The lead institution in a Cooperative Arrangement Development Grant must be an eligible institution. Partners are not required to be eligible institutions. Current program grantees who have an Individual Development Grant under ANNH, Part A may not apply for another Individual Development Grant in this competition unless their grant ends on September 30, 2025.
b.
An eligible HSI that is not a current grantee under the above-cited programs may apply for a FY 2025 grant under all title III, part A programs for which it is eligible, as well as receive consideration for a grant under the HSI program. However, a successful applicant may receive only one grant, as described in 34 CFR 607.2(g)(1).
2. a.
b.
c.
d.
3.
4.
Applicants must include a logic model (as defined in 34 CFR 77.1(c)) or other conceptual framework.
3.
4.
• A “page” is 8.5″ x 11″, on one side only, with 1″ margins at the top, bottom, and both sides.
• Double-space (no more than three lines per vertical inch) all text in the application narrative, including titles, headings, footnotes, quotations, references, and captions, as well as all text in charts, tables, figures, and graphs.
• Use a font that is either 12 point or larger and no smaller than 10 pitch (characters per inch).
• Use one of the following fonts: Times New Roman, Courier, Courier New, or Arial.
The recommended page limit does not apply to the cover sheet; the budget section, including the narrative budget justification; the assurances and certifications; or the one-page abstract and the bibliography. However, the recommended page limit does apply to all of the application narrative.
1.
(a)
The extent to which—
(1) The strengths, weaknesses, and significant problems of the institution's academic programs, institutional management, and fiscal stability are clearly and comprehensively analyzed and result from a process that involved major constituencies of the institution. (5 points)
(2) The goals for the institution's academic programs, institutional management, and fiscal stability are realistic and based on comprehensive analysis. (5 points)
(3) The objectives stated in the plan are measurable, related to institutional goals, and, if achieved, will contribute to the growth and self-sufficiency of the institution. (5 points)
(4) The plan clearly and comprehensively describes the methods and resources the institution will use to institutionalize practice and improvements developed under the proposed project, including, in particular, how operational costs for personnel, maintenance, and upgrades of equipment will be paid with institutional resources. (5 points)
(b)
The extent to which the objectives for each activity are—
(1) Realistic and defined in terms of measurable results. (8 points)
(2) Directly related to the problems to be solved and to the goals of the comprehensive development plan. (8 points)
(c)
The extent to which—
(1) The implementation strategy for each activity is comprehensive. (4 points)
(2) The rationale for the implementation strategy for each activity is clearly described and is supported by the results of relevant studies or projects. (4 points)
(3) The timetable for each activity is realistic and likely to be attained. (4 points)
(4) The quality of the logic model or other conceptual framework underlying the proposed project, including how inputs are related to outcomes. (4 points)
(d)
The extent to which—
(1) The past experience and training of key professional personnel are directly related to the stated activity objectives. (4 points)
(2) The time commitment of key personnel is realistic. (4 points)
(e)
The extent to which—
(1) Procedures for managing the project are likely to ensure efficient and effective project implementation. (8 points)
(2) The project coordinator and activity directors have sufficient authority to conduct the project effectively, including access to the president or chief executive officer. (8 points)
(f)
The extent to which—
(1) The data elements and the data collection procedures are clearly described and appropriate to measure the attainment of activity objectives and to measure the success of the project in achieving the goals of the comprehensive development plan. (8 points)
(2) The data analysis procedures are clearly described and are likely to produce formative and summative results on attaining activity objectives and measuring the success of the project on achieving the goals of the comprehensive development plan. (8 points)
(g)
The extent to which the proposed costs are necessary and reasonable in relation to the project's objectives and scope.
2.
In addition, in making a competitive grant award, the Secretary requires various assurances, including those applicable to Federal civil rights laws that prohibit discrimination in programs or activities receiving Federal financial assistance from the Department (34 CFR 100.4, 104.5, 106.4, 108.8, and 110.23).
A panel of three non-Federal reviewers will review and score each application in accordance with the selection criteria. The applications will be put in a rank order based on the average scores received from the peer review.
In tie-breaking situations for development grants, under 34 CFR 607.23(b), we must award additional tie-breaker points to tied applications in the following three areas. We award one additional point to an application from an IHE that has an endowment fund of which the current market value, per full-time equivalent enrolled student, is less than the average current market value of the endowment funds, per FTE enrolled student, at comparable type institutions that offer similar instruction. We award one additional point to an application from an IHE that has expenditures for library materials per FTE enrolled student that are less than the average expenditure for library materials per FTE enrolled student at similar type institutions. We also add one additional point to an application from an IHE that proposes to carry out one or more of the following activities—
(1) Faculty development;
(2) Funds and administrative management;
(3) Development and improvement of academic programs;
(4) Acquisition of equipment for use in strengthening management and academic programs;
(5) Joint use of facilities; and
(6) Student services.
For the purpose of these funding considerations, we use 2022-2023 data.
If a tie remains after applying the tie-breaker mechanism above, priority will be given to applicants that have the lowest endowment values per FTE enrolled student.
3.
4.
Please note that, if the total value of your currently active grants, cooperative agreements, and procurement contracts from the Federal Government exceeds $10,000,000, the reporting requirements in 2 CFR part 200, Appendix XII, require you to report certain integrity information to FAPIIS semiannually. Please review the requirements in 2 CFR part 200, Appendix XII, if this grant plus all the other Federal funds you receive exceed $10,000,000.
5.
(a) Selecting recipients most likely to be successful in delivering results based on the program objectives through an objective process of evaluating Federal award applications (2 CFR 200.205);
(b) Prohibiting the purchase of certain telecommunication and video surveillance services or equipment in alignment with section 889 of the National Defense Authorization Act of 2019 (Pub. L. 115-232) (2 CFR 200.216);
(c) Providing a preference, to the extent permitted by law, to maximize
(d) Terminating agreements in whole or in part to the greatest extent authorized by law if an award no longer effectuates the program goals or agency priorities (2 CFR 200.340).
1.
If your application is not evaluated or not selected for funding, we notify you.
2.
We reference the regulations outlining the terms and conditions of an award in the
3.
4.
(b) At the end of your project period, you must submit a final performance report, including financial information, as directed by the Secretary. If you receive a multiyear award, you must submit an annual performance report that provides the most current performance and financial expenditure information as directed by the Secretary under 34 CFR 75.118. The Secretary may also require more frequent performance reports under 34 CFR 75.720(c). For specific requirements on reporting, please go to
5.
(a) The percentage change, over the 5-year period, of the number of full-time degree-seeking undergraduates enrolled at Alaska Native and Native Hawaiian-Serving Institutions (
(b) The percentage of first-time, full-time degree-seeking undergraduate students at 4-year Alaska Native and Native Hawaiian-Serving Institutions who were in their first year of postsecondary enrollment in the previous year and are enrolled in the current year at the same Alaska Native and Native Hawaiian-Serving Institution;
(c) The percentage of first-time, full-time degree-seeking undergraduate students at 2-year Alaska Native and Native Hawaiian-Serving Institutions who were in their first year of postsecondary enrollment in the previous year and are enrolled in the current year at the same Alaska Native and Native Hawaiian-Serving Institution;
(d) The percentage of first-time, full-time degree-seeking undergraduate students enrolled at 4-year Alaska Native and Native Hawaiian-Serving Institutions who graduate within 6 years of enrollment; and
(e) The percentage of first-time, full-time degree-seeking undergraduate students enrolled at 2-year Alaska Native and Native Hawaiian-Serving Institutions who graduate within 3 years of enrollment.
6.
In making a continuation award, the Secretary also considers whether the grantee is operating in compliance with the assurances in its approved application, including those applicable to Federal civil rights laws that prohibit discrimination in programs or activities receiving Federal financial assistance from the Department (34 CFR 100.4, 104.5, 106.4, 108.8, and 110.23).
You may also access documents of the Department published in the
This document of the U.S. Department of Education was signed on July, 9 2025, by Christopher J. McCaghren, ED.D,
Election Assistance Commission.
Sunshine Act notice; notice of public meeting.
Public Meeting: U.S. Election Assistance Commission Technical Guidelines Development Committee Virtual Meeting.
Wednesday, July 30, 2025; 1-4 p.m. ET.
The virtual meeting is open to the public and will be livestreamed on the U.S. Election Assistance Commission YouTube Channel:
Kristen Muthig, Telephone: (202) 897-9285, Email:
The TGDC was established in accordance with the requirements of Section 221 of the Help America Vote Act of 2002 (Pub. L. 107-252, codified at 52 U.S.C. 20961), to act in the public interest to assist the Executive Director of the EAC in the development of Voluntary Voting System Guidelines.
Office of Environmental Management, Department of Energy.
Notice of acceptance of Title X claims during fiscal year (FY) 2025.
This Notice announces the Department of Energy's (DOE) acceptance of claims in FY 2025 from eligible uranium and thorium processing site licensees for reimbursement under Title X of the Energy Policy Act of 1992. The FY 2025 DOE Office of Environmental Management's Congressional Budget Request included $5 million for the Title X Uranium and Thorium Reimbursement Program; however, the Congressional appropriation for FY 2025 is zero dollars ($0.00). Thus, the claims received in FY 2024 and claims received in FY 2025 cannot be reimbursed until there is a new appropriation from Congress.
The closing date for the submission of FY 2025 Title X claims is October 1, 2025. DOE will review claims for eligibility and claims will be processed for payment together with any eligible unpaid approved claim balances from prior years, based on availability of funds from future congressional appropriations. If the total approved claim amounts exceed the available funding, the approved claim amounts will be reimbursed on a prorated basis. All reimbursements are subject to the availability of funds from congressional appropriations.
Claims must be submitted by certified or registered mail, return receipt requested, to Mary Young, U.S. DOE Department of Energy, Office of Legacy Management, 2597 Legacy Way, Grand Junction, Colorado 81503. Two copies of the claim should be included with each submission. In addition to the mailed hardcopies, claims may be submitted electronically
Amie Robinson, Title X Program Lead at (240) 243-5550 or email:
DOE published a final rule under 10 CFR part 765 in the
This document of the Department of Energy was signed on July 9, 2025, by Amie Robinson, Office of Waste Disposal, Office of Environmental Management, pursuant to delegated authority from the Secretary of Energy. That document with the original signature and date is maintained by
The staff of the Federal Energy Regulatory Commission (FERC or Commission) will prepare an environmental document that will discuss the environmental impacts of the Wild Trail Project involving construction and operation of facilities by Northwest Pipeline, LLC (Northwest) in Dagget County, Utah. The Commission will use this environmental document in its decision-making process to determine whether the project is in the public convenience and necessity.
This notice announces the opening of the scoping process the Commission will use to gather input from the public and interested agencies regarding the project. As part of the National Environmental Policy Act (NEPA) review process, the Commission takes into account concerns the public may have about proposals and the environmental impacts that could result from its action whenever it considers the issuance of a Certificate of Public Convenience and Necessity. This gathering of public input is referred to as “scoping.” The main goal of the scoping process is to focus the analysis in the environmental document on the important environmental issues. Additional information about the Commission's NEPA process is described below in the
By this notice, the Commission requests public comments on the scope of issues to address in the environmental document. To ensure that your comments are timely and properly recorded, please submit your comments so that the Commission receives them in Washington, DC on or before 5:00 p.m. Eastern Time on August 8, 2025. Comments may be submitted in written form. Further details on how to submit comments are provided in the
Your comments should focus on the potential environmental effects, reasonable alternatives, and measures to avoid or lessen environmental impacts. Your input will help the Commission staff determine what issues they need to evaluate in the environmental document. Commission staff will consider all written comments during the preparation of the environmental document.
If you submitted comments on this project to the Commission before the opening of this docket on May 21, 2025, you will need to file those comments in Docket No. CP25-497-000 to ensure they are considered as part of this proceeding.
This notice is being sent to the Commission's current environmental mailing list for this project. State and local government representatives should notify their constituents of this proposed project and encourage them to comment on their areas of concern.
Northwest provided landowners with a fact sheet prepared by the FERC entitled “An Interstate Natural Gas Facility On My Land? What Do I Need To Know?” which addresses typically asked questions, including the use of eminent domain and how to participate in the Commission's proceedings. This fact sheet along with other landowner topics of interest are available for viewing on the FERC website (
There are three methods you can use to submit your comments to the Commission. Please carefully follow these instructions so that your comments are properly recorded. The Commission encourages electronic filing of comments and has staff available to assist you at (866) 208-3676 or
(1) You can file your comments electronically using the eComment feature, which is located on the Commission's website (
(2) You can file your comments electronically by using the eFiling feature, which is located on the Commission's website (
(3) You can file a paper copy of your comments by mailing them to the Commission. Be sure to reference the project docket number (CP25-497-000) on your letter. Submissions sent via the U.S. Postal Service must be addressed to: Debbie-Anne A. Reese, Secretary, Federal Energy Regulatory Commission, 888 First Street NE, Room 1A, Washington, DC 20426. Submissions sent via any other carrier must be addressed to: Debbie-Anne A. Reese, Secretary, Federal Energy Regulatory Commission, 12225 Wilkins Avenue, Rockville, MD 20852.
Additionally, the Commission offers a free service called eSubscription which makes it easy to stay informed of all issuances and submittals regarding the dockets/projects to which you subscribe. These instant email notifications are the fastest way to receive notification and provide a link to the document files which can reduce the amount of time you spend researching proceedings. Go to
The Commission's Office of Public Participation (OPP) supports meaningful public engagement and participation in Commission proceedings. OPP can help members of the public, including landowners, community organizations, Tribal members and others, access publicly available information and navigate Commission processes. For public inquiries and assistance with making filings such as interventions, comments, or requests for rehearing, the public is encouraged to contact OPP at (202) 502-6595 or
Northwest proposes to construct and operate the Daggett Compressor Station, adjacent to the existing Clay Basin Meter Station in Daggett County, Utah. The Wild Trail Project would provide an additional 57,955 dekatherms a day of northbound firm transportation service from the existing Wild Horse
The Wild Trail Project would consist of the following facilities:
• the greenfield Daggett Compressor Station, adjacent to existing Clay Basin Meter Station. The compressor station would consist of one unit scrubber, a station power distribution building, unitized power buildings, 500-kilowatt emergency generator, oily water sump tank and pump, engine/compressor lube oil storage, hydrocarbon liquid storage, and a new instrument air package with receiver and other items;
• the addition of one low nitrogen oxides (NO
• installation of 24-inch-diameter suction and discharge yard piping to interconnect the Daggett Compressor Station to Northwest's existing 26-inch-diameter Northwest Pipeline;
• installation of a 140-foot communication tower; and
• minor modifications to the existing Clay Basin Meter Station.
The general location of the project facilities is shown in appendix 1.
Construction of the proposed facilities would occur immediately adjacent to the existing Clay Basin Meter Station and would require approximately 20.25 acres of land. The 20.25 acres includes 15.86 acres that encompasses the proposed Daggett Compressor Station located on land managed by the U.S. Bureau of Land Management, as well as approximately 4.39 acres of temporary workspace located within the Ashley National Forest, managed by the U.S. Forest Service. Following construction, the 4.39 acres of U.S. Forest Service land would be restored to pre-construction conditions, as well as the 9.09 acres of construction workspace areas, leaving 6.77 acres of land converted to natural gas use for the Daggett Compressor Station.
Any environmental document issued by the Commission will discuss impacts that could occur as a result of the construction and operation of the proposed project under the relevant general resource areas:
• geology and soils;
• water resources and wetlands;
• vegetation and wildlife;
• threatened and endangered species;
• cultural resources;
• land use;
• socioeconomics;
• air quality and noise; and
• reliability and safety.
Commission staff will also evaluate reasonable alternatives to the proposed project or portions of the project and make recommendations on how to lessen or avoid impacts on the various resource areas. Your comments will help Commission staff identify and focus on the issues that might have an effect on the human environment and potentially eliminate others from further study and discussion in the environmental document.
Following this scoping period, Commission staff will determine whether to prepare an Environmental Assessment (EA) or an Environmental Impact Statement (EIS). The EA or the EIS will present Commission staff's independent analysis of the issues. If Commission staff prepares an EA, a
With this notice, the Commission is asking agencies with jurisdiction by law and/or special expertise with respect to the environmental issues of this project to formally cooperate in the preparation of the environmental document.
In accordance with the Advisory Council on Historic Preservation's implementing regulations for section 106 of the National Historic Preservation Act, the Commission is using this notice to initiate consultation with the Utah State Historic Preservation Office, and to solicit their views and those of other government agencies, interested Indian tribes, and the public on the project's potential effects on historic properties.
The environmental mailing list includes federal, state, and local government representatives and agencies; elected officials; environmental and public interest groups; Native American Tribes; other interested parties; and local libraries and newspapers. This list also includes all affected landowners (as defined in the Commission's regulations) who are potential right-of-way grantors, whose property may be used temporarily for project purposes, or who own homes within certain distances of aboveground facilities, and anyone who submits comments on the project and includes a mailing address with their comments.
If you need to make changes to your name/address, or if you would like to remove your name from the mailing list, please complete one of the following steps:
(1) Send an email to
(2) Return the attached “Mailing List Update Form” (appendix 2).
Additional information about the project is available from the Commission's Office of External Affairs, at (866) 208-FERC, or on the FERC website at
Public sessions or site visits will be posted on the Commission's calendar located at
a.
b.
c.
d.
e.
f.
g.
h.
i.
j. Southeast Alaska Power Agency filed its request to use the Traditional Licensing Process on May 13, 2025. Southeast Alaska Power Agency provided public notice of its request on May 7, 2025. In a letter dated July 8, 2025, the Director of the Division of Hydropower Licensing approved Southeast Alaska Power Agency' request to use the Traditional Licensing Process.
k. With this notice, we are initiating informal consultation with the U.S. Fish and Wildlife Service and the National Marine Fisheries Service under section 7 of the Endangered Species Act and the joint agency regulations thereunder at 50 CFR, Part 402; and the National Marine Fisheries Service under section 305(b) of the Magnuson-Stevens Fishery Conservation and Management Act and implementing regulations at 50 CFR 600.920. We are also initiating consultation with the Alaska State Historic Preservation Officer, as required by section 106, National Historic Preservation Act, and the implementing regulations of the Advisory Council on Historic Preservation at 36 CFR 800.2.
l. With this notice, we are designating the Southeast Alaska Power Agency as the Commission's non-federal representative for carrying out informal consultation pursuant to section 7 of the Endangered Species Act and section 305(b) of the Magnuson-Stevens Fishery Conservation and Management Act; and consultation pursuant to section 106 of the National Historic Preservation Act.
m. Southeast Alaska Power Agency filed a Pre-Application Document (PAD; including a proposed process plan and schedule) with the Commission, pursuant to 18 CFR 5.6 of the Commission's regulations.
n. A copy of the PAD may be viewed and/or printed on the Commission's website
You may register online at
o. The licensee states its unequivocal intent to submit an application for a new license for Project No. 2911-045. Pursuant to 18 CFR 16.8, 16.9, and 16.10 each application for a new license and any competing license applications must be filed with the Commission at least 24 months prior to the expiration of the existing license. All applications for license for this project must be filed by June 30, 2028.
p. The Commission's Office of Public Participation (OPP) supports meaningful public engagement and participation in Commission proceedings. OPP can help members of the public, including landowners, environmental justice communities, Tribal members and others, access publicly available information and navigate Commission processes. For public inquiries and assistance with making filings such as interventions, comments, or requests for rehearing, the public is encouraged to contact OPP at (202) 502-6595 or
Take notice that the Commission received the following exempt wholesale generator filings:
Take notice that the Commission received the following Complaints and Compliance filings in EL Dockets:
Take notice that the Commission received the following electric rate filings:
The filings are accessible in the Commission's eLibrary system (
Any person desiring to intervene, to protest, or to answer a complaint in any of the above proceedings must file in accordance with Rules 211, 214, or 206 of the Commission's Regulations (18 CFR 385.211, 385.214, or 385.206) on or before 5:00 p.m. Eastern time on the specified comment date. Protests may be considered, but intervention is necessary to become a party to the proceeding.
eFiling is encouraged. More detailed information relating to filing requirements, interventions, protests, service, and qualifying facilities filings can be found at:
Federal Accounting Standards Advisory Board.
Notice.
Notice is hereby given that the Appointments Panel, a subcommittee of the Federal Accounting Standards Advisory Board (FASAB), will hold meetings on July 30, 2025. The Appointments Panel makes recommendations regarding appointments for non-federal member positions.
Ms. Monica R. Valentine, Executive Director, 441 G Street NW, Washington, DC 20548, or call (202) 512-7350.
The meetings are closed to the public. The reason for the closure is that matters covered by 5 U.S.C. 552b(c)(2) and (6) will be discussed. Any such discussions will involve matters that relate solely to internal personnel rules and practices of the sponsor agencies and the disclosure of information of a personal nature where disclosure would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 10(d) of the Federal Advisory Committee Act (FACA), 5 U.S.C. 1009(d), portions of advisory committee meetings may be closed to the public where the head of the agency to which the advisory committee reports determines that such portion of such meeting may be closed to the public in accordance with subsection (c) of section 552b of title 5, United States Code. The determination shall be in writing and shall contain the reasons for the determination. A determination has been made in writing by the U.S. Government Accountability Office, the U.S. Department of the Treasury, and the Office of Management and Budget, as required by section 10(d) of FACA, that such portions of the meetings may be closed to the public in accordance with subsection (c) of section 552b of title 5, United States Code.
Federal Communications Commission.
Notice and request for comments.
As part of its continuing effort to reduce paperwork burdens, as required by the Paperwork Reduction Act (PRA) of 1995, the Federal Communications Commission (FCC or the Commission) invites the general public and other Federal Agencies to take this opportunity to comment on the following information collection. Pursuant to the Small Business Paperwork Relief Act of 2002, the FCC seeks specific comment on how it might further reduce the information collection burden for small business concerns with fewer than 25 employees.
Written comments and recommendations for the proposed information collection should be submitted on or before August 13, 2025.
Comments should be sent to
For additional information or copies of the information collection, contact Cathy Williams at (202) 418-2918. To view a copy of this information collection request (ICR) submitted to OMB: (1) go to the web page
The Commission may not conduct or sponsor a collection of information unless it displays a currently valid Office of Management and Budget (OMB) control number. No person shall be subject to any penalty for failing to comply with a collection of information subject to the PRA that does not display a valid OMB control number.
As part of its continuing effort to reduce paperwork burdens, as required by the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C. 3501-3520), the FCC invited the general public and other Federal Agencies to take this opportunity to comment on the following information collection. Comments are requested concerning: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; (b) the accuracy of the Commission's burden estimates; (c) ways to enhance the quality, utility, and clarity of the information collected; and (d) ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology. Pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), the FCC seeks specific comment on how it might “further reduce the information collection burden for small business concerns with fewer than 25 employees.”
Commercial full-power and Class A television stations are required to complete FCC Form 2100, Schedule H within 30 days after the end of each calendar year and file the form with the Commission. The Commission places the form in the station's online public inspection file maintained on the Commission's database (
On July 10, 2019, the Commission adopted a Report and Order in MB Docket Nos. 18-202 and
The FCC Form 602 is comprised of the Main Form containing information regarding the filer and the Schedule A is used to collect ownership data pertaining to the Disclosable Interest Holder(s). Each Disclosable Interest Holder will have a separate Schedule A.
Thus, a filer will submit its FCC Form 602 with multiple copies of Schedule A, as necessary, to list each Disclosable Interest Holder and associated information.
Federal Communications Commission.
Notice and request for comments.
As part of its continuing effort to reduce paperwork burdens, and as required by the Paperwork Reduction Act (PRA) of 1995, the Federal Communications Commission (FCC or Commission) invites the general public and other Federal agencies to take this opportunity to comment on the following information collections. Comments are requested concerning: whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; the accuracy of the Commission's burden estimate; ways to enhance the quality, utility, and clarity of the information collected; ways to minimize the burden of the collection of information on the respondents, including the use of automated collection burden on small business concerns with fewer than 25 employees. The FCC may not conduct or sponsor a collection of information unless it displays a currently valid OMB control number. No person shall be subject to any penalty for failing to comply with a collection of information subject to the PRA that does not display a valid OMB control number.
Written PRA comments should be submitted on or before September 12, 2025. If you anticipate that you will be submitting comments but find it difficult to do so within the period of time allowed by this notice, you should advise the contact listed below as soon as possible.
Direct all PRA comments to Cathy Williams, FCC, via email to
For additional information about the information collection, contact Cathy Williams at (202) 418-2918.
10 a.m., Thursday, July 24, 2025.
The Richard V. Backley Hearing Room, Room 511, 1331 Pennsylvania Avenue NW, Suite 504 North, Washington, DC 20004 (enter from F Street entrance).
Open.
The Commission will consider and act upon the following in open session:
Any person attending this meeting who requires special accessibility features and/or auxiliary aids, such as sign language interpreters, must inform the Commission in advance of those needs. Subject to 29 CFR 2706.150(a)(3) and 2706.160(d).
Emogene Johnson (202) 434-9935/(202) 708-9300 for TDD Relay/1-800-877-8339 for toll free.
July 22, 2025 at 10:00 a.m. ET.
Telephonic. Dial-in (listen only) information: Number: 1-202-599-1426, Code: 705 527 914#; or via web:
James Kaplan, Director, Office of External Affairs, (202) 864-7150.
Centers for Disease Control and Prevention (CDC), Department of Health and Human Services (HHS).
Notice with comment period.
The Centers for Disease Control and Prevention (CDC), as part of its continuing effort to reduce public burden and maximize the utility of government information, invites the general public and other federal agencies the opportunity to comment on a continuing information collection, as required by the Paperwork Reduction Act of 1995. This notice invites comment on a proposed information collection project titled Emerging Infections Program (EIP). The EIP is a population-based surveillance program that collects data via active, laboratory case findings and is used for detecting, identifying, and monitoring emerging pathogens.
CDC must receive written comments on or before September 12, 2025.
You may submit comments, identified by Docket No. CDC-2025-0057 by either of the following methods:
•
•
To request more information on the proposed project or to obtain a copy of the information collection plan and instruments, contact Jeffrey M. Zirger, Information Collection Review Office, Centers for Disease Control and Prevention, 1600 Clifton Road, NE, MS H21-8, Atlanta, Georgia 30329; Telephone: 404-639-7570; Email:
Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501-3520), federal agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. In addition, the PRA also requires federal agencies to provide a 60-day notice in the
The OMB is particularly interested in comments that will help:
1. Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
2. Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
3. Enhance the quality, utility, and clarity of the information to be collected;
4. Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
5. Assess information collection costs.
Emerging Infections Program (OMB Control No. 0920-0978, Exp. 9/30/2027)—Revision—National Center for Emerging and Zoonotic Infectious Diseases (NCEZID), Centers for Disease Control and Prevention (CDC).
The Emerging Infections Programs (EIPs) are population-based centers of excellence established through a network of state health departments collaborating with academic institutions; local health departments; public health and clinical laboratories; infection control professionals; and healthcare providers. EIPs assist in local, state, and national efforts to prevent, control, and monitor the public health impact of infectious diseases.
Activities of the EIPs fall into the following general categories: (1) active surveillance; (2) applied public health epidemiologic and laboratory activities; (3) implementation and evaluation of pilot prevention/intervention projects; and (4) flexible response to public health emergencies. Activities of the EIPs are designed to: (1) address issues that the EIP network is particularly suited to investigate; (2) maintain sufficient flexibility for emergency response and new problems as they arise; (3) develop and evaluate public health interventions to inform public health policy and treatment guidelines; (4) incorporate training as a key function; and (5) prioritize projects that lead directly to the prevention of disease.
A Revision is being submitted to make existing collection instruments clearer, consolidate forms and to add new forms. These forms will allow the EIP to better detect, identify, track changes in laboratory testing methodology, gather information about laboratory utilization in the EIP catchment area to ensure that all cases are being captured, and survey EIP staff to evaluate program quality.
CDC requests OMB approval for an estimated 40,731 burden hours. There is no cost to respondents other than their time to participate.
Centers for Disease Control and Prevention (CDC), Department of Health and Human Services (HHS).
Notice with comment period.
The Centers for Disease Control and Prevention (CDC), as part of its continuing effort to reduce public burden and maximize the utility of government information, invites the general public and other federal agencies the opportunity to comment on a continuing information collection, as required by the Paperwork Reduction Act of 1995. This notice invites comment on a proposed information collection project titled Generic Clearance for CDC/ATSDR Formative Research and Tool Development. This information collection request is designed to allow CDC to conduct formative research information collection activities used to inform aspects of surveillance, communications, health promotion, and research project development.
Written comments must be received on or before September 12, 2025.
You may submit comments, identified by Docket No. CDC-2025-0058 by either of the following methods:
•
•
To request more information on the proposed project or to obtain a copy of the information collection plan and instruments, contact Jeffrey M. Zirger, Information Collection Review Office, Centers for Disease Control and Prevention, 1600 Clifton Road NE, MS H21-8, Atlanta, Georgia 30329; Telephone: 404-639-7570; Email:
Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501-3520), federal agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. In addition, the PRA also requires federal agencies to provide a 60-day notice in the
The OMB is particularly interested in comments that will help:
1. Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
2. Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
3. Enhance the quality, utility, and clarity of the information to be collected;
4. Minimize the burden of the collection of information on those who respond, including through the use of automated, electronic, mechanical, or other technological collection techniques or other forms of information technology;
5. Assess information costs.
Generic Clearance for CDC/ATSDR Formative Research and Tool Development (OMB Control No. 0920-1154, Exp. 3/31/2026)—Extension—Office of Science (OS), Centers for Disease Control and Prevention (CDC).
The Centers for Disease Control and Prevention (CDC) requests approval for an Extension of a Generic Clearance for CDC/ATSDR Formative Research and Tool Development. This information collection request is designed to allow CDC to conduct formative research information collection activities used to inform many aspects of surveillance, communications, health promotion, and research project development at CDC. Formative research is the basis for developing effective strategies including communication channels, for influencing behavior change. It helps researchers identify and understand the characteristics, interests, behaviors and needs of target populations that influence their decisions and actions.
Formative research is integral in developing programs, as well as improving existing and ongoing programs. Formative research looks at the community in which a public health intervention is being or will be implemented and helps the project staff understand the interests, attributes and needs of different populations and persons in that community. Formative research occurs before a program is designed and implemented, or while a program is being conducted.
At CDC, formative research is necessary for developing new programs or adapting programs that deal with the complexity of behaviors, social context, cultural identities, and health care that underlie the epidemiology of diseases and conditions in the U.S. CDC conducts formative research to develop public-sensitive communication messages and user-friendly tools prior to developing or recommending interventions, or care. Sometimes these studies are entirely behavioral but most often they are cycles of interviews and focus groups designed to inform the development of a product.
Products from these formative research studies will be used for prevention of disease. Findings from these studies may also be presented as evidence to disease-specific National Advisory Committees, to support revisions to recommended prevention and intervention methods, as well as new recommendations.
Much of CDC's health communication takes place within campaigns that have fairly lengthy planning periods and/or timeframes that accommodate the standard federal process for approving data collections. Short-term qualitative interviewing and cognitive research techniques have previously proven invaluable in the development of scientifically valid and population-
This request includes studies investigating the utility and acceptability of proposed sampling and recruitment methods, intervention contents and delivery, questionnaire domains, individual questions, and interactions with project staff or electronic data collection equipment. These activities will also provide information about how respondents answer questions and ways in which question response bias and error can be reduced.
This request also includes collection of information from public health programs to assess needs related to initiation of a new program activity or expansion or changes in scope or implementation of existing program activities to adapt them to current needs. The information collected will be used to advise programs and provide capacity-building assistance tailored to identify needs.
Overall, these development activities are intended to provide information that will increase the success of the surveillance or research projects through increasing response rates and decreasing response error, thereby decreasing future data collection burden to the public. The studies that will be covered under this request will include one or more of the following investigational modalities: (1) structured and qualitative interviewing for surveillance, research, interventions and material development; (2) cognitive interviewing for development of specific data collection instruments; (3) methodological research; (4) usability testing of technology-based instruments and materials; (5) field testing of new methodologies and materials; (6) investigation of mental models for health decision-making to inform health communication messages; and (7) organizational needs assessments to support development of capacity. Respondents who will participate in individual and group interviews (qualitative, cognitive, and computer assisted development activities) are selected purposively from those who respond to recruitment advertisements.
In addition to utilizing advertisements for recruitment, respondents who will participate in research on survey methods may be selected purposively or systematically from within an ongoing surveillance or research project. Participation of respondents is voluntary. CDC requests OMB approval for an estimated 20,000 annual burden hours. There is no cost to participants other than their time to participate.
Estimated Annualized Burden Hours
Centers for Medicare & Medicaid Services, Health and Human Services (HHS).
Notice.
The Centers for Medicare & Medicaid Services (CMS) is announcing an opportunity for the public to comment on CMS' intention to collect information from the public. Under the Paperwork Reduction Act of 1995 (PRA), federal agencies are required to publish notice in the
Comments must be received by September 12, 2025.
When commenting, please reference the document identifier or OMB control number. To be assured consideration, comments and recommendations must be submitted in any one of the following ways:
1.
2.
To obtain copies of a supporting statement and any related forms for the proposed collection(s) summarized in this notice, please access the CMS PRA website by copying and pasting the following web address into your web browser:
William N. Parham at (410) 786-4669.
This notice sets out a summary of the use and burden associated with the following information collections. More detailed information can be found in each collection's supporting statement and associated materials (see
Under the PRA (44 U.S.C. 3501-3520), federal agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. The term “collection of information” is defined in 44 U.S.C. 3502(3) and 5 CFR 1320.3(c) and includes agency requests or requirements that members of the public submit reports, keep records, or provide information to a third party. Section 3506(c)(2)(A) of the PRA requires federal agencies to publish a 60-day notice in the
1.
The Medicare Current Beneficiary Survey (MCBS) is the most comprehensive and complete survey available on the Medicare population and is essential in capturing information not otherwise collected through operational or administrative data on the Medicare program. The MCBS is a nationally-representative, longitudinal survey of Medicare beneficiaries that is sponsored by CMS and is directed by the Office of Enterprise Data and Analytics (OEDA). MCBS data collection is primarily conducted by phone and is supplemented with limited video interviewing or in-person visits. The survey captures beneficiary information whether aged or disabled, living in the community or facility, or serviced by managed care or fee-for-service. Data produced as part of the MCBS are enhanced with administrative data (
The MCBS continues to provide unique insight into the Medicare program and helps CMS and its external stakeholders better understand and evaluate the impact of existing programs and significant new policy initiatives. MCBS data are used to assess potential changes to the Medicare program. For example, MCBS data were instrumental in supporting the initial implementation of the Medicare prescription drug benefit and continue providing a means to evaluate prescription drug costs and out-of-pocket burden for these drugs to Medicare beneficiaries. Beginning in Fall 2026, this proposed revision to the clearance will remove questionnaire items that are no longer relevant for administration. The revisions will result in a net decrease in respondent burden.
2.
This revised demonstration helps assist in developing improved procedures for the identification, investigation, and prosecution of potential Medicare fraud. The demonstration helps make sure that payments for home health services are appropriate through either pre-claim or post payment review, thereby working towards the prevention and identification of potential fraud, waste, and abuse; the protection of Medicare Trust Funds from improper payments; and the reduction of Medicare appeals. CMS has implemented the demonstration in Illinois, Ohio, North Carolina, Florida, and Texas with the option to expand to other states in the Palmetto/JM jurisdiction. Under this demonstration, CMS offers choices for providers to demonstrate their compliance with CMS' home health policies. Providers in the demonstration states may participate in either 100 percent pre-claim review or 100 percent post payment review. These providers will continue to be subject to a review method until the HHA reaches the target affirmation or claim approval rate. Once an HHA reaches the target pre-claim review affirmation or post-payment review claim approval rate, it may choose to be relieved from claim reviews, except for a spot check of their claims to ensure continued compliance. Providers who do not wish to participate in either 100 percent pre-claim or post payment reviews have the option to furnish home health services and submit the associated claim for payment without undergoing such reviews; however, they will receive a 25 percent payment reduction on all claims submitted for home health services and may be eligible for review by the Recovery Audit Contractors.
The information required under this collection is required by Medicare contractors to determine proper payment or if there is a suspicion of fraud. Under the pre-claim review option, the HHA sends the pre-claim review request along with all required documentation to the Medicare contractor for review prior to submitting the final claim for payment. If a claim
Centers for Medicare & Medicaid Services, Health and Human Services (HHS).
Notice.
The Centers for Medicare & Medicaid Services (CMS) is announcing an opportunity for the public to comment on CMS' intention to collect information from the public. Under the Paperwork Reduction Act of 1995 (PRA), federal agencies are required to publish notice in the
Comments on the collection(s) of information must be received by the OMB desk officer by
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
To obtain copies of a supporting statement and any related forms for the proposed collection(s) summarized in this notice, please access the CMS PRA website by copying and pasting the following web address into your web browser:
William Parham at (410) 786-4669.
Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501-3520), federal agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. The term “collection of information” is defined in 44 U.S.C. 3502(3) and 5 CFR 1320.3(c) and includes agency requests or requirements that members of the public submit reports, keep records, or provide information to a third party. Section 3506(c)(2)(A) of the PRA (44 U.S.C. 3506(c)(2)(A)) requires federal agencies to publish a 30-day notice in the
1.
Information collected from the POs for use in the audit is obtained electronically through the Health Plan Management System (HPMS). HPMS is a system that was developed and is maintained by CMS and is used to securely transmit information between CMS and POs. All POs have access to HPMS, and users create and maintain a secure user id and password that is used each time HPMS is accessed.
2.
Disclosure of whether prescription drug coverage is creditable provides Medicare with important information
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA or the Agency) has determined the regulatory review period for KISUNLA and is publishing this notice of that determination as required by law. FDA has made the determination because of the submission of an application to the Director of the U.S. Patent and Trademark Office (USPTO), Department of Commerce, for the extension of a patent which claims that human biological product.
Anyone with knowledge that any of the dates as published (see
You may submit comments as follows. Please note that late, untimely filed comments will not be considered. The
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
Jack Dan, Office of Regulatory Policy, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 51, Rm. 6200, Silver Spring, MD 20993, 240-402-6940.
The Drug Price Competition and Patent Term Restoration Act of 1984 (Pub. L. 98-417) and the Generic Animal Drug and Patent Term
A regulatory review period consists of two periods of time: a testing phase and an approval phase. For human biological products, the testing phase begins when the exemption to permit the clinical investigations of the biological product becomes effective and runs until the approval phase begins. The approval phase starts with the initial submission of an application the market the human biological product and continues until FDA grants permission to market the biological product. Although only a portion of a regulatory review period may count toward the actual amount of extension that the Director of USPTO may award (for example, half the testing phase must be subtracted as well as any time that may have occurred before the patent was issued), FDA's determination of the length of a regulatory review period for a human biological product will include all of the testing phase and approval phase as specified in 35 U.S.C. 156(g)(1)(B).
FDA has approved for marketing the human biologic product KISUNLA (donanemab- azbt). KISUNLA is indicated for the treatment of Alzheimer's disease. Treatment with KISUNLA should be initiated in patients with mild cognitive impairment or mild dementia stage of disease, the population in which treatment was initiated in the clinical trials. Subsequent to this approval, the USPTO received a patent term restoration application for KISUNLA (U.S. Patent No. 8,679,498) from Eli Lilly and Company, and the USPTO requested FDA's assistance in determining this patent's eligibility for patent term restoration. In a letter dated March 17, 2025, FDA advised the USPTO that this human biological product had undergone a regulatory review period and that the approval of KISUNLA represented the first permitted commercial marketing or use of the product. Thereafter, the USPTO requested that FDA determine the product's regulatory review period.
FDA has determined that the applicable regulatory review period for KISUNLA is 4,137 days. Of this time, 3,360 days occurred during the testing phase of the regulatory review period, while 777 days occurred during the approval phase. These periods of time were derived from the following dates:
1.
2.
3.
This determination of the regulatory review period establishes the maximum potential length of a patent extension. However, the USPTO applies several statutory limitations in its calculations of the actual period for patent extension. In its application for patent extension, this applicant seeks 1,827 days of patent term extension.
Anyone with knowledge that any of the dates as published are incorrect may submit either electronic or written comments and, under 21 CFR 60.24, ask for a redetermination (see
Submit petitions electronically to
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA or Agency) is announcing an opportunity for public comment on the proposed collection of certain information by the Agency. Under the Paperwork Reduction Act of 1995 (PRA), Federal Agencies are required to publish notice in the
Either electronic or written comments on the collection of information must be submitted by September 12, 2025.
You may submit comments as follows. Please note that late, untimely filed comments will not be considered. The
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
Amber Sanford, Office of Operations, Food and Drug Administration, Three White Flint North, 10A-12M, 11601 Landsdown St., North Bethesda, MD 20852, 301-796-8867,
Under the PRA (44 U.S.C. 3501-3521), Federal Agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. “Collection of information” is defined in 44 U.S.C. 3502(3) and 5 CFR 1320.3(c) and includes Agency requests or requirements that members of the public submit reports, keep records, or provide information to a third party. Section 3506(c)(2)(A) of the PRA (44 U.S.C. 3506(c)(2)(A)) requires Federal Agencies to provide a 60-day notice in the
With respect to the following collection of information, FDA invites comments on these topics: (1) whether the proposed collection of information is necessary for the proper performance of FDA's functions, including whether the information will have practical utility; (2) the accuracy of FDA's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques, when appropriate, and other forms of information technology.
Under sections 532 through 542 of the Federal Food, Drug, and Cosmetic Act (FD&C Act) (21 U.S.C. 360ii through 360ss), FDA has the responsibility to protect the public from unnecessary exposure of radiation from electronic products. The regulations issued under these authorities are listed in Title 21 of the Code of Federal Regulations, chapter I, subchapter J, parts 1000 through 1050 (21 CFR parts 1000 through 1050).
Section 532 of the FD&C Act directs the Secretary of Health and Human Services (the Secretary), to establish and carry out an electronic product radiation control program, including the development, issuance, and administration of performance standards to control the emission of electronic product radiation from electronic products. The program is designed to protect the public health and safety from electronic radiation, and the FD&C Act authorizes the Secretary to procure (by negotiation or otherwise) electronic products for research and testing purposes and to sell or otherwise dispose of such products. Section 534(g) of the FD&C Act directs the Secretary to review and evaluate industry testing programs on a continuing basis; and section 535(e) and (f) of the FD&C Act directs the Secretary to immediately notify manufacturers of, and ensure correction of, radiation defects or noncompliance with performance standards. Section 537(b) of the FD&C Act contains the authority to require manufacturers of electronic products to establish and maintain records
The regulations under parts 1002 through 1010 specify reports to be provided by manufacturers and distributors to FDA and records to be maintained in the event of an investigation of a safety concern or a product recall. FDA conducts laboratory compliance testing of products covered by regulations for product standards in parts 1020, 1030, 1040, and 1050. FDA details product-specific performance standards that specify information to be supplied with the product or require specific reports. The information collections are either specifically called for in the FD&C Act or were developed to aid the Agency in performing its obligations under the FD&C Act. The data reported to FDA and the records maintained are used by FDA and the industry to make decisions and take actions that protect the public from radiation hazards presented by electronic products. This information refers to the identification of, location of, operational characteristics of, quality assurance programs for, and problem identification and correction of electronic products. The data provided to users and others are intended to encourage actions to reduce or eliminate radiation exposures.
FDA uses the following forms to aid respondents in the submission of information for this information collection:
The respondents to this information collection are electronic product and x-ray manufacturers, importers, consumers, and assemblers. The burden estimates were derived by consultation with FDA and industry personnel, and are based on data collected from industry, including product report submissions. An evaluation of the type and scope of information requested was also used to derive some time estimates.
FDA estimates the burden of this collection of information as follows:
Our estimated burden for the information collection reflects an overall increase of 381,828 hours and a corresponding increase of 2,135,962 responses.
We attribute this adjustment to the addition of the new FDA Form 3649C to this collection and the adjustment to an increase in respondents in the number of submissions we received over the last few years.
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA or the Agency) has determined the regulatory review period for IMDELLTRA and is publishing this notice of that determination as required by law. FDA has made the determination because of the submission of applications to the Director of the U.S. Patent and Trademark Office (USPTO), Department of Commerce, for the extension of a patent which claims that human biological product.
Anyone with knowledge that any of the dates as published (see
You may submit comments as follows. Please note that late, untimely filed comments will not be considered. The
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
Jack Dan, Office of Regulatory Policy, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 51, Rm. 6200, Silver Spring, MD 20993, 240-402-6940.
The Drug Price Competition and Patent Term Restoration Act of 1984 (Pub. L. 98-417) and the Generic Animal Drug and Patent Term Restoration Act (Pub. L. 100-670) generally provide that a patent may be extended for a period of up to 5 years so long as the patented item (human drug or biologic product, animal drug product, medical device, food additive, or color additive) was subject to regulatory review by FDA before the item was marketed. Under these acts, a product's regulatory review period forms the basis for determining the amount of extension an applicant may receive.
A regulatory review period consists of two periods of time: a testing phase and an approval phase. For human biological products, the testing phase begins when the exemption to permit the clinical investigations of the biological product becomes effective and runs until the approval phase begins. The approval phase starts with the initial submission of an application to market the human biological product and continues until FDA grants permission to market the biological product. Although only a portion of a regulatory review period may count toward the actual amount of extension that the Director of USPTO may award (for example, half the testing phase must be subtracted as well as any time that may have occurred before the patent was issued), FDA's determination of the length of a regulatory review period for a human biological product will include all of the testing phase and approval phase as specified in 35 U.S.C. 156(g)(1)(B).
FDA has approved for marketing the human biologic product IMDELLTRA (tarlatamab- dlle). IMDELLTRA is indicated for the treatment of adult patients with extensive stage small cell lung cancer with disease progression on or after platinum-based chemotherapy. This indication is approved under accelerated approval based on overall response rate and duration of response. Continued approval for this indication may be contingent upon verification and description of clinical benefit in a confirmatory trial(s). Subsequent to this approval, the USPTO received patent term restoration applications for IMDELLTRA (U.S. Patent Nos. 10,294,300; 10,683,351; 11,591,396) from Amgen Research Munich GMBH, and the USPTO requested FDA's assistance in determining the patents' eligibility for patent term restoration. In a letter dated March 17, 2025, FDA advised the USPTO that this human biological product had undergone a regulatory review period and that the approval of IMDELLTRA represented the first permitted commercial marketing or use of the product. Thereafter, the USPTO requested that FDA determine the product's regulatory review period.
FDA has determined that the applicable regulatory review period for IMDELLTRA is 2,466 days. Of this time, 2,248 days occurred during the testing phase of the regulatory review period, while 218 days occurred during the approval phase. These periods of time were derived from the following dates:
1.
2.
3.
This determination of the regulatory review period establishes the maximum potential length of a patent extension. However, the USPTO applies several statutory limitations in its calculations of the actual period for patent extension. In its applications for patent extension, this applicant seeks 330, 643, or 654 days of patent term extension.
Anyone with knowledge that any of the dates as published are incorrect may submit either electronic or written comments and, under 21 CFR 60.24, ask for a redetermination (see
Submit petitions electronically to
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA or Agency) is announcing an opportunity for public comment on the proposed collection of certain information by the Agency. Under the Paperwork Reduction Act of 1995 (PRA), Federal Agencies are required to publish notice in the
Either electronic or written comments on the collection of information must be submitted by September 12, 2025.
You may submit comments as follows. Please note that late, untimely filed comments will not be considered. The
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
Amber Sanford, Office of Operations, Food and Drug Administration, Three White Flint North, 10A-12M, 11601 Landsdown St., North Bethesda, MD 20852, 301-796-8867,
Under the PRA (44 U.S.C. 3501-3521), Federal Agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. “Collection of information” is defined in 44 U.S.C. 3502(3) and 5 CFR 1320.3(c) and includes Agency requests or requirements that members of the public submit reports, keep records, or provide information to a third party. Section 3506(c)(2)(A) of the PRA (44 U.S.C. 3506(c)(2)(A)) requires Federal Agencies to provide a 60-day notice in the
With respect to the following collection of information, FDA invites comments on these topics: (1) whether the proposed collection of information is necessary for the proper performance of FDA's functions, including whether the information will have practical utility; (2) the accuracy of FDA's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on
This information collection helps support implementation of Agency policies applicable to the authorization for medical products for use in emergencies under sections 564, 564A, and 564B of the Federal Food, Drug, and Cosmetic Act (FD&C Act) (21 U.S.C. 360bbb-3, 360bbb-3a, and 360bbb-3b). For more information regarding emergency use authorization (EUA), visit our website at
Also, under section 564 of the FD&C Act, the Commissioner may establish conditions on issuing an authorization that may be necessary or appropriate to protect the public health. These conditions can include: (1) requirements to disseminate or disclose information to healthcare providers or authorized dispensers and product recipients; (2) adverse event monitoring and reporting; (3) data collection and analysis; (4) specific recordkeeping and records access; (5) restrictions on product advertising, distribution, and administration; and (6) limitations on good manufacturing practice requirements. As governed by statute, some conditions are mandatory to the extent practicable for authorizations of unapproved products, and discretionary for authorizations of unapproved uses of approved products. Some conditions may apply to manufacturers of an EUA product, while other conditions may apply to any person who carries out an activity for which the authorization is issued. Sections 564A and 564B of the FD&C Act establish streamlined mechanisms intended to facilitate preparedness and response activities involving certain FDA approved products without requiring FDA to issue an EUA and set forth emergency dispensing order and expiration date extension authority.
The guidance document entitled, “Emergency Use Authorization of Medical Products and Related Authorities” (January 2017), available for download from our website at
FDA estimates the burden of this collection of information as follows:
Although we have averaged burden across all respondents, we categorize reporting activity by the type of EUA-related submission: (1) those who file a request for FDA to issue an EUA and/or a substantive amendment to an EUA that has previously been issued; (2) those who submit a request for FDA to review information/data (
We also account for burden that may be attendant to the use of the following agency EUA Templates and Fact Sheet Templates:
The CDRH templates are part of the Policy for Coronavirus Disease-2019 Tests During the Public Health Emergency (Revised) and Policy for Monkeypox [mpox] Tests to Address the Public Health Emergency guidance documents, which also include additional policies specific to these public health emergencies. The templates reflect the FDA's current thinking on the data and information that developers should submit to facilitate the EUA process. The templates provide information and recommendations, and they are updated as appropriate as we learn more about the COVID-19 and mpox diseases and gain experience with the EUA process for the various types of tests. Developers who intend to use alternative approaches should consider seeking the FDA's feedback or recommendations to help them through the EUA process.
The CDER templates reflect the FDA's current thinking on the data and information that developers should include in the fact sheets for therapeutics. The templates provide general fact sheet information and recommendations. and are not specific to COVID-19. Developers who intend to use alternative approaches should consider seeking the FDA's feedback or recommendations during the EUA process. Members of the public can submit questions about the templates to
We provide a conservative estimate for respondent recordkeeping, recognizing that the Federal Government performs much of this activity in conjunction with submissions. We do not include burden for public health authorities who may need to submit emergency dispensing orders or expiration date extension requests, assuming covered entities already maintain these records for the products they stockpile.
Our third-party disclosure estimate is based on the number of EUA holders and authorized stakeholders disseminating information, including fact sheets, advertising, and promotional materials.
Our estimated burden for the information collection reflects an overall decrease of 7,087 hours and a corresponding decrease of 302,456 responses.
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA or the Agency) has determined the regulatory review period for LAZCLUZE and is publishing this notice of that determination as required by law. FDA has made the determination because of the submission of an application to the Director of the U.S. Patent and Trademark Office (USPTO), Department of Commerce, for the extension of a patent which claims that human drug product.
Anyone with knowledge that any of the dates as published (see
You may submit comments as follows. Please note that late, untimely filed comments will not be considered. The
•
Because your comment will be made public, you are solely responsible for ensuring that your comment does not include any confidential information that you or a third party may not wish to be posted, such as medical information, your or anyone else's Social Security number, or confidential business information, such as a manufacturing process. Please note that if you include your name, contact information, or other information that identifies you in the body of your comments, that information will be posted on
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” TheAgency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
Jack Dan, Office of Regulatory Policy, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 51, Rm. 6200, Silver Spring, MD 20993, 240-402-6940.
The Drug Price Competition and Patent Term Restoration Act of 1984 (Pub. L. 98-417) and the Generic Animal Drug and Patent Term Restoration Act (Pub. L. 100-670) generally provide that a patent may be extended for a period of up to 5 years so long as the patented item (human drug or biological product, animal drug product, medical device, food additive, or color additive) was subject to regulatory review by FDA before the item was marketed. Under these acts, a product's regulatory review period
A regulatory review period consists of two periods of time: a testing phase and an approval phase. For human drug products, the testing phase begins when the exemption to permit the clinical investigations of the drug becomes effective and runs until the approval phase begins. The approval phase starts with the initial submission of an application to market the human drug product and continues until FDA grants permission to market the drug product. Although only a portion of a regulatory review period may count toward the actual amount of extension that the Director of USPTO may award (for example, half the testing phase must be subtracted as well as any time that may have occurred before the patent was issued), FDA's determination of the length of a regulatory review period for a human drug product will include all of the testing phase and approval phase as specified in 35 U.S.C. 156(g)(1)(B).
FDA has approved for marketing the human drug product LAZCLUZE (lazertinib mesylate) in combination with amivantamab, indicated for the first-line treatment of adult patients with locally advanced or metastatic non-small cell lung cancer with epidermal growth factor receptor exon 19 deletions or exon 21 L858R substitution mutations, as detected by an FDA-approved test. Subsequent to this approval, the USPTO received a patent term restoration application for LAZCLUZE (U.S. Patent No. 9,593,098) from Yuhan Corporation and the USPTO requested FDA's assistance in determining the patent's eligibility for patent term restoration. In a letter dated March 17, 2025, FDA advised the USPTO that this human drug product had undergone a regulatory review period and that the approval of LAZCLUZE represented the first permitted commercial marketing or use of the product. Thereafter, the USPTO requested that FDA determine the product's regulatory review period.
FDA has determined that the applicable regulatory review period for LAZCLUZE is 1,911 days. Of this time, 1,666 days occurred during the testing phase of the regulatory review period, while 245 days occurred during the approval phase. These periods of time were derived from the following dates:
1.
2.
3.
This determination of the regulatory review period establishes the maximum potential length of a patent extension. However, the USPTO applies several statutory limitations in its calculations of the actual period for patent extension. In its application for patent extension, this applicant seeks 1,042 days of patent term extension.
Anyone with knowledge that any of the dates as published are incorrect may submit either electronic or written comments and, under 21 CFR 60.24, ask for a redetermination (see
Submit petitions electronically to
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA or the Agency) has determined the regulatory review period for HEMGENIX and is publishing this notice of that determination as required by law. FDA has made the determination because of the submission of an application to the Director of the U.S. Patent and Trademark Office (USPTO), Department of Commerce, for the extension of a patent which claims that human biological product.
Anyone with knowledge that any of the dates as published (see
You may submit comments as follows. Please note that late, untimely filed comments will not be considered. The
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
Jack Dan, Office of Regulatory Policy, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 51, Rm. 6200, Silver Spring, MD 20993, 240-402-6940.
The Drug Price Competition and Patent Term Restoration Act of 1984 (Pub. L. 98-417) and the Generic Animal Drug and Patent Term Restoration Act (Pub. L. 100-670) generally provide that a patent may be extended for a period of up to 5 years so long as the patented item (human drug or biologic product, animal drug product, medical device, food additive, or color additive) was subject to regulatory review by FDA before the item was marketed. Under these acts, a product's regulatory review period forms the basis for determining the amount of extension an applicant may receive.
A regulatory review period consists of two periods of time: a testing phase and an approval phase. For human biological products, the testing phase begins when the exemption to permit the clinical investigations of the biological product becomes effective and runs until the approval phase begins. The approval phase starts with the initial submission of an application to market the human biological product and continues until FDA grants permission to market the biological product. Although only a portion of a regulatory review period may count toward the actual amount of extension that the Director of USPTO may award (for example, half the testing phase must be subtracted as well as any time that may have occurred before the patent was issued), FDA's determination of the length of a regulatory review period for a human biological product will include all of the testing phase and approval phase as specified in 35 U.S.C. 156(g)(1)(B).
FDA has approved for marketing the human biologic product HEMGENIX (etranacogene dezaparvovec-drlb). HEMGENIX is indicated for the treatment of adults with Hemophilia B (congenital Factor IX deficiency) who: currently use Factor IX prophylaxis therapy, or have current or historical life-threatening hemorrhage, or have repeated, serious spontaneous bleeding episodes. Subsequent to this approval, the USPTO received a patent term restoration application for HEMGENIX (U.S. Patent No. 9,249,405) from uniQure biopharma B.V., and the USPTO requested FDA's assistance in determining this patent's eligibility for patent term restoration. In a letter dated February 6, 2024, FDA advised the USPTO that this human biological product had undergone a regulatory review period and that the approval of HEMGENIX represented the first permitted commercial marketing or use of the product. Thereafter, the USPTO requested that FDA determine the product's regulatory review period.
FDA has determined that the applicable regulatory review period for HEMGENIX is 2,905 days. Of this time, 2,661 days occurred during the testing phase of the regulatory review period, while 244 days occurred during the approval phase. These periods of time were derived from the following dates:
1.
2.
3.
This determination of the regulatory review period establishes the maximum potential length of a patent extension. However, the USPTO applies several statutory limitations in its calculations of the actual period for patent extension. In its application for patent extension, this applicant seeks 1,365 days of patent term extension.
Anyone with knowledge that any of the dates as published are incorrect may submit either electronic or written comments and, under 21 CFR 60.24, ask for a redetermination (see
Submit petitions electronically to
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA or the Agency) has determined the regulatory review period for ABRYSVO and is publishing this notice of that determination as required by law. FDA has made the determination because of the submission of an application to the Director of the U.S. Patent and Trademark Office (USPTO), Department of Commerce, for the extension of a patent which claims that human biological product.
Anyone with knowledge that any of the dates as published (see
You may submit comments as follows. Please note that late, untimely filed comments will not be considered. The
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
Jack Dan, Office of Regulatory Policy, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 51, Rm. 6200, Silver Spring, MD 20993,240-402-6940.
The Drug Price Competition and Patent Term Restoration Act of 1984 (Pub. L. 98-417) and the Generic Animal Drug and Patent Term Restoration Act (Pub. L. 100-670) generally provide that a patent may be extended for a period of up to 5 years so long as the patented item (human drug or biologic product, animal drug product, medical device, food additive, or color additive) was subject to regulatory review by FDA before the item was marketed. Under these acts, a product's regulatory review period forms the basis for determining the amount of extension an applicant may receive.
A regulatory review period consists of two periods of time: a testing phase and an approval phase. For human biological products, the testing phase begins when the exemption to permit the clinical investigations of the biological product becomes effective and runs until the approval phase begins. The approval phase starts with the initial submission of an application to market the human biological product and continues until FDA grants permission to market the biological product. Although only a portion of a regulatory review period may count toward the actual amount of extension that the Director of USPTO may award (for example, half the testing phase must be subtracted as well as any time that may have occurred before the patent was issued), FDA's determination of the length of a regulatory review period for a human biological product will include all of the testing phase and approval phase as specified in 35 U.S.C. 156(g)(1)(B).
FDA has approved for marketing the human biologic product ABRYSVO (respiratory syncytial virus vaccine). ABRYSVO is a vaccine indicated for
• Active immunization of pregnant individuals at 32 through 36 weeks gestational age for the prevention of lower respiratory tract disease (LRTD) and severe LRTD caused by respiratory syncytial virus (RSV) in infants from birth through 6 months of age.
• Active immunization for the prevention of LRTD caused by RSV in individuals 60 years of age and older.
Subsequent to this approval, the USPTO received a patent term restoration application for ABRYSVO (U.S. Patent No. 9,950,058) from PFIZER INC., and the USPTO requested FDA's assistance in determining this patent's eligibility for patent term restoration. In a letter dated April 3, 2024, FDA advised the USPTO that this human biological product had undergone a regulatory review period and that the approval of ABRYSVO represented the first permitted commercial marketing or use of the product. Thereafter, the USPTO requested that FDA determine the product's regulatory review period.
FDA has determined that the applicable regulatory review period for ABRYSVO is 1,918 days. Of this time, 1,674 days occurred during the testing phase of the regulatory review period, while 244 days occurred during the approval phase. These periods of time were derived from the following dates:
1.
2.
3.
This determination of the regulatory review period establishes the maximum potential length of a patent extension. However, the USPTO applies several statutory limitations in its calculations of the actual period for patent extension. In its application for patent extension, this applicant seeks 163 days of patent term extension.
Anyone with knowledge that any of the dates as published are incorrect may submit either electronic or written comments and, under 21 CFR 60.24, ask for a redetermination (see
Submit petitions electronically to
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA or Agency) is announcing an opportunity for public comment on the proposed collection of certain information by the Agency. Under the Paperwork Reduction Act of 1995 (PRA), Federal Agencies are required to publish notice in the
Either electronic or written comments on the collection of information must be submitted by September 12, 2025.
You may submit comments as follows. Please note that late, untimely filed comments will not be considered. The
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
Amber Sanford, Office of Operations, Food and Drug Administration, Three White Flint North, 10A-12M, 11601 Landsdown St., North Bethesda, MD 20852, 304-796-8867,
Under the PRA (44 U.S.C. 3501-3521), Federal Agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. “Collection of information” is defined in 44 U.S.C. 3502(3) and 5 CFR 1320.3(c) and includes Agency requests or requirements that members of the public submit reports, keep records, or provide information to a third party. Section 3506(c)(2)(A) of the PRA (44 U.S.C. 3506(c)(2)(A)) requires Federal Agencies to provide a 60-day notice in the
With respect to the following collection of information, FDA invites comments on these topics: (1) whether the proposed collection of information is necessary for the proper performance of FDA's functions, including whether the information will have practical utility; (2) the accuracy of FDA's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques, when appropriate, and other forms of information technology.
The guidance entitled “Requests for Feedback and Meetings for Medical Device Submissions: The Q-Submission Program” (May 2025) (available at
Recent updates in May 2025 to the Q-Submission guidance moved the instructions for information collection related to requests for feedback regarding development of a Medical Device Development Tool (MDDT), which were previously tracked as Informational Meeting Q-Submissions. We are revising this information collection to add the FDA guidance entitled “Qualification of Medical Device Development Tools: Guidance for Industry, Tool Developers, and Food and Drug Administration Staff” (July 2023) (available at
Prior to submitting a Pre-Submission, medical device sponsors may request that one or more payor organizations join a Pre-Submission meeting. Payors include public payors such as Centers for Medicare & Medicaid Services, private health plans, health technology assessment groups, and others who provide input into coverage, procurement, and reimbursement decisions. To facilitate such opportunities to obtain payor input, FDA provides information about our Early Payor Feedback Program (EPFP) and a list of current payor participants on our website (available at
Under section 745A(b) of the Federal Food, Drug, and Cosmetic Act (FD&C Act) (21 U.S.C. 379k-1(b)), amended by section 207 of the FDA Reauthorization Act of 2017 (Pub. L. 115-52), and consistent with the Medical Device User Fee Amendments 2017 (MDUFA IV) Commitment Letter and the FDA guidance document entitled “Providing Regulatory Submissions for Medical Devices in Electronic Format—Submissions Under Section 745A(b) of the Federal Food, Drug, and Cosmetic Act” (July 2020) (available at
FDA estimates the burden of this collection of information as follows:
Based on our experience with the Q-Submission and Early Payor Feedback Request Programs and Medical Device Development Tools, our estimated burden for the information collection reflects an overall increase of 451,180 hours and 4,535 responses annually. We attribute this adjustment to an increase in the number of respondents according to FDA data. As discussed above, recent updates to the Q-Submission guidance moved the instructions for information collection related to requests for feedback regarding development of MDDTs to the MDDT guidance. MDDT proposal and qualification packages were previously tracked as Informational Meeting Q-Submissions.
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA or the Agency) has determined the regulatory review period for TECELRA and is publishing this notice of that determination as required by law. FDA has made the determination because of the submission of applications to the Director of the U.S. Patent and Trademark Office (USPTO), Department of Commerce, for the extension of a patent which claims that human biological product.
Anyone with knowledge that any of the dates as published (see
You may submit comments as follows. Please note that late, untimely filed comments will not be considered. The
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
Jack Dan, Office of Regulatory Policy, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 51, Rm. 6200, Silver Spring, MD 20993, 240-402-6940.
The Drug Price Competition and Patent Term Restoration Act of 1984 (Pub. L. 98-417) and the Generic Animal Drug and Patent Term Restoration Act (Pub. L. 100-670)
A regulatory review period consists of two periods of time: a testing phase and an approval phase. For human biological products, the testing phase begins when the exemption to permit the clinical investigations of the biological product becomes effective and runs until the approval phase begins. The approval phase starts with the initial submission of an application to market the human biological product and continues until FDA grants permission to market the biological product. Although only a portion of a regulatory review period may count toward the actual amount of extension that the Director of USPTO may award (for example, half the testing phase must be subtracted as well as any time that may have occurred before the patent was issued), FDA's determination of the length of a regulatory review period for a human biological product will include all of the testing phase and approval phase as specified in 35 U.S.C. 156(g)(1)(B).
FDA has approved for marketing the human biologic product TECELRA (afamitresgene autoleucel). TECELRA is indicated for the treatment of adults with unresectable or metastatic synovial sarcoma who have received prior chemotherapy, are HLA-A*02:01P, -A*02:02P, -A*02:03P, or -A*02:06P positive and whose tumor expresses the MAGE-A4 antigen as determined by FDA-approved or cleared companion diagnostic devices. This indication is approved under accelerated approval based on overall response rate and duration of response.
Subsequent to this approval, the USPTO received a patent term restoration application for TECELRA (U.S. Patent Nos. 11,572,400 and 11,725,040) from Adaptimmune Limited, and the USPTO requested FDA's assistance in determining this patents' eligibility for patent term restoration. In a letter dated March 17, 2025, FDA advised the USPTO that this human biological product had undergone a regulatory review period and that the approval of TECELRA represented the first permitted commercial marketing or use of the product. Thereafter, the USPTO requested that FDA determine the product's regulatory review period.
FDA has determined that the applicable regulatory review period for TECELRA is 2,775 days. Of this time, 2,534 days occurred during the testing phase of the regulatory review period, while 241 days occurred during the approval phase. These periods of time were derived from the following dates:
1.
2.
3.
This determination of the regulatory review period establishes the maximum potential length of a patent extension. However, the USPTO applies several statutory limitations in its calculations of the actual period for patent extension. In its applications for patent extension, this applicant seeks 297 or 392 days of patent term extension.
Anyone with knowledge that any of the dates as published are incorrect may submit either electronic or written comments and, under 21 CFR 60.24, ask for a redetermination (see
Submit petitions electronically to
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA or Agency) is announcing an opportunity for public comment on the proposed collection of certain information by the Agency. Under the Paperwork Reduction Act of 1995 (PRA), Federal Agencies are required to publish notice in the
Either electronic or written comments on the collection of information must be submitted by September 12, 2025.
You may submit comments as follows. Please note that late, untimely filed comments will not be considered. The
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
• Mail/Hand Delivery/Courier (for written/paper submissions): Dockets Management Staff (HFA-305), Food and Drug Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852.
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
Amber Sanford, Office of Operations, Food and Drug Administration, Three White Flint North, 10A-12M, 11601 Landsdown St., North Bethesda, MD 20852, 301-796-8867,
Under the PRA (44 U.S.C. 3501-3521), Federal Agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. “Collection of information” is defined in 44 U.S.C. 3502(3) and 5 CFR 1320.3(c) and includes Agency requests or requirements that members of the public submit reports, keep records, or provide information to a third party. Section 3506(c)(2)(A) of the PRA (44 U.S.C. 3506(c)(2)(A)) requires Federal Agencies to provide a 60-day notice in the
With respect to the following collection of information, FDA invites comments on these topics: (1) whether the proposed collection of information is necessary for the proper performance of FDA's functions, including whether the information will have practical utility; (2) the accuracy of FDA's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques, when appropriate, and other forms of information technology.
This information collection supports the development and implementation of FDA public education campaigns related to tobacco use. FDA's Center for Tobacco Products (CTP) was created to carry out the authorities granted under the Family Smoking Prevention and Tobacco Control Act (Tobacco Control Act) (Pub. L. 111-31) to educate the public about the dangers of tobacco use and to serve as a public health resource for tobacco and health information. CTP's tobacco education mission directly contributes to advancing the goals of Executive Order 14212: Establishing the President's Make America Healthy Again Commission, including the Make Our Children Health Again assessment, in three ways. First, CTP works to reduce tobacco use, the leading cause of chronic disease and mortality in the United States. Second, CTP protects the health of children; public education campaigns and other CTP efforts decrease the likelihood that youth initiate or escalate tobacco use. Third, CTP uses gold-standard science to develop, implement, and evaluate its programs.
FDA launched “The Real Cost” educational campaigns in February 2014, seeking to reduce tobacco use among at-risk youth in the United States who are open to using or have already experimented with cigarettes or electronic nicotine delivery systems (ENDS). As with CTP as a whole, FDA's “The Real Cost” Youth Cigarette and E-Cigarette Prevention Campaigns aim to
The first ExPECTT study (Cohort 1) assessed the campaign's impact on outcome variables of interest from November 2013 to November 2016. The second ExPECTT study (Cohort 2; OMB Control No. 0910-0753) assessed the campaign's impact on outcome variables of interest from June 2018 to August 2022. The third ExPECTT study (Cohort 3; OMB Control No. 0910-0915) has been assessing the campaign's impact on outcome variables of interest starting in February 2023. To continue assessing the impact of “The Real Cost” campaigns, FDA intends to extend implementation of the ExPECTT Cohort 3 study. The study consists of multiple waves of data collection, including a baseline survey and up to eight continuing follow-up (FU) surveys, conducted approximately 6-9 months apart. The online surveys are conducted with youth ages 11-17 at baseline (for mail-based recruitment).
The purpose of FDA's ExPECTT Cohort 3 study is to provide credible evidence that changes in key outcomes can be attributed to exposure to the campaign. Using gold-standard science, FDA can determine the strength of the attribution and rule out alternative explanations for observed changes in key outcomes. In the ExPECTT study, FDA has been measuring variation in both potential campaign exposure (
The goal of ExPECTT Cohort 3 is to determine whether future waves of “The Real Cost” public education campaigns will continue to influence the following key outcomes:
FDA estimates the burden of this collection of information as follows:
This study includes a baseline survey and up to eight continuing follow-up surveys, conducted approximately 6-9 months apart. There are two ways that we recruited initial participants to the study at baseline, which took place in 2023: mail-based recruitment (the primary mode of recruitment) and supplemental social media-based recruitment. The recruitment sample for the mail-based data collection included youth ages 11-17. We mailed 326,709 recruitment/study material packages to households at baseline (3 minutes per response) and received 64,314 completed screeners (5 minutes per response) by adults within those households. For the 8,207 households identified as eligible for the study during the screening process (
In addition to the primary mail-based data collection at baseline in 2023, we recruited an additional sample using a social media-based recruitment from a subpopulation of respondents at increased risk for initiating use of cigarettes and ENDS products. This supplemental data collection consisted of online self-administered surveys of participants recruited through social media advertisements. The recruitment sample for this data collection was youth ages 14 to 20 who met the subpopulation criteria. At baseline, 13,888 respondents were invited to take the screener through social media ads (1 minute). We screened 9,444 respondents (5 minutes per screener response) and identified 1,501 eligible respondents. This is a longitudinal study, so participants from the social media sample will be retained in the sample because they were members of the original study cohort.
We estimate that we will lose approximately 15 percent of the original baseline sample at each FU wave. Replenishing the sample will ensure we maintain an adequate longitudinal sample at each study wave and continue to have representation from younger respondents in our aging sample. We will replenish the sample up to 4 times during the study period. We will send out recruitment/study material packages to an additional 450,000 households in total (3 minutes per response) over the course of the study period. We expect to receive an estimated 95,000 completed screeners (5 minutes per response). For households identified as eligible for the study during the replenishment screening process (
For the main data collection at baseline in 2023, we collected data from 5,354 youth respondents recruited by mail. For the supplemental social media data collection at baseline in 2023, we collected data from 1,501 youth respondents. These 6,855 youth respondents provided baseline assent (5 minutes per response) and completed the survey (30 minutes per response). Following completion of the study, we mailed an incentive letter (1 minute). For the 5,354 youth respondents recruited for the main data collection, we asked the parent/guardian to provide permission (5 minutes per response) for the youth to participate in the study. We received a waiver of parental permission for youth 14+ and did not require parental permission for respondents from the social media data collection.
As this is a longitudinal data collection, participants who complete the baseline survey or any follow-up replenishment survey will be recontacted for each subsequent follow-up wave. We will send invitations and study materials to sample respondents for up to eight follow-up waves (10 minutes per respondent). Including youth recruited in the replenishment, this will be up to 14,053 youth at each wave. At each of the eight follow-up waves, respondents are estimated to provide assent (5 minutes per respondent) and complete the survey (30 minutes per respondent). Where required, we will ask the parent/guardian to provide permission (5 minutes per respondent) for the youth to participate in the study. For youth who complete the survey, we will also mail an incentive letter (1 minute per respondent).
To align with Executive Order 14168, Defending Women From Gender Ideology Extremism and Restoring Biological Truth to the Federal Government, we are revising this information collection to remove questions relating to gender. Our estimated burden for the information collection reflects an overall decrease of 557 hours and an increase of 507,886 responses. We are proposing up to 3 additional follow-up waves of data collections, including up to 2 additional replenishment samples. In addition, we updated the estimated burden per response based on past data collections for the baseline and first follow-up wave.
Office of the Secretary, HHS.
Notice; 30-day comment period.
This notice sets forth the interpretation that the U.S. Department of Health and Human Services (HHS) uses for the term “Federal public benefit” as used in Title IV of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA), Public Law 104-193, 8 U.S.C. 1611. In doing so, this notice revises the interpretation of the term set forth in a prior notice, 63 FR 41658 (Aug. 4, 1998) (“the 1998 HHS PRWORA Notice” or “1998 Notice”). This notice also describes and preliminarily identifies the HHS programs that provide “Federal public benefits” within the scope of PRWORA, including HHS programs that were not listed in the 1998 HHS PRWORA Notice.
To be assured consideration, comments must be received no later
Sean R. Keveney, Acting General Counsel, Office of the General Counsel, HHS. 200 Independence Avenue SW, Washington, DC 20201. 202-690-7741.
According to Section 401 of PRWORA, 8 U.S.C. 1611(a), aliens who are not “qualified aliens” are not eligible for any “Federal public benefit” as defined in 8 U.S.C. 1611(c). The prohibition set forth in § 1611(a) is subject to certain narrow exceptions explicitly set forth in § 1611(b).
The statutory text, § 1611(c), defines “Federal public benefit” as “(A) any grant, contract, loan, professional license, or commercial license provided by an agency of the United States or by appropriated funds of the United States” and “(B) any retirement, welfare, health, disability, public or assisted housing, postsecondary education, food assistance, unemployment benefit, or any other similar benefit for which payments or assistance are provided to an individual, household, or family eligibility unit by an agency of the United States or by appropriated funds of the United States.” 8 U.S.C. 1611(c)(1). This definition, too, is subject to certain narrow exceptions.
In addition, under Section 432 of PRWORA, as amended, to the extent required by law, providers of a nonexempt “Federal public benefit” must verify that a person applying for the benefit is a qualified alien and is eligible to receive the benefit. 8 U.S.C. 1642.
The statutory language is clear: if an HHS program falls into either § 1611(c)(1)(A) or (c)(1)(B), such benefits are not available to aliens, unless (i) that alien is a qualified alien, or (ii) some other exception applies to the HHS program, either under § 1611(b) or via the definitional limits on “Federal public benefit” set forth in subparagraph (c)(2). Thus, the task is simple: construe the plain language of § 1611(c)(1)(A) and (c)(1)(B). Those provisions state that “Federal public benefit” means:
(A) any grant, contract, loan, professional license, or commercial license provided by an agency of the United States or by appropriated funds of the United States; and
(B) any retirement, welfare, health, disability, public or assisted housing, postsecondary education, food assistance, unemployment benefit, or any other similar benefit for which payments or assistance are provided to an individual, household, or family eligibility unit by an agency of the United States or by appropriated funds of the United States.
If HHS “provide[s]” the (i) “grant, contract, loan, professional license, or commercial license,” or if the “grant, contract, loan, professional license, or commercial license” is “provided by” “appropriated funds of the United States,” then it is a “Federal public benefit.” Similarly, if HHS “provide[s]” the “retirement, welfare, health, disability, public or assisted housing, postsecondary education, food assistance, unemployment benefit, or any other similar benefit,” or such “benefit” is “provided by” “appropriated funds of the United States,” then such benefit is a “Federal public benefit,” as long as the benefit is “provided to” one of three types of recipients: (i) “an individual,” (ii) a “household,” or (iii) a “family eligibility unit.”
The 1998 HHS PRWORA Notice artificially and impermissibly constrains these statutory definitions, and the scope of PRWORA's effect, in at least four main ways.
Section 1611(c)(1)(A) reaches “any grant, contract, loan, professional license, or commercial license” provided by HHS. HHS administers a multitude of grant programs, including those in which the grants go to institutions (such as research grants) and those in which the grants go to States (such as Title X services grants). Sometimes the activity supported by the grant is carried out by the “recipient”; sometimes the recipient uses an award to provide health professional training support for individuals; and sometimes the recipient acts as a “pass-through entity” “that provides a subaward to a subrecipient to carry out part of a Federal program,” 45 CFR 75.2 (definitions for HHS's uniform grants regulation), under which the obligations and requirements on the recipient flow down to the subrecipient,
PRWORA says “
The 1998 Notice relied on the canon of
Indeed, the reasoning of the 1998 Notice is incoherent when it comes to “grant[s]” in the context of HHS-administered benefit programs. Contrary to the 1998 Notice, “grants” are
The conclusion that “any grant” means “any grant” is reinforced by the structure of the statute. While subparagraph (c)(1)(B) provides a definition of “Federal public benefit” that is tied to the nature of the recipient (“individual, household, or family eligibility unit”), subparagraph (c)(1)(A) does not include similar language. Especially because these are neighboring provisions, the omission has to be assumed to be intentional.
Section 1611(c)(1)(B) clearly prohibits aliens (who are not qualified aliens) from accessing a wide array of HHS-provided benefits “for which payments or assistance are provided to an individual, household, or family eligibility unit[.]” The question is the meaning and function of “eligibility unit” in this provision.
To start, “eligibility unit” does not modify all items of the list. Rather, the term “family eligibility unit” is used in parallel to “household” elsewhere in the statute.
Even just looking to the phrase “eligibility unit” itself, in the benefits context, “family eligibility unit” just means the “unit” by which “eligibility” is assessed.
Thus, the Department believes the proper interpretation of subparagraph (c)(1)(B) is as follows: the listed benefits, including “other similar benefit[s],” are “Federal public benefit[s]” as long as they are provided on either a per-individual, per-household, or per-“family eligibility unit” basis.
The 1998 Notice gave greater significance to “eligibility unit” than that text can bear. The notice interpreted subparagraph (c)(1)(B) to include only “benefits that are (1) provided to an individual, household, or family,
The first flaw of the 1998 Notice is that it assumes that “eligibility unit” modifies “individual” and “household.” It is not clear whether the phrase “eligibility unit” applies to all three items in the list (“individual,” “household,” and “family”) or to just “family.” At a minimum, it strains the English language to conceive of an “individual[ ]eligibility unit.” That notion would commonly be expressed as “eligible individual,” but Congress did not say “eligible individual” in subparagraph (c)(1)(B). As explained above, recognizing that “family eligibility unit” is a discrete phrase (parallel to “individual” and “household”) avoids having to resolve the textual question of the difference between “individual” and “individual eligibility unit.” The Department is unaware of any statute or HHS program that uses the term “individual eligibility unit” in this sense. The Department seeks comment on the application of “eligibility unit” in other federal programs at HHS or similar contexts. In the interpretation that the Department now sets forth, the question is largely
Even if the phrase does apply to all three items, it is not clear whether the word “eligibility” supplies any significant constraint in this context. Of course, the Department is mindful of the canon against superfluity.
In addition, the 1998 Notice's approach is unmoored from the statutory text and invites arbitrary application. Assume for the sake of discussion that “eligibility unit” modifies the entire list. And assume further that the term “eligibility” means a “Federal public benefit” must employ some sort of criteria that excludes certain individuals, household, or families, but not others. The 1998 Notice goes further: those criteria must be in “the authorizing statute” of the benefit program and those criteria must be of some special type. It is not enough if the entire benefit program is structured “to meet the needs of certain populations”; rather, the criteria must be such that “providers use variations in individual characteristics as a basis for determining eligibility, on a case-by-case basis.” 63 FR at 41659-60.
None of the Notice's line-drawing about the right type of criteria is grounded in the statutory text. That is enough to reject it. And the 1998 Notice's own example demonstrates the fallacy of its reasoning. The Notice points to a grant for “children or pregnant women.”
The 1998 Notice also points to the definition of “Federal benefit” in Section 561 of the Illegal Immigration Reform and Immigrant Responsibility Act of 1996 (IIRIRA). 63 FR at 41659. The caption of that section is “Increased maximum criminal penalties for forging or counterfeiting seal of a federal department or agency to facilitate benefit fraud by an unlawful alien.” That is, the entire statutory provision, 18 U.S.C. 506, is about criminal liability for a person who commits certain acts of forgery (or related acts). In defining “Federal benefit” in that context, there is no need to refer to “eligibility unit”—the statute contemplates a person committing a criminal act to “facilitate[e] an alien's application for, or receipt of, a Federal benefit.” 18 U.S.C. 506(b). Any inference that might be drawn for supporting a narrow interpretation of PRWORA is insufficient to overcome the plain meaning of the text of 8 U.S.C. 1611, especially in light of the explicit purpose of PRWORA set forth in § 1601.
By eliminating this arbitrary line-drawing around what constitutes an appropriate “eligibility” criterion, HHS's new interpretation will no longer raise a question about what to do with programs that, as the 1998 Notice describes, “provide a mixture of services, some of which are provided to . . . communities or specified sectors of the population.” 63 FR at 41660. That question was a consequence of the 1998 Notice's convoluted approach to subparagraph (c)(1)(B), in which certain eligibility criteria (such as income limits) counted, but others did not (such as geographic limits). And it led to yet more analysis that was far removed from the statutory text.
Further, the 1998 Notice imposes a requirement that the limits on eligibility to individuals, household, or family be in the statutory text. There is no statutory basis for requiring that the description of eligibility be in statute. At least one court has found the 1998 Notice misinterprets the statute. “HHS's reasoning is not persuasive . . . Not only did HHS fail to explain why a benefit program's status should turn on whether Congress explicitly laid out the eligibility criteria in the statutory text, but HHS's approach would result in a large number of benefit programs falling outside PRWORA's reach, which would run counter to Congress's intent in enacting PRWORA.”
The straightforward reasoning applied by that court, supported by the plain meaning of the statutory text, is consistent with the approach the HHS will take in determining whether an HHS program is a “Federal public benefit” and applying the prohibition in § 1611(a).
Subparagraph (c)(1)(B) lists a wide range of benefits that fall within the definition of “Federal public benefit,” and supplements those specific examples with a catch-all phrase: “any other similar benefit.” HHS programs may provide an “other similar benefit” even if they do not directly fall within the enumerated, specific items of the list. Indeed, that is the point of a catch-all phrase.
The 1998 Notice acknowledged that “the litany of categories in 401(c)(1)(B) is broad.” But the notice only engaged with this statutory language apophatically, providing a single example of what is
The Department announces that it will interpret the phrase “any other similar benefit” in line with plain meaning: any other benefit that is “alike in substance or essentials” to or that “[has] characteristics in common”
The application of this interpretation to specific HHS programs is informed by PRWORA's statement of purpose, which emphasizes that Congress intended to reach a broad range of benefit programs in order to ensure that “aliens within the Nation's borders not depend on public resources to meet their needs, but rather rely on their own capabilities and the resources of their families, their sponsors, and private organizations” and to ensure that “the availability of public benefits not constitute an incentive for immigration to the United States.” 8 U.S.C. 1601(2). HHS's interpretation of subparagraph (c)(1)(B) will also be informed by the recognition that Congress enacted this provision to apply across the multifarious operations of the federal government—that is, HHS will not overread into the fact that Congress provided certain examples to underscore the breadth of subparagraph (c)(1)(B) in order to improperly exclude programs that properly fall within the plain meaning of subparagraph (c)(1)(B).
Based on this interpretation, the Department believes that Head Start is a “similar benefit” to a welfare benefit. While the term “welfare” is not defined in PRWORA, it can be given a fair reading in its plain meaning and agency usage. The broad sweep of “welfare” described in the preamble in section 400 of PRWORA, (8 U.S.C. 1601) supports a broad reading of “welfare” and any “similar benefit”, as do other laws enacted around the same time. The Welfare Indicators Act of 1994 (Pub. L. 103-432) directs the HHS Secretary to publish an annual report on welfare dependency. The law states it should “include analysis of families and individuals receiving assistance under means-tested benefit programs, including the program of aid to families with dependent children under part A of title IV of the Social Security Act (42 U.S.C. 601
While Head Start provides for school readiness, it also provides low-income children and their families with “health, educational, nutritional, and social and other services, that are determined based on family needs assessment, to be necessary.”
To the extent HHS has issued regulatory statements or guidance that suggest the Head Start program is not a “Federal public benefit” under subparagraph (c)(1)(B), those statements cannot stand in light of the plain meaning of PRWORA. This principle, of course, applies beyond the determination of whether the Head Start program is a “Federal public benefit”; it applies to the evaluation of any other program “provided by” by the Department or administered by the Department “by appropriated funds of the United States.” 8 U.S.C. 1611(c)(1)(A), (B).
Section IV of the 1998 Notice, entitled “Exemptions,” asserts that § 1611(b)(1) “excludes some HHS programs from the definition of `Federal public benefits.' ” 63 FR at 41660.
While it is true that § 1611(b)(1) excludes certain HHS programs from the ambit of § 1611(a), it is false that those programs are excluded from the definition of “Federal public benefit.” In fact, the statute clearly says the opposite. Paragraph (b)(1) says “Subsection (a) shall not apply with respect to the following
Having set forth the correct interpretation of the definition of “Federal public benefit,” HHS has determined that the list of HHS programs set forth in the 1998 HHS
The 1998 Notice, 63 FR at 41660, identified the following HHS programs as providing “Federal public benefit[s]” and were not “otherwise excepted” from § 1611(a): (1) Adoption Assistance; (2) Administration on Developmental Disabilities (ADD)—State Developmental Disabilities Councils (direct services only); (3) ADD—Special Projects (direct services only); (4) ADD—University Affiliated Programs (clinical disability assessment services only); (5) Adult Programs/Payments to Territories; (6) Agency for Health Care Policy and Research Dissertation Grants; (7) Child Care and Development Fund; (8) Clinical Training Grant for Faculty Development in Alcohol & Drug Abuse; (9) Foster Care; (10) Health Profession Education and Training Assistance; (11) Independent Living Program; (12) Job Opportunities for Low Income Individuals (JOLI); (13) Low Income Home Energy Assistance Program (LIHEAP); (14) Medicare; (15) Medicaid (except assistance for an emergency medical condition); (16) Mental Health Clinical Training Grants; (17) Native Hawaiian Loan Program; (18) Refugee Cash Assistance; (19) Refugee Medical Assistance; (20) Refugee Preventive Health Services Program; (21) Refugee Social Services Formula Program; (22) Refugee Social Services Discretionary Program; (23) Refugee Targeted Assistance Formula Program; (24) Refugee Targeted Assistance Discretionary Program; (25) Refugee Unaccompanied Minors Program; (26) Refugee Voluntary Agency Matching Grant Program; (27) Repatriation Program; (28) Residential Energy Assistance Challenge Option (REACH); (29) Social Services Block Grant (SSBG); (30) State Child Health Insurance Program (CHIP); (31) Temporary Assistance for Needy Families (TANF).
Based on the interpretation of PRWORA set forth above, and based on intervening developments since the promulgation of the 1998 Notice, HHS now identifies the following additional HHS programs as providing “Federal public benefit[s]”: (32) Title X Family Planning Program; (33) Head Start; (34) Title IV-E Educational and Training Voucher Program; (35) Community Services Block Grant (CSBG); (36) Health Center Program; (37) Substance Use Prevention, Treatment, and Recovery Services Block Grant; (38) Community Mental Health Services Block Grant; (39) Projects for Assistance in Transition from Homelessness Grant Program; (40) Certified Community Behavioral Health Clinics; (41) Mental Health and Substance Use Disorder Treatment, Prevention, and Recovery Support Services Programs administered by the Substance Abuse and Mental Health Services Administration not otherwise covered under (37)-(40), above; (42) Title IV-E Prevention Services Program; (43) Title IV-E Kinship Guardianship Assistance Program; (44) Health Workforce Programs not otherwise covered under “(10) Health Profession Education and Training Assistance”, as described above (including grants, loans, scholarships, payments, and loan repayments).
To be clear, the above list is not exhaustive. Any programs not listed in this notice or established after the date of this notice may still fall under the definition of Federal public benefit. Any additional programs determined to be Federal public benefits will be announced in program specific guidance.
The 1998 Notice, at various points, touched on the immigration-status verification requirements that PRWORA, as amended, attached to HHS programs. While verification requirements are related to a practical effectuation of the prohibition set forth in § 1611(a), they are conceptually distinct from a proper definition of “Federal public benefit.” Thus, the Department is not formally revising the aspects of the 1998 Notice that touch on PROWRA's verification requirements at this time.
However, the Department notes important considerations for stakeholders to keep in mind. The American people, acting through their elected representatives in Congress and the President that they have elected to lead the Executive Branch, has made it clear that it is the policy of this country that persons' access to public benefits should turn on those persons' immigration status. In enacting PRWORA, “Congress ma[de] the following statements concerning national policy with respect to welfare and immigration”: “It continues to be the immigration policy of the United States” that “aliens within the Nation's borders not depend on public resources to meet their needs, but rather rely on their own capabilities and the resources of their families, their sponsors, and private organizations,” and that “the availability of public benefits not constitute an incentive for immigration to the United States.” 8 U.S.C. 1601.
President Trump has similarly issued numerous Presidential actions that reflect the will of the American people that aliens should not burden our public benefits system and that our public benefits system should not serve as a magnet for illegal immigration. This Administration recognizes that it is “it is national policy that `aliens within the Nation's borders not depend on public resources to meet their needs,' and that `it is a compelling government interest to remove the incentive for illegal immigration provided by the availability of public benefits.'” Executive Order 14218, § 1, 90 FR 10581 (quoting PRWORA, alterations omitted). Thus, President Trump has emphasized that his Administration “will uphold the rule of law, defend against the waste of hard-earned taxpayer resources, and protect benefits for American citizens in need, including individuals with disabilities and veterans.”
Even if PRWORA and related regulatory activity do not mandate an entity to conduct verification of the immigration status of a person applying for benefits, nothing in the statute prohibits such an entity from conducting verification.
To be clear, the Department hereby explicitly “display[s] awareness that it is changing position.”
Some may argue that there are reliance interests that are affected by the Department's change in position. Some may argue that the Department's new position will negatively impact public health. However strong these hypothetical policy arguments may be, the Department has no power to override Congress's will, expressed in the clear statutory text of PROWRA.
Although HHS is soliciting public comment on this interpretation, it is necessary to apply this interpretation to HHS programs immediately, prior to receipt and consideration of any comments. Any delay would be contrary to the public interest and fail to address the ongoing emergency at the Southern Border of the United States.
During the prior administration, the numbers of illegal aliens who entered the United States reached dangerous levels, threatened the safety and wellbeing of the American people, and strained Federal and State resources.
Additional delay will also cause unnecessary or incorrect administrative actions by agencies or entities that administer our programs, resulting ultimately in the denial of critical benefits and services to U.S. citizens and qualified aliens who, according to the interpretation in this notice, are otherwise eligible. In sum, although we are providing a 30-day period for public comment, as indicated at the beginning of this notice, this interpretation is effective immediately. Post-promulgation notice-and-comment and immediate effectiveness are consistent with the Administrative Procedure Act, pursuant to 5 U.S.C. 553(b)(A) and (d)(2).
We have examined the impacts of the notice under Executive Order 12866, Executive Order 13563, Executive Order 14192, the Regulatory Flexibility Act (5 U.S.C. 601-612), the Congressional Review Act/Small Business Regulatory Enforcement Fairness Act of 1996 (5 U.S.C. 801, Pub. L. 104-121), and the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4).
Executive Orders 12866 and 13563 direct us to assess all benefits and costs of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits. Regulatory actions are “economically significant” under section 3(f)(1) Executive Order 12866 if they “have an annual effect on the economy of $100 million or more; or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities.” Executive Order 14192 requires that any new incremental costs associated with significant new regulations “shall, to the extent permitted by law, be offset by the elimination of existing costs associated with at least ten prior regulations.” This notice addresses alien eligibility for public benefits, and thus is expressly exempt from the requirements of Executive Order 14192 as a regulatory action related to an immigration-related function of the United States. The analysis indicates, and the Office of Information and Regulatory Affairs (OIRA) has determined, that this notice is an economically significant regulatory action under section 3(f)(1) Executive Order 12866.
Because this notice may result in an annual effect on the economy of $100 million or more or meet other criteria specified in the Congressional Review Act/Small Business Regulatory Enforcement Fairness Act of 1996, OIRA has determined that this notice falls within the scope of 5 U.S.C. 804(2).
The Regulatory Flexibility Act requires Agencies to analyze regulatory options that would minimize any significant impact of a rule on small entities. Because the incremental costs of verification are about 0.1% of the average annual expenditures per enrollee, we certify that the notice will not have a significant economic impact on a substantial number of small entities. This analysis, as well as other sections in this document and the notice, serves as the Final Regulatory Flexibility Analysis, as required under the Regulatory Flexibility Act.
The Unfunded Mandates Reform Act of 1995 (UMRA) generally requires that each agency conduct a cost-benefit analysis; identify and consider a reasonable number of regulatory alternatives; and select the least costly, most cost-effective, or least burdensome alternative that achieves the objectives of the rule before promulgating any proposed or final rule that includes a Federal mandate that may result in expenditures of more than $100 million (adjusted for inflation) in at least one year by State, local, and tribal governments, in the aggregate, or by the private sector. Each agency issuing a rule with relevant effects over that threshold must also seek input from State, local, and tribal governments. The current threshold after adjustment for inflation using the Implicit Price Deflator for the Gross Domestic Product is $187 million, reported in 2024 dollars. UMRA only applies in situations where an agency engages in notice-and-comment rulemaking. It does not apply to this notice.
This notice updates and corrects our interpretation of the term “Federal public benefit.” We anticipate that the notice will lead to a reduction in improper expenditures of taxpayer resources on Federal public benefits for unqualified aliens and a corresponding increase in benefits for U.S. citizens and qualified aliens. We present a partial benefit-cost analysis of the notice—for some effects, focusing on the impacts of one program as an illustrative case of the full potential economic impacts. For the Head Start program, we report a primary estimate of $374 million in annual effects representing incremental expenditures on U.S. citizens and
Pursuant to section 10(a) of the Federal Advisory Committee Act, as amended, notice is hereby given of a meeting of the Scientific Advisory Committee on Alternative Toxicological Methods (SACATM).
SACATM is a federally chartered external advisory group of scientists from the public and private sectors, including representatives of regulated industry and national animal protection organizations. SACATM advises the Interagency Coordinating Committee on the Validation of Alternative Methods (ICCVAM), the National Toxicology Program (NTP) Interagency Center for the Evaluation of Alternative Toxicological Methods (NICEATM), and the Director of the National Institute of Environmental Health Sciences (NIEHS) and NTP regarding statutorily mandated duties of ICCVAM and activities of NICEATM.
This meeting will be held as a virtual meeting and open to the public. Individuals who plan to view the virtual meeting and need special assistance, such as sign language interpretation or other reasonable accommodations, should notify the Contact Person listed below. TTY users should contact the Federal TTY Relay Service at 800-877-8339 or 711 for TTY Relay Service. All requests should be made at least five business days in advance of the meeting.
Meeting is being amended to reflect updated TTY Relay Service phone number.
Registration is required to attend to view the webcast, and/or present oral comments. Written public comments will be accepted. Information about the meeting, registration, and how to submit public comments are available at
Any member of the public interested in presenting oral comments may register at
In addition, any interested person may file written comments with the committee. Information on submitting written comment is available at
Responses to this notice are voluntary. No proprietary, classified, confidential, or sensitive information should be included in statements submitted in response to this notice or presented during the meeting. This request for input is for planning purposes only and is not a solicitation for applications or an obligation on the part of the U.S. Government to provide support for any ideas identified in response to the request. Please note that the U.S. Government will not pay for the preparation of any information submitted or for its use of that information.
Additional information about SACATM, including link to the charter, roster, and records of past meetings, can be found at
Fish and Wildlife Service, Interior.
Notice of initiation of reviews; request for information.
We, the U.S. Fish and Wildlife Service, are initiating 5-year status reviews under the Endangered Species Act for the short-tailed albatross and the wood bison. A 5-year status review is based on the best scientific and commercial data available at the time of the review; therefore, we are requesting submission of any new information on these species that has become available since the last reviews.
To ensure consideration of your information in our reviews, we must receive your comments or information on or before September 12, 2025. However, we will accept new information about the species at any time.
For short-tailed albatross, please submit your information by one of the following methods:
•
•
For the wood bison, please submit your information by one of the following methods:
•
•
For more about submitting information, see Request for Information in the
For short-tailed albatross: Jennifer Spegon, by telephone at 907-271-2768 or by one of the methods in
For the wood bison: Carol Mahara, by telephone at 907-280-9751 or by one of the methods in
Individuals in the United States who are deaf, deafblind, hard of hearing, or have a speech disability may dial 711 (TTY, TTD, or TeleBraille) to access telecommunications relay services. Individuals outside the United States should use the relay services offered within their country to make international calls to the point-of-contact in the United States.
We, the U.S. Fish and Wildlife Service (Service), are initiating 5-year status reviews under the Endangered Species Act of 1973, as amended (ESA; 16 U.S.C. 1531
Under the ESA, we maintain Lists of Endangered and Threatened Wildlife and Plants (which we collectively refer to as the List) in title 50 of the Code of Federal Regulations (CFR) at 50 CFR 17.11 (for wildlife) and 50 CFR 17.12 (for plants). Section 4(c)(2)(A) of the ESA (16 U.S.C. 1533(c)(2)(A)) requires us to review each listed species' status at least once every 5 years. Our regulation at 50 CFR 424.21 requires that we publish a notice in the
A 5-year status review considers all new information available at the time of the review. In conducting these reviews, we consider the best scientific and commercial data that have become available since the current listing determination or most recent status review of each species, such as:
A. Species biology, including but not limited to population trends, distribution, abundance, demographics, and genetics;
B. Habitat conditions, including but not limited to amount, distribution, and suitability;
C. Conservation measures that have been implemented that benefit the species;
D. Threat status and trends in relation to the five listing factors (as defined in section 4(a)(1) of the ESA (16 U.S.C. 1533(a)(1)); and
E. Other new information, data, or corrections, including but not limited to taxonomic or nomenclatural changes, identification of erroneous information contained in the List, and improved analytical methods.
Any new information will be considered during the 5-year review and will also be useful in evaluating the ongoing recovery programs for the species.
•
•
•
•
•
•
To ensure that a 5-year review is complete and based on the best available scientific and commercial information, we request new information from all sources. See the section “What Information Do We Consider in Our Review?” above for specific criteria. If you submit information, please support it with documentation such as maps, references, methods used to gather and analyze the data, and/or copies of any pertinent publications, reports, or letters by knowledgeable sources.
If you wish to provide information for either species listed above, please submit your comments and materials to the appropriate contact in the
Before including your address, phone number, email address, or other personal identifying information in your submission, you should be aware that your entire submission—including your personal identifying information—may be made publicly available at any time. Although you can request that personal identifying information be withheld from public review, we cannot guarantee that we will be able to do so.
A list of all completed and currently active 5-year status reviews can be found at
This document is published under the authority of the Endangered Species Act of 1973, as amended (16 U.S.C. 1531
Bureau of Land Management, Interior.
Notice of public meeting.
In accordance with the Federal Land Policy and Management Act of 1976 and the Federal Advisory Committee Act of 1972, the U.S. Department of the Interior, Bureau of Land Management (BLM) Idaho Resource Advisory Council (RAC) will meet as indicated below.
The Idaho RAC will hold a virtual meeting on Tuesday, August 19, 2025, from 9 a.m. to 5 p.m. Mountain Time (MT). The meeting is open to the public.
The final agenda and virtual participation instructions will be
Monte (Ken) Anderson, telephone: (208) 373-3833, email:
The Idaho RAC is chartered, and the 15-members are appointed by the Secretary of the Interior through the BLM. Their diverse perspectives are represented in commodity, non-commodity, and local area interests. The Idaho RAC serves in an advisory capacity to BLM officials concerning issues relating to land use planning and management of public land resources located within the State of Idaho.
The August 19, 2025, agenda items include a report from the State Director, presentations and discussions on proposed new recreation fees, energy proposals, recreation, restoration and fuels treatments, a fire season update, and District Office updates.
Before including your address, phone number, email address, or other personal identifying information in your comments, please be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comments to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.
Detailed summary minutes for the Idaho RAC meetings will be maintained in the BLM Idaho State Office and will be available for public inspection and reproduction during regular business hours within 30 days of the meetings. Previous minutes and agendas are also available on the Idaho RAC web page at
United States International Trade Commission.
Notice.
July 10, 2025.
Charles Cummings (202-708-1666), Office of Investigations, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436. Hearing-impaired persons can obtain information on this matter by contacting the Commission's TDD terminal on 202-205-1810. Persons with mobility impairments who will need special assistance in gaining access to the Commission should contact the Office of the Secretary at 202-205-2000. General information concerning the Commission may also be obtained by accessing its internet server (
Effective May 6, 2025, the Commission established a schedule for the conduct of the final phase of the subject investigations (90 FR 21948, May 22, 2025). The Commission is revising its schedule as follows: the Commission will make its final release of information on August 11, 2025, and final party comments are due on 5:15 p.m. on August 13, 2025.
For further information concerning this proceeding, see the Commission's notice cited above and the Commission's Rules of Practice and Procedure, part 201, subparts A through E (19 CFR part 201), and part 207, subparts A and C (19 CFR part 207).
By order of the Commission.
U.S. International Trade Commission.
Notice.
Notice is hereby given that the U.S. International Trade Commission has determined not to review an initial determination (“ID”) (Order No. 18) of the presiding administrative law judge (“ALJ”) granting a motion to amend the complaint and notice of investigation to correct the names of certain respondents and to remove one respondent.
Sidney A. Rosenzweig, Office of the General Counsel, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436, telephone (202) 708-2532. Copies of non-confidential documents filed in connection with this investigation may be viewed on the Commission's electronic docket (EDIS) at
On January 22, 2025, the Commission instituted this investigation based on a complaint filed by Modumetal, Inc. of Snohomish, Washington (“Modumetal”). 90 FR 7704 (Jan. 22, 2025). The complaint alleged violations of section 337 of the Tariff Act of 1930, as amended, 19 U.S.C. 1337, based upon the importation into the United States, the sale for importation, and the sale within the United States after importation of certain nanolaminate alloy coated metal parts, components thereof, and products containing the same by reason of the infringement of certain claims of U.S. Patent Nos. 10,253,419 and 11,242,613.
On May 28, 2025, the Commission amended the complaint and notice of investigation to add seven new respondents: Jiangsu DVP Hi Press Tech Co. of Jiangsu, China (“Jiangsu DVP Hi Press”); Kunshan Huizong Machine Co. of Jiangsu, China (“Kunshan”); Maxort Philippines Inc. of Laguna, Philippines; Paloma Turning Co. Pvt Ltd. of Karnataka, India; Shaoxing Xuantong Fluid Connectors Manufacturing Co., Ltd. of Zhejiang, China; Overseas International Group of Shanghai, China (“Overseas”); and Zhejiang Unifull Industrial Fibre Co., Ltd. of Zhejiang, China (“Zhejiang Unifull”). Order No. 13 at 1, 7 (May 8, 2025),
On June 6, 2025, Modumetal filed an unopposed motion pursuant to Commission Rule 210.14(b)(1) & (c), 19 CFR 210.14(b)(1) & (c), to: amend the notice of investigation (“NOI”) to replace Zhejiang Unifull with Zhejiang Fitting Machinery Co., Ltd., also of Zhejiang China; correct the name of Jiangsu DVP Hi Press as Jiangsu DVP Hi Pressure Technology Co., Ltd., also of Jiangsu, China; correct the name of Overseas as Shanghai Overseas Enterprises Co., Ltd., also of Shanghai, China; and remove reference in the NOI to Kunshan to conform to evidence.
On June 10, 2025, the ALJ issued the subject ID (Order No. 18) granting the motion. The ID finds that good cause exists to grant the motion. ID at 5-6. The ID explains that the parties worked together to ensure that each of the respondents had been identified correctly.
No petitions for Commission review of the ID were filed. The Commission has determined not to review the ID.
The Commission vote for this determination took place on July 9, 2025.
The authority for the Commission's determination is contained in section 337 of the Tariff Act of 1930, as amended (19 U.S.C. 1337), and in Part 210 of the Commission's Rules of Practice and Procedure (19 CFR part 210).
By order of the Commission.
Judicial Conference of the United States.
Advisory Committees on Appellate, Bankruptcy, Civil, Criminal, and Evidence Rules; notice of proposed amendments and open hearings.
All written comments and suggestions with respect to the proposed amendments may be submitted on or after the opening of the period for public comment on August 15, 2025, but no later than February 16, 2026.
Written comments must be submitted electronically, following the instructions provided on the website. Comments will be available to the public.
Virtual public hearings are scheduled on the proposed amendments as follows:
• Appellate Rules on January 16, 2026, and February 6, 2026;
• Bankruptcy Rules on January 23, 2026, and January 30, 2026;
• Civil Rules on January 13, 2026, and January 27, 2026;
• Criminal Rules on January 22, 2026 and February 5, 2026; and
• Evidence Rules on January 15, 2026, and January 29, 2026.
Those wishing to testify must contact the Secretary of the Committee on Rules of Practice and Procedure by email at:
Carolyn A. Dubay, Esq., Chief Counsel, Rules Committee Staff, Administrative Office of the U.S. Courts, Thurgood Marshall Federal Judiciary Building, One Columbus Circle NE, Suite 7-300, Washington, DC 20544, Phone (202) 502-1820,
The Advisory Committees on Appellate, Bankruptcy, Civil, Criminal, and Evidence Rules have proposed amendments to the following rules:
• Appellate Rule 15;
• Bankruptcy Rule 2002;
• Bankruptcy Official Forms B101 and 106C;
• Civil Rules 7.1, 26, 41, 45, and 81;
• Criminal Rule 17; and
• Evidence Rule 609 and new Rule 707.
The text of the proposals will be posted on August 15, 2025, on the Judiciary's website at:
On July 22, 2024, the Drug Enforcement Administration (DEA or Government) issued an Order to Show Cause (OSC) to Elias Garcia Garcia, P.A., of Yuma, Arizona (Registrant). Request for Final Agency Action (RFAA), Exhibit (RFAAX) 2, at 1, 3. The OSC proposed the revocation of Registrant's Certificate of Registration No.
The OSC notified Registrant of his right to file with DEA a written request for hearing, and that if he failed to file such a request, he would be deemed to have waived his right to a hearing and be in default.
Further, “[i]n the event that a registrant . . . is deemed to be in default . . . DEA may then file a request for final agency action with the Administrator, along with a record to support its request. In such circumstances, the Administrator may enter a default final order pursuant to [21 CFR] 1316.67.”
The Agency finds that, in light of Registrant's default, the factual allegations in the OSC are admitted. Registrant admits that, on the date the OSC was issued, Registrant was registered as a physician assistant in the State of Arizona. RFAAX 2, at 2. That registration expressly prohibited Registrant from prescribing controlled substances.
Pursuant to 21 U.S.C. 824(a)(3), the Attorney General is authorized to suspend or revoke a registration issued under 21 U.S.C. 823 “upon a finding that the registrant . . . has had his State license or registration suspended . . . [or] revoked . . . by competent State authority and is no longer authorized by State law to engage in the . . . dispensing of controlled substances.” With respect to a practitioner, DEA has also long held that the possession of authority to dispense controlled substances under the laws of the state in which a practitioner engages in professional practice is a fundamental condition for obtaining and maintaining a practitioner's registration.
According to Arizona statute, “[e]very person who manufactures, distributes, dispenses, prescribes or uses for scientific purposes any controlled substance within [Arizona] or who proposes to engage in the manufacture, distribution, prescribing or dispensing of or using for scientific purposes any controlled substance within [Arizona]must first: (1) [o]btain and possess a current license or permit as a medical practitioner as defined in § 32-1901 . . . .” Ariz. Rev. Stat. Ann. § 36-2522(A)(1) (West 2025). Section 32-1901 defines a “[m]edical practitioner” as “any medical doctor . . . or other person who is licensed and authorized by law to use and prescribe drugs and devices to treat sick and injured human beings or animals or to diagnose or prevent sickness in human beings or animals in [Arizona] or any state, territory or district of the United States.”
Here, the undisputed evidence in the record is that Registrant lacks authority to practice as a physician assistant or to handle controlled substances in Arizona. As discussed above, only a licensed medical practitioner can dispense controlled substances in Arizona. Thus, because Registrant lacks authority to practice as a physician assistant or to handle controlled substances in Arizona, and therefore is not a licensed medical practitioner, Registrant is not eligible to maintain a
Pursuant to 28 CFR 0.100(b) and the authority vested in me by 21 U.S.C. 824(a), I hereby revoke DEA Certificate of Registration No. MG8041206 issued to Elias Garcia Garcia, P.A. Further, pursuant to 28 CFR 0.100(b) and the authority vested in me by 21 U.S.C. 823(g)(1), I hereby deny any pending applications of Elias Garcia Garcia, P.A., to renew or modify this registration, as well as any other pending application of Elias Garcia Garcia, P.A., for additional registration in Arizona. This Order is effective August 13, 2025.
This document of the Drug Enforcement Administration was signed on July 9, 2025, by Acting Administrator Robert J. Murphy. That document with the original signature and date is maintained by DEA. For administrative purposes only, and in compliance with requirements of the Office of the Federal Register, the undersigned DEA Federal Register Liaison Officer has been authorized to sign and submit the document in electronic format for publication, as an official document of DEA. This administrative process in no way alters the legal effect of this document upon publication in the
On November 18, 2024, the Agency issued an Order to Show Cause and Immediate Suspension of Registration (OSC/ISO) to JYA LLC d/b/a Webb's Square Pharmacy of Davenport, Florida (Registrant). OSC/ISO, at 1. The OSC/ISO informs Registrant of the immediate suspension of its Drug Enforcement Administration (DEA or Government) Certificate of Registration, No. FJ2231570, pursuant to 21 U.S.C. 824(d), alleging that Registrant's continued registration constitutes “an imminent danger to the public health or safety.”
More specifically, the OSC/ISO alleges that Registrant dispensed controlled substances to individuals without a valid prescription and for other than a legitimate medical purpose “between on or about July 31, 2021, until at least on or about March 28, 2024.”
According to the signed DEA-12, Registrant's designated contact person received the OSC/ISO through personal delivery by a Diversion Investigator and a Task Force Officer on November 21, 2024. Request for Final Agency Action (RFAA), Exhibit (RFAAX) 2, at 1. According to the Controlled Substances Act (CSA) and its implementing regulations, Registrant had thirty days from November 21, 2024, to request a hearing. 21 U.S.C. 824(c)(2)(B); 21 CFR 1301.43(a), 21 CFR 1316.47. The Government represents in its RFAA that Registrant “fail[ed] to submit a request for a hearing and answer,” and that as of February 7, 2025, Registrant “has not filed a motion showing good cause to excuse the default or to reinstate the proceedings.” RFAA, at 2, 9.
Accordingly, based on the Government's representations, the Agency finds that Registrant has not filed a request for a hearing, is deemed to have waived its right to a hearing, is in default, and is deemed to admit the factual allegations of the OSC/ISO. 21 CFR 1301.43(c)(1) and (e). The Agency, therefore, issues this Decision and Order based on the record submitted by the Government, which constitutes the entire record before the Agency. 21 CFR 1301.43(e).
The main objectives of the CSA, according to the Supreme Court, are to “conquer drug abuse and to control the legitimate and illegitimate traffic in controlled substances.”
According to the CSA's implementing regulations, a lawful controlled substance order or prescription is one that is “issued for a legitimate medical purpose by an individual practitioner acting in the usual course of his professional practice.” 21 CFR 1306.04(a). As the Supreme Court explained in the context of the Act's requirement that Schedule II controlled substances may be dispensed only by written prescription, “the prescription requirement . . . ensures patients use controlled substances under the supervision of a doctor so as to prevent addiction and recreational abuse . . . [and] also bars doctors from peddling to patients who crave the drugs for those prohibited uses.”
While the “responsibility for the proper prescribing and dispensing of controlled substances is upon the prescribing practitioner, . . . a corresponding responsibility rests with the pharmacist who fills the prescription.” 21 CFR 1306.04(a). The regulations state the parameters of the pharmacist's corresponding responsibility.
An order purporting to be a prescription issued not in the usual course of professional treatment . . . is not a prescription within the meaning and intent of section 309 of the Act (21 U.S.C. 829) and the person knowingly filling such a purported prescription, as well as the person issuing it, shall be subject to the penalties provided for violations of the provisions of law relating to controlled substances.
The OSC/ISO is addressed to Registrant at its registered address in Florida. Therefore, the Agency also evaluates Registrant's actions according
Due to Registrant's default, the Agency finds that Registrant admits to all of the OSC/ISO's factual allegations. 21 CFR 1301.43(c)(1) and (e). The salient deemed-admitted facts are below.
Registrant is the holder of Certificate of Registration No. FJ2231570 at the registered address of 2200 South Boulevard West in Davenport, Florida 33827. OSC/ISO, at 1.
Between July 5, 2022, and March 28, 2024, Registrant's owner and Pharmacist-in-Charge (OPIC) engaged in frequent conversations with multiple individuals in which OPIC agreed to dispense controlled substances to individuals without a valid prescription and for other than a legitimate medical purpose. OSC/ISO, at 3. Between July 5, 2022, and December 12, 2023, OPIC and Dr. T.D. engaged in multiple conversations, via text message, in which OPIC agreed to dispense controlled substance prescriptions for cash to “patients” of Dr. T.D. where OPIC knew or should have known the prescriptions were issued for other than a legitimate medical purpose.
On or about January 2, 2023, after discussing with OPIC what promethazine with codeine and Tussionex Registrant had available, Dr. T.D. informed OPIC that he would be sending approximately thirteen illegitimate prescriptions for Registrant to dispense.
On or about January 9, 2023, after discussing with Registrant what was available, Dr. T.D. informed OPIC that he would be sending five illegitimate controlled substance prescriptions for promethazine with codeine.
On or about December 12, 2023, Dr. T.D. informed OPIC that he would be sending four illegitimate prescriptions for Registrant to dispense. On the same day, Registrant dispensed promethazine with codeine to four individuals, D.T., J.R., R.M., and A.C., when it knew or should have known that Dr. T.D.'s prescriptions were illegitimate.
Between December 5, 2022, and August 2, 2023, OPIC and C.Y. engaged in multiple conversations via text message during which OPIC agreed to dispense controlled substance prescriptions to C.Y. for other than legitimate medical purposes.
Between August 1, 2021, and March 28, 2024, OPIC and E.D. engaged in multiple conversations via text message during which OPIC agreed to dispense controlled substance prescriptions to E.D. for other than legitimate medical purposes.
In sum, the deemed-admitted facts establish that Registrant unlawfully dispensed about 312 controlled substance prescriptions between about July, 2022 and March, 2024.
According to the OSC/ISO, Registrant “dispensed controlled substances to individuals without a valid prescription and for other than a legitimate medical purpose.” OSC/ISO, at 2. The facts deemed admitted due to Registrant's default establish that Registrant violated multiple provisions of applicable federal and Florida law.
According to the deemed-admitted facts, Registrant knew or should have known that the controlled substance prescriptions listed in the OSC/ISO that it filled after text message conversations with Dr. T.D., C.Y., and E.D., were not issued for a legitimate medical purpose.
Under Section 304 of the CSA, “[a] registration . . . to . . . distribute[ ] or dispense a controlled substance . . . may be suspended or revoked by the Attorney General upon a finding that the registrant . . . has committed such acts as would render his registration under . . . [21 U.S.C. 823] inconsistent with the public interest as determined by such section.” 21 U.S.C. 824(a)(4). In the case of a “practitioner,” which is defined in 21 U.S.C. 802(21) to include a “pharmacy,” Congress directed the Attorney General to consider five factors in making the public interest determination. 21 U.S.C. 823(g)(1)(A-E).
(A) The recommendation of the appropriate State licensing board or professional disciplinary authority.
(B) The [registrant's] experience in dispensing, or conducting research with respect to controlled substances.
(C) The [registrant's] conviction record under Federal or State laws relating to the manufacture, distribution, or dispensing of controlled substances.
(D) Compliance with applicable State, Federal, or local laws relating to controlled substances.
(E) Such other conduct which may threaten the public health and safety.
The five factors are considered in the disjunctive.
The Agency “may rely on any one or a combination of factors and may give each factor the weight [it] deems appropriate.
According to DEA regulations, “[a]t any hearing for the revocation . . . of a registration, the . . . [Government] shall have the burden of proving that the requirements for such revocation . . . pursuant to . . . 21 U.S.C. 824(a) . . . are satisfied.” 21 CFR 1301.44(e);
While the Agency considered all of the 21 U.S.C. 823(g)(1) factors in this matter, the Agency finds that the Government's
As detailed above, the Agency concludes, based on the deemed-admitted facts, that Registrant violated federal law and the applicable Florida Pharmacy Standards of Practice about 312 times between July, 2021 and March, 2024 by dispensing controlled substances when it knew, or should have known, that the prescriptions were invalid and were issued for other than a legitimate medical purpose. 21 CFR 1306.04(a); Fla. Stat. § 465.016(1)(s); Fla. Admin. Code Ann. r. 64B16-27.831(1)(a), (1)(b), (2);
Accordingly, the Agency finds that the Government presented a
Where, as here, (1) Registrant is deemed to have admitted the factual allegations in the OSC/ISO, (2) the deemed-admitted facts are substantial evidence proving the legal violations alleged to support revocation based on acts inconsistent with the public
Further, the Agency has found that the egregiousness and extent of the misconduct are significant factors in determining the appropriate sanction.
Regarding these matters, there is no record evidence that Registrant takes responsibility, let alone unequivocal responsibility, for the founded violations. As such, Registrant has not presented any evidence showing that it can be entrusted with a registration. Accordingly, the record supports the imposition of a sanction.
The interests of specific and general deterrence weigh in favor of revocation given the egregiousness of the founded violations, violations that go to the heart of the CSA and of this Agency's law enforcement mission.
Accordingly, the Agency shall order the revocation of Registrant's registration.
Pursuant to 28 CFR 0.100(b) and the authority vested in me by 21 U.S.C. 824(a)(4) and 21 U.S.C. 823(g)(1), I hereby revoke DEA Certificate of Registration No. FJ2231570 issued to JYA LLC d/b/a Webb's Square Pharmacy.
Further, pursuant to 28 CFR 0.100(b) and the authority vested in me by 21 U.S.C. 824(a) and 21 U.S.C. 823(g)(1), I hereby deny any pending application of JYA LLC d/b/a Webb's Square Pharmacy to renew or modify this registration, as well as any other pending application of JYA LLC d/b/a Webb's Square Pharmacy for registration in Florida.
This Order is effective August 13, 2025.
This document of the Drug Enforcement Administration was signed on July 8, 2025, by Acting Administrator Robert J. Murphy. That document with the original signature and date is maintained by DEA. For administrative purposes only, and in compliance with requirements of the Office of the Federal Register, the undersigned DEA Federal Register Liaison Officer has been authorized to sign and submit the document in electronic format for publication, as an official document of DEA. This administrative process in no way alters the legal effect of this document upon publication in the
On December 2, 2024, the Drug Enforcement Administration (DEA or Government) issued an Order to Show Cause (OSC) to Michael Bouknight of Norristown, Pennsylvania (Applicant). Request for Final Agency Action (RFAA), Exhibit (RFAAX) 3, at 1, 4. The OSC proposed the denial of Applicant's applications for DEA registration, Control Nos. W24128628C and W24092701C, alleging that he currently lacks state authority to handle controlled substances in Pennsylvania and that he materially falsified his applications for registration.
On January 16, 2025, the Government submitted an RFAA to the Administrator requesting that the Agency issue a default final order denying Applicant's applications. RFAA, at 1, 4. After carefully reviewing the entire record and conducting the analysis as set forth in detail below, the Agency finds that Applicant is in default, finds that Applicant is without state authority, and finds that Applicant materially falsified his applications. Accordingly, the Agency grants the Government's RFAA and denies Applicant's applications.
Under 21 CFR 1301.43, an applicant entitled to a hearing who fails to file a timely hearing request “within 30 days after the date of receipt of the [OSC] . . . shall be deemed to have waived their right to a hearing and to be in default” unless “good cause” is established for the failure. 21 CFR 1301.43(a), (c)(1). In the absence of a demonstration of good cause, an applicant who fails to timely file an answer also is “deemed to have waived their right to a hearing and to be in default.” 21 CFR 1301.43(c)(2). Unless excused, a default constitutes “an admission of the factual allegations of the [OSC].” 21 CFR 1301.43(e).
The OSC notified Applicant of his right to file a written request for hearing and answer, and that if he failed to file such a request and answer, he would be deemed to have waived his right to a hearing and be in default.
“A default, unless excused, shall be deemed to constitute a waiver of the [applicant's] right to a hearing and an admission of the factual allegations of the [OSC].” 21 CFR 1301.43(e). Because Applicant is in default and has not moved to excuse the default, the Agency finds that Applicant has admitted to the factual allegations in the OSC. 21 CFR 1301.43(c)(1), (e), (f)(1).
Further, “[i]n the event that [an applicant] . . . is deemed to be in default . . . DEA may then file a request for final agency action with the Administrator, along with a record to support its request. In such circumstances, the Administrator may enter a default final order pursuant to [21 CFR] 1316.67.” 21 CFR 1301.43(f)(1). Here, the Government has requested final agency action based on Applicant's default pursuant to 21 CFR 1301.43(c), (f), and 1301.46. RFAA, at 1-2, 4;
The Agency finds that, in light of Applicant's default, the factual allegations in the OSC are deemed admitted. 21 CFR 1301.43(e). Accordingly, Applicant is deemed to have admitted, in accordance with the OSC, that there is no “record of [Applicant] having ever been authorized to handle controlled substances in Pennsylvania.” RFAAX 3, at 2. According to Pennsylvania online records, of which the Agency takes official notice, Applicant does not possess any professional license that authorizes him to handle controlled substances under the laws of Pennsylvania.
Pursuant to 21 U.S.C. 824(a)(3), the Attorney General may suspend or revoke a registration issued under 21 U.S.C. 823 “upon a finding that the registrant . . . has had his State license or registration suspended . . . [or] revoked . . . by competent State authority and is no longer authorized by State law to engage in the . . . dispensing of controlled substances.” With respect to a practitioner, DEA has also long held that the possession of authority to dispense controlled substances under the laws of the state in which a practitioner engages in professional practice is a fundamental condition for obtaining and maintaining a practitioner's registration.
According to Pennsylvania statute, “dispense” means “to deliver a controlled substance, other drug or device to an ultimate user or research subject by or pursuant to the lawful order of a practitioner, including the prescribing, administering, packaging, labeling, or compounding necessary to prepare such item for that delivery.” 35 Pa. Stat. § 780-102(b) (West 2025). Further, a “practitioner” means “a physician . . . or other person licensed, registered or otherwise permitted to distribute, dispense, conduct research with respect to or to administer a controlled substance, other drug or device in the course of professional practice or research in the Commonwealth of Pennsylvania.”
Here, the undisputed evidence in the record is that Applicant lacks authority to handle controlled substances in Pennsylvania. As discussed above, a person must be a licensed practitioner to dispense a controlled substance in Pennsylvania. Thus, because Applicant lacks authority to handle controlled substances in Pennsylvania, he is not eligible to obtain or maintain a DEA registration in Pennsylvania. Accordingly, the Agency will order that Applicant's applications for DEA registration be denied.
The Agency finds that, in light of Applicant's default, the factual allegations in the OSC are deemed admitted. 21 CFR 1301.43(e). Accordingly, Applicant is deemed to have admitted to each of the following facts. On July 8, 2024, and September 6, 2024, Applicant submitted applications for DEA registration as a practitioner in Schedules II through V. RFAAX 3, at 2. The application forms contained the following statement from DEA: “[Applicant] must be currently authorized to prescribe, distribute, dispense, conduct research, or otherwise handle the controlled
When Applicant submitted his applications, he was not authorized in Pennsylvania to handle controlled substances and there is no record that he has ever been authorized to handle controlled substances in Pennsylvania.
A DEA registration may be denied, suspended, or revoked upon a finding that the applicant or registrant materially falsified any application filed pursuant to or required by the Controlled Substances Act (CSA). 21 U.S.C. 824(a)(1).
The Supreme Court's decision in
First, the Government must prove that the applicant or registrant submitted an application for registration pursuant to the CSA. 21 U.S.C. 824(a)(1);
Second, the Government must prove that the application contained a false statement or omitted information that the application required, either of which may constitute a material falsity.
Third, the Government must prove that the applicant or registrant knew or should have known that the statement is false and/or that the omitted information existed and the application required its disclosure.
Fourth, the Government must prove that the false statement and/or required but omitted information is “material.”
The Government has the burden of proof in this proceeding. 21 CFR 1301.44. Here, the Agency finds that the Government's record evidence presents a
Applicant submitted two applications for DEA registration; each form notified Applicant that state authority to handle controlled substances is a prerequisite to obtain a DEA registration. RFAAX 3, at 2. Both applications clearly asked for Applicant's state license number, to which Applicant responded with a license number that did not belong to him, and therefore, did not authorize him to handle controlled substances.
In addition, the falsifications were material. The Agency has consistently held for decades that possessing valid state authority to handle controlled substances is a prerequisite for obtaining a DEA registration.
In
Here, Applicant's representations that he possessed authority in Pennsylvania to handle controlled substances had the capacity to lead DEA to believe that he met the qualifications for registration, when, in fact, he did not, because those qualifications did not belong to Applicant; they belonged to another practitioner. RFAAX 3, at 2. Thus, the falsities directly affected the statutory analysis that DEA was required to make when it reviewed his applications. 21 U.S.C. 802(21), 823(g)(1), 824(a)(3);
In sum, the Agency finds clear, unequivocal, and convincing record evidence, and Applicant is deemed to have admitted, that he submitted two materially false applications for registration. 21 U.S.C. 824(a)(1); 21 CFR 1301.43(e).
As a result of this established violation, the Agency finds that the Government has established a
Where, as here, the Government has presented a
Specifically, the Agency requires the practitioner to accept responsibility for his or her violation.
Here, Applicant did not timely request a hearing, or timely or properly answer the allegations, and was therefore deemed to be in default. 21 CFR 1301.43(c)(1), (e), (f)(1); RFAA, at 1-4. To date, Applicant has not filed a motion with the Office of the Administrator to excuse the default. 21 CFR 1301.43(c)(1). Applicant has thus failed to answer the allegations contained in the OSC and has not otherwise availed himself of the opportunity to refute the Government's case. As such, Applicant has not accepted responsibility for the proven violations, has made no representations regarding his future compliance with the CSA, and has not made any demonstration that he can be trusted with registration.
Moreover, the evidence presented by the Government shows that Applicant used another person's license number on two applications to falsely represent that he possessed state authority to handle controlled substances, further demonstrating that Applicant cannot be trusted with the responsibilities of holding a controlled substances registration. To permit Applicant to receive a registration under these circumstances would send a dangerous message that fraud is an acceptable means of acquiring a DEA registration and that DEA does not require truthfulness from applicants and registrants.
Accordingly, the Agency will order the denial of Applicant's applications.
Pursuant to 28 CFR 0.100(b) and the authority vested in me by 21 U.S.C. 823 and 824, I hereby deny the pending applications for a DEA Certificate of Registration, Control Nos. W24128628C and W24092701C, submitted by Michael Bouknight, as well as any other pending applications of Michael Bouknight for additional registration in Pennsylvania. This Order is effective August 13, 2025.
This document of the Drug Enforcement Administration was signed on July 8, 2025, by Acting Administrator Robert J. Murphy. That document with the original signature and date is maintained by DEA. For administrative purposes only, and in compliance with requirements of the Office of the Federal Register, the undersigned DEA Federal Register Liaison Officer has been authorized to sign and submit the document in electronic format for publication, as an official document of
On October 24, 2024, the Drug Enforcement Administration (DEA or Government) issued an Order to Show Cause and Immediate Suspension of Registrations (OSC/ISO) to Just Here II Pharmacy, of Philadelphia, Pennsylvania (Registrant). Request for Final Agency Action (RFAA), Exhibit (RFAAX) 1, at 1. The OSC/ISO informed Registrant of the immediate suspension of its DEA Certificate of Registration, No. FJ1928689, pursuant to 21 U.S.C. 824(d), alleging that Registrant's continued registration constitutes “ `an imminent danger to the public health or safety.' ”
More specifically, the OSC/ISO alleged that between September 27, 2023, and March 1, 2024, Registrant failed to maintain accurate records of its inventory, purchasing, and dispensing of controlled substances, in violation of federal and Pennsylvania state law.
On December 13, 2024, the Government submitted a request for final agency action (RFAA) requesting that the Agency issue a default final order revoking Registrant's registration. RFAA, at 1-4. After carefully reviewing the entire record and conducting the analysis as set forth in more detail below, the Agency grants the Government's request for final agency action and revokes Registrant's registration.
Under 21 CFR 1301.43, a registrant entitled to a hearing who fails to file a timely hearing request “within 30 days after the date of receipt of the [OSC] . . . shall be deemed to have waived their right to a hearing and to be in default” unless “good cause” is established for the failure. 21 CFR 1301.43(a) & (c)(1). In the absence of a demonstration of good cause, a registrant who fails to timely file an answer also is “deemed to have waived their right to a hearing and to be in default.” 21 CFR 1301.43(c)(2). Unless excused, a default is deemed to constitute “an admission of the factual allegations of the [OSC].” 21 CFR 1301.43(e).
Here, the OSC/ISO notified Registrant of its right to file with DEA a written request for hearing and that if it failed to file such a request, it would be deemed to have waived its right to a hearing and be in default. RFAAX 2, at 9 (citing 21 CFR 1301.43). Here, Registrant did not request a hearing. RFAA, at 2.
As discussed above, the OSC/ISO alleges that Registrant violated provisions of the CSA and its implementing regulations. As the Supreme Court stated in
Congress was particularly concerned with the need to prevent the diversion of drugs from legitimate to illicit channels. To effectuate these goals, Congress devised a closed regulatory system making it unlawful to manufacture, distribute, dispense, or possess any controlled substance except in a manner authorized by the CSA . . . . The CSA and its implementing regulations set forth strict requirements regarding registration, labeling and packaging, production quotas, drug security, and recordkeeping.
Here, the OSC/ISO's allegations concern the CSA's “strict requirements regarding registration . . . drug security, and recordkeeping” and, therefore, go to the heart of the CSA's “closed regulatory system” specifically designed “to conquer drug abuse and to control the legitimate and illegitimate traffic in controlled substances,” and “to prevent the diversion of drugs from legitimate to illicit channels.”
According to the CSA's implementing regulations, pharmacies must maintain “a complete and accurate record of each controlled substance . . . sold . . . .” 21 CFR 1304.21(a). This includes conducting and maintaining an “initial inventory . . . of all stocks of controlled substances on hand on the date [the pharmacy] first engages in the . . . dispensing of controlled substances,” as well as a “biennial inventory . . . of all stocks of controlled substances on hand.” 21 CFR 1304.11(a)-(c). Pharmacies must retain these inventories “for at least 2 years from the date of such inventory or records, for inspection and copying.” 21 CFR 1304.04.
Pennsylvania law also requires pharmacies to keep accurate records and maintain proper inventories regarding the purchase, sale, or dispensing of any controlled substances. 35 Pa. Cons. Stat. Ann. § 780-112(a)-(c). In Pennsylvania, it is unlawful for a pharmacy to fail to “make, keep or furnish any record, notification, order form, statement, invoice or information” relating to the purchasing or dispensing of a controlled substance.
The Agency finds that, in light of Registrant's default, the factual allegations in the OSC/ISO are deemed admitted. Registrant is deemed to have admitted that from at least September 27, 2023, until at least March 1, 2024, it failed to maintain accurate records of its purchasing and dispensing of controlled substances. RFAAX 1, at 4. For example, Registrant admits that there were significant discrepancies between the dispensing report that DEA investigators analyzed and Registrant's distributor order data.
Accordingly, the Agency finds substantial record evidence that Registrant failed to maintain accurate records of its inventory, purchasing, and dispensing of controlled substances. Additionally, Registrant admits, and the Agency finds substantial record evidence that, it failed to adequately maintain an initial or biennial inventory.
When the CSA's requirements are not met, the Attorney General “may deny, suspend, or revoke [a] registration if . . . the [registrant's] registration would be `inconsistent with the public interest.' ”
(A) The recommendation of the appropriate State licensing board or professional disciplinary authority.
(B) The [registrant's] experience in dispensing, or conducting research with respect to controlled substances.
(C) The [registrant's] conviction record under Federal or State laws relating to the manufacture, distribution, or dispensing of controlled substances.
(D) Compliance with applicable State, Federal, or local laws relating to controlled substances.
(E) Such other conduct which may threaten the public health and safety.
The five factors are considered in the disjunctive.
Moreover, while the Agency is required to consider each of the factors, it “need not make explicit findings as to each one.”
The Government has the burden of proof in this proceeding. 21 CFR 1301.44(e).
While the Agency has considered all the public interest factors of 21 U.S.C. 823(g)(1), the Government's evidence in support of its
The Agency further finds that after considering the factors of 21 U.S.C. 823(g)(1) Registrant's continued registration is “inconsistent with the public interest.” 21 U.S.C. 824(a)(4). Accordingly, the Government satisfied its
Where, as here, the Government has met the burden of showing that Registrant's continued registration is inconsistent with the public interest, the burden shifts to Registrant to show why it can be entrusted with a registration.
Here, Registrant did not timely or properly request a hearing and was deemed to be in default. 21 CFR 1301.43(c)(1), (e), (f)(1); RFAA, at 1-2. To date, Registrant has not filed a motion with the Office of the Administrator to excuse the default. 21 CFR 1301.43(c)(1). Registrant has thus failed to answer the allegations contained in the OSC and has not otherwise availed itself of the opportunity to refute the Government's case. As such, Registrant has made no representations as to its future compliance with the CSA nor made any demonstration that it can be entrusted with registration. Moreover, the evidence presented by the Government shows that Registrant violated the CSA, further indicating that Registrant cannot be entrusted.
Accordingly, the Agency will order the revocation of Registrant's registration.
Pursuant to 28 CFR 0.100(b) and the authority vested in me by 21 U.S.C. 824(a) and 21 U.S.C. 823(g)(1), I hereby revoke DEA Certificate of Registration No. FJ1928689 issued to Just Here II Pharmacy. Further, pursuant to 28 CFR 0.100(b) and the authority vested in me by 21 U.S.C. 824(a) and 21 U.S.C. 823(g)(1), I hereby deny any pending applications of Just Here II Pharmacy to renew or modify the named registrations, as well as any other pending application of Just Here Pharmacy for additional registration in Pennsylvania. This Order is effective August 13, 2025.
This document of the Drug Enforcement Administration was signed on July 8, 2025, by Acting Administrator Robert J. Murphy. That document with the original signature and date is maintained by DEA. For administrative purposes only, and in compliance with requirements of the Office of the Federal Register, the undersigned DEA Federal Register Liaison Officer has been authorized to sign and submit the document in electronic format for publication, as an official document of DEA. This administrative process in no way alters the legal effect of this document upon publication in the
Mine Safety and Health Administration, Labor.
Notice.
This notice is a summary of a petition for modification submitted to the Mine Safety and Health Administration (MSHA) by Nyrstar Tennessee Mines—Strawberry Plains, LLC.
All comments on the petition must be received by MSHA's Office of Standards, Regulations, and Variances on or before August 13, 2025.
You may submit comments identified by Docket No. MSHA-2025-0069 by any of the following methods:
1.
2.
3.
4.
Jessica D. Senk, Office of Standards, Regulations, and Variances at 202-693-9440 (voice),
Section 101(c) of the Federal Mine Safety and Health Act of 1977 and Title 30 of the Code of Federal Regulations (CFR) part 44 govern the application, processing, and disposition of petitions for modification.
Section 101(c) of the Federal Mine Safety and Health Act of 1977 (Mine Act) allows the mine operator or representative of miners to file a petition to modify the application of any mandatory safety standard to a coal or other mine if the Secretary of Labor determines that:
1. An alternative method of achieving the result of such standard exists which will at all times guarantee no less than the same measure of protection afforded the miners of such mine by such standard; or
2. The application of such standard to such mine will result in a diminution of safety to the miners in such mine.
In addition, sections 44.10 and 44.11 of 30 CFR establish the requirements for filing petitions for modification.
(a) On November 13, 2024, MSHA informed the operator that the Agency would begin issuing citations regarding use of the hoist at the Immel Mine. MSHA stated that the citations would be based on a violation of 30 CFR 57.19073 for miners being transported in the cage while materials were on the skip because the compartments and dumping bins are not partitioned to prevent spillage into the cage compartment.
(b) The hoist is a single drum friction hoist powered by a 900 HP GE motor. The Canadian Ingersoll-Rand original serial number is 1832-B.
(c) The shaft is circular, unlined, has a 23-foot diameter, and is 1,642 feet deep.
(d) The shaft has three main compartments, constructed with steel sets, with one conveyance in each compartment. The three compartments are: an ore skip, a small personnel cage, and a larger service and personnel cage.
(e) The standard does not require that there be a particular type of partitions between the compartments.
(f) The larger service and personnel cage is partitioned from the ore skip because it is fully covered and in a separate part of the shaft.
(g) The ore skip is counterbalanced by the larger service and personnel cage which has counterweights affixed to it.
(h) The ore skip has a capacity of approximately 14 tons. It is never filled to the brim, is enclosed by a door with latches, filled below its tonnage rating (generally loaded 2 tons less than its capacity), and is only above the larger service and personnel cage for a small portion of the shaft.
(i) The shaft also has three auxiliary compartments, adjacent to the three main compartments, which are used for mine services—compressed air, water, and electricity.
(j) The petitioner and its predecessors have operated the hoist, as designed, since 1972.
(k) The petitioner has implemented a temporary workaround in which only six miners can be loaded on the large service and personnel cage while the ore skip remains unloaded to avoid an insufficient counterweight for the ore skip.
(l) The current use of the hoist (as described under the alternative method) provides an equivalent degree of safety as that afforded by the standard.
(m) Keeping the ore skip empty and manually removing counterweights each time personnel need to ride in the large cage would result in a diminution of safety. The process of removing the counterweights is time-consuming, dangerous, and creates additional opportunity for risk and human error.
The petitioner proposes the following alternative method:
(a) The lead-zinc ore shall be unloaded into the hoist to be transported to the surface.
(b) The larger service and personnel cage shall serve as the counterweight during operation of the ore skip to transport the ore from production levels to the surface.
(c) As part of the counterweight function, weights shall be affixed to the bottom of the larger service and personnel cage.
(d) The ore skip shall not be filled to the brim and shall dump away from the larger service and personnel cage.
There is no representative of miners at the Immel Mine. A copy of the petition for modification was posted on the mine bulletin board on May 16, 2025.
The petitioner asserts that the alternative method proposed will at all times guarantee no less than the same measure of protection afforded to the miners under the mandatory standard.
Office of Management and Budget, Executive Office of the President.
Notice of monthly cumulative report pursuant to the Congressional Budget and Impoundment Control Act of 1974.
Pursuant to the Congressional Budget and Impoundment Control Act of 1974, OMB is issuing a monthly cumulative report (for July 2025) from the Director detailing the status of rescission proposals that were previously transmitted to the Congress on June 3, 2025.
Release Date: July 9, 2025
The July 2025 cumulative report is available on-line on the OMB website at:
Jason Hoffman, 252 Eisenhower Executive Office Building, Washington, DC 20503, Email address:
National Science Foundation.
Notice and request for comments.
NSF is announcing plans to request renewed clearance of this collection. In accordance with the requirements of the Paperwork Reduction Act of 1995, we are providing the opportunity for public comment on this action. After obtaining and considering public comment, NSF will prepare the submission requesting OMB clearance of this collection for no longer than 3 years.
Written comments on this notice must be received by September 12, 2025, to be assured consideration. Comments received after that date will be considered to the extent practicable. Send comments to address below.
Suzanne H. Plimpton, Reports Clearance Officer, National Science Foundation, 2415 Eisenhower Avenue, Alexandria, Virginia 22314; telephone (703) 292-7556; or send email to
Complete information about NSF's implementation of the Research Performance Progress Report (RPPR) may be found at the following website:
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
The Exchange proposes to amend the NYSE American Equities Price List (“Equities Price List”) and the NYSE American Options Fee Schedule (“Options Fee Schedule”) to establish fees for Industry Members
In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements.
On July 11, 2012, the Commission adopted Rule 613 of Regulation NMS, which required the self-regulatory organizations (“SROs”) to submit a national market system (“NMS”) plan to create, implement and maintain a consolidated audit trail that would capture customer and order event information for orders in NMS securities across all markets, from the time of order inception through routing, cancellation, modification or execution.
The CAT Funding Model provides a framework for the recovery of the costs to create, develop and maintain the CAT, including providing a method for allocating costs to fund the CAT among Participants and Industry Members. The CAT Funding Model establishes two categories of fees: (1) CAT fees assessed by CAT LLC and payable by certain Industry Members to recover a portion of historical CAT costs previously paid by the Participants (“Historical CAT Assessment” fees); and (2) CAT fees assessed by CAT LLC and payable by Participants and Industry Members to fund prospective CAT costs (“CAT Fees”).
Under the CAT Funding Model, Participants, CEBBs and CEBSs are subject to fees designed to cover the ongoing budgeted costs of the CAT, as determined by the Operating Committee. “The Operating Committee will establish fees (`CAT Fees') to be payable by Participants and Industry Members with regard to CAT costs not previously paid by the Participants (`Prospective CAT Costs').”
The CAT Fees to be paid by CEBBs and CEBSs are designed to contribute toward the recovery of two-thirds of the budgeted CAT costs for the relevant period.
CAT LLC proposes to charge CEBBs and CEBSs (as described in more detail below) CAT Fee 2025-2 to recover the reasonably budgeted CAT costs for the period from July 1, 2025 through December 31, 2025 in accordance with the CAT Funding Model. To implement this fee on behalf of CAT LLC, the CAT NMS Plan requires the Participants to “file with the SEC under Section 19(b) of the Exchange Act any such fees on Industry Members that the Operating Committee approves, and such fees shall be labeled as `Consolidated Audit Trail Funding Fees.' ”
CAT Fee 2025-2 will be charged to each CEBB and CEBS for each applicable transaction in Eligible Securities.
(a) with respect to a transaction in an Eligible Security that is executed on an exchange, the Industry Member identified as the Industry Member responsible for the order on the buy-side of the transaction and the Industry Member responsible for the sell-side of the transaction in the equity order trade event and option trade event in the CAT Data submitted to the CAT by the relevant exchange pursuant to the Participant Technical Specifications; and (b) with respect to a transaction in an Eligible Security that is executed otherwise than on an exchange and required to be reported to an equity trade reporting facility of a registered national securities association, the Industry Member identified as the executing broker and the Industry Member identified as the contra-side executing broker in the TRF/ORF/ADF transaction data event in the CAT Data submitted to the CAT by FINRA pursuant to the Participant Technical Specifications; provided, however, in those circumstances where there is a non-Industry Member identified as the contra-side executing broker in the TRF/ORF/ADF transaction data event or no contra-side executing broker is identified in the TRF/ORF/ADF transaction data event, then the Industry Member identified as the executing broker in the TRF/ORF/ADF transaction data event would be treated as CAT Executing Broker for the Buyer and for the Seller.
The following fields of the Participant Technical Specifications indicate the CAT Executing Brokers for the transactions executed on an exchange:
In addition, the following fields of the Participant Technical Specifications would indicate the CAT Executing Brokers for the transactions executed otherwise than on an exchange:
The Operating Committee determined the Fee Rate to be used in calculating CAT Fee 2025-2 (“Fee Rate 2025-2”) by dividing the reasonably budgeted CAT costs (“Budgeted CAT Costs 2025-2”) for the period from July 1, 2025 through December 31, 2025 (“CAT Fee 2025-2 Period”) by the reasonably projected total executed share volume of all transactions in Eligible Securities for the six-month recovery period, as discussed in detail below.
CAT LLC proposes to implement CAT Fee 2025-2 as the third CAT Fee related to Prospective CAT Costs. CAT LLC proposes to commence CAT Fee 2025-2 during the year, rather than at the beginning of the year. Accordingly, CAT Fee 2025-2 “would be calculated as described in paragraph (II)” of Section 11.3(a)(i)(A) of the CAT NMS Plan,
Under the CAT NMS Plan, for purposes of calculating CAT Fees, executed equivalent shares in a transaction in Eligible Securities will be reasonably counted as follows: (1) each executed share for a transaction in NMS Stocks will be counted as one executed equivalent share; (2) each executed contract for a transaction in Listed Options will be counted based on the multiplier applicable to the specific Listed Options (
The CAT NMS Plan states that “[t]he budgeted CAT costs for the year shall be comprised of all reasonable fees, costs and expenses reasonably budgeted to be incurred by or for the Company in connection with the development, implementation and operation of the CAT as set forth in the annual operating budget approved by the Operating Committee pursuant to Section 11.1(a) of the CAT NMS Plan, or as adjusted during the year by the Operating Committee.”
In accordance with the requirements under the CAT NMS Plan, the Operating Committee approved an annual budget for 2025 for CAT LLC (“Original 2025 CAT Budget”) in November 2024.
As described in detail below, the Budgeted CAT Costs 2025-2 would be $60,726,412. CEBBs collectively will be responsible for one-third of the Budged [
The following describes in detail the Budgeted CAT Costs 2025-2 for CAT Fee 2025-2. The following cost details are provided in accordance with the requirement in the CAT NMS Plan to provide in the fee filing the following:
Each of the costs described below are reasonable, appropriate and necessary for the creation, implementation and maintenance of CAT.
The following table breaks down the Budgeted CAT Costs 2025-2 into the categories set forth in Section 11.3(a)(iii)(B) of the CAT NMS Plan.
To the extent that CAT LLC enters into notes with Participants or others to pay costs incurred during the period in which CAT Fee 2025-2 is in effect, CAT LLC will use the proceeds from CAT Fee 2025-2 and the related Participant CAT fees to repay such notes.
The following table compares the annual budgeted CAT costs as set forth in the updated annual CAT budget for 2024 approved by the Operating Committee in July 2024 (“Updated 2024 CAT Budget”),
In addition, the following table compares the first quarter of the Original 2025 CAT Budget with the first quarter of the Updated 2025 CAT Budget. The Updated 2025 CAT Budget includes actual costs for January, February and March 2025, whereas the Original 2025 CAT Budget included budgeted costs for these three months. The variance from the first quarter of the Original 2025 CAT Budget to the actuals for the first quarter of 2025 (as set forth in the Updated 2025 CAT Budget) in the last column of the following chart are used in this filing in supporting the reasonableness of the estimates for each category of costs.
Section 11.3(a)(iii)(B)(B)(1) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the cloud hosting services costs set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that included $82,222,276 in technology costs for cloud hosting services for the CAT Fee 2025-2 Period. The technology costs for cloud hosting services represent costs reasonably budgeted to be incurred for services provided by the cloud services provider for the CAT, Amazon Web Services, Inc. (“AWS”) during the CAT Fee 2025-2 Period.
In the agreement between CAT LLC and the Plan Processor for the CAT (“Plan Processor Agreement”), FINRA CAT, LLC (“FCAT”), AWS was named as the subcontractor to provide cloud hosting services. Under the Plan Processor Agreement, CAT LLC is required to pay FCAT the fees incurred by the Plan Processor for cloud hosting services provided by AWS as FCAT's subcontractor on a monthly basis for the cloud hosting services, and FCAT, in turn, pays such fees to AWS. The fees for cloud hosting services were negotiated by FCAT on an arm's length basis with the goals of managing costs and receiving services required to comply with the CAT NMS Plan and Rule 613, taking into consideration a variety of factors, including the expected volume of data, the breadth of services provided and market rates for similar services. Services provided by AWS include storage services, databases, compute services and other services (such as networking, management tools and DevOps tools), as well as various environments for CAT, such as development, performance testing, test, and production environments. FCAT utilizes such cloud hosting services for a broad array of services for the CAT, such as data ingestion, data management, and analytic tools for the CAT. AWS performs cloud hosting services for both the CAT transaction database as well as the CAT Customer and Account Information System (“CAIS”). It is anticipated that such cloud hosting services will continue during the CAT Fee 2025-2 Period.
The cost for AWS cloud services for the CAT is a function of the volume of CAT Data, largely as a result of the processing and storage of the CAT Data.
CAT LLC estimates that the budget for cloud hosting services costs during the CAT Fee 2025-2 Period will be approximately $82,222,276. The budget for cloud hosting services costs during the CAT Fee 2025-2 Period is calculated based on the Updated 2025 CAT Budget. Specifically, this estimate was calculated by adding the budgeted amounts for cloud hosting services costs for the third and fourth quarters of 2025 as set forth in the Updated 2025 CAT Budget.
CAT LLC estimated the budget for the cost for cloud hosting services for the
This process for estimating the budget for cloud hosting services costs for the CAT Fee 2025-2 Period is the same process by which CAT LLC estimated the cloud hosting services costs for the Original 2025 CAT Budget. The Original 2025 CAT Budget estimated a budget for cloud hosting services of $39,640,542 for the first quarter of 2025. The actual costs for cloud hosting services for the first quarter of 2025, which are set forth in the Updated 2025 CAT Budget, were $36,357,017. Therefore, the variance between budgeted and actual cloud hosting services costs for this period was an approximate decrease of 8%. Accordingly, CAT LLC believes that the process for estimating the budgeted cloud hosting services costs for the CAT Fee 2025-2 Period is reasonable.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for cloud hosting services costs from the prior CAT Fee filing. Accordingly, this filing describes the changes in the cloud hosting services costs from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budgeted costs for cloud hosting services as set forth in the Original 2025 CAT Budget were $182,594,630, and the annual 2025 budgeted costs for cloud hosting services as set forth in the Updated 2025 CAT Budget are $159,230,937. Accordingly, budgeted annual costs for cloud hosting services decreased by $23,363,693 from the Original 2025 CAT Budget to the Updated 2025 CAT Budget, which is an approximate 13% reduction in cloud hosting services costs for the full year of 2025.
Correspondingly, the budgeted costs for cloud hosting services for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget were $97,748,713,
The decrease in costs for cloud hosting services from the Original 2025 CAT Budget to the Updated 2025 CAT Budget, both for the full year for 2025 and for the third and fourth quarters of 2025, reflects (1) a decrease in costs related to changes made pursuant to the Cost Savings Amendment; (2) cost decreases related to optimizations resulting in reduced procesing [
Section 11.3(a)(iii)(B)(B)(1) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the operating fees set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that included $15,453,942 in technology costs for operating fees for the CAT Fee 2025-2 Period. Operating fees are those fees paid by CAT LLC to FCAT as the Plan Processor to operate and maintain the CAT and to perform business operations related to the system, including compliance, security, testing, training, communications with the industry (
• Provide the CAT-related functions and services as the Plan Processor as required by SEC Rule 613 and the CAT NMS Plan in connection with the operation and maintenance of the CAT;
• Address compliance items, including drafting CAT policies and procedures, and addressing Regulation SCI requirements;
• Provide support to the Operating Committee, the Compliance Subcommittee and CAT working groups;
• Assist with interpretive efforts, exemptive requests and amendments regarding the CAT NMS Plan;
• Oversee the security of the CAT;
• Monitor the operation of the CAT, including with regard to Participant and Industry Member reporting;
• Provide support to subcontractors under the Plan Processor Agreement;
• Provide support in discussions with the Participants and the SEC and its staff;
• Operate the FINRA CAT Helpdesk;
• Facilitate communications with the industry, including via FAQs, CAT Alerts, meetings, presentations and webinars;
• Administer the CAT website and all of its content;
• Maintain cyber security insurance related to the CAT;
• Assist with billing, collection and other CAT fee-related activity; and
• Provide technical support and assistance with connectivity, data access, and user support, including the use of CAT Data and query tools, for Participants and the SEC staff.
CAT LLC calculated the budget for the FCAT technology costs for operating fees for the CAT Fee 2025-2 Period based on the recurring monthly operating fees under the Plan Processor Agreement.
As discussed above, CAT LLC estimated the budget for the operating fees during the CAT Fee 2025-2 Period based on monthly rates set forth in the Plan Processor Agreement and the agreement with Algoseek. CAT LLC also recognized that the operating fees are generally consistent throughout the year. This process for estimating the budget for the operating fees for the CAT Fee 2025-2 Period is the same process by which CAT LLC estimated the operating fees for the Original 2025 CAT Budget. The Original 2025 CAT Budget estimated a budget for operating fees of $7,662,270 for the first quarter of 2025.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for operating fees from the prior CAT Fee filing. Accordingly, this filing describes the changes from the operating fees set forth in the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budgeted costs for operating fees as set forth in the Original 2025 CAT Budget were $30,831,330,
Correspondingly, the budgeted costs for operating fees for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget are $15,446,040,
Section 11.3(a)(iii)(B)(B)(1) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the CAIS operating fees set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that included $10,374,924 in technology costs for CAIS operating fees for the CAT Fee 2025-2 Period. CAIS operating fees represent the fees paid to FCAT for services provided with regard to the operation and maintenance of CAIS, and to perform the business operations related to the system, including compliance, security, testing, training, communications with the industry (
During the CAT Fee 2025-2 Period, it is anticipated that FCAT will provide CAIS-related services. Under the Plan Processor Agreement with FCAT, CAT LLC is required to pay FCAT for CAIS-related services provided by FCAT on a monthly basis. CAT LLC negotiated the fees for FCAT's CAIS-related services on an arm's length basis with the goals of managing costs and receiving services required to comply with the CAT NMS Plan, taking into consideration a variety of factors, including the services to be provided and market rates for similar types of activity. During the CAT Fee 2025-2 Period, it is anticipated that FCAT will continue to provide services relating to the ongoing operation, maintenance and support of CAIS.
CAT LLC estimates that the budget for CAIS operating fees during the CAT Fee 2025-2 Period will be approximately $10,374,924. The budget for CAIS operating fees during the CAT Fee 2025-2 Period is calculated based on the Updated 2025 CAT Budget. Specifically, this estimate was calculated by adding the budgeted amounts for CAIS operating fees for the third and fourth quarters of 2025 as set forth in the Updated 2025 CAT Budget.
CAT LLC calculated the budget for FCAT's CAIS-related services for the CAT Fee 2025-2 Period based on the recurring monthly CAIS operating fees under the Plan Processor Agreement. This process for estimating the budget for the CAIS operating fees for the CAT Fee 2025-2 Period is the same process by which CAT LLC estimated the CAIS operating fees for the Original 2025 CAT Budget. The Original 2025 CAT Budget
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for CAIS operating fees from the prior CAT Fee filing. Accordingly, this filing describes the changes in CAIS operating fees from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
CAIS operating fees are based on a recurring monthly rate payable to FCAT and are unchanged from the prior CAT Fee filing. The annual 2025 budgeted costs for CAIS operating fees as set forth in the Original 2025 CAT Budget were $20,749,848, and the annual 2025 budgeted costs for CAIS operating fees as set forth in the Updated 2025 CAT Budget are $20,749,848. Accordingly, the budgeted annual costs for CAIS operating fees are the same for both the Original 2025 CAT Budget and the Updated 2025 CAT Budget.
Correspondingly, the budgeted costs for CAIS operating fees for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget were $10,374,924, and the budgeted costs for CAIS operating fees for the third and fourth quarters of 2025 as set forth in the Updated 2025 CAT Budget are $10,374,924.
Accordingly, there were no changes in the line item for CAIS operating fees from the prior CAT Fee filing.
Section 11.3(a)(iii)(B)(B)(1) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the change request fees set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that included $500,000 in technology costs for change request fees for the CAT Fee 2025-2 Period. The technology costs related to change request fees include costs related to certain modifications, upgrades or other changes to the CAT.
Change requests are standard practice and necessary to reflect operational changes, including changes related to new market developments, such as new market participants. In general, if CAT LLC determines that a modification, upgrade or other changes to the functionality or service is necessary and appropriate, CAT LLC will submit a request for such a change to the Plan Processor. The Plan Processor will then respond to the request with a proposal for implementing the change, including the cost (if any) of such a change. CAT LLC then determines whether to approve the proposed change.
The change request budget line is established to include expected costs to be incurred in which the nature of the costs (
During the CAT Fee 2025-2 Period, it is anticipated that CAT LLC will engage FCAT to pursue certain change requests in accordance with the Plan Processor Agreement. The budget for change requests for the CAT Fee 2025-2 Period includes a placeholder of $500,000 for potential change request fees that may be necessary in accordance with the Plan Processor Agreement. The placeholder amount was determined based on prior experience with change requests related to the CAT.
CAT LLC estimates that the budget for change requests during the CAT Fee 2025-2 Period will be approximately $500,000. The budget for change requests during the CAT Fee 2025-2 Period is calculated based on the Updated 2025 CAT Budget. Specifically, this estimate was calculated by adding the budgeted amounts for the change requests for the third and fourth quarters of 2025 as set forth in the Updated 2025 CAT Budget.
CAT LLC estimated the budget for the potential change requests for the CAT Fee 2025-2 Period based on, among other things, a review of past change requests and potential future change request needs, as well as discussions with FCAT. This process for estimating the budget for the change requests for the CAT Fee 2025-2 Period is the same process by which CAT LLC estimated the change requests cost for the Original 2025 CAT Budget. The Original 2025 CAT Budget estimated a change request budget of $0 for the the [
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for change request fees from the prior CAT Fee filing. Accordingly, this filing describes the changes in the change request fees from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budgeted costs for change requests as set forth in the Original 2025 CAT Budget were $750,000, and the annual 2025 budgeted costs for change requests as set forth in the Updated 2025 CAT Budget are $750,000. Accordingly, budgeted annual costs for change requests are the same for both the Original 2025 CAT Budget and the Updated 2025 CAT Budget.
Correspondingly, the budgeted costs for change requests for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget were $500,000, and the budgeted costs for change request for the third and fourth quarters of 2025 as set forth in the Updated 2025 CAT Budget are
Accordingly, there were no changes in the line item for change requests from the prior CAT Fee filing.
Section 11.3(a)(iii)(B)(B)(1) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the capitalized developed technology costs set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that includes $0 in technology costs for capitalized developed technology costs for the CAT Fee 2025-2 Period. This category of costs includes the budget for capitalizable application development costs incurred in the development of the CAT. It is anticipated that such costs will include certain costs related to the software license fee for CAIS in accordance with the Plan Processor Agreement with FCAT, as well as costs related to a set of technology changes to be implemented by FCAT.
CAT LLC estimates that the budget for capitalized developed technology costs during the CAT Fee 2025-2 Period will be approximately $0. The budget for capitalized developed technology costs during the CAT Fee 2025-2 Period is calculated based on the Updated 2025 CAT Budget. Specifically, this estimate was calculated by adding the budgeted amounts for capitalized developed technology costs for the third and fourth quarters of 2025 as set forth in the Updated 2025 CAT Budget.
CAT LLC estimated the budget for capitalized developed technology costs for the CAT Fee 2025-2 Period based on an analysis of a variety of factors, including information related to potential technology costs and related contractual and Plan requirements, and discussions with FCAT regarding such potential technology costs. This process for estimating the budget for capitalized developed technology costs for the CAT Fee 2025-2 Period is the same process by which CAT LLC estimated the capitalized developed technology costs for the Original 2025 CAT Budget. The Original 2025 CAT Budget estimated a budget for capitalized developed technology costs of $3,923,360 for the first quarter of 2025.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for capitalized developed technology costs from the prior CAT Fee filing. Accordingly, this filing describes the changes in the capitalized developed technology costs from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budget for capitalized developed technology costs as set forth in the Original 2025 CAT Budget were $3,923,360,
In addition, the budget for capitalized developed technology costs for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget was $0,
Section 11.3(a)(iii)(B)(B)(2) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the legal costs set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that includes $3,631,342 in legal costs for the CAT Fee 2025-2 Period. This category of costs represents budgeted costs for legal services for this period. CAT LLC anticipates that it will receive legal services from two law firms, Wilmer Cutler Pickering Hale and Dorr LLP (“WilmerHale”) and Jenner & Block LLP (“Jenner”), during the CAT Fee 2025-2 Period.
During the CAT Fee 2025-2 Period, it is anticipated that WilmerHale will provide legal services related to the following:
• Assist with CAT fee filings and related funding issues;
• Draft exemptive requests from CAT NMS Plan requirements and/or proposed amendments to the CAT NMS Plan;
• Provide legal guidance with respect to interpretations of CAT NMS Plan requirements;
• Provide legal support for the Operating Committee, Compliance Subcommittee, working groups and Leadership Team;
• Draft SRO rule filings related to the CAT Compliance Rule;
• Manage corporate governance matters, including supporting Operating Committee meetings and preparing resolutions and consents;
• Assist with communications with the industry, including CAT Alerts and presentations;
• Provide guidance regarding the confidentiality of CAT Data;
• Assist with cost management analyses and proposals;
• Assist with commercial contract-related matters, including change orders and amendments, Plan Processor Agreement items, and subcontract matters;
• Provide support with regard to discussions with the SEC and its staff, including with respect to addressing interpretive and implementation issues;
• Provide legal guidance with respect to the CAT budgets;
• Provide background assistance to other counsel for CAT matters;
• Assist with legal responses related to third-party data requests; and
• Provide legal support regarding CAT policies and procedures.
CAT LLC estimated the budget for the legal costs for WilmerHale for the CAT Fee 2025-2 Period through an analysis of a variety of factors, including WilmerHale fee rates, historical legal fees, and information related to pending legal issues and potential future legal issues.
During the CAT Fee 2025-2 Period, it is anticipated that Jenner will continue to provide legal assistance to CAT LLC regarding certain litigation matters, including: (1) CAT LLC's defense against a lawsuit filed in the Western District of Texas against the SEC Chair, the SEC and CAT LLC challenging the validity of Rule 613 and the CAT and alleging various constitutional, statutory, and common law claims;
CAT LLC estimated the budget for the legal costs for Jenner for the CAT Fee 2025-2 Period through an analysis of a variety of factors, including Jenner's fee rates, historical legal fees, and information related to pending legal issues and potential future legal issues.
CAT LLC estimated the budget for the legal services for the CAT Fee 2025-2 Period based on an analysis of a variety of factors, including law firm fee rates, historical legal fees, and information related to pending legal issues and potential future legal issues. This process for estimating the budget for the legal services for CAT Fee 2025-2 Period is the same process by which CAT LLC estimated the legal cost for the Original 2025 CAT Budget. The Original 2025 CAT Budget estimated a budget for legal costs of $1,430,000 for the first quarter of 2025. The actual costs for legal services for the first quarter of 2025, which are set forth in the Updated 2025 Budget, were $1,922,990. The increase of $492,990 was due to unanticipated issues that required additional legal efforts on behalf of CAT LLC that developed after the budget was created. Such additional costs were primarily due to additional legal work in responding to an SEC examination related to the CAT, for commercial contract-related matters, including with regard to the Plan Processor Agreement, and related to cost savings initiatives. Accordingly, CAT LLC believes that the process for estimating the budgeted legal costs for the CAT Fee 2025-2 Period is reasonable.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for legal costs from the prior CAT Fee filing. Accordingly, this filing describes the changes in the legal costs from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budgeted legal costs as set forth in the Original 2025 CAT Budget were $5,720,000, and the annual 2025 budgeted legal costs as set forth in the Updated 2025 CAT Budget are $7,370,002. Accordingly, the annual budget for legal costs increased by $1,650,002 from the Original 2025 CAT Budget to the Updated 2025 CAT Budget for the full year of 2025.
Correspondingly, the budgeted legal costs for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget were $2,860,000,
This budgeted increase in the legal costs in the Updated 2025 CAT Budget
Section 11.3(a)(iii)(B)(B)(3) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the consulting costs set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that included $866,167 in consulting costs for the CAT Fee 2025-2 Period. The consulting costs represent the fees estimated to be paid to the consulting firm Deloitte & Touche LLP (“Deloitte”) as project manager during the CAT Fee 2025-2 Period. These consulting costs include costs for advisory services related to the operation of the CAT, and meeting facilitation and communications coordination, vendor support and financial analyses.
It is anticipated that the costs for CAT during the CAT Fee 2025-2 Period will include costs related to consulting services performed by Deloitte. CAT LLC anticipates that it will continue to employ Deloitte during the CAT Fee 2025-2 Period based on, among other things, their expertise, long history with the project, and the recognition that it is anticipated that the consulting fees will remain in line with market rates for this type of specialized consulting work. Deloitte's fee rates are negotiated on an annual basis. CAT LLC assesses Deloitte's performance and reviews prospective budgets and staffing plans submitted by Deloitte on an annual basis. The consulting fees will be paid by CAT LLC to Deloitte.
It is anticipated that Deloitte will provide a variety of consulting services to the CAT during the CAT Fee 2025-2 Period, including the following:
• Implement program operations for the CAT project;
• Provide support to the Operating Committee, the Chair of the Operating Committee and the Leadership Team, including project management support, coordination and planning for meetings and communications, and interfacing with law firms and the SEC;
• Assist with cost and funding matters for the CAT, including assistance with loans and the CAT bank account for CAT funding;
• Provide support for updating the SEC on the progress of the development of the CAT; and
• Provide support for third party vendors for the CAT, including FCAT, Anchin and the law firms engaged by CAT LLC.
In addition, the consulting costs include the compensation for the Chair of the CAT Operating Committee.
CAT LLC estimates that the budget for consulting costs during the CAT Fee 2025-2 Period will be approximately $866,167. The budget for consulting costs during the CAT Fee 2025-2 Period is calculated based on the Updated 2025 CAT Budget. Specifically, this estimate was calculated by adding the budgeted amounts for consulting services for the third and fourth quarters of 2025 as set forth in the Updated 2025 CAT Budget.
CAT LLC estimates the budget for the consulting costs for Deloitte for the CAT Fee 2025-2 Period based on the current statement of work with Deloitte, which took into consideration past consulting costs, potential future consulting needs, the proposed rates and other contractual issues, as well as discussions with Deloitte. This process for estimating the budget for consulting costs for the CAT Fee 2025-2 Period is the same process by which CAT LLC estimated the consulting costs for the Original 2025 CAT Budget. The Original 2025 CAT Budget estimated a budget for consulting services of $437,500 for the first quarter of 2025. The actual costs for consulting services for the first quarter of 2025, which are set forth in the Updated 2025 CAT Budget, were $450,745. Therefore, the variance between budgeted and actual consulting costs for the first quarter of 2025 was approximately 3%. Accordingly, CAT LLC believes that the process for estimating the budgeted consulting costs for the CAT Fee 2025-2 Period is reasonable.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for consulting costs from the prior CAT Fee filing. Accordingly, this filing describes the changes in the consulting costs from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budget for consulting costs as set forth in the Original 2025 CAT Budget was $1,750,000, and the annual 2025 budget for consulting costs as set forth in the Updated 2025 CAT Budget is approximately $1,750,000. Accordingly, the annual budget for consulting costs has not changed from the Original 2025 CAT Budget to the Updated 2025 CAT Budget for the full year of 2025.
Correspondingly, the budget for consulting costs for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget was $875,000,
Section 11.3(a)(iii)(B)(B)(4) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the insurance costs set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that included $1,594,452 in insurance costs for the CAT Fee 2025-2 Period. The insurance costs represent the costs to be incurred for insurance for CAT during the CAT Fee 2025-2 Period.
It is anticipated that the insurance costs for CAT during the CAT Fee 2025-2 Period will include costs related to cyber security liability insurance, directors' and officers' liability insurance, and errors and omissions liability insurance brokered by USI Insurance Services LLC (“USI”). Such policies are standard for corporate entities, and cyber security liability insurance is important for the CAT System. CAT LLC anticipates that it will continue to maintain this insurance during the CAT Fee 2025-2 Period, and notes that the annual premiums for these policies were competitive for the
The budgeted insurance costs for the CAT Fee 2025-2 Period are based on an insurance cost estimate from USI for 2025. Accordingly, CAT LLC believes that the process for estimating the budgeted insurance costs for the CAT Fee 2025-2 Period is reasonable.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for insurance costs from the prior CAT Fee filing. Accordingly, this filing describes the changes in the insurance costs from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budgeted insurance costs as set forth in the Original 2025 CAT Budget were $1,594,452, and the annual 2025 budgeted insurance costs as set forth in the Updated 2025 CAT Budget are $1,594,452. Accordingly, the annual budgeted insurance costs remained the same for the Original 2025 CAT Budget and the Updated 2025 CAT Budget for the full year of 2025.
Correspondingly, the budgeted insurance costs for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget were $1,594,452,
Section 11.3(a)(iii)(B)(B)(5) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the professional and administration costs set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that included $609,818 in professional and administration costs for the CAT Fee 2025-2 Period. In adopting the CAT NMS Plan, the Commission amended the Plan to add a requirement that CAT LLC's financial statements be prepared in compliance with GAAP, audited by an independent public accounting firm, and made publicly available.
It is anticipated that Anchin will provide a variety of services to the CAT during the CAT Fee 2025-2 Period, including the following:
• Update and maintain internal controls;
• Provide cash management and treasury functions;
• Facilitate bill payments to vendors;
• Facilitate repayments of promissory notes to Participants;
• Provide monthly bookkeeping;
• Review vendor invoices and documentation in support of cash disbursements;
• Review documentation to ensure that repayments of promissory notes to Participants are in accordance with established policies and procedures;
• Provide accounting research and consultations on various accounting, financial reporting and tax matters;
• Address not-for-profit tax and accounting considerations;
• Prepare tax returns;
• Address various accounting, financial reporting and operating inquiries from Participants;
• Develop and maintain annual operating and financial budgets, including budget to actual fluctuation analyses;
• Support compliance with the CAT NMS Plan;
• Work with and provide support to the Operating Committee and various CAT working groups;
• Prepare monthly, quarterly and annual financial statements;
• Review and reconcile the monthly FINRA CAT reports/analyses related to billings, collections, outstanding accounts receivable and cash account;
• Perform certain verification, completeness, and validation testing related to the monthly FINRA CAT reports/analyses related to billings;
• Support the annual financial statement audits by an independent auditor;
• Review historical costs from inception;
• Provide accounting and financial information in support of SEC filings; and
• Perform additional ad hoc accounting and financial advisory services, as requested by CAT LLC.
CAT LLC estimated the annual budget for the costs for Anchin based on historical costs adjusted for cost of living rate increases, and projected incremental advisory and support services.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for professional and administration costs from the prior CAT Fee filing. Accordingly, this filing describes the changes in the professional and administration costs from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budgeted professional and administration costs as set forth in the Original 2025 CAT Budget were $882,456, and the annual 2025 budgeted professional and administration costs as set forth in the Updated 2025 CAT Budget are $1,193,090. Accordingly, the budgeted annual costs for professional and administration services increased by $310,634 from the Original 2025 CAT Budget to the Updated 2025 CAT Budget for the full year of 2025.
Correspondingly, the budgeted costs for professional and administration services for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget were $444,246,
This budgeted increase in the professional and administration costs in the Updated 2025 CAT Budget from the Original 2025 Budget, both for the full year for 2025 and for the third and fourth quarters of 2025, was primarily due to increases in both financial advisory costs and accounting costs as a result of additional anticipated efforts related to billings and collections of fees from Participants and Industry Members, coupled with expected incremental efforts related to supporting CAT LLC's independent auditors for the 2024 audit.
Section 11.3(a)(iii)(B)(B)(6) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the public relations costs set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that included $0 in public relations costs for the CAT Fee 2025-2 Period. The public relations costs represent the fees paid to a public relations firm for professional communications services to CAT, including media relations consulting, strategy and execution. Because CAT LLC anticipates that it will not engage a public relations firm for the third and fourth quarters of 2025, the budget for public relations costs for this period is $0.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for public relations costs from the prior CAT Fee filing. Accordingly, this filing describes the changes in the public relations costs from the Updated 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual budgeted public relations costs for 2025 as set forth in the Original 2025 CAT Budget were $50,000, and the annual budgeted public relations costs for 2025 as set forth in the Updated 2025 CAT Budget are $6,575. Accordingly, the annual budget for public relations cost for 2025 decreased by $43,425 from the Original 2025 CAT Budget to the Updated 2025 CAT Budget for the full year of 2025.
Correspondingly, the budgeted costs for public relations services for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget were $25,000,
This budgeted decrease in the public relations costs from the Original 2025 CAT Budget to the Updated 2025 CAT Budget, both for the full year for 2025 and for the third and fourth quarters of 2025, was primarily due to CAT LLC's anticipation that it would not engage a public relations firm for the remainder of 2025.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the reserve costs set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that includes a reserve amount for 2025. Section 11.1(a)(i) of the CAT NMS Plan states that the budget shall include a reserve. Section 11.1(a)(ii) of the CAT NMS Plan further describes the reserve as follows:
For the reserve referenced in paragraph (a)(i) of this Section, the budget will include an amount reasonably necessary to allow the Company to maintain a reserve of not more than 25% of the annual budget. To the extent collected CAT fees exceed CAT costs, including the reserve of 25% of the annual budget, such surplus shall be used to offset future fees. For the avoidance of doubt, the Company will only include an amount for the reserve in the annual budget if the Company does not have a sufficient reserve (which shall be up to but not more than 25% of the annual budget). For the avoidance of doubt, the calculation of the amount of the reserve would exclude the amount of the reserve from the budget.
CAT LLC determined to maintain a reserve in the amount of 25% of the total expenses set forth in Updated 2025 CAT Budget (which does not include the reserve amount). Accordingly, the total 25% reserve was calculated by multiplying the total expenses set forth in the Updated 2025 CAT Budget (other than the reserve) by 25%, which is $57,083,638.
The Updated 2025 CAT Budget states that CAT LLC had accrued $70,942,596 for the reserve as of the beginning of 2025, and an additional $28,846,075 during the first quarter of 2025, from the collection of CAT Fees 2024-1 and 2025-1 and the related Participant CAT Fees. In addition, the Updated 2025 CAT Budget anticipates the collection of an additional $11,821,477 during the second quarter of 2025 via CAT Fee 2025-1 and the related Participant CAT Fee. Accordingly, the Updated 2025 CAT Budget estimates that CAT LLC would collect a surplus reserve amount through June 2025 of $54,526,412 over the 25% reserve amount of $57,083,638.
Such surplus was related, in part, to (i) the collection of CAT fees in excess of the budgeted CAT costs for 2024 and 2025 in light of the greater actual executed equivalent share volume than the projected executed equivalent share volume for CAT Fees 2024-1 and 2025-1, and (ii) a reduction in anticipated budgeted costs associated with the implementation of certain cost savings measures approved by the SEC pertaining to the processing of options market maker quotes and the storage of certain data.
As set forth in the Budgeted CAT Costs 2025-2, the surplus reserve balance of $54,526,412 would be used to offset a portion of CAT costs for the third and fourth quarters of 2025, thereby reducing the fee rate to be paid for CAT Fee 2025-2. Specifically, the total costs used to calculate the fee rate for CAT Fee 2025-2 would be reduced by the amount of the surplus reserve as set forth in the following table:
Accordingly, the fee rate for CAT Fee 2025-2 is calculated based on this reduced amount of $60,726,412, resulting in a fee rate of $0.000009 per executed equivalent share. If the fee rate for CAT Fee 2025-2 were calculated solely based on the reasonably budgeted costs for CAT for July-December 2025 excluding the reduction in that amount due to the surplus reserve offset (that is, based on $115,252,921, not $60,726,412), the fee rate would be the higher rate of $0.000017.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for a reserve from the prior CAT Fee filing. Accordingly, this filing describes the changes in the reserve from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
For the Original 2025 CAT Budget, CAT LLC determined to maintain a reserve in the amount of 25% of budgeted CAT costs (other than the reserve). Accordingly, the total 25% reserve was calculated by multiplying the budgeted CAT costs (other than the reserve) as set forth in the Original 2025 CAT Budget (which is $248,846,076) by 25%, for a target reserve amount of
As discussed above, CAT LLC determined to maintain a reserve in the amount of 25% of the budgeted CAT costs (other than the reserve). Accordingly, the total 25% reserve was calculated by multiplying the budgeted CAT costs (other than the reserve) as set forth in the Updated 2025 CAT Budget (which is $228,334,551) by 25%, for a target reserve amount of $57,083,638.
As discussed above, such surplus reserve balance of $54,526,412 would be used to offset a portion of CAT costs for the third and fourth quarters of 2025, thereby reducing the fee rate for CAT Fee 2025-2 in accordance with Section 11.1(a)(ii) of the CAT NMS Plan. Section 11.1(a)(ii) of the CAT NMS Plan states that “[t]o the extent collected CAT fees exceed CAT costs, including the reserve of 25% of the annual budget, such surplus shall be used to offset future fees.”
The calculation of Fee Rate 2025-2 also requires the determination of the projected total executed equivalent share volume of transactions in Eligible Securities for the CAT Fee 2025-2 Period. Under the CAT NMS Plan, the Operating Committee is required to “reasonably determine the projected total executed equivalent share volume of all transactions in Eligible Securities for each relevant period based on the executed equivalent share volume of all transactions in Eligible Securities for the prior twelve months.”
The total executed equivalent share volume of transactions in Eligible Securities for the 12-month period from April 2024 through March 2025 was 4,580,287,680,646.28 executed equivalent shares. The Operating Committee has determined to calculate the projected total executed equivalent share volume for the six-month recovery period for CAT Fee 2025-2 by multiplying by one-half the executed equivalent share volume for the 12-month period from April 2024 through March 2025. The Operating Committee determined that such an approach was reasonable as the CAT's annual executed equivalent share volume has remained relatively constant. For example, the executed equivalent share volume for 2021 was 3,963,697,612,395, the executed equivalent share volume for 2022 was 4,039,821,841,560.31, the executed equivalent share volume for 2023 was 3,868,940,345,680.6, and the executed equivalent share volume for 2024 was 4,295,884,600,069.41. Accordingly, the projected total executed equivalent share volume for the six-month period for CAT Fee 2025-2 is projected to be 2,290,143,840,323.14 executed equivalent shares.
The projected total executed equivalent share volume of all transactions in Eligible Securities for the six-month recovery period for CAT Fee 2025-2 and a description of the calculation of the projection is provided in this filing in accordance with the requirement in the CAT NMS Plan to provide such information in a fee filing for a CAT Fee.
Fee Rate 2025-2 would be calculated by dividing the Budgeted CAT Costs 2025-2 by the reasonably projected total executed equivalent share volume of all transactions in Eligible Securities for the six-month recovery period for CAT Fee 2025-2, as described in detail above.
CEBBs and CEBSs would be required to pay fees for CAT Fee 2025-2 on a monthly basis for six months, from August 2025 until January 2026. A CEBB's or CEBS's fee for each month would be calculated based on the transactions in Eligible Securities executed by the CEBB or CEBS from the prior month.
To implement CAT Fee 2025-2, the Exchange proposes to add a new paragraph to the “Consolidated Audit Trail Funding Fees” section of the Exchange's Fee Schedule, to include the proposed paragraphs described below.
The CAT NMS Plan states that:
Each Industry Member that is the CAT Executing Broker for the buyer in a transaction in Eligible Securities (“CAT Executing Broker for the Buyer” or “CEBB”) and each Industry Member that is the CAT Executing Broker for the seller in a transaction in Eligible Securities (“CAT Executing Broker for the Seller” or “CEBS”) will be required to pay a CAT Fee for each such transaction in Eligible Securities in the prior month based on CAT Data. The CEBB's CAT Fee or CEBS's CAT Fee (as applicable) for each transaction in Eligible Securities will be calculated by multiplying the number of executed equivalent shares in the transaction by one-third and by the Fee Rate reasonably determined pursuant to paragraph (a)(i) of this Section 11.3.
Accordingly, based on the factors discussed above, the Exchange proposes to add paragraph (a)(5) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule. Proposed paragraph (a)(5) would state the following:
(A) Each CAT Executing Broker shall receive its first invoice for CAT Fee 2025-2 in August 2025, which shall set forth the CAT Fee 2025-2 fees calculated based on transactions in July 2025, and shall receive an invoice for CAT Fee 2025-2 for each month thereafter until January 2026.
(B) Consolidated Audit Trail, LLC shall provide each CAT Executing Broker with an invoice for CAT Fee 2025-2 on a monthly basis. Each month, such invoices shall set forth a fee for each transaction in Eligible Securities executed by the CAT Executing Broker in its capacity as a CAT Executing Broker for the Buyer (“CEBB”) and/or the CAT Executing Broker for the Seller (“CEBS”) (as applicable) from the prior month as set forth in CAT Data. The fee for each such transaction will be calculated by multiplying the number of executed equivalent shares in the transaction by the fee rate of $0.000009 per executed equivalent share.
(C) Notwithstanding the last invoice date of January 2026 for CAT Fee 2025-2 in paragraph 5(A), CAT Fee 2025-2 shall continue in effect after January 2026, with each CAT Executing Broker receiving an invoice for CAT Fee 2025-2 each month, until a new subsequent CAT Fee is in effect with regard to Industry Members in accordance with Section 19(b) of the Exchange Act. Consolidated Audit Trail, LLC will provide notice when CAT Fee 2025-2 will no longer be in effect.
(D) Each CAT Executing Broker shall be required to pay each invoice for CAT Fee 2025-2 in accordance with paragraph (b).
As noted in the Plan amendment for the CAT Funding Model, “[a]s a practical matter, the fee filing would provide the exact fee per executed equivalent share to be paid for the CAT Fees, by multiplying the Fee Rate by one-third and describing the relevant number of decimal places for the fee.”
The proposed language in paragraph (a)(5)(A) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule would describe when CAT Executing Brokers would receive their first monthly invoice for CAT Fee 2025-2. Specifically, CAT Executing Brokers would receive their first monthly invoice for CAT Fee 2025-2 in August 2025 and the fees set forth in that invoice would be calculated based on transactions executed in July 2025. The payment for the first invoice would be required within 30 days after the receipt of the first invoice (unless a longer period is indicated), as described in paragraph (b)(2) of the Fee Schedule.
Proposed paragraph (a)(5)(A) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule also would describe the monthly cadence of the invoices for CAT Fee 2025-2. Specifically, after the first invoices are provided to CAT Executing Brokers in August 2025, invoices will be sent to CAT Executing Brokers each month thereafter until January 2026.
Proposed paragraph (a)(5)(B) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule would describe the invoices for CAT Fee 2025-2. Proposed paragraph (a)(5)(B) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule would state that “Consolidated Audit Trail, LLC shall provide each CAT Executing Broker with an invoice for CAT Fee 2025-2 on a monthly basis.” Proposed paragraph (a)(5)(B) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule also would describe the fees to be set forth in the invoices for CAT Fee 2025-2. Specifically, it would state that “[e]ach month, such invoices shall set forth a fee for each transaction in Eligible Securities executed by the CAT Executing Broker in its capacity as a CAT Executing Broker for the Buyer (`CEBB') and/or the CAT Executing Broker for the Seller (`CEBS') (as applicable) from the prior month as set forth in CAT Data. The fee for each such transaction will be calculated by multiplying the number of executed equivalent shares in the transaction by the fee rate of $0.000009 per executed equivalent share.”
Since CAT Fee 2025-2 is a monthly fee based on actual transaction volume from the prior month, CAT Fee 2025-2 may collect more or less than two-thirds of the Budgeted CAT Costs 2025-2. To the extent that CAT Fee 2025-2 collects more than two-thirds of the Budgeted CAT Costs 2025-2, any excess money collected will be used to offset future fees and/or to fund the reserve for the CAT. To the extent that CAT Fee 2025-2 collects less than two-thirds of the Budgeted CAT Costs 2025-2, the budget for the CAT in the ensuing months will reflect such shortfall.
Furthermore, proposed paragraph (a)(5)(C) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule would describe how long CAT Fee 2025-2 would remain in effect. It would state that “[n]otwithstanding the last invoice date of January 2026 for CAT Fee 2025-2 in paragraph 5(A), CAT Fee 2025-2 shall continue in effect after January 2026, with each CAT Executing Broker receiving an invoice for CAT Fee 2025-2 each month, until a new subsequent CAT Fee is in effect with regard to Industry Members in accordance with Section 19(b) of the Exchange Act. Consolidated Audit Trail,
Finally, proposed paragraph (a)(5)(D) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule would set forth the requirement for the CAT Executing Brokers to pay the invoices for CAT Fee 2025-2. It would state that “[e]ach CAT Executing Broker shall be required to pay each invoice for CAT Fee 2025-2 in accordance with paragraph (b).”
Paragraph (b)(1) of the “Consolidated Audit Trail Funding Fees” section of the Fee Schedule describes the manner of payment of Industry Member CAT fees. It states that “[e]ach CAT Executing Broker shall pay its CAT fees as required pursuant to paragraph (a) each month to the Consolidated Audit Trail, LLC in the manner prescribed by the Consolidated Audit Trail, LLC.” The CAT NMS Plan requires the Operating Committee to establish a system for the collection of CAT fees.
The CAT NMS Plan further states that:
Participants shall require each Industry Member to pay all applicable fees authorized under this Article XI within thirty (30) days after receipt of an invoice or other notice indicating payment is due (unless a longer payment period is otherwise indicated). If an Industry Member fails to pay any such fee when due (as determined in accordance with the preceding sentence), such Industry Member shall pay interest on the outstanding balance from such due date until such fee is paid at a per annum rate equal to the lesser of: (a) the Prime Rate plus 300 basis points; or (b) the maximum rate permitted by applicable law.
Paragraph (b)(2) of the Consolidated Audit Trail Funding Fees section of the Fee Schedule states that:
Each CAT Executing Broker shall pay the CAT fees required pursuant to paragraph (a) within thirty days after receipt of an invoice or other notice indicating payment is due (unless a longer payment period is otherwise indicated). If a CAT Executing Broker fails to pay any such CAT fee when due, such CAT Executing Broker shall pay interest on the outstanding balance from such due date until such fee is paid at a per annum rate equal to the lesser of (i) the Prime Rate plus 300 basis points, or (ii) the maximum rate permitted by applicable law.
The requirements of paragraph (b)(2) would apply to CAT Fee 2025-2.
The CAT NMS Plan states that:
Details regarding the calculation of a Participant or CAT Executing Broker's CAT Fees will be provided upon request to such Participant or CAT Executing Broker. At a minimum, such details would include each Participant or CAT Executing Broker's executed equivalent share volume and corresponding fee by (1) Listed Options, NMS Stocks and OTC Equity Securities, (2) by transactions executed on each exchange and transactions executed otherwise than on an exchange, and (3) by buy-side transactions and sell-side transactions.
Such information would provide CEBBs and CEBSs with the ability to understand the details regarding the calculation of their CAT Fee.
In addition, CAT LLC will make certain aggregate statistics regarding CAT Fees publicly available. Specifically, the CAT NMS Plan states that, “[f]or each CAT Fee, at a minimum, CAT LLC will make publicly available the aggregate executed equivalent share volume and corresponding aggregate fee by (1) Listed Options, NMS Stocks and OTC Equity Securities, (2) by transactions executed on each exchange and transactions executed otherwise than on an exchange, and (3) by buy-side transactions and sell-side transactions.”
Furthermore, CAT LLC will make publicly available on the CAT website the total amount invoiced each month that CAT Fee 2025-2 is in effect as well as the total amount invoiced for CAT Fee 2025-2 for all months since its commencement. CAT LLC also will make publicly available on the CAT website the total costs to be collected from Industry Members for CAT Fee 2025-2.
The CAT NMS Plan states that “[n]o Participant will make a filing with the SEC pursuant to Section 19(b) of the Exchange Act regarding any CAT Fee related to Prospective CAT Costs until the Financial Accountability Milestone related to Period 4 described in Section 11.6 has been satisfied.”
CAT LLC intends for CAT Fee 2025-2 to replace CAT Fee 2025-1 (which has a fee rate of $0.000022).
While CAT Fees charged to Industry Members become effective in accordance with the requirements of Section 19(b) of the Exchange Act,
The Exchange believes the proposed rule change is consistent with the requirements of the Exchange Act. The Exchange believes that the proposed rule change is consistent with Section 6(b)(5) of the Act,
The Exchange believes that this proposal is consistent with the Act because it implements provisions of the Plan and is designed to assist the Exchange in meeting regulatory obligations pursuant to the Plan. In approving the Plan, the SEC noted that the Plan “is necessary and appropriate in the public interest, for the protection of investors and the maintenance of fair and orderly markets, to remove impediments to, and perfect the mechanism of a national market system, or is otherwise in furtherance of the purposes of the Act.”
The Exchange believes that the proposed fees to be paid by the CEBBs and CEBSs are reasonable, equitably allocated and not unfairly discriminatory. First, the CAT Fee 2025-2 fees to be collected are directly associated with the budgeted costs of establishing and maintaining the CAT, where such costs include Plan Processor costs and costs related to technology, legal, consulting, insurance, professional and administration, and public relations costs.
The proposed CAT Fee 2025-2 fees would be charged to Industry Members in support of the maintenance of a consolidated audit trail for regulatory purposes. The proposed fees, therefore, are consistent with the Commission's view that regulatory fees be used for regulatory purposes and not to support the Exchange's business operations. The proposed fees would not cover Exchange services unrelated to the CAT. In addition, any surplus would be used as a reserve to offset future fees. Given the direct relationship between CAT fees and CAT costs, the Exchange believes that the proposed fees are reasonable, equitable and not unfairly discriminatory.
As further discussed below, the SEC approved the CAT Funding Model, finding it was reasonable and that it equitably allocates fees among Participants and Industry Members. The Exchange believes that the proposed fees adopted pursuant to the CAT Funding Model approved by the SEC are reasonable, equitably allocated and not unfairly discriminatory.
Section 11.1(b) of the CAT NMS Plan states that “[t]he Participants shall file with the SEC under Section 19(b) of the Exchange Act any such fees on Industry Members that the Operating Committee approves.” Per Section 11.1(b) of the CAT NMS Plan, the Exchange has filed this fee filing to implement the Industry Member CAT fees included in the CAT Funding Model. The Exchange believes that this proposal is consistent with the Exchange Act because it is consistent with, and implements, the CAT Funding Model in the CAT NMS Plan, and is designed to assist the Exchange and its Industry Members in meeting regulatory obligations pursuant to the CAT NMS Plan. In approving the CAT NMS Plan, the SEC noted that the Plan “is necessary and appropriate in the public interest, for the protection of investors and the maintenance of fair and orderly markets, to remove impediments to, and perfect the mechanism of a national market system, or is otherwise in furtherance of the purposes of the
The SEC has determined that the CAT Funding Model is reasonable and satisfies the requirements of the Exchange Act. Specifically, the SEC has concluded that the method for determining CAT Fees as set forth in Section 11.3 of the CAT NMS Plan, including the formula for calculating the Fee Rate, the identification of the parties responsible for payment and the transactions subject to the fee rate for CAT Fees, is reasonable and satisfies the Exchange Act.
The formula for calculating a Fee Rate requires the amount of Budgeted CAT Costs to be recovered. Specifically, Section 11.3(a)(iii)(B) of the CAT NMS Plan requires a fee filing to provide:
In accordance with this requirement, the Exchange has set forth the amount and type of Budgeted CAT Costs 2025-2 for each of these categories above.
Section 11.3(a)(iii)(B) of the CAT NMS Plan also requires that the fee filing provide “sufficient detail to demonstrate that the budget for the upcoming year, or part of year, as applicable, is reasonable and appropriate.” As discussed below, the Exchange believes that the budget for the CAT Fee 2025-2 Period is “reasonable and appropriate.” Each of the costs included in CAT Fee 2025-2 are reasonable and appropriate because the costs are consistent with standard industry practice, based on the need to comply with the requirements of the CAT NMS Plan, incurred subject to negotiations performed on an arm's length basis, and/or are consistent with the needs of any legal entity, particularly one with no employees.
In approving the CAT Funding Model, the Commission recognized that it is appropriate to recover budgeted costs related to cloud hosting services as a part of CAT Fees.
To comply with the requirements of the Plan, the breadth of the cloud activities related to the CAT is substantial. The cloud services not only include the production environment for the CAT, but they also include two industry testing environments, support environments for quality assurance and stress testing and disaster recovery capabilities. Moreover, the cloud storage costs are driven by the requirements of the Plan, which requires the storage of multiple versions of the data, from the original submitted version of the data through various processing steps, to the final version of the data.
Data volume is a significant driver of costs for cloud hosting services. When the Commission adopted the CAT NMS Plan in 2016, it estimated that the CAT would need to receive 58 billion records per day
In addition to the effect of the data volume on the cloud hosting costs, the processing timelines set forth in the Plan contribute to the cloud hosting costs. Although CAT LLC has proactively sought to manage cloud hosting costs while complying with the Plan, including through requests to the Commission for exemptive relief and amendments to the CAT NMS Plan to reduce costs, stringent CAT NMS Plan requirements do not allow for any material flexibility in cloud architecture design choices, processing timelines (
The costs for cloud hosting services also reflect the need for specialized cloud hosting services given the data volume and unique processing needs of the CAT. The data volume as well as the data processing needs of the CAT necessitate the use of cloud hosting services. The equipment, power and services required for an on-premises data model, the alternative to cloud
The reasonableness of the cloud hosting services costs is further supported by key cost discipline mechanisms for the CAT—a cost-based funding structure, cost transparency, cost management efforts (including regular efforts to lower compute and storage costs where permitted by the Plan) and oversight. Together, these mechanisms help ensure the ongoing reasonableness of the CAT's costs and the level of fees assessed to support those costs.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted costs related to operating fees as a part of CAT Fees.
The operating fees would include the negotiated fees paid by CAT LLC to the Plan Processor to operate and maintain the system for order-related information and to perform business operations related to the system, including compliance, security, testing, training, communications with the industry (
The operating costs also include costs related to the receipt of market data. CAT LLC anticipates receiving certain market data from Algoseek during the CAT Fee 2025-2 Period. CAT LLC anticipates that Algoseek will provide data as set forth in the SIP Data requirements of the CAT NMS Plan and that the fees are reasonable and in line with market rates for market data received.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted costs related to CAIS operating fees as a part of CAT Fees.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted costs related to change request fees as a part of CAT Fees.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted costs related to capitalized developed technology costs as a part of CAT Fees.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted costs related to legal fees as a part of CAT Fees.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted consulting costs as a part of CAT Fees.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted insurance costs as a part of CAT Fees.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted professional and administration costs as a part of CAT Fees.
CAT LLC anticipates continuing to make use of Anchin, a financial advisory firm, to assist with financial matters for the CAT. CAT LLC determined that the budgeted costs for Anchin were appropriate, as the financial advisory services were to be provided at reasonable market rates that were comparable to the rates charged by other such firms for similar work. Moreover, the total budgeted costs for such financial advisory services were appropriate in light of the breadth of services provided by Anchin. The services budgeted to be performed by Anchin and the budgeted costs related to such services are described above.
CAT LLC anticipates continuing to make use of Grant Thornton, an independent accounting firm, to complete the audit of CAT LLC's financial statements, in accordance with the requirements of the CAT NMS Plan. CAT LLC determined that the budgeted costs for Grant Thornton were appropriate, as the accounting services were to be provided at reasonable market rates that were comparable to the rates charged by other such firms for similar work. Moreover, the total budgeted costs for such accounting services were appropriate in light of the breadth of services provided by Grant Thornton. The services budgeted to be performed by Grant Thornton and the budgeted costs related to such services are described above.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted public relations costs as a part of CAT Fees.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted reserve costs as a part of CAT Fees.
In its approval order for the CAT Funding Model, the Commission stated that it would be reasonable for the annual operating budget for the CAT to
Because the CAT is a critical regulatory tool/system, the CAT needs to have a stable funding source to build financial stability to support the Company as a going concern. Funding for the CAT, as noted in Section 11.1(b), is the responsibility of the Participants and the industry. Because CAT fees are charged based on the budget, which is based on anticipated volume, it is reasonable to have a reserve on hand to prevent a shortfall in the event there is an unexpectedly high volume in a given year. A reserve would help to assure that the CAT has sufficient resources to cover costs should there be unanticipated costs or costs that are higher than expected.
The SEC also recognized that a reserve would help address the difficulty in predicting certain variable CAT costs, like trading volume.
As discussed further below,
The CAT NMS Plan also requires fee filings for Prospective CAT Fees to include “a discussion of how the budget is reconciled to the collected fees.”
The total executed equivalent share volume of transactions in Eligible Securities for the period from April 2024 through March 2025 was 4,580,287,680,646.28 executed equivalent shares. CAT LLC determined the total executed equivalent share volume for the prior twelve months by counting executed equivalent shares in the same manner as it counts executed equivalent shares for CAT billing purposes.
CAT LLC has determined that the projected total executed equivalent share volume for the six months of CAT Fee 2025-2 Period by multiplying by one-half the executed equivalent share volume for the prior twelve months: one-half times 4,580,287,680,646.28 executed equivalent shares.
As noted in the approval order for the CAT Funding Model, as a practical matter, the fee filing for a CAT Fee would provide the exact fee per executed equivalent share to be paid for each CAT Fee, by multiplying the Fee Rate by one-third and describing the relevant number of decimal places for the fee rate.
The Exchange believes that charging CAT Fee 2025-2 with a fee rate of $0.000009 per executed equivalent share is reasonable because it provides for a revenue stream for the Company that is aligned with the Budgeted CAT Costs 2025-2. Moreover, the Exchange believes that the level of the fee rate is reasonable, as it is less than CAT Fee 2025-1 and is comparable to other transaction-based fees. Indeed, CAT Fee 2025-2 is significantly lower than fees previously assessed pursuant to Section 31 (
CAT Fee 2025-2 provides for an equitable allocation of fees, as it equitably allocates CAT costs between and among the Participants and Industry Members. The SEC approved the CAT Funding Model, finding that each aspect of the CAT Funding Model satisfied the requirements of the Exchange Act, including the formula for calculating CAT Fees as well as the Industry Members to be charged the CAT Fees.
CAT Fee 2025-2 provides for an equitable allocation of fees as it complies with the requirements regarding the calculation of CAT Fees as set forth in the CAT NMS Plan. For example, as described above, the calculation of CAT Fee 2025-2 complies with the formula set forth in Section 11.3(a) of the CAT NMS Plan. In addition, CAT Fee 2025-2 would be charged to CEBBs and CEBSs in accordance with Section 11.3(a) of the CAT NMS Plan. Furthermore, the Participants would be charged for their designated share of the Budgeted CAT Costs 2025-2 through a fee implemented via the CAT NMS Plan, which would have the same fee rate as CAT Fee 2025-2.
In addition, as discussed above, each of the inputs into the calculation of CAT Fee 2025-2—the Budgeted CAT Costs 2025-2, the count for the executed equivalent share volume for the prior 12 months, and the projected executed equivalent share volume for the CAT Fee 2025-2 Period—are reasonable. Moreover, these inputs lead to a reasonable fee rate for CAT Fee 2025-2 that is lower than other fee rates for transaction-based fees. A reasonable fee rate allocated in accordance with the requirements of the CAT Funding Model provides for an equitable allocation of fees.
CAT Fee 2025-2 is not an unfairly discriminatory fee. The SEC approved the CAT Funding Model, finding that each aspect of the CAT Funding Model satisfies the requirements of the Exchange Act. In reaching this conclusion, the SEC analyzed the potential effect of CAT Fees calculated pursuant to the CAT Funding Model on affected categories of market participants, including Participants (including exchanges and FINRA), Industry Members (including subcategories of Industry Members, such as alternative trading systems, CAT Executing Brokers and market makers), and investors generally, and considered market effects related to equities and options, among other things. CAT Fee 2025-2 complies with the requirements regarding the calculation of CAT Fees as set forth in the CAT NMS Plan. In addition, as discussed above, each of the inputs into the calculation of CAT Fee 2025-2 and the resulting fee rate for CAT Fee 2025-2 is reasonable. Therefore, CAT Fee 2025-2 does not impose an unfairly discriminatory fee on Industry Members.
The Exchange believes the proposed fees established pursuant to the CAT Funding Model promote just and equitable principles of trade, and, in general, protect investors and the public interest, and are provided in a transparent manner and with specificity in the Fee Schedule. The Exchange also believes that the proposed fees are reasonable because they would provide ease of calculation, ease of billing and other administrative functions, and predictability of a fee based on fixed rate per executed equivalent share. Such factors are crucial to estimating a reliable revenue stream for CAT LLC and for permitting Exchange members to reasonably predict their payment obligations for budgeting purposes.
Section 6(b)(8) of the Act
In addition, all Participants (including exchanges and FINRA) are proposing to introduce CAT Fee 2025-2 on behalf of CAT LLC to implement the requirements of the CAT NMS Plan. Therefore, this is not a competitive fee filing, and, therefore, it does not raise competition issues between and among the Participants.
Furthermore, in approving the CAT Funding Model, the SEC analyzed the potential competitive impact of the CAT Funding Model, including competitive issues related to market services, trading services and regulatory services, efficiency concerns, and capital formation.
As discussed above, each of the inputs into the calculation of CAT Fee 2025-2 is reasonable and the resulting fee rate for CAT Fee 2025-2 calculated in accordance with the CAT Funding Model is reasonable. Therefore, CAT Fee 2025-2 would not impose any burden on competition that is not necessary or appropriate in furtherance of the purpose of the Exchange Act.
No written comments were solicited or received with respect to the proposed rule change.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1)
The Exchange proposes to amend the Connectivity Fee Schedule to amend the list of third party systems and third party data feeds to which Users can connect, related fees and a reference to who can charge redistribution fees. The proposed rule change is available on the Exchange's website at
In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements.
The Exchange proposes to amend the Connectivity Fee Schedule to amend the list of third party systems and third party data feeds to which Users
Currently, Users are offered connectivity to the execution systems of third party markets and other service providers (“Third Party Systems”) and connectivity to data feeds from third party markets and other content service providers (“Third Party Data Feeds”) at the Mahwah, New Jersey data center (“MDC”).
The Exchange proposes to make the following changes to the list of Third Party Systems:
• Add Blue Ocean ATS (BOATS), Canadian Imperial Bank of Commerce (CIBC), Long Term Stock Exchange,
• To reflect Cboe Canada`s integration of Cboe Canada and Cboe MATCHNow into one entity,
To make these changes, the list of available Third Party Systems would be amended as follows (proposed deletions bracketed, proposed additions italicized):
The Exchange does not propose to change the monthly recurring fee Users pay for access to each Third Party System. Although the proposed changes to the list of Third Party Systems would combine Cboe MATCHNow with Cboe Canada to reflect their integration by Cboe Canada, thereby removing Cboe MATCHNow from the current list of Third Party Systems, no User would be charged more as a consequence. A User would continue to be able to choose which systems it wants from any Third Party System. It would not have to receive any systems, or pay for any bandwidth, that it did not choose.
The Exchange expects that the connectivity partner of BOATS will charge a redistribution fee, which will be passed through to the User. Accordingly, the Exchange proposes to add “and their partners” to the first sentence of the second paragraph under “Connectivity to Third Party Data Feeds,” which describes who can charge redistribution fees, so that it includes connectivity partners.
The Exchange proposes to make the following changes to the list of Third Party Data Feeds (together, the “Proposed Third Party Data Feeds”):
• Add the following Third Party Data Feeds with the following fees for monthly recurring connectivity:
○ Blue Ocean ATS (BOATS), for $750 a month;
○ Cboe CFE Futures, for $1,500 per month;
○ Long Term Stock Exchange, for $2,600 per month;
○ MEMX Equities, for $2,000 per month;
○ MEMX Options, for $2,000 per month;
○ Small Exchange, for $1,000 per month.
• To reflect Cboe Canada's integration of Cboe Canada and Cboe MATCHNow into one entity,
• Combine Nasdaq Stock Market with Nasdaq ISE under the name “Nasdaq Stock Market” and change the combined monthly recurring connectivity fee to $3,000 per month.
• Combine TMX Group and Montreal Exchange
In addition, the Exchange proposes to change the monthly recurring connectivity fee per Third Party Data Feed for 18 feeds.
To make these changes, the text under “Connectivity to Third Party Data Feeds” and list of available Third Party Data Feeds would be amended as follows (proposed deletions bracketed, proposed additions italicized):
Third Party Data Feed providers
The Exchange would provide access to the Proposed Third Party Systems as conveniences to Users.
As with the current Third Party Systems, Users would connect to the Proposed Third Party Systems over the internet protocol (“IP”) network, a local area network available in the MDC.
As with the current Third Party Systems, in order to obtain access to a Proposed Third Party System, the User would enter into an agreement with the relevant proposed third party, pursuant to which it would charge the User for access to the Proposed Third Party System. The Exchange would then enable unicast connectivity between the User and the Proposed Third Party System over the IP network.
The Exchange has no affiliation with the providers of any of the Proposed Third Party Systems. Establishing a User's access to a Proposed Third Party System would not give the Exchange any right to use the Proposed Third Party System. Connectivity to a Proposed Third Party System would not provide access or order entry to the Exchange's execution system, and a User's connection to a Proposed Third Party System would not be through the Exchange's execution system.
The Exchange proposes to charge the same monthly recurring fee for connectivity to the Proposed Third Party Systems that it does for the current Third Party Systems. Specifically, when a User requested access to a Proposed Third Party System, it would identify the applicable third party and what bandwidth connection would be required. The fees for such bandwidth connection would vary based on the size of the connection, not on the particular Third Party System the User chooses. The Exchange is not proposing to change the pricing of any of these bandwidth connections; the Exchange is simply expanding the list of Third Party Systems that Users may access via these bandwidth connections.
The Exchange would provide connectivity to the Proposed Third Party Data Feeds as a convenience to Users.
As with the existing connections to Third Party Data Feeds, the Exchange would receive a Proposed Third Party Data Feed from the content service provider at the relevant source. The Exchange would then provide connectivity to that data to Users for a fee. Users would connect to the Proposed Third Party Data Feeds over the IP network. The Proposed Third Party Data Feeds would include trading and other information concerning the securities that are traded on the relevant third party systems.
As with the existing connections to Third Party Data Feeds, in order to connect to a Proposed Third Party Data Feed, a User would enter into a contract with the third party content service provider, pursuant to which it may charge the User for the data feed. The Exchange would receive the Proposed Third Party Data Feed in remote locations and transport it over its fiber optic network to the MDC. After the content service provider and User entered into an agreement and the Exchange received authorization from the content service provider, the Exchange would retransmit the data to the User over the User's port. The Exchange would charge the User for connectivity to the Proposed Third Party Data Feed. A User would only receive, and would only be charged the fee for, connectivity to a Proposed Third Party Data Feed for which it entered into a contract.
The Exchange has no affiliation with the sellers of the Proposed Third Party Data Feeds and would have no right to use those feeds other than as a redistributor of the data. None of the Proposed Third Party Data Feeds would provide access or order entry to the Exchange's execution system. The Proposed Third Party Data Feeds would not provide access or order entry service to the execution systems of the third parties generating the feeds. The Exchange would receive the Proposed Third Party Data Feeds via arms-length agreements and would have no inherent
The proposed rule change would not apply differently to distinct types or sizes of market participants. Rather, it would apply to all Users equally. As is currently the case, the purchase of any colocation service is completely voluntary and the Connectivity Fee Schedule is applied uniformly to all Users.
Access to most of the Proposed Third Party Systems and connectivity to most of the Proposed Third Party Data Feeds were requested by Users, but the Exchange believes that it would gain at most a handful of new customers among Users due to the proposed change.
The Commission has repeatedly expressed its preference for competition over regulatory intervention in determining prices, products, and services in the securities markets. Specifically, in Regulation NMS, the Commission highlighted the importance of market forces in determining prices and SRO revenues and, also, recognized that current regulation of the market system “has been remarkably successful in promoting market competition in its broader forms that are most important to investors and listed companies.”
The Exchange's provision of access to the Proposed Third Party Systems (“Access”) and connectivity to the Proposed Third Party Data Feeds (“Connectivity”) is subject to competition from access and connectivity that Users can obtain through the third-party telecommunications service providers that have installed their equipment in the MDC's two meet-me-rooms (“Telecoms”).
More specifically, a User may access a Proposed Third Party System by, first, entering into an agreement with the relevant proposed third party, pursuant to which the third party would charge the User for access to the Proposed Third Party System, and second, accessing the Proposed Third Party System through one of the Telecoms. Likewise, a User may connect to a Proposed Third Party Data Feed by, first, entering into a contract with the third party content service provider, if required, pursuant to which the third party may charge the User for the Proposed Third Party Data Feed, and second, connecting to the Proposed Third Party Data Feed through one of the Telecoms.
In both cases, the User would be able to access any of the Proposed Third Party Systems or connect to any of the Proposed Third Party Feeds independent of the Access or Connectivity provided by the Exchange. Users that already have or establish access or connectivity are not at any competitive disadvantage created by the Exchange.
The proposed change is not otherwise intended to address any other issues relating to colocation services or related fees, and the Exchange is not aware of any problems that Users would have in complying with the proposed change.
The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,
The Exchange believes that the proposed rule change is reasonable.
In considering the reasonableness of proposed services and fees, the Commission's market-based test considers “whether the exchange was subject to significant competitive forces in setting the terms of its proposal . . . , including the level of any fees.”
As described above,
Because Users are third parties and are not required to make such
Such Users compete, or would compete, with the Exchange's Access and Connectivity and exert, or would exert, significant competitive forces on the Exchange in setting the terms of its proposal, including the level of the Exchange's proposed fees.
The Exchange does not believe that FIDS would have any competitive advantage over Users that establish independent access to Proposed Third Party Systems or connectivity to Proposed Third Party Data Feeds. The Exchange's proposed service for Access and Connectivity does not have (a) any special access to the Proposed Third Party Systems and Proposed Third Party Data Feeds or (b) advantage within the MDC, as all distances in the MDC are normalized.
Moreover, the Exchange does not believe that FIDS would have any competitive advantage because it would charge for connectivity only, not the Proposed Third Party System or Proposed Third Party Data Feed itself. All Users that connect to a Proposed Third Party System or Proposed Third Party Data Feed, whether they elect to connect using the Exchange's proposed service or not, would have to pay a third party for the Proposed Third Party System or Proposed Third Party Data Feed.
Nor does the Exchange believe that FIDS has a competitive advantage by virtue of the fact that ICE owns and operates the MDC's meet-me-rooms. Users purchasing Access or Connectivity—like Users of any other colocation service—would require a circuit connecting out of the MDC, and in most cases, such circuits are provided by Telecoms.
If anything, the Exchange would be subject to a competitive disadvantage vis-à-vis Users regarding access to the Proposed Third Party Systems or connectivity to the Proposed Third Party Data Feeds. Users that choose to independently establish access or connectivity may negotiate terms with the Telecoms through whom such access and connectivity is delivered, in response to competitive forces. Such prices are not required to be filed by any party with the Commission. In contrast, the Exchange's service and pricing would be standardized as set out in this filing, and the Exchange would be unable to respond to pricing pressure from its competitors without seeking a formal fee change in a filing before the Commission.
In sum, because the Exchange is subject to significant competitive forces in setting the terms on which it offers its proposal, in particular because the Exchange believes that a substantially similar substitute is available, and the Exchange has not placed actual or proposed Users that already have or establish access or connectivity at a competitive disadvantage created by the Exchange, the proposed fees for the Exchange's connectivity to Proposed Third Party Systems and Proposed Third Party Data Feeds are reasonable.
The Exchange believes that it is reasonable to add “and their partners” to the second paragraph under “Connectivity to Third Party Data Feeds” (“Proposed Pass-Through Edit”) as that would add clarity as to who may charge redistribution fees, making the paragraph more precise.
The Exchange believes that it is reasonable to make the proposed changes, as connectivity to the Proposed Third Party Systems and access to the Proposed Third Party Data Feeds was generally requested by Users.
The Exchange believes that the proposed rule change is equitable.
The Exchange believes that the fees for connectivity to the Proposed Third Party Data Feeds are an equitable allocation of fees. The Exchange recognizes that the monthly recurring fee Users pay for access to the below
• The combination of Cboe MATCHNow into Cboe Canada reflects the integration by Cboe Canada of those two entities into one entity.
• Nasdaq Stock Market and Nasdaq ISE are proposed to be combined. With this combination, Nasdaq ISE as well as Nasdaq BX, Nasdaq GEMX, Nasdaq MRX, Nasdaq PHLX and the Nasdaq Stock Market—which are all distinct self-regulatory organizations—will all be available under “Nasdaq Stock Market”. The proposed fee for the combination of the Nasdaq Stock Market and Nasdaq ISE is equal to the sum of the current fees for those feeds.
• The Montreal Exchange is a subsidiary of TMX Group.
The Exchange believes it is equitable to propose to increase the fee for ICE Data Services Consolidated Feed Shared Farm >1 Gb to $2,000
The Exchange does not propose to change the monthly recurring fee Users pay for access to each Third Party System. Although the proposed changes to the list of Third Party Systems would combine Cboe MATCHNow with Cboe Canada to reflect their integration by Cboe Canada, thereby removing Cboe MATCHNow from the current list of Third Party Systems, no User would be charged more as a consequence. A User would continue to be able to choose which systems it wants from any Third Party System. It would not have to receive any systems, or pay for any bandwidth, that it did not choose.
The Exchange believes that the Proposed Pass-Through Edit is equitable as it would add clarity as to who may charge redistribution fees, making the paragraph more precise and thereby ensuring the accuracy of, and adding clarity and transparency to, the Connectivity Fee Schedule.
Without this proposed rule change, Users would have fewer options for connectivity to the Proposed Third Party Systems and Proposed Third Party Data Feeds. By offering Access and Connectivity, the Exchange gives each User additional options for addressing its needs, responding to User demand for options. Offering these additional services would help each User tailor its data center operations to the requirements of its business operations by allowing it to select the form and latency of connectivity that best suits its needs. Users that do not opt to utilize the Exchange's proposed Access or Connectivity would still be able to access Proposed Third Party Systems or connect to Proposed Third Party Data Feeds using Telecoms.
The Exchange believes that the proposed change is equitable because it will result in fees being charged only to Users that voluntarily select to receive the corresponding services and because those services will be available to all Users.
Furthermore, the Exchange believes that the services and fees proposed herein are equitably allocated because, in addition to the services being completely voluntary, they are available to all Users on an equal basis (
The Exchange believes that the proposed rule change is not unfairly discriminatory, for the following reasons.
The Exchange believes that the Proposed Pass-Through Edit is not unfairly discriminatory as it would add clarity as to who may charge redistribution fees, making the paragraph more precise and thereby ensuring the accuracy of, and adding clarity and transparency to, the Connectivity Fee Schedule to all market participants.
Without this proposed rule change, Users would have fewer options for access to Proposed Third Party Systems or connectivity to Proposed Third Party Data Feeds. The proposed change would provide Users with an additional choice with respect to the form and optimal latency of the access they use to connect to Proposed Third Party Systems or connectivity to Proposed Third Party Data Feeds, allowing a User to select the connectivity that better suits its needs, helping it tailor its colocation operations to the requirements of its business operations. Users that do not opt to utilize the Exchange's proposed Access or Connectivity would still be able to access the Proposed Third Party Systems or connect to Proposed Third Party Data Feeds using Telecoms.
The Exchange believes that the proposed change is not unfairly discriminatory because it will result in fees being charged only to Users that voluntarily select to receive the corresponding services and because those services will be available to all Users. Furthermore, the Exchange believes that the services and fees proposed herein are not unfairly discriminatory because, in addition to the services being completely voluntary, they are available to all Users on an equal basis (
For all these reasons, the Exchange believes that the proposal is consistent with the Act.
In accordance with Section 6(b)(8) of the Act,
The Exchange does not believe that FIDS would have any competitive advantage over Users that establish independent access to Proposed Third Party Systems or connectivity to Proposed Third Party Data Feeds. The Exchange's proposed service for Access and Connectivity does not have (a) any special access to the Proposed Third Party Systems and Proposed Third Party Data Feeds or (b) advantage within the MDC, as all distances in the MDC are normalized.
Moreover, the Exchange does not believe that FIDS would have any competitive advantage because it would charge for connectivity only, not the Proposed Third Party System or Proposed Third Party Data Feed itself. All Users that connect to a Proposed Third Party System or Proposed Third Party Data Feed, whether they elect to connect using the Exchange's proposed service or not, would have to pay a third party for the Proposed Third Party System or Proposed Third Party Data Feed.
Nor does the Exchange believe that FIDS has a competitive advantage over any third-party competitors offering access to the Proposed Third Party Systems or connectivity to the Proposed Third Party Data Feeds by virtue of the fact that ICE owns and operates the MDC's meet-me-rooms. Users purchasing Access or Connectivity—like Users of any other colocation service—would require a circuit connecting out of the MDC, and in most cases, such circuits are provided by third-party Telecoms. Currently, 16 Telecoms operate in the meet-me-rooms and provide a variety of circuit choices. It is in the Exchange's best interest to set the fees that Telecoms pay to operate in the meet-me-rooms at a reasonable level
If anything, the Exchange would be subject to a competitive disadvantage vis-à-vis Users regarding access to the Proposed Third Party Systems or connectivity to the Proposed Third Party Data Feeds. Users that choose to independently establish access or connectivity may negotiate terms with the Telecoms or other Users through whom such access and connectivity is delivered, in response to competitive forces. Such prices are not required to be filed by any party with the Commission. In contrast, the Exchange's service and pricing would be standardized as set out in this filing, and the Exchange would be unable to respond to pricing pressure from its competitors without seeking a formal fee change in a filing before the Commission.
The Proposed Pass-Through Edit would not impose any burden on competition. It is not intended to address competitive issues but rather is concerned solely with adding clarity as to who may charge redistribution fees.
The changes would not put any market participants at a relative disadvantage compared to other market participants or penalize one or more categories of market participants in a manner that would impose an undue burden on competition.
No written comments were solicited or received with respect to the proposed rule change.
The Exchange has filed the proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act
At any time within 60 days of the filing of such proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings under Section 19(b)(2)(B)
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
SR-NYSEARCA-2025-47 on the subject line.
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
The Exchange proposes to establish fees for Industry Members
The text of the proposed rule change is available on the Exchange's website at
In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements.
On July 11, 2012, the Commission adopted Rule 613 of Regulation NMS, which required the self-regulatory organizations (“SROs”) to submit a national market system (“NMS”) plan to create, implement and maintain a consolidated audit trail that would capture customer and order event information for orders in NMS securities across all markets, from the time of order inception through routing, cancellation, modification or execution.
The CAT Funding Model provides a framework for the recovery of the costs to create, develop and maintain the CAT, including providing a method for allocating costs to fund the CAT among Participants and Industry Members. The CAT Funding Model establishes two categories of fees: (1) CAT fees assessed by CAT LLC and payable by certain Industry Members to recover a portion of historical CAT costs previously paid by the Participants (“Historical CAT Assessment” fees); and (2) CAT fees assessed by CAT LLC and payable by Participants and Industry Members to fund prospective CAT costs (“CAT Fees”).
Under the CAT Funding Model, Participants, CEBBs and CEBSs are subject to fees designed to cover the ongoing budgeted costs of the CAT, as determined by the Operating Committee. “The Operating Committee will establish fees (`CAT Fees') to be payable by Participants and Industry Members with regard to CAT costs not previously paid by the Participants (`Prospective CAT Costs').”
The CAT Fees to be paid by CEBBs and CEBSs are designed to contribute toward the recovery of two-thirds of the budgeted CAT costs for the relevant period.
CAT LLC proposes to charge CEBBs and CEBSs (as described in more detail below) CAT Fee 2025-2 to recover the reasonably budgeted CAT costs for the period from July 1, 2025 through December 31, 2025 in accordance with the CAT Funding Model. To implement this fee on behalf of CAT LLC, the CAT NMS Plan requires the Participants to “file with the SEC under Section 19(b) of the Exchange Act any such fees on Industry Members that the Operating Committee approves, and such fees shall be labeled as `Consolidated Audit Trail Funding Fees.' ”
CAT Fee 2025-2 will be charged to each CEBB and CEBS for each applicable transaction in Eligible Securities.
(a) with respect to a transaction in an Eligible Security that is executed on an exchange, the Industry Member identified as the Industry Member responsible for the order on the buy-side of the transaction and the Industry Member responsible for the sell-side of the transaction in the equity order trade event and option trade event in the CAT Data submitted to the CAT by the relevant exchange pursuant to the Participant Technical Specifications; and (b) with respect to a transaction in an Eligible Security that is executed otherwise than on an exchange and required to be reported to an equity trade reporting facility of a registered national securities association, the Industry Member identified as the executing broker and the Industry Member identified as the contra-side executing broker in the TRF/ORF/ADF transaction data event in the CAT Data submitted to the CAT by FINRA pursuant to the Participant Technical Specifications; provided, however, in those circumstances where there is a non-Industry Member identified as the contra-side executing broker in the TRF/ORF/ADF transaction data event or no contra-side executing broker is identified in the TRF/ORF/ADF transaction data event, then the Industry Member identified as the executing broker in the TRF/ORF/ADF transaction data event would be treated as CAT Executing Broker for the Buyer and for the Seller.
The following fields of the Participant Technical Specifications indicate the CAT Executing Brokers for the transactions executed on an exchange:
In
The Operating Committee determined the Fee Rate to be used in calculating CAT Fee 2025-2 (“Fee Rate 2025-2”) by dividing the reasonably budgeted CAT costs (“Budgeted CAT Costs 2025-2”) for the period from July 1, 2025 through December 31, 2025 (“CAT Fee 2025-2 Period”) by the reasonably projected total executed share volume of all transactions in Eligible Securities for the six-month recovery period, as discussed in detail below.
CAT LLC proposes to implement CAT Fee 2025-2 as the third CAT Fee related to Prospective CAT Costs. CAT LLC proposes to commence CAT Fee 2025-2 during the year, rather than at the beginning of the year. Accordingly, CAT Fee 2025-2 “would be calculated as described in paragraph (II)” of Section 11.3(a)(i)(A) of the CAT NMS Plan,
Under the CAT NMS Plan, for purposes of calculating CAT Fees, executed equivalent shares in a transaction in Eligible Securities will be reasonably counted as follows: (1) each executed share for a transaction in NMS Stocks will be counted as one executed equivalent share; (2) each executed contract for a transaction in Listed Options will be counted based on the multiplier applicable to the specific Listed Options (
The CAT NMS Plan states that “[t]he budgeted CAT costs for the year shall be comprised of all reasonable fees, costs and expenses reasonably budgeted to be incurred by or for the Company in connection with the development,
In accordance with the requirements under the CAT NMS Plan, the Operating Committee approved an annual budget for 2025 for CAT LLC (“Original 2025 CAT Budget”) in November 2024.
As described in detail below, the Budgeted CAT Costs 2025-2 would be $60,726,412. CEBBs collectively will be responsible for one-third of the Budged [
The following describes in detail the Budgeted CAT Costs 2025-2 for CAT Fee 2025-2. The following cost details are provided in accordance with the requirement in the CAT NMS Plan to provide in the fee filing the following:
Each of the costs described below are reasonable, appropriate and necessary for the creation, implementation and maintenance of CAT.
The following table breaks down the Budgeted CAT Costs 2025-2 into the categories set forth in Section 11.3(a)(iii)(B) of the CAT NMS Plan.
To the extent that CAT LLC enters into notes with Participants or others to pay costs incurred during the period in which CAT Fee 2025-2 is in effect, CAT LLC will use the proceeds from CAT Fee 2025-2 and the related Participant CAT fees to repay such notes.
The following table compares the annual budgeted CAT costs as set forth in the updated annual CAT budget for 2024 approved by the Operating Committee in July 2024 (“Updated 2024 CAT Budget”),
In addition, the following table compares the first quarter of the Original 2025 CAT Budget with the first quarter of the Updated 2025 CAT Budget. The Updated 2025 CAT Budget includes actual costs for January, February and March 2025, whereas the Original 2025 CAT Budget included budgeted costs for these three months. The variance from the first quarter of the Original 2025 CAT Budget to the actuals for the first quarter of 2025 (as set forth in the Updated 2025 CAT Budget) in the last column of the following chart are used in this filing in supporting the reasonableness of the estimates for each category of costs.
Section 11.3(a)(iii)(B)(B)(1) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the cloud hosting services costs set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that included $82,222,276 in technology costs for cloud hosting services for the CAT Fee 2025-2 Period. The technology costs for cloud hosting services represent costs reasonably budgeted to be incurred for services provided by the cloud services provider for the CAT, Amazon Web Services, Inc. (“AWS”) during the CAT Fee 2025-2 Period.
In the agreement between CAT LLC and the Plan Processor for the CAT (“Plan Processor Agreement”), FINRA CAT, LLC (“FCAT”), AWS was named as the subcontractor to provide cloud hosting services. Under the Plan Processor Agreement, CAT LLC is required to pay FCAT the fees incurred by the Plan Processor for cloud hosting services provided by AWS as FCAT's subcontractor on a monthly basis for the cloud hosting services, and FCAT, in turn, pays such fees to AWS. The fees for cloud hosting services were negotiated by FCAT on an arm's length basis with the goals of managing costs and receiving services required to comply with the CAT NMS Plan and Rule 613, taking into consideration a variety of factors, including the expected volume of data, the breadth of services provided and market rates for similar services. Services provided by AWS include storage services, databases, compute services and other services (such as networking, management tools and DevOps tools), as well as various environments for CAT, such as development, performance testing, test, and production environments. FCAT utilizes such cloud hosting services for a broad array of services for the CAT, such as data ingestion, data management, and analytic tools for the CAT. AWS performs cloud hosting services for both the CAT transaction database as well as the CAT Customer and Account Information System (“CAIS”). It is anticipated that such cloud hosting services will continue during the CAT Fee 2025-2 Period.
The cost for AWS cloud services for the CAT is a function of the volume of CAT Data, largely as a result of the processing and storage of the CAT Data.
CAT LLC estimates that the budget for cloud hosting services costs during the CAT Fee 2025-2 Period will be approximately $82,222,276. The budget for cloud hosting services costs during the CAT Fee 2025-2 Period is calculated based on the Updated 2025 CAT Budget. Specifically, this estimate was calculated by adding the budgeted amounts for cloud hosting services costs for the third and fourth quarters of 2025 as set forth in the Updated 2025 CAT Budget.
CAT LLC estimated the budget for the cost for cloud hosting services for the
This process for estimating the budget for cloud hosting services costs for the CAT Fee 2025-2 Period is the same process by which CAT LLC estimated the cloud hosting services costs for the Original 2025 CAT Budget. The Original 2025 CAT Budget estimated a budget for cloud hosting services of $39,640,542 for the first quarter of 2025. The actual costs for cloud hosting services for the first quarter of 2025, which are set forth in the Updated 2025 CAT Budget, were $36,357,017. Therefore, the variance between budgeted and actual cloud hosting services costs for this period was an approximate decrease of 8%. Accordingly, CAT LLC believes that the process for estimating the budgeted cloud hosting services costs for the CAT Fee 2025-2 Period is reasonable.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for cloud hosting services costs from the prior CAT Fee filing. Accordingly, this filing describes the changes in the cloud hosting services costs from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budgeted costs for cloud hosting services as set forth in the Original 2025 CAT Budget were $182,594,630, and the annual 2025 budgeted costs for cloud hosting services as set forth in the Updated 2025 CAT Budget are $159,230,937. Accordingly, budgeted annual costs for cloud hosting services decreased by $23,363,693 from the Original 2025 CAT Budget to the Updated 2025 CAT Budget, which is an approximate 13% reduction in cloud hosting services costs for the full year of 2025.
Correspondingly, the budgeted costs for cloud hosting services for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget were $97,748,713,
The decrease in costs for cloud hosting services from the Original 2025 CAT Budget to the Updated 2025 CAT Budget, both for the full year for 2025 and for the third and fourth quarters of 2025, reflects (1) a decrease in costs related to changes made pursuant to the Cost Savings Amendment; (2) cost decreases related to optimizations resulting in reduced procesing [
Section 11.3(a)(iii)(B)(B)(1) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the operating fees set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that included $15,453,942 in technology costs for operating fees for the CAT Fee 2025-2 Period. Operating fees are those fees paid by CAT LLC to FCAT as the Plan Processor to operate and maintain the CAT and to perform business operations related to the system, including compliance, security, testing, training, communications with the industry (
• Provide the CAT-related functions and services as the Plan Processor as required by SEC Rule 613 and the CAT NMS Plan in connection with the operation and maintenance of the CAT;
• Address compliance items, including drafting CAT policies and procedures, and addressing Regulation SCI requirements;
• Provide support to the Operating Committee, the Compliance Subcommittee and CAT working groups;
• Assist with interpretive efforts, exemptive requests and amendments regarding the CAT NMS Plan;
• Oversee the security of the CAT;
• Monitor the operation of the CAT, including with regard to Participant and Industry Member reporting;
• Provide support to subcontractors under the Plan Processor Agreement;
• Provide support in discussions with the Participants and the SEC and its staff;
• Operate the FINRA CAT Helpdesk;
• Facilitate communications with the industry, including via FAQs, CAT Alerts, meetings, presentations and webinars;
• Administer the CAT website and all of its content;
• Maintain cyber security insurance related to the CAT;
• Assist with billing, collection and other CAT fee-related activity; and
• Provide technical support and assistance with connectivity, data access, and user support, including the use of CAT Data and query tools, for Participants and the SEC staff.
CAT LLC calculated the budget for the FCAT technology costs for operating fees for the CAT Fee 2025-2 Period based on the recurring monthly operating fees under the Plan Processor Agreement.
As discussed above, CAT LLC estimated the budget for the operating fees during the CAT Fee 2025-2 Period based on monthly rates set forth in the Plan Processor Agreement and the agreement with Algoseek. CAT LLC also recognized that the operating fees are generally consistent throughout the year. This process for estimating the budget for the operating fees for the CAT Fee 2025-2 Period is the same process by which CAT LLC estimated the operating fees for the Original 2025 CAT Budget. The Original 2025 CAT Budget estimated a budget for operating fees of $7,662,270 for the first quarter of 2025.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for operating fees from the prior CAT Fee filing. Accordingly, this filing describes the changes from the operating fees set forth in the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budgeted costs for operating fees as set forth in the Original 2025 CAT Budget were $30,831,330,
Correspondingly, the budgeted costs for operating fees for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget were $15,446,040,
Section 11.3(a)(iii)(B)(B)(1) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the CAIS operating fees set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that included $10,374,924 in technology costs for CAIS operating fees for the CAT Fee 2025-2 Period. CAIS operating fees represent the fees paid to FCAT for services provided with regard to the operation and maintenance of CAIS, and to perform the business operations related to the system, including compliance, security, testing, training, communications with the industry (
During the CAT Fee 2025-2 Period, it is anticipated that FCAT will provide CAIS-related services. Under the Plan Processor Agreement with FCAT, CAT LLC is required to pay FCAT for CAIS-related services provided by FCAT on a monthly basis. CAT LLC negotiated the fees for FCAT's CAIS-related services on an arm's length basis with the goals of managing costs and receiving services required to comply with the CAT NMS Plan, taking into consideration a variety of factors, including the services to be provided and market rates for similar types of activity. During the CAT Fee 2025-2 Period, it is anticipated that FCAT will continue to provide services relating to the ongoing operation, maintenance and support of CAIS.
CAT LLC estimates that the budget for CAIS operating fees during the CAT Fee 2025-2 Period will be approximately $10,374,924. The budget for CAIS operating fees during the CAT Fee 2025-2 Period is calculated based on the Updated 2025 CAT Budget. Specifically, this estimate was calculated by adding the budgeted amounts for CAIS operating fees for the third and fourth quarters of 2025 as set forth in the Updated 2025 CAT Budget.
CAT LLC calculated the budget for FCAT's CAIS-related services for the CAT Fee 2025-2 Period based on the recurring monthly CAIS operating fees under the Plan Processor Agreement. This process for estimating the budget for the CAIS operating fees for the CAT Fee 2025-2 Period is the same process by which CAT LLC estimated the CAIS operating fees for the Original 2025 CAT Budget. The Original 2025 CAT Budget
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for CAIS operating fees from the prior CAT Fee filing. Accordingly, this filing describes the changes in CAIS operating fees from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
CAIS operating fees are based on a recurring monthly rate payable to FCAT and are unchanged from the prior CAT Fee filing. The annual 2025 budgeted costs for CAIS operating fees as set forth in the Original 2025 CAT Budget were $20,749,848, and the annual 2025 budgeted costs for CAIS operating fees as set forth in the Updated 2025 CAT Budget are $20,749,848. Accordingly, the budgeted annual costs for CAIS operating fees are the same for both the Original 2025 CAT Budget and the Updated 2025 CAT Budget.
Correspondingly, the budgeted costs for CAIS operating fees for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget were $10,374,924, and the budgeted costs for CAIS operating fees for the third and fourth quarters of 2025 as set forth in the Updated 2025 CAT Budget are $10,374,924.
Accordingly, there were no changes in the line item for CAIS operating fees from the prior CAT Fee filing.
Section 11.3(a)(iii)(B)(B)(1) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the change request fees set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that included $500,000 in technology costs for change request fees for the CAT Fee 2025-2 Period. The technology costs related to change request fees include costs related to certain modifications, upgrades or other changes to the CAT.
Change requests are standard practice and necessary to reflect operational changes, including changes related to new market developments, such as new market participants. In general, if CAT LLC determines that a modification, upgrade or other changes to the functionality or service is necessary and appropriate, CAT LLC will submit a request for such a change to the Plan Processor. The Plan Processor will then respond to the request with a proposal for implementing the change, including the cost (if any) of such a change. CAT LLC then determines whether to approve the proposed change.
The change request budget line is established to include expected costs to be incurred in which the nature of the costs (
During the CAT Fee 2025-2 Period, it is anticipated that CAT LLC will engage FCAT to pursue certain change requests in accordance with the Plan Processor Agreement. The budget for change requests for the CAT Fee 2025-2 Period includes a placeholder of $500,000 for potential change request fees that may be necessary in accordance with the Plan Processor Agreement. The placeholder amount was determined based on prior experience with change requests related to the CAT.
CAT LLC estimates that the budget for change requests during the CAT Fee 2025-2 Period will be approximately $500,000. The budget for change requests during the CAT Fee 2025-2 Period is calculated based on the Updated 2025 CAT Budget. Specifically, this estimate was calculated by adding the budgeted amounts for the change requests for the third and fourth quarters of 2025 as set forth in the Updated 2025 CAT Budget.
CAT LLC estimated the budget for the potential change requests for the CAT Fee 2025-2 Period based on, among other things, a review of past change requests and potential future change request needs, as well as discussions with FCAT. This process for estimating the budget for the change requests for the CAT Fee 2025-2 Period is the same process by which CAT LLC estimated the change requests cost for the Original 2025 CAT Budget. The Original 2025 CAT Budget estimated a change request budget of $0 for the the [
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for change request fees from the prior CAT Fee filing. Accordingly, this filing describes the changes in the change request fees from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budgeted costs for change requests as set forth in the Original 2025 CAT Budget were $750,000, and the annual 2025 budgeted costs for change requests as set forth in the Updated 2025 CAT Budget are $750,000. Accordingly, budgeted annual costs for change requests are the same for both the Original 2025 CAT Budget and the Updated 2025 CAT Budget.
Correspondingly, the budgeted costs for change requests for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget were $500,000, and the budgeted costs for change request for the third and fourth quarters of 2025 as set forth in the Updated 2025 CAT Budget are
Accordingly, there were no changes in the line item for change requests from the prior CAT Fee filing.
Section 11.3(a)(iii)(B)(B)(1) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the capitalized developed technology costs set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that includes $0 in technology costs for capitalized developed technology costs for the CAT Fee 2025-2 Period. This category of costs includes the budget for capitalizable application development costs incurred in the development of the CAT. It is anticipated that such costs will include certain costs related to the software license fee for CAIS in accordance with the Plan Processor Agreement with FCAT, as well as costs related to a set of technology changes to be implemented by FCAT.
CAT LLC estimates that the budget for capitalized developed technology costs during the CAT Fee 2025-2 Period will be approximately $0. The budget for capitalized developed technology costs during the CAT Fee 2025-2 Period is calculated based on the Updated 2025 CAT Budget. Specifically, this estimate was calculated by adding the budgeted amounts for capitalized developed technology costs for the third and fourth quarters of 2025 as set forth in the Updated 2025 CAT Budget.
CAT LLC estimated the budget for capitalized developed technology costs for the CAT Fee 2025-2 Period based on an analysis of a variety of factors, including information related to potential technology costs and related contractual and Plan requirements, and discussions with FCAT regarding such potential technology costs. This process for estimating the budget for capitalized developed technology costs for the CAT Fee 2025-2 Period is the same process by which CAT LLC estimated the capitalized developed technology costs for the Original 2025 CAT Budget. The Original 2025 CAT Budget estimated a budget for capitalized developed technology costs of $3,923,360 for the first quarter of 2025.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for capitalized developed technology costs from the prior CAT Fee filing. Accordingly, this filing describes the changes in the capitalized developed technology costs from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budget for capitalized developed technology costs as set forth in the Original 2025 CAT Budget were $3,923,360,
In addition, the budget for capitalized developed technology costs for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget was $0,
Section 11.3(a)(iii)(B)(B)(2) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the legal costs set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that includes $3,631,342 in legal costs for the CAT Fee 2025-2 Period. This category of costs represents budgeted costs for legal services for this period. CAT LLC anticipates that it will receive legal services from two law firms, Wilmer Cutler Pickering Hale and Dorr LLP (“WilmerHale”) and Jenner & Block LLP (“Jenner”), during the CAT Fee 2025-2 Period.
During the CAT Fee 2025-2 Period, it is anticipated that WilmerHale will provide legal services related to the following:
• Assist with CAT fee filings and related funding issues;
• Draft exemptive requests from CAT NMS Plan requirements and/or proposed amendments to the CAT NMS Plan;
• Provide legal guidance with respect to interpretations of CAT NMS Plan requirements;
• Provide legal support for the Operating Committee, Compliance Subcommittee, working groups and Leadership Team;
• Draft SRO rule filings related to the CAT Compliance Rule;
• Manage corporate governance matters, including supporting Operating Committee meetings and preparing resolutions and consents;
• Assist with communications with the industry, including CAT Alerts and presentations;
• Provide guidance regarding the confidentiality of CAT Data;
• Assist with cost management analyses and proposals;
• Assist with commercial contract-related matters, including change orders and amendments, Plan Processor Agreement items, and subcontract matters;
• Provide support with regard to discussions with the SEC and its staff, including with respect to addressing interpretive and implementation issues;
• Provide legal guidance with respect to the CAT budgets;
• Provide background assistance to other counsel for CAT matters;
• Assist with legal responses related to third-party data requests; and
• Provide legal support regarding CAT policies and procedures.
CAT LLC estimated the budget for the legal costs for WilmerHale for the CAT Fee 2025-2 Period through an analysis of a variety of factors, including WilmerHale fee rates, historical legal fees, and information related to pending legal issues and potential future legal issues.
During the CAT Fee 2025-2 Period, it is anticipated that Jenner will continue to provide legal assistance to CAT LLC regarding certain litigation matters, including: (1) CAT LLC's defense against a lawsuit filed in the Western District of Texas against the SEC Chair, the SEC and CAT LLC challenging the validity of Rule 613 and the CAT and alleging various constitutional, statutory, and common law claims;
CAT LLC estimated the budget for the legal costs for Jenner for the CAT Fee 2025-2 Period through an analysis of a variety of factors, including Jenner's fee rates, historical legal fees, and information related to pending legal issues and potential future legal issues.
CAT LLC estimated the budget for the legal services for the CAT Fee 2025-2 Period based on an analysis of a variety of factors, including law firm fee rates, historical legal fees, and information related to pending legal issues and potential future legal issues. This process for estimating the budget for the legal services for CAT Fee 2025-2 Period is the same process by which CAT LLC estimated the legal cost for the Original 2025 CAT Budget. The Original 2025 CAT Budget estimated a budget for legal costs of $1,430,000 for the first quarter of 2025. The actual costs for legal services for the first quarter of 2025, which are set forth in the Updated 2025 Budget, were $1,922,990. The increase of $492,990 was due to unanticipated issues that required additional legal efforts on behalf of CAT LLC that developed after the budget was created. Such additional costs were primarily due to additional legal work in responding to an SEC examination related to the CAT, for commercial contract-related matters, including with regard to the Plan Processor Agreement, and related to cost savings initiatives. Accordingly, CAT LLC believes that the process for estimating the budgeted legal costs for the CAT Fee 2025-2 Period is reasonable.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for legal costs from the prior CAT Fee filing. Accordingly, this filing describes the changes in the legal costs from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budgeted legal costs as set forth in the Original 2025 CAT Budget were $5,720,000, and the annual 2025 budgeted legal costs as set forth in the Updated 2025 CAT Budget are $7,370,002. Accordingly, the annual budget for legal costs increased by $1,650,002 from the Original 2025 CAT Budget to the Updated 2025 CAT Budget for the full year of 2025.
Correspondingly, the budgeted legal costs for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget were $2,860,000,
This budgeted increase in the legal costs in the Updated 2025 CAT Budget
Section 11.3(a)(iii)(B)(B)(3) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the consulting costs set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that included $866,167 in consulting costs for the CAT Fee 2025-2 Period. The consulting costs represent the fees estimated to be paid to the consulting firm Deloitte & Touche LLP (“Deloitte”) as project manager during the CAT Fee 2025-2 Period. These consulting costs include costs for advisory services related to the operation of the CAT, and meeting facilitation and communications coordination, vendor support and financial analyses.
It is anticipated that the costs for CAT during the CAT Fee 2025-2 Period will include costs related to consulting services performed by Deloitte. CAT LLC anticipates that it will continue to employ Deloitte during the CAT Fee 2025-2 Period based on, among other things, their expertise, long history with the project, and the recognition that it is anticipated that the consulting fees will remain in line with market rates for this type of specialized consulting work. Deloitte's fee rates are negotiated on an annual basis. CAT LLC assesses Deloitte's performance and reviews prospective budgets and staffing plans submitted by Deloitte on an annual basis. The consulting fees will be paid by CAT LLC to Deloitte.
It is anticipated that Deloitte will provide a variety of consulting services to the CAT during the CAT Fee 2025-2 Period, including the following:
• Implement program operations for the CAT project;
• Provide support to the Operating Committee, the Chair of the Operating Committee and the Leadership Team, including project management support, coordination and planning for meetings and communications, and interfacing with law firms and the SEC;
• Assist with cost and funding matters for the CAT, including assistance with loans and the CAT bank account for CAT funding;
• Provide support for updating the SEC on the progress of the development of the CAT; and
• Provide support for third party vendors for the CAT, including FCAT, Anchin and the law firms engaged by CAT LLC.
In addition, the consulting costs include the compensation for the Chair of the CAT Operating Committee.
CAT LLC estimates that the budget for consulting costs during the CAT Fee 2025-2 Period will be approximately $866,167. The budget for consulting costs during the CAT Fee 2025-2 Period is calculated based on the Updated 2025 CAT Budget. Specifically, this estimate was calculated by adding the budgeted amounts for consulting services for the third and fourth quarters of 2025 as set forth in the Updated 2025 CAT Budget.
CAT LLC estimates the budget for the consulting costs for Deloitte for the CAT Fee 2025-2 Period based on the current statement of work with Deloitte, which took into consideration past consulting costs, potential future consulting needs, the proposed rates and other contractual issues, as well as discussions with Deloitte. This process for estimating the budget for consulting costs for the CAT Fee 2025-2 Period is the same process by which CAT LLC estimated the consulting costs for the Original 2025 CAT Budget. The Original 2025 CAT Budget estimated a budget for consulting services of $437,500 for the first quarter of 2025. The actual costs for consulting services for the first quarter of 2025, which are set forth in the Updated 2025 CAT Budget, were $450,745. Therefore, the variance between budgeted and actual consulting costs for the first quarter of 2025 was approximately 3%. Accordingly, CAT LLC believes that the process for estimating the budgeted consulting costs for the CAT Fee 2025-2 Period is reasonable.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for consulting costs from the prior CAT Fee filing. Accordingly, this filing describes the changes in the consulting costs from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budget for consulting costs as set forth in the Original 2025 CAT Budget was $1,750,000, and the annual 2025 budget for consulting costs as set forth in the Updated 2025 CAT Budget is approximately $1,750,000. Accordingly, the annual budget for consulting costs has not changed from the Original 2025 CAT Budget to the Updated 2025 CAT Budget for the full year of 2025.
Correspondingly, the budget for consulting costs for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget was $875,000,
Section 11.3(a)(iii)(B)(B)(4) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the insurance costs set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that included $1,594,452 in insurance costs for the CAT Fee 2025-2 Period. The insurance costs represent the costs to be incurred for insurance for CAT during the CAT Fee 2025-2 Period.
It is anticipated that the insurance costs for CAT during the CAT Fee 2025-2 Period will include costs related to cyber security liability insurance, directors' and officers' liability insurance, and errors and omissions liability insurance brokered by USI Insurance Services LLC (“USI”). Such policies are standard for corporate entities, and cyber security liability insurance is important for the CAT System. CAT LLC anticipates that it will continue to maintain this insurance during the CAT Fee 2025-2 Period, and notes that the annual premiums for these policies were competitive for the
The budgeted insurance costs for the CAT Fee 2025-2 Period are based on an insurance cost estimate from USI for 2025. Accordingly, CAT LLC believes that the process for estimating the budgeted insurance costs for the CAT Fee 2025-2 Period is reasonable.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for insurance costs from the prior CAT Fee filing. Accordingly, this filing describes the changes in the insurance costs from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budgeted insurance costs as set forth in the Original 2025 CAT Budget were $1,594,452, and the annual 2025 budgeted insurance costs as set forth in the Updated 2025 CAT Budget are $1,594,452. Accordingly, the annual budgeted insurance costs remained the same for the Original 2025 CAT Budget and the Updated 2025 CAT Budget for the full year of 2025.
Correspondingly, the budgeted insurance costs for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget were $1,594,452,
Section 11.3(a)(iii)(B)(B)(5) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the professional and administration costs set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that included $609,818 in professional and administration costs for the CAT Fee 2025-2 Period. In adopting the CAT NMS Plan, the Commission amended the Plan to add a requirement that CAT LLC's financial statements be prepared in compliance with GAAP, audited by an independent public accounting firm, and made publicly available.
It is anticipated that Anchin will provide a variety of services to the CAT during the CAT Fee 2025-2 Period, including the following:
• Update and maintain internal controls;
• Provide cash management and treasury functions;
• Facilitate bill payments to vendors;
• Facilitate repayments of promissory notes to Participants;
• Provide monthly bookkeeping;
• Review vendor invoices and documentation in support of cash disbursements;
• Review documentation to ensure that repayments of promissory notes to Participants are in accordance with established policies and procedures;
• Provide accounting research and consultations on various accounting, financial reporting and tax matters;
• Address not-for-profit tax and accounting considerations;
• Prepare tax returns;
• Address various accounting, financial reporting and operating inquiries from Participants;
• Develop and maintain annual operating and financial budgets, including budget to actual fluctuation analyses;
• Support compliance with the CAT NMS Plan;
• Work with and provide support to the Operating Committee and various CAT working groups;
• Prepare monthly, quarterly and annual financial statements;
• Review and reconcile the monthly FINRA CAT reports/analyses related to billings, collections, outstanding accounts receivable and cash account;
• Perform certain verification, completeness, and validation testing related to the monthly FINRA CAT reports/analyses related to billings;
• Support the annual financial statement audits by an independent auditor;
• Review historical costs from inception;
• Provide accounting and financial information in support of SEC filings; and
• Perform additional ad hoc accounting and financial advisory services, as requested by CAT LLC.
CAT LLC estimated the annual budget for the costs for Anchin based on historical costs adjusted for cost of living rate increases, and projected incremental advisory and support services.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for professional and administration costs from the prior CAT Fee filing. Accordingly, this filing describes the changes in the professional and administration costs from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budgeted professional and administration costs as set forth in the Original 2025 CAT Budget were $882,456, and the annual 2025 budgeted professional and administration costs as set forth in the Updated 2025 CAT Budget are $1,193,090. Accordingly, the budgeted annual costs for professional and administration services increased by $310,634 from the Original 2025 CAT Budget to the Updated 2025 CAT Budget for the full year of 2025.
Correspondingly, the budgeted costs for professional and administration services for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget were $444,246,
This budgeted increase in the professional and administration costs in the Updated 2025 CAT Budget from the Original 2025 Budget, both for the full year for 2025 and for the third and fourth quarters of 2025, was primarily due to increases in both financial advisory costs and accounting costs as a result of additional anticipated efforts related to billings and collections of fees from Participants and Industry Members, coupled with expected incremental efforts related to supporting CAT LLC's independent auditors for the 2024 audit.
Section 11.3(a)(iii)(B)(B)(6) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the public relations costs set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that included $0 in public relations costs for the CAT Fee 2025-2 Period. The public relations costs represent the fees paid to a public relations firm for professional communications services to CAT, including media relations consulting, strategy and execution. Because CAT LLC anticipates that it will not engage a public relations firm for the third and fourth quarters of 2025, the budget for public relations costs for this period is $0.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for public relations costs from the prior CAT Fee filing. Accordingly, this filing describes the changes in the public relations costs from the Updated 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual budgeted public relations costs for 2025 as set forth in the Original 2025 CAT Budget were $50,000, and the annual budgeted public relations costs for 2025 as set forth in the Updated 2025 CAT Budget are $6,575. Accordingly, the annual budget for public relations cost for 2025 decreased by $43,425 from the Original 2025 CAT Budget to the Updated 2025 CAT Budget for the full year of 2025.
Correspondingly, the budgeted costs for public relations services for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget were $25,000,
This budgeted decrease in the public relations costs from the Original 2025 CAT Budget to the Updated 2025 CAT Budget, both for the full year for 2025 and for the third and fourth quarters of 2025, was primarily due to CAT LLC's anticipation that it would not engage a public relations firm for the remainder of 2025.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the reserve costs set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that includes a reserve amount for 2025. Section 11.1(a)(i) of the CAT NMS Plan states that the budget shall include a reserve. Section 11.1(a)(ii) of the CAT NMS Plan further describes the reserve as follows:
For the reserve referenced in paragraph (a)(i) of this Section, the budget will include an amount reasonably necessary to allow the Company to maintain a reserve of not more than 25% of the annual budget. To the extent collected CAT fees exceed CAT costs, including the reserve of 25% of the annual budget, such surplus shall be used to offset future fees. For the avoidance of doubt, the Company will only include an amount for the reserve in the annual budget if the Company does not have a sufficient reserve (which shall be up to but not more than 25% of the annual budget). For the avoidance of doubt, the calculation of the amount of the reserve would exclude the amount of the reserve from the budget.
CAT LLC determined to maintain a reserve in the amount of 25% of the total expenses set forth in Updated 2025 CAT Budget (which does not include the reserve amount). Accordingly, the total 25% reserve was calculated by multiplying the total expenses set forth in the Updated 2025 CAT Budget (other than the reserve) by 25%, which is $57,083,638.
The Updated 2025 CAT Budget states that CAT LLC had accrued $70,942,596 for the reserve as of the beginning of 2025, and an additional $28,846,075 during the first quarter of 2025, from the collection of CAT Fees 2024-1 and 2025-1 and the related Participant CAT Fees. In addition, the Updated 2025 CAT Budget anticipates the collection of an additional $11,821,477 during the second quarter of 2025 via CAT Fee 2025-1 and the related Participant CAT Fee. Accordingly, the Updated 2025 CAT Budget estimates that CAT LLC would collect a surplus reserve amount through June 2025 of $54,526,412 over the 25% reserve amount of $57,083,638.
Such surplus was related, in part, to (i) the collection of CAT fees in excess of the budgeted CAT costs for 2024 and 2025 in light of the greater actual executed equivalent share volume than the projected executed equivalent share volume for CAT Fees 2024-1 and 2025-1, and (ii) a reduction in anticipated budgeted costs associated with the implementation of certain cost savings measures approved by the SEC pertaining to the processing of options market maker quotes and the storage of certain data.
As set forth in the Budgeted CAT Costs 2025-2, the surplus reserve balance of $54,526,412 would be used to offset a portion of CAT costs for the third and fourth quarters of 2025, thereby reducing the fee rate to be paid for CAT Fee 2025-2. Specifically, the total costs used to calculate the fee rate for CAT Fee 2025-2 would be reduced by the amount of the surplus reserve as set forth in the following table:
Accordingly, the fee rate for CAT Fee 2025-2 is calculated based on this reduced amount of $60,726,412, resulting in a fee rate of $0.000009 per executed equivalent share. If the fee rate for CAT Fee 2025-2 were calculated solely based on the reasonably budgeted costs for CAT for July-December 2025 excluding the reduction in that amount due to the surplus reserve offset (that is, based on $115,252,921, not $60,726,412), the fee rate would be the higher rate of $0.000017.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for a reserve from the prior CAT Fee filing. Accordingly, this filing describes the changes in the reserve from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
For the Original 2025 CAT Budget, CAT LLC determined to maintain a reserve in the amount of 25% of budgeted CAT costs (other than the reserve). Accordingly, the total 25% reserve was calculated by multiplying the budgeted CAT costs (other than the reserve) as set forth in the Original 2025 CAT Budget (which is $248,846,076) by 25%, for a target reserve amount of
As discussed above, CAT LLC determined to maintain a reserve in the amount of 25% of the budgeted CAT costs (other than the reserve). Accordingly, the total 25% reserve was calculated by multiplying the budgeted CAT costs (other than the reserve) as set forth in the Updated 2025 CAT Budget (which is $228,334,551) by 25%, for a target reserve amount of $57,083,638.
As discussed above, such surplus reserve balance of $54,526,412 would be used to offset a portion of CAT costs for the third and fourth quarters of 2025, thereby reducing the fee rate for CAT Fee 2025-2 in accordance with Section 11.1(a)(ii) of the CAT NMS Plan. Section 11.1(a)(ii) of the CAT NMS Plan states that “[t]o the extent collected CAT fees exceed CAT costs, including the reserve of 25% of the annual budget, such surplus shall be used to offset future fees.”
The calculation of Fee Rate 2025-2 also requires the determination of the projected total executed equivalent share volume of transactions in Eligible Securities for the CAT Fee 2025-2 Period. Under the CAT NMS Plan, the Operating Committee is required to “reasonably determine the projected total executed equivalent share volume of all transactions in Eligible Securities for each relevant period based on the executed equivalent share volume of all transactions in Eligible Securities for the prior twelve months.”
The total executed equivalent share volume of transactions in Eligible Securities for the 12-month period from April 2024 through March 2025 was 4,580,287,680,646.28 executed equivalent shares. The Operating Committee has determined to calculate the projected total executed equivalent share volume for the six-month recovery period for CAT Fee 2025-2 by multiplying by one-half the executed equivalent share volume for the 12-month period from April 2024 through March 2025. The Operating Committee determined that such an approach was reasonable as the CAT's annual executed equivalent share volume has remained relatively constant. For example, the executed equivalent share volume for 2021 was 3,963,697,612,395, the executed equivalent share volume for 2022 was 4,039,821,841,560.31, the executed equivalent share volume for 2023 was 3,868,940,345,680.6, and the executed equivalent share volume for 2024 was 4,295,884,600,069.41. Accordingly, the projected total executed equivalent share volume for the six-month period for CAT Fee 2025-2 is projected to be 2,290,143,840,323.14 executed equivalent shares.
The projected total executed equivalent share volume of all transactions in Eligible Securities for the six-month recovery period for CAT Fee 2025-2 and a description of the calculation of the projection is provided in this filing in accordance with the requirement in the CAT NMS Plan to provide such information in a fee filing for a CAT Fee.
Fee Rate 2025-2 would be calculated by dividing the Budgeted CAT Costs 2025-2 by the reasonably projected total executed equivalent share volume of all transactions in Eligible Securities for the six-month recovery period for CAT Fee 2025-2, as described in detail above.
CEBBs and CEBSs would be required to pay fees for CAT Fee 2025-2 on a monthly basis for six months, from August 2025 until January 2026. A CEBB's or CEBS's fee for each month would be calculated based on the transactions in Eligible Securities executed by the CEBB or CEBS from the prior month.
To implement CAT Fee 2025-2, the Exchange proposes to add a new paragraph to the “Consolidated Audit Trail Funding Fees” section of the Exchange's Fee Schedule, to include the proposed paragraphs described below.
The CAT NMS Plan states that:
Each Industry Member that is the CAT Executing Broker for the buyer in a transaction in Eligible Securities (“CAT Executing Broker for the Buyer” or “CEBB”) and each Industry Member that is the CAT Executing Broker for the seller in a transaction in Eligible Securities (“CAT Executing Broker for the Seller” or “CEBS”) will be required to pay a CAT Fee for each such transaction in Eligible Securities in the prior month based on CAT Data. The CEBB's CAT Fee or CEBS's CAT Fee (as applicable) for each transaction in Eligible Securities will be calculated by multiplying the number of executed equivalent shares in the transaction by one-third and by the Fee Rate reasonably determined pursuant to paragraph (a)(i) of this Section 11.3.
Accordingly, based on the factors discussed above, the Exchange proposes to add paragraph (a)(5) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule. Proposed paragraph (a)(5) would state the following:
(A) Each CAT Executing Broker shall receive its first invoice for CAT Fee 2025-2 in August 2025, which shall set forth the CAT Fee 2025-2 fees calculated based on transactions in July 2025, and shall receive an invoice for CAT Fee 2025-2 for each month thereafter until January 2026.
(B) Consolidated Audit Trail, LLC shall provide each CAT Executing Broker with an invoice for CAT Fee 2025-2 on a monthly basis. Each month, such invoices shall set forth a fee for each transaction in Eligible Securities executed by the CAT Executing Broker in its capacity as a CAT Executing Broker for the Buyer (“CEBB”) and/or the CAT Executing Broker for the Seller (“CEBS”) (as applicable) from the prior month as set forth in CAT Data. The fee for each such transaction will be calculated by multiplying the number of executed equivalent shares in the transaction by the fee rate of $0.000009 per executed equivalent share.
(C) Notwithstanding the last invoice date of January 2026 for CAT Fee 2025-2 in paragraph 5(A), CAT Fee 2025-2 shall continue in effect after January 2026, with each CAT Executing Broker receiving an invoice for CAT Fee 2025-2 each month, until a new subsequent CAT Fee is in effect with regard to Industry Members in accordance with Section 19(b) of the Exchange Act. Consolidated Audit Trail, LLC will provide notice when CAT Fee 2025-2 will no longer be in effect.
(D) Each CAT Executing Broker shall be required to pay each invoice for CAT Fee 2025-2 in accordance with paragraph (b).
As noted in the Plan amendment for the CAT Funding Model, “[a]s a practical matter, the fee filing would provide the exact fee per executed equivalent share to be paid for the CAT Fees, by multiplying the Fee Rate by one-third and describing the relevant number of decimal places for the fee.”
The proposed language in paragraph (a)(5)(A) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule would describe when CAT Executing Brokers would receive their first monthly invoice for CAT Fee 2025-2. Specifically, CAT Executing Brokers would receive their first monthly invoice for CAT Fee 2025-2 in August 2025 and the fees set forth in that invoice would be calculated based on transactions executed in July 2025. The payment for the first invoice would be required within 30 days after the receipt of the first invoice (unless a longer period is indicated), as described in paragraph (b)(2) of the Fee Schedule.
Proposed paragraph (a)(5)(A) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule also would describe the monthly cadence of the invoices for CAT Fee 2025-2. Specifically, after the first invoices are provided to CAT Executing Brokers in August 2025, invoices will be sent to CAT Executing Brokers each month thereafter until January 2026.
Proposed paragraph (a)(5)(B) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule would describe the invoices for CAT Fee 2025-2. Proposed paragraph (a)(5)(B) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule would state that “Consolidated Audit Trail, LLC shall provide each CAT Executing Broker with an invoice for CAT Fee 2025-2 on a monthly basis.” Proposed paragraph (a)(5)(B) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule also would describe the fees to be set forth in the invoices for CAT Fee 2025-2. Specifically, it would state that “[e]ach month, such invoices shall set forth a fee for each transaction in Eligible Securities executed by the CAT Executing Broker in its capacity as a CAT Executing Broker for the Buyer (`CEBB') and/or the CAT Executing Broker for the Seller (`CEBS') (as applicable) from the prior month as set forth in CAT Data. The fee for each such transaction will be calculated by multiplying the number of executed equivalent shares in the transaction by the fee rate of $0.000009 per executed equivalent share.”
Since CAT Fee 2025-2 is a monthly fee based on actual transaction volume from the prior month, CAT Fee 2025-2 may collect more or less than two-thirds of the Budgeted CAT Costs 2025-2. To the extent that CAT Fee 2025-2 collects more than two-thirds of the Budgeted CAT Costs 2025-2, any excess money collected will be used to offset future fees and/or to fund the reserve for the CAT. To the extent that CAT Fee 2025-2 collects less than two-thirds of the Budgeted CAT Costs 2025-2, the budget for the CAT in the ensuing months will reflect such shortfall.
Furthermore, proposed paragraph (a)(5)(C) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule would describe how long CAT Fee 2025-2 would remain in effect. It would state that “[n]otwithstanding the last invoice date of January 2026 for CAT Fee 2025-2 in paragraph 5(A), CAT Fee 2025-2 shall continue in effect after January 2026, with each CAT Executing Broker receiving an invoice for CAT Fee 2025-2 each month, until a new subsequent CAT Fee is in effect with regard to Industry Members in accordance with Section 19(b) of the Exchange Act. Consolidated Audit Trail,
Finally, proposed paragraph (a)(5)(D) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule would set forth the requirement for the CAT Executing Brokers to pay the invoices for CAT Fee 2025-2. It would state that “[e]ach CAT Executing Broker shall be required to pay each invoice for CAT Fee 2025-2 in accordance with paragraph (b).”
Paragraph (b)(1) of the “Consolidated Audit Trail Funding Fees” section of the Fee Schedule describes the manner of payment of Industry Member CAT fees. It states that “[e]ach CAT Executing Broker shall pay its CAT fees as required pursuant to paragraph (a) each month to the Consolidated Audit Trail, LLC in the manner prescribed by the Consolidated Audit Trail, LLC.” The CAT NMS Plan requires the Operating Committee to establish a system for the collection of CAT fees.
The CAT NMS Plan further states that:
Participants shall require each Industry Member to pay all applicable fees authorized under this Article XI within thirty (30) days after receipt of an invoice or other notice indicating payment is due (unless a longer payment period is otherwise indicated). If an Industry Member fails to pay any such fee when due (as determined in accordance with the preceding sentence), such Industry Member shall pay interest on the outstanding balance from such due date until such fee is paid at a per annum rate equal to the lesser of: (a) the Prime Rate plus 300 basis points; or (b) the maximum rate permitted by applicable law.
Paragraph (b)(2) of the Consolidated Audit Trail Funding Fees section of the Fee Schedule states that:
Each CAT Executing Broker shall pay the CAT fees required pursuant to paragraph (a) within thirty days after receipt of an invoice or other notice indicating payment is due (unless a longer payment period is otherwise indicated). If a CAT Executing Broker fails to pay any such CAT fee when due, such CAT Executing Broker shall pay interest on the outstanding balance from such due date until such fee is paid at a per annum rate equal to the lesser of (i) the Prime Rate plus 300 basis points, or (ii) the maximum rate permitted by applicable law.
The requirements of paragraph (b)(2) would apply to CAT Fee 2025-2.
The CAT NMS Plan states that:
Details regarding the calculation of a Participant or CAT Executing Broker's CAT Fees will be provided upon request to such Participant or CAT Executing Broker. At a minimum, such details would include each Participant or CAT Executing Broker's executed equivalent share volume and corresponding fee by (1) Listed Options, NMS Stocks and OTC Equity Securities, (2) by transactions executed on each exchange and transactions executed otherwise than on an exchange, and (3) by buy-side transactions and sell-side transactions.
Such information would provide CEBBs and CEBSs with the ability to understand the details regarding the calculation of their CAT Fee.
In addition, CAT LLC will make certain aggregate statistics regarding CAT Fees publicly available. Specifically, the CAT NMS Plan states that, “[f]or each CAT Fee, at a minimum, CAT LLC will make publicly available the aggregate executed equivalent share volume and corresponding aggregate fee by (1) Listed Options, NMS Stocks and OTC Equity Securities, (2) by transactions executed on each exchange and transactions executed otherwise than on an exchange, and (3) by buy-side transactions and sell-side transactions.”
Furthermore, CAT LLC will make publicly available on the CAT website the total amount invoiced each month that CAT Fee 2025-2 is in effect as well as the total amount invoiced for CAT Fee 2025-2 for all months since its commencement. CAT LLC also will make publicly available on the CAT website the total costs to be collected from Industry Members for CAT Fee 2025-2.
The CAT NMS Plan states that “[n]o Participant will make a filing with the SEC pursuant to Section 19(b) of the Exchange Act regarding any CAT Fee related to Prospective CAT Costs until the Financial Accountability Milestone related to Period 4 described in Section 11.6 has been satisfied.”
CAT LLC intends for CAT Fee 2025-2 to replace CAT Fee 2025-1 (which has a fee rate of $0.000022).
While CAT Fees charged to Industry Members become effective in accordance with the requirements of Section 19(b) of the Exchange Act,
The Exchange believes the proposed rule change is consistent with the requirements of the Exchange Act. The Exchange believes that the proposed rule change is consistent with Section 6(b)(5) of the Act,
The Exchange believes that this proposal is consistent with the Act because it implements provisions of the Plan and is designed to assist the Exchange in meeting regulatory obligations pursuant to the Plan. In approving the Plan, the SEC noted that the Plan “is necessary and appropriate in the public interest, for the protection of investors and the maintenance of fair and orderly markets, to remove impediments to, and perfect the mechanism of a national market system, or is otherwise in furtherance of the purposes of the Act.”
The Exchange believes that the proposed fees to be paid by the CEBBs and CEBSs are reasonable, equitably allocated and not unfairly discriminatory. First, the CAT Fee 2025-2 fees to be collected are directly associated with the budgeted costs of establishing and maintaining the CAT, where such costs include Plan Processor costs and costs related to technology, legal, consulting, insurance, professional and administration, and public relations costs.
The proposed CAT Fee 2025-2 fees would be charged to Industry Members in support of the maintenance of a consolidated audit trail for regulatory purposes. The proposed fees, therefore, are consistent with the Commission's view that regulatory fees be used for regulatory purposes and not to support the Exchange's business operations. The proposed fees would not cover Exchange services unrelated to the CAT. In addition, any surplus would be used as a reserve to offset future fees. Given the direct relationship between CAT fees and CAT costs, the Exchange believes that the proposed fees are reasonable, equitable and not unfairly discriminatory.
As further discussed below, the SEC approved the CAT Funding Model, finding it was reasonable and that it equitably allocates fees among Participants and Industry Members. The Exchange believes that the proposed fees adopted pursuant to the CAT Funding Model approved by the SEC are reasonable, equitably allocated and not unfairly discriminatory.
Section 11.1(b) of the CAT NMS Plan states that “[t]he Participants shall file with the SEC under Section 19(b) of the Exchange Act any such fees on Industry Members that the Operating Committee approves.” Per Section 11.1(b) of the CAT NMS Plan, the Exchange has filed this fee filing to implement the Industry Member CAT fees included in the CAT Funding Model. The Exchange believes that this proposal is consistent with the Exchange Act because it is consistent with, and implements, the CAT Funding Model in the CAT NMS Plan, and is designed to assist the Exchange and its Industry Members in meeting regulatory obligations pursuant to the CAT NMS Plan. In approving the CAT NMS Plan, the SEC noted that the Plan “is necessary and appropriate in the public interest, for the protection of investors and the maintenance of fair and orderly markets, to remove impediments to, and
The SEC has determined that the CAT Funding Model is reasonable and satisfies the requirements of the Exchange Act. Specifically, the SEC has concluded that the method for determining CAT Fees as set forth in Section 11.3 of the CAT NMS Plan, including the formula for calculating the Fee Rate, the identification of the parties responsible for payment and the transactions subject to the fee rate for CAT Fees, is reasonable and satisfies the Exchange Act.
The formula for calculating a Fee Rate requires the amount of Budgeted CAT Costs to be recovered. Specifically, Section 11.3(a)(iii)(B) of the CAT NMS Plan requires a fee filing to provide:
In accordance with this requirement, the Exchange has set forth the amount and type of Budgeted CAT Costs 2025-2 for each of these categories above.
Section 11.3(a)(iii)(B) of the CAT NMS Plan also requires that the fee filing provide “sufficient detail to demonstrate that the budget for the upcoming year, or part of year, as applicable, is reasonable and appropriate.” As discussed below, the Exchange believes that the budget for the CAT Fee 2025-2 Period is “reasonable and appropriate.” Each of the costs included in CAT Fee 2025-2 are reasonable and appropriate because the costs are consistent with standard industry practice, based on the need to comply with the requirements of the CAT NMS Plan, incurred subject to negotiations performed on an arm's length basis, and/or are consistent with the needs of any legal entity, particularly one with no employees.
In approving the CAT Funding Model, the Commission recognized that it is appropriate to recover budgeted costs related to cloud hosting services as a part of CAT Fees.
To comply with the requirements of the Plan, the breadth of the cloud activities related to the CAT is substantial. The cloud services not only include the production environment for the CAT, but they also include two industry testing environments, support environments for quality assurance and stress testing and disaster recovery capabilities. Moreover, the cloud storage costs are driven by the requirements of the Plan, which requires the storage of multiple versions of the data, from the original submitted version of the data through various processing steps, to the final version of the data.
Data volume is a significant driver of costs for cloud hosting services. When the Commission adopted the CAT NMS Plan in 2016, it estimated that the CAT would need to receive 58 billion records per day
In addition to the effect of the data volume on the cloud hosting costs, the processing timelines set forth in the Plan contribute to the cloud hosting costs. Although CAT LLC has proactively sought to manage cloud hosting costs while complying with the Plan, including through requests to the Commission for exemptive relief and amendments to the CAT NMS Plan to reduce costs, stringent CAT NMS Plan requirements do not allow for any material flexibility in cloud architecture design choices, processing timelines (
The costs for cloud hosting services also reflect the need for specialized cloud hosting services given the data volume and unique processing needs of the CAT. The data volume as well as the data processing needs of the CAT necessitate the use of cloud hosting services. The equipment, power and services required for an on-premises
The reasonableness of the cloud hosting services costs is further supported by key cost discipline mechanisms for the CAT—a cost-based funding structure, cost transparency, cost management efforts (including regular efforts to lower compute and storage costs where permitted by the Plan) and oversight. Together, these mechanisms help ensure the ongoing reasonableness of the CAT's costs and the level of fees assessed to support those costs.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted costs related to operating fees as a part of CAT Fees.
The operating fees would include the negotiated fees paid by CAT LLC to the Plan Processor to operate and maintain the system for order-related information and to perform business operations related to the system, including compliance, security, testing, training, communications with the industry (
The operating costs also include costs related to the receipt of market data. CAT LLC anticipates receiving certain market data from Algoseek during the CAT Fee 2025-2 Period. CAT LLC anticipates that Algoseek will provide data as set forth in the SIP Data requirements of the CAT NMS Plan and that the fees are reasonable and in line with market rates for market data received.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted costs related to CAIS operating fees as a part of CAT Fees.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted costs related to change request fees as a part of CAT Fees.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted costs related to capitalized developed technology costs as a part of CAT Fees.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted costs related to legal fees as a part of CAT Fees.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted consulting costs as a part of CAT Fees.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted insurance costs as a part of CAT Fees.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted professional and administration costs as a part of CAT Fees.
CAT LLC anticipates continuing to make use of Anchin, a financial advisory firm, to assist with financial matters for the CAT. CAT LLC determined that the budgeted costs for Anchin were appropriate, as the financial advisory services were to be provided at reasonable market rates that were comparable to the rates charged by other such firms for similar work. Moreover, the total budgeted costs for such financial advisory services were appropriate in light of the breadth of services provided by Anchin. The services budgeted to be performed by Anchin and the budgeted costs related to such services are described above.
CAT LLC anticipates continuing to make use of Grant Thornton, an independent accounting firm, to complete the audit of CAT LLC's financial statements, in accordance with the requirements of the CAT NMS Plan. CAT LLC determined that the budgeted costs for Grant Thornton were appropriate, as the accounting services were to be provided at reasonable market rates that were comparable to the rates charged by other such firms for similar work. Moreover, the total budgeted costs for such accounting services were appropriate in light of the breadth of services provided by Grant Thornton. The services budgeted to be performed by Grant Thornton and the budgeted costs related to such services are described above.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted public relations costs as a part of CAT Fees.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted reserve costs as a part of CAT Fees.
In its approval order for the CAT Funding Model, the Commission stated that it would be reasonable for the annual operating budget for the CAT to
Because the CAT is a critical regulatory tool/system, the CAT needs to have a stable funding source to build financial stability to support the Company as a going concern. Funding for the CAT, as noted in Section 11.1(b), is the responsibility of the Participants and the industry. Because CAT fees are charged based on the budget, which is based on anticipated volume, it is reasonable to have a reserve on hand to prevent a shortfall in the event there is an unexpectedly high volume in a given year. A reserve would help to assure that the CAT has sufficient resources to cover costs should there be unanticipated costs or costs that are higher than expected.
The SEC also recognized that a reserve would help address the difficulty in predicting certain variable CAT costs, like trading volume.
As discussed further below,
The CAT NMS Plan also requires fee filings for Prospective CAT Fees to include “a discussion of how the budget is reconciled to the collected fees.”
The total executed equivalent share volume of transactions in Eligible Securities for the period from April 2024 through March 2025 was 4,580,287,680,646.28 executed equivalent shares. CAT LLC determined the total executed equivalent share volume for the prior twelve months by counting executed equivalent shares in the same manner as it counts executed equivalent shares for CAT billing purposes.
CAT LLC has determined that the projected total executed equivalent share volume for the six months of CAT Fee 2025-2 Period by multiplying by one-half the executed equivalent share volume for the prior twelve months: one-half times 4,580,287,680,646.28 executed equivalent shares.
As noted in the approval order for the CAT Funding Model, as a practical matter, the fee filing for a CAT Fee would provide the exact fee per executed equivalent share to be paid for each CAT Fee, by multiplying the Fee Rate by one-third and describing the relevant number of decimal places for the fee rate.
The Exchange believes that charging CAT Fee 2025-2 with a fee rate of $0.000009 per executed equivalent share is reasonable because it provides for a revenue stream for the Company that is aligned with the Budgeted CAT Costs 2025-2. Moreover, the Exchange believes that the level of the fee rate is reasonable, as it is less than CAT Fee 2025-1 and is comparable to other transaction-based fees. Indeed, CAT Fee 2025-2 is significantly lower than fees previously assessed pursuant to Section 31 (
CAT Fee 2025-2 provides for an equitable allocation of fees, as it equitably allocates CAT costs between and among the Participants and Industry Members. The SEC approved the CAT Funding Model, finding that each aspect of the CAT Funding Model satisfied the requirements of the Exchange Act, including the formula for calculating CAT Fees as well as the Industry Members to be charged the CAT Fees.
CAT Fee 2025-2 provides for an equitable allocation of fees as it complies with the requirements regarding the calculation of CAT Fees as set forth in the CAT NMS Plan. For example, as described above, the calculation of CAT Fee 2025-2 complies with the formula set forth in Section 11.3(a) of the CAT NMS Plan. In addition, CAT Fee 2025-2 would be charged to CEBBs and CEBSs in accordance with Section 11.3(a) of the CAT NMS Plan. Furthermore, the Participants would be charged for their designated share of the Budgeted CAT Costs 2025-2 through a fee implemented via the CAT NMS Plan, which would have the same fee rate as CAT Fee 2025-2.
In addition, as discussed above, each of the inputs into the calculation of CAT Fee 2025-2—the Budgeted CAT Costs 2025-2, the count for the executed equivalent share volume for the prior 12 months, and the projected executed equivalent share volume for the CAT Fee 2025-2 Period—are reasonable. Moreover, these inputs lead to a reasonable fee rate for CAT Fee 2025-2 that is lower than other fee rates for transaction-based fees. A reasonable fee rate allocated in accordance with the requirements of the CAT Funding Model provides for an equitable allocation of fees.
CAT Fee 2025-2 is not an unfairly discriminatory fee. The SEC approved the CAT Funding Model, finding that each aspect of the CAT Funding Model satisfies the requirements of the Exchange Act. In reaching this conclusion, the SEC analyzed the potential effect of CAT Fees calculated pursuant to the CAT Funding Model on affected categories of market participants, including Participants (including exchanges and FINRA), Industry Members (including subcategories of Industry Members, such as alternative trading systems, CAT Executing Brokers and market makers), and investors generally, and considered market effects related to equities and options, among other things. CAT Fee 2025-2 complies with the requirements regarding the calculation of CAT Fees as set forth in the CAT NMS Plan. In addition, as discussed above, each of the inputs into the calculation of CAT Fee 2025-2 and the resulting fee rate for CAT Fee 2025-2 is reasonable. Therefore, CAT Fee 2025-2 does not impose an unfairly discriminatory fee on Industry Members.
The Exchange believes the proposed fees established pursuant to the CAT Funding Model promote just and equitable principles of trade, and, in general, protect investors and the public interest, and are provided in a transparent manner and with specificity in the Fee Schedule. The Exchange also believes that the proposed fees are reasonable because they would provide ease of calculation, ease of billing and other administrative functions, and predictability of a fee based on fixed rate per executed equivalent share. Such factors are crucial to estimating a reliable revenue stream for CAT LLC and for permitting Exchange members to reasonably predict their payment obligations for budgeting purposes.
Section 6(b)(8) of the Act
In addition, all Participants (including exchanges and FINRA) are proposing to introduce CAT Fee 2025-2 on behalf of CAT LLC to implement the requirements of the CAT NMS Plan. Therefore, this is not a competitive fee filing, and, therefore, it does not raise competition issues between and among the Participants.
Furthermore, in approving the CAT Funding Model, the SEC analyzed the potential competitive impact of the CAT Funding Model, including competitive issues related to market services, trading services and regulatory services, efficiency concerns, and capital formation.
As discussed above, each of the inputs into the calculation of CAT Fee 2025-2 is reasonable and the resulting fee rate for CAT Fee 2025-2 calculated in accordance with the CAT Funding Model is reasonable. Therefore, CAT Fee 2025-2 would not impose any burden on competition that is not necessary or appropriate in furtherance of the purpose of the Exchange Act.
No written comments were solicited or received with respect to the proposed rule change.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
On February 14, 2025, Dream Exchange Holdings, Inc. (“DreamEx”) filed with the Securities and Exchange Commission (“Commission”) a Form 1 application under the Securities Exchange Act of 1934 (“Exchange Act”), seeking registration as a national securities exchange under Section 6 of the Exchange Act.
As described in the OIP, DreamEx proposes to operate a fully automated electronic trading platform for the trading of NMS stocks with a continuous automated matching function. DreamEx would not maintain a physical trading floor. Liquidity would be derived from orders to buy and orders to sell submitted to DreamEx electronically by its registered broker-dealer members from remote locations. DreamEx proposes to have one class of membership open to registered broker-dealers and also proposes to allow members to register under DreamEx rules as market makers on DreamEx and be subject to certain specified requirements and obligations set forth in DreamEx's proposed rules. DreamEx proposes to enter into a technology services agreement with MEMX Technologies, LLC (“MEMX Technologies”) to license the technology underlying the DreamEx trading platform.
In Amendment No. 1, DreamEx proposes to revise Exhibits A, A-2, C, C-2, C-4, C-6, J, and K principally to: (1) update the ownership, voting, and governance provisions in the DreamEx By-Laws and the limited liability company agreements of DxC, DxLLC, and DxP, including a limited temporary exemption from the ownership and voting limitations in the DxC limited liability company agreement and from the voting limitations in the DxLLC limited liability company agreement, to conform to the ownership, voting, and governance provisions of existing national securities exchanges; (2) make related conforming and definitional changes; (3) update the list of shareholders owning 5% or more of DreamEx; and (4) provide greater detail regarding DreamEx's intention to enter into a technology services agreement with MEMX Technologies. In Amendment No. 1, DreamEx also proposes to renumber and add Exhibit C-3(a) and C-3(b) to provide the Articles of Organization and Certificate of Good Standing of DxLLC, and revise Exhibit B-1 to add rules regarding the waiver of qualification examinations for
The Commission requests that interested persons provide written views and data with respect to DreamEx's Form 1, as amended by Amendment No. 1. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
The Exchange proposes to amend the NYSE Arca Equities Fees and Charges (“Equities Fee Schedule”) and the NYSE Arca Options Fees and Charges (“Options Fee Schedule”) to establish fees for Industry Members
In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements.
On July 11, 2012, the Commission adopted Rule 613 of Regulation NMS, which required the self-regulatory organizations (“SROs”) to submit a national market system (“NMS”) plan to create, implement and maintain a consolidated audit trail that would capture customer and order event information for orders in NMS securities
The CAT Funding Model provides a framework for the recovery of the costs to create, develop and maintain the CAT, including providing a method for allocating costs to fund the CAT among Participants and Industry Members. The CAT Funding Model establishes two categories of fees: (1) CAT fees assessed by CAT LLC and payable by certain Industry Members to recover a portion of historical CAT costs previously paid by the Participants (“Historical CAT Assessment” fees); and (2) CAT fees assessed by CAT LLC and payable by Participants and Industry Members to fund prospective CAT costs (“CAT Fees”).
Under the CAT Funding Model, Participants, CEBBs and CEBSs are subject to fees designed to cover the ongoing budgeted costs of the CAT, as determined by the Operating Committee. “The Operating Committee will establish fees (`CAT Fees') to be payable by Participants and Industry Members with regard to CAT costs not previously paid by the Participants (`Prospective CAT Costs').”
The CAT Fees to be paid by CEBBs and CEBSs are designed to contribute toward the recovery of two-thirds of the budgeted CAT costs for the relevant period.
CAT LLC proposes to charge CEBBs and CEBSs (as described in more detail below) CAT Fee 2025-2 to recover the reasonably budgeted CAT costs for the period from July 1, 2025 through December 31, 2025 in accordance with the CAT Funding Model. To implement this fee on behalf of CAT LLC, the CAT NMS Plan requires the Participants to “file with the SEC under Section 19(b) of the Exchange Act any such fees on Industry Members that the Operating Committee approves, and such fees shall be labeled as `Consolidated Audit Trail Funding Fees.' ”
CAT Fee 2025-2 will be charged to each CEBB and CEBS for each applicable transaction in Eligible Securities.
(a) with respect to a transaction in an Eligible Security that is executed on an exchange, the Industry Member identified as the Industry Member responsible for the order on the buy-side of the transaction and the Industry Member responsible for the sell-side of the transaction in the equity order trade event and option trade event in the CAT Data submitted to the CAT by the relevant exchange pursuant to the Participant Technical Specifications; and (b) with respect to a transaction in an Eligible Security that is executed otherwise than on an exchange and required to be reported to an equity trade reporting facility of a registered national securities association, the Industry Member identified as the executing broker and the Industry Member identified as the contra-side executing broker in the TRF/ORF/ADF transaction data event in the CAT Data submitted to the CAT by FINRA pursuant to the Participant Technical Specifications; provided, however, in those circumstances where there is a non-Industry Member identified as the contra-side executing broker in the TRF/ORF/ADF transaction data event or no contra-side executing broker is identified in the TRF/ORF/ADF transaction data event, then the Industry Member identified as the executing broker in the TRF/ORF/ADF transaction data event would be treated as CAT Executing Broker for the Buyer and for the Seller.
The following fields of the Participant Technical Specifications indicate the
In addition, the following fields of the Participant Technical Specifications would indicate the CAT Executing Brokers for the transactions executed otherwise than on an exchange:
The Operating Committee determined the Fee Rate to be used in calculating CAT Fee 2025-2 (“Fee Rate 2025-2”) by dividing the reasonably budgeted CAT costs (“Budgeted CAT Costs 2025-2”) for the period from July 1, 2025 through December 31, 2025 (“CAT Fee 2025-2 Period”) by the reasonably projected total executed share volume of all transactions in Eligible Securities for the six-month recovery period, as discussed in detail below.
CAT LLC proposes to implement CAT Fee 2025-2 as the third CAT Fee related to Prospective CAT Costs. CAT LLC proposes to commence CAT Fee 2025-2 during the year, rather than at the beginning of the year. Accordingly, CAT Fee 2025-2 “would be calculated as described in paragraph (II)” of Section 11.3(a)(i)(A) of the CAT NMS Plan,
Under the CAT NMS Plan, for purposes of calculating CAT Fees, executed equivalent shares in a transaction in Eligible Securities will be reasonably counted as follows: (1) each executed share for a transaction in NMS Stocks will be counted as one executed equivalent share; (2) each executed contract for a transaction in Listed Options will be counted based on the multiplier applicable to the specific Listed Options (
The CAT NMS Plan states that “[t]he budgeted CAT costs for the year shall be comprised of all reasonable fees, costs and expenses reasonably budgeted to be incurred by or for the Company in connection with the development, implementation and operation of the CAT as set forth in the annual operating budget approved by the Operating Committee pursuant to Section 11.1(a) of the CAT NMS Plan, or as adjusted during the year by the Operating Committee.”
In accordance with the requirements under the CAT NMS Plan, the Operating Committee approved an annual budget for 2025 for CAT LLC (“Original 2025 CAT Budget”) in November 2024.
As described in detail below, the Budgeted CAT Costs 2025-2 would be $60,726,412. CEBBs collectively will be responsible for one-third of the Budged [
The following describes in detail the Budgeted CAT Costs 2025-2 for CAT Fee 2025-2. The following cost details are provided in accordance with the requirement in the CAT NMS Plan to provide in the fee filing the following:
Each of the costs described below are reasonable, appropriate and necessary for the creation, implementation and maintenance of CAT.
The following table breaks down the Budgeted CAT Costs 2025-2 into the categories set forth in Section 11.3(a)(iii)(B) of the CAT NMS Plan.
To the extent that CAT LLC enters into notes with Participants or others to pay costs incurred during the period in which CAT Fee 2025-2 is in effect, CAT LLC will use the proceeds from CAT Fee 2025-2 and the related Participant CAT fees to repay such notes.
The following table compares the annual budgeted CAT costs as set forth in the updated annual CAT budget for 2024 approved by the Operating Committee in July 2024 (“Updated 2024 CAT Budget”),
In addition, the following table compares the first quarter of the Original 2025 CAT Budget with the first quarter of the Updated 2025 CAT Budget. The Updated 2025 CAT Budget includes actual costs for January, February and March 2025, whereas the Original 2025 CAT Budget included budgeted costs for these three months. The variance from the first quarter of the Original 2025 CAT Budget to the actuals for the first quarter of 2025 (as set forth in the Updated 2025 CAT Budget) in the last column of the following chart are used in this filing in supporting the
Section 11.3(a)(iii)(B)(B)(1) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the cloud hosting services costs set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that included $82,222,276 in technology costs for cloud hosting services for the CAT Fee 2025-2 Period. The technology costs for cloud hosting services represent costs reasonably budgeted to be incurred for services provided by the cloud services provider for the CAT, Amazon Web Services, Inc. (“AWS”) during the CAT Fee 2025-2 Period.
In the agreement between CAT LLC and the Plan Processor for the CAT (“Plan Processor Agreement”), FINRA CAT, LLC (“FCAT”), AWS was named as the subcontractor to provide cloud hosting services. Under the Plan Processor Agreement, CAT LLC is required to pay FCAT the fees incurred by the Plan Processor for cloud hosting services provided by AWS as FCAT's subcontractor on a monthly basis for the cloud hosting services, and FCAT, in turn, pays such fees to AWS. The fees for cloud hosting services were negotiated by FCAT on an arm's length basis with the goals of managing costs and receiving services required to comply with the CAT NMS Plan and Rule 613, taking into consideration a variety of factors, including the expected volume of data, the breadth of services provided and market rates for similar services. Services provided by AWS include storage services, databases, compute services and other services (such as networking, management tools and DevOps tools), as well as various environments for CAT, such as development, performance testing, test, and production environments. FCAT utilizes such cloud hosting services for a broad array of services for the CAT, such as data ingestion, data management, and analytic tools for the CAT. AWS performs cloud hosting services for both the CAT transaction database as well as the CAT Customer and Account Information System (“CAIS”). It is anticipated that such cloud hosting services will continue during the CAT Fee 2025-2 Period.
The cost for AWS cloud services for the CAT is a function of the volume of CAT Data, largely as a result of the processing and storage of the CAT Data.
CAT LLC estimates that the budget for cloud hosting services costs during the CAT Fee 2025-2 Period will be approximately $82,222,276. The budget for cloud hosting services costs during the CAT Fee 2025-2 Period is calculated based on the Updated 2025 CAT Budget. Specifically, this estimate was
CAT LLC estimated the budget for the cost for cloud hosting services for the CAT Fee 2025-2 Period based on an assumption of 40% annual year-over-year volume growth for the transaction database and an assumption of 5% annual year-over-year volume growth for CAIS. CAT LLC determined these growth assumptions in coordination with FCAT based on an analysis of a variety of existing data and alternative growth scenarios. In particular, in determining to use the 40% annual year-over-year volume growth in events per day, CAT LLC considered, among other things, the average annual year-over-year volume growth for 2019 through 2024 of approximately 45%, the average annual year-over-year volume growth for 2020 through 2024 of approximately 30%, and the average monthly growth rate for 2024 of approximately 50%.
This process for estimating the budget for cloud hosting services costs for the CAT Fee 2025-2 Period is the same process by which CAT LLC estimated the cloud hosting services costs for the Original 2025 CAT Budget. The Original 2025 CAT Budget estimated a budget for cloud hosting services of $39,640,542 for the first quarter of 2025. The actual costs for cloud hosting services for the first quarter of 2025, which are set forth in the Updated 2025 CAT Budget, were $36,357,017. Therefore, the variance between budgeted and actual cloud hosting services costs for this period was an approximate decrease of 8%. Accordingly, CAT LLC believes that the process for estimating the budgeted cloud hosting services costs for the CAT Fee 2025-2 Period is reasonable.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for cloud hosting services costs from the prior CAT Fee filing. Accordingly, this filing describes the changes in the cloud hosting services costs from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budgeted costs for cloud hosting services as set forth in the Original 2025 CAT Budget were $182,594,630, and the annual 2025 budgeted costs for cloud hosting services as set forth in the Updated 2025 CAT Budget are $159,230,937. Accordingly, budgeted annual costs for cloud hosting services decreased by $23,363,693 from the Original 2025 CAT Budget to the Updated 2025 CAT Budget, which is an approximate 13% reduction in cloud hosting services costs for the full year of 2025.
Correspondingly, the budgeted costs for cloud hosting services for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget were $97,748,713,
The decrease in costs for cloud hosting services from the Original 2025 CAT Budget to the Updated 2025 CAT Budget, both for the full year for 2025 and for the third and fourth quarters of 2025, reflects (1) a decrease in costs related to changes made pursuant to the Cost Savings Amendment; (2) cost decreases related to optimizations resulting in reduced procesing [
Section 11.3(a)(iii)(B)(B)(1) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the operating fees set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that included $15,453,942 in technology costs for operating fees for the CAT Fee 2025-2 Period. Operating fees are those fees paid by CAT LLC to FCAT as the Plan Processor to operate and maintain the CAT and to perform business operations related to the system, including compliance, security, testing, training, communications with the industry (
• Provide the CAT-related functions and services as the Plan Processor as required by SEC Rule 613 and the CAT NMS Plan in connection with the operation and maintenance of the CAT;
• Address compliance items, including drafting CAT policies and procedures, and addressing Regulation SCI requirements;
• Provide support to the Operating Committee, the Compliance Subcommittee and CAT working groups;
• Assist with interpretive efforts, exemptive requests and amendments regarding the CAT NMS Plan;
• Oversee the security of the CAT;
• Monitor the operation of the CAT, including with regard to Participant and Industry Member reporting;
• Provide support to subcontractors under the Plan Processor Agreement;
• Provide support in discussions with the Participants and the SEC and its staff;
• Operate the FINRA CAT Helpdesk;
• Facilitate communications with the industry, including via FAQs, CAT Alerts, meetings, presentations and webinars;
• Administer the CAT website and all of its content;
• Maintain cyber security insurance related to the CAT;
• Assist with billing, collection and other CAT fee-related activity; and
• Provide technical support and assistance with connectivity, data access, and user support, including the use of CAT Data and query tools, for Participants and the SEC staff.
CAT LLC calculated the budget for the FCAT technology costs for operating fees for the CAT Fee 2025-2 Period based on the recurring monthly operating fees under the Plan Processor Agreement.
As discussed above, CAT LLC estimated the budget for the operating fees during the CAT Fee 2025-2 Period based on monthly rates set forth in the Plan Processor Agreement and the agreement with Algoseek. CAT LLC also recognized that the operating fees are generally consistent throughout the year. This process for estimating the budget for the operating fees for the CAT Fee 2025-2 Period is the same process by which CAT LLC estimated the operating fees for the Original 2025 CAT Budget. The Original 2025 CAT Budget estimated a budget for operating fees of $7,662,270 for the first quarter of 2025.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for operating fees from the prior CAT Fee filing. Accordingly, this filing describes the changes from the operating fees set forth in the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budgeted costs for operating fees as set forth in the Original 2025 CAT Budget were $30,831,330,
Correspondingly, the budgeted costs for operating fees for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget were $15,446,040,
Section 11.3(a)(iii)(B)(B)(1) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the CAIS operating fees set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that included $10,374,924 in technology costs for CAIS operating fees for the CAT Fee 2025-2 Period. CAIS operating fees represent the fees paid to FCAT for services provided with regard to the operation and maintenance of CAIS, and to perform the business operations related to the system, including compliance, security, testing, training, communications with the industry (
During the CAT Fee 2025-2 Period, it is anticipated that FCAT will provide CAIS-related services. Under the Plan Processor Agreement with FCAT, CAT LLC is required to pay FCAT for CAIS-related services provided by FCAT on a monthly basis. CAT LLC negotiated the fees for FCAT's CAIS-related services on an arm's length basis with the goals of managing costs and receiving services required to comply with the CAT NMS Plan, taking into consideration a variety of factors, including the services to be provided and market rates for similar types of activity. During the CAT Fee 2025-2 Period, it is anticipated that FCAT will continue to provide services relating to the ongoing operation, maintenance and support of CAIS.
CAT LLC estimates that the budget for CAIS operating fees during the CAT Fee 2025-2 Period will be approximately $10,374,924. The budget for CAIS operating fees during the CAT Fee 2025-2 Period is calculated based on the Updated 2025 CAT Budget. Specifically, this estimate was calculated by adding the budgeted amounts for CAIS operating fees for the third and fourth quarters of 2025 as set
CAT LLC calculated the budget for FCAT's CAIS-related services for the CAT Fee 2025-2 Period based on the recurring monthly CAIS operating fees under the Plan Processor Agreement. This process for estimating the budget for the CAIS operating fees for the CAT Fee 2025-2 Period is the same process by which CAT LLC estimated the CAIS operating fees for the Original 2025 CAT Budget. The Original 2025 CAT Budget estimated a budget of $5,187,462 for CAIS operating fees for the first quarter of 2025. The actual costs for CAIS operating fees for the first quarter of 2025, which are set forth in the Updated 2025 CAT Budget, were $5,187,462. There was no variance between budgeted and actual CAIS operating fees for the first quarter of 2025. Accordingly, CAT LLC believes that the process for estimating the budgeted CAIS operating fees for the CAT Fee 2025-2 Period is reasonable.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for CAIS operating fees from the prior CAT Fee filing. Accordingly, this filing describes the changes in CAIS operating fees from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
CAIS operating fees are based on a recurring monthly rate payable to FCAT and are unchanged from the prior CAT Fee filing. The annual 2025 budgeted costs for CAIS operating fees as set forth in the Original 2025 CAT Budget were $20,749,848, and the annual 2025 budgeted costs for CAIS operating fees as set forth in the Updated 2025 CAT Budget are $20,749,848. Accordingly, the budgeted annual costs for CAIS operating fees are the same for both the Original 2025 CAT Budget and the Updated 2025 CAT Budget.
Correspondingly, the budgeted costs for CAIS operating fees for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget were $10,374,924, and the budgeted costs for CAIS operating fees for the third and fourth quarters of 2025 as set forth in the Updated 2025 CAT Budget are $10,374,924.
Accordingly, there were no changes in the line item for CAIS operating fees from the prior CAT Fee filing.
Section 11.3(a)(iii)(B)(B)(1) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the change request fees set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that included $500,000 in technology costs for change request fees for the CAT Fee 2025-2 Period. The technology costs related to change request fees include costs related to certain modifications, upgrades or other changes to the CAT.
Change requests are standard practice and necessary to reflect operational changes, including changes related to new market developments, such as new market participants. In general, if CAT LLC determines that a modification, upgrade or other changes to the functionality or service is necessary and appropriate, CAT LLC will submit a request for such a change to the Plan Processor. The Plan Processor will then respond to the request with a proposal for implementing the change, including the cost (if any) of such a change. CAT LLC then determines whether to approve the proposed change.
The change request budget line is established to include expected costs to be incurred in which the nature of the costs (
During the CAT Fee 2025-2 Period, it is anticipated that CAT LLC will engage FCAT to pursue certain change requests in accordance with the Plan Processor Agreement. The budget for change requests for the CAT Fee 2025-2 Period includes a placeholder of $500,000 for potential change request fees that may be necessary in accordance with the Plan Processor Agreement. The placeholder amount was determined based on prior experience with change requests related to the CAT.
CAT LLC estimates that the budget for change requests during the CAT Fee 2025-2 Period will be approximately $500,000. The budget for change requests during the CAT Fee 2025-2 Period is calculated based on the Updated 2025 CAT Budget. Specifically, this estimate was calculated by adding the budgeted amounts for the change requests for the third and fourth quarters of 2025 as set forth in the Updated 2025 CAT Budget.
CAT LLC estimated the budget for the potential change requests for the CAT Fee 2025-2 Period based on, among other things, a review of past change requests and potential future change request needs, as well as discussions with FCAT. This process for estimating the budget for the change requests for the CAT Fee 2025-2 Period is the same process by which CAT LLC estimated the change requests cost for the Original 2025 CAT Budget. The Original 2025 CAT Budget estimated a change request budget of $0 for the [
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for change request fees from the prior CAT Fee filing. Accordingly, this filing describes the changes in the change request fees from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budgeted costs for change requests as set forth in the Original 2025 CAT Budget were
Correspondingly, the budgeted costs for change requests for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget were $500,000, and the budgeted costs for change request for the third and fourth quarters of 2025 as set forth in the Updated 2025 CAT Budget are $500,000.
Accordingly, there were no changes in the line item for change requests from the prior CAT Fee filing.
Section 11.3(a)(iii)(B)(B)(1) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the capitalized developed technology costs set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that includes $0 in technology costs for capitalized developed technology costs for the CAT Fee 2025-2 Period. This category of costs includes the budget for capitalizable application development costs incurred in the development of the CAT. It is anticipated that such costs will include certain costs related to the software license fee for CAIS in accordance with the Plan Processor Agreement with FCAT, as well as costs related to a set of technology changes to be implemented by FCAT.
CAT LLC estimates that the budget for capitalized developed technology costs during the CAT Fee 2025-2 Period will be approximately $0. The budget for capitalized developed technology costs during the CAT Fee 2025-2 Period is calculated based on the Updated 2025 CAT Budget. Specifically, this estimate was calculated by adding the budgeted amounts for capitalized developed technology costs for the third and fourth quarters of 2025 as set forth in the Updated 2025 CAT Budget.
CAT LLC estimated the budget for capitalized developed technology costs for the CAT Fee 2025-2 Period based on an analysis of a variety of factors, including information related to potential technology costs and related contractual and Plan requirements, and discussions with FCAT regarding such potential technology costs. This process for estimating the budget for capitalized developed technology costs for the CAT Fee 2025-2 Period is the same process by which CAT LLC estimated the capitalized developed technology costs for the Original 2025 CAT Budget. The Original 2025 CAT Budget estimated a budget for capitalized developed technology costs of $3,923,360 for the first quarter of 2025.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for capitalized developed technology costs from the prior CAT Fee filing. Accordingly, this filing describes the changes in the capitalized developed technology costs from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budget for capitalized developed technology costs as set forth in the Original 2025 CAT Budget were $3,923,360,
In addition, the budget for capitalized developed technology costs for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget was $0,
Section 11.3(a)(iii)(B)(B)(2) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the legal costs set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that includes $3,631,342 in legal costs for the CAT Fee 2025-2 Period. This category of costs represents budgeted costs for legal services for this period. CAT LLC anticipates that it will receive legal services from two law firms, Wilmer Cutler Pickering Hale and Dorr LLP (“WilmerHale”) and Jenner & Block LLP (“Jenner”), during the CAT Fee 2025-2 Period.
During the CAT Fee 2025-2 Period, it is anticipated that WilmerHale will provide legal services related to the following:
• Assist with CAT fee filings and related funding issues;
• Draft exemptive requests from CAT NMS Plan requirements and/or proposed amendments to the CAT NMS Plan;
• Provide legal guidance with respect to interpretations of CAT NMS Plan requirements;
• Provide legal support for the Operating Committee, Compliance Subcommittee, working groups and Leadership Team;
• Draft SRO rule filings related to the CAT Compliance Rule;
• Manage corporate governance matters, including supporting Operating Committee meetings and preparing resolutions and consents;
• Assist with communications with the industry, including CAT Alerts and presentations;
• Provide guidance regarding the confidentiality of CAT Data;
• Assist with cost management analyses and proposals;
• Assist with commercial contract-related matters, including change orders and amendments, Plan Processor Agreement items, and subcontract matters;
• Provide support with regard to discussions with the SEC and its staff, including with respect to addressing interpretive and implementation issues;
• Provide legal guidance with respect to the CAT budgets;
• Provide background assistance to other counsel for CAT matters;
• Assist with legal responses related to third-party data requests; and
• Provide legal support regarding CAT policies and procedures.
CAT LLC estimated the budget for the legal costs for WilmerHale for the CAT Fee 2025-2 Period through an analysis of a variety of factors, including WilmerHale fee rates, historical legal fees, and information related to pending legal issues and potential future legal issues.
During the CAT Fee 2025-2 Period, it is anticipated that Jenner will continue to provide legal assistance to CAT LLC regarding certain litigation matters, including: (1) CAT LLC's defense against a lawsuit filed in the Western District of Texas against the SEC Chair, the SEC and CAT LLC challenging the validity of Rule 613 and the CAT and alleging various constitutional, statutory, and common law claims;
CAT LLC estimated the budget for the legal costs for Jenner for the CAT Fee 2025-2 Period through an analysis of a variety of factors, including Jenner's fee rates, historical legal fees, and information related to pending legal issues and potential future legal issues.
CAT LLC estimated the budget for the legal services for the CAT Fee 2025-2 Period based on an analysis of a variety of factors, including law firm fee rates, historical legal fees, and information related to pending legal issues and potential future legal issues. This process for estimating the budget for the legal services for CAT Fee 2025-2 Period is the same process by which CAT LLC estimated the legal cost for the Original 2025 CAT Budget. The Original 2025 CAT Budget estimated a budget for legal costs of $1,430,000 for the first quarter of 2025. The actual costs for legal services for the first quarter of 2025, which are set forth in the Updated 2025 Budget, were $1,922,990. The increase of $492,990 was due to unanticipated issues that required additional legal efforts on behalf of CAT LLC that developed after the budget was created. Such additional costs were primarily due to additional legal work in responding to an SEC examination related to the CAT, for commercial contract-related matters, including with regard to the Plan Processor Agreement, and related to cost savings initiatives. Accordingly, CAT LLC believes that the process for estimating the budgeted legal costs for the CAT Fee 2025-2 Period is reasonable.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for legal costs from the prior CAT Fee filing. Accordingly, this filing describes the changes in the legal costs from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budgeted legal costs as set forth in the Original 2025 CAT Budget were $5,720,000, and the annual 2025 budgeted legal costs as set forth in the Updated 2025 CAT Budget are $7,370,002. Accordingly, the annual budget for legal costs increased by $1,650,002 from the Original 2025 CAT Budget to the Updated 2025 CAT Budget for the full year of 2025.
Correspondingly, the budgeted legal costs for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget were $2,860,000,
This budgeted increase in the legal costs in the Updated 2025 CAT Budget from the Original 2025 Budget, both for the full year for 2025 and for the third and fourth quarters of 2025, was primarily due to an anticipated increase in legal costs related to litigation matters as well as regulatory and corporate legal matters.
Section 11.3(a)(iii)(B)(B)(3) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the consulting costs set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that included $866,167 in consulting costs for the CAT Fee 2025-2 Period. The consulting costs represent the fees estimated to be paid to the consulting firm Deloitte & Touche LLP (“Deloitte”) as project manager during the CAT Fee 2025-2 Period. These consulting costs include costs for advisory services related to the operation of the CAT, and meeting facilitation and communications coordination, vendor support and financial analyses.
It is anticipated that the costs for CAT during the CAT Fee 2025-2 Period will include costs related to consulting services performed by Deloitte. CAT LLC anticipates that it will continue to employ Deloitte during the CAT Fee 2025-2 Period based on, among other things, their expertise, long history with the project, and the recognition that it is anticipated that the consulting fees will remain in line with market rates for this type of specialized consulting work. Deloitte's fee rates are negotiated on an annual basis. CAT LLC assesses Deloitte's performance and reviews prospective budgets and staffing plans submitted by Deloitte on an annual basis. The consulting fees will be paid by CAT LLC to Deloitte.
It is anticipated that Deloitte will provide a variety of consulting services to the CAT during the CAT Fee 2025-2 Period, including the following:
• Implement program operations for the CAT project;
• Provide support to the Operating Committee, the Chair of the Operating Committee and the Leadership Team, including project management support, coordination and planning for meetings and communications, and interfacing with law firms and the SEC;
• Assist with cost and funding matters for the CAT, including assistance with loans and the CAT bank account for CAT funding;
• Provide support for updating the SEC on the progress of the development of the CAT; and
• Provide support for third party vendors for the CAT, including FCAT, Anchin and the law firms engaged by CAT LLC.
In addition, the consulting costs include the compensation for the Chair of the CAT Operating Committee.
CAT LLC estimates that the budget for consulting costs during the CAT Fee 2025-2 Period will be approximately $866,167. The budget for consulting costs during the CAT Fee 2025-2 Period is calculated based on the Updated 2025 CAT Budget. Specifically, this estimate was calculated by adding the budgeted amounts for consulting services for the third and fourth quarters of 2025 as set forth in the Updated 2025 CAT Budget.
CAT LLC estimates the budget for the consulting costs for Deloitte for the CAT Fee 2025-2 Period based on the current statement of work with Deloitte, which took into consideration past consulting costs, potential future consulting needs, the proposed rates and other contractual issues, as well as discussions with Deloitte. This process for estimating the budget for consulting costs for the CAT Fee 2025-2 Period is the same process by which CAT LLC estimated the consulting costs for the Original 2025 CAT Budget. The Original 2025 CAT Budget estimated a budget for consulting services of $437,500 for the first quarter of 2025. The actual costs for consulting services for the first quarter of 2025, which are set forth in the Updated 2025 CAT Budget, were $450,745. Therefore, the variance between budgeted and actual consulting costs for the first quarter of 2025 was approximately 3%. Accordingly, CAT LLC believes that the process for estimating the budgeted consulting costs for the CAT Fee 2025-2 Period is reasonable.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for consulting costs from the prior CAT Fee filing. Accordingly, this filing describes the changes in the consulting costs from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budget for consulting costs as set forth in the Original 2025 CAT Budget was $1,750,000, and the annual 2025 budget for consulting costs as set forth in the Updated 2025 CAT Budget is approximately $1,750,000. Accordingly, the annual budget for consulting costs has not changed from the Original 2025 CAT Budget to the Updated 2025 CAT Budget for the full year of 2025.
Correspondingly, the budget for consulting costs for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget was $875,000,
Section 11.3(a)(iii)(B)(B)(4) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the insurance costs set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that included $1,594,452 in insurance costs for the CAT Fee 2025-2 Period. The insurance costs represent the costs to be
It is anticipated that the insurance costs for CAT during the CAT Fee 2025-2 Period will include costs related to cyber security liability insurance, directors' and officers' liability insurance, and errors and omissions liability insurance brokered by USI Insurance Services LLC (“USI”). Such policies are standard for corporate entities, and cyber security liability insurance is important for the CAT System. CAT LLC anticipates that it will continue to maintain this insurance during the CAT Fee 2025-2 Period, and notes that the annual premiums for these policies were competitive for the coverage provided. CAT LLC estimated the budget for the insurance costs for the CAT Fee 2025-2 Period based on the insurance estimate from USI for 2025. The annual premiums would be paid by CAT LLC to USI.
The budgeted insurance costs for the CAT Fee 2025-2 Period are based on an insurance cost estimate from USI for 2025. Accordingly, CAT LLC believes that the process for estimating the budgeted insurance costs for the CAT Fee 2025-2 Period is reasonable.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for insurance costs from the prior CAT Fee filing. Accordingly, this filing describes the changes in the insurance costs from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budgeted insurance costs as set forth in the Original 2025 CAT Budget were $1,594,452, and the annual 2025 budgeted insurance costs as set forth in the Updated 2025 CAT Budget are $1,594,452. Accordingly, the annual budgeted insurance costs remained the same for the Original 2025 CAT Budget and the Updated 2025 CAT Budget for the full year of 2025.
Correspondingly, the budgeted insurance costs for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget were $1,594,452,
Section 11.3(a)(iii)(B)(B)(5) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the professional and administration costs set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that included $609,818 in professional and administration costs for the CAT Fee 2025-2 Period. In adopting the CAT NMS Plan, the Commission amended the Plan to add a requirement that CAT LLC's financial statements be prepared in compliance with GAAP, audited by an independent public accounting firm, and made publicly available.
It is anticipated that Anchin will provide a variety of services to the CAT during the CAT Fee 2025-2 Period, including the following:
• Update and maintain internal controls;
• Provide cash management and treasury functions;
• Facilitate bill payments to vendors;
• Facilitate repayments of promissory notes to Participants;
• Provide monthly bookkeeping;
• Review vendor invoices and documentation in support of cash disbursements;
• Review documentation to ensure that repayments of promissory notes to Participants are in accordance with established policies and procedures;
• Provide accounting research and consultations on various accounting, financial reporting and tax matters;
• Address not-for-profit tax and accounting considerations;
• Prepare tax returns;
• Address various accounting, financial reporting and operating inquiries from Participants;
• Develop and maintain annual operating and financial budgets, including budget to actual fluctuation analyses;
• Support compliance with the CAT NMS Plan;
• Work with and provide support to the Operating Committee and various CAT working groups;
• Prepare monthly, quarterly and annual financial statements;
• Review and reconcile the monthly FINRA CAT reports/analyses related to billings, collections, outstanding accounts receivable and cash account;
• Perform certain verification, completeness, and validation testing related to the monthly FINRA CAT reports/analyses related to billings;
• Support the annual financial statement audits by an independent auditor;
• Review historical costs from inception;
• Provide accounting and financial information in support of SEC filings; and
• Perform additional ad hoc accounting and financial advisory services, as requested by CAT LLC.
CAT LLC estimated the annual budget for the costs for Anchin based on historical costs adjusted for cost of living rate increases, and projected incremental advisory and support services.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for professional and administration costs from the prior CAT Fee filing. Accordingly, this filing describes the changes in the professional and administration costs from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budgeted professional and administration costs as set forth in the Original 2025 CAT Budget were $882,456, and the annual 2025 budgeted professional and administration costs as set forth in the Updated 2025 CAT Budget are $1,193,090. Accordingly, the budgeted annual costs for professional and administration services increased by $310,634 from the Original 2025 CAT Budget to the Updated 2025 CAT Budget for the full year of 2025.
Correspondingly, the budgeted costs for professional and administration services for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget were $444,246,
This budgeted increase in the professional and administration costs in the Updated 2025 CAT Budget from the Original 2025 Budget, both for the full year for 2025 and for the third and fourth quarters of 2025, was primarily due to increases in both financial advisory costs and accounting costs as a result of additional anticipated efforts related to billings and collections of fees from Participants and Industry Members, coupled with expected incremental efforts related to supporting CAT LLC's independent auditors for the 2024 audit.
Section 11.3(a)(iii)(B)(B)(6) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the public relations costs set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that included $0 in public relations costs for the CAT Fee 2025-2 Period. The public relations costs represent the fees paid to a public relations firm for professional communications services to CAT, including media relations consulting, strategy and execution. Because CAT LLC anticipates that it will not engage a public relations firm for the third and fourth quarters of 2025, the budget for public relations costs for this period is $0.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for public relations costs from the prior CAT Fee filing. Accordingly, this filing describes the changes in the public relations costs from the Updated 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual budgeted public relations costs for 2025 as set forth in the Original 2025 CAT Budget were $50,000, and the annual budgeted public relations costs for 2025 as set forth in the Updated 2025 CAT Budget are $6,575. Accordingly, the annual budget for public relations cost for 2025 decreased by $43,425 from the Original 2025 CAT Budget to the Updated 2025 CAT Budget for the full year of 2025.
Correspondingly, the budgeted costs for public relations services for the third and fourth quarters of 2025 as set forth
This budgeted decrease in the public relations costs from the Original 2025 CAT Budget to the Updated 2025 CAT Budget, both for the full year for 2025 and for the third and fourth quarters of 2025, was primarily due to CAT LLC's anticipation that it would not engage a public relations firm for the remainder of 2025.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the reserve costs set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that includes a reserve amount for 2025. Section 11.1(a)(i) of the CAT NMS Plan states that the budget shall include a reserve. Section 11.1(a)(ii) of the CAT NMS Plan further describes the reserve as follows:
For the reserve referenced in paragraph (a)(i) of this Section, the budget will include an amount reasonably necessary to allow the Company to maintain a reserve of not more than 25% of the annual budget. To the extent collected CAT fees exceed CAT costs, including the reserve of 25% of the annual budget, such surplus shall be used to offset future fees. For the avoidance of doubt, the Company will only include an amount for the reserve in the annual budget if the Company does not have a sufficient reserve (which shall be up to but not more than 25% of the annual budget). For the avoidance of doubt, the calculation of the amount of the reserve would exclude the amount of the reserve from the budget.
CAT LLC determined to maintain a reserve in the amount of 25% of the total expenses set forth in Updated 2025 CAT Budget (which does not include the reserve amount). Accordingly, the total 25% reserve was calculated by multiplying the total expenses set forth in the Updated 2025 CAT Budget (other than the reserve) by 25%, which is $57,083,638.
The Updated 2025 CAT Budget states that CAT LLC had accrued $70,942,596 for the reserve as of the beginning of 2025, and an additional $28,846,075 during the first quarter of 2025, from the collection of CAT Fees 2024-1 and 2025-1 and the related Participant CAT Fees. In addition, the Updated 2025 CAT Budget anticipates the collection of an additional $11,821,477 during the second quarter of 2025 via CAT Fee 2025-1 and the related Participant CAT Fee. Accordingly, the Updated 2025 CAT Budget estimates that CAT LLC would collect a surplus reserve amount through June 2025 of $54,526,412 over the 25% reserve amount of $57,083,638.
Such surplus was related, in part, to (i) the collection of CAT fees in excess of the budgeted CAT costs for 2024 and 2025 in light of the greater actual executed equivalent share volume than the projected executed equivalent share volume for CAT Fees 2024-1 and 2025-1, and (ii) a reduction in anticipated budgeted costs associated with the implementation of certain cost savings measures approved by the SEC pertaining to the processing of options market maker quotes and the storage of certain data.
As set forth in the Budgeted CAT Costs 2025-2, the surplus reserve balance of $54,526,412 would be used to offset a portion of CAT costs for the third and fourth quarters of 2025, thereby reducing the fee rate to be paid for CAT Fee 2025-2. Specifically, the total costs used to calculate the fee rate for CAT Fee 2025-2 would be reduced by the amount of the surplus reserve as set forth in the following table:
Accordingly, the fee rate for CAT Fee 2025-2 is calculated based on this reduced amount of $60,726,412, resulting in a fee rate of $0.000009 per executed equivalent share. If the fee rate for CAT Fee 2025-2 were calculated solely based on the reasonably budgeted costs for CAT for July-December 2025 excluding the reduction in that amount due to the surplus reserve offset (that is, based on $115,252,921, not $60,726,412), the fee rate would be the higher rate of $0.000017.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for a reserve from the prior CAT Fee filing. Accordingly, this filing describes the
For the Original 2025 CAT Budget, CAT LLC determined to maintain a reserve in the amount of 25% of budgeted CAT costs (other than the reserve). Accordingly, the total 25% reserve was calculated by multiplying the budgeted CAT costs (other than the reserve) as set forth in the Original 2025 CAT Budget (which is $248,846,076) by 25%, for a target reserve amount of $62,211,519. However, the Original 2025 CAT Budget recognized that a portion of the reserve—$38,369,315—would have been previously collected, and therefore would not need to be included the budgeted CAT costs to be recovered by the CAT Fees. Specifically, the Original 2025 CAT Budget recognized that there was (i) a liquidity reserve balance of $27,695,385 at the beginning of 2025, (ii) a favorable variance of $10,084,698 for budgeted versus actual cloud hosting services costs covering the period from July 16, 2024 through September 30, 2024, and (iii) a Participation Fee from a new Participant in the CAT NMS Plan of $589,232. These three items totaled $38,369,315. Accordingly, the Original 2025 CAT Budget only included $23,842,200 to be collected towards the reserve via the CAT Fee. This $23,842,200 is calculated by reducing the total 25% reserve amount of $62,211,519 by the $38,369,315 previously collected for the reserve. In the Original 2025 CAT Budget, the budget anticipated collecting the remaining reserve amount of $23,842,200 evenly throughout the year, that is, $5,960,500 for each quarter.
As discussed above, CAT LLC determined to maintain a reserve in the amount of 25% of the budgeted CAT costs (other than the reserve). Accordingly, the total 25% reserve was calculated by multiplying the budgeted CAT costs (other than the reserve) as set forth in the Updated 2025 CAT Budget (which is $228,334,551) by 25%, for a target reserve amount of $57,083,638.
As discussed above, such surplus reserve balance of $54,526,412 would be used to offset a portion of CAT costs for the third and fourth quarters of 2025, thereby reducing the fee rate for CAT Fee 2025-2 in accordance with Section 11.1(a)(ii) of the CAT NMS Plan. Section 11.1(a)(ii) of the CAT NMS Plan states that “[t]o the extent collected CAT fees exceed CAT costs, including the reserve of 25% of the annual budget, such surplus shall be used to offset future fees.”
The calculation of Fee Rate 2025-2 also requires the determination of the projected total executed equivalent share volume of transactions in Eligible Securities for the CAT Fee 2025-2 Period. Under the CAT NMS Plan, the Operating Committee is required to “reasonably determine the projected total executed equivalent share volume of all transactions in Eligible Securities for each relevant period based on the executed equivalent share volume of all transactions in Eligible Securities for the prior twelve months.”
The total executed equivalent share volume of transactions in Eligible Securities for the 12-month period from April 2024 through March 2025 was 4,580,287,680,646.28 executed equivalent shares. The Operating Committee has determined to calculate the projected total executed equivalent share volume for the six-month recovery period for CAT Fee 2025-2 by multiplying by one-half the executed equivalent share volume for the 12-month period from April 2024 through March 2025. The Operating Committee determined that such an approach was reasonable as the CAT's annual executed equivalent share volume has remained relatively constant. For example, the executed equivalent share volume for 2021 was 3,963,697,612,395, the executed equivalent share volume for 2022 was 4,039,821,841,560.31, the executed equivalent share volume for 2023 was 3,868,940,345,680.6, and the executed equivalent share volume for 2024 was 4,295,884,600,069.41. Accordingly, the projected total executed equivalent share volume for the six-month period for CAT Fee 2025-2 is projected to be 2,290,143,840,323.14 executed equivalent shares.
The projected total executed equivalent share volume of all transactions in Eligible Securities for the six-month recovery period for CAT Fee 2025-2 and a description of the calculation of the projection is provided in this filing in accordance with the requirement in the CAT NMS Plan to provide such information in a fee filing for a CAT Fee.
Fee Rate 2025-2 would be calculated by dividing the Budgeted CAT Costs 2025-2 by the reasonably projected total executed equivalent share volume of all transactions in Eligible Securities for the six-month recovery period for CAT Fee 2025-2, as described in detail above.
CEBBs and CEBSs would be required to pay fees for CAT Fee 2025-2 on a monthly basis for six months, from August 2025 until January 2026. A CEBB's or CEBS's fee for each month would be calculated based on the transactions in Eligible Securities executed by the CEBB or CEBS from the prior month.
To implement CAT Fee 2025-2, the Exchange proposes to add a new paragraph to the “Consolidated Audit Trail Funding Fees” section of the Exchange's Fee Schedule, to include the proposed paragraphs described below.
The CAT NMS Plan states that:
Each Industry Member that is the CAT Executing Broker for the buyer in a transaction in Eligible Securities (“CAT Executing Broker for the Buyer” or “CEBB”) and each Industry Member that is the CAT Executing Broker for the seller in a transaction in Eligible Securities (“CAT Executing Broker for the Seller” or “CEBS”) will be required to pay a CAT Fee for each such transaction in Eligible Securities in the prior month based on CAT Data. The CEBB's CAT Fee or CEBS's CAT Fee (as applicable) for each transaction in Eligible Securities will be calculated by multiplying the number of executed equivalent shares in the transaction by one-third and by the Fee Rate reasonably determined pursuant to paragraph (a)(i) of this Section 11.3.
Accordingly, based on the factors discussed above, the Exchange proposes to add paragraph (a)(5) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule. Proposed paragraph (a)(5) would state the following:
(A) Each CAT Executing Broker shall receive its first invoice for CAT Fee 2025-2 in August 2025, which shall set forth the CAT Fee 2025-2 fees calculated based on transactions in July 2025, and shall receive an invoice for CAT Fee 2025-2 for each month thereafter until January 2026.
(B) Consolidated Audit Trail, LLC shall provide each CAT Executing Broker with an invoice for CAT Fee 2025-2 on a monthly basis. Each month, such invoices shall set forth a fee for each transaction in Eligible Securities executed by the CAT Executing Broker in its capacity as a CAT Executing Broker for the Buyer (“CEBB”) and/or the CAT Executing Broker for the Seller (“CEBS”) (as applicable) from the prior month as set forth in CAT Data. The fee for each such transaction will be calculated by multiplying the number of executed equivalent shares in the transaction by the fee rate of $0.000009 per executed equivalent share.
(C) Notwithstanding the last invoice date of January 2026 for CAT Fee 2025-2 in paragraph 5(A), CAT Fee 2025-2 shall continue in effect after January 2026, with each CAT Executing Broker receiving an invoice for CAT Fee 2025-2 each month, until a new subsequent CAT Fee is in effect with regard to Industry Members in accordance with Section 19(b) of the Exchange Act. Consolidated Audit Trail, LLC will provide notice when CAT Fee 2025-2 will no longer be in effect.
(D) Each CAT Executing Broker shall be required to pay each invoice for CAT Fee 2025-2 in accordance with paragraph (b).
As noted in the Plan amendment for the CAT Funding Model, “[a]s a practical matter, the fee filing would provide the exact fee per executed equivalent share to be paid for the CAT Fees, by multiplying the Fee Rate by one-third and describing the relevant number of decimal places for the fee.”
The proposed language in paragraph (a)(5)(A) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule would describe when CAT Executing Brokers would receive their first monthly invoice for CAT Fee 2025-2. Specifically, CAT Executing Brokers would receive their first monthly invoice for CAT Fee 2025-2 in August 2025 and the fees set forth in that invoice would be calculated based on transactions executed in July 2025. The payment for the first invoice would be required within 30 days after the receipt of the first invoice (unless a longer period is indicated), as described in paragraph (b)(2) of the Fee Schedule.
Proposed paragraph (a)(5)(A) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule also would describe the monthly cadence of the invoices for CAT Fee 2025-2. Specifically, after the first invoices are provided to CAT Executing Brokers in August 2025, invoices will be sent to CAT Executing Brokers each month thereafter until January 2026.
Proposed paragraph (a)(5)(B) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule would describe the invoices for CAT Fee 2025-2. Proposed paragraph (a)(5)(B) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule would state that “Consolidated Audit Trail, LLC shall provide each CAT Executing Broker with an invoice for CAT Fee 2025-2 on a monthly basis.” Proposed paragraph (a)(5)(B) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule also would describe the fees to be set forth in the invoices for CAT Fee 2025-2. Specifically, it would state that “[e]ach month, such invoices shall set forth a fee for each transaction in Eligible Securities executed by the CAT Executing Broker in its capacity as a CAT Executing Broker for the Buyer (`CEBB') and/or the CAT Executing Broker for the Seller (`CEBS') (as applicable) from the prior month as set forth in CAT Data. The fee for each such transaction will be calculated by multiplying the number of executed equivalent shares in the transaction by the fee rate of $0.000009 per executed equivalent share.”
Since CAT Fee 2025-2 is a monthly fee based on actual transaction volume from the prior month, CAT Fee 2025-2 may collect more or less than two-thirds of the Budgeted CAT Costs 2025-2. To the extent that CAT Fee 2025-2 collects more than two-thirds of the Budgeted CAT Costs 2025-2, any excess money collected will be used to offset future fees and/or to fund the reserve for the CAT. To the extent that CAT Fee 2025-2 collects less than two-thirds of the Budgeted CAT Costs 2025-2, the budget for the CAT in the ensuing months will reflect such shortfall.
Furthermore, proposed paragraph (a)(5)(C) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule would describe how long CAT Fee 2025-2 would remain in effect. It would state that “[n]otwithstanding the last invoice date of January 2026 for CAT Fee 2025-2 in paragraph 5(A), CAT Fee 2025-2 shall continue in effect after January 2026, with each CAT Executing Broker receiving an invoice for CAT Fee 2025-2 each month, until a new subsequent CAT Fee is in effect with regard to Industry Members in accordance with Section 19(b) of the Exchange Act. Consolidated Audit Trail, LLC will provide notice when CAT Fee 2025-2 will no longer be in effect.”
Finally, proposed paragraph (a)(5)(D) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule would set forth the requirement for the CAT Executing Brokers to pay the invoices for CAT Fee 2025-2. It would state that “[e]ach CAT Executing Broker shall be required to pay each invoice for CAT Fee 2025-2 in accordance with paragraph (b).”
Paragraph (b)(1) of the “Consolidated Audit Trail Funding Fees” section of the Fee Schedule describes the manner of payment of Industry Member CAT fees. It states that “[e]ach CAT Executing Broker shall pay its CAT fees as required pursuant to paragraph (a) each month to the Consolidated Audit Trail, LLC in the manner prescribed by the Consolidated Audit Trail, LLC.” The CAT NMS Plan requires the Operating Committee to establish a system for the collection of CAT fees.
The CAT NMS Plan further states that:
Participants shall require each Industry Member to pay all applicable fees authorized under this Article XI within thirty (30) days after receipt of an invoice or other notice indicating payment is due (unless a longer payment period is otherwise indicated). If an Industry Member fails to pay any such fee when due (as determined in accordance with the preceding sentence), such Industry Member shall pay interest on the outstanding balance from such due date until such fee is paid at a per annum rate equal to the lesser of: (a) the Prime Rate plus 300 basis points; or (b) the maximum rate permitted by applicable law.
Paragraph (b)(2) of the Consolidated Audit Trail Funding Fees section of the Fee Schedule states that:
Each CAT Executing Broker shall pay the CAT fees required pursuant to paragraph (a) within thirty days after receipt of an invoice or other notice indicating payment is due (unless a longer payment period is otherwise indicated). If a CAT Executing Broker fails to pay any such CAT fee when due, such CAT Executing Broker shall pay interest on the outstanding balance from such due date until such fee is paid at a per annum rate equal to the lesser of (i) the Prime Rate plus 300 basis points, or (ii) the maximum rate permitted by applicable law.
The requirements of paragraph (b)(2) would apply to CAT Fee 2025-2.
The CAT NMS Plan states that:
Details regarding the calculation of a Participant or CAT Executing Broker's CAT Fees will be provided upon request to such Participant or CAT Executing Broker. At a minimum, such details would include each Participant or CAT Executing Broker's executed equivalent share volume and corresponding fee by (1) Listed Options, NMS Stocks and OTC Equity Securities, (2) by transactions executed on each exchange and transactions executed otherwise than on an exchange, and (3) by buy-side transactions and sell-side transactions.
Such information would provide CEBBs and CEBSs with the ability to understand the details regarding the calculation of their CAT Fee.
In addition, CAT LLC will make certain aggregate statistics regarding CAT Fees publicly available. Specifically, the CAT NMS Plan states that, “[f]or each CAT Fee, at a minimum, CAT LLC will make publicly available the aggregate executed equivalent share volume and corresponding aggregate fee by (1) Listed Options, NMS Stocks and OTC Equity Securities, (2) by transactions executed on each exchange and transactions executed otherwise than on an exchange, and (3) by buy-side transactions and sell-side transactions.”
Furthermore, CAT LLC will make publicly available on the CAT website the total amount invoiced each month that CAT Fee 2025-2 is in effect as well as the total amount invoiced for CAT Fee 2025-2 for all months since its commencement. CAT LLC also will make publicly available on the CAT website the total costs to be collected from Industry Members for CAT Fee 2025-2.
The CAT NMS Plan states that “[n]o Participant will make a filing with the SEC pursuant to Section 19(b) of the Exchange Act regarding any CAT Fee related to Prospective CAT Costs until the Financial Accountability Milestone related to Period 4 described in Section 11.6 has been satisfied.”
CAT LLC intends for CAT Fee 2025-2 to replace CAT Fee 2025-1 (which has a fee rate of $0.000022).
While CAT Fees charged to Industry Members become effective in accordance with the requirements of Section 19(b) of the Exchange Act,
The Exchange believes the proposed rule change is consistent with the requirements of the Exchange Act. The Exchange believes that the proposed rule change is consistent with Section 6(b)(5) of the Act,
The Exchange believes that this proposal is consistent with the Act because it implements provisions of the Plan and is designed to assist the Exchange in meeting regulatory obligations pursuant to the Plan. In approving the Plan, the SEC noted that the Plan “is necessary and appropriate in the public interest, for the protection of investors and the maintenance of fair and orderly markets, to remove impediments to, and perfect the mechanism of a national market system, or is otherwise in furtherance of the purposes of the Act.”
The Exchange believes that the proposed fees to be paid by the CEBBs and CEBSs are reasonable, equitably allocated and not unfairly discriminatory. First, the CAT Fee 2025-2 fees to be collected are directly associated with the budgeted costs of establishing and maintaining the CAT, where such costs include Plan Processor costs and costs related to technology, legal, consulting, insurance, professional and administration, and public relations costs.
The proposed CAT Fee 2025-2 fees would be charged to Industry Members in support of the maintenance of a consolidated audit trail for regulatory purposes. The proposed fees, therefore, are consistent with the Commission's view that regulatory fees be used for regulatory purposes and not to support the Exchange's business operations. The proposed fees would not cover Exchange services unrelated to the CAT. In addition, any surplus would be used as a reserve to offset future fees. Given the direct relationship between CAT fees and CAT costs, the Exchange believes that the proposed fees are reasonable, equitable and not unfairly discriminatory.
As further discussed below, the SEC approved the CAT Funding Model, finding it was reasonable and that it equitably allocates fees among Participants and Industry Members. The Exchange believes that the proposed fees adopted pursuant to the CAT Funding Model approved by the SEC are reasonable, equitably allocated and not unfairly discriminatory.
Section 11.1(b) of the CAT NMS Plan states that “[t]he Participants shall file with the SEC under Section 19(b) of the Exchange Act any such fees on Industry Members that the Operating Committee approves.” Per Section 11.1(b) of the CAT NMS Plan, the Exchange has filed this fee filing to implement the Industry Member CAT fees included in the CAT Funding Model. The Exchange believes
The SEC has determined that the CAT Funding Model is reasonable and satisfies the requirements of the Exchange Act. Specifically, the SEC has concluded that the method for determining CAT Fees as set forth in Section 11.3 of the CAT NMS Plan, including the formula for calculating the Fee Rate, the identification of the parties responsible for payment and the transactions subject to the fee rate for CAT Fees, is reasonable and satisfies the Exchange Act.
The formula for calculating a Fee Rate requires the amount of Budgeted CAT Costs to be recovered. Specifically, Section 11.3(a)(iii)(B) of the CAT NMS Plan requires a fee filing to provide:
In accordance with this requirement, the Exchange has set forth the amount and type of Budgeted CAT Costs 2025-2 for each of these categories above.
Section 11.3(a)(iii)(B) of the CAT NMS Plan also requires that the fee filing provide “sufficient detail to demonstrate that the budget for the upcoming year, or part of year, as applicable, is reasonable and appropriate.” As discussed below, the Exchange believes that the budget for the CAT Fee 2025-2 Period is “reasonable and appropriate.” Each of the costs included in CAT Fee 2025-2 are reasonable and appropriate because the costs are consistent with standard industry practice, based on the need to comply with the requirements of the CAT NMS Plan, incurred subject to negotiations performed on an arm's length basis, and/or are consistent with the needs of any legal entity, particularly one with no employees.
In approving the CAT Funding Model, the Commission recognized that it is appropriate to recover budgeted costs related to cloud hosting services as a part of CAT Fees.
To comply with the requirements of the Plan, the breadth of the cloud activities related to the CAT is substantial. The cloud services not only include the production environment for the CAT, but they also include two industry testing environments, support environments for quality assurance and stress testing and disaster recovery capabilities. Moreover, the cloud storage costs are driven by the requirements of the Plan, which requires the storage of multiple versions of the data, from the original submitted version of the data through various processing steps, to the final version of the data.
Data volume is a significant driver of costs for cloud hosting services. When the Commission adopted the CAT NMS Plan in 2016, it estimated that the CAT would need to receive 58 billion records per day
In addition to the effect of the data volume on the cloud hosting costs, the processing timelines set forth in the Plan contribute to the cloud hosting costs. Although CAT LLC has proactively sought to manage cloud hosting costs while complying with the Plan, including through requests to the Commission for exemptive relief and amendments to the CAT NMS Plan to reduce costs, stringent CAT NMS Plan requirements do not allow for any material flexibility in cloud architecture design choices, processing timelines (
The costs for cloud hosting services also reflect the need for specialized cloud hosting services given the data volume and unique processing needs of the CAT. The data volume as well as the data processing needs of the CAT necessitate the use of cloud hosting services. The equipment, power and services required for an on-premises data model, the alternative to cloud hosting services, would be cost prohibitive. Moreover, as CAT was being developed, there were limited cloud hosting providers that could satisfy all the necessary CAT requirements, including the operational and security criteria. Over time, more providers offering cloud hosting services that would satisfy these criteria have entered the market. CAT LLC will continue to evaluate alternative cloud hosting services, recognizing that the time and cost to move to an alternative cloud provider would be substantial.
The reasonableness of the cloud hosting services costs is further supported by key cost discipline mechanisms for the CAT—a cost-based funding structure, cost transparency, cost management efforts (including regular efforts to lower compute and storage costs where permitted by the Plan) and oversight. Together, these mechanisms help ensure the ongoing reasonableness of the CAT's costs and the level of fees assessed to support those costs.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted costs related to operating fees as a part of CAT Fees.
The operating fees would include the negotiated fees paid by CAT LLC to the Plan Processor to operate and maintain the system for order-related information and to perform business operations related to the system, including compliance, security, testing, training, communications with the industry (
The operating costs also include costs related to the receipt of market data. CAT LLC anticipates receiving certain market data from Algoseek during the CAT Fee 2025-2 Period. CAT LLC anticipates that Algoseek will provide data as set forth in the SIP Data requirements of the CAT NMS Plan and that the fees are reasonable and in line with market rates for market data received.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted costs related to CAIS operating fees as a part of CAT Fees.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted costs related to change request fees as a part of CAT Fees.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted costs related to capitalized developed technology costs as a part of CAT Fees.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted costs related to legal fees as a part of CAT Fees.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted consulting costs as a part of CAT Fees.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted insurance costs as a part of CAT Fees.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted professional and administration costs as a part of CAT Fees.
CAT LLC anticipates continuing to make use of Anchin, a financial advisory firm, to assist with financial matters for the CAT. CAT LLC determined that the budgeted costs for Anchin were appropriate, as the financial advisory services were to be provided at reasonable market rates that were comparable to the rates charged by other such firms for similar work. Moreover, the total budgeted costs for such financial advisory services were appropriate in light of the breadth of services provided by Anchin. The services budgeted to be performed by Anchin and the budgeted costs related to such services are described above.
CAT LLC anticipates continuing to make use of Grant Thornton, an independent accounting firm, to complete the audit of CAT LLC's financial statements, in accordance with the requirements of the CAT NMS Plan. CAT LLC determined that the budgeted costs for Grant Thornton were appropriate, as the accounting services were to be provided at reasonable market rates that were comparable to the rates charged by other such firms for similar work. Moreover, the total budgeted costs for such accounting services were appropriate in light of the breadth of services provided by Grant Thornton. The services budgeted to be performed by Grant Thornton and the budgeted costs related to such services are described above.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted public relations costs as a part of CAT Fees.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted reserve costs as a part of CAT Fees.
In its approval order for the CAT Funding Model, the Commission stated that it would be reasonable for the annual operating budget for the CAT to “include a reserve of not more than 25% of the annual budget.”
Because the CAT is a critical regulatory tool/system, the CAT needs to have a stable funding source to build financial stability to support the Company as a going concern. Funding for the CAT, as noted in Section 11.1(b), is the responsibility of the Participants and the industry. Because CAT fees are charged based on the budget, which is based on anticipated volume, it is reasonable to have a reserve on hand to prevent a shortfall in the event there is an unexpectedly high volume in a given year. A reserve would help to assure that the CAT has sufficient resources to cover costs should there be unanticipated costs or costs that are higher than expected.
The SEC also recognized that a reserve would help address the difficulty in predicting certain variable CAT costs, like trading volume.
As discussed further below,
The CAT NMS Plan also requires fee filings for Prospective CAT Fees to include “a discussion of how the budget is reconciled to the collected fees.”
The total executed equivalent share volume of transactions in Eligible Securities for the period from April 2024 through March 2025 was 4,580,287,680,646.28 executed equivalent shares. CAT LLC determined the total executed equivalent share volume for the prior twelve months by counting executed equivalent shares in the same manner as it counts executed equivalent shares for CAT billing purposes.
CAT LLC has determined that the projected total executed equivalent share volume for the six months of CAT Fee 2025-2 Period by multiplying by one-half the executed equivalent share volume for the prior twelve months: one-half times 4,580,287,680,646.28 executed equivalent shares.
As noted in the approval order for the CAT Funding Model, as a practical matter, the fee filing for a CAT Fee would provide the exact fee per executed equivalent share to be paid for each CAT Fee, by multiplying the Fee Rate by one-third and describing the relevant number of decimal places for the fee rate.
The Exchange believes that charging CAT Fee 2025-2 with a fee rate of $0.000009 per executed equivalent share is reasonable because it provides for a revenue stream for the Company that is aligned with the Budgeted CAT Costs 2025-2. Moreover, the Exchange believes that the level of the fee rate is reasonable, as it is less than CAT Fee 2025-1 and is comparable to other transaction-based fees. Indeed, CAT Fee 2025-2 is significantly lower than fees previously assessed pursuant to Section 31 (
CAT Fee 2025-2 provides for an equitable allocation of fees, as it equitably allocates CAT costs between and among the Participants and Industry Members. The SEC approved the CAT Funding Model, finding that each aspect of the CAT Funding Model satisfied the requirements of the Exchange Act, including the formula for calculating CAT Fees as well as the Industry Members to be charged the CAT Fees.
CAT Fee 2025-2 provides for an equitable allocation of fees as it complies with the requirements regarding the calculation of CAT Fees as set forth in the CAT NMS Plan. For example, as described above, the calculation of CAT Fee 2025-2 complies with the formula set forth in Section 11.3(a) of the CAT NMS Plan. In addition, CAT Fee 2025-2 would be charged to CEBBs and CEBSs in accordance with Section 11.3(a) of the CAT NMS Plan. Furthermore, the Participants would be charged for their designated share of the Budgeted CAT Costs 2025-2 through a fee implemented via the CAT NMS Plan, which would have the same fee rate as CAT Fee 2025-2.
In addition, as discussed above, each of the inputs into the calculation of CAT Fee 2025-2—the Budgeted CAT Costs 2025-2, the count for the executed equivalent share volume for the prior 12 months, and the projected executed equivalent share volume for the CAT Fee 2025-2 Period—are reasonable. Moreover, these inputs lead to a reasonable fee rate for CAT Fee 2025-2 that is lower than other fee rates for transaction-based fees. A reasonable fee rate allocated in accordance with the requirements of the CAT Funding Model provides for an equitable allocation of fees.
CAT Fee 2025-2 is not an unfairly discriminatory fee. The SEC approved the CAT Funding Model, finding that each aspect of the CAT Funding Model satisfies the requirements of the Exchange Act. In reaching this conclusion, the SEC analyzed the potential effect of CAT Fees calculated pursuant to the CAT Funding Model on affected categories of market participants, including Participants (including exchanges and FINRA), Industry Members (including subcategories of Industry Members, such as alternative trading systems, CAT Executing Brokers and market makers), and investors generally, and considered market effects related to equities and options, among other things. CAT Fee 2025-2 complies with the requirements regarding the calculation of CAT Fees as set forth in the CAT NMS Plan. In addition, as discussed above, each of the inputs into the calculation of CAT Fee 2025-2 and the resulting fee rate for CAT Fee 2025-2 is reasonable. Therefore, CAT Fee 2025-2 does not impose an unfairly discriminatory fee on Industry Members.
The Exchange believes the proposed fees established pursuant to the CAT Funding Model promote just and equitable principles of trade, and, in general, protect investors and the public interest, and are provided in a transparent manner and with specificity in the Fee Schedule. The Exchange also believes that the proposed fees are reasonable because they would provide ease of calculation, ease of billing and other administrative functions, and predictability of a fee based on fixed rate per executed equivalent share. Such factors are crucial to estimating a reliable revenue stream for CAT LLC and for permitting Exchange members to reasonably predict their payment obligations for budgeting purposes.
Section 6(b)(8) of the Act
In addition, all Participants (including exchanges and FINRA) are proposing to introduce CAT Fee 2025-2 on behalf of CAT LLC to implement the requirements of the CAT NMS Plan. Therefore, this is not a competitive fee filing, and, therefore, it does not raise competition issues between and among the Participants.
Furthermore, in approving the CAT Funding Model, the SEC analyzed the potential competitive impact of the CAT Funding Model, including competitive issues related to market services, trading services and regulatory services, efficiency concerns, and capital formation.
As discussed above, each of the inputs into the calculation of CAT Fee 2025-2 is reasonable and the resulting fee rate for CAT Fee 2025-2 calculated in accordance with the CAT Funding Model is reasonable. Therefore, CAT Fee 2025-2 would not impose any burden on competition that is not necessary or appropriate in furtherance of the purpose of the Exchange Act.
No written comments were solicited or received with respect to the proposed rule change.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
Cboe EDGX Exchange, Inc. (the “Exchange” or “EDGX”) proposes to introduce a Small Retail Broker Hosted Solutions Program and to update the existing eligibility requirements for the Small Retail Brokerage Distribution Program for the Cboe One Summary Feed and EDGX Top Data Feed. The text of the proposed rule change is provided in Exhibit 5.
The text of the proposed rule change is also available on the Exchange's website (
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The Exchange proposes to adopt a Small Retail Broker Hosted Solutions Program (the “Program”) for EDGX Top Data and Cboe One Summary Data (collectively, the “Applicable Feeds”).
Further, the Exchange proposes to increase the allowed maximum Non-Professional Data User subscriber count for the existing Small Retail Broker Program for Cboe One Summary Feed and EDGX Top Data Feed.
By way of background, the Exchange currently offers the EDGX Top Data Feed, which is a data feed that offers top-of-book quotations and last sale information based on orders entered into the Exchange's System. The EDGX Top Data Feed benefits investors by facilitating their prompt access to real-time top-of-book information contained in EDGX Top Data. The Exchange's affiliated equities exchanges (
Currently, the Exchange offers a Small Retail Broker Distribution Program
The Exchange now proposes to create a new Program based on the proposed eligibility criteria for Small Retail Brokers to specifically support Small Retail Brokers who are operating platforms on behalf of other Small Retail Brokers. Based on customer feedback, there are Small Retail Brokers who would like to provide this data via a hosted solution as a White Label Service
Of further note, the Hosting Small Retail Broker Distributor is responsible for reporting its External Hosted Subscribers and their users, and ultimately the Hosting Small Retail Broker is responsible for payment of all data fees for both its External Subscribed Subscriber and itself. While the Exchange is not privy to pass-through costs between Hosting Small Retail Broker Distributors and External Hosted Subscribers, this proposed pricing allows Hosting Small Retail Broker Distributors the freedom to charge or not charge External Hosted Subscribers while also appropriately charging for a service provided to an External Hosted Subscriber that is benefitting from an infrastructure developed and supported by the Hosting Small Retail Broker Distributor. The Exchange notes that the current Small Retail Broker Program prevents the Hosting Small Retail Broker Distributor from packaging this waiver as part of their overall service to their External Hosted Subscribers (as External Hosted Subscribers would be billed directly under the existing Small Retail Broker Program). Given that External Hosted Subscribers are smaller relative to other Small Retail Brokers currently participating in the Program, the costs associated with the Applicable Feeds are inherently prohibitive to the External Hosted Subscriber.
Under the proposed program, a Hosting Small Retail Broker providing the data to at least one External Hosted Subscriber would be eligible for a credit of its Distribution Fee (a credit of $750/month for EDGX Top Data Feed and a credit of $3,500/month for Cboe One Summary Feed) that it is normally responsible for under the existing Small Retail Broker Program. Additionally, the External Hosted Subscriber shall also receive a waiver of the Distribution Fee (a credit of $750/month for EDGX Top Data Feed and a credit of $3,500/month for Cboe One Summary Feed). The External Hosted Subscriber will also receive a waiver of the Data Consolidation Fee for the Cboe One Summary Data (a credit of $350/month), and in lieu of paying the Non-Professional User fees, it shall be a set monthly fee of $750 for EDGX Top and
In addition to the changes set forth above, the Exchange also proposes to modify the existing Small Retail Broker Program for Cboe One Summary Feed and EDGX Top Feed to increase the number of Non-Professional Data User maximum from 5,000 to 10,000 to be consistent with the proposed threshold for External Hosted Subscribers. As previously discussed, the Exchange proposes to also use the cap of 10,000 Non-Professional Data Users for the proposed Program. The Exchange proposes to increase this in support of increased participation across both retail and investor markets in order to facilitate the growth of smaller retail brokers on a global scale.
As mentioned above, the Program's existing fee structure makes it costly for both Hosting Small Retail Broker Distributors and its External Hosted Subscribers to provide data to the External Hosted Subscribers retail clients as Distribution Fees are assessed on both Small Retail Brokers. With this fee proposal, the Exchange hopes to make its data more widely accessible for retail users who receive their data from External Hosted Subscribers.
The Exchange believes that this proposal will (i) further increase the competitiveness of the Exchange's top of book market data products compared to competitor offerings that may currently be cheaper for firms with a limited subscriber base that do not yet have the scale to take advantage of the lower subscriber fees offered by the Exchange and (ii) provide additional incentives for Hosting Small Retail Broker Distributors to provide hosted solution services for other Small Retail Brokers in order to make data more widely available to retail investors. In turn, the Exchange believes that this change may benefit market participants and investors by spurring additional competition and increasing the accessibility of the Exchange's top of book data.
The Exchange notes that at least one other exchange has a similar offering. For example, the New York Stock Exchange has a Redistribution Fee Waiver for NYSE Trades, for which redistributors of data may have their redistribution fee waived so long as they provide the data to at least one data feed recipient and reports such data feed recipient or recipients to the Exchange.
Without these discounts, a redistributor of NYSE Trades would pay the General Access Fee of $1,500/month in addition to the Redistribution Fee of $1,000/month and the applicable Professional User Fee ($4/month/User) and Non-Professional User Fee ($0.20/month/User).
While the eligibility requirements of the NYSE program and the proposed Program differ, both programs are intended to incentivize redistribution of applicable data feeds by providing enhanced discounts and both programs target different segments for a specific purpose. The proposed discounts under this Program are intended to make the Exchange's offering competitively
Without the proposed pricing discounts, the Exchange believes that (i) prospective customers may not be interested in purchasing top of book data from the Exchange, and may instead purchase such data from other national securities exchanges or the SIPs, potentially at a higher cost than would be available pursuant to the proposed program and (ii) that Hosting Small Retail Broker Distributors are not incentivized to make the Applicable Feeds available via a hosted solution for retail investors of its External Hosted Subscribers. Similar to the existing Small Retail Broker Program, the Exchange believes that this Program will continue to increase competition for such market data, and that enhanced competition could help to further reduce data fees as providers compete for subscribers, as well as help diversify the availability and quality of data offerings available to retail investors through their Hosting Small Retail Broker Distributors. Ultimately, the Exchange believes that it is critical that it be allowed to compete by offering attractive pricing to customers as increasing the availability of such products ensures continued competition with alternative offerings. Such competition may be constrained when competitors are impeded from offering alternative and cost-effective solutions to customers.
The Exchange believes that the proposed rule change is consistent with the objectives of Section 6 of the Act,
The Exchange also believes that the proposed rule change is consistent with Section 11(A) of the Act.
In adopting Regulation NMS, the Commission granted SROs and broker-dealers increased authority and flexibility to offer new and unique market data to the public. It was believed that this authority would expand the amount of data available to consumers, and also spur innovation and competition for the provision of market data. The Exchange believes that the proposed fee change would further broaden the availability of U.S. equity market data to investors, and in particular retail investors, consistent with the principles of Regulation NMS.
The Exchange operates in a highly competitive environment. Indeed, there are sixteen registered national securities exchanges that trade U.S. equities and offer associated top of book market data products to their customers. The national securities exchanges also compete with the SIPs for market data customers. The Commission has repeatedly expressed its preference for competition over regulatory intervention in determining prices, products, and services in the securities markets. Specifically, in Regulation NMS, the Commission highlighted the importance of market forces in determining prices and SRO revenues and, also, recognized that current regulation of the market system “has been remarkably successful in promoting market competition in its broader forms that are most important to investors and listed companies.”
Making alternative data products available to market participants ultimately ensures increased competition in the marketplace, and constrains the ability of exchanges to charge prohibitive fees. In the event that a market participant views one exchange's top of book data fees as more or less attractive than the competition they can, and frequently do, switch between competing products. In fact, the competitiveness of the market for such top of book data products is one of the primary factors animating this proposed rule change, which is designed to allow the Exchange to further compete for this business. As mentioned above, at least one other Exchange provides a similar waiver for redistribution of market data.
The Exchange notes that the Applicable Feeds are distributed and purchased on a voluntary basis, in that neither the Exchange nor market data distributors are required by any rule or regulation to make these data products available. Distributors (including vendors) and Users can therefore discontinue use at any time and for any reason, including due to an assessment of the reasonableness of fees charged. Further, the Exchange is not required to make any proprietary data products available or to offer any specific pricing alternatives to any customers.
The Commission has long stressed the need to ensure that the equities markets are structured in a way that meets the needs of ordinary investors. For example, the Commission's strategic plan for fiscal years 2018-2022 touts “focus on the long-term interests of our Main Street investors” as the Commission's number one strategic goal.
The Exchange proposes that the proposed waivers for the Applicable Feeds only apply to Hosting Small Retail Broker Distributors and its External Hosted Subscribers for three reasons. First, the Hosting Small Retail Broker Distributor is creating a full-service offering for External Hosted Subscribers in contrast to the Small Retail Brokers under the current Program, which only provide services directly to its own retail clients. Maintaining an additional platform for External Hosted Subscribers' clients is an additional workstream for Hosted Subscribers (in contrast to Small Retail Brokers that only provide data and services directly to their retail clients) as they support additional ecosystems of business, each with its own book of
Second, by creating this program, the Exchange is further able to reach additional retail investors. By waiving Distribution Fees for both the Hosting Small Retail Broker Distributor and its External Hosted Subscriber, both parties are incentivized to work together to provide data to retail investors. Third, as mentioned previously, the Hosting Small Retail Broker is responsible for the fees and reporting for both its own activity and that of its External Hosted Subscriber. While the Exchange is not privy to pass-through costs between Hosting Small Retail Broker Distributors and External Hosted Subscribers, this proposed pricing allows Hosting Small Retail Broker Distributors the freedom to charge or not charge External Hosted Subscribers while also appropriately charging for a service provided to an External Hosted Subscriber that is benefitting from an infrastructure developed and supported by the Hosting Small Retail Broker Distributor. The Exchange notes that the current Small Retail Broker Program prevents the Hosting Small Retail Broker Distributor from packaging this waiver as part of their overall service to their External Hosted Subscribers (as External Hosted Subscribers would be billed directly under the existing Small Retail Broker Program). Given that External Hosted Subscribers are smaller relative to other Small Retail Brokers currently participating in the Program, these costs associated with the Applicable Feeds are inherently prohibitive to the External Hosted Subscriber. Through this program, fees will not be a deterrent for Hosting Small Retail Brokers and External Hosted Subscribers to establish platforms that reach a wider scope of retail investors.
Furthermore, while this Program would be effectively limited to smaller firms in accordance with the proposed eligibility requirements, the Exchange does not believe that this limitation makes the fees inequitable or unfairly discriminatory. The Exchange notes that large broker-dealers and/or vendors that distribute the Exchange's data products to a sizeable number of investors benefit from the current fee structure, which includes lower subscriber fees and Enterprise licenses. Due to lower subscriber fees, distributors that provide the Applicable Feeds to more than the proposed capped amounts of Users permitted under either the Small Retail Broker Program or this Program already enjoy cost savings compared to competitor products. The Program, in addition to the existing Small Retail Broker Program, would therefore continue to ensure that small retail brokers that distribute top of book data to their retail investor customers could also benefit from reduced pricing, and would aid in increasing the competitiveness of the Exchange's data products for this key segment of the market.
The Exchange believes that the proposed cap of 10,000 for the Cboe One Summary Data Feed and EDGX Top Data Feed for this Program, as well as increasing this cap to 10,0000 for the Cboe One Summary Data Feed and EDGX Top Data Feed for the Small Retail Broker Program is reasonable and not unfairly discriminatory as the Exchange believes it is in the best interest of all market participants to more broadly expand this in support of inclusion for more retail investors by participation in both programs by small retail brokers on a global scale.
The Exchange believes that the Distribution Fee Waivers for both the External Hosted Subscriber and the Hosting Small Retail Broker Distributor are reasonable as they represent a significant cost reduction for the Hosting Small Retail Broker Distributor to provide a hosted solution for the External Hosted Subscriber, to ultimately provide the data to the External Hosted Subscriber's retail investors. While the existing fee structure does provide a benefit of a discounted waiver for Small Retail Brokers that externally distribute the data, these discounted Distribution Fees are still incurred by both the External Hosted Subscriber and the Hosting Small Retail Broker Distributor. In an attempt to alleviate these costs, and make this data more available to retail investors, the Exchange proposes to waive the Distribution Fees for both the Hosting Small Retail Broker Distributor and the External Hosted Subscriber. With this Program, the Exchange believes it will increase market accessibility and data to investors on a global scale. Exchange Hosted Subscribers may not have the infrastructure or technical capabilities to offer market data and/or execution services to its retail investors. Through waiving these fees for the External Hosted Subscriber, the Exchange hopes to reach a broader scale of retail investors globally. Further, as discussed above, the Exchange also believes it is appropriate and not unfairly discriminatory to limit this specific credit to the External Hosted Subscriber and the Hosting Small Retail Broker Distributor given the development and maintenance the Hosting Small Retail Broker Distributor acquires to provide this data to the External Hosted Subscriber's end users.
The Exchange believes it is reasonable to not charge the External Hosted Subscriber the Data Consolidation Fee for Cboe One Summary Data for the duration of the time that they are eligible for this program. As previously discussed, the waiver of fees for the External Hosted Subscriber is intended to make this data more available to retail investors. The Exchange also believes it is appropriate and not unfairly discriminatory to limit this specific credit to the External Hosted Subscriber because, as described above, the Exchange believes by alleviating some of the barriers to entry, that Exchange Hosted Subscribers are able to bring this data and execution services to their retail investors. Of further note, the Exchange believes it is reasonable to maintain this cost for the Hosting Small Retail Broker Distributor as the Hosting Small Retail Broker Distributor is the party receiving this data from the Exchange where it is consolidated for the benefit of the Hosting Small Retail Broker Distributor.
The Exchange believes it is reasonable to set a fixed cost for Non-Professional Users fees for External Hosted Subscribers by charging a flat, fixed cost instead of charging per user to allow for additional savings. Under this structure, the External Hosted Subscriber shall still be responsible by paying the standard per User fee of a Professional Users under the Applicable Feed. The Exchange does not believe this is unfairly discriminatory as the program is based around making the Applicable Feeds available for Non-Professional Users. The Exchange also notes that it has taken a similar approach here to the NYSE Per User Access Fee, which sets a fixed costs where the data is used only for display purposes.
The Exchange does not believe that the proposed rule change would result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange operates in a highly competitive environment, and its ability to price these data products is constrained by: (i) Competition among exchanges that offer similar data products to their customers; and (ii) the existence of inexpensive real-time consolidated data disseminated by the SIPs. Top of book data is disseminated by both the SIPs and the sixteen equities exchanges. There are therefore a number of alternative products available to market participants and investors. In this competitive environment potential subscribers are free to choose which competing product to purchase to satisfy their need for market information. Often, the choice comes down to price, as broker-dealers or vendors look to purchase the cheapest top of book data product, or quality, as market participants seek to purchase data that represents significant market liquidity. In order to better compete for this segment of the market, the Exchange is proposing to reduce the cost of top of book data provided by Hosting Small Retail Broker Distributors to its External Hosted Subscribers, and in turn, their retail investors. The Exchange believes that this would facilitate greater access to such data, ultimately benefiting the retail investors that are provided access to such market data.
The Exchange does not believe that this price reduction would cause any unnecessary or inappropriate burden on intermarket competition as other exchanges and data vendors are free to lower their prices to better compete with the Exchange's offering. Indeed, as explained in the basis section of this proposed rule change, the Exchange's decision to (i) waive the Distribution Fee for the Hosting Small Retail Broker and the External Hosted Subscriber and (ii) waiving the Consolidation Fee (when applicable) for the External Hosted Subscriber and (iii) setting a fixed cost for the Non-Professional Users for the External Hosted Subscriber is itself a competitive response to different fee structures available on competing markets. The Exchange therefore believes that the proposed rule change is pro-competitive as it seeks to offer pricing incentives to customers to better position the Exchange as it competes to attract additional market data subscribers. The Exchange also believes that the proposed reduction in fees the Hosting Small Retail Broker and the External Hosted Subscriber would not cause any unnecessary or inappropriate burden on intramarket competition. Although the proposed fee discount would be largely limited to small retail broker subscribers, larger broker-dealers and vendors can already purchase top of book data from the Exchange at prices that represent a significant cost savings when compared to competitor products that combine higher subscriber fees with lower fees for distribution. In light of the benefits already provided to this group of subscribers, the Exchange believes that additional discounts to small retail brokers would increase rather than decrease competition among broker-dealers that participate on the Exchange. Furthermore, as discussed earlier in this proposed rule change, the Exchange believes that offering pricing benefits to brokers that represent retail investors facilitates the Commission's mission of protecting ordinary investors, and is therefore consistent with the Act.
The Exchange neither solicited nor received comments on the proposed rule change.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1)
The Exchange proposes to amend the Connectivity Fee Schedule to amend the list of third party systems and third party data feeds to which Users can connect, related fees and a reference to who can charge redistribution fees. The proposed rule change is available on the Exchange's website at
In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements.
The Exchange proposes to amend the Connectivity Fee Schedule to amend the list of third party systems and third party data feeds to which Users
Currently, Users are offered connectivity to the execution systems of third party markets and other service providers (“Third Party Systems”) and connectivity to data feeds from third party markets and other content service providers (“Third Party Data Feeds”) at the Mahwah, New Jersey data center (“MDC”).
The Exchange proposes to make the following changes to the list of Third Party Systems:
• Add Blue Ocean ATS (BOATS), Canadian Imperial Bank of Commerce (CIBC), Long Term Stock Exchange,
• To reflect Cboe Canada`s integration of Cboe Canada and Cboe MATCHNow into one entity,
To make these changes, the list of available Third Party Systems would be amended as follows (proposed deletions bracketed, proposed additions italicized):
The Exchange does not propose to change the monthly recurring fee Users pay for access to each Third Party System. Although the proposed changes to the list of Third Party Systems would combine Cboe MATCHNow with Cboe Canada to reflect their integration by Cboe Canada, thereby removing Cboe MATCHNow from the current list of Third Party Systems, no User would be charged more as a consequence. A User would continue to be able to choose which systems it wants from any Third Party System. It would not have to receive any systems, or pay for any bandwidth, that it did not choose.
The Exchange expects that the connectivity partner of BOATS will charge a redistribution fee, which will be passed through to the User.
The Exchange proposes to make the following changes to the list of Third Party Data Feeds (together, the “Proposed Third Party Data Feeds”):
• Add the following Third Party Data Feeds with the following fees for monthly recurring connectivity:
○ Blue Ocean ATS (BOATS), for $750 a month;
○ Cboe CFE Futures, for $1,500 per month;
○ Long Term Stock Exchange, for $2,600 per month;
○ MEMX Equities, for $2,000 per month;
○ MEMX Options, for $2,000 per month;
○ Small Exchange, for $1,000 per month.
• To reflect Cboe Canada's integration of Cboe Canada and Cboe MATCHNow into one entity,
• Combine Nasdaq Stock Market with Nasdaq ISE under the name “Nasdaq Stock Market” and change the combined monthly recurring connectivity fee to $3,000 per month.
• Combine TMX Group and Montreal Exchange
In addition, the Exchange proposes to change the monthly recurring connectivity fee per Third Party Data Feed for 18 feeds.
To make these changes, the text under “Connectivity to Third Party Data Feeds” and list of available Third Party Data Feeds would be amended as follows (proposed deletions bracketed, proposed additions italicized):
Third Party Data Feed providers
The Exchange would provide access to the Proposed Third Party Systems as conveniences to Users.
As with the current Third Party Systems, Users would connect to the Proposed Third Party Systems over the internet protocol (“IP”) network, a local area network available in the MDC.
As with the current Third Party Systems, in order to obtain access to a Proposed Third Party System, the User would enter into an agreement with the relevant proposed third party, pursuant to which it would charge the User for access to the Proposed Third Party System. The Exchange would then enable unicast connectivity between the User and the Proposed Third Party System over the IP network.
The Exchange has no affiliation with the providers of any of the Proposed Third Party Systems. Establishing a User's access to a Proposed Third Party System would not give the Exchange any right to use the Proposed Third Party System. Connectivity to a Proposed Third Party System would not provide access or order entry to the Exchange's execution system, and a User's connection to a Proposed Third Party System would not be through the Exchange's execution system.
The Exchange proposes to charge the same monthly recurring fee for connectivity to the Proposed Third Party Systems that it does for the current Third Party Systems. Specifically, when a User requested access to a Proposed Third Party System, it would identify the applicable third party and what bandwidth connection would be required. The fees for such bandwidth connection would vary based on the size of the connection, not on the particular Third Party System the User chooses. The Exchange is not proposing to change the pricing of any of these bandwidth connections; the Exchange is simply expanding the list of Third Party Systems that Users may access via these bandwidth connections.
The Exchange would provide connectivity to the Proposed Third Party Data Feeds as a convenience to Users.
As with the existing connections to Third Party Data Feeds, the Exchange would receive a Proposed Third Party Data Feed from the content service provider at the relevant source. The Exchange would then provide connectivity to that data to Users for a fee. Users would connect to the Proposed Third Party Data Feeds over the IP network. The Proposed Third Party Data Feeds would include trading and other information concerning the securities that are traded on the relevant third party systems.
As with the existing connections to Third Party Data Feeds, in order to connect to a Proposed Third Party Data Feed, a User would enter into a contract with the third party content service provider, pursuant to which it may charge the User for the data feed. The Exchange would receive the Proposed Third Party Data Feed in remote locations and transport it over its fiber optic network to the MDC. After the content service provider and User entered into an agreement and the Exchange received authorization from the content service provider, the Exchange would retransmit the data to the User over the User's port. The Exchange would charge the User for connectivity to the Proposed Third Party Data Feed. A User would only receive, and would only be charged the fee for, connectivity to a Proposed Third Party Data Feed for which it entered into a contract.
The Exchange has no affiliation with the sellers of the Proposed Third Party Data Feeds and would have no right to use those feeds other than as a redistributor of the data. None of the Proposed Third Party Data Feeds would provide access or order entry to the Exchange's execution system. The Proposed Third Party Data Feeds would not provide access or order entry service to the execution systems of the third parties generating the feeds. The Exchange would receive the Proposed Third Party Data Feeds via arms-length agreements and would have no inherent advantage over any other distributor of such data.
The proposed rule change would not apply differently to distinct types or sizes of market participants. Rather, it would apply to all Users equally. As is currently the case, the purchase of any colocation service is completely voluntary and the Connectivity Fee Schedule is applied uniformly to all Users.
Access to most of the Proposed Third Party Systems and connectivity to most of the Proposed Third Party Data Feeds were requested by Users, but the Exchange believes that it would gain at most a handful of new customers among Users due to the proposed change.
The Commission has repeatedly expressed its preference for competition over regulatory intervention in determining prices, products, and services in the securities markets. Specifically, in Regulation NMS, the Commission highlighted the importance of market forces in determining prices and SRO revenues and, also, recognized that current regulation of the market system “has been remarkably successful in promoting market competition in its broader forms that are most important to investors and listed companies.”
The Exchange's provision of access to the Proposed Third Party Systems (“Access”) and connectivity to the Proposed Third Party Data Feeds (“Connectivity”) is subject to competition from access and connectivity that Users can obtain through the third-party telecommunications service providers that have installed their equipment in the MDC's two meet-me-rooms (“Telecoms”).
More specifically, a User may access a Proposed Third Party System by, first, entering into an agreement with the relevant proposed third party, pursuant to which the third party would charge the User for access to the Proposed Third Party System, and second, accessing the Proposed Third Party System through one of the Telecoms. Likewise, a User may connect to a Proposed Third Party Data Feed by, first, entering into a contract with the third party content service provider, if required, pursuant to which the third party may charge the User for the Proposed Third Party Data Feed, and second, connecting to the Proposed Third Party Data Feed through one of the Telecoms.
In both cases, the User would be able to access any of the Proposed Third
The proposed change is not otherwise intended to address any other issues relating to colocation services or related fees, and the Exchange is not aware of any problems that Users would have in complying with the proposed change.
The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,
The Exchange believes that the proposed rule change is reasonable.
In considering the reasonableness of proposed services and fees, the Commission's market-based test considers “whether the exchange was subject to significant competitive forces in setting the terms of its proposal . . . , including the level of any fees.”
As described above,
Because Users are third parties and are not required to make such information public, the Exchange does not have visibility into how many Users currently access the Proposed Third Party Systems or connect to the Proposed Third Party Data Feeds independently, as described above.
Such Users compete, or would compete, with the Exchange's Access and Connectivity and exert, or would exert, significant competitive forces on the Exchange in setting the terms of its proposal, including the level of the Exchange's proposed fees.
The Exchange does not believe that FIDS would have any competitive advantage over Users that establish independent access to Proposed Third Party Systems or connectivity to Proposed Third Party Data Feeds. The Exchange's proposed service for Access and Connectivity does not have (a) any special access to the Proposed Third Party Systems and Proposed Third Party Data Feeds or (b) advantage within the MDC, as all distances in the MDC are normalized.
Moreover, the Exchange does not believe that FIDS would have any competitive advantage because it would charge for connectivity only, not the Proposed Third Party System or Proposed Third Party Data Feed itself. All Users that connect to a Proposed Third Party System or Proposed Third Party Data Feed, whether they elect to connect using the Exchange's proposed service or not, would have to pay a third party for the Proposed Third Party System or Proposed Third Party Data Feed.
Nor does the Exchange believe that FIDS has a competitive advantage by virtue of the fact that ICE owns and operates the MDC's meet-me-rooms. Users purchasing Access or Connectivity—like Users of any other colocation service—would require a circuit connecting out of the MDC, and
If anything, the Exchange would be subject to a competitive disadvantage vis-à-vis Users regarding access to the Proposed Third Party Systems or connectivity to the Proposed Third Party Data Feeds. Users that choose to independently establish access or connectivity may negotiate terms with the Telecoms through whom such access and connectivity is delivered, in response to competitive forces. Such prices are not required to be filed by any party with the Commission. In contrast, the Exchange's service and pricing would be standardized as set out in this filing, and the Exchange would be unable to respond to pricing pressure from its competitors without seeking a formal fee change in a filing before the Commission.
In sum, because the Exchange is subject to significant competitive forces in setting the terms on which it offers its proposal, in particular because the Exchange believes that a substantially similar substitute is available, and the Exchange has not placed actual or proposed Users that already have or establish access or connectivity at a competitive disadvantage created by the Exchange, the proposed fees for the Exchange's connectivity to Proposed Third Party Systems and Proposed Third Party Data Feeds are reasonable.
The Exchange believes that it is reasonable to add “and their partners” to the second paragraph under “Connectivity to Third Party Data Feeds” (“Proposed Pass-Through Edit”) as that would add clarity as to who may charge redistribution fees, making the paragraph more precise.
The Exchange believes that it is reasonable to make the proposed changes, as connectivity to the Proposed Third Party Systems and access to the Proposed Third Party Data Feeds was generally requested by Users.
The Exchange believes that the proposed rule change is equitable.
The Exchange believes that the fees for connectivity to the Proposed Third Party Data Feeds are an equitable allocation of fees. The Exchange recognizes that the monthly recurring fee Users pay for access to the below Proposed Third Party Data Feeds will increase if they connect to one, but not both, of the current Third Data Feeds, but believes that they are equitable, for the following reasons:
• The combination of Cboe MATCHNow into Cboe Canada reflects the integration by Cboe Canada of those two entities into one entity.
• Nasdaq Stock Market and Nasdaq ISE are proposed to be combined. With this combination, Nasdaq ISE as well as Nasdaq BX, Nasdaq GEMX, Nasdaq MRX, Nasdaq PHLX and the Nasdaq Stock Market—which are all distinct self-regulatory organizations—will all be available under “Nasdaq Stock Market”. The proposed fee for the combination of the Nasdaq Stock Market and Nasdaq ISE is equal to the sum of the current fees for those feeds.
• The Montreal Exchange is a subsidiary of TMX Group.
The Exchange believes it is equitable to propose to increase the fee for ICE Data Services Consolidated Feed Shared Farm >1 Gb to $2,000
The Exchange does not propose to change the monthly recurring fee Users pay for access to each Third Party System. Although the proposed changes to the list of Third Party Systems would combine Cboe MATCHNow with Cboe Canada to reflect their integration by Cboe Canada, thereby removing Cboe MATCHNow from the current list of Third Party Systems, no User would be charged more as a consequence. A User would continue to be able to choose which systems it wants from any Third Party System. It would not have to receive any systems, or pay for any bandwidth, that it did not choose.
The Exchange believes that the Proposed Pass-Through Edit is equitable as it would add clarity as to who may charge redistribution fees, making the
Without this proposed rule change, Users would have fewer options for connectivity to the Proposed Third Party Systems and Proposed Third Party Data Feeds. By offering Access and Connectivity, the Exchange gives each User additional options for addressing its needs, responding to User demand for options. Offering these additional services would help each User tailor its data center operations to the requirements of its business operations by allowing it to select the form and latency of connectivity that best suits its needs. Users that do not opt to utilize the Exchange's proposed Access or Connectivity would still be able to access Proposed Third Party Systems or connect to Proposed Third Party Data Feeds using Telecoms.
The Exchange believes that the proposed change is equitable because it will result in fees being charged only to Users that voluntarily select to receive the corresponding services and because those services will be available to all Users.
Furthermore, the Exchange believes that the services and fees proposed herein are equitably allocated because, in addition to the services being completely voluntary, they are available to all Users on an equal basis (
The Exchange believes that the proposed rule change is not unfairly discriminatory, for the following reasons.
The Exchange believes that the Proposed Pass-Through Edit is not unfairly discriminatory as it would add clarity as to who may charge redistribution fees, making the paragraph more precise and thereby ensuring the accuracy of, and adding clarity and transparency to, the Connectivity Fee Schedule to all market participants.
Without this proposed rule change, Users would have fewer options for access to Proposed Third Party Systems or connectivity to Proposed Third Party Data Feeds. The proposed change would provide Users with an additional choice with respect to the form and optimal latency of the access they use to connect to Proposed Third Party Systems or connectivity to Proposed Third Party Data Feeds, allowing a User to select the connectivity that better suits its needs, helping it tailor its colocation operations to the requirements of its business operations. Users that do not opt to utilize the Exchange's proposed Access or Connectivity would still be able to access the Proposed Third Party Systems or connect to Proposed Third Party Data Feeds using Telecoms.
The Exchange believes that the proposed change is not unfairly discriminatory because it will result in fees being charged only to Users that voluntarily select to receive the corresponding services and because those services will be available to all Users. Furthermore, the Exchange believes that the services and fees proposed herein are not unfairly discriminatory because, in addition to the services being completely voluntary, they are available to all Users on an equal basis (
For all these reasons, the Exchange believes that the proposal is consistent with the Act.
In accordance with Section 6(b)(8) of the Act,
The Exchange does not believe that FIDS would have any competitive advantage over Users that establish independent access to Proposed Third Party Systems or connectivity to Proposed Third Party Data Feeds. The Exchange's proposed service for Access and Connectivity does not have (a) any special access to the Proposed Third Party Systems and Proposed Third Party Data Feeds or (b) advantage within the MDC, as all distances in the MDC are normalized.
Moreover, the Exchange does not believe that FIDS would have any competitive advantage because it would charge for connectivity only, not the Proposed Third Party System or Proposed Third Party Data Feed itself. All Users that connect to a Proposed Third Party System or Proposed Third Party Data Feed, whether they elect to connect using the Exchange's proposed service or not, would have to pay a third party for the Proposed Third Party System or Proposed Third Party Data Feed.
Nor does the Exchange believe that FIDS has a competitive advantage over any third-party competitors offering access to the Proposed Third Party Systems or connectivity to the Proposed Third Party Data Feeds by virtue of the fact that ICE owns and operates the MDC's meet-me-rooms. Users purchasing Access or Connectivity—like Users of any other colocation service—would require a circuit connecting out of the MDC, and in most cases, such circuits are provided by third-party Telecoms. Currently, 16 Telecoms operate in the meet-me-rooms and provide a variety of circuit choices. It is in the Exchange's best interest to set the fees that Telecoms pay to operate in the meet-me-rooms at a reasonable level
If anything, the Exchange would be subject to a competitive disadvantage vis-à-vis Users regarding access to the Proposed Third Party Systems or connectivity to the Proposed Third Party Data Feeds. Users that choose to independently establish access or connectivity may negotiate terms with the Telecoms or other Users through whom such access and connectivity is delivered, in response to competitive forces. Such prices are not required to be filed by any party with the Commission. In contrast, the Exchange's service and pricing would be standardized as set out in this filing, and the Exchange would be unable to respond to pricing pressure from its competitors without seeking a formal fee change in a filing before the Commission.
The Proposed Pass-Through Edit would not impose any burden on competition. It is not intended to address competitive issues but rather is concerned solely with adding clarity as to who may charge redistribution fees.
The changes would not put any market participants at a relative disadvantage compared to other market participants or penalize one or more categories of market participants in a manner that would impose an undue burden on competition.
No written comments were solicited or received with respect to the proposed rule change.
The Exchange has filed the proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act
At any time within 60 days of the filing of such proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings under Section 19(b)(2)(B)
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
2:00 p.m. on Thursday, July 17, 2025.
The meeting will be held via remote means and at the Commission's headquarters, 100 F Street NE, Washington, DC 20549.
This meeting will be closed to the public.
Commissioners, Counsel to the Commissioners, the Secretary to the Commission, and recording secretaries will attend the closed meeting. Certain staff members who have an interest in the matters also may be present.
In the event that the time, date, or location of this meeting changes, an announcement of the change, along with the new time, date, and/or place of the meeting will be posted on the Commission's website at
The General Counsel of the Commission, or his designee, has certified that, in his opinion, one or more of the exemptions set forth in 5 U.S.C. 552b(c)(3), (5), (6), (7), (8), 9(B) and (10) and 17 CFR 200.402(a)(3), (a)(5), (a)(6), (a)(7), (a)(8), (a)(9)(ii) and (a)(10), permit consideration of the scheduled matters at the closed meeting.
The subject matter of the closed meeting will consist of the following topics:
Institution and settlement of injunctive actions;
Institution and settlement of administrative proceedings;
Resolution of litigation claims; and
Other matters relating to examinations and enforcement proceedings.
At times, changes in Commission priorities require alterations in the scheduling of meeting agenda items that may consist of adjudicatory, examination, litigation, or regulatory matters.
For further information, please contact Vanessa A. Countryman from the Office of the Secretary at (202) 551-5400.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
Cboe BYX Exchange, Inc. (the “Exchange” or “BYX”) proposes to introduce a Small Retail Broker Hosted Solutions Program and to update the existing eligibility requirements for the Small Retail Brokerage Distribution Program for the Cboe One Summary Feed and BYX Top Data Feed. The text of the proposed rule change is provided in Exhibit 5.
The text of the proposed rule change is also available on the Exchange's website (
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The Exchange proposes to adopt a Small Retail Broker Hosted Solutions Program (the “Program”) for BYX Top Data and Cboe One Summary Data (collectively, the “Applicable Feeds”).
Further, the Exchange proposes to increase the allowed maximum Non-Professional Data User subscriber count for the existing Small Retail Broker Program for Cboe One Summary Feed and BYX Top Data Feed.
By way of background, the Exchange currently offers the BYX Top Data Feed, which is a data feed that offers top-of-book quotations and last sale information based on orders entered into the Exchange's System. The BYX Top Data Feed benefits investors by facilitating their prompt access to real-time top-of-book information contained in BYX Top Data. The Exchange's affiliated equities exchanges (
Currently, the Exchange offers a Small Retail Broker Distribution Program
The Exchange now proposes to create a new Program based on the proposed eligibility criteria for Small Retail Brokers to specifically support Small Retail Brokers who are operating platforms on behalf of other Small Retail Brokers. Based on customer feedback, there are Small Retail Brokers who would like to provide this data via a hosted solution as a White Label Service
Of further note, the Hosting Small Retail Broker Distributor is responsible for reporting its External Hosted Subscribers and their users, and ultimately the Hosting Small Retail Broker is responsible for payment of all data fees for both its External Hosted Subscribers and itself. While the Exchange is not privy to pass-through costs between Hosting Small Retail Broker Distributors and External Hosted Subscribers, this proposed pricing allows Hosting Small Retail Broker Distributors the freedom to charge or not charge External Hosted Subscribers while also appropriately charging for a service provided to an External Hosted Subscriber that is benefitting from an infrastructure developed and supported by the Hosting Small Retail Broker Distributor. The Exchange notes that the current Small Retail Broker Program prevents the Hosting Small Retail Broker Distributor from packaging this waiver as part of their overall service to their External Hosted Subscribers (as External Hosted Subscribers would be billed directly under the existing Small Retail Broker Program). Given that External Hosted Subscribers are smaller relative to other Small Retail Brokers currently participating in the Program, the costs associated with the Applicable Feeds are inherently prohibitive to the External Hosted Subscriber.
Under the proposed program, a Hosting Small Retail Broker providing the data to at least one External Hosted Subscriber would be eligible for a credit of its Distribution Fee (a credit of $250/month for BYX Top Data Feed and a credit of $3,500/month for Cboe One Summary Feed) that it is normally responsible for under the existing Small Retail Broker Program. Additionally, the External Hosted Subscriber shall also receive a waiver of the Distribution Fee (a credit of $250/month for BYX Top Data Feed and a credit of $3,500/month for Cboe One Summary Feed). The External Hosted Subscriber will also receive a waiver of the Data Consolidation Fee for the Cboe One Summary Data (a credit of $350/month) and in lieu of paying the Non-Professional User fees, it shall be a set monthly fee of $100 for BYX Top and $850 for Cboe One Summary Data.
In addition to the changes set forth above, the Exchange also proposes to modify the existing Small Retail Broker Program for Cboe One Summary Feed and BYX Top Feed to increase the number of Non-Professional Data User maximum from 5,000 to 10,000 to be consistent with the proposed threshold for External Hosted Subscribers. As previously discussed, the Exchange proposes to also use the cap of 10,000 Non-Professional Data Users for the proposed Program. The Exchange proposes to increase this in support of
As mentioned above, the existing fee structure makes it costly for both Hosting Small Retail Broker Distributors and its External Hosted Subscribers to provide data to the External Hosted Subscribers' retail clients as Distribution Fees are assessed on both Small Retail Brokers. With this fee proposal, the Exchange hopes to make its data more widely accessible for retail users who receive their data from External Hosted Subscribers.
The Exchange believes that that this proposal will (i) further increase the competitiveness of the Exchange's top of book market data products compared to competitor offerings that may currently be cheaper for firms with a limited subscriber base that do not yet have the scale to take advantage of the lower subscriber fees offered by the Exchange; and will (ii) provide additional incentives for Hosting Small Retail Broker Distributors to provide hosted solution services for other Small Retail Brokers in order to make data more widely available to retail investors. In turn, the Exchange believes that this change may benefit market participants and investors by spurring additional competition and increasing the accessibility of the Exchange's top of book data.
The Exchange notes that at least one other exchange has a similar offering. For example, the New York Stock Exchange has a Redistribution Fee Waiver for NYSE Trades, for which redistributors of data may have their redistribution fee waived so long as they provide the data to at least one data feed recipient and reports such data feed recipient or recipients to the Exchange.
Without these discounts, a redistributor of NYSE Trades would pay the General Access Fee of $1,500/month in addition to the Redistribution Fee of $1,000/month and the applicable Professional User Fee ($4/month/User) and Non-Professional User Fee ($0.20/month/User).
While the eligibility requirements of the NYSE program and the proposed Program differ, both programs are intended to incentivize redistribution of applicable data feeds by providing enhanced discounts and both programs target different segments for a specific purpose. The proposed discounts under this Program are intended to make the Exchange's offering competitively priced relative to alternative options that participants may have.
Without the proposed pricing discounts, the Exchange believes that (i) prospective customers may not be interested in purchasing top of book data from the Exchange, and may instead purchase such data from other national securities exchanges or the SIPs, potentially at a higher cost than would be available pursuant to the proposed program and (ii) that Hosting Small Retail Broker Distributors are not incentivized to make the Applicable Feeds available via a hosted solution for retail investors of its External Hosted Subscribers. Similar to the existing Small Retail Broker Program, the Exchange believes that this Program will continue to increase competition for such market data, and that enhanced competition could help to further reduce data fees as providers compete for subscribers, as well as help diversify the availability and quality of data offerings available to retail investors through their Hosting Small Retail Broker Distributors. Ultimately, the Exchange believes that it is critical that it be allowed to compete by offering attractive pricing to customers as increasing the availability of such products ensures continued competition with alternative offerings. Such competition may be constrained when competitors are impeded from offering alternative and cost-effective solutions to customers.
The Exchange believes that the proposed rule change is consistent with the objectives of Section 6 of the Act,
The Exchange also believes that the proposed rule change is consistent with Section 11(A) of the Act.
In adopting Regulation NMS, the Commission granted SROs and broker-dealers increased authority and flexibility to offer new and unique market data to the public. It was believed that this authority would expand the amount of data available to consumers, and also spur innovation and competition for the provision of market data. The Exchange believes that the proposed fee change would further broaden the availability of U.S. equity market data to investors, and in particular retail investors, consistent with the principles of Regulation NMS.
The Exchange operates in a highly competitive environment. Indeed, there are sixteen registered national securities exchanges that trade U.S. equities and offer associated top of book market data products to their customers. The national securities exchanges also compete with the SIPs for market data customers. The Commission has repeatedly expressed its preference for competition over regulatory intervention in determining prices, products, and services in the securities markets. Specifically, in Regulation NMS, the Commission highlighted the importance of market forces in determining prices and SRO revenues and, also, recognized that current regulation of the market system “has been remarkably successful in promoting market competition in its broader forms that are most important to investors and listed companies.”
Making alternative data products available to market participants ultimately ensures increased competition in the marketplace, and constrains the ability of exchanges to charge prohibitive fees. In the event that a market participant views one exchange's top of book data fees as more or less attractive than the competition they can, and frequently do, switch between competing products. In fact, the competitiveness of the market for such top of book data products is one of the primary factors animating this proposed rule change, which is designed to allow the Exchange to further compete for this business. As mentioned above, at least one other Exchange provides a similar waiver for redistribution of market data.
The Exchange notes that the Applicable Feeds are distributed and purchased on a voluntary basis, in that neither the Exchange nor market data distributors are required by any rule or regulation to make these data products available. Distributors (including vendors) and Users can therefore discontinue use at any time and for any reason, including due to an assessment of the reasonableness of fees charged. Further, the Exchange is not required to make any proprietary data products available or to offer any specific pricing alternatives to any customers.
The Commission has long stressed the need to ensure that the equities markets are structured in a way that meets the needs of ordinary investors. For example, the Commission's strategic plan for fiscal years 2018-2022 touts “focus on the long-term interests of our Main Street investors” as the Commission's number one strategic goal.
The Exchange proposes that the proposed waivers for the Applicable Feeds only apply to Hosting Small Retail Broker Distributors and its External Hosted Subscribers for three reasons. First, the Hosting Small Retail Broker Distributor is creating a full-service offering for External Hosted Subscribers in contrast to the Small Retail Brokers under the current Program, which only provide services directly to its own retail clients. Maintaining an additional platform for External Hosted Subscribers' clients is an additional workstream for Hosted Subscribers (in contrast to Small Retail Brokers that only provide data and services directly to their retail clients) as they support additional ecosystems of business, each with its own book of retail clients. In order to incentivize the Hosting Small Retail Broker Distributors to take on the additional duties associated with hosting External Hosted Subscribers (such as managing the data, entitlements, and display of the application provided to the External Hosted Subscriber), the Exchange believes it is not unfairly discriminatory to provide a waiver of the Distribution Fee for the Hosting Small Retail Broker, as opposed to the standard discounted Distribution Fee it would normally pay under the Small Retail Broker Program.
Second, by creating this program, the Exchange is further able to reach additional retail investors. By waiving Distribution Fees for both the Hosting Small Retail Broker Distributor and its External Hosted Subscriber, both parties are incentivized to work together to provide data to retail investors. Third, as mentioned previously, the Hosting Small Retail Broker is responsible for the fees and reporting for both its own activity and that of its External Hosted Subscriber. While the Exchange is not privy to pass-through costs between Hosting Small Retail Broker Distributors and External Hosted Subscribers, this proposed pricing allows Hosting Small Retail Broker Distributors the freedom to charge or not charge External Hosted Subscribers while also appropriately charging for a service provided to an External Hosted Subscriber that is benefitting from an infrastructure developed and supported by the Hosting Small Retail Broker Distributor. The Exchange notes that the current Small Retail Broker Program prevents the Hosting Small Retail Broker Distributor from packaging this waiver as part of their overall service to their External Hosted Subscribers (as External Hosted Subscribers would be billed directly under the existing Small Retail Broker Program). Given that External Hosted Subscribers are smaller relative to other Small Retail Brokers currently participating in the Program, these costs associated with the Applicable Feeds are inherently prohibitive to the External Hosted Subscriber. Through this program, fees will not be a deterrent for Hosting Small Retail Brokers and External Hosted Subscribers to establish platforms that reach a wider scope of retail investors. Furthermore, while this Program would be effectively limited to
The Exchange believes that the proposed cap of 10,000 for the Cboe One Summary Data Feed and BYX Top Data Feed for this Program, as well as increasing this cap to 10,0000 for the Cboe One Summary Data Feed and BYX Top Data Feed for the Small Retail Broker Program is reasonable and not unfairly discriminatory as the Exchange believes it is in the best interest of all market participants to more broadly expand this in support of inclusion for more retail investors by participation in both programs by small retail brokers on a global scale.
The Exchange believes that the Distribution Fee Waivers for both the External Hosted Subscriber and the Hosting Small Retail Broker Distributor are reasonable as they represent a significant cost reduction for the Hosting Small Retail Broker Distributor to provide a hosted solution for the External Hosted Subscriber, to ultimately provide the data to the External Hosted Subscriber's retail investors. While the existing fee structure does provide a benefit of a discounted waiver for Small Retail Brokers that externally distribute the data, these discounted Distribution Fees are still incurred by both the External Hosted Subscriber and the Hosting Small Retail Broker Distributor. In an attempt to alleviate these costs, and make this data more available to retail investors, the Exchange proposes to waive the Distribution Fees for both the Hosting Small Retail Broker Distributor and the External Hosted Subscriber. With this Program, the Exchange believes it will increase market accessibility and data to investors on a global scale. Exchange Hosted Subscribers may not have the infrastructure or technical capabilities to offer market data and/or execution services to its retail investors. Through waiving these fees for the External Hosted Subscriber, the Exchange hopes to reach a broader scale of retail investors globally. Further, as discussed above, the Exchange also believes it is appropriate and not unfairly discriminatory to limit this specific credit to the External Hosted Subscriber and the Hosting Small Retail Broker Distributor given the development and maintenance the Hosting Small Retail Broker Distributor acquires to provide this data to the External Hosted Subscriber's end users.
The Exchange believes it is reasonable to not charge the External Hosted Subscriber the Data Consolidation Fee for Cboe One Summary Data for the duration of the time that they are eligible for this program. As previously discussed, the waiver of fees for the External Hosted Subscriber is intended to make this data more available to retail investors. The Exchange also believes it is appropriate and not unfairly discriminatory to limit this specific credit to the External Hosted Subscriber because, as described above, the Exchange believes by alleviating some of the barriers to entry, that Exchange Hosted Subscribers are able to bring this data and execution services to their retail investors. Of further note, the Exchange believes it is reasonable to maintain this cost for the Hosting Small Retail Broker Distributor as the Hosting Small Retail Broker Distributor is the party receiving this data from the Exchange where it is consolidated for the benefit of the Hosting Small Retail Broker Distributor.
The Exchange believes it is reasonable to set a fixed cost for Non-Professional Users fees for External Hosted Subscribers by charging a flat, fixed cost instead of charging per user to allow for additional savings. Under this structure, the External Hosted Subscriber shall still be responsible by paying the standard per User fee of a Professional Users under the Applicable Feed. The Exchange does not believe this is unfairly discriminatory as the program is based around making the Applicable Feeds available for Non-Professional Users. The Exchange also notes that it has taken a similar approach here to the NYSE Per User Access Fee, which sets a fixed cost where the data is used only for display purposes.
The Exchange does not believe that the proposed rule change would result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange operates in a highly competitive environment, and its ability to price these data products is constrained by: (i) Competition among exchanges that offer similar data products to their customers; and (ii) the existence of inexpensive real-time consolidated data disseminated by the SIPs. Top of book data is disseminated by both the SIPs and the sixteen equities exchanges. There are therefore a number of alternative products available to market participants and investors. In this competitive environment potential subscribers are free to choose which competing product to purchase to satisfy their need for market information. Often, the choice comes down to price, as broker-dealers or vendors look to purchase the cheapest top of book data product, or quality, as market participants seek to purchase data that represents significant market liquidity. In order to better compete for this segment of the market, the Exchange is proposing to reduce the cost of top of book data provided by Hosting Small Retail Broker Distributors to its External Hosted Subscribers, and in turn, their retail investors. The Exchange believes that this would facilitate greater access to such data, ultimately benefiting the retail investors that are provided access to such market data.
The Exchange does not believe that this price reduction would cause any unnecessary or inappropriate burden on intermarket competition as other exchanges and data vendors are free to lower their prices to better compete with the Exchange's offering. Indeed, as explained in the basis section of this proposed rule change, the Exchange's decision to (i) waive the Distribution Fee for the Hosting Small Retail Broker and the External Hosted Subscriber and (ii) waiving the Consolidation Fee (when applicable) for the External Hosted Subscriber and (iii) setting a fixed cost for the Non-Professional Users for the External Hosted Subscriber is itself a competitive response to different fee structures available on
The Exchange neither solicited nor received comments on the proposed rule change.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1)
The Exchange proposes to proposes to [sic] amend the Connectivity Fee Schedule to amend the list of third party systems and third party data feeds to which Users can connect, related fees and a reference to who can charge redistribution fees. The proposed rule change is available on the Exchange's website at
In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text
The Exchange proposes to amend the Connectivity Fee Schedule to amend the list of third party systems and third party data feeds to which Users
Currently, Users are offered connectivity to the execution systems of third party markets and other service providers (“Third Party Systems”) and connectivity to data feeds from third party markets and other content service providers (“Third Party Data Feeds”) at the Mahwah, New Jersey data center (“MDC”).
The Exchange proposes to make the following changes to the list of Third Party Systems:
• Add Blue Ocean ATS (BOATS), Canadian Imperial Bank of Commerce (CIBC), Long Term Stock Exchange,
• To reflect Cboe Canada`s integration of Cboe Canada and Cboe MATCHNow into one entity,
To make these changes, the list of available Third Party Systems would be amended as follows (proposed deletions bracketed, proposed additions italicized):
The Exchange does not propose to change the monthly recurring fee Users pay for access to each Third Party System. Although the proposed changes to the list of Third Party Systems would combine Cboe MATCHNow with Cboe Canada to reflect their integration by Cboe Canada, thereby removing Cboe MATCHNow from the current list of Third Party Systems, no User would be charged more as a consequence. A User would continue to be able to choose which systems it wants from any Third Party System. It would not have to receive any systems, or pay for any bandwidth, that it did not choose.
The Exchange expects that the connectivity partner of BOATS will charge a redistribution fee, which will be passed through to the User. Accordingly, the Exchange proposes to add “and their partners” to the first sentence of the second paragraph under “Connectivity to Third Party Data Feeds,” which describes who can charge redistribution fees, so that it includes connectivity partners.
The Exchange proposes to make the following changes to the list of Third Party Data Feeds (together, the “Proposed Third Party Data Feeds”):
• Add the following Third Party Data Feeds with the following fees for monthly recurring connectivity:
○ Blue Ocean ATS (BOATS), for $750 a month;
○ Cboe CFE Futures, for $1,500 per month;
○ Long Term Stock Exchange, for $2,600 per month;
○ MEMX Equities, for $2,000 per month;
○ MEMX Options, for $2,000 per month;
○ Small Exchange, for $1,000 per month.
• To reflect Cboe Canada's integration of Cboe Canada and Cboe MATCHNow into one entity,
• Combine Nasdaq Stock Market with Nasdaq ISE under the name “Nasdaq Stock Market” and change the combined monthly recurring connectivity fee to $3,000 per month.
• Combine TMX Group and Montreal Exchange
In addition, the Exchange proposes to change the monthly recurring connectivity fee per Third Party Data Feed for 18 feeds.
To make these changes, the text under “Connectivity to Third Party Data Feeds” and list of available Third Party Data Feeds would be amended as follows (proposed deletions bracketed, proposed additions italicized):
Third Party Data Feed providers
The Exchange would provide access to the Proposed Third Party Systems as conveniences to Users.
As with the current Third Party Systems, Users would connect to the Proposed Third Party Systems over the internet protocol (“IP”) network, a local area network available in the MDC.
As with the current Third Party Systems, in order to obtain access to a Proposed Third Party System, the User would enter into an agreement with the relevant proposed third party, pursuant to which it would charge the User for access to the Proposed Third Party System. The Exchange would then enable unicast connectivity between the User and the Proposed Third Party System over the IP network.
The Exchange has no affiliation with the providers of any of the Proposed Third Party Systems. Establishing a User's access to a Proposed Third Party System would not give the Exchange any right to use the Proposed Third Party System. Connectivity to a Proposed Third Party System would not provide access or order entry to the Exchange's execution system, and a User's connection to a Proposed Third Party System would not be through the Exchange's execution system.
The Exchange proposes to charge the same monthly recurring fee for connectivity to the Proposed Third Party Systems that it does for the current Third Party Systems. Specifically, when a User requested access to a Proposed Third Party System, it would identify the applicable third party and what bandwidth connection would be required. The fees for such bandwidth connection would vary based on the size of the connection, not on the particular Third Party System the User chooses. The Exchange is not proposing to change the pricing of any of these bandwidth connections; the Exchange is simply expanding the list of Third Party Systems that Users may access via these bandwidth connections.
The Exchange would provide connectivity to the Proposed Third Party Data Feeds as a convenience to Users.
As with the existing connections to Third Party Data Feeds, the Exchange would receive a Proposed Third Party
As with the existing connections to Third Party Data Feeds, in order to connect to a Proposed Third Party Data Feed, a User would enter into a contract with the third party content service provider, pursuant to which it may charge the User for the data feed. The Exchange would receive the Proposed Third Party Data Feed in remote locations and transport it over its fiber optic network to the MDC. After the content service provider and User entered into an agreement and the Exchange received authorization from the content service provider, the Exchange would retransmit the data to the User over the User's port. The Exchange would charge the User for connectivity to the Proposed Third Party Data Feed. A User would only receive, and would only be charged the fee for, connectivity to a Proposed Third Party Data Feed for which it entered into a contract.
The Exchange has no affiliation with the sellers of the Proposed Third Party Data Feeds and would have no right to use those feeds other than as a redistributor of the data. None of the Proposed Third Party Data Feeds would provide access or order entry to the Exchange's execution system. The Proposed Third Party Data Feeds would not provide access or order entry service to the execution systems of the third parties generating the feeds. The Exchange would receive the Proposed Third Party Data Feeds via arms-length agreements and would have no inherent advantage over any other distributor of such data.
The proposed rule change would not apply differently to distinct types or sizes of market participants. Rather, it would apply to all Users equally. As is currently the case, the purchase of any colocation service is completely voluntary and the Connectivity Fee Schedule is applied uniformly to all Users.
Access to most of the Proposed Third Party Systems and connectivity to most of the Proposed Third Party Data Feeds were requested by Users, but the Exchange believes that it would gain at most a handful of new customers among Users due to the proposed change.
The Commission has repeatedly expressed its preference for competition over regulatory intervention in determining prices, products, and services in the securities markets. Specifically, in Regulation NMS, the Commission highlighted the importance of market forces in determining prices and SRO revenues and, also, recognized that current regulation of the market system “has been remarkably successful in promoting market competition in its broader forms that are most important to investors and listed companies.”
The Exchange's provision of access to the Proposed Third Party Systems (“Access”) and connectivity to the Proposed Third Party Data Feeds (“Connectivity”) is subject to competition from access and connectivity that Users can obtain through the third-party telecommunications service providers that have installed their equipment in the MDC's two meet-me-rooms (“Telecoms”).
More specifically, a User may access a Proposed Third Party System by, first, entering into an agreement with the relevant proposed third party, pursuant to which the third party would charge the User for access to the Proposed Third Party System, and second, accessing the Proposed Third Party System through one of the Telecoms. Likewise, a User may connect to a Proposed Third Party Data Feed by, first, entering into a contract with the third party content service provider, if required, pursuant to which the third party may charge the User for the Proposed Third Party Data Feed, and second, connecting to the Proposed Third Party Data Feed through one of the Telecoms.
In both cases, the User would be able to access any of the Proposed Third Party Systems or connect to any of the Proposed Third Party Feeds independent of the Access or Connectivity provided by the Exchange. Users that already have or establish access or connectivity are not at any competitive disadvantage created by the Exchange.
The proposed change is not otherwise intended to address any other issues relating to colocation services or related fees, and the Exchange is not aware of any problems that Users would have in complying with the proposed change.
The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,
The Exchange believes that the proposed rule change is reasonable.
In considering the reasonableness of proposed services and fees, the Commission's market-based test considers “whether the exchange was subject to significant competitive forces in setting the terms of its proposal . . . , including the level of any fees.”
As described above,
Because Users are third parties and are not required to make such information public, the Exchange does not have visibility into how many Users currently access the Proposed Third Party Systems or connect to the Proposed Third Party Data Feeds independently, as described above.
Such Users compete, or would compete, with the Exchange's Access and Connectivity and exert, or would exert, significant competitive forces on the Exchange in setting the terms of its proposal, including the level of the Exchange's proposed fees.
The Exchange does not believe that FIDS would have any competitive advantage over Users that establish independent access to Proposed Third Party Systems or connectivity to Proposed Third Party Data Feeds. The Exchange's proposed service for Access and Connectivity does not have (a) any special access to the Proposed Third Party Systems and Proposed Third Party Data Feeds or (b) advantage within the MDC, as all distances in the MDC are normalized.
Moreover, the Exchange does not believe that FIDS would have any competitive advantage because it would charge for connectivity only, not the Proposed Third Party System or Proposed Third Party Data Feed itself. All Users that connect to a Proposed Third Party System or Proposed Third Party Data Feed, whether they elect to connect using the Exchange's proposed service or not, would have to pay a third party for the Proposed Third Party System or Proposed Third Party Data Feed.
Nor does the Exchange believe that FIDS has a competitive advantage by virtue of the fact that ICE owns and operates the MDC's meet-me-rooms. Users purchasing Access or Connectivity—like Users of any other colocation service—would require a circuit connecting out of the MDC, and in most cases, such circuits are provided by Telecoms.
If anything, the Exchange would be subject to a competitive disadvantage vis-à-vis Users regarding access to the Proposed Third Party Systems or connectivity to the Proposed Third Party Data Feeds. Users that choose to independently establish access or connectivity may negotiate terms with the Telecoms through whom such access and connectivity is delivered, in response to competitive forces. Such prices are not required to be filed by any party with the Commission. In contrast, the Exchange's service and pricing would be standardized as set out in this filing, and the Exchange would be unable to respond to pricing pressure from its competitors without seeking a formal fee change in a filing before the Commission.
In sum, because the Exchange is subject to significant competitive forces in setting the terms on which it offers
The Exchange believes that it is reasonable to add “and their partners” to the second paragraph under “Connectivity to Third Party Data Feeds” (“Proposed Pass-Through Edit”) as that would add clarity as to who may charge redistribution fees, making the paragraph more precise.
The Exchange believes that it is reasonable to make the proposed changes, as connectivity to the Proposed Third Party Systems and access to the Proposed Third Party Data Feeds was generally requested by Users.
The Exchange believes that the proposed rule change is equitable.
The Exchange believes that the fees for connectivity to the Proposed Third Party Data Feeds are an equitable allocation of fees. The Exchange recognizes that the monthly recurring fee Users pay for access to the below Proposed Third Party Data Feeds will increase if they connect to one, but not both, of the current Third Data Feeds, but believes that they are equitable, for the following reasons:
• The combination of Cboe MATCHNow into Cboe Canada reflects the integration by Cboe Canada of those two entities into one entity.
• Nasdaq Stock Market and Nasdaq ISE are proposed to be combined. With this combination, Nasdaq ISE as well as Nasdaq BX, Nasdaq GEMX, Nasdaq MRX, Nasdaq PHLX and the Nasdaq Stock Market—which are all distinct self-regulatory organizations—will all be available under “Nasdaq Stock Market”. The proposed fee for the combination of the Nasdaq Stock Market and Nasdaq ISE is equal to the sum of the current fees for those feeds.
• The Montreal Exchange is a subsidiary of TMX Group.
The Exchange believes it is equitable to propose to increase the fee for ICE Data Services Consolidated Feed Shared Farm >1 Gb to $2,000
The Exchange does not propose to change the monthly recurring fee Users pay for access to each Third Party System. Although the proposed changes to the list of Third Party Systems would combine Cboe MATCHNow with Cboe Canada to reflect their integration by Cboe Canada, thereby removing Cboe MATCHNow from the current list of Third Party Systems, no User would be charged more as a consequence. A User would continue to be able to choose which systems it wants from any Third Party System. It would not have to receive any systems, or pay for any bandwidth, that it did not choose.
The Exchange believes that the Proposed Pass-Through Edit is equitable as it would add clarity as to who may charge redistribution fees, making the paragraph more precise and thereby ensuring the accuracy of, and adding clarity and transparency to, the Connectivity Fee Schedule.
Without this proposed rule change, Users would have fewer options for connectivity to the Proposed Third Party Systems and Proposed Third Party Data Feeds. By offering Access and Connectivity, the Exchange gives each User additional options for addressing its needs, responding to User demand for options. Offering these additional services would help each User tailor its data center operations to the requirements of its business operations by allowing it to select the form and latency of connectivity that best suits its needs. Users that do not opt to utilize the Exchange's proposed Access or Connectivity would still be able to access Proposed Third Party Systems or connect to Proposed Third Party Data Feeds using Telecoms.
The Exchange believes that the proposed change is equitable because it will result in fees being charged only to Users that voluntarily select to receive the corresponding services and because those services will be available to all Users.
Furthermore, the Exchange believes that the services and fees proposed herein are equitably allocated because, in addition to the services being completely voluntary, they are available to all Users on an equal basis (
The Exchange believes that the proposed rule change is not unfairly discriminatory, for the following reasons.
The Exchange believes that the Proposed Pass-Through Edit is not unfairly discriminatory as it would add clarity as to who may charge redistribution fees, making the paragraph more precise and thereby ensuring the accuracy of, and adding clarity and transparency to, the Connectivity Fee Schedule to all market participants.
Without this proposed rule change, Users would have fewer options for access to Proposed Third Party Systems or connectivity to Proposed Third Party Data Feeds. The proposed change would provide Users with an additional choice with respect to the form and optimal latency of the access they use to connect to Proposed Third Party Systems or connectivity to Proposed Third Party Data Feeds, allowing a User to select the connectivity that better suits its needs, helping it tailor its colocation operations to the requirements of its
The Exchange believes that the proposed change is not unfairly discriminatory because it will result in fees being charged only to Users that voluntarily select to receive the corresponding services and because those services will be available to all Users. Furthermore, the Exchange believes that the services and fees proposed herein are not unfairly discriminatory because, in addition to the services being completely voluntary, they are available to all Users on an equal basis (
For all these reasons, the Exchange believes that the proposal is consistent with the Act.
In accordance with Section 6(b)(8) of the Act,
The Exchange does not believe that FIDS would have any competitive advantage over Users that establish independent access to Proposed Third Party Systems or connectivity to Proposed Third Party Data Feeds. The Exchange's proposed service for Access and Connectivity does not have (a) any special access to the Proposed Third Party Systems and Proposed Third Party Data Feeds or (b) advantage within the MDC, as all distances in the MDC are normalized.
Moreover, the Exchange does not believe that FIDS would have any competitive advantage because it would charge for connectivity only, not the Proposed Third Party System or Proposed Third Party Data Feed itself. All Users that connect to a Proposed Third Party System or Proposed Third Party Data Feed, whether they elect to connect using the Exchange's proposed service or not, would have to pay a third party for the Proposed Third Party System or Proposed Third Party Data Feed.
Nor does the Exchange believe that FIDS has a competitive advantage over any third-party competitors offering access to the Proposed Third Party Systems or connectivity to the Proposed Third Party Data Feeds by virtue of the fact that ICE owns and operates the MDC's meet-me-rooms. Users purchasing Access or Connectivity—like Users of any other colocation service—would require a circuit connecting out of the MDC, and in most cases, such circuits are provided by third-party Telecoms. Currently, 16 Telecoms operate in the meet-me-rooms and provide a variety of circuit choices. It is in the Exchange's best interest to set the fees that Telecoms pay to operate in the meet-me-rooms at a reasonable level
If anything, the Exchange would be subject to a competitive disadvantage vis-à-vis Users regarding access to the Proposed Third Party Systems or connectivity to the Proposed Third Party Data Feeds. Users that choose to independently establish access or connectivity may negotiate terms with the Telecoms or other Users through whom such access and connectivity is delivered, in response to competitive forces. Such prices are not required to be filed by any party with the Commission. In contrast, the Exchange's service and pricing would be standardized as set out in this filing, and the Exchange would be unable to respond to pricing pressure from its competitors without seeking a formal fee change in a filing before the Commission.
The Proposed Pass-Through Edit would not impose any burden on competition. It is not intended to address competitive issues but rather is concerned solely with adding clarity as to who may charge redistribution fees.
The changes would not put any market participants at a relative disadvantage compared to other market participants or penalize one or more categories of market participants in a manner that would impose an undue burden on competition.
No written comments were solicited or received with respect to the proposed rule change.
The Exchange has filed the proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act
At any time within 60 days of the filing of such proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings under Section 19(b)(2)(B)
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
On May 12, 2025, Cboe BZX Exchange, Inc. (“BZX”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1)
Section 19(b)(2) of the Act
The Commission finds it appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change and the issues raised therein. Accordingly, the Commission, pursuant to Section 19(b)(2) of the Act,
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
On January 31, 2025, Texas Stock Exchange LLC (“TXSE”) filed with the Securities and Exchange Commission (“Commission”) a Form 1 application (“Form 1”) under the Securities Exchange Act of 1934 (“Act”), seeking
Section 19(a)(1) of the Act
TXSE proposes to operate a fully automated limit order book for orders to buy and sell securities with a continuous automated matching function. TXSE would execute orders in price/time priority, and would “rank equally priced trading interest within the System in time priority in the following order: (i) The portion of a Limit Order with a Displayed instruction; (ii) Limit Orders with a Non-Displayed instruction (including the Reserve Quantity of Limit Orders); and (iii) Orders with a Peg instruction, ranked in priority based upon the time such orders were initially received by the System.”
A more detailed description of the manner of operation of TXSE's proposed system can be found in Exhibit E to TXSE's Form 1. The proposed rulebook for the proposed exchange can be found in Exhibit B to TXSE's Form 1. A complete set of forms concerning membership and access can be found in Exhibit F to TXSE's Form 1.
With respect to governance, TXSE would be a subsidiary of its parent company, TXSE Group Inc. (“TXSE Group”), which would directly hold 100% of the equity of TXSE. In turn, TXSE Group would be owned by a group of investors that are party to a stockholders' agreement (“Stockholders' Agreement”). The Stockholders' Agreement would provide a 40% cap on beneficial ownership of stock of TXSE Group by any person (alone or together with its related persons) and would further cap beneficial ownership of TXSE Group by members of TXSE at 20%.
The governing documents for TXSE can be found in Exhibit A to TXSE's Form 1, and a listing of the officers and directors of TXSE can be found in Exhibit J. The governing documents for TXSE Group, including the Stockholders' Agreement, can be found in Exhibit C to TXSE's Form 1.
As required by Section 19(a)(1)(B) of the Act,
Under Section 19(a)(1) of the Act, the Commission shall grant an application for registration as a national securities exchange if the Commission finds that the requirements of the Act and the rules and regulations thereunder with respect to the applicant are satisfied. The Commission shall deny such application for registration if it does not make such a finding.
The Commission requests that interested persons provide written views and data with respect to TXSE's Form 1 and any relevant issues.
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
By the Commission.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
The Exchange proposes to establish fees for Industry Members
The text of the proposed rule change is available on the Exchange's website at
In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements.
On July 11, 2012, the Commission adopted Rule 613 of Regulation NMS, which required the self-regulatory organizations (“SROs”) to submit a national market system (“NMS”) plan to create, implement and maintain a consolidated audit trail that would capture customer and order event information for orders in NMS securities across all markets, from the time of order inception through routing, cancellation, modification or execution.
The CAT Funding Model provides a framework for the recovery of the costs to create, develop and maintain the CAT, including providing a method for allocating costs to fund the CAT among Participants and Industry Members. The CAT Funding Model establishes two categories of fees: (1) CAT fees assessed by CAT LLC and payable by certain Industry Members to recover a portion of historical CAT costs previously paid by the Participants (“Historical CAT Assessment” fees); and (2) CAT fees assessed by CAT LLC and payable by Participants and Industry Members to fund prospective CAT costs (“CAT Fees”).
Under the CAT Funding Model, Participants, CEBBs and CEBSs are subject to fees designed to cover the ongoing budgeted costs of the CAT, as determined by the Operating Committee. “The Operating Committee will establish fees (`CAT Fees') to be payable by Participants and Industry Members with regard to CAT costs not previously paid by the Participants (`Prospective CAT Costs').”
The CAT Fees to be paid by CEBBs and CEBSs are designed to contribute toward the recovery of two-thirds of the budgeted CAT costs for the relevant period.
CAT LLC proposes to charge CEBBs and CEBSs (as described in more detail below) CAT Fee 2025-2 to recover the reasonably budgeted CAT costs for the period from July 1, 2025 through December 31, 2025 in accordance with the CAT Funding Model. To implement this fee on behalf of CAT LLC, the CAT NMS Plan requires the Participants to “file with the SEC under Section 19(b) of the Exchange Act any such fees on Industry Members that the Operating Committee approves, and such fees shall be labeled as `Consolidated Audit Trail Funding Fees.' ”
CAT Fee 2025-2 will be charged to each CEBB and CEBS for each applicable transaction in Eligible Securities.
(a) with respect to a transaction in an Eligible Security that is executed on an exchange, the Industry Member identified as the Industry Member responsible for the order on the buy-side of the transaction and the Industry Member responsible for the sell-side of the transaction in the equity order trade event and option trade event in the CAT Data submitted to the CAT by the relevant exchange pursuant to the Participant Technical Specifications; and (b) with respect to a transaction in an Eligible Security that is executed otherwise than on an exchange and required to be reported to an equity trade reporting facility of a registered national securities association, the Industry Member identified as the executing broker and the Industry Member identified as the contra-side executing broker in the TRF/ORF/ADF transaction data event in the CAT Data submitted to the CAT by FINRA pursuant to the Participant Technical Specifications; provided, however, in those circumstances where there is a non-Industry Member identified as the contra-side executing broker in the TRF/ORF/ADF transaction data event or no contra-side executing broker is identified in the TRF/ORF/ADF transaction data event, then the Industry Member identified as the executing broker in the TRF/ORF/ADF transaction data event would be treated as CAT Executing Broker for the Buyer and for the Seller.
The following fields of the Participant Technical Specifications indicate the CAT Executing Brokers for the transactions executed on an exchange:
In addition, the following fields of the Participant Technical Specifications would indicate the CAT Executing Brokers for the transactions executed otherwise than on an exchange:
The Operating Committee determined the Fee Rate to be used in calculating CAT Fee 2025-2 (“Fee Rate 2025-2”) by dividing the reasonably budgeted CAT costs (“Budgeted CAT Costs 2025-2”) for the period from July 1, 2025 through December 31, 2025 (“CAT Fee 2025-2 Period”) by the reasonably projected total executed share volume of all transactions in Eligible Securities for the six-month recovery period, as discussed in detail below.
CAT LLC proposes to implement CAT Fee 2025-2 as the third CAT Fee related to Prospective CAT Costs. CAT LLC proposes to commence CAT Fee 2025-2 during the year, rather than at the beginning of the year. Accordingly, CAT Fee 2025-2 “would be calculated as described in paragraph (II)” of Section 11.3(a)(i)(A) of the CAT NMS Plan,
Under the CAT NMS Plan, for purposes of calculating CAT Fees, executed equivalent shares in a transaction in Eligible Securities will be reasonably counted as follows: (1) each executed share for a transaction in NMS Stocks will be counted as one executed equivalent share; (2) each executed contract for a transaction in Listed Options will be counted based on the multiplier applicable to the specific Listed Options (
The CAT NMS Plan states that “[t]he budgeted CAT costs for the year shall be comprised of all reasonable fees, costs and expenses reasonably budgeted to be incurred by or for the Company in connection with the development, implementation and operation of the CAT as set forth in the annual operating budget approved by the Operating Committee pursuant to Section 11.1(a) of the CAT NMS Plan, or as adjusted during the year by the Operating Committee.”
In accordance with the requirements under the CAT NMS Plan, the Operating Committee approved an annual budget for 2025 for CAT LLC (“Original 2025 CAT Budget”) in November 2024.
As described in detail below, the Budgeted CAT Costs 2025-2 would be $60,726,412. CEBBs collectively will be responsible for one-third of the Budged [
The following describes in detail the Budgeted CAT Costs 2025-2 for CAT Fee 2025-2. The following cost details are provided in accordance with the requirement in the CAT NMS Plan to provide in the fee filing the following:
Each of the costs described below are reasonable, appropriate and necessary for the creation, implementation and maintenance of CAT.
The following table breaks down the Budgeted CAT Costs 2025-2 into the categories set forth in Section 11.3(a)(iii)(B) of the CAT NMS Plan.
To the extent that CAT LLC enters into notes with Participants or others to pay costs incurred during the period in which CAT Fee 2025-2 is in effect, CAT LLC will use the proceeds from CAT Fee 2025-2 and the related Participant CAT fees to repay such notes.
The following table compares the annual budgeted CAT costs as set forth in the updated annual CAT budget for 2024 approved by the Operating Committee in July 2024 (“Updated 2024 CAT Budget”),
In addition, the following table compares the first quarter of the Original 2025 CAT Budget with the first quarter of the Updated 2025 CAT Budget. The Updated 2025 CAT Budget includes actual costs for January, February and March 2025, whereas the Original 2025 CAT Budget included budgeted costs for these three months. The variance from the first quarter of the Original 2025 CAT Budget to the actuals for the first quarter of 2025 (as set forth in the Updated 2025 CAT Budget) in the last column of the following chart are used in this filing in supporting the reasonableness of the estimates for each category of costs.
Section 11.3(a)(iii)(B)(B)(1) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the cloud hosting services costs set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that included $82,222,276 in technology costs for cloud hosting services for the CAT Fee 2025-2 Period. The technology costs for cloud hosting services represent costs reasonably budgeted to be incurred for services provided by the cloud services provider for the CAT, Amazon Web Services, Inc. (“AWS”) during the CAT Fee 2025-2 Period.
In the agreement between CAT LLC and the Plan Processor for the CAT (“Plan Processor Agreement”), FINRA CAT, LLC (“FCAT”), AWS was named as the subcontractor to provide cloud hosting services. Under the Plan Processor Agreement, CAT LLC is required to pay FCAT the fees incurred by the Plan Processor for cloud hosting services provided by AWS as FCAT's subcontractor on a monthly basis for the cloud hosting services, and FCAT, in turn, pays such fees to AWS. The fees for cloud hosting services were negotiated by FCAT on an arm's length basis with the goals of managing costs and receiving services required to comply with the CAT NMS Plan and Rule 613, taking into consideration a variety of factors, including the expected volume of data, the breadth of services provided and market rates for similar services. Services provided by AWS include storage services, databases, compute services and other services (such as networking, management tools and DevOps tools), as well as various environments for CAT, such as development, performance testing, test, and production environments. FCAT utilizes such cloud hosting services for a broad array of services for the CAT, such as data ingestion, data management, and analytic tools for the CAT. AWS performs cloud hosting services for both the CAT transaction database as well as the CAT Customer and Account Information System (“CAIS”). It is anticipated that such cloud hosting services will continue during the CAT Fee 2025-2 Period.
The cost for AWS cloud services for the CAT is a function of the volume of CAT Data, largely as a result of the processing and storage of the CAT Data.
CAT LLC estimates that the budget for cloud hosting services costs during the CAT Fee 2025-2 Period will be approximately $82,222,276. The budget for cloud hosting services costs during the CAT Fee 2025-2 Period is calculated based on the Updated 2025 CAT Budget. Specifically, this estimate was calculated by adding the budgeted amounts for cloud hosting services costs for the third and fourth quarters of 2025 as set forth in the Updated 2025 CAT Budget.
CAT LLC estimated the budget for the cost for cloud hosting services for the
This process for estimating the budget for cloud hosting services costs for the CAT Fee 2025-2 Period is the same process by which CAT LLC estimated the cloud hosting services costs for the Original 2025 CAT Budget. The Original 2025 CAT Budget estimated a budget for cloud hosting services of $39,640,542 for the first quarter of 2025. The actual costs for cloud hosting services for the first quarter of 2025, which are set forth in the Updated 2025 CAT Budget, were $36,357,017. Therefore, the variance between budgeted and actual cloud hosting services costs for this period was an approximate decrease of 8%. Accordingly, CAT LLC believes that the process for estimating the budgeted cloud hosting services costs for the CAT Fee 2025-2 Period is reasonable.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for cloud hosting services costs from the prior CAT Fee filing. Accordingly, this filing describes the changes in the cloud hosting services costs from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budgeted costs for cloud hosting services as set forth in the Original 2025 CAT Budget were $182,594,630, and the annual 2025 budgeted costs for cloud hosting services as set forth in the Updated 2025 CAT Budget are $159,230,937. Accordingly, budgeted annual costs for cloud hosting services decreased by $23,363,693 from the Original 2025 CAT Budget to the Updated 2025 CAT Budget, which is an approximate 13% reduction in cloud hosting services costs for the full year of 2025.
Correspondingly, the budgeted costs for cloud hosting services for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget were $97,748,713,
The decrease in costs for cloud hosting services from the Original 2025 CAT Budget to the Updated 2025 CAT Budget, both for the full year for 2025 and for the third and fourth quarters of 2025, reflects (1) a decrease in costs related to changes made pursuant to the Cost Savings Amendment; (2) cost decreases related to optimizations resulting in reduced procesing [
Section 11.3(a)(iii)(B)(B)(1) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the operating fees set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that included $15,453,942 in technology costs for operating fees for the CAT Fee 2025-2 Period. Operating fees are those fees paid by CAT LLC to FCAT as the Plan Processor to operate and maintain the CAT and to perform business operations related to the system, including compliance, security, testing, training, communications with the industry (
• Provide the CAT-related functions and services as the Plan Processor as required by SEC Rule 613 and the CAT NMS Plan in connection with the operation and maintenance of the CAT;
• Address compliance items, including drafting CAT policies and procedures, and addressing Regulation SCI requirements;
• Provide support to the Operating Committee, the Compliance Subcommittee and CAT working groups;
• Assist with interpretive efforts, exemptive requests and amendments regarding the CAT NMS Plan;
• Oversee the security of the CAT;
• Monitor the operation of the CAT, including with regard to Participant and Industry Member reporting;
• Provide support to subcontractors under the Plan Processor Agreement;
• Provide support in discussions with the Participants and the SEC and its staff;
• Operate the FINRA CAT Helpdesk;
• Facilitate communications with the industry, including via FAQs, CAT Alerts, meetings, presentations and webinars;
• Administer the CAT website and all of its content;
• Maintain cyber security insurance related to the CAT;
• Assist with billing, collection and other CAT fee-related activity; and
• Provide technical support and assistance with connectivity, data access, and user support, including the use of CAT Data and query tools, for Participants and the SEC staff.
CAT LLC calculated the budget for the FCAT technology costs for operating fees for the CAT Fee 2025-2 Period based on the recurring monthly operating fees under the Plan Processor Agreement.
As discussed above, CAT LLC estimated the budget for the operating fees during the CAT Fee 2025-2 Period based on monthly rates set forth in the Plan Processor Agreement and the agreement with Algoseek. CAT LLC also recognized that the operating fees are generally consistent throughout the year. This process for estimating the budget for the operating fees for the CAT Fee 2025-2 Period is the same process by which CAT LLC estimated the operating fees for the Original 2025 CAT Budget. The Original 2025 CAT Budget estimated a budget for operating fees of $7,662,270 for the first quarter of 2025.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for operating fees from the prior CAT Fee filing. Accordingly, this filing describes the changes from the operating fees set forth in the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budgeted costs for operating fees as set forth in the Original 2025 CAT Budget were $30,831,330,
Correspondingly, the budgeted costs for operating fees for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget were $15,446,040,
Section 11.3(a)(iii)(B)(B)(1) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the CAIS operating fees set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that included $10,374,924 in technology costs for CAIS operating fees for the CAT Fee 2025-2 Period. CAIS operating fees represent the fees paid to FCAT for services provided with regard to the operation and maintenance of CAIS, and to perform the business operations related to the system, including compliance, security, testing, training, communications with the industry (
During the CAT Fee 2025-2 Period, it is anticipated that FCAT will provide CAIS-related services. Under the Plan Processor Agreement with FCAT, CAT LLC is required to pay FCAT for CAIS-related services provided by FCAT on a monthly basis. CAT LLC negotiated the fees for FCAT's CAIS-related services on an arm's length basis with the goals of managing costs and receiving services required to comply with the CAT NMS Plan, taking into consideration a variety of factors, including the services to be provided and market rates for similar types of activity. During the CAT Fee 2025-2 Period, it is anticipated that FCAT will continue to provide services relating to the ongoing operation, maintenance and support of CAIS.
CAT LLC estimates that the budget for CAIS operating fees during the CAT Fee 2025-2 Period will be approximately $10,374,924. The budget for CAIS operating fees during the CAT Fee 2025-2 Period is calculated based on the Updated 2025 CAT Budget. Specifically, this estimate was calculated by adding the budgeted amounts for CAIS operating fees for the third and fourth quarters of 2025 as set forth in the Updated 2025 CAT Budget.
CAT LLC calculated the budget for FCAT's CAIS-related services for the CAT Fee 2025-2 Period based on the recurring monthly CAIS operating fees under the Plan Processor Agreement. This process for estimating the budget for the CAIS operating fees for the CAT Fee 2025-2 Period is the same process by which CAT LLC estimated the CAIS operating fees for the Original 2025 CAT Budget. The Original 2025 CAT Budget
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for CAIS operating fees from the prior CAT Fee filing. Accordingly, this filing describes the changes in CAIS operating fees from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
CAIS operating fees are based on a recurring monthly rate payable to FCAT and are unchanged from the prior CAT Fee filing. The annual 2025 budgeted costs for CAIS operating fees as set forth in the Original 2025 CAT Budget were $20,749,848, and the annual 2025 budgeted costs for CAIS operating fees as set forth in the Updated 2025 CAT Budget are $20,749,848. Accordingly, the budgeted annual costs for CAIS operating fees are the same for both the Original 2025 CAT Budget and the Updated 2025 CAT Budget.
Correspondingly, the budgeted costs for CAIS operating fees for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget were $10,374,924, and the budgeted costs for CAIS operating fees for the third and fourth quarters of 2025 as set forth in the Updated 2025 CAT Budget are $10,374,924.
Accordingly, there were no changes in the line item for CAIS operating fees from the prior CAT Fee filing.
Section 11.3(a)(iii)(B)(B)(1) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the change request fees set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that included $500,000 in technology costs for change request fees for the CAT Fee 2025-2 Period. The technology costs related to change request fees include costs related to certain modifications, upgrades or other changes to the CAT.
Change requests are standard practice and necessary to reflect operational changes, including changes related to new market developments, such as new market participants. In general, if CAT LLC determines that a modification, upgrade or other changes to the functionality or service is necessary and appropriate, CAT LLC will submit a request for such a change to the Plan Processor. The Plan Processor will then respond to the request with a proposal for implementing the change, including the cost (if any) of such a change. CAT LLC then determines whether to approve the proposed change.
The change request budget line is established to include expected costs to be incurred in which the nature of the costs (
During the CAT Fee 2025-2 Period, it is anticipated that CAT LLC will engage FCAT to pursue certain change requests in accordance with the Plan Processor Agreement. The budget for change requests for the CAT Fee 2025-2 Period includes a placeholder of $500,000 for potential change request fees that may be necessary in accordance with the Plan Processor Agreement. The placeholder amount was determined based on prior experience with change requests related to the CAT.
CAT LLC estimates that the budget for change requests during the CAT Fee 2025-2 Period will be approximately $500,000. The budget for change requests during the CAT Fee 2025-2 Period is calculated based on the Updated 2025 CAT Budget. Specifically, this estimate was calculated by adding the budgeted amounts for the change requests for the third and fourth quarters of 2025 as set forth in the Updated 2025 CAT Budget.
CAT LLC estimated the budget for the potential change requests for the CAT Fee 2025-2 Period based on, among other things, a review of past change requests and potential future change request needs, as well as discussions with FCAT. This process for estimating the budget for the change requests for the CAT Fee 2025-2 Period is the same process by which CAT LLC estimated the change requests cost for the Original 2025 CAT Budget. The Original 2025 CAT Budget estimated a change request budget of $0 for the the [
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for change request fees from the prior CAT Fee filing. Accordingly, this filing describes the changes in the change request fees from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budgeted costs for change requests as set forth in the Original 2025 CAT Budget were $750,000, and the annual 2025 budgeted costs for change requests as set forth in the Updated 2025 CAT Budget are $750,000. Accordingly, budgeted annual costs for change requests are the same for both the Original 2025 CAT Budget and the Updated 2025 CAT Budget.
Correspondingly, the budgeted costs for change requests for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget were $500,000, and the budgeted costs for change request for the third and fourth quarters of 2025 as set forth in the Updated 2025 CAT Budget are
Accordingly, there were no changes in the line item for change requests from the prior CAT Fee filing.
Section 11.3(a)(iii)(B)(B)(1) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the capitalized developed technology costs set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that includes $0 in technology costs for capitalized developed technology costs for the CAT Fee 2025-2 Period. This category of costs includes the budget for capitalizable application development costs incurred in the development of the CAT. It is anticipated that such costs will include certain costs related to the software license fee for CAIS in accordance with the Plan Processor Agreement with FCAT, as well as costs related to a set of technology changes to be implemented by FCAT.
CAT LLC estimates that the budget for capitalized developed technology costs during the CAT Fee 2025-2 Period will be approximately $0. The budget for capitalized developed technology costs during the CAT Fee 2025-2 Period is calculated based on the Updated 2025 CAT Budget. Specifically, this estimate was calculated by adding the budgeted amounts for capitalized developed technology costs for the third and fourth quarters of 2025 as set forth in the Updated 2025 CAT Budget.
CAT LLC estimated the budget for capitalized developed technology costs for the CAT Fee 2025-2 Period based on an analysis of a variety of factors, including information related to potential technology costs and related contractual and Plan requirements, and discussions with FCAT regarding such potential technology costs. This process for estimating the budget for capitalized developed technology costs for the CAT Fee 2025-2 Period is the same process by which CAT LLC estimated the capitalized developed technology costs for the Original 2025 CAT Budget. The Original 2025 CAT Budget estimated a budget for capitalized developed technology costs of $3,923,360 for the first quarter of 2025.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for capitalized developed technology costs from the prior CAT Fee filing. Accordingly, this filing describes the changes in the capitalized developed technology costs from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budget for capitalized developed technology costs as set forth in the Original 2025 CAT Budget were $3,923,360,
In addition, the budget for capitalized developed technology costs for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget was $0,
Section 11.3(a)(iii)(B)(B)(2) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the legal costs set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that includes $3,631,342 in legal costs for the CAT Fee 2025-2 Period. This category of costs represents budgeted costs for legal services for this period. CAT LLC anticipates that it will receive legal services from two law firms, Wilmer Cutler Pickering Hale and Dorr LLP (“WilmerHale”) and Jenner & Block LLP (“Jenner”), during the CAT Fee 2025-2 Period.
During the CAT Fee 2025-2 Period, it is anticipated that WilmerHale will provide legal services related to the following:
• Assist with CAT fee filings and related funding issues;
• Draft exemptive requests from CAT NMS Plan requirements and/or proposed amendments to the CAT NMS Plan;
• Provide legal guidance with respect to interpretations of CAT NMS Plan requirements;
• Provide legal support for the Operating Committee, Compliance Subcommittee, working groups and Leadership Team;
• Draft SRO rule filings related to the CAT Compliance Rule;
• Manage corporate governance matters, including supporting Operating Committee meetings and preparing resolutions and consents;
• Assist with communications with the industry, including CAT Alerts and presentations;
• Provide guidance regarding the confidentiality of CAT Data;
• Assist with cost management analyses and proposals;
• Assist with commercial contract-related matters, including change orders and amendments, Plan Processor Agreement items, and subcontract matters;
• Provide support with regard to discussions with the SEC and its staff, including with respect to addressing interpretive and implementation issues;
• Provide legal guidance with respect to the CAT budgets;
• Provide background assistance to other counsel for CAT matters;
• Assist with legal responses related to third-party data requests; and
• Provide legal support regarding CAT policies and procedures.
CAT LLC estimated the budget for the legal costs for WilmerHale for the CAT Fee 2025-2 Period through an analysis of a variety of factors, including WilmerHale fee rates, historical legal fees, and information related to pending legal issues and potential future legal issues.
During the CAT Fee 2025-2 Period, it is anticipated that Jenner will continue to provide legal assistance to CAT LLC regarding certain litigation matters, including: (1) CAT LLC's defense against a lawsuit filed in the Western District of Texas against the SEC Chair, the SEC and CAT LLC challenging the validity of Rule 613 and the CAT and alleging various constitutional, statutory, and common law claims;
CAT LLC estimated the budget for the legal costs for Jenner for the CAT Fee 2025-2 Period through an analysis of a variety of factors, including Jenner's fee rates, historical legal fees, and information related to pending legal issues and potential future legal issues.
CAT LLC estimated the budget for the legal services for the CAT Fee 2025-2 Period based on an analysis of a variety of factors, including law firm fee rates, historical legal fees, and information related to pending legal issues and potential future legal issues. This process for estimating the budget for the legal services for CAT Fee 2025-2 Period is the same process by which CAT LLC estimated the legal cost for the Original 2025 CAT Budget. The Original 2025 CAT Budget estimated a budget for legal costs of $1,430,000 for the first quarter of 2025. The actual costs for legal services for the first quarter of 2025, which are set forth in the Updated 2025 Budget, were $1,922,990. The increase of $492,990 was due to unanticipated issues that required additional legal efforts on behalf of CAT LLC that developed after the budget was created. Such additional costs were primarily due to additional legal work in responding to an SEC examination related to the CAT, for commercial contract-related matters, including with regard to the Plan Processor Agreement, and related to cost savings initiatives. Accordingly, CAT LLC believes that the process for estimating the budgeted legal costs for the CAT Fee 2025-2 Period is reasonable.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for legal costs from the prior CAT Fee filing. Accordingly, this filing describes the changes in the legal costs from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budgeted legal costs as set forth in the Original 2025 CAT Budget were $5,720,000, and the annual 2025 budgeted legal costs as set forth in the Updated 2025 CAT Budget are $7,370,002. Accordingly, the annual budget for legal costs increased by $1,650,002 from the Original 2025 CAT Budget to the Updated 2025 CAT Budget for the full year of 2025.
Correspondingly, the budgeted legal costs for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget were $2,860,000,
This budgeted increase in the legal costs in the Updated 2025 CAT Budget
Section 11.3(a)(iii)(B)(B)(3) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the consulting costs set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that included $866,167 in consulting costs for the CAT Fee 2025-2 Period. The consulting costs represent the fees estimated to be paid to the consulting firm Deloitte & Touche LLP (“Deloitte”) as project manager during the CAT Fee 2025-2 Period. These consulting costs include costs for advisory services related to the operation of the CAT, and meeting facilitation and communications coordination, vendor support and financial analyses.
It is anticipated that the costs for CAT during the CAT Fee 2025-2 Period will include costs related to consulting services performed by Deloitte. CAT LLC anticipates that it will continue to employ Deloitte during the CAT Fee 2025-2 Period based on, among other things, their expertise, long history with the project, and the recognition that it is anticipated that the consulting fees will remain in line with market rates for this type of specialized consulting work. Deloitte's fee rates are negotiated on an annual basis. CAT LLC assesses Deloitte's performance and reviews prospective budgets and staffing plans submitted by Deloitte on an annual basis. The consulting fees will be paid by CAT LLC to Deloitte.
It is anticipated that Deloitte will provide a variety of consulting services to the CAT during the CAT Fee 2025-2 Period, including the following:
• Implement program operations for the CAT project;
• Provide support to the Operating Committee, the Chair of the Operating Committee and the Leadership Team, including project management support, coordination and planning for meetings and communications, and interfacing with law firms and the SEC;
• Assist with cost and funding matters for the CAT, including assistance with loans and the CAT bank account for CAT funding;
• Provide support for updating the SEC on the progress of the development of the CAT; and
• Provide support for third party vendors for the CAT, including FCAT, Anchin and the law firms engaged by CAT LLC.
In addition, the consulting costs include the compensation for the Chair of the CAT Operating Committee.
CAT LLC estimates that the budget for consulting costs during the CAT Fee 2025-2 Period will be approximately $866,167. The budget for consulting costs during the CAT Fee 2025-2 Period is calculated based on the Updated 2025 CAT Budget. Specifically, this estimate was calculated by adding the budgeted amounts for consulting services for the third and fourth quarters of 2025 as set forth in the Updated 2025 CAT Budget.
CAT LLC estimates the budget for the consulting costs for Deloitte for the CAT Fee 2025-2 Period based on the current statement of work with Deloitte, which took into consideration past consulting costs, potential future consulting needs, the proposed rates and other contractual issues, as well as discussions with Deloitte. This process for estimating the budget for consulting costs for the CAT Fee 2025-2 Period is the same process by which CAT LLC estimated the consulting costs for the Original 2025 CAT Budget. The Original 2025 CAT Budget estimated a budget for consulting services of $437,500 for the first quarter of 2025. The actual costs for consulting services for the first quarter of 2025, which are set forth in the Updated 2025 CAT Budget, were $450,745. Therefore, the variance between budgeted and actual consulting costs for the first quarter of 2025 was approximately 3%. Accordingly, CAT LLC believes that the process for estimating the budgeted consulting costs for the CAT Fee 2025-2 Period is reasonable.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for consulting costs from the prior CAT Fee filing. Accordingly, this filing describes the changes in the consulting costs from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budget for consulting costs as set forth in the Original 2025 CAT Budget was $1,750,000, and the annual 2025 budget for consulting costs as set forth in the Updated 2025 CAT Budget is approximately $1,750,000. Accordingly, the annual budget for consulting costs has not changed from the Original 2025 CAT Budget to the Updated 2025 CAT Budget for the full year of 2025.
Correspondingly, the budget for consulting costs for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget was $875,000,
Section 11.3(a)(iii)(B)(B)(4) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the insurance costs set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that included $1,594,452 in insurance costs for the CAT Fee 2025-2 Period. The insurance costs represent the costs to be incurred for insurance for CAT during the CAT Fee 2025-2 Period.
It is anticipated that the insurance costs for CAT during the CAT Fee 2025-2 Period will include costs related to cyber security liability insurance, directors' and officers' liability insurance, and errors and omissions liability insurance brokered by USI Insurance Services LLC (“USI”). Such policies are standard for corporate entities, and cyber security liability insurance is important for the CAT System. CAT LLC anticipates that it will continue to maintain this insurance during the CAT Fee 2025-2 Period, and notes that the annual premiums for these policies were competitive for the
The budgeted insurance costs for the CAT Fee 2025-2 Period are based on an insurance cost estimate from USI for 2025. Accordingly, CAT LLC believes that the process for estimating the budgeted insurance costs for the CAT Fee 2025-2 Period is reasonable.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for insurance costs from the prior CAT Fee filing. Accordingly, this filing describes the changes in the insurance costs from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budgeted insurance costs as set forth in the Original 2025 CAT Budget were $1,594,452, and the annual 2025 budgeted insurance costs as set forth in the Updated 2025 CAT Budget are $1,594,452. Accordingly, the annual budgeted insurance costs remained the same for the Original 2025 CAT Budget and the Updated 2025 CAT Budget for the full year of 2025.
Correspondingly, the budgeted insurance costs for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget were $1,594,452,
Section 11.3(a)(iii)(B)(B)(5) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the professional and administration costs set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that included $609,818 in professional and administration costs for the CAT Fee 2025-2 Period. In adopting the CAT NMS Plan, the Commission amended the Plan to add a requirement that CAT LLC's financial statements be prepared in compliance with GAAP, audited by an independent public accounting firm, and made publicly available.
It is anticipated that Anchin will provide a variety of services to the CAT during the CAT Fee 2025-2 Period, including the following:
• Update and maintain internal controls;
• Provide cash management and treasury functions;
• Facilitate bill payments to vendors;
• Facilitate repayments of promissory notes to Participants;
• Provide monthly bookkeeping;
• Review vendor invoices and documentation in support of cash disbursements;
• Review documentation to ensure that repayments of promissory notes to Participants are in accordance with established policies and procedures;
• Provide accounting research and consultations on various accounting, financial reporting and tax matters;
• Address not-for-profit tax and accounting considerations;
• Prepare tax returns;
• Address various accounting, financial reporting and operating inquiries from Participants;
• Develop and maintain annual operating and financial budgets, including budget to actual fluctuation analyses;
• Support compliance with the CAT NMS Plan;
• Work with and provide support to the Operating Committee and various CAT working groups;
• Prepare monthly, quarterly and annual financial statements;
• Review and reconcile the monthly FINRA CAT reports/analyses related to billings, collections, outstanding accounts receivable and cash account;
• Perform certain verification, completeness, and validation testing related to the monthly FINRA CAT reports/analyses related to billings;
• Support the annual financial statement audits by an independent auditor;
• Review historical costs from inception;
• Provide accounting and financial information in support of SEC filings; and
• Perform additional ad hoc accounting and financial advisory services, as requested by CAT LLC.
CAT LLC estimated the annual budget for the costs for Anchin based on historical costs adjusted for cost of living rate increases, and projected incremental advisory and support services.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for professional and administration costs from the prior CAT Fee filing. Accordingly, this filing describes the changes in the professional and administration costs from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budgeted professional and administration costs as set forth in the Original 2025 CAT Budget were $882,456, and the annual 2025 budgeted professional and administration costs as set forth in the Updated 2025 CAT Budget are $1,193,090. Accordingly, the budgeted annual costs for professional and administration services increased by $310,634 from the Original 2025 CAT Budget to the Updated 2025 CAT Budget for the full year of 2025.
Correspondingly, the budgeted costs for professional and administration services for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget were $444,246,
This budgeted increase in the professional and administration costs in the Updated 2025 CAT Budget from the Original 2025 Budget, both for the full year for 2025 and for the third and fourth quarters of 2025, was primarily due to increases in both financial advisory costs and accounting costs as a result of additional anticipated efforts related to billings and collections of fees from Participants and Industry Members, coupled with expected incremental efforts related to supporting CAT LLC's independent auditors for the 2024 audit.
Section 11.3(a)(iii)(B)(B)(6) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the public relations costs set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that included $0 in public relations costs for the CAT Fee 2025-2 Period. The public relations costs represent the fees paid to a public relations firm for professional communications services to CAT, including media relations consulting, strategy and execution. Because CAT LLC anticipates that it will not engage a public relations firm for the third and fourth quarters of 2025, the budget for public relations costs for this period is $0.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for public relations costs from the prior CAT Fee filing. Accordingly, this filing describes the changes in the public relations costs from the Updated 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual budgeted public relations costs for 2025 as set forth in the Original 2025 CAT Budget were $50,000, and the annual budgeted public relations costs for 2025 as set forth in the Updated 2025 CAT Budget are $6,575. Accordingly, the annual budget for public relations cost for 2025 decreased by $43,425 from the Original 2025 CAT Budget to the Updated 2025 CAT Budget for the full year of 2025.
Correspondingly, the budgeted costs for public relations services for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget were $25,000,
This budgeted decrease in the public relations costs from the Original 2025 CAT Budget to the Updated 2025 CAT Budget, both for the full year for 2025 and for the third and fourth quarters of 2025, was primarily due to CAT LLC's anticipation that it would not engage a public relations firm for the remainder of 2025.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the reserve costs set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that includes a reserve amount for 2025. Section 11.1(a)(i) of the CAT NMS Plan states that the budget shall include a reserve. Section 11.1(a)(ii) of the CAT NMS Plan further describes the reserve as follows:
For the reserve referenced in paragraph (a)(i) of this Section, the budget will include an amount reasonably necessary to allow the Company to maintain a reserve of not more than 25% of the annual budget. To the extent collected CAT fees exceed CAT costs, including the reserve of 25% of the annual budget, such surplus shall be used to offset future fees. For the avoidance of doubt, the Company will only include an amount for the reserve in the annual budget if the Company does not have a sufficient reserve (which shall be up to but not more than 25% of the annual budget). For the avoidance of doubt, the calculation of the amount of the reserve would exclude the amount of the reserve from the budget.
CAT LLC determined to maintain a reserve in the amount of 25% of the total expenses set forth in Updated 2025 CAT Budget (which does not include the reserve amount). Accordingly, the total 25% reserve was calculated by multiplying the total expenses set forth in the Updated 2025 CAT Budget (other than the reserve) by 25%, which is $57,083,638.
The Updated 2025 CAT Budget states that CAT LLC had accrued $70,942,596 for the reserve as of the beginning of 2025, and an additional $28,846,075 during the first quarter of 2025, from the collection of CAT Fees 2024-1 and 2025-1 and the related Participant CAT Fees. In addition, the Updated 2025 CAT Budget anticipates the collection of an additional $11,821,477 during the second quarter of 2025 via CAT Fee 2025-1 and the related Participant CAT Fee. Accordingly, the Updated 2025 CAT Budget estimates that CAT LLC would collect a surplus reserve amount through June 2025 of $54,526,412 over the 25% reserve amount of $57,083,638.
Such surplus was related, in part, to (i) the collection of CAT fees in excess of the budgeted CAT costs for 2024 and 2025 in light of the greater actual executed equivalent share volume than the projected executed equivalent share volume for CAT Fees 2024-1 and 2025-1, and (ii) a reduction in anticipated budgeted costs associated with the implementation of certain cost savings measures approved by the SEC pertaining to the processing of options market maker quotes and the storage of certain data.
As set forth in the Budgeted CAT Costs 2025-2, the surplus reserve balance of $54,526,412 would be used to offset a portion of CAT costs for the third and fourth quarters of 2025, thereby reducing the fee rate to be paid for CAT Fee 2025-2. Specifically, the total costs used to calculate the fee rate for CAT Fee 2025-2 would be reduced by the amount of the surplus reserve as set forth in the following table:
Accordingly, the fee rate for CAT Fee 2025-2 is calculated based on this reduced amount of $60,726,412, resulting in a fee rate of $0.000009 per executed equivalent share. If the fee rate for CAT Fee 2025-2 were calculated solely based on the reasonably budgeted costs for CAT for July-December 2025 excluding the reduction in that amount due to the surplus reserve offset (that is, based on $115,252,921, not $60,726,412), the fee rate would be the higher rate of $0.000017.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for a reserve from the prior CAT Fee filing. Accordingly, this filing describes the changes in the reserve from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
For the Original 2025 CAT Budget, CAT LLC determined to maintain a reserve in the amount of 25% of budgeted CAT costs (other than the reserve). Accordingly, the total 25% reserve was calculated by multiplying the budgeted CAT costs (other than the reserve) as set forth in the Original 2025 CAT Budget (which is $248,846,076) by 25%, for a target reserve amount of
As discussed above, CAT LLC determined to maintain a reserve in the amount of 25% of the budgeted CAT costs (other than the reserve). Accordingly, the total 25% reserve was calculated by multiplying the budgeted CAT costs (other than the reserve) as set forth in the Updated 2025 CAT Budget (which is $228,334,551) by 25%, for a target reserve amount of $57,083,638.
As discussed above, such surplus reserve balance of $54,526,412 would be used to offset a portion of CAT costs for the third and fourth quarters of 2025, thereby reducing the fee rate for CAT Fee 2025-2 in accordance with Section 11.1(a)(ii) of the CAT NMS Plan. Section 11.1(a)(ii) of the CAT NMS Plan states that “[t]o the extent collected CAT fees exceed CAT costs, including the reserve of 25% of the annual budget, such surplus shall be used to offset future fees.”
The calculation of Fee Rate 2025-2 also requires the determination of the projected total executed equivalent share volume of transactions in Eligible Securities for the CAT Fee 2025-2 Period. Under the CAT NMS Plan, the Operating Committee is required to “reasonably determine the projected total executed equivalent share volume of all transactions in Eligible Securities for each relevant period based on the executed equivalent share volume of all transactions in Eligible Securities for the prior twelve months.”
The total executed equivalent share volume of transactions in Eligible Securities for the 12-month period from April 2024 through March 2025 was 4,580,287,680,646.28 executed equivalent shares. The Operating Committee has determined to calculate the projected total executed equivalent share volume for the six-month recovery period for CAT Fee 2025-2 by multiplying by one-half the executed equivalent share volume for the 12-month period from April 2024 through March 2025. The Operating Committee determined that such an approach was reasonable as the CAT's annual executed equivalent share volume has remained relatively constant. For example, the executed equivalent share volume for 2021 was 3,963,697,612,395, the executed equivalent share volume for 2022 was 4,039,821,841,560.31, the executed equivalent share volume for 2023 was 3,868,940,345,680.6, and the executed equivalent share volume for 2024 was 4,295,884,600,069.41. Accordingly, the projected total executed equivalent share volume for the six-month period for CAT Fee 2025-2 is projected to be 2,290,143,840,323.14 executed equivalent shares.
The projected total executed equivalent share volume of all transactions in Eligible Securities for the six-month recovery period for CAT Fee 2025-2 and a description of the calculation of the projection is provided in this filing in accordance with the requirement in the CAT NMS Plan to provide such information in a fee filing for a CAT Fee.
Fee Rate 2025-2 would be calculated by dividing the Budgeted CAT Costs 2025-2 by the reasonably projected total executed equivalent share volume of all transactions in Eligible Securities for the six-month recovery period for CAT Fee 2025-2, as described in detail above.
CEBBs and CEBSs would be required to pay fees for CAT Fee 2025-2 on a monthly basis for six months, from August 2025 until January 2026. A CEBB's or CEBS's fee for each month would be calculated based on the transactions in Eligible Securities executed by the CEBB or CEBS from the prior month.
To implement CAT Fee 2025-2, the Exchange proposes to add a new paragraph to the “Consolidated Audit Trail Funding Fees” section of the Exchange's Fee Schedule, to include the proposed paragraphs described below.
The CAT NMS Plan states that:
Each Industry Member that is the CAT Executing Broker for the buyer in a transaction in Eligible Securities (“CAT Executing Broker for the Buyer” or “CEBB”) and each Industry Member that is the CAT Executing Broker for the seller in a transaction in Eligible Securities (“CAT Executing Broker for the Seller” or “CEBS”) will be required to pay a CAT Fee for each such transaction in Eligible Securities in the prior month based on CAT Data. The CEBB's CAT Fee or CEBS's CAT Fee (as applicable) for each transaction in Eligible Securities will be calculated by multiplying the number of executed equivalent shares in the transaction by one-third and by the Fee Rate reasonably determined pursuant to paragraph (a)(i) of this Section 11.3.
Accordingly, based on the factors discussed above, the Exchange proposes to add paragraph (a)(5) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule. Proposed paragraph (a)(5) would state the following:
(A) Each CAT Executing Broker shall receive its first invoice for CAT Fee 2025-2 in August 2025, which shall set forth the CAT Fee 2025-2 fees calculated based on transactions in July 2025, and shall receive an invoice for CAT Fee 2025-2 for each month thereafter until January 2026.
(B) Consolidated Audit Trail, LLC shall provide each CAT Executing Broker with an invoice for CAT Fee 2025-2 on a monthly basis. Each month, such invoices shall set forth a fee for each transaction in Eligible Securities executed by the CAT Executing Broker in its capacity as a CAT Executing Broker for the Buyer (“CEBB”) and/or the CAT Executing Broker for the Seller (“CEBS”) (as applicable) from the prior month as set forth in CAT Data. The fee for each such transaction will be calculated by multiplying the number of executed equivalent shares in the transaction by the fee rate of $0.000009 per executed equivalent share.
(C) Notwithstanding the last invoice date of January 2026 for CAT Fee 2025-2 in paragraph 5(A), CAT Fee 2025-2 shall continue in effect after January 2026, with each CAT Executing Broker receiving an invoice for CAT Fee 2025-2 each month, until a new subsequent CAT Fee is in effect with regard to Industry Members in accordance with Section 19(b) of the Exchange Act. Consolidated Audit Trail, LLC will provide notice when CAT Fee 2025-2 will no longer be in effect.
(D) Each CAT Executing Broker shall be required to pay each invoice for CAT Fee 2025-2 in accordance with paragraph (b).
As noted in the Plan amendment for the CAT Funding Model, “[a]s a practical matter, the fee filing would provide the exact fee per executed equivalent share to be paid for the CAT Fees, by multiplying the Fee Rate by one-third and describing the relevant number of decimal places for the fee.”
The proposed language in paragraph (a)(5)(A) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule would describe when CAT Executing Brokers would receive their first monthly invoice for CAT Fee 2025-2. Specifically, CAT Executing Brokers would receive their first monthly invoice for CAT Fee 2025-2 in August 2025 and the fees set forth in that invoice would be calculated based on transactions executed in July 2025. The payment for the first invoice would be required within 30 days after the receipt of the first invoice (unless a longer period is indicated), as described in paragraph (b)(2) of the Fee Schedule.
Proposed paragraph (a)(5)(A) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule also would describe the monthly cadence of the invoices for CAT Fee 2025-2. Specifically, after the first invoices are provided to CAT Executing Brokers in August 2025, invoices will be sent to CAT Executing Brokers each month thereafter until January 2026.
Proposed paragraph (a)(5)(B) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule would describe the invoices for CAT Fee 2025-2. Proposed paragraph (a)(5)(B) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule would state that “Consolidated Audit Trail, LLC shall provide each CAT Executing Broker with an invoice for CAT Fee 2025-2 on a monthly basis.” Proposed paragraph (a)(5)(B) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule also would describe the fees to be set forth in the invoices for CAT Fee 2025-2. Specifically, it would state that “[e]ach month, such invoices shall set forth a fee for each transaction in Eligible Securities executed by the CAT Executing Broker in its capacity as a CAT Executing Broker for the Buyer (`CEBB') and/or the CAT Executing Broker for the Seller (`CEBS') (as applicable) from the prior month as set forth in CAT Data. The fee for each such transaction will be calculated by multiplying the number of executed equivalent shares in the transaction by the fee rate of $0.000009 per executed equivalent share.”
Since CAT Fee 2025-2 is a monthly fee based on actual transaction volume from the prior month, CAT Fee 2025-2 may collect more or less than two-thirds of the Budgeted CAT Costs 2025-2. To the extent that CAT Fee 2025-2 collects more than two-thirds of the Budgeted CAT Costs 2025-2, any excess money collected will be used to offset future fees and/or to fund the reserve for the CAT. To the extent that CAT Fee 2025-2 collects less than two-thirds of the Budgeted CAT Costs 2025-2, the budget for the CAT in the ensuing months will reflect such shortfall.
Furthermore, proposed paragraph (a)(5)(C) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule would describe how long CAT Fee 2025-2 would remain in effect. It would state that “[n]otwithstanding the last invoice date of January 2026 for CAT Fee 2025-2 in paragraph 5(A), CAT Fee 2025-2 shall continue in effect after January 2026, with each CAT Executing Broker receiving an invoice for CAT Fee 2025-2 each month, until a new subsequent CAT Fee is in effect with regard to Industry Members in accordance with Section 19(b) of the Exchange Act. Consolidated Audit Trail,
Finally, proposed paragraph (a)(5)(D) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule would set forth the requirement for the CAT Executing Brokers to pay the invoices for CAT Fee 2025-2. It would state that “[e]ach CAT Executing Broker shall be required to pay each invoice for CAT Fee 2025-2 in accordance with paragraph (b).”
Paragraph (b)(1) of the “Consolidated Audit Trail Funding Fees” section of the Fee Schedule describes the manner of payment of Industry Member CAT fees. It states that “[e]ach CAT Executing Broker shall pay its CAT fees as required pursuant to paragraph (a) each month to the Consolidated Audit Trail, LLC in the manner prescribed by the Consolidated Audit Trail, LLC.” The CAT NMS Plan requires the Operating Committee to establish a system for the collection of CAT fees.
The CAT NMS Plan further states that:
Participants shall require each Industry Member to pay all applicable fees authorized under this Article XI within thirty (30) days after receipt of an invoice or other notice indicating payment is due (unless a longer payment period is otherwise indicated). If an Industry Member fails to pay any such fee when due (as determined in accordance with the preceding sentence), such Industry Member shall pay interest on the outstanding balance from such due date until such fee is paid at a per annum rate equal to the lesser of: (a) the Prime Rate plus 300 basis points; or (b) the maximum rate permitted by applicable law.
Paragraph (b)(2) of the Consolidated Audit Trail Funding Fees section of the Fee Schedule states that:
Each CAT Executing Broker shall pay the CAT fees required pursuant to paragraph (a) within thirty days after receipt of an invoice or other notice indicating payment is due (unless a longer payment period is otherwise indicated). If a CAT Executing Broker fails to pay any such CAT fee when due, such CAT Executing Broker shall pay interest on the outstanding balance from such due date until such fee is paid at a per annum rate equal to the lesser of (i) the Prime Rate plus 300 basis points, or (ii) the maximum rate permitted by applicable law.
The requirements of paragraph (b)(2) would apply to CAT Fee 2025-2.
The CAT NMS Plan states that:
Details regarding the calculation of a Participant or CAT Executing Broker's CAT Fees will be provided upon request to such Participant or CAT Executing Broker. At a minimum, such details would include each Participant or CAT Executing Broker's executed equivalent share volume and corresponding fee by (1) Listed Options, NMS Stocks and OTC Equity Securities, (2) by transactions executed on each exchange and transactions executed otherwise than on an exchange, and (3) by buy-side transactions and sell-side transactions.
Such information would provide CEBBs and CEBSs with the ability to understand the details regarding the calculation of their CAT Fee.
In addition, CAT LLC will make certain aggregate statistics regarding CAT Fees publicly available. Specifically, the CAT NMS Plan states that, “[f]or each CAT Fee, at a minimum, CAT LLC will make publicly available the aggregate executed equivalent share volume and corresponding aggregate fee by (1) Listed Options, NMS Stocks and OTC Equity Securities, (2) by transactions executed on each exchange and transactions executed otherwise than on an exchange, and (3) by buy-side transactions and sell-side transactions.”
Furthermore, CAT LLC will make publicly available on the CAT website the total amount invoiced each month that CAT Fee 2025-2 is in effect as well as the total amount invoiced for CAT Fee 2025-2 for all months since its commencement. CAT LLC also will make publicly available on the CAT website the total costs to be collected from Industry Members for CAT Fee 2025-2.
The CAT NMS Plan states that “[n]o Participant will make a filing with the SEC pursuant to Section 19(b) of the Exchange Act regarding any CAT Fee related to Prospective CAT Costs until the Financial Accountability Milestone related to Period 4 described in Section 11.6 has been satisfied.”
CAT LLC intends for CAT Fee 2025-2 to replace CAT Fee 2025-1 (which has a fee rate of $0.000022).
While CAT Fees charged to Industry Members become effective in accordance with the requirements of Section 19(b) of the Exchange Act,
The Exchange believes the proposed rule change is consistent with the requirements of the Exchange Act. The Exchange believes that the proposed rule change is consistent with Section 6(b)(5) of the Act,
The Exchange believes that this proposal is consistent with the Act because it implements provisions of the Plan and is designed to assist the Exchange in meeting regulatory obligations pursuant to the Plan. In approving the Plan, the SEC noted that the Plan “is necessary and appropriate in the public interest, for the protection of investors and the maintenance of fair and orderly markets, to remove impediments to, and perfect the mechanism of a national market system, or is otherwise in furtherance of the purposes of the Act.”
The Exchange believes that the proposed fees to be paid by the CEBBs and CEBSs are reasonable, equitably allocated and not unfairly discriminatory. First, the CAT Fee 2025-2 fees to be collected are directly associated with the budgeted costs of establishing and maintaining the CAT, where such costs include Plan Processor costs and costs related to technology, legal, consulting, insurance, professional and administration, and public relations costs.
The proposed CAT Fee 2025-2 fees would be charged to Industry Members in support of the maintenance of a consolidated audit trail for regulatory purposes. The proposed fees, therefore, are consistent with the Commission's view that regulatory fees be used for regulatory purposes and not to support the Exchange's business operations. The proposed fees would not cover Exchange services unrelated to the CAT. In addition, any surplus would be used as a reserve to offset future fees. Given the direct relationship between CAT fees and CAT costs, the Exchange believes that the proposed fees are reasonable, equitable and not unfairly discriminatory.
As further discussed below, the SEC approved the CAT Funding Model, finding it was reasonable and that it equitably allocates fees among Participants and Industry Members. The Exchange believes that the proposed fees adopted pursuant to the CAT Funding Model approved by the SEC are reasonable, equitably allocated and not unfairly discriminatory.
Section 11.1(b) of the CAT NMS Plan states that “[t]he Participants shall file with the SEC under Section 19(b) of the Exchange Act any such fees on Industry Members that the Operating Committee approves.” Per Section 11.1(b) of the CAT NMS Plan, the Exchange has filed this fee filing to implement the Industry Member CAT fees included in the CAT Funding Model. The Exchange believes that this proposal is consistent with the Exchange Act because it is consistent with, and implements, the CAT Funding Model in the CAT NMS Plan, and is designed to assist the Exchange and its Industry Members in meeting regulatory obligations pursuant to the CAT NMS Plan. In approving the CAT NMS Plan, the SEC noted that the Plan “is necessary and appropriate in the public interest, for the protection of investors and the maintenance of fair and orderly markets, to remove impediments to, and
The SEC has determined that the CAT Funding Model is reasonable and satisfies the requirements of the Exchange Act. Specifically, the SEC has concluded that the method for determining CAT Fees as set forth in Section 11.3 of the CAT NMS Plan, including the formula for calculating the Fee Rate, the identification of the parties responsible for payment and the transactions subject to the fee rate for CAT Fees, is reasonable and satisfies the Exchange Act.
The formula for calculating a Fee Rate requires the amount of Budgeted CAT Costs to be recovered. Specifically, Section 11.3(a)(iii)(B) of the CAT NMS Plan requires a fee filing to provide:
In accordance with this requirement, the Exchange has set forth the amount and type of Budgeted CAT Costs 2025-2 for each of these categories above.
Section 11.3(a)(iii)(B) of the CAT NMS Plan also requires that the fee filing provide “sufficient detail to demonstrate that the budget for the upcoming year, or part of year, as applicable, is reasonable and appropriate.” As discussed below, the Exchange believes that the budget for the CAT Fee 2025-2 Period is “reasonable and appropriate.” Each of the costs included in CAT Fee 2025-2 are reasonable and appropriate because the costs are consistent with standard industry practice, based on the need to comply with the requirements of the CAT NMS Plan, incurred subject to negotiations performed on an arm's length basis, and/or are consistent with the needs of any legal entity, particularly one with no employees.
In approving the CAT Funding Model, the Commission recognized that it is appropriate to recover budgeted costs related to cloud hosting services as a part of CAT Fees.
To comply with the requirements of the Plan, the breadth of the cloud activities related to the CAT is substantial. The cloud services not only include the production environment for the CAT, but they also include two industry testing environments, support environments for quality assurance and stress testing and disaster recovery capabilities. Moreover, the cloud storage costs are driven by the requirements of the Plan, which requires the storage of multiple versions of the data, from the original submitted version of the data through various processing steps, to the final version of the data.
Data volume is a significant driver of costs for cloud hosting services. When the Commission adopted the CAT NMS Plan in 2016, it estimated that the CAT would need to receive 58 billion records per day
In addition to the effect of the data volume on the cloud hosting costs, the processing timelines set forth in the Plan contribute to the cloud hosting costs. Although CAT LLC has proactively sought to manage cloud hosting costs while complying with the Plan, including through requests to the Commission for exemptive relief and amendments to the CAT NMS Plan to reduce costs, stringent CAT NMS Plan requirements do not allow for any material flexibility in cloud architecture design choices, processing timelines (
The costs for cloud hosting services also reflect the need for specialized cloud hosting services given the data volume and unique processing needs of the CAT. The data volume as well as the data processing needs of the CAT necessitate the use of cloud hosting services. The equipment, power and services required for an on-premises
The reasonableness of the cloud hosting services costs is further supported by key cost discipline mechanisms for the CAT—a cost-based funding structure, cost transparency, cost management efforts (including regular efforts to lower compute and storage costs where permitted by the Plan) and oversight. Together, these mechanisms help ensure the ongoing reasonableness of the CAT's costs and the level of fees assessed to support those costs.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted costs related to operating fees as a part of CAT Fees.
The operating fees would include the negotiated fees paid by CAT LLC to the Plan Processor to operate and maintain the system for order-related information and to perform business operations related to the system, including compliance, security, testing, training, communications with the industry (
The operating costs also include costs related to the receipt of market data. CAT LLC anticipates receiving certain market data from Algoseek during the CAT Fee 2025-2 Period. CAT LLC anticipates that Algoseek will provide data as set forth in the SIP Data requirements of the CAT NMS Plan and that the fees are reasonable and in line with market rates for market data received.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted costs related to CAIS operating fees as a part of CAT Fees.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted costs related to change request fees as a part of CAT Fees.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted costs related to capitalized developed technology costs as a part of CAT Fees.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted costs related to legal fees as a part of CAT Fees.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted consulting costs as a part of CAT Fees.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted insurance costs as a part of CAT Fees.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted professional and administration costs as a part of CAT Fees.
CAT LLC anticipates continuing to make use of Anchin, a financial advisory firm, to assist with financial matters for the CAT. CAT LLC determined that the budgeted costs for Anchin were appropriate, as the financial advisory services were to be provided at reasonable market rates that were comparable to the rates charged by other such firms for similar work. Moreover, the total budgeted costs for such financial advisory services were appropriate in light of the breadth of services provided by Anchin. The services budgeted to be performed by Anchin and the budgeted costs related to such services are described above.
CAT LLC anticipates continuing to make use of Grant Thornton, an independent accounting firm, to complete the audit of CAT LLC's financial statements, in accordance with the requirements of the CAT NMS Plan. CAT LLC determined that the budgeted costs for Grant Thornton were appropriate, as the accounting services were to be provided at reasonable market rates that were comparable to the rates charged by other such firms for similar work. Moreover, the total budgeted costs for such accounting services were appropriate in light of the breadth of services provided by Grant Thornton. The services budgeted to be performed by Grant Thornton and the budgeted costs related to such services are described above.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted public relations costs as a part of CAT Fees.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted reserve costs as a part of CAT Fees.
In its approval order for the CAT Funding Model, the Commission stated that it would be reasonable for the annual operating budget for the CAT to
Because the CAT is a critical regulatory tool/system, the CAT needs to have a stable funding source to build financial stability to support the Company as a going concern. Funding for the CAT, as noted in Section 11.1(b), is the responsibility of the Participants and the industry. Because CAT fees are charged based on the budget, which is based on anticipated volume, it is reasonable to have a reserve on hand to prevent a shortfall in the event there is an unexpectedly high volume in a given year. A reserve would help to assure that the CAT has sufficient resources to cover costs should there be unanticipated costs or costs that are higher than expected.
The SEC also recognized that a reserve would help address the difficulty in predicting certain variable CAT costs, like trading volume.
As discussed further below,
The CAT NMS Plan also requires fee filings for Prospective CAT Fees to include “a discussion of how the budget is reconciled to the collected fees.”
The total executed equivalent share volume of transactions in Eligible Securities for the period from April 2024 through March 2025 was 4,580,287,680,646.28 executed equivalent shares. CAT LLC determined the total executed equivalent share volume for the prior twelve months by counting executed equivalent shares in the same manner as it counts executed equivalent shares for CAT billing purposes.
CAT LLC has determined that the projected total executed equivalent share volume for the six months of CAT Fee 2025-2 Period by multiplying by one-half the executed equivalent share volume for the prior twelve months: one-half times 4,580,287,680,646.28 executed equivalent shares.
As noted in the approval order for the CAT Funding Model, as a practical matter, the fee filing for a CAT Fee would provide the exact fee per executed equivalent share to be paid for each CAT Fee, by multiplying the Fee Rate by one-third and describing the relevant number of decimal places for the fee rate.
The Exchange believes that charging CAT Fee 2025-2 with a fee rate of $0.000009 per executed equivalent share is reasonable because it provides for a revenue stream for the Company that is aligned with the Budgeted CAT Costs 2025-2. Moreover, the Exchange believes that the level of the fee rate is reasonable, as it is less than CAT Fee 2025-1 and is comparable to other transaction-based fees. Indeed, CAT Fee 2025-2 is significantly lower than fees previously assessed pursuant to Section 31 (
CAT Fee 2025-2 provides for an equitable allocation of fees, as it equitably allocates CAT costs between and among the Participants and Industry Members. The SEC approved the CAT Funding Model, finding that each aspect of the CAT Funding Model satisfied the requirements of the Exchange Act, including the formula for calculating CAT Fees as well as the Industry Members to be charged the CAT Fees.
CAT Fee 2025-2 provides for an equitable allocation of fees as it complies with the requirements regarding the calculation of CAT Fees as set forth in the CAT NMS Plan. For example, as described above, the calculation of CAT Fee 2025-2 complies with the formula set forth in Section 11.3(a) of the CAT NMS Plan. In addition, CAT Fee 2025-2 would be charged to CEBBs and CEBSs in accordance with Section 11.3(a) of the CAT NMS Plan. Furthermore, the Participants would be charged for their designated share of the Budgeted CAT Costs 2025-2 through a fee implemented via the CAT NMS Plan, which would have the same fee rate as CAT Fee 2025-2.
In addition, as discussed above, each of the inputs into the calculation of CAT Fee 2025-2—the Budgeted CAT Costs 2025-2, the count for the executed equivalent share volume for the prior 12 months, and the projected executed equivalent share volume for the CAT Fee 2025-2 Period—are reasonable. Moreover, these inputs lead to a reasonable fee rate for CAT Fee 2025-2 that is lower than other fee rates for transaction-based fees. A reasonable fee rate allocated in accordance with the requirements of the CAT Funding Model provides for an equitable allocation of fees.
CAT Fee 2025-2 is not an unfairly discriminatory fee. The SEC approved the CAT Funding Model, finding that each aspect of the CAT Funding Model satisfies the requirements of the Exchange Act. In reaching this conclusion, the SEC analyzed the potential effect of CAT Fees calculated pursuant to the CAT Funding Model on affected categories of market participants, including Participants (including exchanges and FINRA), Industry Members (including subcategories of Industry Members, such as alternative trading systems, CAT Executing Brokers and market makers), and investors generally, and considered market effects related to equities and options, among other things. CAT Fee 2025-2 complies with the requirements regarding the calculation of CAT Fees as set forth in the CAT NMS Plan. In addition, as discussed above, each of the inputs into the calculation of CAT Fee 2025-2 and the resulting fee rate for CAT Fee 2025-2 is reasonable. Therefore, CAT Fee 2025-2 does not impose an unfairly discriminatory fee on Industry Members.
The Exchange believes the proposed fees established pursuant to the CAT Funding Model promote just and equitable principles of trade, and, in general, protect investors and the public interest, and are provided in a transparent manner and with specificity in the Fee Schedule. The Exchange also believes that the proposed fees are reasonable because they would provide ease of calculation, ease of billing and other administrative functions, and predictability of a fee based on fixed rate per executed equivalent share. Such factors are crucial to estimating a reliable revenue stream for CAT LLC and for permitting Exchange members to reasonably predict their payment obligations for budgeting purposes.
Section 6(b)(8) of the Act
In addition, all Participants (including exchanges and FINRA) are proposing to introduce CAT Fee 2025-2 on behalf of CAT LLC to implement the requirements of the CAT NMS Plan. Therefore, this is not a competitive fee filing, and, therefore, it does not raise competition issues between and among the Participants.
Furthermore, in approving the CAT Funding Model, the SEC analyzed the potential competitive impact of the CAT Funding Model, including competitive issues related to market services, trading services and regulatory services, efficiency concerns, and capital formation.
As discussed above, each of the inputs into the calculation of CAT Fee 2025-2 is reasonable and the resulting fee rate for CAT Fee 2025-2 calculated in accordance with the CAT Funding Model is reasonable. Therefore, CAT Fee 2025-2 would not impose any burden on competition that is not necessary or appropriate in furtherance of the purpose of the Exchange Act.
No written comments were solicited or received with respect to the proposed rule change.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Securities and Exchange Commission (“Commission” or “SEC”).
Notice.
Notice of an application under Section 6(c) of the Investment Company Act of 1940 (“Act”) for an exemption from Sections 18(a)(2), 18(c), 18(i), and 61(a) of the Act.
Applicants request an order to permit certain closed-end investment companies that have elected to be regulated as business development companies to issue multiple classes of shares with varying sales loads and asset-based distribution and/or service fees.
Silver Point Specialty Credit Fund Management, LLC and Silver Point Specialty Lending Fund.
The application was filed on April 15, 2025, and amended on May 23, 2025.
An order granting the requested relief will be issued unless the Commission orders a hearing. Interested persons may request a hearing on any application by emailing the SEC's Secretary at
Hearing requests should be received by the Commission by 5:30 p.m. on August 4, 2025, and should be accompanied by proof of service on applicants, in the form of an affidavit or, for lawyers, a certificate of service. Pursuant to rule 0-5 under the Act, hearing requests should state the nature of the writer's interest, any facts bearing upon the desirability of a hearing on the matter, the reason for the request, and the issues contested. Persons who wish to be notified of a hearing may request notification by emailing the Commission's Secretary at
For the Commission, by the Division of Investment Management, under delegated authority.
On January 24, 2025, The Nasdaq Stock Market LLC (“Nasdaq” or
On March 11, 2025, pursuant to Section 19(b)(2) of the Exchange Act,
The Exchange proposes to update certain representations made in the proposed rule change previously filed with and approved by the Commission relating to the shares of the iShares Bitcoin Trust (the “Trust”), specifically to allow for “in-kind” transfers of the Trust's bitcoin. Shares of Trust (“Shares”) are currently listed and traded on the Exchange under Nasdaq Rule 5711(d). This Amendment No. 2 supersedes Amendment No. 1 in its entirety.
The text of the proposed rule change is available on the Exchange's website at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item III below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The Commission approved the listing and trading of the Shares on the Exchange pursuant to Nasdaq Rule 5711(d)
Coinbase Custody Trust Company, LLC (the “Bitcoin Custodian”) is the custodian for the Trust's bitcoin holdings, and maintains a custody account for the Trust (“Custody Account”); Coinbase, Inc. (the “Prime Execution Agent”), an affiliate of the Bitcoin Custodian, is the prime broker for the Trust and maintains a trading account for the Trust (“Trading Account”); and Bank of New York Mellon is the custodian for the Trust's cash holdings (the “Cash Custodian” and together with the Bitcoin Custodian, the “Custodians”) and the administrator of the Trust (the “Trust Administrator”).
The Exchange now proposes to amend representations regarding the Trust's creation and redemption process as set forth in the previous rule filing to list and trade Shares, specifically to allow for in-kind transfers of the Trust's bitcoin.
The Exchange proposes to amend the Original IBIT Filing section entitled “Custody of the Trust's Bitcoin and Creation and Redemption” to add further detail on how the Trust will handle transfers of bitcoin in connection with the proposed in-kind creation and redemption process, and make certain conforming changes to the description of the cash creation and redemption process. As proposed, the language in the “Custody of the Trust's Bitcoin and Creation and Redemption” section from the Original IBIT Filing will be deleted and replaced with the following language.
An investment in the Shares is backed by bitcoin held by the Bitcoin Custodian on behalf of the Trust. All of the Trust's
The Trust's bitcoin holdings and cash holdings from time to time may temporarily be maintained in the Trading Account held with the Prime Execution Agent, an affiliate of the Bitcoin Custodian. Coinbase Inc. serves as the Trust's Prime Execution Agent pursuant to the Trust's agreement with the Prime Execution Agent (“Prime Execution Agent Agreement”). In this capacity, the Prime Execution Agent facilitates (1) the buying and selling of bitcoin by the Trust in response to cash creations and redemptions between the Trust and registered broker-dealers that are Depositary Trust Company (“DTC”) participants that enter into an authorized participant agreement with the Sponsor and the Trustee (“Authorized Participants”), (2) the transfer of bitcoin between the Trust and an Authorized Participant, its designated agent or client as part of in-kind creations and redemptions, and (3) the sale of bitcoin to pay the Sponsor's fee, any other Trust expenses not assumed by the Sponsor, to the extent applicable, and in extraordinary circumstances, in connection with the liquidation of the Trust's bitcoin.
The Authorized Participants will deliver cash or bitcoin to create shares and will receive cash or bitcoin when redeeming shares.
For a cash creation or redemption of a Basket of Shares, the Authorized Participant will be required to submit the cash creation or redemption order by an early order cutoff time (the “Cash Order Cutoff Time”). The Cash Order Cutoff Time will initially be 6:00 p.m. ET on the business day prior to trade date.
For an in-kind creation or redemption of a Basket of Shares, the Authorized Participant will be required to submit the in-kind creation or redemption order by an order cutoff (“In-Kind Order Cutoff Time”). The In-Kind Order Cutoff Time will initially be 3:59 p.m. ET on the trade date.
In connection with cash creations and cash redemptions, the Authorized Participants will submit orders to create or redeem Baskets of Shares exclusively in exchange for cash. The Trust will engage in bitcoin transactions to convert cash into bitcoin (in association with creation orders) and bitcoin into cash (in association with redemption orders). The Trust will conduct its bitcoin purchase and sale transactions by, in its sole discretion, choosing to trade directly with designated third parties (each, a “Bitcoin Trading Counterparty”), pursuant to written agreements between each such Bitcoin Trading Counterparty and the Trust, or choosing to trade through the Prime Execution Agent acting in an agency capacity with third parties through its Coinbase Prime service
Following the Cash Order Cutoff Time for a creation order, the Trust will choose, in its sole discretion, to enter into a transaction with a Bitcoin Trading Counterparty or the Prime Execution Agent to buy bitcoin in exchange for the cash proceeds from such cash creation order. On settlement date for a cash creation, the Trust delivers Shares to the Authorized Participant in exchange for cash received from the Authorized Participant. Also, on or around the settlement date, the Bitcoin Trading Counterparty or Prime Execution Agent, as applicable, deposits the required bitcoin pursuant to its trade with the Trust into the Trust's Trading Account in exchange for cash. In the event the Trust has not been able to successfully execute and complete settlement of a bitcoin transaction by the settlement date of the cash creation order, the Authorized Participant will be given the option to (1) cancel the cash creation order, or (2) accept that the Trust will continue to attempt to complete the execution, which will delay the settlement date of the cash creation order. With respect to a cash creation order, as between the Trust and the Authorized Participant, the Authorized Participant is responsible for the dollar cost of the difference between the bitcoin price utilized in calculating NAV per Share on trade date and the price at which the Trust acquires the bitcoin to the extent the price realized in buying the bitcoin is higher than the bitcoin price utilized in the NAV. To the extent the price realized in buying the bitcoin is lower than the price utilized in the NAV, the Authorized Participant shall get to keep the dollar impact of any such difference.
Because the Trust's Trading Account may not be funded with cash on trade date for the purchase of bitcoin associated with a cash creation order, the Trust may borrow trade credits (“Trade Credits”) in the form of cash from Coinbase Credit, Inc. (the “Trade Credit Lender”), an affiliate of the Prime Execution Agent, under the trade financing agreement (“Trade Financing Agreement”) or may require the Authorized Participant to deliver the required cash for the cash creation order on trade date. The extension of Trade Credits on trade date allows the Trust to purchase bitcoin through the Prime Execution Agent on trade date, with such bitcoin being deposited in the Trust's Trading Account. On settlement date for a cash creation order, the Trust delivers Shares to the Authorized Participant in exchange for cash received from the Authorized Participant. To the extent Trade Credits were utilized, the Trust uses the cash to repay the Trade Credits borrowed from the Trade Credit Lender. On settlement date for a cash creation order, the bitcoin purchased is swept from the Trust's Trading Account to the Trust's Custody Account pursuant to a regular end-of-day sweep process.
In connection with in-kind creations, the Authorized Participants will submit
On settlement date for an in-kind creation, the Trust delivers Shares to the Authorized Participant in exchange for bitcoin received from the Authorized Participant, or its designated agent or client. The Authorized Participant or its designated agent or client will deposit such bitcoin to the Trust's Trading Account at the Prime Execution Agent. In the event the Authorized Participant, its designated agent or client, has not deposited the bitcoin to the Trust's Trading Account at the Prime Execution Agent by the applicable time on the settlement date of the in-kind creation order, the Authorized Participant will be given the option to (1) cancel the in-kind creation order, (2) delay settlement of the order to enable delivery of bitcoin at a later date, or (3) accept that the Trust will execute a bitcoin transaction required for the creation and the Authorized Participant will deliver the U.S. dollars required for this purchase. In the case of (3) only, the Authorized Participant is responsible for the dollar cost of the difference between the bitcoin price utilized in calculating NAV per Share on trade date and the price at which the Trust acquires the bitcoin to the extent the price realized in buying the bitcoin is higher than the bitcoin price utilized in the NAV. To the extent the price realized in buying the bitcoin is lower than the price utilized in the NAV, the Authorized Participant shall get to keep the dollar impact of any such difference.
Following the Cash Order Cutoff Time for a cash redemption order, the Trust may choose, in its sole discretion, to enter into a transaction with a Bitcoin Trading Counterparty or the Prime Execution Agent, to sell bitcoin in exchange for cash. After the Cash Order Cutoff Time, the Trust instructs the Bitcoin Custodian to prepare to move the associated bitcoin from the Trust's Custody Account to the Trust's Trading Account. On settlement date for a redemption order, the Authorized Participant delivers the necessary Shares to the Trust, and on or around settlement date, a Bitcoin Trading Counterparty or Prime Execution Agent, as applicable, delivers the cash associated with the Trust's sale of bitcoin to the Trust in exchange for the Trust's bitcoin, and the Trust delivers cash to the Authorized Participant. In the event the Trust has not been able to successfully execute and complete settlement of a bitcoin transaction by the settlement date, the Authorized Participant will be given the option to (1) cancel the redemption order, or (2) accept that the Trust will continue to attempt to complete the execution, which will delay the settlement date. With respect to a cash redemption order, between the Trust and the Authorized Participant, the Authorized Participant will be responsible for the dollar cost of the difference between the bitcoin price utilized in calculating the NAV per Share on trade date and the price realized in selling the bitcoin to raise the cash needed for the cash redemption order to the extent the price realized in selling the bitcoin is lower than the bitcoin price utilized in the NAV. To the extent the price realized in selling the bitcoin is higher than the price utilized in the NAV, the Authorized Participant will get to keep the dollar impact of any such difference.
The Trust may use financing in connection with a cash redemption order when bitcoin remains in the Trust's Custody Account at the point of intended execution of a sale of bitcoin. In those circumstances, the Trust may borrow Trade Credits in the form of bitcoin from the Trade Credit Lender, which allows the Trust to sell bitcoin through the Prime Execution Agent on trade date, and the cash proceeds are deposited in the Trust's Trading Account. On settlement date for a redemption order, the Trust delivers cash to the Authorized Participant in exchange for Shares received from the Authorized Participant. In the event financing was used, the Trust will use the bitcoin moved from the Trust's Custody Account to the Trading Account to repay the Trade Credits borrowed from the Trade Credit Lender.
In connection with in-kind redemptions, the Authorized Participants will submit orders by the In-Kind Order Cutoff Time to redeem Baskets of Shares in exchange for bitcoin.
On settlement date for an in-kind redemption, the Trust delivers bitcoin to the account of the Authorized Participant or its designated agent or client at the Prime Execution Agent in exchange for Shares received from the Authorized Participant.
The Exchange also proposes to modify the Original IBIT Filing section “Creation and Redemption of Shares” to integrate the proposed in-kind creation and redemption process. Specifically, the Original IBIT Filing currently states that Baskets are only issued or redeemed in exchange for an amount of cash determined by the Trustee on each day that Nasdaq is open for regular trading. No Shares are issued unless the Cash Custodian has allocated to the Trust's account the corresponding amount of cash. The amount of cash necessary for the creation of a Basket, or to be received upon redemption of a Basket, will decrease over the life of the Trust, due to the payment or accrual of fees and other expenses or liabilities payable by the Trust.
The Exchange now proposes to delete the above language from the Original IBIT Filing, and replace it with the following: Baskets are only issued or redeemed in exchange for an amount of bitcoin and/or cash determined by the Trustee on each day that Nasdaq is open for regular trading. No Shares are issued unless the Authorized Participant has properly delivered the requisite amount of cash or bitcoin to the Trust's account.
The Exchange believes that its proposal is consistent with Section 6(b) of the Act,
The Exchange believes that permitting in-kind transfers with respect to the Trust's creation and redemption process promotes just and equitable principles of trade and helps remove impediments to and perfect the mechanism of a free and open market and a national market system. As discussed above, the proposed changes would permit the Trust to utilize an in-kind creation and redemption process in addition to the cash creation and redemption process. This added ability would make the Trust (and the market more generally) operate more efficiently because Authorized Participants, their designated agents or clients, would be able to source bitcoin rather than to provide cash to the Trust and/or receive
Except for the changes described above, all other representations in the Original IBIT Filing remain unchanged and will continue to constitute continued listing requirements. In addition, the Trust will continue to comply with the terms of the Original IBIT Filing and the requirements in Rule 5711(d).
The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. As discussed above, the proposed amendments are intended to reflect changes to the Trust's creation and redemption process, specifically to allow for in-kind transfers. As discussed above, the Exchange believes that the proposed rule change would increase operational efficiencies for the Trust (and the market more generally). The Exchange believes these changes will not impose any burden on competition.
No written comments were either solicited or received.
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change, as modified by Amendment No. 2, is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
On May 21, 2025, NYSE Arca, Inc. (“NYSE Arca” or the “Exchange”) filed with the Securities and Exchange Commission (the “Commission”), pursuant to Section 19(b)(1)
On June 30, 2025, the Exchange filed Amendment No. 2 to the proposed rule change, which is described in Items I and II below, which Items have been prepared by the self-regulatory organization. Amendment No. 2 replaces and supersedes the original filing, as amended by Amendment No. 1, in its entirety. The Commission is publishing this notice to solicit comments on the proposed rule change, as modified by Amendment No. 2, from interested persons.
The Exchange proposes to amend the Bitwise Bitcoin ETF Trust and the Bitwise Ethereum ETF, shares of which have been approved by the Commission to list and trade on the Exchange pursuant to Rule 8.201-E (Commodity-Based Trust Shares), to permit in-kind creations and redemptions. This Amendment No. 2 to SR-NYSEARCA-2025-38 replaces SR-NYSEARCA-2025-38 and Amendment No. 1 thereto as originally filed and supersedes such filings in their entirety. The proposed rule change is available on the
In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item III below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements.
The Exchange proposes to amend the Bitwise Bitcoin ETF Trust (the “Bitcoin Trust”) and the Bitwise Ethereum ETF (the “ETH Trust” and, together with the Bitcoin Trust, the “Trusts”), shares of which have been approved by the Commission to list and trade on the Exchange pursuant to Rule 8.201-E (Commodity-Based Trust Shares), to permit in-kind creations and redemptions.
The Commission approved the listing and trading of shares (“Bitcoin Trust Shares”) of the Bitcoin Trust on the Exchange under Rule 8.201-E (Commodity-Based Trust Shares) on January 10, 2024.
Rule 8.201-E governs the listing and trading of Commodity-Based Trust Shares. Commodity-Based Trust Shares are securities issued by a trust that represent investors' discrete identifiable and undivided beneficial ownership interest in the commodities deposited into the trust. The Bitcoin Trust Shares are issued by the Bitcoin Trust, a Delaware statutory trust, and the ETH Trust Shares are issued by the ETH Trust, also a Delaware statutory trust.
The Exchange proposes to amend representations regarding the Bitcoin Trust's creation and redemption process as set forth in its previous rule filing to list and trade Bitcoin Trust Shares to provide that the Bitcoin Trust may process creations and redemptions in either cash or bitcoin and to describe the process by which the Bitcoin Trust would conduct in-kind transfers of its bitcoin.
Except for the changes described below, all other representations in Amendment No. 2 remain unchanged and will continue to constitute continued listing requirements. In addition, the Bitcoin Trust will continue to comply with the terms of Amendment No. 2 and the requirements of Rule 8.201-E.
In connection with in-kind creations, the Authorized Participant must submit a purchase order by an order cutoff time (the “In-Kind Order Cutoff Time”) to create Baskets of Bitcoin Trust Shares in exchange for bitcoin. The In-Kind Order Cutoff Time will initially be 3:59 p.m. ET on the date a purchase order is received by the Transfer Agent and approved by the Marketing Agent (the “Purchase Order Date”).
On the settlement date for an in-kind creation, the Bitcoin Trust delivers Bitcoin Trust Shares to the Authorized Participant in exchange for bitcoin received from the Authorized Participant or its designated agent or client. The Authorized Participant or its designated agent or client will deposit such bitcoin with Coinbase Custody Trust Company, LLC (the “Bitcoin Custodian”). In the event the Authorized Participant has not deposited the bitcoin with the Bitcoin Custodian by the applicable time on the settlement date of the in-kind purchase order, the Authorized Participant will be given the option to (1) cancel the in-kind purchase order, (2) delay settlement of the purchase order to enable delivery of bitcoin at a later date, or (3) accept that the Bitcoin Trust will execute a bitcoin transaction required for the creation and the Authorized Participant and the Authorized Participant will deliver the U.S. dollars required for the purchase order.
In connection with in-kind redemptions, the Authorized Participant must submit an order by the In-Kind Order Cutoff Time to redeem Baskets of Bitcoin Trust Shares in exchange for bitcoin. On the settlement date for an in-kind redemption, the Bitcoin Trust delivers bitcoin to the Authorized Participant in exchange for Bitcoin Trust Shares received from the Authorized Participant or its designated agent or client. The Authorized Participant or its designated agent or client will deposit such Bitcoin Trust Shares to the Bitcoin Trust's DTC account.
In the event the Authorized Participant has not deposited the Bitcoin Trust Shares to the Bitcoin Trust's DTC account by the applicable time on the settlement date of the in-kind redemption order, the Authorized Participant will be given the option to (1) cancel the in-kind redemption order, (2) delay settlement of the redemption order to enable delivery of Bitcoin Trust Shares at a later date, or (3) accept that the Bitcoin Trust will execute a bitcoin transaction required for the redemption order and the Authorized Participant will be delivered the U.S. dollars required as calculated during the cash redemption process.
Similarly, the Exchange proposes to amend representations regarding the ETH Trust's creation and redemption process as set forth in its previous rule filing to list and trade ETH Trust Shares to allow for in-kind transfers of the ETH Trust's ether.
Except for the changes described below, all other representations in Amendment No. 1 remain unchanged and will continue to constitute continued listing requirements. In addition, the ETH Trust will continue to comply with the terms of Amendment No. 1 and the requirements in Rule 8.201-E.
In connection with in-kind creations, the Authorized Participant must submit a purchase order by the In-Kind Order Cutoff Time to create Baskets of ETH Trust Shares in exchange for ether. The In-Kind Order Cutoff Time will initially be 3:59 p.m. ET on the Purchase Order Date.
On the settlement date for an in-kind creation, the ETH Trust delivers ETH Trust Shares to the Authorized Participant in exchange for ether received from the Authorized Participant or its designated agent or client. The Authorized Participant or its designated agent or client will deposit such ether with Coinbase Custody Trust Company, LLC (the “Ether Custodian”). In the event the Authorized Participant has not deposited the ether with the Ether Custodian by the applicable time on the settlement date of the in-kind purchase order, the Authorized Participant will be given the option to (1) cancel the in-kind purchase order, (2) delay settlement of the purchase order to enable delivery of ether at a later date, or (3) accept that the ETH Trust will execute a ether transaction required for the creation and the Authorized Participant and the Authorized Participant will deliver the U.S. dollars required for the purchase order.
In connection with in-kind redemptions, the Authorized Participant must submit an order by the In-Kind Order Cutoff Time to redeem Baskets of ETH Trust Shares in exchange for ether. On the settlement date for an in-kind redemption, the ETH Trust delivers ether to the Authorized Participant in exchange for ETH Trust Shares received from the Authorized Participant or its designated agent or client. The Authorized Participant or its designated agent or client will deposit such ETH Trust Shares to the ETH Trust's DTC account.
In the event the Authorized Participant has not deposited the ETH Trust Shares to the ETH Trust's DTC account by the applicable time on the settlement date of the in-kind redemption order, the Authorized Participant will be given the option to (1) cancel the in-kind redemption order, (2) delay settlement of the redemption order to enable delivery of ETH Trust Shares at a later date, or (3) accept that the ETH Trust will execute a ether transaction required for the redemption order and the Authorized Participant will be delivered the U.S. dollars required as calculated during the cash redemption process.
The Exchange believes the proposed rule change is consistent with the Act and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of Section 6(b)
The Exchange believes the proposed rule change is designed to remove impediments to and perfect the mechanism of a free and open market and, in general, to protect investors and the public interest because it would update representations in both Amendment No. 2 to the Bitcoin Trust Shares filing and Amendment No. 1 to the ETH Trust Shares filing such that the respective Trusts would both be able to engage in in-kind transactions with Authorized Participants, as described above. This ability would make the Trusts (and the market more generally) operate more efficiently because Authorized Participants would be able to source bitcoin or ether, as applicable, rather than provide cash to the applicable Trust and/or to receive bitcoin or ether, as applicable, directly from the Trusts. In-kind creations and redemptions would allow Authorized Participants to be responsible for buying and selling the applicable crypto asset rather than the Trusts, which would potentially lessen the impact on the market of the Trusts on both sides of the transaction by allowing the Authorized Participants to decide how and where to source the underlying crypto asset for creations and deciding how, where, and whether to sell the underlying crypto asset for redemptions. This would improve the creation and redemption process for both Authorized Participants and the Trusts, increase efficiency, and ultimately benefit the end investors in the Trusts.
As noted above, except for the addition of in-kind creation and redemption for the Bitcoin Trust, all other representations made in Amendment No. 2 to the Bitcoin Trust Shares filing remain unchanged and will continue to constitute continuing listing requirements for the Bitcoin Trust. Similarly, except for the addition of in-kind creation and redemption for the ETH Trust, all other representations made in Amendment No. 1 to the ETH Trust Shares filing remain unchanged and will continue to constitute continuing listing requirements for the ETH Trust.
Accordingly, the Exchange believes that this proposed rule change raises no novel regulatory issues.
The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purpose of the Act. As discussed above, the proposed amendments are intended to reflect changes to the Trusts' creation and redemption processes, specifically to allow for in-kind transfers.
No written comments were solicited or received with respect to the proposed rule change.
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change, as modified by Amendment No. 2, is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
The Exchange proposes to amend the NYSE American Equities Price List (“Equities Price List”) and the NYSE American Options Fee Schedule (“Options Fee Schedule”) to establish fees for Industry Members
In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements.
On July 11, 2012, the Commission adopted Rule 613 of Regulation NMS, which required the self-regulatory organizations (“SROs”) to submit a national market system (“NMS”) plan to create, implement and maintain a consolidated audit trail that would capture customer and order event information for orders in NMS securities across all markets, from the time of order inception through routing, cancellation, modification or execution.
The CAT Funding Model provides a framework for the recovery of the costs to create, develop and maintain the CAT, including providing a method for allocating costs to fund the CAT among Participants and Industry Members. The CAT Funding Model establishes two categories of fees: (1) CAT fees assessed by CAT LLC and payable by certain Industry Members to recover a portion of historical CAT costs previously paid by the Participants (“Historical CAT Assessment” fees); and (2) CAT fees assessed by CAT LLC and payable by Participants and Industry Members to fund prospective CAT costs (“CAT Fees”).
Under the CAT Funding Model, Participants, CEBBs and CEBSs are subject to fees designed to cover the ongoing budgeted costs of the CAT, as determined by the Operating Committee. “The Operating Committee will establish fees (`CAT Fees') to be payable by Participants and Industry Members with regard to CAT costs not previously paid by the Participants (`Prospective CAT Costs').”
The CAT Fees to be paid by CEBBs and CEBSs are designed to contribute toward the recovery of two-thirds of the budgeted CAT costs for the relevant period.
CAT LLC proposes to charge CEBBs and CEBSs (as described in more detail below) CAT Fee 2025-2 to recover the reasonably budgeted CAT costs for the period from July 1, 2025 through December 31, 2025 in accordance with the CAT Funding Model. To implement this fee on behalf of CAT LLC, the CAT NMS Plan requires the Participants to “file with the SEC under Section 19(b) of the Exchange Act any such fees on Industry Members that the Operating Committee approves, and such fees shall be labeled as `Consolidated Audit Trail Funding Fees.' ”
CAT Fee 2025-2 will be charged to each CEBB and CEBS for each applicable transaction in Eligible Securities.
(a) with respect to a transaction in an Eligible Security that is executed on an exchange, the Industry Member identified as the Industry Member responsible for the order on the buy-side of the transaction and the Industry Member responsible for the sell-side of the transaction in the equity order trade event and option trade event in the CAT Data submitted to the CAT by the relevant exchange pursuant to the Participant Technical Specifications; and (b) with respect to a transaction in an Eligible Security that is executed otherwise than on an exchange and required to be reported to an equity trade reporting facility of a registered national securities association, the Industry Member identified as the executing broker and the Industry Member identified as the contra-side executing broker in the TRF/ORF/ADF transaction data event in the CAT Data submitted to the CAT by FINRA pursuant to the Participant Technical Specifications; provided, however, in those circumstances where there is a non-Industry Member identified as the contra-side executing broker in the TRF/ORF/ADF transaction data event or no contra-side executing broker is identified in the TRF/ORF/ADF transaction data event, then the Industry Member identified as the executing broker in the TRF/ORF/ADF transaction data event would be treated as CAT Executing Broker for the Buyer and for the Seller.
The following fields of the Participant Technical Specifications indicate the CAT Executing Brokers for the transactions executed on an exchange:
In addition, the following fields of the Participant Technical Specifications would indicate the CAT Executing Brokers for the transactions executed otherwise than on an exchange:
The Operating Committee determined the Fee Rate to be used in calculating CAT Fee 2025-2 (“Fee Rate 2025-2”) by dividing the reasonably budgeted CAT costs (“Budgeted CAT Costs 2025-2”) for the period from July 1, 2025 through December 31, 2025 (“CAT Fee 2025-2 Period”) by the reasonably projected total executed share volume of all transactions in Eligible Securities for the six-month recovery period, as discussed in detail below.
CAT LLC proposes to implement CAT Fee 2025-2 as the third CAT Fee related to Prospective CAT Costs. CAT LLC proposes to commence CAT Fee 2025-2 during the year, rather than at the beginning of the year. Accordingly, CAT Fee 2025-2 “would be calculated as described in paragraph (II)” of Section 11.3(a)(i)(A) of the CAT NMS Plan,
Under the CAT NMS Plan, for purposes of calculating CAT Fees, executed equivalent shares in a transaction in Eligible Securities will be reasonably counted as follows: (1) each executed share for a transaction in NMS Stocks will be counted as one executed equivalent share; (2) each executed contract for a transaction in Listed Options will be counted based on the multiplier applicable to the specific Listed Options (
The CAT NMS Plan states that “[t]he budgeted CAT costs for the year shall be comprised of all reasonable fees, costs and expenses reasonably budgeted to be incurred by or for the Company in connection with the development, implementation and operation of the CAT as set forth in the annual operating budget approved by the Operating Committee pursuant to Section 11.1(a) of the CAT NMS Plan, or as adjusted during the year by the Operating Committee.”
In accordance with the requirements under the CAT NMS Plan, the Operating Committee approved an annual budget for 2025 for CAT LLC (“Original 2025 CAT Budget”) in November 2024.
As described in detail below, the Budgeted CAT Costs 2025-2 would be $60,726,412. CEBBs collectively will be responsible for one-third of the Budged [
The following describes in detail the Budgeted CAT Costs 2025-2 for CAT Fee 2025-2. The following cost details are provided in accordance with the requirement in the CAT NMS Plan to provide in the fee filing the following:
Each of the costs described below are reasonable, appropriate and necessary for the creation, implementation and maintenance of CAT.
The following table breaks down the Budgeted CAT Costs 2025-2 into the categories set forth in Section 11.3(a)(iii)(B) of the CAT NMS Plan.
To the extent that CAT LLC enters into notes with Participants or others to pay costs incurred during the period in which CAT Fee 2025-2 is in effect, CAT LLC will use the proceeds from CAT Fee 2025-2 and the related Participant CAT fees to repay such notes.
The following table compares the annual budgeted CAT costs as set forth in the updated annual CAT budget for 2024 approved by the Operating Committee in July 2024 (“Updated 2024 CAT Budget”),
In addition, the following table compares the first quarter of the Original 2025 CAT Budget with the first quarter of the Updated 2025 CAT Budget. The Updated 2025 CAT Budget includes actual costs for January, February and March 2025, whereas the Original 2025 CAT Budget included budgeted costs for these three months. The variance from the first quarter of the Original 2025 CAT Budget to the actuals for the first quarter of 2025 (as set forth in the Updated 2025 CAT Budget) in the last column of the following chart are used in this filing in supporting the reasonableness of the estimates for each category of costs.
Section 11.3(a)(iii)(B)(B)(1) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the cloud hosting services costs set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that included $82,222,276 in technology costs for cloud hosting services for the CAT Fee 2025-2 Period. The technology costs for cloud hosting services represent costs reasonably budgeted to be incurred for services provided by the cloud services provider for the CAT, Amazon Web Services, Inc. (“AWS”) during the CAT Fee 2025-2 Period.
In the agreement between CAT LLC and the Plan Processor for the CAT (“Plan Processor Agreement”), FINRA CAT, LLC (“FCAT”), AWS was named as the subcontractor to provide cloud hosting services. Under the Plan Processor Agreement, CAT LLC is required to pay FCAT the fees incurred by the Plan Processor for cloud hosting services provided by AWS as FCAT's subcontractor on a monthly basis for the cloud hosting services, and FCAT, in turn, pays such fees to AWS. The fees for cloud hosting services were negotiated by FCAT on an arm's length basis with the goals of managing costs and receiving services required to comply with the CAT NMS Plan and Rule 613, taking into consideration a variety of factors, including the expected volume of data, the breadth of services provided and market rates for similar services. Services provided by AWS include storage services, databases, compute services and other services (such as networking, management tools and DevOps tools), as well as various environments for CAT, such as development, performance testing, test, and production environments. FCAT utilizes such cloud hosting services for a broad array of services for the CAT, such as data ingestion, data management, and analytic tools for the CAT. AWS performs cloud hosting services for both the CAT transaction database as well as the CAT Customer and Account Information System (“CAIS”). It is anticipated that such cloud hosting services will continue during the CAT Fee 2025-2 Period.
The cost for AWS cloud services for the CAT is a function of the volume of CAT Data, largely as a result of the processing and storage of the CAT Data.
CAT LLC estimates that the budget for cloud hosting services costs during the CAT Fee 2025-2 Period will be approximately $82,222,276. The budget for cloud hosting services costs during the CAT Fee 2025-2 Period is calculated based on the Updated 2025 CAT Budget. Specifically, this estimate was calculated by adding the budgeted amounts for cloud hosting services costs for the third and fourth quarters of 2025 as set forth in the Updated 2025 CAT Budget.
CAT LLC estimated the budget for the cost for cloud hosting services for the
This process for estimating the budget for cloud hosting services costs for the CAT Fee 2025-2 Period is the same process by which CAT LLC estimated the cloud hosting services costs for the Original 2025 CAT Budget. The Original 2025 CAT Budget estimated a budget for cloud hosting services of $39,640,542 for the first quarter of 2025. The actual costs for cloud hosting services for the first quarter of 2025, which are set forth in the Updated 2025 CAT Budget, were $36,357,017. Therefore, the variance between budgeted and actual cloud hosting services costs for this period was an approximate decrease of 8%. Accordingly, CAT LLC believes that the process for estimating the budgeted cloud hosting services costs for the CAT Fee 2025-2 Period is reasonable.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for cloud hosting services costs from the prior CAT Fee filing. Accordingly, this filing describes the changes in the cloud hosting services costs from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budgeted costs for cloud hosting services as set forth in the Original 2025 CAT Budget were $182,594,630, and the annual 2025 budgeted costs for cloud hosting services as set forth in the Updated 2025 CAT Budget are $159,230,937. Accordingly, budgeted annual costs for cloud hosting services decreased by $23,363,693 from the Original 2025 CAT Budget to the Updated 2025 CAT Budget, which is an approximate 13% reduction in cloud hosting services costs for the full year of 2025.
Correspondingly, the budgeted costs for cloud hosting services for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget were $97,748,713,
The decrease in costs for cloud hosting services from the Original 2025 CAT Budget to the Updated 2025 CAT Budget, both for the full year for 2025 and for the third and fourth quarters of 2025, reflects (1) a decrease in costs related to changes made pursuant to the Cost Savings Amendment; (2) cost decreases related to optimizations resulting in reduced procesing [
Section 11.3(a)(iii)(B)(B)(1) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the operating fees set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that included $15,453,942 in technology costs for operating fees for the CAT Fee 2025-2 Period. Operating fees are those fees paid by CAT LLC to FCAT as the Plan Processor to operate and maintain the CAT and to perform business operations related to the system, including compliance, security, testing, training, communications with the industry (
• Provide the CAT-related functions and services as the Plan Processor as required by SEC Rule 613 and the CAT NMS Plan in connection with the operation and maintenance of the CAT;
• Address compliance items, including drafting CAT policies and procedures, and addressing Regulation SCI requirements;
• Provide support to the Operating Committee, the Compliance Subcommittee and CAT working groups;
• Assist with interpretive efforts, exemptive requests and amendments regarding the CAT NMS Plan;
• Oversee the security of the CAT;
• Monitor the operation of the CAT, including with regard to Participant and Industry Member reporting;
• Provide support to subcontractors under the Plan Processor Agreement;
• Provide support in discussions with the Participants and the SEC and its staff;
• Operate the FINRA CAT Helpdesk;
• Facilitate communications with the industry, including via FAQs, CAT Alerts, meetings, presentations and webinars;
• Administer the CAT website and all of its content;
• Maintain cyber security insurance related to the CAT;
• Assist with billing, collection and other CAT fee-related activity; and
• Provide technical support and assistance with connectivity, data access, and user support, including the use of CAT Data and query tools, for Participants and the SEC staff.
CAT LLC calculated the budget for the FCAT technology costs for operating fees for the CAT Fee 2025-2 Period based on the recurring monthly operating fees under the Plan Processor Agreement.
As discussed above, CAT LLC estimated the budget for the operating fees during the CAT Fee 2025-2 Period based on monthly rates set forth in the Plan Processor Agreement and the agreement with Algoseek. CAT LLC also recognized that the operating fees are generally consistent throughout the year. This process for estimating the budget for the operating fees for the CAT Fee 2025-2 Period is the same process by which CAT LLC estimated the operating fees for the Original 2025 CAT Budget. The Original 2025 CAT Budget estimated a budget for operating fees of $7,662,270 for the first quarter of 2025.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for operating fees from the prior CAT Fee filing. Accordingly, this filing describes the changes from the operating fees set forth in the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budgeted costs for operating fees as set forth in the Original 2025 CAT Budget were $30,831,330,
Correspondingly, the budgeted costs for operating fees for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget were $15,446,040,
Section 11.3(a)(iii)(B)(B)(1) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the CAIS operating fees set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that included $10,374,924 in technology costs for CAIS operating fees for the CAT Fee 2025-2 Period. CAIS operating fees represent the fees paid to FCAT for services provided with regard to the operation and maintenance of CAIS, and to perform the business operations related to the system, including compliance, security, testing, training, communications with the industry (
During the CAT Fee 2025-2 Period, it is anticipated that FCAT will provide CAIS-related services. Under the Plan Processor Agreement with FCAT, CAT LLC is required to pay FCAT for CAIS-related services provided by FCAT on a monthly basis. CAT LLC negotiated the fees for FCAT's CAIS-related services on an arm's length basis with the goals of managing costs and receiving services required to comply with the CAT NMS Plan, taking into consideration a variety of factors, including the services to be provided and market rates for similar types of activity. During the CAT Fee 2025-2 Period, it is anticipated that FCAT will continue to provide services relating to the ongoing operation, maintenance and support of CAIS.
CAT LLC estimates that the budget for CAIS operating fees during the CAT Fee 2025-2 Period will be approximately $10,374,924. The budget for CAIS operating fees during the CAT Fee 2025-2 Period is calculated based on the Updated 2025 CAT Budget. Specifically, this estimate was calculated by adding the budgeted amounts for CAIS operating fees for the third and fourth quarters of 2025 as set forth in the Updated 2025 CAT Budget.
CAT LLC calculated the budget for FCAT's CAIS-related services for the CAT Fee 2025-2 Period based on the recurring monthly CAIS operating fees under the Plan Processor Agreement. This process for estimating the budget for the CAIS operating fees for the CAT Fee 2025-2 Period is the same process by which CAT LLC estimated the CAIS operating fees for the Original 2025 CAT Budget. The Original 2025 CAT Budget
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for CAIS operating fees from the prior CAT Fee filing. Accordingly, this filing describes the changes in CAIS operating fees from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
CAIS operating fees are based on a recurring monthly rate payable to FCAT and are unchanged from the prior CAT Fee filing. The annual 2025 budgeted costs for CAIS operating fees as set forth in the Original 2025 CAT Budget were $20,749,848, and the annual 2025 budgeted costs for CAIS operating fees as set forth in the Updated 2025 CAT Budget are $20,749,848. Accordingly, the budgeted annual costs for CAIS operating fees are the same for both the Original 2025 CAT Budget and the Updated 2025 CAT Budget.
Correspondingly, the budgeted costs for CAIS operating fees for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget were $10,374,924, and the budgeted costs for CAIS operating fees for the third and fourth quarters of 2025 as set forth in the Updated 2025 CAT Budget are $10,374,924.
Accordingly, there were no changes in the line item for CAIS operating fees from the prior CAT Fee filing.
Section 11.3(a)(iii)(B)(B)(1) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the change request fees set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that included $500,000 in technology costs for change request fees for the CAT Fee 2025-2 Period. The technology costs related to change request fees include costs related to certain modifications, upgrades or other changes to the CAT.
Change requests are standard practice and necessary to reflect operational changes, including changes related to new market developments, such as new market participants. In general, if CAT LLC determines that a modification, upgrade or other changes to the functionality or service is necessary and appropriate, CAT LLC will submit a request for such a change to the Plan Processor. The Plan Processor will then respond to the request with a proposal for implementing the change, including the cost (if any) of such a change. CAT LLC then determines whether to approve the proposed change.
The change request budget line is established to include expected costs to be incurred in which the nature of the costs (
During the CAT Fee 2025-2 Period, it is anticipated that CAT LLC will engage FCAT to pursue certain change requests in accordance with the Plan Processor Agreement. The budget for change requests for the CAT Fee 2025-2 Period includes a placeholder of $500,000 for potential change request fees that may be necessary in accordance with the Plan Processor Agreement. The placeholder amount was determined based on prior experience with change requests related to the CAT.
CAT LLC estimates that the budget for change requests during the CAT Fee 2025-2 Period will be approximately $500,000. The budget for change requests during the CAT Fee 2025-2 Period is calculated based on the Updated 2025 CAT Budget. Specifically, this estimate was calculated by adding the budgeted amounts for the change requests for the third and fourth quarters of 2025 as set forth in the Updated 2025 CAT Budget.
CAT LLC estimated the budget for the potential change requests for the CAT Fee 2025-2 Period based on, among other things, a review of past change requests and potential future change request needs, as well as discussions with FCAT. This process for estimating the budget for the change requests for the CAT Fee 2025-2 Period is the same process by which CAT LLC estimated the change requests cost for the Original 2025 CAT Budget. The Original 2025 CAT Budget estimated a change request budget of $0 for the the [
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for change request fees from the prior CAT Fee filing. Accordingly, this filing describes the changes in the change request fees from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budgeted costs for change requests as set forth in the Original 2025 CAT Budget were $750,000, and the annual 2025 budgeted costs for change requests as set forth in the Updated 2025 CAT Budget are $750,000. Accordingly, budgeted annual costs for change requests are the same for both the Original 2025 CAT Budget and the Updated 2025 CAT Budget.
Correspondingly, the budgeted costs for change requests for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget were $500,000, and the budgeted costs for change request for the third and fourth quarters of 2025 as set forth in the Updated 2025 CAT Budget are
Accordingly, there were no changes in the line item for change requests from the prior CAT Fee filing.
Section 11.3(a)(iii)(B)(B)(1) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the capitalized developed technology costs set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that includes $0 in technology costs for capitalized developed technology costs for the CAT Fee 2025-2 Period. This category of costs includes the budget for capitalizable application development costs incurred in the development of the CAT. It is anticipated that such costs will include certain costs related to the software license fee for CAIS in accordance with the Plan Processor Agreement with FCAT, as well as costs related to a set of technology changes to be implemented by FCAT.
CAT LLC estimates that the budget for capitalized developed technology costs during the CAT Fee 2025-2 Period will be approximately $0. The budget for capitalized developed technology costs during the CAT Fee 2025-2 Period is calculated based on the Updated 2025 CAT Budget. Specifically, this estimate was calculated by adding the budgeted amounts for capitalized developed technology costs for the third and fourth quarters of 2025 as set forth in the Updated 2025 CAT Budget.
CAT LLC estimated the budget for capitalized developed technology costs for the CAT Fee 2025-2 Period based on an analysis of a variety of factors, including information related to potential technology costs and related contractual and Plan requirements, and discussions with FCAT regarding such potential technology costs. This process for estimating the budget for capitalized developed technology costs for the CAT Fee 2025-2 Period is the same process by which CAT LLC estimated the capitalized developed technology costs for the Original 2025 CAT Budget. The Original 2025 CAT Budget estimated a budget for capitalized developed technology costs of $3,923,360 for the first quarter of 2025.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for capitalized developed technology costs from the prior CAT Fee filing. Accordingly, this filing describes the changes in the capitalized developed technology costs from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budget for capitalized developed technology costs as set forth in the Original 2025 CAT Budget were $3,923,360,
In addition, the budget for capitalized developed technology costs for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget was $0,
Section 11.3(a)(iii)(B)(B)(2) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the legal costs set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that includes $3,631,342 in legal costs for the CAT Fee 2025-2 Period. This category of costs represents budgeted costs for legal services for this period. CAT LLC anticipates that it will receive legal services from two law firms, Wilmer Cutler Pickering Hale and Dorr LLP (“WilmerHale”) and Jenner & Block LLP (“Jenner”), during the CAT Fee 2025-2 Period.
During the CAT Fee 2025-2 Period, it is anticipated that WilmerHale will provide legal services related to the following:
• Assist with CAT fee filings and related funding issues;
• Draft exemptive requests from CAT NMS Plan requirements and/or proposed amendments to the CAT NMS Plan;
• Provide legal guidance with respect to interpretations of CAT NMS Plan requirements;
• Provide legal support for the Operating Committee, Compliance Subcommittee, working groups and Leadership Team;
• Draft SRO rule filings related to the CAT Compliance Rule;
• Manage corporate governance matters, including supporting Operating Committee meetings and preparing resolutions and consents;
• Assist with communications with the industry, including CAT Alerts and presentations;
• Provide guidance regarding the confidentiality of CAT Data;
• Assist with cost management analyses and proposals;
• Assist with commercial contract-related matters, including change orders and amendments, Plan Processor Agreement items, and subcontract matters;
• Provide support with regard to discussions with the SEC and its staff, including with respect to addressing interpretive and implementation issues;
• Provide legal guidance with respect to the CAT budgets;
• Provide background assistance to other counsel for CAT matters;
• Assist with legal responses related to third-party data requests; and
• Provide legal support regarding CAT policies and procedures.
CAT LLC estimated the budget for the legal costs for WilmerHale for the CAT Fee 2025-2 Period through an analysis of a variety of factors, including WilmerHale fee rates, historical legal fees, and information related to pending legal issues and potential future legal issues.
During the CAT Fee 2025-2 Period, it is anticipated that Jenner will continue to provide legal assistance to CAT LLC regarding certain litigation matters, including: (1) CAT LLC's defense against a lawsuit filed in the Western District of Texas against the SEC Chair, the SEC and CAT LLC challenging the validity of Rule 613 and the CAT and alleging various constitutional, statutory, and common law claims;
CAT LLC estimated the budget for the legal costs for Jenner for the CAT Fee 2025-2 Period through an analysis of a variety of factors, including Jenner's fee rates, historical legal fees, and information related to pending legal issues and potential future legal issues.
CAT LLC estimated the budget for the legal services for the CAT Fee 2025-2 Period based on an analysis of a variety of factors, including law firm fee rates, historical legal fees, and information related to pending legal issues and potential future legal issues. This process for estimating the budget for the legal services for CAT Fee 2025-2 Period is the same process by which CAT LLC estimated the legal cost for the Original 2025 CAT Budget. The Original 2025 CAT Budget estimated a budget for legal costs of $1,430,000 for the first quarter of 2025. The actual costs for legal services for the first quarter of 2025, which are set forth in the Updated 2025 Budget, were $1,922,990. The increase of $492,990 was due to unanticipated issues that required additional legal efforts on behalf of CAT LLC that developed after the budget was created. Such additional costs were primarily due to additional legal work in responding to an SEC examination related to the CAT, for commercial contract-related matters, including with regard to the Plan Processor Agreement, and related to cost savings initiatives. Accordingly, CAT LLC believes that the process for estimating the budgeted legal costs for the CAT Fee 2025-2 Period is reasonable.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for legal costs from the prior CAT Fee filing. Accordingly, this filing describes the changes in the legal costs from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budgeted legal costs as set forth in the Original 2025 CAT Budget were $5,720,000, and the annual 2025 budgeted legal costs as set forth in the Updated 2025 CAT Budget are $7,370,002. Accordingly, the annual budget for legal costs increased by $1,650,002 from the Original 2025 CAT Budget to the Updated 2025 CAT Budget for the full year of 2025.
Correspondingly, the budgeted legal costs for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget were $2,860,000,
This budgeted increase in the legal costs in the Updated 2025 CAT Budget
Section 11.3(a)(iii)(B)(B)(3) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the consulting costs set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that included $866,167 in consulting costs for the CAT Fee 2025-2 Period. The consulting costs represent the fees estimated to be paid to the consulting firm Deloitte & Touche LLP (“Deloitte”) as project manager during the CAT Fee 2025-2 Period. These consulting costs include costs for advisory services related to the operation of the CAT, and meeting facilitation and communications coordination, vendor support and financial analyses.
It is anticipated that the costs for CAT during the CAT Fee 2025-2 Period will include costs related to consulting services performed by Deloitte. CAT LLC anticipates that it will continue to employ Deloitte during the CAT Fee 2025-2 Period based on, among other things, their expertise, long history with the project, and the recognition that it is anticipated that the consulting fees will remain in line with market rates for this type of specialized consulting work. Deloitte's fee rates are negotiated on an annual basis. CAT LLC assesses Deloitte's performance and reviews prospective budgets and staffing plans submitted by Deloitte on an annual basis. The consulting fees will be paid by CAT LLC to Deloitte.
It is anticipated that Deloitte will provide a variety of consulting services to the CAT during the CAT Fee 2025-2 Period, including the following:
• Implement program operations for the CAT project;
• Provide support to the Operating Committee, the Chair of the Operating Committee and the Leadership Team, including project management support, coordination and planning for meetings and communications, and interfacing with law firms and the SEC;
• Assist with cost and funding matters for the CAT, including assistance with loans and the CAT bank account for CAT funding;
• Provide support for updating the SEC on the progress of the development of the CAT; and
• Provide support for third party vendors for the CAT, including FCAT, Anchin and the law firms engaged by CAT LLC.
In addition, the consulting costs include the compensation for the Chair of the CAT Operating Committee.
CAT LLC estimates that the budget for consulting costs during the CAT Fee 2025-2 Period will be approximately $866,167. The budget for consulting costs during the CAT Fee 2025-2 Period is calculated based on the Updated 2025 CAT Budget. Specifically, this estimate was calculated by adding the budgeted amounts for consulting services for the third and fourth quarters of 2025 as set forth in the Updated 2025 CAT Budget.
CAT LLC estimates the budget for the consulting costs for Deloitte for the CAT Fee 2025-2 Period based on the current statement of work with Deloitte, which took into consideration past consulting costs, potential future consulting needs, the proposed rates and other contractual issues, as well as discussions with Deloitte. This process for estimating the budget for consulting costs for the CAT Fee 2025-2 Period is the same process by which CAT LLC estimated the consulting costs for the Original 2025 CAT Budget. The Original 2025 CAT Budget estimated a budget for consulting services of $437,500 for the first quarter of 2025. The actual costs for consulting services for the first quarter of 2025, which are set forth in the Updated 2025 CAT Budget, were $450,745. Therefore, the variance between budgeted and actual consulting costs for the first quarter of 2025 was approximately 3%. Accordingly, CAT LLC believes that the process for estimating the budgeted consulting costs for the CAT Fee 2025-2 Period is reasonable.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for consulting costs from the prior CAT Fee filing. Accordingly, this filing describes the changes in the consulting costs from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budget for consulting costs as set forth in the Original 2025 CAT Budget was $1,750,000, and the annual 2025 budget for consulting costs as set forth in the Updated 2025 CAT Budget is approximately $1,750,000. Accordingly, the annual budget for consulting costs has not changed from the Original 2025 CAT Budget to the Updated 2025 CAT Budget for the full year of 2025.
Correspondingly, the budget for consulting costs for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget was $875,000,
Section 11.3(a)(iii)(B)(B)(4) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the insurance costs set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that included $1,594,452 in insurance costs for the CAT Fee 2025-2 Period. The insurance costs represent the costs to be incurred for insurance for CAT during the CAT Fee 2025-2 Period.
It is anticipated that the insurance costs for CAT during the CAT Fee 2025-2 Period will include costs related to cyber security liability insurance, directors' and officers' liability insurance, and errors and omissions liability insurance brokered by USI Insurance Services LLC (“USI”). Such policies are standard for corporate entities, and cyber security liability insurance is important for the CAT System. CAT LLC anticipates that it will continue to maintain this insurance during the CAT Fee 2025-2 Period, and notes that the annual premiums for these policies were competitive for the
The budgeted insurance costs for the CAT Fee 2025-2 Period are based on an insurance cost estimate from USI for 2025. Accordingly, CAT LLC believes that the process for estimating the budgeted insurance costs for the CAT Fee 2025-2 Period is reasonable.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for insurance costs from the prior CAT Fee filing. Accordingly, this filing describes the changes in the insurance costs from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budgeted insurance costs as set forth in the Original 2025 CAT Budget were $1,594,452, and the annual 2025 budgeted insurance costs as set forth in the Updated 2025 CAT Budget are $1,594,452. Accordingly, the annual budgeted insurance costs remained the same for the Original 2025 CAT Budget and the Updated 2025 CAT Budget for the full year of 2025.
Correspondingly, the budgeted insurance costs for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget were $1,594,452,
Section 11.3(a)(iii)(B)(B)(5) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the professional and administration costs set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that included $609,818 in professional and administration costs for the CAT Fee 2025-2 Period. In adopting the CAT NMS Plan, the Commission amended the Plan to add a requirement that CAT LLC's financial statements be prepared in compliance with GAAP, audited by an independent public accounting firm, and made publicly available.
It is anticipated that Anchin will provide a variety of services to the CAT during the CAT Fee 2025-2 Period, including the following:
• Update and maintain internal controls;
• Provide cash management and treasury functions;
• Facilitate bill payments to vendors;
• Facilitate repayments of promissory notes to Participants;
• Provide monthly bookkeeping;
• Review vendor invoices and documentation in support of cash disbursements;
• Review documentation to ensure that repayments of promissory notes to Participants are in accordance with established policies and procedures;
• Provide accounting research and consultations on various accounting, financial reporting and tax matters;
• Address not-for-profit tax and accounting considerations;
• Prepare tax returns;
• Address various accounting, financial reporting and operating inquiries from Participants;
• Develop and maintain annual operating and financial budgets, including budget to actual fluctuation analyses;
• Support compliance with the CAT NMS Plan;
• Work with and provide support to the Operating Committee and various CAT working groups;
• Prepare monthly, quarterly and annual financial statements;
• Review and reconcile the monthly FINRA CAT reports/analyses related to billings, collections, outstanding accounts receivable and cash account;
• Perform certain verification, completeness, and validation testing related to the monthly FINRA CAT reports/analyses related to billings;
• Support the annual financial statement audits by an independent auditor;
• Review historical costs from inception;
• Provide accounting and financial information in support of SEC filings; and
• Perform additional ad hoc accounting and financial advisory services, as requested by CAT LLC.
CAT LLC estimated the annual budget for the costs for Anchin based on historical costs adjusted for cost of living rate increases, and projected incremental advisory and support services.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for professional and administration costs from the prior CAT Fee filing. Accordingly, this filing describes the changes in the professional and administration costs from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budgeted professional and administration costs as set forth in the Original 2025 CAT Budget were $882,456, and the annual 2025 budgeted professional and administration costs as set forth in the Updated 2025 CAT Budget are $1,193,090. Accordingly, the budgeted annual costs for professional and administration services increased by $310,634 from the Original 2025 CAT Budget to the Updated 2025 CAT Budget for the full year of 2025.
Correspondingly, the budgeted costs for professional and administration services for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget were $444,246,
This budgeted increase in the professional and administration costs in the Updated 2025 CAT Budget from the Original 2025 Budget, both for the full year for 2025 and for the third and fourth quarters of 2025, was primarily due to increases in both financial advisory costs and accounting costs as a result of additional anticipated efforts related to billings and collections of fees from Participants and Industry Members, coupled with expected incremental efforts related to supporting CAT LLC's independent auditors for the 2024 audit.
Section 11.3(a)(iii)(B)(B)(6) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the public relations costs set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that included $0 in public relations costs for the CAT Fee 2025-2 Period. The public relations costs represent the fees paid to a public relations firm for professional communications services to CAT, including media relations consulting, strategy and execution. Because CAT LLC anticipates that it will not engage a public relations firm for the third and fourth quarters of 2025, the budget for public relations costs for this period is $0.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for public relations costs from the prior CAT Fee filing. Accordingly, this filing describes the changes in the public relations costs from the Updated 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual budgeted public relations costs for 2025 as set forth in the Original 2025 CAT Budget were $50,000, and the annual budgeted public relations costs for 2025 as set forth in the Updated 2025 CAT Budget are $6,575. Accordingly, the annual budget for public relations cost for 2025 decreased by $43,425 from the Original 2025 CAT Budget to the Updated 2025 CAT Budget for the full year of 2025.
Correspondingly, the budgeted costs for public relations services for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget were $25,000,
This budgeted decrease in the public relations costs from the Original 2025 CAT Budget to the Updated 2025 CAT Budget, both for the full year for 2025 and for the third and fourth quarters of 2025, was primarily due to CAT LLC's anticipation that it would not engage a public relations firm for the remainder of 2025.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the reserve costs set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that includes a reserve amount for 2025. Section 11.1(a)(i) of the CAT NMS Plan states that the budget shall include a reserve. Section 11.1(a)(ii) of the CAT NMS Plan further describes the reserve as follows:
For the reserve referenced in paragraph (a)(i) of this Section, the budget will include an amount reasonably necessary to allow the Company to maintain a reserve of not more than 25% of the annual budget. To the extent collected CAT fees exceed CAT costs, including the reserve of 25% of the annual budget, such surplus shall be used to offset future fees. For the avoidance of doubt, the Company will only include an amount for the reserve in the annual budget if the Company does not have a sufficient reserve (which shall be up to but not more than 25% of the annual budget). For the avoidance of doubt, the calculation of the amount of the reserve would exclude the amount of the reserve from the budget.
CAT LLC determined to maintain a reserve in the amount of 25% of the total expenses set forth in Updated 2025 CAT Budget (which does not include the reserve amount). Accordingly, the total 25% reserve was calculated by multiplying the total expenses set forth in the Updated 2025 CAT Budget (other than the reserve) by 25%, which is $57,083,638.
The Updated 2025 CAT Budget states that CAT LLC had accrued $70,942,596 for the reserve as of the beginning of 2025, and an additional $28,846,075 during the first quarter of 2025, from the collection of CAT Fees 2024-1 and 2025-1 and the related Participant CAT Fees. In addition, the Updated 2025 CAT Budget anticipates the collection of an additional $11,821,477 during the second quarter of 2025 via CAT Fee 2025-1 and the related Participant CAT Fee. Accordingly, the Updated 2025 CAT Budget estimates that CAT LLC would collect a surplus reserve amount through June 2025 of $54,526,412 over the 25% reserve amount of $57,083,638.
Such surplus was related, in part, to (i) the collection of CAT fees in excess of the budgeted CAT costs for 2024 and 2025 in light of the greater actual executed equivalent share volume than the projected executed equivalent share volume for CAT Fees 2024-1 and 2025-1, and (ii) a reduction in anticipated budgeted costs associated with the implementation of certain cost savings measures approved by the SEC pertaining to the processing of options market maker quotes and the storage of certain data.
As set forth in the Budgeted CAT Costs 2025-2, the surplus reserve balance of $54,526,412 would be used to offset a portion of CAT costs for the third and fourth quarters of 2025, thereby reducing the fee rate to be paid for CAT Fee 2025-2. Specifically, the total costs used to calculate the fee rate for CAT Fee 2025-2 would be reduced by the amount of the surplus reserve as set forth in the following table:
Accordingly, the fee rate for CAT Fee 2025-2 is calculated based on this reduced amount of $60,726,412, resulting in a fee rate of $0.000009 per executed equivalent share. If the fee rate for CAT Fee 2025-2 were calculated solely based on the reasonably budgeted costs for CAT for July-December 2025 excluding the reduction in that amount due to the surplus reserve offset (that is, based on $115,252,921, not $60,726,412), the fee rate would be the higher rate of $0.000017.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for a reserve from the prior CAT Fee filing. Accordingly, this filing describes the changes in the reserve from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
For the Original 2025 CAT Budget, CAT LLC determined to maintain a reserve in the amount of 25% of budgeted CAT costs (other than the reserve). Accordingly, the total 25% reserve was calculated by multiplying the budgeted CAT costs (other than the reserve) as set forth in the Original 2025 CAT Budget (which is $248,846,076) by 25%, for a target reserve amount of
As discussed above, CAT LLC determined to maintain a reserve in the amount of 25% of the budgeted CAT costs (other than the reserve). Accordingly, the total 25% reserve was calculated by multiplying the budgeted CAT costs (other than the reserve) as set forth in the Updated 2025 CAT Budget (which is $228,334,551) by 25%, for a target reserve amount of $57,083,638.
As discussed above, such surplus reserve balance of $54,526,412 would be used to offset a portion of CAT costs for the third and fourth quarters of 2025, thereby reducing the fee rate for CAT Fee 2025-2 in accordance with Section 11.1(a)(ii) of the CAT NMS Plan. Section 11.1(a)(ii) of the CAT NMS Plan states that “[t]o the extent collected CAT fees exceed CAT costs, including the reserve of 25% of the annual budget, such surplus shall be used to offset future fees.”
The calculation of Fee Rate 2025-2 also requires the determination of the projected total executed equivalent share volume of transactions in Eligible Securities for the CAT Fee 2025-2 Period. Under the CAT NMS Plan, the Operating Committee is required to “reasonably determine the projected total executed equivalent share volume of all transactions in Eligible Securities for each relevant period based on the executed equivalent share volume of all transactions in Eligible Securities for the prior twelve months.”
The total executed equivalent share volume of transactions in Eligible Securities for the 12-month period from April 2024 through March 2025 was 4,580,287,680,646.28 executed equivalent shares. The Operating Committee has determined to calculate the projected total executed equivalent share volume for the six-month recovery period for CAT Fee 2025-2 by multiplying by one-half the executed equivalent share volume for the 12-month period from April 2024 through March 2025. The Operating Committee determined that such an approach was reasonable as the CAT's annual executed equivalent share volume has remained relatively constant. For example, the executed equivalent share volume for 2021 was 3,963,697,612,395, the executed equivalent share volume for 2022 was 4,039,821,841,560.31, the executed equivalent share volume for 2023 was 3,868,940,345,680.6, and the executed equivalent share volume for 2024 was 4,295,884,600,069.41. Accordingly, the projected total executed equivalent share volume for the six-month period for CAT Fee 2025-2 is projected to be 2,290,143,840,323.14 executed equivalent shares.
The projected total executed equivalent share volume of all transactions in Eligible Securities for the six-month recovery period for CAT Fee 2025-2 and a description of the calculation of the projection is provided in this filing in accordance with the requirement in the CAT NMS Plan to provide such information in a fee filing for a CAT Fee.
Fee Rate 2025-2 would be calculated by dividing the Budgeted CAT Costs 2025-2 by the reasonably projected total executed equivalent share volume of all transactions in Eligible Securities for the six-month recovery period for CAT Fee 2025-2, as described in detail above.
CEBBs and CEBSs would be required to pay fees for CAT Fee 2025-2 on a monthly basis for six months, from August 2025 until January 2026. A CEBB's or CEBS's fee for each month would be calculated based on the transactions in Eligible Securities executed by the CEBB or CEBS from the prior month.
To implement CAT Fee 2025-2, the Exchange proposes to add a new paragraph to the “Consolidated Audit Trail Funding Fees” section of the Exchange's Fee Schedule, to include the proposed paragraphs described below.
The CAT NMS Plan states that:
Each Industry Member that is the CAT Executing Broker for the buyer in a transaction in Eligible Securities (“CAT Executing Broker for the Buyer” or “CEBB”) and each Industry Member that is the CAT Executing Broker for the seller in a transaction in Eligible Securities (“CAT Executing Broker for the Seller” or “CEBS”) will be required to pay a CAT Fee for each such transaction in Eligible Securities in the prior month based on CAT Data. The CEBB's CAT Fee or CEBS's CAT Fee (as applicable) for each transaction in Eligible Securities will be calculated by multiplying the number of executed equivalent shares in the transaction by one-third and by the Fee Rate reasonably determined pursuant to paragraph (a)(i) of this Section 11.3.
Accordingly, based on the factors discussed above, the Exchange proposes to add paragraph (a)(5) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule. Proposed paragraph (a)(5) would state the following:
(A) Each CAT Executing Broker shall receive its first invoice for CAT Fee 2025-2 in August 2025, which shall set forth the CAT Fee 2025-2 fees calculated based on transactions in July 2025, and shall receive an invoice for CAT Fee 2025-2 for each month thereafter until January 2026.
(B) Consolidated Audit Trail, LLC shall provide each CAT Executing Broker with an invoice for CAT Fee 2025-2 on a monthly basis. Each month, such invoices shall set forth a fee for each transaction in Eligible Securities executed by the CAT Executing Broker in its capacity as a CAT Executing Broker for the Buyer (“CEBB”) and/or the CAT Executing Broker for the Seller (“CEBS”) (as applicable) from the prior month as set forth in CAT Data. The fee for each such transaction will be calculated by multiplying the number of executed equivalent shares in the transaction by the fee rate of $0.000009 per executed equivalent share.
(C) Notwithstanding the last invoice date of January 2026 for CAT Fee 2025-2 in paragraph 5(A), CAT Fee 2025-2 shall continue in effect after January 2026, with each CAT Executing Broker receiving an invoice for CAT Fee 2025-2 each month, until a new subsequent CAT Fee is in effect with regard to Industry Members in accordance with Section 19(b) of the Exchange Act. Consolidated Audit Trail, LLC will provide notice when CAT Fee 2025-2 will no longer be in effect.
(D) Each CAT Executing Broker shall be required to pay each invoice for CAT Fee 2025-2 in accordance with paragraph (b).
As noted in the Plan amendment for the CAT Funding Model, “[a]s a practical matter, the fee filing would provide the exact fee per executed equivalent share to be paid for the CAT Fees, by multiplying the Fee Rate by one-third and describing the relevant number of decimal places for the fee.”
The proposed language in paragraph (a)(5)(A) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule would describe when CAT Executing Brokers would receive their first monthly invoice for CAT Fee 2025-2. Specifically, CAT Executing Brokers would receive their first monthly invoice for CAT Fee 2025-2 in August 2025 and the fees set forth in that invoice would be calculated based on transactions executed in July 2025. The payment for the first invoice would be required within 30 days after the receipt of the first invoice (unless a longer period is indicated), as described in paragraph (b)(2) of the Fee Schedule.
Proposed paragraph (a)(5)(A) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule also would describe the monthly cadence of the invoices for CAT Fee 2025-2. Specifically, after the first invoices are provided to CAT Executing Brokers in August 2025, invoices will be sent to CAT Executing Brokers each month thereafter until January 2026.
Proposed paragraph (a)(5)(B) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule would describe the invoices for CAT Fee 2025-2. Proposed paragraph (a)(5)(B) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule would state that “Consolidated Audit Trail, LLC shall provide each CAT Executing Broker with an invoice for CAT Fee 2025-2 on a monthly basis.” Proposed paragraph (a)(5)(B) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule also would describe the fees to be set forth in the invoices for CAT Fee 2025-2. Specifically, it would state that “[e]ach month, such invoices shall set forth a fee for each transaction in Eligible Securities executed by the CAT Executing Broker in its capacity as a CAT Executing Broker for the Buyer (`CEBB') and/or the CAT Executing Broker for the Seller (`CEBS') (as applicable) from the prior month as set forth in CAT Data. The fee for each such transaction will be calculated by multiplying the number of executed equivalent shares in the transaction by the fee rate of $0.000009 per executed equivalent share.”
Since CAT Fee 2025-2 is a monthly fee based on actual transaction volume from the prior month, CAT Fee 2025-2 may collect more or less than two-thirds of the Budgeted CAT Costs 2025-2. To the extent that CAT Fee 2025-2 collects more than two-thirds of the Budgeted CAT Costs 2025-2, any excess money collected will be used to offset future fees and/or to fund the reserve for the CAT. To the extent that CAT Fee 2025-2 collects less than two-thirds of the Budgeted CAT Costs 2025-2, the budget for the CAT in the ensuing months will reflect such shortfall.
Furthermore, proposed paragraph (a)(5)(C) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule would describe how long CAT Fee 2025-2 would remain in effect. It would state that “[n]otwithstanding the last invoice date of January 2026 for CAT Fee 2025-2 in paragraph 5(A), CAT Fee 2025-2 shall continue in effect after January 2026, with each CAT Executing Broker receiving an invoice for CAT Fee 2025-2 each month, until a new subsequent CAT Fee is in effect with regard to Industry Members in accordance with Section 19(b) of the Exchange Act. Consolidated Audit Trail,
Finally, proposed paragraph (a)(5)(D) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule would set forth the requirement for the CAT Executing Brokers to pay the invoices for CAT Fee 2025-2. It would state that “[e]ach CAT Executing Broker shall be required to pay each invoice for CAT Fee 2025-2 in accordance with paragraph (b).”
Paragraph (b)(1) of the “Consolidated Audit Trail Funding Fees” section of the Fee Schedule describes the manner of payment of Industry Member CAT fees. It states that “[e]ach CAT Executing Broker shall pay its CAT fees as required pursuant to paragraph (a) each month to the Consolidated Audit Trail, LLC in the manner prescribed by the Consolidated Audit Trail, LLC.” The CAT NMS Plan requires the Operating Committee to establish a system for the collection of CAT fees.
The CAT NMS Plan further states that:
Participants shall require each Industry Member to pay all applicable fees authorized under this Article XI within thirty (30) days after receipt of an invoice or other notice indicating payment is due (unless a longer payment period is otherwise indicated). If an Industry Member fails to pay any such fee when due (as determined in accordance with the preceding sentence), such Industry Member shall pay interest on the outstanding balance from such due date until such fee is paid at a per annum rate equal to the lesser of: (a) the Prime Rate plus 300 basis points; or (b) the maximum rate permitted by applicable law.
Paragraph (b)(2) of the Consolidated Audit Trail Funding Fees section of the Fee Schedule states that:
Each CAT Executing Broker shall pay the CAT fees required pursuant to paragraph (a) within thirty days after receipt of an invoice or other notice indicating payment is due (unless a longer payment period is otherwise indicated). If a CAT Executing Broker fails to pay any such CAT fee when due, such CAT Executing Broker shall pay interest on the outstanding balance from such due date until such fee is paid at a per annum rate equal to the lesser of (i) the Prime Rate plus 300 basis points, or (ii) the maximum rate permitted by applicable law.
The requirements of paragraph (b)(2) would apply to CAT Fee 2025-2.
The CAT NMS Plan states that:
Details regarding the calculation of a Participant or CAT Executing Broker's CAT Fees will be provided upon request to such Participant or CAT Executing Broker. At a minimum, such details would include each Participant or CAT Executing Broker's executed equivalent share volume and corresponding fee by (1) Listed Options, NMS Stocks and OTC Equity Securities, (2) by transactions executed on each exchange and transactions executed otherwise than on an exchange, and (3) by buy-side transactions and sell-side transactions.
Such information would provide CEBBs and CEBSs with the ability to understand the details regarding the calculation of their CAT Fee.
In addition, CAT LLC will make certain aggregate statistics regarding CAT Fees publicly available. Specifically, the CAT NMS Plan states that, “[f]or each CAT Fee, at a minimum, CAT LLC will make publicly available the aggregate executed equivalent share volume and corresponding aggregate fee by (1) Listed Options, NMS Stocks and OTC Equity Securities, (2) by transactions executed on each exchange and transactions executed otherwise than on an exchange, and (3) by buy-side transactions and sell-side transactions.”
Furthermore, CAT LLC will make publicly available on the CAT website the total amount invoiced each month that CAT Fee 2025-2 is in effect as well as the total amount invoiced for CAT Fee 2025-2 for all months since its commencement. CAT LLC also will make publicly available on the CAT website the total costs to be collected from Industry Members for CAT Fee 2025-2.
The CAT NMS Plan states that “[n]o Participant will make a filing with the SEC pursuant to Section 19(b) of the Exchange Act regarding any CAT Fee related to Prospective CAT Costs until the Financial Accountability Milestone related to Period 4 described in Section 11.6 has been satisfied.”
CAT LLC intends for CAT Fee 2025-2 to replace CAT Fee 2025-1 (which has a fee rate of $0.000022).
While CAT Fees charged to Industry Members become effective in accordance with the requirements of Section 19(b) of the Exchange Act,
The Exchange believes the proposed rule change is consistent with the requirements of the Exchange Act. The Exchange believes that the proposed rule change is consistent with Section 6(b)(5) of the Act,
The Exchange believes that this proposal is consistent with the Act because it implements provisions of the Plan and is designed to assist the Exchange in meeting regulatory obligations pursuant to the Plan. In approving the Plan, the SEC noted that the Plan “is necessary and appropriate in the public interest, for the protection of investors and the maintenance of fair and orderly markets, to remove impediments to, and perfect the mechanism of a national market system, or is otherwise in furtherance of the purposes of the Act.”
The Exchange believes that the proposed fees to be paid by the CEBBs and CEBSs are reasonable, equitably allocated and not unfairly discriminatory. First, the CAT Fee 2025-2 fees to be collected are directly associated with the budgeted costs of establishing and maintaining the CAT, where such costs include Plan Processor costs and costs related to technology, legal, consulting, insurance, professional and administration, and public relations costs.
The proposed CAT Fee 2025-2 fees would be charged to Industry Members in support of the maintenance of a consolidated audit trail for regulatory purposes. The proposed fees, therefore, are consistent with the Commission's view that regulatory fees be used for regulatory purposes and not to support the Exchange's business operations. The proposed fees would not cover Exchange services unrelated to the CAT. In addition, any surplus would be used as a reserve to offset future fees. Given the direct relationship between CAT fees and CAT costs, the Exchange believes that the proposed fees are reasonable, equitable and not unfairly discriminatory.
As further discussed below, the SEC approved the CAT Funding Model, finding it was reasonable and that it equitably allocates fees among Participants and Industry Members. The Exchange believes that the proposed fees adopted pursuant to the CAT Funding Model approved by the SEC are reasonable, equitably allocated and not unfairly discriminatory.
Section 11.1(b) of the CAT NMS Plan states that “[t]he Participants shall file with the SEC under Section 19(b) of the Exchange Act any such fees on Industry Members that the Operating Committee approves.” Per Section 11.1(b) of the CAT NMS Plan, the Exchange has filed this fee filing to implement the Industry Member CAT fees included in the CAT Funding Model. The Exchange believes that this proposal is consistent with the Exchange Act because it is consistent with, and implements, the CAT Funding Model in the CAT NMS Plan, and is designed to assist the Exchange and its Industry Members in meeting regulatory obligations pursuant to the CAT NMS Plan. In approving the CAT NMS Plan, the SEC noted that the Plan “is necessary and appropriate in the public interest, for the protection of investors and the maintenance of fair and orderly markets, to remove impediments to, and perfect the mechanism of a national market system, or is otherwise in furtherance of the purposes of the
The SEC has determined that the CAT Funding Model is reasonable and satisfies the requirements of the Exchange Act. Specifically, the SEC has concluded that the method for determining CAT Fees as set forth in Section 11.3 of the CAT NMS Plan, including the formula for calculating the Fee Rate, the identification of the parties responsible for payment and the transactions subject to the fee rate for CAT Fees, is reasonable and satisfies the Exchange Act.
The formula for calculating a Fee Rate requires the amount of Budgeted CAT Costs to be recovered. Specifically, Section 11.3(a)(iii)(B) of the CAT NMS Plan requires a fee filing to provide:
In accordance with this requirement, the Exchange has set forth the amount and type of Budgeted CAT Costs 2025-2 for each of these categories above.
Section 11.3(a)(iii)(B) of the CAT NMS Plan also requires that the fee filing provide “sufficient detail to demonstrate that the budget for the upcoming year, or part of year, as applicable, is reasonable and appropriate.” As discussed below, the Exchange believes that the budget for the CAT Fee 2025-2 Period is “reasonable and appropriate.” Each of the costs included in CAT Fee 2025-2 are reasonable and appropriate because the costs are consistent with standard industry practice, based on the need to comply with the requirements of the CAT NMS Plan, incurred subject to negotiations performed on an arm's length basis, and/or are consistent with the needs of any legal entity, particularly one with no employees.
In approving the CAT Funding Model, the Commission recognized that it is appropriate to recover budgeted costs related to cloud hosting services as a part of CAT Fees.
To comply with the requirements of the Plan, the breadth of the cloud activities related to the CAT is substantial. The cloud services not only include the production environment for the CAT, but they also include two industry testing environments, support environments for quality assurance and stress testing and disaster recovery capabilities. Moreover, the cloud storage costs are driven by the requirements of the Plan, which requires the storage of multiple versions of the data, from the original submitted version of the data through various processing steps, to the final version of the data.
Data volume is a significant driver of costs for cloud hosting services. When the Commission adopted the CAT NMS Plan in 2016, it estimated that the CAT would need to receive 58 billion records per day
In addition to the effect of the data volume on the cloud hosting costs, the processing timelines set forth in the Plan contribute to the cloud hosting costs. Although CAT LLC has proactively sought to manage cloud hosting costs while complying with the Plan, including through requests to the Commission for exemptive relief and amendments to the CAT NMS Plan to reduce costs, stringent CAT NMS Plan requirements do not allow for any material flexibility in cloud architecture design choices, processing timelines (
The costs for cloud hosting services also reflect the need for specialized cloud hosting services given the data volume and unique processing needs of the CAT. The data volume as well as the data processing needs of the CAT necessitate the use of cloud hosting services. The equipment, power and services required for an on-premises data model, the alternative to cloud
The reasonableness of the cloud hosting services costs is further supported by key cost discipline mechanisms for the CAT—a cost-based funding structure, cost transparency, cost management efforts (including regular efforts to lower compute and storage costs where permitted by the Plan) and oversight. Together, these mechanisms help ensure the ongoing reasonableness of the CAT's costs and the level of fees assessed to support those costs.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted costs related to operating fees as a part of CAT Fees.
The operating fees would include the negotiated fees paid by CAT LLC to the Plan Processor to operate and maintain the system for order-related information and to perform business operations related to the system, including compliance, security, testing, training, communications with the industry (
The operating costs also include costs related to the receipt of market data. CAT LLC anticipates receiving certain market data from Algoseek during the CAT Fee 2025-2 Period. CAT LLC anticipates that Algoseek will provide data as set forth in the SIP Data requirements of the CAT NMS Plan and that the fees are reasonable and in line with market rates for market data received.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted costs related to CAIS operating fees as a part of CAT Fees.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted costs related to change request fees as a part of CAT Fees.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted costs related to capitalized developed technology costs as a part of CAT Fees.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted costs related to legal fees as a part of CAT Fees.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted consulting costs as a part of CAT Fees.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted insurance costs as a part of CAT Fees.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted professional and administration costs as a part of CAT Fees.
CAT LLC anticipates continuing to make use of Anchin, a financial advisory firm, to assist with financial matters for the CAT. CAT LLC determined that the budgeted costs for Anchin were appropriate, as the financial advisory services were to be provided at reasonable market rates that were comparable to the rates charged by other such firms for similar work. Moreover, the total budgeted costs for such financial advisory services were appropriate in light of the breadth of services provided by Anchin. The services budgeted to be performed by Anchin and the budgeted costs related to such services are described above.
CAT LLC anticipates continuing to make use of Grant Thornton, an independent accounting firm, to complete the audit of CAT LLC's financial statements, in accordance with the requirements of the CAT NMS Plan. CAT LLC determined that the budgeted costs for Grant Thornton were appropriate, as the accounting services were to be provided at reasonable market rates that were comparable to the rates charged by other such firms for similar work. Moreover, the total budgeted costs for such accounting services were appropriate in light of the breadth of services provided by Grant Thornton. The services budgeted to be performed by Grant Thornton and the budgeted costs related to such services are described above.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted public relations costs as a part of CAT Fees.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted reserve costs as a part of CAT Fees.
In its approval order for the CAT Funding Model, the Commission stated that it would be reasonable for the annual operating budget for the CAT to
Because the CAT is a critical regulatory tool/system, the CAT needs to have a stable funding source to build financial stability to support the Company as a going concern. Funding for the CAT, as noted in Section 11.1(b), is the responsibility of the Participants and the industry. Because CAT fees are charged based on the budget, which is based on anticipated volume, it is reasonable to have a reserve on hand to prevent a shortfall in the event there is an unexpectedly high volume in a given year. A reserve would help to assure that the CAT has sufficient resources to cover costs should there be unanticipated costs or costs that are higher than expected.
The SEC also recognized that a reserve would help address the difficulty in predicting certain variable CAT costs, like trading volume.
As discussed further below,
The CAT NMS Plan also requires fee filings for Prospective CAT Fees to include “a discussion of how the budget is reconciled to the collected fees.”
The total executed equivalent share volume of transactions in Eligible Securities for the period from April 2024 through March 2025 was 4,580,287,680,646.28 executed equivalent shares. CAT LLC determined the total executed equivalent share volume for the prior twelve months by counting executed equivalent shares in the same manner as it counts executed equivalent shares for CAT billing purposes.
CAT LLC has determined that the projected total executed equivalent share volume for the six months of CAT Fee 2025-2 Period by multiplying by one-half the executed equivalent share volume for the prior twelve months: one-half times 4,580,287,680,646.28 executed equivalent shares.
As noted in the approval order for the CAT Funding Model, as a practical matter, the fee filing for a CAT Fee would provide the exact fee per executed equivalent share to be paid for each CAT Fee, by multiplying the Fee Rate by one-third and describing the relevant number of decimal places for the fee rate.
The Exchange believes that charging CAT Fee 2025-2 with a fee rate of $0.000009 per executed equivalent share is reasonable because it provides for a revenue stream for the Company that is aligned with the Budgeted CAT Costs 2025-2. Moreover, the Exchange believes that the level of the fee rate is reasonable, as it is less than CAT Fee 2025-1 and is comparable to other transaction-based fees. Indeed, CAT Fee 2025-2 is significantly lower than fees previously assessed pursuant to Section 31 (
CAT Fee 2025-2 provides for an equitable allocation of fees, as it equitably allocates CAT costs between and among the Participants and Industry Members. The SEC approved the CAT Funding Model, finding that each aspect of the CAT Funding Model satisfied the requirements of the Exchange Act, including the formula for calculating CAT Fees as well as the Industry Members to be charged the CAT Fees.
CAT Fee 2025-2 provides for an equitable allocation of fees as it complies with the requirements regarding the calculation of CAT Fees as set forth in the CAT NMS Plan. For example, as described above, the calculation of CAT Fee 2025-2 complies with the formula set forth in Section 11.3(a) of the CAT NMS Plan. In addition, CAT Fee 2025-2 would be charged to CEBBs and CEBSs in accordance with Section 11.3(a) of the CAT NMS Plan. Furthermore, the Participants would be charged for their designated share of the Budgeted CAT Costs 2025-2 through a fee implemented via the CAT NMS Plan, which would have the same fee rate as CAT Fee 2025-2.
In addition, as discussed above, each of the inputs into the calculation of CAT Fee 2025-2—the Budgeted CAT Costs 2025-2, the count for the executed equivalent share volume for the prior 12 months, and the projected executed equivalent share volume for the CAT Fee 2025-2 Period—are reasonable. Moreover, these inputs lead to a reasonable fee rate for CAT Fee 2025-2 that is lower than other fee rates for transaction-based fees. A reasonable fee rate allocated in accordance with the requirements of the CAT Funding Model provides for an equitable allocation of fees.
CAT Fee 2025-2 is not an unfairly discriminatory fee. The SEC approved the CAT Funding Model, finding that each aspect of the CAT Funding Model satisfies the requirements of the Exchange Act. In reaching this conclusion, the SEC analyzed the potential effect of CAT Fees calculated pursuant to the CAT Funding Model on affected categories of market participants, including Participants (including exchanges and FINRA), Industry Members (including subcategories of Industry Members, such as alternative trading systems, CAT Executing Brokers and market makers), and investors generally, and considered market effects related to equities and options, among other things. CAT Fee 2025-2 complies with the requirements regarding the calculation of CAT Fees as set forth in the CAT NMS Plan. In addition, as discussed above, each of the inputs into the calculation of CAT Fee 2025-2 and the resulting fee rate for CAT Fee 2025-2 is reasonable. Therefore, CAT Fee 2025-2 does not impose an unfairly discriminatory fee on Industry Members.
The Exchange believes the proposed fees established pursuant to the CAT Funding Model promote just and equitable principles of trade, and, in general, protect investors and the public interest, and are provided in a transparent manner and with specificity in the Fee Schedule. The Exchange also believes that the proposed fees are reasonable because they would provide ease of calculation, ease of billing and other administrative functions, and predictability of a fee based on fixed rate per executed equivalent share. Such factors are crucial to estimating a reliable revenue stream for CAT LLC and for permitting Exchange members to reasonably predict their payment obligations for budgeting purposes.
Section 6(b)(8) of the Act
In addition, all Participants (including exchanges and FINRA) are proposing to introduce CAT Fee 2025-2 on behalf of CAT LLC to implement the requirements of the CAT NMS Plan. Therefore, this is not a competitive fee filing, and, therefore, it does not raise competition issues between and among the Participants.
Furthermore, in approving the CAT Funding Model, the SEC analyzed the potential competitive impact of the CAT Funding Model, including competitive issues related to market services, trading services and regulatory services, efficiency concerns, and capital formation.
As discussed above, each of the inputs into the calculation of CAT Fee 2025-2 is reasonable and the resulting fee rate for CAT Fee 2025-2 calculated in accordance with the CAT Funding Model is reasonable. Therefore, CAT Fee 2025-2 would not impose any burden on competition that is not necessary or appropriate in furtherance of the purpose of the Exchange Act.
No written comments were solicited or received with respect to the proposed rule change.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
Cboe EDGA Exchange, Inc. (the “Exchange” or “EDGA”) proposes to introduce a Small Retail Broker Hosted Solutions Program and to update the existing eligibility requirements for the Small Retail Brokerage Distribution Program for the Cboe One Summary Feed. The text of the proposed rule change is provided in Exhibit 5.
The text of the proposed rule change is also available on the Exchange's website (
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The Exchange proposes to adopt a Small Retail Broker Hosted Solutions Program (the “Program”) for Cboe One Summary Data (collectively, the “Applicable Feed”).
Further, the Exchange proposes to increase the allowed maximum Non-Professional Data User subscriber count for the existing Small Retail Broker Program for Cboe One Summary Feed.
By way of background, the Exchange currently offers the EDGA Top Data Feed, which is a data feed that offers top-of-book quotations and last sale information based on orders entered into the Exchange's System. The EDGA Top Data Feed benefits investors by facilitating their prompt access to real-time top-of-book information contained in EDGA Top Data. The Exchange's affiliated equities exchanges (
Currently, the Exchange offers a Small Retail Broker Distribution Program
The Exchange now proposes to create a new Program based on the proposed eligibility criteria for Small Retail Brokers to specifically support Small Retail Brokers who are operating platforms on behalf of other Small Retail Brokers. Based on customer feedback, there are Small Retail Brokers who would like to provide this data via a hosted solution as a White Label Service
Of further note, the Hosting Small Retail Broker Distributor is responsible for reporting its External Hosted Subscribers and their users, and ultimately the Hosting Small Retail Broker is responsible for payment of all data fees for both its External Subscribers and itself. While the Exchange is not privy to pass-through costs between Hosting Small Retail Broker Distributors and External Hosted Subscribers this proposed pricing allows Hosting Small Retail Broker Distributors the freedom to charge or not charge External Hosted Subscribers while also appropriately charging for a service provided to an External Hosted Subscriber that is benefitting from an infrastructure developed and supported by the Hosting Small Retail Broker Distributor. The Exchange notes that the current Small Retail Broker Program prevents the Hosting Small Retail Broker Distributor from packaging this waiver as part of their overall service to their External Hosted Subscribers (as External Hosted Subscribers would be billed directly under the existing Small Retail Broker Program). Given that External Hosted Subscribers are smaller relative to other Small Retail Brokers currently participating in the Program, the costs associated with the Applicable Feeds are inherently prohibitive to the External Hosted Subscriber.
Under the proposed program, a Hosting Small Retail Broker providing the data to at least one External Hosted Subscriber would be eligible for a credit of its Distribution Fee (a credit of $3,500/month for Cboe One Summary Feed) that it is normally responsible for under the existing Small Retail Broker Program. Additionally, the External Hosted Subscriber shall also receive a waiver of the Distribution Fee (a credit of $3,500/month for Cboe One Summary Feed). The External Hosted Subscriber will also receive a waiver of the Data Consolidation Fee for the Cboe One Summary Data (a credit of $350/month), and in lieu of paying the Non-Professional User fees, it shall be a set monthly fee $850 for Cboe One Summary Data.
In addition to the changes set forth above, the Exchange also proposes to modify the existing Small Retail Broker Program for Cboe One Summary Feed to increase the number of Non-Professional Data User maximum from 5,000 to 10,000 to be consistent with the proposed threshold for External Hosted Subscribers. As previously discussed, the Exchange proposes to also use the cap of 10,000 Non-Professional Data Users for the proposed Program. The Exchange proposes to increase this in support of increased participation across both retail and investor markets in order to facilitate the growth of smaller retail brokers on a global scale.
As mentioned above, the Program's existing fee structure makes it costly for both Hosting Small Retail Broker Distributors and its External Hosted Subscribers to provide data to the External Hosted Subscribers retail clients as Distribution Fees are assessed on both Small Retail Brokers. With this fee proposal, the Exchange hopes to make its data more widely accessible for retail users who receive their data from External Hosted Subscribers.
to the Exchange believes that this proposal will (i) further increase the competitiveness of the Exchange's top of book market data products compared to competitor offerings that may currently be cheaper for firms with a limited subscriber base that do not yet have the scale to take advantage of the lower subscriber fees offered by the Exchange and (ii) provide additional incentives for Hosting Small Retail Broker Distributors to provide hosted solution services for other Small Retail Brokers in order to make data more widely available to retail investors. In turn, the Exchange believes that this change may benefit market participants and investors by spurring additional competition and increasing the accessibility of the Exchange's top of book data.
The Exchange notes that at least one other exchange has a similar offering. For example, the New York Stock Exchange has a Redistribution Fee Waiver for NYSE Trades, for which redistributors of data may have their redistribution fee waived so long as they provide the data to at least one data feed recipient and reports such data feed recipient or recipients to the Exchange.
Without these discounts, a redistributor of NYSE Trades would pay the General Access Fee of $1,500/month in addition to the Redistribution Fee of $1,000/month and the applicable Professional User Fee ($4/month/User) and Non-Professional User Fee ($0.20/month/User).
While the eligibility requirements of the NYSE program and the proposed Program differ, both programs are intended to incentivize redistribution of applicable data feeds by providing enhanced discounts and both programs target different segments for a specific purpose. The proposed discounts under this Program are intended to make the Exchange's offering competitively priced relative to alternative options that participants may have.
Without the proposed pricing discounts, the Exchange believes that (i) prospective customers may not be interested in purchasing top of book data from the Exchange, and may instead purchase such data from other national securities exchanges or the SIPs, potentially at a higher cost than would be available pursuant to the proposed program and (ii) that Hosting Small Retail Broker Distributors are not incentivized to make the Applicable Feed available via a hosted solution for retail investors of its External Hosted Subscribers. Similar to the existing Small Retail Broker Program, the Exchange believes that this Program will continue to increase competition for such market data, and that enhanced competition could help to further reduce data fees as providers compete for subscribers, as well as help diversify the availability and quality of data offerings available to retail investors
The Exchange believes that the proposed rule change is consistent with the objectives of Section 6 of the Act,
The Exchange also believes that the proposed rule change is consistent with Section 11(A) of the Act.
In adopting Regulation NMS, the Commission granted SROs and broker-dealers increased authority and flexibility to offer new and unique market data to the public. It was believed that this authority would expand the amount of data available to consumers, and also spur innovation and competition for the provision of market data. The Exchange believes that the proposed fee change would further broaden the availability of U.S. equity market data to investors, and in particular retail investors, consistent with the principles of Regulation NMS.
The Exchange operates in a highly competitive environment. Indeed, there are sixteen registered national securities exchanges that trade U.S. equities and offer associated top of book market data products to their customers. The national securities exchanges also compete with the SIPs for market data customers. The Commission has repeatedly expressed its preference for competition over regulatory intervention in determining prices, products, and services in the securities markets. Specifically, in Regulation NMS, the Commission highlighted the importance of market forces in determining prices and SRO revenues and, also, recognized that current regulation of the market system “has been remarkably successful in promoting market competition in its broader forms that are most important to investors and listed companies.”
Making alternative data products available to market participants ultimately ensures increased competition in the marketplace, and constrains the ability of exchanges to charge prohibitive fees. In the event that a market participant views one exchange's top of book data fees as more or less attractive than the competition they can, and frequently do, switch between competing products. In fact, the competitiveness of the market for such top of book data products is one of the primary factors animating this proposed rule change, which is designed to allow the Exchange to further compete for this business. As mentioned above, at least one other Exchange provides a similar waiver for redistribution of market data.
The Exchange notes that the Applicable Feed is distributed and purchased on a voluntary basis, in that neither the Exchange nor market data distributors are required by any rule or regulation to make these data products available. Distributors (including vendors) and Users can therefore discontinue use at any time and for any reason, including due to an assessment of the reasonableness of fees charged. Further, the Exchange is not required to make any proprietary data products available or to offer any specific pricing alternatives to any customers.
The Commission has long stressed the need to ensure that the equities markets are structured in a way that meets the needs of ordinary investors. For example, the Commission's strategic plan for fiscal years 2018-2022 touts “focus on the long-term interests of our Main Street investors” as the Commission's number one strategic goal.
The Exchange proposes that the proposed waivers for the Applicable Feed only apply to Hosting Small Retail Broker Distributors and its External Hosted Subscribers for three reasons. First, the Hosting Small Retail Broker Distributor is creating a full-service offering for External Hosted Subscribers in contrast to the Small Retail Brokers under the current Program, which only provide services directly to its own retail clients. Maintaining an additional platform for External Hosted Subscribers' clients is an additional workstream for Hosted Subscribers (in contrast to Small Retail Brokers that only provide data and services directly to their retail clients) as they support additional ecosystems of business, each with its own book of retail clients. In order to incentivize the Hosting Small Retail Broker Distributors to take on the additional duties associated with hosting External Hosted Subscribers (such as managing the data, entitlements, and display of the application provided to the external Hosted Subscriber), the Exchange believes it is not unfairly discriminatory to provide a waiver of the Distribution Fee for the Hosting Small Retail Broker, as opposed to the standard discounted Distribution Fee it would normally pay under the Small Retail Broker Program.
Second, by creating this program, the Exchange is further able to reach additional retail investors. By waiving Distribution Fees for both the Hosting Small Retail Broker Distributor and its External Hosted Subscriber, both parties are incentivized to work together to provide data to retail investors. Third, as mentioned previously, the Hosting Small Retail Broker is responsible for the fees and reporting for both its own activity and that of its External Hosted
Furthermore, while this Program would be effectively limited to smaller firms in accordance with the proposed eligibility requirements, the Exchange does not believe that this limitation makes the fees inequitable or unfairly discriminatory. The Exchange notes that large broker-dealers and/or vendors that distribute the Exchange's data products to a sizeable number of investors benefit from the current fee structure, which includes lower subscriber fees and Enterprise licenses. Due to lower subscriber fees, distributors that provide the Applicable Feed to more than the proposed capped amounts of Users permitted under either the Small Retail Broker Program or this Program already enjoy cost savings compared to competitor products. The Program, in addition to the existing Small Retail Broker Program, would therefore continue to ensure that small retail brokers that distribute top of book data to their retail investor customers could also benefit from reduced pricing, and would aid in increasing the competitiveness of the Exchange's data products for this key segment of the market.
The Exchange believes that the proposed cap of 10,000 for the Cboe One Summary Data Feed for this Program, as well as increasing this cap to 10,0000 for the Cboe One Summary Data Feed for the Small Retail Broker Program is reasonable and not unfairly discriminatory as the Exchange believes it is in the best interest of all market participants to more broadly expand this in support of inclusion for more retail investors by participation in both programs by small retail brokers on a global scale.
The Exchange believes that the Distribution Fee Waivers for both the External Hosted Subscriber and the Hosting Small Retail Broker Distributor are reasonable as they represent a significant cost reduction for the Hosting Small Retail Broker Distributor to provide a hosted solution for the External Hosted Subscriber, to ultimately provide the data to the External Hosted Subscriber's retail investors. While the existing fee structure does provide a benefit of a discounted waiver for Small Retail Brokers that externally distribute the data, these discounted Distribution Fees are still incurred by both the external Hosted Subscriber and the Hosting Small Retail Broker Distributor. In an attempt to alleviate these costs, and make this data more available to retail investors, the Exchange proposes to waive the Distribution Fees for both the Hosting Small Retail Broker Distributor and the External Hosted Subscriber. With this Program, the Exchange believes it will increase market accessibility and data to investors on a global scale. Exchange Hosted Subscribers may not have the infrastructure or technical capabilities to offer market data and/or execution services to its retail investors. Through waiving these fees for the External Hosted Subscriber, the Exchange hopes to reach a broader scale of retail investors globally. Further, as discussed above, the Exchange also believes it is appropriate and not unfairly discriminatory to limit this specific credit to the External Hosted Subscriber and the Hosting Small Retail Broker Distributor given the development and maintenance the Hosting Small Retail Broker Distributor acquires to provide this data to the External Hosted Subscriber's end users.
The Exchange believes it is reasonable to not charge the External Hosted Subscriber the Data Consolidation Fee for Cboe One Summary Data for the duration of the time that they are eligible for this program. As previously discussed, the waiver of fees for the External Hosted Subscriber is intended to make this data more available to retail investors. The Exchange also believes it is appropriate and not unfairly discriminatory to limit this specific credit to the External Hosted Subscriber because, as described above, the Exchange believes by alleviating some of the barriers to entry, that Exchange Hosted Subscribers are able to bring this data and execution services to their retail investors. Of further note, the Exchange believes it is reasonable to maintain this cost for the Hosting Small Retail Broker Distributor as the Hosting Small Retail Broker Distributor is the party receiving this data from the Exchange where it is consolidated for the benefit of the Hosting Small Retail Broker Distributor.
The Exchange believes it is reasonable to set a fixed cost for Non-Professional Users fees for External Hosted Subscribers by charging a flat, fixed cost instead of charging per user to allow for additional savings. Under this structure, the External Hosted Subscriber shall still be responsible by paying the standard per User fee of a Professional Users under the Applicable Feed. The Exchange does not believe this is unfairly discriminatory as the program is based around making the Applicable Feed available for Non-Professional Users. The Exchange also notes that it has taken a similar approach here to the NYSE Per User Access Fee, which sets a fixed cost where the data is used only for display purposes.
The Exchange does not believe that the proposed rule change would result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange operates in a highly competitive environment, and its ability to price these data products is constrained by: (i) Competition among exchanges that offer similar data products to their customers; and (ii) the existence of inexpensive real-time consolidated data disseminated by the SIPs. Top of book data is disseminated by both the SIPs and the sixteen equities exchanges. There are therefore a number of alternative products available to market participants and investors. In this competitive environment potential subscribers are free to choose which competing product to purchase to satisfy their need for market information. Often, the choice comes down to price, as broker-dealers or vendors look to purchase the cheapest
The Exchange does not believe that this price reduction would cause any unnecessary or inappropriate burden on intermarket competition as other exchanges and data vendors are free to lower their prices to better compete with the Exchange's offering. Indeed, as explained in the basis section of this proposed rule change, the Exchange's decision to (i) waive the Distribution Fee for the Hosting Small Retail Broker and the External Hosted Subscriber and (ii) waiving the Consolidation Fee (when applicable) for the External Hosted Subscriber and (iii) setting a fixed cost for the Non-Professional Users for the External Hosted Subscriber is itself a competitive response to different fee structures available on competing markets. The Exchange therefore believes that the proposed rule change is pro-competitive as it seeks to offer pricing incentives to customers to better position the Exchange as it competes to attract additional market data subscribers. The Exchange also believes that the proposed reduction in fees the Hosting Small Retail Broker and the External Hosted Subscriber would not cause any unnecessary or inappropriate burden on intramarket competition. Although the proposed fee discount would be largely limited to small retail broker subscribers, larger broker-dealers and vendors can already purchase top of book data from the Exchange at prices that represent a significant cost savings when compared to competitor products that combine higher subscriber fees with lower fees for distribution. In light of the benefits already provided to this group of subscribers, the Exchange believes that additional discounts to small retail brokers would increase rather than decrease competition among broker-dealers that participate on the Exchange. Furthermore, as discussed earlier in this proposed rule change, the Exchange believes that offering pricing benefits to brokers that represent retail investors facilitates the Commission's mission of protecting ordinary investors, and is therefore consistent with the Act.
The Exchange neither solicited nor received comments on the proposed rule change.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
The Exchange proposes to amend the Fee Schedule of NYSE Texas, Inc. (“Fee Schedule”) to establish fees for Industry Members
In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements.
On July 11, 2012, the Commission adopted Rule 613 of Regulation NMS, which required the self-regulatory organizations (“SROs”) to submit a national market system (“NMS”) plan to create, implement and maintain a consolidated audit trail that would capture customer and order event information for orders in NMS securities across all markets, from the time of order inception through routing, cancellation, modification or execution.
The CAT Funding Model provides a framework for the recovery of the costs to create, develop and maintain the CAT, including providing a method for allocating costs to fund the CAT among Participants and Industry Members. The CAT Funding Model establishes two categories of fees: (1) CAT fees assessed by CAT LLC and payable by certain Industry Members to recover a portion of historical CAT costs previously paid by the Participants (“Historical CAT Assessment” fees); and (2) CAT fees assessed by CAT LLC and payable by Participants and Industry Members to fund prospective CAT costs (“CAT Fees”).
Under the CAT Funding Model, Participants, CEBBs and CEBSs are subject to fees designed to cover the ongoing budgeted costs of the CAT, as determined by the Operating Committee. “The Operating Committee will establish fees (`CAT Fees') to be payable by Participants and Industry Members with regard to CAT costs not previously paid by the Participants (`Prospective CAT Costs').”
The CAT Fees to be paid by CEBBs and CEBSs are designed to contribute toward the recovery of two-thirds of the budgeted CAT costs for the relevant period.
CAT LLC proposes to charge CEBBs and CEBSs (as described in more detail below) CAT Fee 2025-2 to recover the reasonably budgeted CAT costs for the period from July 1, 2025 through December 31, 2025 in accordance with the CAT Funding Model. To implement this fee on behalf of CAT LLC, the CAT NMS Plan requires the Participants to “file with the SEC under Section 19(b) of the Exchange Act any such fees on Industry Members that the Operating Committee approves, and such fees shall be labeled as `Consolidated Audit Trail Funding Fees.' ”
CAT Fee 2025-2 will be charged to each CEBB and CEBS for each applicable transaction in Eligible Securities.
(a) with respect to a transaction in an Eligible Security that is executed on an exchange, the Industry Member identified as the Industry Member responsible for the order on the buy-side of the transaction and the Industry Member responsible for the sell-side of the transaction in the equity order trade event and option trade event in the CAT Data submitted to the CAT by the relevant exchange pursuant to the Participant Technical Specifications; and (b) with respect to a transaction in an Eligible Security that is executed otherwise than on an exchange and required to be reported to an equity trade reporting facility of a registered national securities association, the Industry Member identified as the executing broker and the Industry Member identified as the contra-side executing broker in the TRF/ORF/ADF transaction data event in the CAT Data submitted to the CAT by FINRA pursuant to the Participant Technical Specifications; provided, however, in those circumstances where there is a non-Industry Member identified as the contra-side executing broker in the TRF/ORF/ADF transaction data event or no contra-side executing broker is identified in the TRF/ORF/ADF transaction data event, then the Industry Member identified as the executing broker in the TRF/ORF/ADF transaction data event would be treated as CAT Executing Broker for the Buyer and for the Seller.
The following fields of the Participant Technical Specifications indicate the CAT Executing Brokers for the transactions executed on an exchange:
In addition, the following fields of the Participant Technical Specifications would indicate the CAT Executing Brokers for the transactions executed otherwise than on an exchange:
The Operating Committee determined the Fee Rate to be used in calculating CAT Fee 2025-2 (“Fee Rate 2025-2”) by dividing the reasonably budgeted CAT costs (“Budgeted CAT Costs 2025-2”) for the period from July 1, 2025 through December 31, 2025 (“CAT Fee 2025-2 Period”) by the reasonably projected total executed share volume of all transactions in Eligible Securities for the six-month recovery period, as discussed in detail below.
CAT LLC proposes to implement CAT Fee 2025-2 as the third CAT Fee related to Prospective CAT Costs. CAT LLC proposes to commence CAT Fee 2025-2 during the year, rather than at the beginning of the year. Accordingly, CAT Fee 2025-2 “would be calculated as described in paragraph (II)” of Section 11.3(a)(i)(A) of the CAT NMS Plan,
Under the CAT NMS Plan, for purposes of calculating CAT Fees, executed equivalent shares in a transaction in Eligible Securities will be reasonably counted as follows: (1) each executed share for a transaction in NMS Stocks will be counted as one executed equivalent share; (2) each executed contract for a transaction in Listed Options will be counted based on the multiplier applicable to the specific Listed Options (
The CAT NMS Plan states that “[t]he budgeted CAT costs for the year shall be comprised of all reasonable fees, costs and expenses reasonably budgeted to be incurred by or for the Company in connection with the development, implementation and operation of the CAT as set forth in the annual operating budget approved by the Operating Committee pursuant to Section 11.1(a) of the CAT NMS Plan, or as adjusted during the year by the Operating Committee.”
Operating Committee to approve an operating budget for CAT LLC on an annual basis. It requires the budget to “include the projected costs of the Company, including the costs of developing and operating the CAT for the upcoming year, and the sources of all revenues to cover such costs, as well as the funding of any reserve that the Operating Committee reasonably deems appropriate for the prudent operation of the Company.” Section 11.1(a)(i) of the CAT NMS Plan further states that:
In accordance with the requirements under the CAT NMS Plan, the Operating Committee approved an annual budget for 2025 for CAT LLC (“Original 2025 CAT Budget”) in November 2024.
As described in detail below, the Budgeted CAT Costs 2025-2 would be $60,726,412. CEBBs collectively will be responsible for one-third of the Budged [
The following describes in detail the Budgeted CAT Costs 2025-2 for CAT Fee 2025-2. The following cost details are provided in accordance with the requirement in the CAT NMS Plan to provide in the fee filing the following:
Each of the costs described below are reasonable, appropriate and necessary for the creation, implementation and maintenance of CAT.
The following table breaks down the Budgeted CAT Costs 2025-2 into the categories set forth in Section 11.3(a)(iii)(B) of the CAT NMS Plan.
To the extent
The following table compares the annual budgeted CAT costs as set forth in the updated annual CAT budget for 2024 approved by the Operating Committee in July 2024 (“Updated 2024 CAT Budget”),
In addition, the following table compares the first quarter of the Original 2025 CAT Budget with the first quarter of the Updated 2025 CAT Budget. The Updated 2025 CAT Budget includes actual costs for January, February and March 2025, whereas the Original 2025 CAT Budget included budgeted costs for these three months. The variance from the first quarter of the Original 2025 CAT Budget to the actuals for the first quarter of 2025 (as set forth in the Updated 2025 CAT Budget) in the last column of the following chart are used in this filing in supporting the reasonableness of the estimates for each category of costs.
Section 11.3(a)(iii)(B)(B)(1) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the cloud hosting services costs set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that included $82,222,276 in technology costs for cloud hosting services for the CAT Fee 2025-2 Period. The technology costs for cloud hosting services represent costs reasonably budgeted to be incurred for services provided by the cloud services provider for the CAT, Amazon Web Services, Inc. (“AWS”) during the CAT Fee 2025-2 Period.
In the agreement between CAT LLC and the Plan Processor for the CAT (“Plan Processor Agreement”), FINRA CAT, LLC (“FCAT”), AWS was named as the subcontractor to provide cloud hosting services. Under the Plan Processor Agreement, CAT LLC is required to pay FCAT the fees incurred by the Plan Processor for cloud hosting services provided by AWS as FCAT's subcontractor on a monthly basis for the cloud hosting services, and FCAT, in turn, pays such fees to AWS. The fees for cloud hosting services were negotiated by FCAT on an arm's length basis with the goals of managing costs and receiving services required to comply with the CAT NMS Plan and Rule 613, taking into consideration a variety of factors, including the expected volume of data, the breadth of services provided and market rates for similar services. Services provided by AWS include storage services, databases, compute services and other services (such as networking, management tools and DevOps tools), as well as various environments for CAT, such as development, performance testing, test, and production environments. FCAT utilizes such cloud hosting services for a broad array of services for the CAT, such as data ingestion, data management, and analytic tools for the CAT. AWS performs cloud hosting services for both the CAT transaction database as well as the CAT Customer and Account Information System (“CAIS”). It is anticipated that such cloud hosting services will continue during the CAT Fee 2025-2 Period.
The cost for AWS cloud services for the CAT is a function of the volume of CAT Data, largely as a result of the processing and storage of the CAT Data.
CAT LLC estimates that the budget for cloud hosting services costs during the CAT Fee 2025-2 Period will be approximately $82,222,276. The budget for cloud hosting services costs during the CAT Fee 2025-2 Period is calculated based on the Updated 2025 CAT Budget. Specifically, this estimate was calculated by adding the budgeted amounts for cloud hosting services costs for the third and fourth quarters of 2025 as set forth in the Updated 2025 CAT Budget.
CAT LLC estimated the budget for the cost for cloud hosting services for the CAT Fee 2025-2 Period based on an assumption of 40% annual year-over-year volume growth for the transaction database and an assumption of 5% annual year-over-year volume growth for CAIS. CAT LLC determined these growth assumptions in coordination with FCAT based on an analysis of a variety of existing data and alternative growth scenarios. In particular, in determining to use the 40% annual year-over-year volume growth in events per day, CAT LLC considered, among other things, the average annual year-over-year volume growth for 2019 through 2024 of approximately 45%, the average annual year-over-year volume growth for 2020 through 2024 of approximately 30%, and the average monthly growth rate for 2024 of approximately 50%.
This process for estimating the budget for cloud hosting services costs for the CAT Fee 2025-2 Period is the same process by which CAT LLC estimated the cloud hosting services costs for the Original 2025 CAT Budget. The Original 2025 CAT Budget estimated a budget for cloud hosting services of $39,640,542 for the first quarter of 2025. The actual costs for cloud hosting services for the first quarter of 2025, which are set forth in the Updated 2025 CAT Budget, were $36,357,017. Therefore, the variance between budgeted and actual cloud hosting services costs for this period was an approximate decrease of 8%. Accordingly, CAT LLC believes that the process for estimating the budgeted cloud hosting services costs for the CAT Fee 2025-2 Period is reasonable.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for cloud hosting services costs from the prior CAT Fee filing. Accordingly, this filing describes the changes in the cloud hosting services costs from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budgeted costs for cloud hosting services as set forth in the Original 2025 CAT Budget were $182,594,630, and the annual 2025 budgeted costs for cloud hosting services as set forth in the Updated 2025 CAT Budget are $159,230,937. Accordingly, budgeted annual costs for cloud hosting services decreased by $23,363,693 from the Original 2025 CAT
Correspondingly, the budgeted costs for cloud hosting services for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget were $97,748,713,
The decrease in costs for cloud hosting services from the Original 2025 CAT Budget to the Updated 2025 CAT Budget, both for the full year for 2025 and for the third and fourth quarters of 2025, reflects (1) a decrease in costs related to changes made pursuant to the Cost Savings Amendment; (2) cost decreases related to optimizations resulting in reduced procesing [
Section 11.3(a)(iii)(B)(B)(1) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the operating fees set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that included $15,453,942 in technology costs for operating fees for the CAT Fee 2025-2 Period. Operating fees are those fees paid by CAT LLC to FCAT as the Plan Processor to operate and maintain the CAT and to perform business operations related to the system, including compliance, security, testing, training, communications with the industry (
• Provide the CAT-related functions and services as the Plan Processor as required by SEC Rule 613 and the CAT NMS Plan in connection with the operation and maintenance of the CAT;
• Address compliance items, including drafting CAT policies and procedures, and addressing Regulation SCI requirements;
• Provide support to the Operating Committee, the Compliance Subcommittee and CAT working groups;
• Assist with interpretive efforts, exemptive requests and amendments regarding the CAT NMS Plan;
• Oversee the security of the CAT;
• Monitor the operation of the CAT, including with regard to Participant and Industry Member reporting;
• Provide support to subcontractors under the Plan Processor Agreement;
• Provide support in discussions with the Participants and the SEC and its staff;
• Operate the FINRA CAT Helpdesk;
• Facilitate communications with the industry, including via FAQs, CAT Alerts, meetings, presentations and webinars;
• Administer the CAT website and all of its content;
• Maintain cyber security insurance related to the CAT;
• Assist with billing, collection and other CAT fee-related activity; and
• Provide technical support and assistance with connectivity, data access, and user support, including the use of CAT Data and query tools, for Participants and the SEC staff.
CAT LLC calculated the budget for the FCAT technology costs for operating fees for the CAT Fee 2025-2 Period based on the recurring monthly operating fees under the Plan Processor Agreement.
As discussed above, CAT LLC estimated the budget for the operating fees during the CAT Fee 2025-2 Period based on monthly rates set forth in the Plan Processor Agreement and the agreement with Algoseek. CAT LLC also recognized that the operating fees are generally consistent throughout the year. This process for estimating the budget for the operating fees for the CAT Fee 2025-2 Period is the same process by which CAT LLC estimated the operating fees for the Original 2025 CAT Budget. The Original 2025 CAT Budget estimated a budget for operating fees of $7,662,270 for the first quarter of 2025.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for operating fees from the prior CAT Fee filing. Accordingly, this filing describes the changes from the operating fees set forth in the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budgeted costs for operating fees as set forth in the Original 2025 CAT Budget were $30,831,330,
Correspondingly, the budgeted costs for operating fees for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget were $15,446,040,
Section 11.3(a)(iii)(B)(B)(1) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the CAIS operating fees set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that included $10,374,924 in technology costs for CAIS operating fees for the CAT Fee 2025-2 Period. CAIS operating fees represent the fees paid to FCAT for services provided with regard to the operation and maintenance of CAIS, and to perform the business operations related to the system, including compliance, security, testing, training, communications with the industry (
During the CAT Fee 2025-2 Period, it is anticipated that FCAT will provide CAIS-related services. Under the Plan Processor Agreement with FCAT, CAT LLC is required to pay FCAT for CAIS-related services provided by FCAT on a monthly basis. CAT LLC negotiated the fees for FCAT's CAIS-related services on an arm's length basis with the goals of managing costs and receiving services required to comply with the CAT NMS Plan, taking into consideration a variety of factors, including the services to be provided and market rates for similar types of activity. During the CAT Fee 2025-2 Period, it is anticipated that FCAT will continue to provide services relating to the ongoing operation, maintenance and support of CAIS.
CAT LLC estimates that the budget for CAIS operating fees during the CAT Fee 2025-2 Period will be approximately $10,374,924. The budget for CAIS operating fees during the CAT Fee 2025-2 Period is calculated based on the Updated 2025 CAT Budget. Specifically, this estimate was calculated by adding the budgeted amounts for CAIS operating fees for the third and fourth quarters of 2025 as set forth in the Updated 2025 CAT Budget.
CAT LLC calculated the budget for FCAT's CAIS-related services for the CAT Fee 2025-2 Period based on the recurring monthly CAIS operating fees under the Plan Processor Agreement. This process for estimating the budget for the CAIS operating fees for the CAT Fee 2025-2 Period is the same process by which CAT LLC estimated the CAIS operating fees for the Original 2025 CAT Budget. The Original 2025 CAT Budget estimated a budget of $5,187,462 for CAIS operating fees for the first quarter of 2025. The actual costs for CAIS operating fees for the first quarter of 2025, which are set forth in the Updated 2025 CAT Budget, were $5,187,462. There was no variance between budgeted and actual CAIS operating fees for the first quarter of 2025. Accordingly, CAT LLC believes that the process for estimating the budgeted CAIS operating fees for the CAT Fee 2025-2 Period is reasonable.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for CAIS operating fees from the prior CAT Fee filing. Accordingly, this filing describes the changes in CAIS operating fees from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
CAIS operating fees are based on a recurring monthly rate payable to FCAT and are unchanged from the prior CAT Fee filing. The annual 2025 budgeted costs for CAIS operating fees as set forth in the Original 2025 CAT Budget were $20,749,848, and the annual 2025 budgeted costs for CAIS operating fees as set forth in the Updated 2025 CAT Budget are $20,749,848. Accordingly, the budgeted annual costs for CAIS operating fees are the same for both the Original 2025 CAT Budget and the Updated 2025 CAT Budget.
Correspondingly, the budgeted costs for CAIS operating fees for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget were $10,374,924, and the budgeted costs for CAIS operating fees for the third and fourth quarters of 2025 as set forth in the Updated 2025 CAT Budget are $10,374,924.
Accordingly, there were no changes in the line item for CAIS operating fees from the prior CAT Fee filing.
Section 11.3(a)(iii)(B)(B)(1) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the change request fees set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that included $500,000 in technology costs for change request fees for the CAT Fee 2025-2 Period. The technology costs related to change request fees include costs related to certain modifications, upgrades or other changes to the CAT.
Change requests are standard practice and necessary to reflect operational changes, including changes related to new market developments, such as new market participants. In general, if CAT LLC determines that a modification, upgrade or other changes to the functionality or service is necessary and appropriate, CAT LLC will submit a request for such a change to the Plan Processor. The Plan Processor will then respond to the request with a proposal for implementing the change, including the cost (if any) of such a change. CAT LLC then determines whether to approve the proposed change.
The change request budget line is established to include expected costs to be incurred in which the nature of the costs (
During the CAT Fee 2025-2 Period, it is anticipated that CAT LLC will engage FCAT to pursue certain change requests in accordance with the Plan Processor Agreement. The budget for change requests for the CAT Fee 2025-2 Period includes a placeholder of $500,000 for potential change request fees that may be necessary in accordance with the Plan Processor Agreement. The placeholder amount was determined based on prior experience with change requests related to the CAT.
CAT LLC estimates that the budget for change requests during the CAT Fee 2025-2 Period will be approximately $500,000. The budget for change requests during the CAT Fee 2025-2 Period is calculated based on the Updated 2025 CAT Budget. Specifically, this estimate was calculated by adding the budgeted amounts for the change requests for the third and fourth quarters of 2025 as set forth in the Updated 2025 CAT Budget.
CAT LLC estimated the budget for the potential change requests for the CAT Fee 2025-2 Period based on, among other things, a review of past change requests and potential future change request needs, as well as discussions with FCAT. This process for estimating the budget for the change requests for the CAT Fee 2025-2 Period is the same process by which CAT LLC estimated the change requests cost for the Original 2025 CAT Budget. The Original 2025 CAT Budget estimated a change request budget of $0 for the the [
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for change request fees from the prior CAT Fee filing. Accordingly, this filing describes the changes in the change request fees from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budgeted costs for change requests as set forth in the Original 2025 CAT Budget were $750,000, and the annual 2025 budgeted costs for change requests as set forth in the Updated 2025 CAT Budget are $750,000. Accordingly, budgeted annual costs for change requests are the same for both the Original 2025 CAT Budget and the Updated 2025 CAT Budget.
Correspondingly, the budgeted costs for change requests for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget were $500,000, and the budgeted costs for change request for the third and fourth quarters of 2025 as set forth in the Updated 2025 CAT Budget are $500,000.
Accordingly, there were no changes in the line item for change requests from the prior CAT Fee filing.
Section 11.3(a)(iii)(B)(B)(1) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the capitalized developed technology costs set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that includes $0 in technology costs for capitalized developed technology costs for the CAT Fee 2025-2 Period. This category of costs includes the budget for capitalizable application development costs incurred in the development of the CAT. It is anticipated that such costs will include certain costs related to the software license fee for CAIS in accordance with the Plan Processor Agreement with FCAT, as well as costs related to a set of technology changes to be implemented by FCAT.
CAT LLC estimates that the budget for capitalized developed technology costs during the CAT Fee 2025-2 Period will be approximately $0. The budget for capitalized developed technology costs during the CAT Fee 2025-2 Period is calculated based on the Updated 2025 CAT Budget. Specifically, this estimate was calculated by adding the budgeted amounts for capitalized developed technology costs for the third and fourth quarters of 2025 as set forth in the Updated 2025 CAT Budget.
CAT LLC estimated the budget for capitalized developed technology costs for the CAT Fee 2025-2 Period based on an analysis of a variety of factors, including information related to potential technology costs and related contractual and Plan requirements, and discussions with FCAT regarding such potential technology costs. This process for estimating the budget for capitalized developed technology costs for the CAT Fee 2025-2 Period is the same process by which CAT LLC estimated the capitalized developed technology costs for the Original 2025 CAT Budget. The Original 2025 CAT Budget estimated a budget for capitalized developed technology costs of $3,923,360 for the first quarter of 2025.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for capitalized developed technology costs from the prior CAT Fee filing. Accordingly, this filing describes the changes in the capitalized developed technology costs from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budget for capitalized developed technology costs as set forth in the Original 2025 CAT Budget were $3,923,360,
In addition, the budget for capitalized developed technology costs for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget was $0,
Section 11.3(a)(iii)(B)(B)(2) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the legal costs set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that includes $3,631,342 in legal costs for the CAT Fee 2025-2 Period. This category of costs represents budgeted costs for legal services for this period. CAT LLC anticipates that it will receive legal services from two law firms, Wilmer Cutler Pickering Hale and Dorr LLP (“WilmerHale”) and Jenner & Block LLP (“Jenner”), during the CAT Fee 2025-2 Period.
During the CAT Fee 2025-2 Period, it is anticipated that WilmerHale will provide legal services related to the following:
• Assist with CAT fee filings and related funding issues;
• Draft exemptive requests from CAT NMS Plan requirements and/or proposed amendments to the CAT NMS Plan;
• Provide legal guidance with respect to interpretations of CAT NMS Plan requirements;
• Provide legal support for the Operating Committee, Compliance Subcommittee, working groups and Leadership Team;
• Draft SRO rule filings related to the CAT Compliance Rule;
• Manage corporate governance matters, including supporting Operating Committee meetings and preparing resolutions and consents;
• Assist with communications with the industry, including CAT Alerts and presentations;
• Provide guidance regarding the confidentiality of CAT Data;
• Assist with cost management analyses and proposals;
• Assist with commercial contract-related matters, including change orders and amendments, Plan Processor Agreement items, and subcontract matters;
• Provide support with regard to discussions with the SEC and its staff, including with respect to addressing interpretive and implementation issues;
• Provide legal guidance with respect to the CAT budgets;
• Provide background assistance to other counsel for CAT matters;
• Assist with legal responses related to third-party data requests; and
• Provide legal support regarding CAT policies and procedures.
CAT LLC estimated the budget for the legal costs for WilmerHale for the CAT Fee 2025-2 Period through an analysis of a variety of factors, including WilmerHale fee rates, historical legal fees, and information related to pending legal issues and potential future legal issues.
During the CAT Fee 2025-2 Period, it is anticipated that Jenner will continue to provide legal assistance to CAT LLC regarding certain litigation matters, including: (1) CAT LLC's defense against a lawsuit filed in the Western District of Texas against the SEC Chair, the SEC and CAT LLC challenging the validity of Rule 613 and the CAT and alleging various constitutional, statutory, and common law claims;
CAT LLC estimated the budget for the legal costs for Jenner for the CAT Fee 2025-2 Period through an analysis of a variety of factors, including Jenner's fee rates, historical legal fees, and information related to pending legal issues and potential future legal issues.
CAT LLC estimated the budget for the legal services for the CAT Fee 2025-2 Period based on an analysis of a variety of factors, including law firm fee rates, historical legal fees, and information related to pending legal issues and potential future legal issues. This process for estimating the budget for the legal services for CAT Fee 2025-2 Period is the same process by which CAT LLC estimated the legal cost for the Original 2025 CAT Budget. The Original 2025 CAT Budget estimated a budget for legal costs of $1,430,000 for the first quarter of 2025. The actual costs for legal services for the first quarter of 2025, which are set forth in the Updated 2025 Budget, were $1,922,990. The increase of $492,990 was due to unanticipated issues that required additional legal efforts on behalf of CAT LLC that developed after the budget was created. Such additional costs were primarily due to additional legal work in responding to an SEC examination related to the CAT, for commercial contract-related matters, including with regard to the Plan Processor Agreement, and related to cost savings initiatives. Accordingly, CAT LLC believes that the process for estimating the budgeted legal costs for the CAT Fee 2025-2 Period is reasonable.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for legal costs from the prior CAT Fee filing. Accordingly, this filing describes the changes in the legal costs from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budgeted legal costs as set forth in the Original 2025 CAT Budget were $5,720,000, and the annual 2025 budgeted legal costs as set forth in the Updated 2025 CAT Budget are $7,370,002. Accordingly, the annual budget for legal costs increased by $1,650,002 from the Original 2025 CAT Budget to the Updated 2025 CAT Budget for the full year of 2025.
Correspondingly, the budgeted legal costs for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget were $2,860,000,
This budgeted increase in the legal costs in the Updated 2025 CAT Budget from the Original 2025 Budget, both for the full year for 2025 and for the third and fourth quarters of 2025, was primarily due to an anticipated increase in legal costs related to litigation matters as well as regulatory and corporate legal matters.
Section 11.3(a)(iii)(B)(B)(3) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the consulting costs set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that included $866,167 in consulting costs for the CAT Fee 2025-2 Period. The consulting costs represent the fees estimated to be paid to the consulting firm Deloitte & Touche LLP (“Deloitte”) as project manager during the CAT Fee 2025-2 Period. These consulting costs include costs for advisory services related to the operation of the CAT, and meeting facilitation and communications coordination, vendor support and financial analyses.
It is anticipated that the costs for CAT during the CAT Fee 2025-2 Period will include costs related to consulting services performed by Deloitte. CAT LLC anticipates that it will continue to employ Deloitte during the CAT Fee 2025-2 Period based on, among other things, their expertise, long history with the project, and the recognition that it is anticipated that the consulting fees will remain in line with market rates for this type of specialized consulting work. Deloitte's fee rates are negotiated on an annual basis. CAT LLC assesses Deloitte's performance and reviews prospective budgets and staffing plans submitted by Deloitte on an annual basis. The consulting fees will be paid by CAT LLC to Deloitte.
It is anticipated that Deloitte will provide a variety of consulting services to the CAT during the CAT Fee 2025-2 Period, including the following:
• Implement program operations for the CAT project;
• Provide support to the Operating Committee, the Chair of the Operating Committee and the Leadership Team, including project management support, coordination and planning for meetings and communications, and interfacing with law firms and the SEC;
• Assist with cost and funding matters for the CAT, including assistance with loans and the CAT bank account for CAT funding;
• Provide support for updating the SEC on the progress of the development of the CAT; and
• Provide support for third party vendors for the CAT, including FCAT, Anchin and the law firms engaged by CAT LLC.
In addition, the consulting costs include the compensation for the Chair of the CAT Operating Committee.
CAT LLC estimates that the budget for consulting costs during the CAT Fee 2025-2 Period will be approximately $866,167. The budget for consulting costs during the CAT Fee 2025-2 Period is calculated based on the Updated 2025 CAT Budget. Specifically, this estimate was calculated by adding the budgeted amounts for consulting services for the third and fourth quarters of 2025 as set forth in the Updated 2025 CAT Budget.
CAT LLC estimates the budget for the consulting costs for Deloitte for the CAT Fee 2025-2 Period based on the current statement of work with Deloitte, which took into consideration past consulting costs, potential future consulting needs, the proposed rates and other contractual issues, as well as discussions with Deloitte. This process for estimating the budget for consulting costs for the CAT Fee 2025-2 Period is the same process by which CAT LLC estimated the consulting costs for the Original 2025 CAT Budget. The Original 2025 CAT Budget estimated a budget for consulting services of $437,500 for the first quarter of 2025. The actual costs for consulting services for the first quarter of 2025, which are set forth in the Updated 2025 CAT Budget, were $450,745. Therefore, the variance between budgeted and actual consulting costs for the first quarter of 2025 was approximately 3%. Accordingly, CAT LLC believes that the process for estimating the budgeted consulting costs for the CAT Fee 2025-2 Period is reasonable.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for consulting costs from the prior CAT Fee filing. Accordingly, this filing describes the changes in the consulting costs from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budget for consulting costs as set forth in the Original 2025 CAT Budget was $1,750,000, and the annual 2025 budget for consulting costs as set forth in the Updated 2025 CAT Budget is approximately $1,750,000. Accordingly, the annual budget for consulting costs has not changed from the Original 2025 CAT Budget to the Updated 2025 CAT Budget for the full year of 2025.
Correspondingly, the budget for consulting costs for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget was $875,000,
Section 11.3(a)(iii)(B)(B)(4) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the insurance costs set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that included $1,594,452 in insurance costs for the CAT Fee 2025-2 Period. The insurance costs represent the costs to be incurred for insurance for CAT during the CAT Fee 2025-2 Period.
It is anticipated that the insurance costs for CAT during the CAT Fee 2025-2 Period will include costs related to cyber security liability insurance, directors' and officers' liability insurance, and errors and omissions liability insurance brokered by USI Insurance Services LLC (“USI”). Such policies are standard for corporate entities, and cyber security liability insurance is important for the CAT System. CAT LLC anticipates that it will continue to maintain this insurance during the CAT Fee 2025-2 Period, and notes that the annual premiums for these policies were competitive for the coverage provided. CAT LLC estimated the budget for the insurance costs for the CAT Fee 2025-2 Period based on the insurance estimate from USI for 2025. The annual premiums would be paid by CAT LLC to USI.
The budgeted insurance costs for the CAT Fee 2025-2 Period are based on an insurance cost estimate from USI for 2025. Accordingly, CAT LLC believes that the process for estimating the budgeted insurance costs for the CAT Fee 2025-2 Period is reasonable.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for insurance costs from the prior CAT Fee filing. Accordingly, this filing describes the changes in the insurance costs from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budgeted insurance costs as set forth in the Original 2025 CAT Budget were $1,594,452, and the annual 2025 budgeted insurance costs as set forth in the Updated 2025 CAT Budget are $1,594,452. Accordingly, the annual budgeted insurance costs remained the same for the Original 2025 CAT Budget and the Updated 2025 CAT Budget for the full year of 2025.
Correspondingly, the budgeted insurance costs for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget were $1,594,452,
Section 11.3(a)(iii)(B)(B)(5) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the professional and administration costs set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that included $609,818 in professional and administration costs for the CAT Fee 2025-2 Period. In adopting the CAT NMS Plan, the Commission amended the Plan to add a requirement that CAT LLC's financial statements be prepared in compliance with GAAP, audited by an independent public accounting firm, and made
It is anticipated that Anchin will provide a variety of services to the CAT during the CAT Fee 2025-2 Period, including the following:
• Update and maintain internal controls;
• Provide cash management and treasury functions;
• Facilitate bill payments to vendors;
• Facilitate repayments of promissory notes to Participants;
• Provide monthly bookkeeping;
• Review vendor invoices and documentation in support of cash disbursements;
• Review documentation to ensure that repayments of promissory notes to Participants are in accordance with established policies and procedures;
• Provide accounting research and consultations on various accounting, financial reporting and tax matters;
• Address not-for-profit tax and accounting considerations;
• Prepare tax returns;
• Address various accounting, financial reporting and operating inquiries from Participants;
• Develop and maintain annual operating and financial budgets, including budget to actual fluctuation analyses;
• Support compliance with the CAT NMS Plan;
• Work with and provide support to the Operating Committee and various CAT working groups;
• Prepare monthly, quarterly and annual financial statements;
• Review and reconcile the monthly FINRA CAT reports/analyses related to billings, collections, outstanding accounts receivable and cash account;
• Perform certain verification, completeness, and validation testing related to the monthly FINRA CAT reports/analyses related to billings;
• Support the annual financial statement audits by an independent auditor;
• Review historical costs from inception;
• Provide accounting and financial information in support of SEC filings; and
• Perform additional ad hoc accounting and financial advisory services, as requested by CAT LLC.
CAT LLC estimated the annual budget for the costs for Anchin based on historical costs adjusted for cost of living rate increases, and projected incremental advisory and support services.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for professional and administration costs from the prior CAT Fee filing. Accordingly, this filing describes the changes in the professional and administration costs from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budgeted professional and administration costs as set forth in the Original 2025 CAT Budget were $882,456, and the annual 2025 budgeted professional and administration costs as set forth in the Updated 2025 CAT Budget are $1,193,090. Accordingly, the budgeted annual costs for professional and administration services increased by $310,634 from the Original 2025 CAT Budget to the Updated 2025 CAT Budget for the full year of 2025.
Correspondingly, the budgeted costs for professional and administration services for the third and fourth quarters
This budgeted increase in the professional and administration costs in the Updated 2025 CAT Budget from the Original 2025 Budget, both for the full year for 2025 and for the third and fourth quarters of 2025, was primarily due to increases in both financial advisory costs and accounting costs as a result of additional anticipated efforts related to billings and collections of fees from Participants and Industry Members, coupled with expected incremental efforts related to supporting CAT LLC's independent auditors for the 2024 audit.
Section 11.3(a)(iii)(B)(B)(6) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the public relations costs set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that included $0 in public relations costs for the CAT Fee 2025-2 Period. The public relations costs represent the fees paid to a public relations firm for professional communications services to CAT, including media relations consulting, strategy and execution. Because CAT LLC anticipates that it will not engage a public relations firm for the third and fourth quarters of 2025, the budget for public relations costs for this period is $0.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for public relations costs from the prior CAT Fee filing. Accordingly, this filing describes the changes in the public relations costs from the Updated 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual budgeted public relations costs for 2025 as set forth in the Original 2025 CAT Budget were $50,000, and the annual budgeted public relations costs for 2025 as set forth in the Updated 2025 CAT Budget are $6,575. Accordingly, the annual budget for public relations cost for 2025 decreased by $43,425 from the Original 2025 CAT Budget to the Updated 2025 CAT Budget for the full year of 2025.
Correspondingly, the budgeted costs for public relations services for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget were $25,000,
This budgeted decrease in the public relations costs from the Original 2025 CAT Budget to the Updated 2025 CAT Budget, both for the full year for 2025 and for the third and fourth quarters of 2025, was primarily due to CAT LLC's anticipation that it would not engage a public relations firm for the remainder of 2025.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the reserve costs set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that includes a reserve amount for 2025. Section 11.1(a)(i) of the CAT NMS Plan states that the budget shall include a reserve. Section 11.1(a)(ii) of the CAT NMS Plan further describes the reserve as follows:
For the reserve referenced in paragraph (a)(i) of this Section, the budget will include an amount reasonably necessary to allow the Company to maintain a reserve of not more than 25% of the annual budget. To the extent collected CAT fees exceed CAT costs, including the reserve of 25% of the annual budget, such surplus shall be used to offset future fees. For the avoidance of doubt, the Company will only include an amount for the reserve in the annual budget if the Company does not have a sufficient reserve (which shall be up to but not more than 25% of the annual budget). For the avoidance of doubt, the calculation of the amount of the reserve would exclude the amount of the reserve from the budget.
CAT LLC determined to maintain a reserve in the amount of 25% of the total expenses set forth in Updated 2025 CAT Budget (which does not include the reserve amount). Accordingly, the total 25% reserve was calculated by multiplying the total expenses set forth in the Updated 2025 CAT Budget (other than the reserve) by 25%, which is $57,083,638.
The Updated 2025 CAT Budget states that CAT LLC had accrued $70,942,596 for the reserve as of the beginning of 2025, and an additional $28,846,075 during the first quarter of 2025, from the collection of CAT Fees 2024-1 and 2025-1 and the related Participant CAT Fees. In addition, the Updated 2025 CAT Budget anticipates the collection of an additional $11,821,477 during the second quarter of 2025 via CAT Fee 2025-1 and the related Participant CAT Fee. Accordingly, the Updated 2025 CAT Budget estimates that CAT LLC would collect a surplus reserve amount through June 2025 of $54,526,412 over the 25% reserve amount of $57,083,638.
Such surplus was related, in part, to (i) the collection of CAT fees in excess of the budgeted CAT costs for 2024 and 2025 in light of the greater actual executed equivalent share volume than the projected executed equivalent share volume for CAT Fees 2024-1 and 2025-1, and (ii) a reduction in anticipated budgeted costs associated with the implementation of certain cost savings measures approved by the SEC pertaining to the processing of options market maker quotes and the storage of certain data.
As set forth in the Budgeted CAT Costs 2025-2, the surplus reserve balance of $54,526,412 would be used to offset a portion of CAT costs for the third and fourth quarters of 2025, thereby reducing the fee rate to be paid for CAT Fee 2025-2. Specifically, the total costs used to calculate the fee rate for CAT Fee 2025-2 would be reduced by the amount of the surplus reserve as set forth in the following table:
Accordingly, the fee rate for CAT Fee 2025-2 is calculated based on this reduced amount of $60,726,412, resulting in a fee rate of $0.000009 per executed equivalent share. If the fee rate for CAT Fee 2025-2 were calculated solely based on the reasonably budgeted costs for CAT for July-December 2025 excluding the reduction in that amount due to the surplus reserve offset (that is, based on $115,252,921, not $60,726,412), the fee rate would be the higher rate of $0.000017.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for a reserve from the prior CAT Fee filing. Accordingly, this filing describes the changes in the reserve from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
For the Original 2025 CAT Budget, CAT LLC determined to maintain a reserve in the amount of 25% of budgeted CAT costs (other than the reserve). Accordingly, the total 25% reserve was calculated by multiplying the budgeted CAT costs (other than the reserve) as set forth in the Original 2025 CAT Budget (which is $248,846,076) by 25%, for a target reserve amount of $62,211,519. However, the Original 2025 CAT Budget recognized that a portion of the reserve—$38,369,315—would have been previously collected, and therefore would not need to be included the budgeted CAT costs to be recovered by the CAT Fees. Specifically, the Original 2025 CAT Budget recognized that there was (i) a liquidity reserve balance of $27,695,385 at the beginning of 2025, (ii) a favorable variance of $10,084,698 for budgeted versus actual cloud hosting services costs covering the period from July 16, 2024 through September 30, 2024, and (iii) a Participation Fee from a new Participant in the CAT NMS Plan of $589,232. These three items totaled $38,369,315. Accordingly, the Original 2025 CAT Budget only included $23,842,200 to be collected towards the reserve via the CAT Fee. This $23,842,200 is calculated by reducing the total 25% reserve amount of $62,211,519 by the $38,369,315 previously collected for the reserve. In the Original 2025 CAT Budget, the budget anticipated collecting the remaining reserve amount of $23,842,200 evenly throughout the year, that is, $5,960,500 for each quarter.
As discussed above, CAT LLC determined to maintain a reserve in the amount of 25% of the budgeted CAT costs (other than the reserve). Accordingly, the total 25% reserve was calculated by multiplying the budgeted CAT costs (other than the reserve) as set forth in the Updated 2025 CAT Budget (which is $228,334,551) by 25%, for a target reserve amount of $57,083,638.
As discussed above, such surplus reserve balance of $54,526,412 would be used to offset a portion of CAT costs for the third and fourth quarters of 2025, thereby reducing the fee rate for CAT Fee 2025-2 in accordance with Section 11.1(a)(ii) of the CAT NMS Plan. Section 11.1(a)(ii) of the CAT NMS Plan states that “[t]o the extent collected CAT fees exceed CAT costs, including the reserve of 25% of the annual budget, such surplus shall be used to offset future fees.”
The calculation of Fee Rate 2025-2 also requires the determination of the projected total executed equivalent share volume of transactions in Eligible Securities for the CAT Fee 2025-2 Period. Under the CAT NMS Plan, the Operating Committee is required to “reasonably determine the projected total executed equivalent share volume
The total executed equivalent share volume of transactions in Eligible Securities for the 12-month period from April 2024 through March 2025 was 4,580,287,680,646.28 executed equivalent shares. The Operating Committee has determined to calculate the projected total executed equivalent share volume for the six-month recovery period for CAT Fee 2025-2 by multiplying by one-half the executed equivalent share volume for the 12-month period from April 2024 through March 2025. The Operating Committee determined that such an approach was reasonable as the CAT's annual executed equivalent share volume has remained relatively constant. For example, the executed equivalent share volume for 2021 was 3,963,697,612,395, the executed equivalent share volume for 2022 was 4,039,821,841,560.31, the executed equivalent share volume for 2023 was 3,868,940,345,680.6, and the executed equivalent share volume for 2024 was 4,295,884,600,069.41. Accordingly, the projected total executed equivalent share volume for the six-month period for CAT Fee 2025-2 is projected to be 2,290,143,840,323.14 executed equivalent shares.
The projected total executed equivalent share volume of all transactions in Eligible Securities for the six-month recovery period for CAT Fee 2025-2 and a description of the calculation of the projection is provided in this filing in accordance with the requirement in the CAT NMS Plan to provide such information in a fee filing for a CAT Fee.
Fee Rate 2025-2 would be calculated by dividing the Budgeted CAT Costs 2025-2 by the reasonably projected total executed equivalent share volume of all transactions in Eligible Securities for the six-month recovery period for CAT Fee 2025-2, as described in detail above.
CEBBs and CEBSs would be required to pay fees for CAT Fee 2025-2 on a monthly basis for six months, from August 2025 until January 2026. A CEBB's or CEBS's fee for each month would be calculated based on the transactions in Eligible Securities executed by the CEBB or CEBS from the prior month.
To implement CAT Fee 2025-2, the Exchange proposes to add a new paragraph to the “Consolidated Audit Trail Funding Fees” section of the Exchange's Fee Schedule, to include the proposed paragraphs described below.
The CAT NMS Plan states that:
Each Industry Member that is the CAT Executing Broker for the buyer in a transaction in Eligible Securities (“CAT Executing Broker for the Buyer” or “CEBB”) and each Industry Member that is the CAT Executing Broker for the seller in a transaction in Eligible Securities (“CAT Executing Broker for the Seller” or “CEBS”) will be required to pay a CAT Fee for each such transaction in Eligible Securities in the prior month based on CAT Data. The CEBB's CAT Fee or CEBS's CAT Fee (as applicable) for each transaction in Eligible Securities will be calculated by multiplying the number of executed equivalent shares in the transaction by one-third and by the Fee Rate reasonably determined pursuant to paragraph (a)(i) of this Section 11.3.
Accordingly, based on the factors discussed above, the Exchange proposes to add paragraph (a)(5) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule. Proposed paragraph (a)(5) would state the following:
(A) Each CAT Executing Broker shall receive its first invoice for CAT Fee 2025-2 in August 2025, which shall set forth the CAT Fee 2025-2 fees calculated based on transactions in July 2025, and shall receive an invoice for CAT Fee 2025-2 for each month thereafter until January 2026.
(B) Consolidated Audit Trail, LLC shall provide each CAT Executing Broker with an invoice for CAT Fee 2025-2 on a monthly basis. Each month, such invoices shall set forth a fee for each transaction in Eligible Securities executed by the CAT Executing Broker in its capacity as a CAT Executing Broker for the Buyer (“CEBB”) and/or the CAT Executing Broker for the Seller (“CEBS”) (as applicable) from the prior month as set forth in CAT Data. The fee for each such transaction will be calculated by multiplying the number of executed equivalent shares in the transaction by the fee rate of $0.000009 per executed equivalent share.
(C) Notwithstanding the last invoice date of January 2026 for CAT Fee 2025-2 in paragraph 5(A), CAT Fee 2025-2 shall continue in effect after January 2026, with each CAT Executing Broker receiving an invoice for CAT Fee 2025-2 each month, until a new subsequent CAT Fee is in effect with regard to Industry Members in accordance with Section 19(b) of the Exchange Act. Consolidated Audit Trail, LLC will provide notice when CAT Fee 2025-2 will no longer be in effect.
(D) Each CAT Executing Broker shall be required to pay each invoice for CAT Fee 2025-2 in accordance with paragraph (b).
As noted in the Plan amendment for the CAT Funding Model, “[a]s a practical matter, the fee filing would provide the exact fee per executed equivalent share to be paid for the CAT Fees, by multiplying the Fee Rate by one-third and describing the relevant number of decimal places for the
The proposed language in paragraph (a)(5)(A) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule would describe when CAT Executing Brokers would receive their first monthly invoice for CAT Fee 2025-2. Specifically, CAT Executing Brokers would receive their first monthly invoice for CAT Fee 2025-2 in August 2025 and the fees set forth in that invoice would be calculated based on transactions executed in July 2025. The payment for the first invoice would be required within 30 days after the receipt of the first invoice (unless a longer period is indicated), as described in paragraph (b)(2) of the Fee Schedule.
Proposed paragraph (a)(5)(A) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule also would describe the monthly cadence of the invoices for CAT Fee 2025-2. Specifically, after the first invoices are provided to CAT Executing Brokers in August 2025, invoices will be sent to CAT Executing Brokers each month thereafter until January 2026.
Proposed paragraph (a)(5)(B) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule would describe the invoices for CAT Fee 2025-2. Proposed paragraph (a)(5)(B) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule would state that “Consolidated Audit Trail, LLC shall provide each CAT Executing Broker with an invoice for CAT Fee 2025-2 on a monthly basis.” Proposed paragraph (a)(5)(B) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule also would describe the fees to be set forth in the invoices for CAT Fee 2025-2. Specifically, it would state that “[e]ach month, such invoices shall set forth a fee for each transaction in Eligible Securities executed by the CAT Executing Broker in its capacity as a CAT Executing Broker for the Buyer (`CEBB') and/or the CAT Executing Broker for the Seller (`CEBS') (as applicable) from the prior month as set forth in CAT Data. The fee for each such transaction will be calculated by multiplying the number of executed equivalent shares in the transaction by the fee rate of $0.000009 per executed equivalent share.”
Since CAT Fee 2025-2 is a monthly fee based on actual transaction volume from the prior month, CAT Fee 2025-2 may collect more or less than two-thirds of the Budgeted CAT Costs 2025-2. To the extent that CAT Fee 2025-2 collects more than two-thirds of the Budgeted CAT Costs 2025-2, any excess money collected will be used to offset future fees and/or to fund the reserve for the CAT. To the extent that CAT Fee 2025-2 collects less than two-thirds of the Budgeted CAT Costs 2025-2, the budget for the CAT in the ensuing months will reflect such shortfall.
Furthermore, proposed paragraph (a)(5)(C) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule would describe how long CAT Fee 2025-2 would remain in effect. It would state that “[n]otwithstanding the last invoice date of January 2026 for CAT Fee 2025-2 in paragraph 5(A), CAT Fee 2025-2 shall continue in effect after January 2026, with each CAT Executing Broker receiving an invoice for CAT Fee 2025-2 each month, until a new subsequent CAT Fee is in effect with regard to Industry Members in accordance with Section 19(b) of the Exchange Act. Consolidated Audit Trail, LLC will provide notice when CAT Fee 2025-2 will no longer be in effect.”
Finally, proposed paragraph (a)(5)(D) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule would set forth the requirement for the CAT Executing Brokers to pay the invoices for CAT Fee 2025-2. It would state that “[e]ach CAT Executing Broker shall be required to pay each invoice for CAT Fee 2025-2 in accordance with paragraph (b).”
Paragraph (b)(1) of the “Consolidated Audit Trail Funding Fees” section of the Fee Schedule describes the manner of payment of Industry Member CAT fees. It states that “[e]ach CAT Executing Broker shall pay its CAT fees as required pursuant to paragraph (a) each month to the Consolidated Audit Trail, LLC in the manner prescribed by the Consolidated Audit Trail, LLC.” The CAT NMS Plan requires the Operating Committee to establish a system for the collection of CAT fees.
The CAT NMS Plan further states that:
Participants shall require each Industry Member to pay all applicable fees authorized under this Article XI within thirty (30) days after receipt of an invoice or other notice indicating payment is due (unless a longer payment period is otherwise indicated). If an Industry Member fails to pay any such fee when due (as determined in accordance with the preceding sentence), such Industry Member shall pay interest on the outstanding balance from such due date until such fee is paid at a per annum rate equal to the lesser of: (a) the Prime Rate plus 300 basis points; or (b) the maximum rate permitted by applicable law.
Paragraph (b)(2) of the Consolidated Audit Trail Funding Fees section of the Fee Schedule states that:
Each CAT Executing Broker shall pay the CAT fees required pursuant to paragraph (a) within thirty days after receipt of an invoice or other notice indicating payment is due (unless a longer payment period is otherwise indicated). If a CAT Executing Broker fails to pay any such CAT fee when due, such CAT Executing Broker shall pay interest on the outstanding balance from such due date until such fee is paid at a per annum rate equal to the lesser of (i) the Prime Rate plus 300 basis points, or (ii) the maximum rate permitted by applicable law.
The requirements of paragraph (b)(2) would apply to CAT Fee 2025-2.
The CAT NMS Plan states that:
Details regarding the calculation of a Participant or CAT Executing Broker's CAT Fees will be provided upon request to such Participant or CAT Executing Broker. At a minimum, such details would include each Participant or CAT Executing Broker's executed equivalent share volume and corresponding fee by (1) Listed Options, NMS Stocks and OTC Equity Securities, (2) by transactions executed on each exchange and transactions executed otherwise than on an exchange, and (3) by buy-side transactions and sell-side transactions.
Such information would provide CEBBs and CEBSs with the ability to
In addition, CAT LLC will make certain aggregate statistics regarding CAT Fees publicly available. Specifically, the CAT NMS Plan states that, “[f]or each CAT Fee, at a minimum, CAT LLC will make publicly available the aggregate executed equivalent share volume and corresponding aggregate fee by (1) Listed Options, NMS Stocks and OTC Equity Securities, (2) by transactions executed on each exchange and transactions executed otherwise than on an exchange, and (3) by buy-side transactions and sell-side transactions.”
Furthermore, CAT LLC will make publicly available on the CAT website the total amount invoiced each month that CAT Fee 2025-2 is in effect as well as the total amount invoiced for CAT Fee 2025-2 for all months since its commencement. CAT LLC also will make publicly available on the CAT website the total costs to be collected from Industry Members for CAT Fee 2025-2.
The CAT NMS Plan states that “[n]o Participant will make a filing with the SEC pursuant to Section 19(b) of the Exchange Act regarding any CAT Fee related to Prospective CAT Costs until the Financial Accountability Milestone related to Period 4 described in Section 11.6 has been satisfied.”
CAT LLC intends for CAT Fee 2025-2 to replace CAT Fee 2025-1 (which has a fee rate of $0.000022).
While CAT Fees charged to Industry Members become effective in accordance with the requirements of Section 19(b) of the Exchange Act,
The Exchange believes the proposed rule change is consistent with the requirements of the Exchange Act. The Exchange believes that the proposed rule change is consistent with Section 6(b)(5) of the Act,
The Exchange believes that this proposal is consistent with the Act because it implements provisions of the Plan and is designed to assist the Exchange in meeting regulatory obligations pursuant to the Plan. In approving the Plan, the SEC noted that the Plan “is necessary and appropriate in the public interest, for the protection of investors and the maintenance of fair and orderly markets, to remove impediments to, and perfect the mechanism of a national market system, or is otherwise in furtherance of the purposes of the Act.”
The Exchange believes that the proposed fees to be paid by the CEBBs and CEBSs are reasonable, equitably allocated and not unfairly discriminatory. First, the CAT Fee 2025-2 fees to be collected are directly associated with the budgeted costs of establishing and maintaining the CAT, where such costs include Plan Processor costs and costs related to technology, legal, consulting, insurance, professional and administration, and public relations costs.
The proposed CAT Fee 2025-2 fees would be charged to Industry Members in support of the maintenance of a consolidated audit trail for regulatory purposes. The proposed fees, therefore, are consistent with the Commission's view that regulatory fees be used for regulatory purposes and not to support the Exchange's business operations. The proposed fees would not cover Exchange services unrelated to the CAT. In addition, any surplus would be used as a reserve to offset future fees. Given the direct relationship between CAT fees and CAT costs, the Exchange believes that the proposed fees are reasonable, equitable and not unfairly discriminatory.
As further discussed below, the SEC approved the CAT Funding Model, finding it was reasonable and that it equitably allocates fees among Participants and Industry Members. The Exchange believes that the proposed fees adopted pursuant to the CAT Funding Model approved by the SEC are reasonable, equitably allocated and not unfairly discriminatory.
Section 11.1(b) of the CAT NMS Plan states that “[t]he Participants shall file with the SEC under Section 19(b) of the Exchange Act any such fees on Industry Members that the Operating Committee approves.” Per Section 11.1(b) of the CAT NMS Plan, the Exchange has filed this fee filing to implement the Industry Member CAT fees included in the CAT Funding Model. The Exchange believes that this proposal is consistent with the Exchange Act because it is consistent with, and implements, the CAT Funding Model in the CAT NMS Plan, and is designed to assist the Exchange and its Industry Members in meeting regulatory obligations pursuant to the CAT NMS Plan. In approving the CAT NMS Plan, the SEC noted that the Plan “is necessary and appropriate in the public interest, for the protection of investors and the maintenance of fair and orderly markets, to remove impediments to, and perfect the mechanism of a national market system, or is otherwise in furtherance of the purposes of the Act.”
The SEC has determined that the CAT Funding Model is reasonable and satisfies the requirements of the Exchange Act. Specifically, the SEC has concluded that the method for determining CAT Fees as set forth in Section 11.3 of the CAT NMS Plan, including the formula for calculating the Fee Rate, the identification of the parties responsible for payment and the transactions subject to the fee rate for CAT Fees, is reasonable and satisfies the Exchange Act.
The formula for calculating a Fee Rate requires the amount of Budgeted CAT Costs to be recovered. Specifically, Section 11.3(a)(iii)(B) of the CAT NMS Plan requires a fee filing to provide:
In accordance with this requirement, the Exchange has set forth the amount and type of Budgeted CAT Costs 2025-2 for each of these categories above.
Section 11.3(a)(iii)(B) of the CAT NMS Plan also requires that the fee filing provide “sufficient detail to demonstrate that the budget for the upcoming year, or part of year, as applicable, is reasonable and appropriate.” As discussed below, the Exchange believes that the budget for the CAT Fee 2025-2 Period is “reasonable and appropriate.” Each of the costs included in CAT Fee 2025-2 are reasonable and appropriate because the costs are consistent with standard industry practice, based on the need to
In approving the CAT Funding Model, the Commission recognized that it is appropriate to recover budgeted costs related to cloud hosting services as a part of CAT Fees.
To comply with the requirements of the Plan, the breadth of the cloud activities related to the CAT is substantial. The cloud services not only include the production environment for the CAT, but they also include two industry testing environments, support environments for quality assurance and stress testing and disaster recovery capabilities. Moreover, the cloud storage costs are driven by the requirements of the Plan, which requires the storage of multiple versions of the data, from the original submitted version of the data through various processing steps, to the final version of the data.
Data volume is a significant driver of costs for cloud hosting services. When the Commission adopted the CAT NMS Plan in 2016, it estimated that the CAT would need to receive 58 billion records per day
In addition to the effect of the data volume on the cloud hosting costs, the processing timelines set forth in the Plan contribute to the cloud hosting costs. Although CAT LLC has proactively sought to manage cloud hosting costs while complying with the Plan, including through requests to the Commission for exemptive relief and amendments to the CAT NMS Plan to reduce costs, stringent CAT NMS Plan requirements do not allow for any material flexibility in cloud architecture design choices, processing timelines (
The costs for cloud hosting services also reflect the need for specialized cloud hosting services given the data volume and unique processing needs of the CAT. The data volume as well as the data processing needs of the CAT necessitate the use of cloud hosting services. The equipment, power and services required for an on-premises data model, the alternative to cloud hosting services, would be cost prohibitive. Moreover, as CAT was being developed, there were limited cloud hosting providers that could satisfy all the necessary CAT requirements, including the operational and security criteria. Over time, more providers offering cloud hosting services that would satisfy these criteria have entered the market. CAT LLC will continue to evaluate alternative cloud hosting services, recognizing that the time and cost to move to an alternative cloud provider would be substantial.
The reasonableness of the cloud hosting services costs is further supported by key cost discipline mechanisms for the CAT—a cost-based funding structure, cost transparency, cost management efforts (including regular efforts to lower compute and storage costs where permitted by the Plan) and oversight. Together, these mechanisms help ensure the ongoing reasonableness of the CAT's costs and the level of fees assessed to support those costs.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted costs related to operating fees as a part of CAT Fees.
The operating fees would include the negotiated fees paid by CAT LLC to the Plan Processor to operate and maintain the system for order-related information and to perform business operations related to the system, including compliance, security, testing, training, communications with the industry (
The operating costs also include costs related to the receipt of market data. CAT LLC anticipates receiving certain market data from Algoseek during the CAT Fee 2025-2 Period. CAT LLC anticipates that Algoseek will provide data as set forth in the SIP Data requirements of the CAT NMS Plan and that the fees are reasonable and in line with market rates for market data received.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted costs related to
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted costs related to change request fees as a part of CAT Fees.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted costs related to capitalized developed technology costs as a part of CAT Fees.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted costs related to legal fees as a part of CAT Fees.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted consulting costs as a part of CAT Fees.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted insurance costs as a part of CAT Fees.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted professional and administration costs as a part of CAT Fees.
CAT LLC anticipates continuing to make use of Anchin, a financial advisory firm, to assist with financial matters for the CAT. CAT LLC determined that the budgeted costs for Anchin were appropriate, as the financial advisory services were to be provided at reasonable market rates that were comparable to the rates charged by other such firms for similar work. Moreover, the total budgeted costs for such financial advisory services were appropriate in light of the breadth of services provided by Anchin. The services budgeted to be performed by Anchin and the budgeted costs related to such services are described above.
CAT LLC anticipates continuing to make use of Grant Thornton, an independent accounting firm, to complete the audit of CAT LLC's financial statements, in accordance with the requirements of the CAT NMS Plan. CAT LLC determined that the budgeted costs for Grant Thornton were appropriate, as the accounting services were to be provided at reasonable market rates that were comparable to the rates charged by other such firms for similar work. Moreover, the total budgeted costs for such accounting services were appropriate in light of the breadth of services provided by Grant Thornton. The services budgeted to be performed by Grant Thornton and the budgeted costs related to such services are described above.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted public relations costs as a part of CAT Fees.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted reserve costs as a part of CAT Fees.
In its approval order for the CAT Funding Model, the Commission stated that it would be reasonable for the annual operating budget for the CAT to “include a reserve of not more than 25% of the annual budget.”
Because the CAT is a critical regulatory tool/system, the CAT needs to have a stable funding source to build financial stability to support the Company as a going concern. Funding for the CAT, as noted in Section 11.1(b), is the responsibility of the Participants and the industry. Because CAT fees are charged based on the budget, which is based on anticipated volume, it is reasonable to have a reserve on hand to prevent a shortfall in the event there is an unexpectedly high volume in a given year. A reserve would help to assure that the CAT has sufficient resources to cover costs should there be unanticipated costs or costs that are higher than expected.
The SEC also recognized that a reserve would help address the difficulty in predicting certain variable CAT costs, like trading volume.
As discussed further below,
The CAT NMS Plan also requires fee filings for Prospective CAT Fees to include “a discussion of how the budget is reconciled to the collected fees.”
The total executed equivalent share volume of transactions in Eligible Securities for the period from April 2024 through March 2025 was 4,580,287,680,646.28 executed equivalent shares. CAT LLC determined the total executed equivalent share volume for the prior twelve months by counting executed equivalent shares in the same manner as it counts executed equivalent shares for CAT billing purposes.
CAT LLC has determined that the projected total executed equivalent share volume for the six months of CAT Fee 2025-2 Period by multiplying by one-half the executed equivalent share volume for the prior twelve months: one-half times 4,580,287,680,646.28 executed equivalent shares.
As noted in the approval order for the CAT Funding Model, as a practical matter, the fee filing for a CAT Fee would provide the exact fee per executed equivalent share to be paid for each CAT Fee, by multiplying the Fee Rate by one-third and describing the relevant number of decimal places for the fee rate.
The Exchange believes that charging CAT Fee 2025-2 with a fee rate of $0.000009 per executed equivalent share is reasonable because it provides for a revenue stream for the Company that is aligned with the Budgeted CAT Costs 2025-2. Moreover, the Exchange believes that the level of the fee rate is reasonable, as it is less than CAT Fee 2025-1 and is comparable to other transaction-based fees. Indeed, CAT Fee 2025-2 is significantly lower than fees previously assessed pursuant to Section 31 (
CAT Fee 2025-2 provides for an equitable allocation of fees, as it equitably allocates CAT costs between and among the Participants and Industry Members. The SEC approved the CAT Funding Model, finding that each aspect of the CAT Funding Model satisfied the requirements of the Exchange Act, including the formula for calculating CAT Fees as well as the Industry Members to be charged the CAT Fees.
CAT Fee 2025-2 provides for an equitable allocation of fees as it complies with the requirements regarding the calculation of CAT Fees as set forth in the CAT NMS Plan. For example, as described above, the calculation of CAT Fee 2025-2 complies with the formula set forth in Section 11.3(a) of the CAT NMS Plan. In addition, CAT Fee 2025-2 would be charged to CEBBs and CEBSs in accordance with Section 11.3(a) of the CAT NMS Plan. Furthermore, the Participants would be charged for their designated share of the Budgeted CAT Costs 2025-2 through a fee implemented via the CAT NMS Plan, which would have the same fee rate as CAT Fee 2025-2.
In addition, as discussed above, each of the inputs into the calculation of CAT Fee 2025-2—the Budgeted CAT Costs 2025-2, the count for the executed equivalent share volume for the prior 12 months, and the projected executed equivalent share volume for the CAT Fee 2025-2 Period—are reasonable. Moreover, these inputs lead to a reasonable fee rate for CAT Fee 2025-2 that is lower than other fee rates for transaction-based fees. A reasonable fee rate allocated in accordance with the requirements of the CAT Funding Model provides for an equitable allocation of fees.
CAT Fee 2025-2 is not an unfairly discriminatory fee. The SEC approved the CAT Funding Model, finding that each aspect of the CAT Funding Model satisfies the requirements of the Exchange Act. In reaching this conclusion, the SEC analyzed the potential effect of CAT Fees calculated pursuant to the CAT Funding Model on affected categories of market participants, including Participants (including exchanges and FINRA), Industry Members (including subcategories of Industry Members, such as alternative trading systems, CAT Executing Brokers and market makers), and investors generally, and considered market effects related to equities and options, among other things. CAT Fee 2025-2 complies with the requirements regarding the calculation of CAT Fees as set forth in the CAT NMS Plan. In addition, as discussed above, each of the inputs into the calculation of CAT Fee 2025-2 and the resulting fee rate for CAT Fee 2025-2 is reasonable. Therefore, CAT Fee 2025-2 does not
The Exchange believes the proposed fees established pursuant to the CAT Funding Model promote just and equitable principles of trade, and, in general, protect investors and the public interest, and are provided in a transparent manner and with specificity in the Fee Schedule. The Exchange also believes that the proposed fees are reasonable because they would provide ease of calculation, ease of billing and other administrative functions, and predictability of a fee based on fixed rate per executed equivalent share. Such factors are crucial to estimating a reliable revenue stream for CAT LLC and for permitting Exchange members to reasonably predict their payment obligations for budgeting purposes.
Section 6(b)(8) of the Act
In addition, all Participants (including exchanges and FINRA) are proposing to introduce CAT Fee 2025-2 on behalf of CAT LLC to implement the requirements of the CAT NMS Plan. Therefore, this is not a competitive fee filing, and, therefore, it does not raise competition issues between and among the Participants.
Furthermore, in approving the CAT Funding Model, the SEC analyzed the potential competitive impact of the CAT Funding Model, including competitive issues related to market services, trading services and regulatory services, efficiency concerns, and capital formation.
As discussed above, each of the inputs into the calculation of CAT Fee 2025-2 is reasonable and the resulting fee rate for CAT Fee 2025-2 calculated in accordance with the CAT Funding Model is reasonable. Therefore, CAT Fee 2025-2 would not impose any burden on competition that is not necessary or appropriate in furtherance of the purpose of the Exchange Act.
No written comments were solicited or received with respect to the proposed rule change.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1)
The Exchange proposes to amend the Connectivity Fee Schedule to amend the list of third party systems and third party data feeds to which Users can connect, related fees and a reference to who can charge redistribution fees. The proposed rule change is available on the Exchange's website at
In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements.
The Exchange proposes to amend the Connectivity Fee Schedule to amend the list of third party systems and third party data feeds to which Users
Currently, Users are offered connectivity to the execution systems of third party markets and other service providers (“Third Party Systems”) and connectivity to data feeds from third party markets and other content service providers (“Third Party Data Feeds”) at the Mahwah, New Jersey data center (“MDC”).
The Exchange proposes to make the following changes to the list of Third Party Systems:
• Add Blue Ocean ATS (BOATS), Canadian Imperial Bank of Commerce (CIBC), Long Term Stock Exchange,
• To reflect Cboe Canada`s integration of Cboe Canada and Cboe MATCHNow into one entity,
To make these changes, the list of available Third Party Systems would be amended as follows (proposed deletions bracketed, proposed additions italicized):
The Exchange does not propose to change the monthly recurring fee Users pay for access to each Third Party System. Although the proposed changes to the list of Third Party Systems would combine Cboe MATCHNow with Cboe Canada to reflect their integration by Cboe Canada, thereby removing Cboe MATCHNow from the current list of Third Party Systems, no User would be charged more as a consequence. A User would continue to be able to choose which systems it wants from any Third Party System. It would not have to receive any systems, or pay for any bandwidth, that it did not choose.
The Exchange expects that the connectivity partner of BOATS will charge a redistribution fee, which will be passed through to the User.
The Exchange proposes to make the following changes to the list of Third Party Data Feeds (together, the “Proposed Third Party Data Feeds”):
• Add the following Third Party Data Feeds with the following fees for monthly recurring connectivity:
○ Blue Ocean ATS (BOATS), for $750 a month;
○ Cboe CFE Futures, for $1,500 per month;
○ Long Term Stock Exchange, for $2,600 per month;
○ MEMX Equities, for $2,000 per month;
○ MEMX Options, for $2,000 per month;
○ Small Exchange, for $1,000 per month.
• To reflect Cboe Canada's integration of Cboe Canada and Cboe MATCHNow into one entity,
• Combine Nasdaq Stock Market with Nasdaq ISE under the name “Nasdaq Stock Market” and change the combined monthly recurring connectivity fee to $3,000 per month.
• Combine TMX Group and Montreal Exchange
In addition, the Exchange proposes to change the monthly recurring connectivity fee per Third Party Data Feed for 18 feeds.
To make these changes, the text under “Connectivity to Third Party Data Feeds” and list of available Third Party Data Feeds would be amended as follows (proposed deletions bracketed, proposed additions italicized):
Third Party Data Feed providers
The Exchange would provide access to the Proposed Third Party Systems as conveniences to Users.
As with the current Third Party Systems, Users would connect to the Proposed Third Party Systems over the internet protocol (“IP”) network, a local area network available in the MDC.
As with the current Third Party Systems, in order to obtain access to a Proposed Third Party System, the User would enter into an agreement with the relevant proposed third party, pursuant to which it would charge the User for access to the Proposed Third Party System. The Exchange would then enable unicast connectivity between the User and the Proposed Third Party System over the IP network.
The Exchange has no affiliation with the providers of any of the Proposed Third Party Systems. Establishing a User's access to a Proposed Third Party System would not give the Exchange any right to use the Proposed Third Party System. Connectivity to a Proposed Third Party System would not provide access or order entry to the Exchange's execution system, and a User's connection to a Proposed Third Party System would not be through the Exchange's execution system.
The Exchange proposes to charge the same monthly recurring fee for connectivity to the Proposed Third Party Systems that it does for the current Third Party Systems. Specifically, when a User requested access to a Proposed Third Party System, it would identify the applicable third party and what bandwidth connection would be required. The fees for such bandwidth connection would vary based on the size of the connection, not on the particular Third Party System the User chooses. The Exchange is not proposing to change the pricing of any of these bandwidth connections; the Exchange is simply expanding the list of Third Party Systems that Users may access via these bandwidth connections.
The Exchange would provide connectivity to the Proposed Third Party Data Feeds as a convenience to Users.
As with the existing connections to Third Party Data Feeds, the Exchange would receive a Proposed Third Party Data Feed from the content service provider at the relevant source. The Exchange would then provide connectivity to that data to Users for a fee. Users would connect to the Proposed Third Party Data Feeds over the IP network. The Proposed Third Party Data Feeds would include trading and other information concerning the securities that are traded on the relevant third party systems.
As with the existing connections to Third Party Data Feeds, in order to connect to a Proposed Third Party Data Feed, a User would enter into a contract with the third party content service provider, pursuant to which it may charge the User for the data feed. The Exchange would receive the Proposed Third Party Data Feed in remote locations and transport it over its fiber optic network to the MDC. After the content service provider and User entered into an agreement and the Exchange received authorization from the content service provider, the Exchange would retransmit the data to the User over the User's port. The Exchange would charge the User for connectivity to the Proposed Third Party Data Feed. A User would only receive, and would only be charged the fee for, connectivity to a Proposed Third Party Data Feed for which it entered into a contract.
The Exchange has no affiliation with the sellers of the Proposed Third Party Data Feeds and would have no right to use those feeds other than as a redistributor of the data. None of the Proposed Third Party Data Feeds would provide access or order entry to the Exchange's execution system. The Proposed Third Party Data Feeds would not provide access or order entry service to the execution systems of the third parties generating the feeds. The Exchange would receive the Proposed Third Party Data Feeds via arms-length agreements and would have no inherent advantage over any other distributor of such data.
The proposed rule change would not apply differently to distinct types or sizes of market participants. Rather, it would apply to all Users equally. As is currently the case, the purchase of any colocation service is completely voluntary and the Connectivity Fee Schedule is applied uniformly to all Users.
Access to most of the Proposed Third Party Systems and connectivity to most of the Proposed Third Party Data Feeds were requested by Users, but the Exchange believes that it would gain at most a handful of new customers among Users due to the proposed change.
The Commission has repeatedly expressed its preference for competition over regulatory intervention in determining prices, products, and services in the securities markets. Specifically, in Regulation NMS, the Commission highlighted the importance of market forces in determining prices and SRO revenues and, also, recognized that current regulation of the market system “has been remarkably successful in promoting market competition in its broader forms that are most important to investors and listed companies.”
The Exchange's provision of access to the Proposed Third Party Systems (“Access”) and connectivity to the Proposed Third Party Data Feeds (“Connectivity”) is subject to competition from access and connectivity that Users can obtain through the third-party telecommunications service providers that have installed their equipment in the MDC's two meet-me-rooms (“Telecoms”).
More specifically, a User may access a Proposed Third Party System by, first, entering into an agreement with the relevant proposed third party, pursuant to which the third party would charge the User for access to the Proposed Third Party System, and second, accessing the Proposed Third Party System through one of the Telecoms. Likewise, a User may connect to a Proposed Third Party Data Feed by, first, entering into a contract with the third party content service provider, if required, pursuant to which the third party may charge the User for the Proposed Third Party Data Feed, and second, connecting to the Proposed Third Party Data Feed through one of the Telecoms.
In both cases, the User would be able to access any of the Proposed Third
The proposed change is not otherwise intended to address any other issues relating to colocation services or related fees, and the Exchange is not aware of any problems that Users would have in complying with the proposed change.
The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,
The Exchange believes that the proposed rule change is reasonable.
In considering the reasonableness of proposed services and fees, the Commission's market-based test considers “whether the exchange was subject to significant competitive forces in setting the terms of its proposal . . . , including the level of any fees.”
As described above,
Because Users are third parties and are not required to make such information public, the Exchange does not have visibility into how many Users currently access the Proposed Third Party Systems or connect to the Proposed Third Party Data Feeds independently, as described above.
Such Users compete, or would compete, with the Exchange's Access and Connectivity and exert, or would exert, significant competitive forces on the Exchange in setting the terms of its proposal, including the level of the Exchange's proposed fees.
The Exchange does not believe that FIDS would have any competitive advantage over Users that establish independent access to Proposed Third Party Systems or connectivity to Proposed Third Party Data Feeds. The Exchange's proposed service for Access and Connectivity does not have (a) any special access to the Proposed Third Party Systems and Proposed Third Party Data Feeds or (b) advantage within the MDC, as all distances in the MDC are normalized.
Moreover, the Exchange does not believe that FIDS would have any competitive advantage because it would charge for connectivity only, not the Proposed Third Party System or Proposed Third Party Data Feed itself. All Users that connect to a Proposed Third Party System or Proposed Third Party Data Feed, whether they elect to connect using the Exchange's proposed service or not, would have to pay a third party for the Proposed Third Party System or Proposed Third Party Data Feed.
Nor does the Exchange believe that FIDS has a competitive advantage by virtue of the fact that ICE owns and operates the MDC's meet-me-rooms. Users purchasing Access or Connectivity—like Users of any other colocation service—would require a circuit connecting out of the MDC, and
If anything, the Exchange would be subject to a competitive disadvantage vis-à-vis Users regarding access to the Proposed Third Party Systems or connectivity to the Proposed Third Party Data Feeds. Users that choose to independently establish access or connectivity may negotiate terms with the Telecoms through whom such access and connectivity is delivered, in response to competitive forces. Such prices are not required to be filed by any party with the Commission. In contrast, the Exchange's service and pricing would be standardized as set out in this filing, and the Exchange would be unable to respond to pricing pressure from its competitors without seeking a formal fee change in a filing before the Commission.
In sum, because the Exchange is subject to significant competitive forces in setting the terms on which it offers its proposal, in particular because the Exchange believes that a substantially similar substitute is available, and the Exchange has not placed actual or proposed Users that already have or establish access or connectivity at a competitive disadvantage created by the Exchange, the proposed fees for the Exchange's connectivity to Proposed Third Party Systems and Proposed Third Party Data Feeds are reasonable.
The Exchange believes that it is reasonable to add “and their partners” to the second paragraph under “Connectivity to Third Party Data Feeds” (“Proposed Pass-Through Edit”) as that would add clarity as to who may charge redistribution fees, making the paragraph more precise.
The Exchange believes that it is reasonable to make the proposed changes, as connectivity to the Proposed Third Party Systems and access to the Proposed Third Party Data Feeds was generally requested by Users.
The Exchange believes that the proposed rule change is equitable.
The Exchange believes that the fees for connectivity to the Proposed Third Party Data Feeds are an equitable allocation of fees. The Exchange recognizes that the monthly recurring fee Users pay for access to the below Proposed Third Party Data Feeds will increase if they connect to one, but not both, of the current Third Data Feeds, but believes that they are equitable, for the following reasons:
• The combination of Cboe MATCHNow into Cboe Canada reflects the integration by Cboe Canada of those two entities into one entity.
• Nasdaq Stock Market and Nasdaq ISE are proposed to be combined. With this combination, Nasdaq ISE as well as Nasdaq BX, Nasdaq GEMX, Nasdaq MRX, Nasdaq PHLX and the Nasdaq Stock Market—which are all distinct self-regulatory organizations—will all be available under “Nasdaq Stock Market”. The proposed fee for the combination of the Nasdaq Stock Market and Nasdaq ISE is equal to the sum of the current fees for those feeds.
• The Montreal Exchange is a subsidiary of TMX Group.
The Exchange believes it is equitable to propose to increase the fee for ICE Data Services Consolidated Feed Shared Farm >1 Gb to $2,000
The Exchange does not propose to change the monthly recurring fee Users pay for access to each Third Party System. Although the proposed changes to the list of Third Party Systems would combine Cboe MATCHNow with Cboe Canada to reflect their integration by Cboe Canada, thereby removing Cboe MATCHNow from the current list of Third Party Systems, no User would be charged more as a consequence. A User would continue to be able to choose which systems it wants from any Third Party System. It would not have to receive any systems, or pay for any bandwidth, that it did not choose.
The Exchange believes that the Proposed Pass-Through Edit is equitable as it would add clarity as to who may charge redistribution fees, making the
Without this proposed rule change, Users would have fewer options for connectivity to the Proposed Third Party Systems and Proposed Third Party Data Feeds. By offering Access and Connectivity, the Exchange gives each User additional options for addressing its needs, responding to User demand for options. Offering these additional services would help each User tailor its data center operations to the requirements of its business operations by allowing it to select the form and latency of connectivity that best suits its needs. Users that do not opt to utilize the Exchange's proposed Access or Connectivity would still be able to access Proposed Third Party Systems or connect to Proposed Third Party Data Feeds using Telecoms.
The Exchange believes that the proposed change is equitable because it will result in fees being charged only to Users that voluntarily select to receive the corresponding services and because those services will be available to all Users.
Furthermore, the Exchange believes that the services and fees proposed herein are equitably allocated because, in addition to the services being completely voluntary, they are available to all Users on an equal basis (
The Exchange believes that the proposed rule change is not unfairly discriminatory, for the following reasons.
The Exchange believes that the Proposed Pass-Through Edit is not unfairly discriminatory as it would add clarity as to who may charge redistribution fees, making the paragraph more precise and thereby ensuring the accuracy of, and adding clarity and transparency to, the Connectivity Fee Schedule to all market participants.
Without this proposed rule change, Users would have fewer options for access to Proposed Third Party Systems or connectivity to Proposed Third Party Data Feeds. The proposed change would provide Users with an additional choice with respect to the form and optimal latency of the access they use to connect to Proposed Third Party Systems or connectivity to Proposed Third Party Data Feeds, allowing a User to select the connectivity that better suits its needs, helping it tailor its colocation operations to the requirements of its business operations. Users that do not opt to utilize the Exchange's proposed Access or Connectivity would still be able to access the Proposed Third Party Systems or connect to Proposed Third Party Data Feeds using Telecoms.
The Exchange believes that the proposed change is not unfairly discriminatory because it will result in fees being charged only to Users that voluntarily select to receive the corresponding services and because those services will be available to all Users. Furthermore, the Exchange believes that the services and fees proposed herein are not unfairly discriminatory because, in addition to the services being completely voluntary, they are available to all Users on an equal basis (
For all these reasons, the Exchange believes that the proposal is consistent with the Act.
In accordance with Section 6(b)(8) of the Act,
The Exchange does not believe that FIDS would have any competitive advantage over Users that establish independent access to Proposed Third Party Systems or connectivity to Proposed Third Party Data Feeds. The Exchange's proposed service for Access and Connectivity does not have (a) any special access to the Proposed Third Party Systems and Proposed Third Party Data Feeds or (b) advantage within the MDC, as all distances in the MDC are normalized.
Moreover, the Exchange does not believe that FIDS would have any competitive advantage because it would charge for connectivity only, not the Proposed Third Party System or Proposed Third Party Data Feed itself. All Users that connect to a Proposed Third Party System or Proposed Third Party Data Feed, whether they elect to connect using the Exchange's proposed service or not, would have to pay a third party for the Proposed Third Party System or Proposed Third Party Data Feed.
Nor does the Exchange believe that FIDS has a competitive advantage over any third-party competitors offering access to the Proposed Third Party Systems or connectivity to the Proposed Third Party Data Feeds by virtue of the fact that ICE owns and operates the MDC's meet-me-rooms. Users purchasing Access or Connectivity—like Users of any other colocation service—would require a circuit connecting out of the MDC, and in most cases, such circuits are provided by third-party Telecoms. Currently, 16 Telecoms operate in the meet-me-rooms and provide a variety of circuit choices. It is in the Exchange's best interest to set the fees that Telecoms pay to operate in the meet-me-rooms at a reasonable level
If anything, the Exchange would be subject to a competitive disadvantage vis-à-vis Users regarding access to the Proposed Third Party Systems or connectivity to the Proposed Third Party Data Feeds. Users that choose to independently establish access or connectivity may negotiate terms with the Telecoms or other Users through whom such access and connectivity is delivered, in response to competitive forces. Such prices are not required to be filed by any party with the Commission. In contrast, the Exchange's service and pricing would be standardized as set out in this filing, and the Exchange would be unable to respond to pricing pressure from its competitors without seeking a formal fee change in a filing before the Commission.
The Proposed Pass-Through Edit would not impose any burden on competition. It is not intended to address competitive issues but rather is concerned solely with adding clarity as to who may charge redistribution fees.
The changes would not put any market participants at a relative disadvantage compared to other market participants or penalize one or more categories of market participants in a manner that would impose an undue burden on competition.
No written comments were solicited or received with respect to the proposed rule change.
The Exchange has filed the proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act
At any time within 60 days of the filing of such proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings under Section 19(b)(2)(B)
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
The Exchange proposes to establish fees for Industry Members
The text of the proposed rule change is available on the Exchange's website at
In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements.
On July 11, 2012, the Commission adopted Rule 613 of Regulation NMS, which required the self-regulatory organizations (“SROs”) to submit a national market system (“NMS”) plan to create, implement and maintain a consolidated audit trail that would capture customer and order event information for orders in NMS securities across all markets, from the time of order inception through routing, cancellation, modification or execution.
The CAT Funding Model provides a framework for the recovery of the costs to create, develop and maintain the CAT, including providing a method for allocating costs to fund the CAT among Participants and Industry Members. The CAT Funding Model establishes two categories of fees: (1) CAT fees assessed by CAT LLC and payable by certain Industry Members to recover a portion of historical CAT costs previously paid by the Participants (“Historical CAT Assessment” fees); and (2) CAT fees assessed by CAT LLC and payable by Participants and Industry Members to fund prospective CAT costs (“CAT Fees”).
Under the CAT Funding Model, Participants, CEBBs and CEBSs are subject to fees designed to cover the ongoing budgeted costs of the CAT, as determined by the Operating Committee. “The Operating Committee will establish fees (`CAT Fees') to be payable by Participants and Industry Members with regard to CAT costs not previously paid by the Participants (`Prospective CAT Costs').”
The CAT Fees to be paid by CEBBs and CEBSs are designed to contribute toward the recovery of two-thirds of the budgeted CAT costs for the relevant period.
CAT LLC proposes to charge CEBBs and CEBSs (as described in more detail below) CAT Fee 2025-2 to recover the reasonably budgeted CAT costs for the period from July 1, 2025 through December 31, 2025 in accordance with the CAT Funding Model. To implement this fee on behalf of CAT LLC, the CAT NMS Plan requires the Participants to “file with the SEC under Section 19(b) of the Exchange Act any such fees on Industry Members that the Operating Committee approves, and such fees shall be labeled as `Consolidated Audit Trail Funding Fees.' ”
CAT Fee 2025-2 will be charged to each CEBB and CEBS for each applicable transaction in Eligible Securities.
(a) with respect to a transaction in an Eligible Security that is executed on an exchange, the Industry Member identified as the Industry Member responsible for the order on the buy-side of the transaction and the Industry Member responsible for the sell-side of the transaction in the equity order trade event and option trade event in the CAT Data submitted to the CAT by the relevant exchange pursuant to the Participant Technical Specifications; and (b) with respect to a transaction in an Eligible Security that is executed otherwise than on an exchange and required to be reported to an equity trade reporting facility of a registered national securities association, the Industry Member identified as the executing broker and the Industry Member identified as the contra-side executing broker in the TRF/ORF/ADF transaction data event in the CAT Data submitted to the CAT by FINRA pursuant to the Participant Technical Specifications; provided, however, in those circumstances where there is a non-Industry Member identified as the contra-side executing broker in the TRF/ORF/ADF transaction data event or no contra-side executing broker is identified in the TRF/ORF/ADF transaction data event, then the Industry Member identified as the executing broker in the TRF/ORF/ADF transaction data event would be treated as CAT Executing Broker for the Buyer and for the Seller.
The following fields of the Participant Technical Specifications indicate the CAT Executing Brokers for the transactions executed on an exchange:
In
The Operating Committee determined the Fee Rate to be used in calculating CAT Fee 2025-2 (“Fee Rate 2025-2”) by dividing the reasonably budgeted CAT costs (“Budgeted CAT Costs 2025-2”) for the period from July 1, 2025 through December 31, 2025 (“CAT Fee 2025-2 Period”) by the reasonably projected total executed share volume of all transactions in Eligible Securities for the six-month recovery period, as discussed in detail below.
CAT LLC proposes to implement CAT Fee 2025-2 as the third CAT Fee related to Prospective CAT Costs. CAT LLC proposes to commence CAT Fee 2025-2 during the year, rather than at the beginning of the year. Accordingly, CAT Fee 2025-2 “would be calculated as described in paragraph (II)” of Section 11.3(a)(i)(A) of the CAT NMS Plan,
Under the CAT NMS Plan, for purposes of calculating CAT Fees, executed equivalent shares in a transaction in Eligible Securities will be reasonably counted as follows: (1) each executed share for a transaction in NMS Stocks will be counted as one executed equivalent share; (2) each executed contract for a transaction in Listed Options will be counted based on the multiplier applicable to the specific Listed Options (
The CAT NMS Plan states that “[t]he budgeted CAT costs for the year shall be comprised of all reasonable fees, costs and expenses reasonably budgeted to be incurred by or for the Company in connection with the development, implementation and operation of the CAT as set forth in the annual operating budget approved by the Operating Committee pursuant to Section 11.1(a) of the CAT NMS Plan, or as adjusted during the year by the Operating Committee.”
In accordance with the requirements under the CAT NMS Plan, the Operating Committee approved an annual budget for 2025 for CAT LLC (“Original 2025 CAT Budget”) in November 2024.
As described in detail below, the Budgeted CAT Costs 2025-2 would be $60,726,412. CEBBs collectively will be responsible for one-third of the Budged [
The following describes in detail the Budgeted CAT Costs 2025-2 for CAT Fee 2025-2. The following cost details are provided in accordance with the requirement in the CAT NMS Plan to provide in the fee filing the following:
Each of the costs described below are reasonable, appropriate and necessary for the creation, implementation and maintenance of CAT.
The following table breaks down the Budgeted CAT Costs 2025-2 into the categories set forth in Section
To the extent that CAT LLC enters into notes with Participants or others to pay costs incurred during the period in which CAT Fee 2025-2 is in effect, CAT LLC will use the proceeds from CAT Fee 2025-2 and the related Participant CAT fees to repay such notes.
The following table compares the annual budgeted CAT costs as set forth in the updated annual CAT budget for 2024 approved by the Operating Committee in July 2024 (“Updated 2024 CAT Budget”),
In addition, the following table compares the first quarter of the Original 2025 CAT Budget with the first quarter of the Updated 2025 CAT Budget. The Updated 2025 CAT Budget includes actual costs for January, February and March 2025, whereas the Original 2025 CAT Budget included budgeted costs for these three months. The variance from the first quarter of the Original 2025 CAT Budget to the actuals for the first quarter of 2025 (as set forth in the Updated 2025 CAT Budget) in the last column of the following chart are used in this filing in supporting the reasonableness of the estimates for each category of costs.
Section 11.3(a)(iii)(B)(B)(1) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the cloud hosting services costs set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that included $82,222,276 in technology costs for cloud hosting services for the CAT Fee 2025-2 Period. The technology costs for cloud hosting services represent costs reasonably budgeted to be incurred for services provided by the cloud services provider for the CAT, Amazon Web Services, Inc. (“AWS”) during the CAT Fee 2025-2 Period.
In the agreement between CAT LLC and the Plan Processor for the CAT (“Plan Processor Agreement”), FINRA CAT, LLC (“FCAT”), AWS was named as the subcontractor to provide cloud hosting services. Under the Plan Processor Agreement, CAT LLC is required to pay FCAT the fees incurred by the Plan Processor for cloud hosting services provided by AWS as FCAT's subcontractor on a monthly basis for the cloud hosting services, and FCAT, in turn, pays such fees to AWS. The fees for cloud hosting services were negotiated by FCAT on an arm's length basis with the goals of managing costs and receiving services required to comply with the CAT NMS Plan and Rule 613, taking into consideration a variety of factors, including the expected volume of data, the breadth of services provided and market rates for similar services. Services provided by AWS include storage services, databases, compute services and other services (such as networking, management tools and DevOps tools), as well as various environments for CAT, such as development, performance testing, test, and production environments. FCAT utilizes such cloud hosting services for a broad array of services for the CAT, such as data ingestion, data management, and analytic tools for the CAT. AWS performs cloud hosting services for both the CAT transaction database as well as the CAT Customer and Account Information System (“CAIS”). It is anticipated that such cloud hosting services will continue during the CAT Fee 2025-2 Period.
The cost for AWS cloud services for the CAT is a function of the volume of CAT Data, largely as a result of the processing and storage of the CAT Data.
CAT LLC estimates that the budget for cloud hosting services costs during the CAT Fee 2025-2 Period will be approximately $82,222,276. The budget for cloud hosting services costs during the CAT Fee 2025-2 Period is calculated based on the Updated 2025 CAT Budget. Specifically, this estimate was calculated by adding the budgeted amounts for cloud hosting services costs for the third and fourth quarters of 2025 as set forth in the Updated 2025 CAT Budget.
CAT LLC estimated the budget for the cost for cloud hosting services for the CAT Fee 2025-2 Period based on an assumption of 40% annual year-over-year volume growth for the transaction database and an assumption of 5% annual year-over-year volume growth for CAIS. CAT LLC determined these growth assumptions in coordination with FCAT based on an analysis of a variety of existing data and alternative growth scenarios. In particular, in determining to use the 40% annual year-over-year volume growth in events per day, CAT LLC considered, among other things, the average annual year-over-year volume growth for 2019 through 2024 of approximately 45%, the average annual year-over-year volume growth for 2020 through 2024 of approximately 30%, and the average monthly growth rate for 2024 of approximately 50%.
This process for estimating the budget for cloud hosting services costs for the CAT Fee 2025-2 Period is the same process by which CAT LLC estimated the cloud hosting services costs for the Original 2025 CAT Budget. The Original 2025 CAT Budget estimated a budget for cloud hosting services of $39,640,542 for the first quarter of 2025. The actual costs for cloud hosting services for the first quarter of 2025, which are set forth in the Updated 2025 CAT Budget, were $36,357,017. Therefore, the variance between budgeted and actual cloud hosting services costs for this period was an approximate decrease of 8%. Accordingly, CAT LLC believes that the process for estimating the budgeted cloud hosting services costs for the CAT Fee 2025-2 Period is reasonable.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for cloud hosting services costs from the prior CAT Fee filing. Accordingly, this filing describes the changes in the cloud hosting services costs from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budgeted costs for cloud hosting services as set forth in the Original 2025 CAT Budget were $182,594,630, and the annual 2025 budgeted costs for cloud hosting services as set forth in the Updated 2025
Correspondingly, the budgeted costs for cloud hosting services for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget were $97,748,713,
The decrease in costs for cloud hosting services from the Original 2025 CAT Budget to the Updated 2025 CAT Budget, both for the full year for 2025 and for the third and fourth quarters of 2025, reflects (1) a decrease in costs related to changes made pursuant to the Cost Savings Amendment; (2) cost decreases related to optimizations resulting in reduced procesing [
Section 11.3(a)(iii)(B)(B)(1) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the operating fees set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that included $15,453,942 in technology costs for operating fees for the CAT Fee 2025-2 Period. Operating fees are those fees paid by CAT LLC to FCAT as the Plan Processor to operate and maintain the CAT and to perform business operations related to the system, including compliance, security, testing, training, communications with the industry (
• Provide the CAT-related functions and services as the Plan Processor as required by SEC Rule 613 and the CAT NMS Plan in connection with the operation and maintenance of the CAT;
• Address compliance items, including drafting CAT policies and procedures, and addressing Regulation SCI requirements;
• Provide support to the Operating Committee, the Compliance Subcommittee and CAT working groups;
• Assist with interpretive efforts, exemptive requests and amendments regarding the CAT NMS Plan;
• Oversee the security of the CAT;
• Monitor the operation of the CAT, including with regard to Participant and Industry Member reporting;
• Provide support to subcontractors under the Plan Processor Agreement;
• Provide support in discussions with the Participants and the SEC and its staff;
• Operate the FINRA CAT Helpdesk;
• Facilitate communications with the industry, including via FAQs, CAT Alerts, meetings, presentations and webinars;
• Administer the CAT website and all of its content;
• Maintain cyber security insurance related to the CAT;
• Assist with billing, collection and other CAT fee-related activity; and
• Provide technical support and assistance with connectivity, data access, and user support, including the use of CAT Data and query tools, for Participants and the SEC staff.
CAT LLC calculated the budget for the FCAT technology costs for operating fees for the CAT Fee 2025-2 Period based on the recurring monthly operating fees under the Plan Processor Agreement.
As discussed above, CAT LLC estimated the budget for the operating fees during the CAT Fee 2025-2 Period based on monthly rates set forth in the Plan Processor Agreement and the agreement with Algoseek. CAT LLC also recognized that the operating fees are generally consistent throughout the year. This process for estimating the budget for the operating fees for the CAT Fee 2025-2 Period is the same process by which CAT LLC estimated the operating fees for the Original 2025 CAT Budget. The Original 2025 CAT Budget estimated a budget for operating fees of $7,662,270 for the first quarter of 2025.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for operating fees from the prior CAT Fee filing. Accordingly, this filing describes the changes from the operating fees set forth in the Original 2025 CAT Budget,
The annual 2025 budgeted costs for operating fees as set forth in the Original 2025 CAT Budget were $30,831,330,
Correspondingly, the budgeted costs for operating fees for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget were $15,446,040,
Section 11.3(a)(iii)(B)(B)(1) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the CAIS operating fees set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that included $10,374,924 in technology costs for CAIS operating fees for the CAT Fee 2025-2 Period. CAIS operating fees represent the fees paid to FCAT for services provided with regard to the operation and maintenance of CAIS, and to perform the business operations related to the system, including compliance, security, testing, training, communications with the industry (
During the CAT Fee 2025-2 Period, it is anticipated that FCAT will provide CAIS-related services. Under the Plan Processor Agreement with FCAT, CAT LLC is required to pay FCAT for CAIS-related services provided by FCAT on a monthly basis. CAT LLC negotiated the fees for FCAT's CAIS-related services on an arm's length basis with the goals of managing costs and receiving services required to comply with the CAT NMS Plan, taking into consideration a variety of factors, including the services to be provided and market rates for similar types of activity. During the CAT Fee 2025-2 Period, it is anticipated that FCAT will continue to provide services relating to the ongoing operation, maintenance and support of CAIS.
CAT LLC estimates that the budget for CAIS operating fees during the CAT Fee 2025-2 Period will be approximately $10,374,924. The budget for CAIS operating fees during the CAT Fee 2025-2 Period is calculated based on the Updated 2025 CAT Budget. Specifically, this estimate was calculated by adding the budgeted amounts for CAIS operating fees for the third and fourth quarters of 2025 as set forth in the Updated 2025 CAT Budget.
CAT LLC calculated the budget for FCAT's CAIS-related services for the CAT Fee 2025-2 Period based on the recurring monthly CAIS operating fees under the Plan Processor Agreement. This process for estimating the budget for the CAIS operating fees for the CAT Fee 2025-2 Period is the same process by which CAT LLC estimated the CAIS operating fees for the Original 2025 CAT Budget. The Original 2025 CAT Budget estimated a budget of $5,187,462 for CAIS operating fees for the first quarter of 2025. The actual costs for CAIS operating fees for the first quarter of 2025, which are set forth in the Updated 2025 CAT Budget, were $5,187,462. There was no variance between budgeted and actual CAIS operating fees for the first quarter of 2025. Accordingly, CAT LLC believes that the process for estimating the budgeted CAIS operating fees for the CAT Fee 2025-2 Period is reasonable.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for CAIS operating fees from the prior CAT Fee filing. Accordingly, this filing describes the changes in CAIS operating fees from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
CAIS operating fees are based on a recurring monthly rate payable to FCAT and are unchanged from the prior CAT Fee filing. The annual 2025 budgeted costs for CAIS operating fees as set forth in the Original 2025 CAT Budget were $20,749,848, and the annual 2025 budgeted costs for CAIS operating fees as set forth in the Updated 2025 CAT Budget are $20,749,848. Accordingly, the budgeted annual costs for CAIS operating fees are the same for both the Original 2025 CAT Budget and the Updated 2025 CAT Budget.
Correspondingly, the budgeted costs for CAIS operating fees for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget were $10,374,924, and the budgeted costs for CAIS operating fees for the third and fourth quarters of 2025 as set forth in the Updated 2025 CAT Budget are $10,374,924.
Accordingly, there were no changes in the line item for CAIS operating fees from the prior CAT Fee filing.
Section 11.3(a)(iii)(B)(B)(1) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the change request fees set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section
Change requests are standard practice and necessary to reflect operational changes, including changes related to new market developments, such as new market participants. In general, if CAT LLC determines that a modification, upgrade or other changes to the functionality or service is necessary and appropriate, CAT LLC will submit a request for such a change to the Plan Processor. The Plan Processor will then respond to the request with a proposal for implementing the change, including the cost (if any) of such a change. CAT LLC then determines whether to approve the proposed change.
The change request budget line is established to include expected costs to be incurred in which the nature of the costs (
During the CAT Fee 2025-2 Period, it is anticipated that CAT LLC will engage FCAT to pursue certain change requests in accordance with the Plan Processor Agreement. The budget for change requests for the CAT Fee 2025-2 Period includes a placeholder of $500,000 for potential change request fees that may be necessary in accordance with the Plan Processor Agreement. The placeholder amount was determined based on prior experience with change requests related to the CAT.
CAT LLC estimates that the budget for change requests during the CAT Fee 2025-2 Period will be approximately $500,000. The budget for change requests during the CAT Fee 2025-2 Period is calculated based on the Updated 2025 CAT Budget. Specifically, this estimate was calculated by adding the budgeted amounts for the change requests for the third and fourth quarters of 2025 as set forth in the Updated 2025 CAT Budget.
CAT LLC estimated the budget for the potential change requests for the CAT Fee 2025-2 Period based on, among other things, a review of past change requests and potential future change request needs, as well as discussions with FCAT. This process for estimating the budget for the change requests for the CAT Fee 2025-2 Period is the same process by which CAT LLC estimated the change requests cost for the Original 2025 CAT Budget. The Original 2025 CAT Budget estimated a change request budget of $0 for the the [
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for change request fees from the prior CAT Fee filing. Accordingly, this filing describes the changes in the change request fees from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budgeted costs for change requests as set forth in the Original 2025 CAT Budget were $750,000, and the annual 2025 budgeted costs for change requests as set forth in the Updated 2025 CAT Budget are $750,000. Accordingly, budgeted annual costs for change requests are the same for both the Original 2025 CAT Budget and the Updated 2025 CAT Budget.
Correspondingly, the budgeted costs for change requests for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget were $500,000, and the budgeted costs for change request for the third and fourth quarters of 2025 as set forth in the Updated 2025 CAT Budget are $500,000.
Accordingly, there were no changes in the line item for change requests from the prior CAT Fee filing.
Section 11.3(a)(iii)(B)(B)(1) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the capitalized developed technology costs set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that includes $0 in technology costs for capitalized developed technology costs for the CAT Fee 2025-2 Period. This category of costs includes the budget for capitalizable application development costs incurred in the development of the CAT. It is anticipated that such costs will include certain costs related to the software license fee for CAIS in accordance with the Plan Processor Agreement with FCAT, as well as costs related to a set of technology changes to be implemented by FCAT.
CAT LLC estimates that the budget for capitalized developed technology costs during the CAT Fee 2025-2 Period will be approximately $0. The budget for capitalized developed technology costs during the CAT Fee 2025-2 Period is calculated based on the Updated 2025 CAT Budget. Specifically, this estimate was calculated by adding the budgeted amounts for capitalized developed technology costs for the third and fourth quarters of 2025 as set forth in the Updated 2025 CAT Budget.
CAT LLC estimated the budget for capitalized developed technology costs for the CAT Fee 2025-2 Period based on an analysis of a variety of factors, including information related to potential technology costs and related contractual and Plan requirements, and discussions with FCAT regarding such potential technology costs. This process for estimating the budget for capitalized developed technology costs for the CAT Fee 2025-2 Period is the same process by which CAT LLC estimated the capitalized developed technology costs for the Original 2025 CAT Budget. The Original 2025 CAT Budget estimated a budget for capitalized developed technology costs of $3,923,360 for the first quarter of 2025.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for capitalized developed technology costs from the prior CAT Fee filing. Accordingly, this filing describes the changes in the capitalized developed technology costs from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budget for capitalized developed technology costs as set forth in the Original 2025 CAT Budget were $3,923,36,
In addition, the budget for capitalized developed technology costs for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget was $0,
Section 11.3(a)(iii)(B)(B)(2) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the legal costs set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that includes $3,631,342 in legal costs for the CAT Fee 2025-2 Period. This category of costs represents budgeted costs for legal services for this period. CAT LLC anticipates that it will receive legal services from two law firms, Wilmer Cutler Pickering Hale and Dorr LLP (“WilmerHale”) and Jenner & Block LLP (“Jenner”), during the CAT Fee 2025-2 Period.
During the CAT Fee 2025-2 Period, it is anticipated that WilmerHale will provide legal services related to the following:
• Assist with CAT fee filings and related funding issues;
• Draft exemptive requests from CAT NMS Plan requirements and/or proposed amendments to the CAT NMS Plan;
• Provide legal guidance with respect to interpretations of CAT NMS Plan requirements;
• Provide legal support for the Operating Committee, Compliance Subcommittee, working groups and Leadership Team;
• Draft SRO rule filings related to the CAT Compliance Rule;
• Manage corporate governance matters, including supporting Operating Committee meetings and preparing resolutions and consents;
• Assist with communications with the industry, including CAT Alerts and presentations;
• Provide guidance regarding the confidentiality of CAT Data;
• Assist with cost management analyses and proposals;
• Assist with commercial contract-related matters, including change orders and amendments, Plan Processor Agreement items, and subcontract matters;
• Provide support with regard to discussions with the SEC and its staff, including with respect to addressing interpretive and implementation issues;
• Provide legal guidance with respect to the CAT budgets;
• Provide background assistance to other counsel for CAT matters;
• Assist with legal responses related to third-party data requests; and
• Provide legal support regarding CAT policies and procedures.
CAT LLC estimated the budget for the legal costs for WilmerHale for the CAT Fee 2025-2 Period through an analysis of a variety of factors, including WilmerHale fee rates, historical legal fees, and information related to pending legal issues and potential future legal issues.
During the CAT Fee 2025-2 Period, it is anticipated that Jenner will continue to provide legal assistance to CAT LLC regarding certain litigation matters, including: (1) CAT LLC's defense against a lawsuit filed in the Western District of Texas against the SEC Chair, the SEC and CAT LLC challenging the validity of Rule 613 and the CAT and alleging various constitutional, statutory, and common law claims;
CAT LLC estimated the budget for the legal costs for Jenner for the CAT Fee 2025-2 Period through an analysis of a variety of factors, including Jenner's fee rates, historical legal fees, and information related to pending legal issues and potential future legal issues.
CAT LLC estimated the budget for the legal services for the CAT Fee 2025-2 Period based on an analysis of a variety of factors, including law firm fee rates, historical legal fees, and information related to pending legal issues and potential future legal issues. This process for estimating the budget for the legal services for CAT Fee 2025-2 Period is the same process by which CAT LLC estimated the legal cost for the Original 2025 CAT Budget. The Original 2025 CAT Budget estimated a budget for legal costs of $1,430,000 for the first quarter of 2025. The actual costs for legal services for the first quarter of 2025, which are set forth in the Updated 2025 Budget, were $1,922,990. The increase of $492,990 was due to unanticipated issues that required additional legal efforts on behalf of CAT LLC that developed after the budget was created. Such additional costs were primarily due to additional legal work in responding to an SEC examination related to the CAT, for commercial contract-related matters, including with regard to the Plan Processor Agreement, and related to cost savings initiatives. Accordingly, CAT LLC believes that the process for estimating the budgeted legal costs for the CAT Fee 2025-2 Period is reasonable.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for legal costs from the prior CAT Fee filing. Accordingly, this filing describes the changes in the legal costs from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budgeted legal costs as set forth in the Original 2025 CAT Budget were $5,720,000, and the annual 2025 budgeted legal costs as set forth in the Updated 2025 CAT Budget are $7,370,002. Accordingly, the annual budget for legal costs increased by $1,650,002 from the Original 2025 CAT Budget to the Updated 2025 CAT Budget for the full year of 2025.
Correspondingly, the budgeted legal costs for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget were $2,860,000,
This budgeted increase in the legal costs in the Updated 2025 CAT Budget from the Original 2025 Budget, both for the full year for 2025 and for the third and fourth quarters of 2025, was primarily due to an anticipated increase in legal costs related to litigation matters as well as regulatory and corporate legal matters.
Section 11.3(a)(iii)(B)(B)(3) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the consulting costs set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that included $866,167 in consulting costs for the CAT Fee 2025-2 Period. The consulting costs represent the fees estimated to be paid to the consulting firm Deloitte & Touche LLP (“Deloitte”) as project manager during the CAT Fee 2025-2 Period. These consulting costs include costs for advisory services related to the operation of the CAT, and meeting facilitation and communications coordination, vendor support and financial analyses.
It is anticipated that the costs for CAT during the CAT Fee 2025-2 Period will include costs related to consulting services performed by Deloitte. CAT LLC anticipates that it will continue to employ Deloitte during the CAT Fee 2025-2 Period based on, among other things, their expertise, long history with the project, and the recognition that it is anticipated that the consulting fees will remain in line with market rates for this type of specialized consulting work. Deloitte's fee rates are negotiated on an annual basis. CAT LLC assesses Deloitte's performance and reviews prospective budgets and staffing plans submitted by Deloitte on an annual basis. The consulting fees will be paid by CAT LLC to Deloitte.
It is anticipated that Deloitte will provide a variety of consulting services to the CAT during the CAT Fee 2025-2 Period, including the following:
• Implement program operations for the CAT project;
• Provide support to the Operating Committee, the Chair of the Operating Committee and the Leadership Team, including project management support, coordination and planning for meetings and communications, and interfacing with law firms and the SEC;
• Assist with cost and funding matters for the CAT, including assistance with loans and the CAT bank account for CAT funding;
• Provide support for updating the SEC on the progress of the development of the CAT; and
• Provide support for third party vendors for the CAT, including FCAT, Anchin and the law firms engaged by CAT LLC.
In addition, the consulting costs include the compensation for the Chair of the CAT Operating Committee.
CAT LLC estimates that the budget for consulting costs during the CAT Fee 2025-2 Period will be approximately $866,167. The budget for consulting costs during the CAT Fee 2025-2 Period is calculated based on the Updated 2025 CAT Budget. Specifically, this estimate was calculated by adding the budgeted amounts for consulting services for the third and fourth quarters of 2025 as set forth in the Updated 2025 CAT Budget.
CAT LLC estimates the budget for the consulting costs for Deloitte for the CAT Fee 2025-2 Period based on the current statement of work with Deloitte, which took into consideration past consulting costs, potential future consulting needs, the proposed rates and other contractual issues, as well as discussions with Deloitte. This process for estimating the budget for consulting costs for the CAT Fee 2025-2 Period is the same process by which CAT LLC estimated the consulting costs for the Original 2025 CAT Budget. The Original 2025 CAT Budget estimated a budget for consulting services of $437,500 for the first quarter of 2025. The actual costs for consulting services for the first quarter of 2025, which are set forth in the Updated 2025 CAT Budget, were $450,745. Therefore, the variance between budgeted and actual consulting costs for the first quarter of 2025 was approximately 3%. Accordingly, CAT LLC believes that the process for estimating the budgeted consulting costs for the CAT Fee 2025-2 Period is reasonable.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for consulting costs from the prior CAT Fee filing. Accordingly, this filing describes the changes in the consulting costs from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budget for consulting costs as set forth in the Original 2025 CAT Budget was $1,750,000, and the annual 2025 budget for consulting costs as set forth in the Updated 2025 CAT Budget is approximately $1,750,000. Accordingly, the annual budget for consulting costs has not changed from the Original 2025 CAT Budget to the Updated 2025 CAT Budget for the full year of 2025.
Correspondingly, the budget for consulting costs for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget was $875,000,
Section 11.3(a)(iii)(B)(B)(4) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the insurance costs set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that included $1,594,452 in insurance costs for the CAT Fee 2025-2 Period. The insurance costs represent the costs to be incurred for insurance for CAT during the CAT Fee 2025-2 Period.
It is anticipated that the insurance costs for CAT during the CAT Fee 2025-2 Period will include costs related to cyber security liability insurance, directors' and officers' liability insurance, and errors and omissions liability insurance brokered by USI Insurance Services LLC (“USI”). Such policies are standard for corporate entities, and cyber security liability insurance is important for the CAT System. CAT LLC anticipates that it will continue to maintain this insurance during the CAT Fee 2025-2 Period, and notes that the annual premiums for these policies were competitive for the coverage provided. CAT LLC estimated the budget for the insurance costs for the CAT Fee 2025-2 Period based on the insurance estimate from USI for 2025. The annual premiums would be paid by CAT LLC to USI.
The budgeted insurance costs for the CAT Fee 2025-2 Period are based on an insurance cost estimate from USI for 2025. Accordingly, CAT LLC believes that the process for estimating the budgeted insurance costs for the CAT Fee 2025-2 Period is reasonable.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for insurance costs from the prior CAT Fee filing. Accordingly, this filing describes the changes in the insurance costs from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budgeted insurance costs as set forth in the Original 2025 CAT Budget were $1,594,452, and the annual 2025 budgeted insurance costs as set forth in the Updated 2025 CAT Budget are $1,594,452. Accordingly, the annual budgeted insurance costs remained the same for the Original 2025 CAT Budget and the Updated 2025 CAT Budget for the full year of 2025.
Correspondingly, the budgeted insurance costs for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget were $1,594,452,
Section 11.3(a)(iii)(B)(B)(5) of the CAT NMS Plan requires the fee filing for a
It is anticipated that Anchin will provide a variety of services to the CAT during the CAT Fee 2025-2 Period, including the following:
• Update and maintain internal controls;
• Provide cash management and treasury functions;
• Facilitate bill payments to vendors;
• Facilitate repayments of promissory notes to Participants;
• Provide monthly bookkeeping;
• Review vendor invoices and documentation in support of cash disbursements;
• Review documentation to ensure that repayments of promissory notes to Participants are in accordance with established policies and procedures;
• Provide accounting research and consultations on various accounting, financial reporting and tax matters;
• Address not-for-profit tax and accounting considerations;
• Prepare tax returns;
• Address various accounting, financial reporting and operating inquiries from Participants;
• Develop and maintain annual operating and financial budgets, including budget to actual fluctuation analyses;
• Support compliance with the CAT NMS Plan;
• Work with and provide support to the Operating Committee and various CAT working groups;
• Prepare monthly, quarterly and annual financial statements;
• Review and reconcile the monthly FINRA CAT reports/analyses related to billings, collections, outstanding accounts receivable and cash account;
• Perform certain verification, completeness, and validation testing related to the monthly FINRA CAT reports/analyses related to billings;
• Support the annual financial statement audits by an independent auditor;
• Review historical costs from inception;
• Provide accounting and financial information in support of SEC filings; and
• Perform additional ad hoc accounting and financial advisory services, as requested by CAT LLC.
CAT LLC estimated the annual budget for the costs for Anchin based on historical costs adjusted for cost of living rate increases, and projected incremental advisory and support services.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for professional and administration costs from the prior CAT Fee filing. Accordingly, this filing describes the changes in the professional and administration costs from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budgeted professional and administration costs as set forth in the Original 2025 CAT Budget were $882,456, and the annual 2025 budgeted professional and administration costs as set forth in the Updated 2025 CAT Budget are $1,193,090. Accordingly, the budgeted annual costs for professional and administration services increased by $310,634 from the Original 2025 CAT Budget to the Updated 2025 CAT Budget for the full year of 2025.
Correspondingly, the budgeted costs for professional and administration services for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget were $444,246,
This budgeted increase in the professional and administration costs in the Updated 2025 CAT Budget from the Original 2025 Budget, both for the full year for 2025 and for the third and fourth quarters of 2025, was primarily due to increases in both financial advisory costs and accounting costs as a result of additional anticipated efforts related to billings and collections of fees from Participants and Industry Members, coupled with expected incremental efforts related to supporting CAT LLC's independent auditors for the 2024 audit.
Section 11.3(a)(iii)(B)(B)(6) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the public relations costs set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that included $0 in public relations costs for the CAT Fee 2025-2 Period. The public relations costs represent the fees paid to a public relations firm for professional communications services to CAT, including media relations consulting, strategy and execution. Because CAT LLC anticipates that it will not engage a public relations firm for the third and fourth quarters of 2025, the budget for public relations costs for this period is $0.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for public relations costs from the prior CAT Fee filing. Accordingly, this filing describes the changes in the public relations costs from the Updated 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual budgeted public relations costs for 2025 as set forth in the Original 2025 CAT Budget were $50,000, and the annual budgeted public relations costs for 2025 as set forth in the Updated 2025 CAT Budget are $6,575. Accordingly, the annual budget for public relations cost for 2025 decreased by $43,425 from the Original 2025 CAT Budget to the Updated 2025 CAT Budget for the full year of 2025.
Correspondingly, the budgeted costs for public relations services for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget were $25,000,
This budgeted decrease in the public relations costs from the Original 2025 CAT Budget to the Updated 2025 CAT Budget, both for the full year for 2025 and for the third and fourth quarters of 2025, was primarily due to CAT LLC's anticipation that it would not engage a public relations firm for the remainder of 2025.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the reserve costs set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that includes a reserve amount for 2025. Section 11.1(a)(i) of the CAT NMS Plan states that the budget shall include a reserve. Section 11.1(a)(ii) of the CAT NMS Plan further describes the reserve as follows:
For the reserve referenced in paragraph (a)(i) of this Section, the budget will include an amount reasonably necessary to allow the Company to maintain a reserve of not more than 25% of the annual budget. To the extent collected CAT fees exceed CAT costs, including the reserve of 25% of the annual budget, such surplus shall be used to offset future fees. For the avoidance of doubt, the Company will only include an amount for the reserve in the annual budget if the Company does not have a sufficient reserve (which shall be up to but not more than 25% of the annual budget). For the avoidance of doubt, the calculation of the amount of the reserve would exclude the amount of the reserve from the budget.
CAT LLC determined to maintain a reserve in the amount of 25% of the total expenses set forth in Updated 2025 CAT Budget (which does not include the reserve amount). Accordingly, the total 25% reserve was calculated by multiplying the total expenses set forth in the Updated 2025 CAT Budget (other than the reserve) by 25%, which is $57,083,638.
The Updated 2025 CAT Budget states that CAT LLC had accrued $70,942,596 for the reserve as of the beginning of 2025, and an additional $28,846,075 during the first quarter of 2025, from the collection of CAT Fees 2024-1 and 2025-1 and the related Participant CAT Fees. In addition, the Updated 2025 CAT Budget anticipates the collection of an additional $11,821,477 during the second quarter of 2025 via CAT Fee 2025-1 and the related Participant CAT Fee. Accordingly, the Updated 2025 CAT Budget estimates that CAT LLC would collect a surplus reserve amount through June 2025 of $54,526,412 over the 25% reserve amount of
Such surplus was related, in part, to (i) the collection of CAT fees in excess of the budgeted CAT costs for 2024 and 2025 in light of the greater actual executed equivalent share volume than the projected executed equivalent share volume for CAT Fees 2024-1 and 2025-1, and (ii) a reduction in anticipated budgeted costs associated with the implementation of certain cost savings measures approved by the SEC pertaining to the processing of options market maker quotes and the storage of certain data.
As set forth in the Budgeted CAT Costs 2025-2, the surplus reserve balance of $54,526,412 would be used to offset a portion of CAT costs for the third and fourth quarters of 2025, thereby reducing the fee rate to be paid for CAT Fee 2025-2. Specifically, the total costs used to calculate the fee rate for CAT Fee 2025-2 would be reduced by the amount of the surplus reserve as set forth in the following table:
Accordingly, the fee rate for CAT Fee 2025-2 is calculated based on this reduced amount of $60,726,412, resulting in a fee rate of $0.000009 per executed equivalent share. If the fee rate for CAT Fee 2025-2 were calculated solely based on the reasonably budgeted costs for CAT for July—December 2025 excluding the reduction in that amount due to the surplus reserve offset (that is, based on $115,252,921, not $60,726,412), the fee rate would be the higher rate of $0.000017.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for a reserve from the prior CAT Fee filing. Accordingly, this filing describes the changes in the reserve from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
For the Original 2025 CAT Budget, CAT LLC determined to maintain a reserve in the amount of 25% of budgeted CAT costs (other than the reserve). Accordingly, the total 25% reserve was calculated by multiplying the budgeted CAT costs (other than the reserve) as set forth in the Original 2025 CAT Budget (which is $248,846,076) by 25%, for a target reserve amount of $62,211,519. However, the Original 2025 CAT Budget recognized that a portion of the reserve—$38,369,315—would have been previously collected, and therefore would not need to be included the budgeted CAT costs to be recovered by the CAT Fees. Specifically, the Original 2025 CAT Budget recognized that there was (i) a liquidity reserve balance of $27,695,385 at the beginning of 2025, (ii) a favorable variance of $10,084,698 for budgeted versus actual cloud hosting services costs covering the period from July 16, 2024 through September 30, 2024, and (iii) a Participation Fee from a new Participant in the CAT NMS Plan of $589,232. These three items totaled $38,369,315. Accordingly, the Original 2025 CAT Budget only included $23,842,200 to be collected towards the reserve via the CAT Fee. This $23,842,200 is calculated by reducing the total 25% reserve amount of $62,211,519 by the $38,369,315 previously collected for the reserve. In the Original 2025 CAT Budget, the budget anticipated collecting the remaining reserve amount of $23,842,200 evenly throughout the year, that is, $5,960,500 for each quarter.
As discussed above, CAT LLC determined to maintain a reserve in the amount of 25% of the budgeted CAT costs (other than the reserve). Accordingly, the total 25% reserve was calculated by multiplying the budgeted CAT costs (other than the reserve) as set forth in the Updated 2025 CAT Budget (which is $228,334,551) by 25%, for a target reserve amount of $57,083,638.
As discussed above, such surplus reserve balance of $54,526,412 would be used to offset a portion of CAT costs for the third and fourth quarters of 2025, thereby reducing the fee rate for CAT Fee 2025-2 in accordance with Section 11.1(a)(ii) of the CAT NMS Plan. Section 11.1(a)(ii) of the CAT NMS Plan states that “[t]o the extent collected CAT fees exceed CAT costs, including the reserve of 25% of the annual budget, such surplus shall be used to offset future fees.”
The calculation of Fee Rate 2025-2 also requires the determination of the projected total executed equivalent share volume of transactions in Eligible Securities for the CAT Fee 2025-2 Period. Under the CAT NMS Plan, the Operating Committee is required to “reasonably determine the projected total executed equivalent share volume of all transactions in Eligible Securities for each relevant period based on the executed equivalent share volume of all transactions in Eligible Securities for the prior twelve months.”
The total executed equivalent share volume of transactions in Eligible Securities for the 12-month period from April 2024 through March 2025 was 4,580,287,680,646.28 executed equivalent shares. The Operating Committee has determined to calculate the projected total executed equivalent share volume for the six-month recovery period for CAT Fee 2025-2 by multiplying by one-half the executed equivalent share volume for the 12-month period from April 2024 through March 2025. The Operating Committee determined that such an approach was reasonable as the CAT's annual executed equivalent share volume has remained relatively constant. For example, the executed equivalent share volume for 2021 was 3,963,697,612,395, the executed equivalent share volume for 2022 was 4,039,821,841,560.31, the executed equivalent share volume for 2023 was 3,868,940,345,680.6, and the executed equivalent share volume for 2024 was 4,295,884,600,069.41. Accordingly, the projected total executed equivalent share volume for the six-month period for CAT Fee 2025-2 is projected to be 2,290,143,840,323.14 executed equivalent shares.
The projected total executed equivalent share volume of all transactions in Eligible Securities for the six-month recovery period for CAT Fee 2025-2 and a description of the calculation of the projection is provided in this filing in accordance with the requirement in the CAT NMS Plan to provide such information in a fee filing for a CAT Fee.
Fee Rate 2025-2 would be calculated by dividing the Budgeted CAT Costs 2025-2 by the reasonably projected total executed equivalent share volume of all transactions in Eligible Securities for the six-month recovery period for CAT Fee 2025-2, as described in detail above.
Prospective CAT Costs will be calculated (
CEBBs and CEBSs would be required to pay fees for CAT Fee 2025-2 on a monthly basis for six months, from August 2025 until January 2026. A CEBB's or CEBS's fee for each month would be calculated based on the transactions in Eligible Securities executed by the CEBB or CEBS from the prior month.
To implement CAT Fee 2025-2, the Exchange proposes to add a new paragraph to the “Consolidated Audit Trail Funding Fees” section of the Exchange's Fee Schedule, to include the proposed paragraphs described below.
The CAT NMS Plan states that:
Each Industry Member that is the CAT Executing Broker for the buyer in a transaction in Eligible Securities (“CAT Executing Broker for the Buyer” or “CEBB”) and each Industry Member that is the CAT Executing Broker for the seller in a transaction in Eligible Securities (“CAT Executing Broker for the Seller” or “CEBS”) will be required to pay a CAT Fee for each such transaction in Eligible Securities in the prior month based on CAT Data. The CEBB's CAT Fee or CEBS's CAT Fee (as applicable) for each transaction in Eligible Securities will be calculated by multiplying the number of executed equivalent shares in the transaction by one-third and by the Fee Rate reasonably determined pursuant to paragraph (a)(i) of this Section 11.3.
Accordingly, based on the factors discussed above, the Exchange proposes to add paragraph (a)(5) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule. Proposed paragraph (a)(5) would state the following:
(A) Each CAT Executing Broker shall receive its first invoice for CAT Fee 2025-2 in August 2025, which shall set forth the CAT Fee 2025-2 fees calculated based on transactions in July 2025, and shall receive an invoice for CAT Fee 2025-2 for each month thereafter until January 2026.
(B) Consolidated Audit Trail, LLC shall provide each CAT Executing Broker with an invoice for CAT Fee 2025-2 on a monthly basis. Each month, such invoices shall set forth a fee for each transaction in Eligible Securities executed by the CAT Executing Broker in its capacity as a CAT Executing
(C) Notwithstanding the last invoice date of January 2026 for CAT Fee 2025-2 in paragraph 5(A), CAT Fee 2025-2 shall continue in effect after January 2026, with each CAT Executing Broker receiving an invoice for CAT Fee 2025-2 each month, until a new subsequent CAT Fee is in effect with regard to Industry Members in accordance with Section 19(b) of the Exchange Act. Consolidated Audit Trail, LLC will provide notice when CAT Fee 2025-2 will no longer be in effect.
(D) Each CAT Executing Broker shall be required to pay each invoice for CAT Fee 2025-2 in accordance with paragraph (b).
As noted in the Plan amendment for the CAT Funding Model, “[a]s a practical matter, the fee filing would provide the exact fee per executed equivalent share to be paid for the CAT Fees, by multiplying the Fee Rate by one-third and describing the relevant number of decimal places for the fee.”
The proposed language in paragraph (a)(5)(A) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule would describe when CAT Executing Brokers would receive their first monthly invoice for CAT Fee 2025-2. Specifically, CAT Executing Brokers would receive their first monthly invoice for CAT Fee 2025-2 in August 2025 and the fees set forth in that invoice would be calculated based on transactions executed in July 2025. The payment for the first invoice would be required within 30 days after the receipt of the first invoice (unless a longer period is indicated), as described in paragraph (b)(2) of the Fee Schedule.
Proposed paragraph (a)(5)(A) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule also would describe the monthly cadence of the invoices for CAT Fee 2025-2. Specifically, after the first invoices are provided to CAT Executing Brokers in August 2025, invoices will be sent to CAT Executing Brokers each month thereafter until January 2026.
Proposed paragraph (a)(5)(B) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule would describe the invoices for CAT Fee 2025-2. Proposed paragraph (a)(5)(B) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule would state that “Consolidated Audit Trail, LLC shall provide each CAT Executing Broker with an invoice for CAT Fee 2025-2 on a monthly basis.” Proposed paragraph (a)(5)(B) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule also would describe the fees to be set forth in the invoices for CAT Fee 2025-2. Specifically, it would state that “[e]ach month, such invoices shall set forth a fee for each transaction in Eligible Securities executed by the CAT Executing Broker in its capacity as a CAT Executing Broker for the Buyer (`CEBB') and/or the CAT Executing Broker for the Seller (`CEBS') (as applicable) from the prior month as set forth in CAT Data. The fee for each such transaction will be calculated by multiplying the number of executed equivalent shares in the transaction by the fee rate of $0.000009 per executed equivalent share.”
Since CAT Fee 2025-2 is a monthly fee based on actual transaction volume from the prior month, CAT Fee 2025-2 may collect more or less than two-thirds of the Budgeted CAT Costs 2025-2. To the extent that CAT Fee 2025-2 collects more than two-thirds of the Budgeted CAT Costs 2025-2, any excess money collected will be used to offset future fees and/or to fund the reserve for the CAT. To the extent that CAT Fee 2025-2 collects less than two-thirds of the Budgeted CAT Costs 2025-2, the budget for the CAT in the ensuing months will reflect such shortfall.
Furthermore, proposed paragraph (a)(5)(C) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule would describe how long CAT Fee 2025-2 would remain in effect. It would state that “[n]otwithstanding the last invoice date of January 2026 for CAT Fee 2025-2 in paragraph 5(A), CAT Fee 2025-2 shall continue in effect after January 2026, with each CAT Executing Broker receiving an invoice for CAT Fee 2025-2 each month, until a new subsequent CAT Fee is in effect with regard to Industry Members in accordance with Section 19(b) of the Exchange Act. Consolidated Audit Trail, LLC will provide notice when CAT Fee 2025-2 will no longer be in effect.”
Finally, proposed paragraph (a)(5)(D) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule would set forth the requirement for the CAT Executing Brokers to pay the invoices for CAT Fee 2025-2. It would state that “[e]ach CAT Executing Broker shall be required to pay each invoice for CAT Fee 2025-2 in accordance with paragraph (b).”
Paragraph (b)(1) of the “Consolidated Audit Trail Funding Fees” section of the Fee Schedule describes the manner of payment of Industry Member CAT fees. It states that “[e]ach CAT Executing Broker shall pay its CAT fees as required pursuant to paragraph (a) each month to the Consolidated Audit Trail, LLC in the manner prescribed by the Consolidated Audit Trail, LLC.” The CAT NMS Plan requires the Operating Committee to establish a system for the collection of CAT fees.
The CAT NMS Plan further states that:
Participants shall require each Industry Member to pay all applicable fees authorized under this Article XI within thirty (30) days after receipt of an invoice or other notice indicating payment is due (unless a longer payment period is otherwise indicated). If an Industry Member fails to pay any such fee when due (as determined in accordance with the preceding sentence), such Industry Member shall pay interest on the outstanding balance from such due date until such fee is paid at a per annum rate equal to the lesser of: (a) the Prime Rate plus 300 basis points; or (b) the maximum rate permitted by applicable law.
Paragraph (b)(2) of the Consolidated Audit Trail Funding Fees section of the Fee Schedule states that:
Each CAT Executing Broker shall pay the CAT fees required pursuant to paragraph (a) within thirty days after receipt of an invoice or other notice indicating payment is due
The requirements of paragraph (b)(2) would apply to CAT Fee 2025-2.
The CAT NMS Plan states that:
Details regarding the calculation of a Participant or CAT Executing Broker's CAT Fees will be provided upon request to such Participant or CAT Executing Broker. At a minimum, such details would include each Participant or CAT Executing Broker's executed equivalent share volume and corresponding fee by (1) Listed Options, NMS Stocks and OTC Equity Securities, (2) by transactions executed on each exchange and transactions executed otherwise than on an exchange, and (3) by buy-side transactions and sell-side transactions.
Such information would provide CEBBs and CEBSs with the ability to understand the details regarding the calculation of their CAT Fee.
In addition, CAT LLC will make certain aggregate statistics regarding CAT Fees publicly available. Specifically, the CAT NMS Plan states that, “[f]or each CAT Fee, at a minimum, CAT LLC will make publicly available the aggregate executed equivalent share volume and corresponding aggregate fee by (1) Listed Options, NMS Stocks and OTC Equity Securities, (2) by transactions executed on each exchange and transactions executed otherwise than on an exchange, and (3) by buy-side transactions and sell-side transactions.”
Furthermore, CAT LLC will make publicly available on the CAT website the total amount invoiced each month that CAT Fee 2025-2 is in effect as well as the total amount invoiced for CAT Fee 2025-2 for all months since its commencement. CAT LLC also will make publicly available on the CAT website the total costs to be collected from Industry Members for CAT Fee 2025-2.
The CAT NMS Plan states that “[n]o Participant will make a filing with the SEC pursuant to Section 19(b) of the Exchange Act regarding any CAT Fee related to Prospective CAT Costs until the Financial Accountability Milestone related to Period 4 described in Section 11.6 has been satisfied.”
CAT LLC intends for CAT Fee 2025-2 to replace CAT Fee 2025-1 (which has a fee rate of $0.000022).
While CAT Fees charged to Industry Members become effective in accordance with the requirements of Section 19(b) of the Exchange Act,
[e]ach Participant shall pay all fees or other amounts required to be paid under this Agreement within thirty (30) days after receipt of an invoice or other notice indicating payment is due (unless a longer payment period is otherwise indicated) (the “Payment Date”). The Participant shall pay interest on the outstanding balance from the Payment Date until such fee or amount is paid at a per annum rate equal to the lesser of: (i) Prime Rate plus 300 basis points; or (ii) the maximum rate permitted by applicable law.
The Exchange believes the proposed rule change is consistent with the requirements of the Exchange Act. The Exchange believes that the proposed rule change is consistent with Section 6(b)(5) of the Act,
The Exchange believes that this proposal is consistent with the Act because it implements provisions of the Plan and is designed to assist the Exchange in meeting regulatory obligations pursuant to the Plan. In approving the Plan, the SEC noted that the Plan “is necessary and appropriate in the public interest, for the protection of investors and the maintenance of fair and orderly markets, to remove impediments to, and perfect the mechanism of a national market system, or is otherwise in furtherance of the purposes of the Act.”
The Exchange believes that the proposed fees to be paid by the CEBBs and CEBSs are reasonable, equitably allocated and not unfairly discriminatory. First, the CAT Fee 2025-2 fees to be collected are directly associated with the budgeted costs of establishing and maintaining the CAT, where such costs include Plan Processor costs and costs related to technology, legal, consulting, insurance, professional and administration, and public relations costs.
The proposed CAT Fee 2025-2 fees would be charged to Industry Members in support of the maintenance of a consolidated audit trail for regulatory purposes. The proposed fees, therefore, are consistent with the Commission's view that regulatory fees be used for regulatory purposes and not to support the Exchange's business operations. The proposed fees would not cover Exchange services unrelated to the CAT. In addition, any surplus would be used as a reserve to offset future fees. Given the direct relationship between CAT fees and CAT costs, the Exchange believes that the proposed fees are reasonable, equitable and not unfairly discriminatory.
As further discussed below, the SEC approved the CAT Funding Model, finding it was reasonable and that it equitably allocates fees among Participants and Industry Members. The Exchange believes that the proposed fees adopted pursuant to the CAT Funding Model approved by the SEC are reasonable, equitably allocated and not unfairly discriminatory.
Section 11.1(b) of the CAT NMS Plan states that “[t]he Participants shall file with the SEC under Section 19(b) of the Exchange Act any such fees on Industry Members that the Operating Committee approves.” Per Section 11.1(b) of the CAT NMS Plan, the Exchange has filed this fee filing to implement the Industry Member CAT fees included in the CAT Funding Model. The Exchange believes that this proposal is consistent with the Exchange Act because it is consistent with, and implements, the CAT Funding Model in the CAT NMS Plan, and is designed to assist the Exchange and its Industry Members in meeting regulatory obligations pursuant to the CAT NMS Plan. In approving the CAT NMS Plan, the SEC noted that the Plan “is necessary and appropriate in the public interest, for the protection of investors and the maintenance of fair and orderly markets, to remove impediments to, and perfect the mechanism of a national market system, or is otherwise in furtherance of the purposes of the Act.”
The SEC has determined that the CAT Funding Model is reasonable and satisfies the requirements of the Exchange Act. Specifically, the SEC has concluded that the method for determining CAT Fees as set forth in Section 11.3 of the CAT NMS Plan, including the formula for calculating the Fee Rate, the identification of the parties responsible for payment and the transactions subject to the fee rate for CAT Fees, is reasonable and satisfies the Exchange Act.
The formula for calculating a Fee Rate requires the amount of Budgeted CAT Costs to be recovered. Specifically, Section 11.3(a)(iii)(B) of the CAT NMS Plan requires a fee filing to provide:
In accordance with this requirement, the Exchange has set forth the amount and type of Budgeted CAT Costs 2025-2 for each of these categories above.
Section 11.3(a)(iii)(B) of the CAT NMS Plan also requires that the fee filing provide “sufficient detail to demonstrate that the budget for the upcoming year, or part of year, as applicable, is reasonable and appropriate.” As discussed below, the Exchange believes that the budget for the CAT Fee 2025-2 Period is “reasonable and appropriate.” Each of the costs included in CAT Fee 2025-2 are reasonable and appropriate because the costs are consistent with standard industry practice, based on the need to comply with the requirements of the CAT NMS Plan, incurred subject to negotiations performed on an arm's length basis, and/or are consistent with the needs of any legal entity, particularly one with no employees.
In approving the CAT Funding Model, the Commission recognized that it is appropriate to recover budgeted costs related to cloud hosting services as a part of CAT Fees.
To comply with the requirements of the Plan, the breadth of the cloud activities related to the CAT is substantial. The cloud services not only include the production environment for the CAT, but they also include two industry testing environments, support environments for quality assurance and stress testing and disaster recovery capabilities. Moreover, the cloud storage costs are driven by the requirements of the Plan, which requires the storage of multiple versions of the data, from the original submitted version of the data through various processing steps, to the final version of the data.
Data volume is a significant driver of costs for cloud hosting services. When the Commission adopted the CAT NMS Plan in 2016, it estimated that the CAT would need to receive 58 billion records per day
In addition to the effect of the data volume on the cloud hosting costs, the processing timelines set forth in the Plan contribute to the cloud hosting costs. Although CAT LLC has proactively sought to manage cloud hosting costs while complying with the Plan, including through requests to the Commission for exemptive relief and amendments to the CAT NMS Plan to reduce costs, stringent CAT NMS Plan requirements do not allow for any material flexibility in cloud architecture design choices, processing timelines (
The costs for cloud hosting services also reflect the need for specialized cloud hosting services given the data volume and unique processing needs of the CAT. The data volume as well as the data processing needs of the CAT necessitate the use of cloud hosting services. The equipment, power and services required for an on-premises data model, the alternative to cloud hosting services, would be cost prohibitive. Moreover, as CAT was being developed, there were limited cloud hosting providers that could satisfy all the necessary CAT requirements, including the operational and security criteria. Over time, more providers offering cloud hosting services that would satisfy these criteria have entered the market. CAT LLC will continue to evaluate alternative cloud hosting services, recognizing that the time and cost to move to an alternative cloud provider would be substantial.
The reasonableness of the cloud hosting services costs is further supported by key cost discipline mechanisms for the CAT—a cost-based funding structure, cost transparency, cost management efforts (including regular efforts to lower compute and storage costs where permitted by the Plan) and oversight. Together, these mechanisms help ensure the ongoing reasonableness of the CAT's costs and the level of fees assessed to support those costs.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted costs related to operating fees as a part of CAT Fees.
The operating fees would include the negotiated fees paid by CAT LLC to the Plan Processor to operate and maintain the system for order-related information and to perform business operations related to the system, including compliance, security, testing, training, communications with the industry (
The operating costs also include costs related to the receipt of market data. CAT LLC anticipates receiving certain market data from Algoseek during the CAT Fee 2025-2 Period. CAT LLC anticipates that Algoseek will provide data as set forth in the SIP Data requirements of the CAT NMS Plan and that the fees are reasonable and in line with market rates for market data received.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted costs related to CAIS operating fees as a part of CAT Fees.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted costs related to change request fees as a part of CAT Fees.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted costs related to capitalized developed technology costs as a part of CAT Fees.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted costs related to legal fees as a part of CAT Fees.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted consulting costs as a part of CAT Fees.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted insurance costs as a part of CAT Fees.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted professional and administration costs as a part of CAT Fees.
CAT LLC anticipates continuing to make use of Anchin, a financial advisory firm, to assist with financial matters for the CAT. CAT LLC determined that the budgeted costs for Anchin were appropriate, as the financial advisory services were to be provided at reasonable market rates that were comparable to the rates charged by other such firms for similar work. Moreover, the total budgeted costs for such financial advisory services were appropriate in light of the breadth of services provided by Anchin. The services budgeted to be performed by Anchin and the budgeted costs related to such services are described above.
CAT LLC anticipates continuing to make use of Grant Thornton, an independent accounting firm, to complete the audit of CAT LLC's financial statements, in accordance with the requirements of the CAT NMS Plan. CAT LLC determined that the budgeted costs for Grant Thornton were appropriate, as the accounting services were to be provided at reasonable market rates that were comparable to the rates charged by other such firms for similar work. Moreover, the total budgeted costs for such accounting services were appropriate in light of the breadth of services provided by Grant Thornton. The services budgeted to be performed by Grant Thornton and the budgeted costs related to such services are described above.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted public relations costs as a part of CAT Fees.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted reserve costs as a part of CAT Fees.
In its approval order for the CAT Funding Model, the Commission stated that it would be reasonable for the annual operating budget for the CAT to “include a reserve of not more than 25% of the annual budget.”
Because the CAT is a critical regulatory tool/system, the CAT needs to have a stable funding source to build financial stability to support the Company as a going concern. Funding for the CAT, as noted in Section 11.1(b), is the responsibility of the Participants and the industry. Because CAT fees are charged based on the budget, which is based on anticipated volume, it is reasonable to have a reserve on hand to prevent a shortfall in the event there is an unexpectedly high volume in a given year. A reserve would help to assure that the CAT has sufficient resources to cover costs should there be unanticipated costs or costs that are higher than expected.
The SEC also recognized that a reserve would help address the difficulty in predicting certain variable CAT costs, like trading volume.
As discussed further below,
The CAT NMS Plan also requires fee filings for Prospective CAT Fees to include “a discussion of how the budget is reconciled to the collected fees.”
The total executed equivalent share volume of transactions in Eligible Securities for the period from April 2024 through March 2025 was 4,580,287,680,646.28 executed equivalent shares. CAT LLC determined the total executed equivalent share volume for the prior twelve months by counting executed equivalent shares in the same manner as it counts executed equivalent shares for CAT billing purposes.
CAT LLC has determined that the projected total executed equivalent share volume for the six months of CAT Fee 2025-2 Period by multiplying by one-half the executed equivalent share volume for the prior twelve months: one-half times 4,580,287,680,646.28 executed equivalent shares.
As noted in the approval order for the CAT Funding Model, as a practical matter, the fee filing for a CAT Fee would provide the exact fee per executed equivalent share to be paid for each CAT Fee, by multiplying the Fee Rate by one-third and describing the relevant number of decimal places for the fee rate.
The Exchange believes that charging CAT Fee 2025-2 with a fee rate of $0.000009 per executed equivalent share is reasonable because it provides for a revenue stream for the Company that is aligned with the Budgeted CAT Costs 2025-2. Moreover, the Exchange believes that the level of the fee rate is reasonable, as it is less than CAT Fee 2025-1 and is comparable to other transaction-based fees. Indeed, CAT Fee 2025-2 is significantly lower than fees previously assessed pursuant to Section 31 (
CAT Fee 2025-2 provides for an equitable allocation of fees, as it equitably allocates CAT costs between and among the Participants and Industry Members. The SEC approved the CAT Funding Model, finding that each aspect of the CAT Funding Model satisfied the requirements of the Exchange Act, including the formula for calculating CAT Fees as well as the Industry Members to be charged the CAT Fees.
CAT Fee 2025-2 provides for an equitable allocation of fees as it complies with the requirements regarding the calculation of CAT Fees as set forth in the CAT NMS Plan. For example, as described above, the calculation of CAT Fee 2025-2 complies with the formula set forth in Section 11.3(a) of the CAT NMS Plan. In addition, CAT Fee 2025-2 would be charged to CEBBs and CEBSs in accordance with Section 11.3(a) of the CAT NMS Plan. Furthermore, the Participants would be charged for their designated share of the Budgeted CAT Costs 2025-2 through a fee implemented via the CAT NMS Plan, which would have the same fee rate as CAT Fee 2025-2.
In addition, as discussed above, each of the inputs into the calculation of CAT Fee 2025-2—the Budgeted CAT Costs 2025-2, the count for the executed equivalent share volume for the prior 12 months, and the projected executed equivalent share volume for the CAT Fee 2025-2 Period—are reasonable. Moreover, these inputs lead to a reasonable fee rate for CAT Fee 2025-2 that is lower than other fee rates for transaction-based fees. A reasonable fee rate allocated in accordance with the requirements of the CAT Funding Model provides for an equitable allocation of fees.
CAT Fee 2025-2 is not an unfairly discriminatory fee. The SEC approved the CAT Funding Model, finding that each aspect of the CAT Funding Model satisfies the requirements of the Exchange Act. In reaching this conclusion, the SEC analyzed the potential effect of CAT Fees calculated pursuant to the CAT Funding Model on affected categories of market participants, including Participants (including exchanges and FINRA), Industry Members (including subcategories of Industry Members, such as alternative trading systems, CAT Executing Brokers and market makers), and investors generally, and considered market effects related to equities and options, among other things. CAT Fee 2025-2 complies with the requirements regarding the calculation of CAT Fees as set forth in the CAT NMS Plan. In addition, as discussed above, each of the inputs into the calculation of CAT Fee 2025-2 and the resulting fee rate for CAT Fee 2025-2 is reasonable. Therefore, CAT Fee 2025-2 does not impose an unfairly discriminatory fee on Industry Members.
The Exchange believes the proposed fees established pursuant to the CAT Funding Model promote just and equitable principles of trade, and, in general, protect investors and the public interest, and are provided in a transparent manner and with specificity in the Fee Schedule. The Exchange also believes that the proposed fees are reasonable because they would provide ease of calculation, ease of billing and other administrative functions, and predictability of a fee based on fixed rate per executed equivalent share. Such factors are crucial to estimating a reliable revenue stream for CAT LLC and for permitting Exchange members to reasonably predict their payment obligations for budgeting purposes.
Section 6(b)(8) of the Act
In addition, all Participants (including exchanges and FINRA) are proposing to introduce CAT Fee 2025-2 on behalf of CAT LLC to implement the requirements of the CAT NMS Plan. Therefore, this is not a competitive fee filing, and, therefore, it does not raise competition issues between and among the Participants.
Furthermore, in approving the CAT Funding Model, the SEC analyzed the potential competitive impact of the CAT Funding Model, including competitive issues related to market services, trading services and regulatory services, efficiency concerns, and capital formation.
As discussed above, each of the inputs into the calculation of CAT Fee 2025-2 is reasonable and the resulting fee rate for CAT Fee 2025-2 calculated in accordance with the CAT Funding Model is reasonable. Therefore, CAT Fee 2025-2 would not impose any burden on competition that is not necessary or appropriate in furtherance of the purpose of the Exchange Act.
No written comments were solicited or received with respect to the proposed rule change.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
Cboe BZX Exchange, Inc. (the “Exchange” or “BZX”) proposes to introduce a Small Retail Broker Hosted Solutions Program and to update the existing eligibility requirements for the Small Retail Brokerage Distribution Program for the Cboe One Summary Feed. The text of the proposed rule change is provided in Exhibit 5.
The text of the proposed rule change is also available on the Exchange's website (
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The Exchange proposes to adopt a Small Retail Broker Hosted Solutions Program (the “Program”) for Cboe One Summary Data (collectively, the “Applicable Feed”).
Further, the Exchange proposes to increase the allowed maximum Non-Professional Data User subscriber count for the existing Small Retail Broker Program for Cboe One Summary Feed.
By way of background, the Exchange currently offers the BZX Top Data Feed, which is a data feed that offers top-of-book quotations and last sale information based on orders entered into the Exchange's System. The BZX Top Data Feed benefits investors by facilitating their prompt access to real-time top-of-book information contained in BZX Top Data. The Exchange's affiliated equities exchanges (
Currently, the Exchange offers a Small Retail Broker Distribution Program
The Exchange now proposes to create a new Program based on the proposed eligibility criteria for Small Retail Brokers to specifically support Small Retail Brokers who are operating platforms on behalf of other Small Retail Brokers. Based on customer feedback, there are Small Retail Brokers who would like to provide this data via a hosted solution as a White Label Service
Of further note, the Hosting Small Retail Broker Distributor is responsible for reporting its External Hosted Subscribers and their users, and ultimately the Hosting Small Retail Broker is responsible for payment of all data fees for both its External Hosted Subscribers and itself. While the Exchange is not privy to pass-through costs between Hosting Small Retail Broker Distributors and External Hosted Subscribers, this proposed pricing allows Hosting Small Retail Broker Distributors the freedom to charge or not charge External Hosted Subscribers while also appropriately charging for a service provided to an External Hosted Subscriber that is benefitting from an infrastructure developed and supported by the Hosting Small Retail Broker Distributor. The Exchange notes that the current Small Retail Broker Program prevents the Hosting Small Retail Broker Distributor from packaging this waiver as part of their overall service to their External Hosted Subscribers (as External Hosted Subscribers would be billed directly under the existing Small Retail Broker Program). Given that External Hosted Subscribers are smaller relative to other Small Retail Brokers currently participating in the Program, the costs associated with the Applicable Feeds are inherently prohibitive to the External Hosted Subscriber.
Under the proposed program, a Hosting Small Retail Broker providing the data to at least one External Hosted Subscriber would be eligible for a credit of its Distribution Fee (a credit of $3,500/month for Cboe One Summary Feed) that it is normally responsible for under the existing Small Retail Broker Program. Additionally, the External Hosted Subscriber shall also receive a waiver of the Distribution Fee (a credit of $3,500/month for Cboe One Summary Feed). The External Hosted Subscriber will also receive a waiver of the Data Consolidation Fee (a credit of $350/month) and in lieu of paying the Non-Professional User fees, it shall be a set monthly fee $850 for Cboe One Summary Data.
In addition to the changes set forth above, the Exchange also proposes to modify the existing Small Retail Broker Program for Cboe One Summary Feed to increase the number of Non-Professional Data User maximum from 5,000 to 10,000 to be consistent with the proposed threshold for External Hosted Subscribers. As previously discussed, the Exchange proposes to also use the cap of 10,000 Non-Professional Data Users for the proposed Program. The Exchange proposes to increase this in support of increased participation across both retail and investor markets in order to facilitate the growth of smaller retail brokers on a global scale.
As mentioned above, the Program's existing fee structure makes it costly for both Hosting Small Retail Broker Distributors and its External Hosted Subscribers to provide data to the External Hosted Subscribers retail clients as Distribution Fees are assessed on both Small Retail Brokers. With this fee proposal, the Exchange hopes to make its data more widely accessible for retail users who receive their data from External Hosted Subscribers.
The Exchange believes that this proposal will (i) further increase the competitiveness of the Exchange's top of book market data products compared to competitor offerings that may currently be cheaper for firms with a limited subscriber base that do not yet have the scale to take advantage of the lower subscriber fees offered by the Exchange; and (ii) provide additional incentives for Hosting Small Retail Broker Distributors to provide hosted solution services for other Small Retail Brokers in order to make data more widely available to retail investors. In turn, the Exchange believes that this change may benefit market participants and investors by spurring additional competition and increasing the accessibility of the Exchange's top of book data.
The Exchange notes that at least one other exchange has a similar offering. For example, the New York Stock Exchange has a Redistribution Fee Waiver for NYSE Trades, for which redistributors of data may have their redistribution fee waived so long as they provide the data to at least one data feed recipient and reports such data feed recipient or recipients to the Exchange.
Without these discounts, a redistributor of NYSE Trades would pay the General Access Fee of $1,500/month in addition to the Redistribution Fee of $1,000/month and the applicable Professional User Fee ($4/month/User) and Non-Professional User Fee ($0.20/month/User).
While the eligibility requirements of the NYSE program and the proposed Program differ, both programs are intended to incentivize redistribution of applicable data feeds by providing enhanced discounts and both programs target different segments for a specific purpose. The proposed discounts under this Program are intended to make the Exchange's offering competitively priced relative to alternative options that participants may have.
Without the proposed pricing discounts, the Exchange believes that (i) prospective customers may not be interested in purchasing top of book data from the Exchange, and may instead purchase such data from other national securities exchanges or the SIPs, potentially at a higher cost than would be available pursuant to the proposed program and (ii) that Hosting Small Retail Broker Distributors are not incentivized to make the Applicable Feed available via a hosted solution for retail investors of its External Hosted Subscribers. Similar to the existing Small Retail Broker Program, the Exchange believes that this Program will continue to increase competition for such market data, and that enhanced competition could help to further reduce data fees as providers compete for subscribers, as well as help diversify the availability and quality of data offerings available to retail investors through their Hosting Small Retail Broker Distributors. Ultimately, the Exchange believes that it is critical that it be allowed to compete by offering attractive pricing to customers as increasing the availability of such products ensures continued competition with alternative offerings. Such competition may be constrained when competitors are impeded from offering alternative and cost-effective solutions to customers.
The Exchange believes that the proposed rule change is consistent with the objectives of Section 6 of the Act,
The Exchange also believes that the proposed rule change is consistent with Section 11(A) of the Act.
In adopting Regulation NMS, the Commission granted SROs and broker-dealers increased authority and flexibility to offer new and unique market data to the public. It was believed that this authority would expand the amount of data available to consumers, and also spur innovation and competition for the provision of market data. The Exchange believes that the proposed fee change would further broaden the availability of U.S. equity market data to investors, and in particular retail investors, consistent with the principles of Regulation NMS.
The Exchange operates in a highly competitive environment. Indeed, there are sixteen registered national securities exchanges that trade U.S. equities and offer associated top of book market data products to their customers. The national securities exchanges also
Making alternative data products available to market participants ultimately ensures increased competition in the marketplace, and constrains the ability of exchanges to charge prohibitive fees. In the event that a market participant views one exchange's top of book data fees as more or less attractive than the competition they can, and frequently do, switch between competing products. In fact, the competitiveness of the market for such top of book data products is one of the primary factors animating this proposed rule change, which is designed to allow the Exchange to further compete for this business. As mentioned above, at least one other Exchange provides a similar waiver for redistribution of market data.
The Exchange notes that the Applicable Feed is distributed and purchased on a voluntary basis, in that neither the Exchange nor market data distributors are required by any rule or regulation to make these data products available. Distributors (including vendors) and Users can therefore discontinue use at any time and for any reason, including due to an assessment of the reasonableness of fees charged. Further, the Exchange is not required to make any proprietary data products available or to offer any specific pricing alternatives to any customers.
The Commission has long stressed the need to ensure that the equities markets are structured in a way that meets the needs of ordinary investors. For example, the Commission's strategic plan for fiscal years 2018-2022 touts “focus on the long-term interests of our Main Street investors” as the Commission's number one strategic goal.
The Exchange proposes that the proposed waivers for the Applicable Feed only apply to Hosting Small Retail Broker Distributors and its External Hosted Subscribers for three reasons. First, the Hosting Small Retail Broker Distributor is creating a full-service offering for External Hosted Subscribers in contrast to the Small Retail Brokers under the current Program, which only provide services directly to its own retail clients. Maintaining an additional platform for External Hosted Subscribers' clients is an additional workstream for Hosted Subscribers (in contrast to Small Retail Brokers that only provide data and services directly to their retail clients) as they support additional ecosystems of business, each with its own book of retail clients. In order to incentivize the Hosting Small Retail Broker Distributors to take on the additional duties associated with hosting External Hosted Subscribers (such as managing the data, entitlements, and display of the application provided to the External Hosted Subscriber), the Exchange believes it is not unfairly discriminatory to provide a waiver of the Distribution Fee for the Hosting Small Retail Broker, as opposed to the standard discounted Distribution Fee it would normally pay under the Small Retail Broker Program.
Second, by creating this program, the Exchange is further able to reach additional retail investors. By waiving Distribution Fees for both the Hosting Small Retail Broker Distributor and its External Hosted Subscriber, both parties are incentivized to work together to provide data to retail investors. Third, as mentioned previously, the Hosting Small Retail Broker is responsible for the fees and reporting for both its own activity and that of its External Hosted Subscriber While the Exchange is not privy to pass-through costs between Hosting Small Retail Broker Distributors and External Hosted Subscribers, this proposed pricing allows Hosting Small Retail Broker Distributors the freedom to charge or not charge External Hosted Subscribers while also appropriately charging for a service provided to an External Hosted Subscriber that is benefitting from an infrastructure developed and supported by the Hosting Small Retail Broker Distributor. The Exchange notes that the current Small Retail Broker Program prevents the Hosting Small Retail Broker Distributor from packaging this waiver as part of their overall service to their External Hosted Subscribers (as External Hosted Subscribers would be billed directly under the existing Small Retail Broker Program). Given that External Hosted Subscribers are smaller relative to other Small Retail Brokers currently participating in the Program, these costs associated with the Applicable Feeds are inherently prohibitive to the External Hosted Subscriber. Through this program, fees will not be a deterrent for Hosting Small Retail Brokers and External Hosted Subscribers to establish platforms that reach a wider scope of retail investors.
Furthermore, while this Program would be effectively limited to smaller firms in accordance with the proposed eligibility requirements, the Exchange does not believe that this limitation makes the fees inequitable or unfairly discriminatory. The Exchange notes that large broker-dealers and/or vendors that distribute the Exchange's data products to a sizeable number of investors benefit from the current fee structure, which includes lower subscriber fees and Enterprise licenses. Due to lower subscriber fees, distributors that provide the Applicable Feed to more than the proposed capped amounts of Users permitted under either the Small Retail Broker Program or this Program already enjoy cost savings compared to competitor products. The Program, in addition to the existing Small Retail Broker Program, would therefore continue to ensure that small retail brokers that distribute top of book data to their retail investor customers could also benefit from reduced pricing, and would aid in increasing the competitiveness of the Exchange's data products for this key segment of the market.
The Exchange believes that the proposed cap of 10,000 for the Cboe One Summary Data Feed for this Program, as well as increasing this cap to 10,0000 for the Cboe One Summary Data Feed for the Small Retail Broker Program is
The Exchange believes that the Distribution Fee Waivers for both the External Hosted Subscriber and the Hosting Small Retail Broker Distributor are reasonable as they represent a significant cost reduction for the Hosting Small Retail Broker Distributor to provide a hosted solution for the External Hosted Subscriber, to ultimately provide the data to the External Hosted Subscriber's retail investors. While the existing fee structure does provide a benefit of a discounted waiver for Small Retail Brokers that externally distribute the data, the discounted Distribution Fees are still incurred by both the External Hosted Subscriber and the Hosting Small Retail Broker Distributor. In an attempt to alleviate these costs, and make this data more available to retail investors, the Exchange proposes to waive the Distribution Fees for both the Hosting Small Retail Broker Distributor and the External Hosted Subscriber. With this Program, the Exchange believes it will increase market accessibility and data to investors on a global scale. Exchange Hosted Subscribers may not have the infrastructure or technical capabilities to offer market data and/or execution services to its retail investors. Through waiving these fees for the External Hosted Subscriber, the Exchange hopes to reach a broader scale of retail investors globally. Further, as discussed above, the Exchange also believes it is appropriate and not unfairly discriminatory to limit this specific credit to the External Hosted Subscriber and the Hosting Small Retail Broker Distributor given the development and maintenance the Hosting Small Retail Broker Distributor acquires to provide this data to the External Hosted Subscriber's end users.
The Exchange believes it is reasonable to not charge the External Hosted Subscriber the Data Consolidation Fee for Cboe One Summary Data for the duration of the time that they are eligible for this program. As previously discussed, the waiver of fees for the External Hosted Subscriber is intended to make this data more available to retail investors. The Exchange also believes it is appropriate and not unfairly discriminatory to limit this specific credit to the External Hosted Subscriber because, as described above, the Exchange believes by alleviating some of the barriers to entry, that Exchange Hosted Subscribers are able to bring this data and execution services to their retail investors. Of further note, the Exchange believes it is reasonable to maintain this cost for the Hosting Small Retail Broker Distributor as the Hosting Small Retail Broker Distributor is the party receiving this data from the Exchange where it is consolidated for the benefit of the Hosting Small Retail Broker Distributor.
The Exchange believes it is reasonable to set a fixed cost for Non-Professional Users fees for External Hosted Subscribers by charging a flat, fixed cost instead of charging per user to allow for additional savings. Under this structure, the External Hosted Subscriber shall still be responsible by paying the standard per User fee of a Professional Users under the Applicable Feed. The Exchange does not believe this is unfairly discriminatory as the program is based around making the Applicable Feed available for Non-Professional Users. The Exchange also notes that it has taken a similar approach here to the NYSE Per User Access Fee, which sets a fixed cost where the data is used only for display purposes.
The Exchange does not believe that the proposed rule change would result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange operates in a highly competitive environment, and its ability to price these data products is constrained by: (i) Competition among exchanges that offer similar data products to their customers; and (ii) the existence of inexpensive real-time consolidated data disseminated by the SIPs. Top of book data is disseminated by both the SIPs and the sixteen equities exchanges. There are therefore a number of alternative products available to market participants and investors. In this competitive environment potential subscribers are free to choose which competing product to purchase to satisfy their need for market information. Often, the choice comes down to price, as broker-dealers or vendors look to purchase the cheapest top of book data product, or quality, as market participants seek to purchase data that represents significant market liquidity. In order to better compete for this segment of the market, the Exchange is proposing to reduce the cost of top of book data provided by Hosting Small Retail Broker Distributors to its External Hosted Subscribers, and in turn, their retail investors. The Exchange believes that this would facilitate greater access to such data, ultimately benefiting the retail investors that are provided access to such market data.
The Exchange does not believe that this price reduction would cause any unnecessary or inappropriate burden on intermarket competition as other exchanges and data vendors are free to lower their prices to better compete with the Exchange's offering. Indeed, as explained in the basis section of this proposed rule change, the Exchange's decision to (i) waive the Distribution Fee for the Hosting Small Retail Broker and the External Hosted Subscriber and (ii) waiving the Consolidation Fee (when applicable) for the External Hosted Subscriber and (iii) setting a fixed cost for the Non-Professional Users for the External Hosted Subscriber is itself a competitive response to different fee structures available on competing markets. The Exchange therefore believes that the proposed rule change is pro-competitive as it seeks to offer pricing incentives to customers to better position the Exchange as it competes to attract additional market data subscribers. The Exchange also believes that the proposed reduction in fees the Hosting Small Retail Broker and the External Hosted Subscriber would not cause any unnecessary or inappropriate burden on intramarket competition. Although the proposed fee discount would be largely limited to small retail broker subscribers, larger broker-dealers and vendors can already purchase top of book data from the Exchange at prices that represent a significant cost savings when compared to competitor products that combine higher subscriber fees with lower fees for distribution. In light of the benefits already provided to this group of subscribers, the Exchange believes that additional discounts to small retail brokers would increase rather than decrease competition among broker-dealers that participate on the Exchange. Furthermore, as discussed earlier in this proposed rule change, the Exchange believes that offering pricing benefits to brokers that represent retail investors facilitates the Commission's mission of
The Exchange neither solicited nor received comments on the proposed rule change.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
The Exchange proposes to establish fees for Industry Members
The text of the proposed rule change is available on the Exchange's website at
In its filing with the Commission, the self-regulatory organization included
On July 11, 2012, the Commission adopted Rule 613 of Regulation NMS, which required the self-regulatory organizations (“SROs”) to submit a national market system (“NMS”) plan to create, implement and maintain a consolidated audit trail that would capture customer and order event information for orders in NMS securities across all markets, from the time of order inception through routing, cancellation, modification or execution.
The CAT Funding Model provides a framework for the recovery of the costs to create, develop and maintain the CAT, including providing a method for allocating costs to fund the CAT among Participants and Industry Members. The CAT Funding Model establishes two categories of fees: (1) CAT fees assessed by CAT LLC and payable by certain Industry Members to recover a portion of historical CAT costs previously paid by the Participants (“Historical CAT Assessment” fees); and (2) CAT fees assessed by CAT LLC and payable by Participants and Industry Members to fund prospective CAT costs (“CAT Fees”).
Under the CAT Funding Model, Participants, CEBBs and CEBSs are subject to fees designed to cover the ongoing budgeted costs of the CAT, as determined by the Operating Committee. “The Operating Committee will establish fees (`CAT Fees') to be payable by Participants and Industry Members with regard to CAT costs not previously paid by the Participants (`Prospective CAT Costs').”
The CAT Fees to be paid by CEBBs and CEBSs are designed to contribute toward the recovery of two-thirds of the budgeted CAT costs for the relevant period.
CAT LLC proposes to charge CEBBs and CEBSs (as described in more detail below) CAT Fee 2025-2 to recover the reasonably budgeted CAT costs for the period from July 1, 2025 through December 31, 2025 in accordance with the CAT Funding Model. To implement this fee on behalf of CAT LLC, the CAT NMS Plan requires the Participants to “file with the SEC under Section 19(b) of the Exchange Act any such fees on Industry Members that the Operating Committee approves, and such fees shall be labeled as `Consolidated Audit Trail Funding Fees.' ”
CAT Fee 2025-2 will be charged to each CEBB and CEBS for each applicable transaction in Eligible Securities.
(a) with respect to a transaction in an Eligible Security that is executed on an exchange, the Industry Member identified as the Industry Member responsible for the order on the buy-side of the transaction and the Industry Member responsible for the sell-side of the transaction in the equity order trade event and option trade event in the CAT Data submitted to the CAT by the relevant exchange pursuant to the Participant Technical Specifications; and (b) with respect to a transaction in an Eligible Security that is executed otherwise than on an exchange and required to be reported to an equity trade reporting facility of a registered national securities association, the Industry Member identified as the executing
The following fields of the Participant Technical Specifications indicate the CAT Executing Brokers for the transactions executed on an exchange:
In addition, the following fields of the Participant Technical Specifications would indicate the CAT Executing Brokers for the transactions executed otherwise than on an exchange:
The Operating Committee determined the Fee Rate to be used in calculating CAT Fee 2025-2 (“Fee Rate 2025-2”) by dividing the reasonably budgeted CAT costs (“Budgeted CAT Costs 2025-2”) for the period from July 1, 2025 through December 31, 2025 (“CAT Fee 2025-2 Period”) by the reasonably projected total executed share volume of all transactions in Eligible Securities for the six-month recovery period, as discussed in detail below.
CAT LLC proposes to implement CAT Fee 2025-2 as the third CAT Fee related to Prospective CAT Costs. CAT LLC proposes to commence CAT Fee 2025-2 during the year, rather than at the beginning of the year. Accordingly, CAT Fee 2025-2 “would be calculated as described in paragraph (II)” of Section 11.3(a)(i)(A) of the CAT NMS Plan,
Under the CAT NMS Plan, for purposes of calculating CAT Fees, executed equivalent shares in a transaction in Eligible Securities will be reasonably counted as follows: (1) each executed share for a transaction in NMS Stocks will be counted as one executed equivalent share; (2) each executed contract for a transaction in Listed Options will be counted based on the multiplier applicable to the specific Listed Options (
The CAT NMS Plan states that “[t]he budgeted CAT costs for the year shall be comprised of all reasonable fees, costs and expenses reasonably budgeted to be incurred by or for the Company in connection with the development, implementation and operation of the CAT as set forth in the annual operating budget approved by the Operating Committee pursuant to Section 11.1(a) of the CAT NMS Plan, or as adjusted during the year by the Operating Committee.”
In accordance with the requirements under the CAT NMS Plan, the Operating Committee approved an annual budget for 2025 for CAT LLC (“Original 2025 CAT Budget”) in November 2024.
As described in detail below, the Budgeted CAT Costs 2025-2 would be $60,726,412. CEBBs collectively will be responsible for one-third of the Budged [
The following describes in detail the Budgeted CAT Costs 2025-2 for CAT Fee 2025-2. The following cost details are provided in accordance with the requirement in the CAT NMS Plan to provide in the fee filing the following:
Each of the costs described below are reasonable, appropriate and necessary for the creation, implementation and maintenance of CAT.
The following table breaks down the Budgeted CAT Costs 2025-2 into the categories set forth in Section 11.3(a)(iii)(B) of the CAT NMS Plan.
To the extent that CAT LLC enters into notes with Participants or others to pay costs incurred during the period in which CAT Fee 2025-2 is in effect, CAT LLC will use the proceeds from CAT Fee 2025-2 and the related Participant CAT fees to repay such notes.
The following table compares the annual budgeted CAT costs as set forth in the updated annual CAT budget for 2024 approved by the Operating Committee in July 2024 (“Updated 2024 CAT Budget”),
In addition, the following table compares the first quarter of the Original 2025 CAT Budget with the first quarter of the Updated 2025 CAT Budget. The Updated 2025 CAT Budget includes actual costs for January, February and March 2025, whereas the Original 2025 CAT Budget included budgeted costs for these three months. The variance from the first quarter of the Original 2025 CAT Budget to the actuals for the first quarter of 2025 (as set forth in the Updated 2025 CAT Budget) in the last column of the following chart are used in this filing in supporting the reasonableness of the estimates for each category of costs.
Section 11.3(a)(iii)(B)(B)(1) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the cloud hosting services costs set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that included $82,222,276 in technology costs for cloud hosting services for the CAT Fee 2025-2 Period. The technology costs for cloud hosting services represent costs reasonably budgeted to be incurred for services provided by the cloud services provider for the CAT, Amazon Web Services, Inc. (“AWS”) during the CAT Fee 2025-2 Period.
In the agreement between CAT LLC and the Plan Processor for the CAT (“Plan Processor Agreement”), FINRA CAT, LLC (“FCAT”), AWS was named as the subcontractor to provide cloud hosting services. Under the Plan Processor Agreement, CAT LLC is required to pay FCAT the fees incurred by the Plan Processor for cloud hosting services provided by AWS as FCAT's subcontractor on a monthly basis for the cloud hosting services, and FCAT, in turn, pays such fees to AWS. The fees for cloud hosting services were negotiated by FCAT on an arm's length basis with the goals of managing costs and receiving services required to comply with the CAT NMS Plan and Rule 613, taking into consideration a variety of factors, including the expected volume of data, the breadth of services provided and market rates for similar services. Services provided by AWS include storage services, databases, compute services and other services (such as networking, management tools and DevOps tools), as well as various environments for CAT, such as development, performance testing, test, and production environments. FCAT utilizes such cloud hosting services for a broad array of services for the CAT, such as data ingestion, data management, and analytic tools for the CAT. AWS performs cloud hosting services for both the CAT transaction database as well as
The cost for AWS cloud services for the CAT is a function of the volume of CAT Data, largely as a result of the processing and storage of the CAT Data.
CAT LLC estimates that the budget for cloud hosting services costs during the CAT Fee 2025-2 Period will be approximately $82,222,276. The budget for cloud hosting services costs during the CAT Fee 2025-2 Period is calculated based on the Updated 2025 CAT Budget. Specifically, this estimate was calculated by adding the budgeted amounts for cloud hosting services costs for the third and fourth quarters of 2025 as set forth in the Updated 2025 CAT Budget.
CAT LLC estimated the budget for the cost for cloud hosting services for the CAT Fee 2025-2 Period based on an assumption of 40% annual year-over-year volume growth for the transaction database and an assumption of 5% annual year-over-year volume growth for CAIS. CAT LLC determined these growth assumptions in coordination with FCAT based on an analysis of a variety of existing data and alternative growth scenarios. In particular, in determining to use the 40% annual year-over-year volume growth in events per day, CAT LLC considered, among other things, the average annual year-over-year volume growth for 2019 through 2024 of approximately 45%, the average annual year-over-year volume growth for 2020 through 2024 of approximately 30%, and the average monthly growth rate for 2024 of approximately 50%.
This process for estimating the budget for cloud hosting services costs for the CAT Fee 2025-2 Period is the same process by which CAT LLC estimated the cloud hosting services costs for the Original 2025 CAT Budget. The Original 2025 CAT Budget estimated a budget for cloud hosting services of $39,640,542 for the first quarter of 2025. The actual costs for cloud hosting services for the first quarter of 2025, which are set forth in the Updated 2025 CAT Budget, were $36,357,017. Therefore, the variance between budgeted and actual cloud hosting services costs for this period was an approximate decrease of 8%. Accordingly, CAT LLC believes that the process for estimating the budgeted cloud hosting services costs for the CAT Fee 2025-2 Period is reasonable.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for cloud hosting services costs from the prior CAT Fee filing. Accordingly, this filing describes the changes in the cloud hosting services costs from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budgeted costs for cloud hosting services as set forth in the Original 2025 CAT Budget were $182,594,630, and the annual 2025 budgeted costs for cloud hosting services as set forth in the Updated 2025 CAT Budget are $159,230,937. Accordingly, budgeted annual costs for cloud hosting services decreased by $23,363,693 from the Original 2025 CAT Budget to the Updated 2025 CAT Budget, which is an approximate 13% reduction in cloud hosting services costs for the full year of 2025.
Correspondingly, the budgeted costs for cloud hosting services for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget were $97,748,713,
The decrease in costs for cloud hosting services from the Original 2025 CAT Budget to the Updated 2025 CAT Budget, both for the full year for 2025 and for the third and fourth quarters of 2025, reflects (1) a decrease in costs related to changes made pursuant to the Cost Savings Amendment; (2) cost decreases related to optimizations resulting in reduced procesing [
Section 11.3(a)(iii)(B)(B)(1) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the operating fees set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that included $15,453,942 in technology costs for operating fees for the CAT Fee 2025-2 Period. Operating fees are those fees paid by CAT LLC to FCAT as the Plan Processor to operate and maintain the CAT and to perform business operations related to the system, including compliance, security, testing, training, communications with the industry (
• Provide the CAT-related functions and services as the Plan Processor as required by SEC Rule 613 and the CAT NMS Plan in connection with the operation and maintenance of the CAT;
• Address compliance items, including drafting CAT policies and procedures, and addressing Regulation SCI requirements;
• Provide support to the Operating Committee, the Compliance Subcommittee and CAT working groups;
• Assist with interpretive efforts, exemptive requests and amendments regarding the CAT NMS Plan;
• Oversee the security of the CAT;
• Monitor the operation of the CAT, including with regard to Participant and Industry Member reporting;
• Provide support to subcontractors under the Plan Processor Agreement;
• Provide support in discussions with the Participants and the SEC and its staff;
• Operate the FINRA CAT Helpdesk;
• Facilitate communications with the industry, including via FAQs, CAT Alerts, meetings, presentations and webinars;
• Administer the CAT website and all of its content;
• Maintain cyber security insurance related to the CAT;
• Assist with billing, collection and other CAT fee-related activity; and
• Provide technical support and assistance with connectivity, data access, and user support, including the use of CAT Data and query tools, for Participants and the SEC staff.
CAT LLC calculated the budget for the FCAT technology costs for operating fees for the CAT Fee 2025-2 Period based on the recurring monthly operating fees under the Plan Processor Agreement.
As discussed above, CAT LLC estimated the budget for the operating fees during the CAT Fee 2025-2 Period based on monthly rates set forth in the Plan Processor Agreement and the agreement with Algoseek. CAT LLC also recognized that the operating fees are generally consistent throughout the year. This process for estimating the budget for the operating fees for the CAT Fee 2025-2 Period is the same process by which CAT LLC estimated the operating fees for the Original 2025 CAT Budget. The Original 2025 CAT Budget estimated a budget for operating fees of $7,662,270 for the first quarter of 2025.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for operating fees from the prior CAT Fee filing. Accordingly, this filing describes the changes from the operating fees set forth in the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budgeted costs for operating fees as set forth in the Original 2025 CAT Budget were $30,831,330,
Correspondingly, the budgeted costs for operating fees for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget were $15,446,040,
Section 11.3(a)(iii)(B)(B)(1) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the CAIS operating fees set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that included $10,374,924 in technology costs for CAIS operating fees for the CAT Fee 2025-2 Period. CAIS operating fees represent the fees paid to FCAT for services provided with regard to the operation and maintenance of CAIS, and to perform the business operations
During the CAT Fee 2025-2 Period, it is anticipated that FCAT will provide CAIS-related services. Under the Plan Processor Agreement with FCAT, CAT LLC is required to pay FCAT for CAIS-related services provided by FCAT on a monthly basis. CAT LLC negotiated the fees for FCAT's CAIS-related services on an arm's length basis with the goals of managing costs and receiving services required to comply with the CAT NMS Plan, taking into consideration a variety of factors, including the services to be provided and market rates for similar types of activity. During the CAT Fee 2025-2 Period, it is anticipated that FCAT will continue to provide services relating to the ongoing operation, maintenance and support of CAIS.
CAT LLC estimates that the budget for CAIS operating fees during the CAT Fee 2025-2 Period will be approximately $10,374,924. The budget for CAIS operating fees during the CAT Fee 2025-2 Period is calculated based on the Updated 2025 CAT Budget. Specifically, this estimate was calculated by adding the budgeted amounts for CAIS operating fees for the third and fourth quarters of 2025 as set forth in the Updated 2025 CAT Budget.
CAT LLC calculated the budget for FCAT's CAIS-related services for the CAT Fee 2025-2 Period based on the recurring monthly CAIS operating fees under the Plan Processor Agreement. This process for estimating the budget for the CAIS operating fees for the CAT Fee 2025-2 Period is the same process by which CAT LLC estimated the CAIS operating fees for the Original 2025 CAT Budget. The Original 2025 CAT Budget estimated a budget of $5,187,462 for CAIS operating fees for the first quarter of 2025. The actual costs for CAIS operating fees for the first quarter of 2025, which are set forth in the Updated 2025 CAT Budget, were $5,187,462. There was no variance between budgeted and actual CAIS operating fees for the first quarter of 2025. Accordingly, CAT LLC believes that the process for estimating the budgeted CAIS operating fees for the CAT Fee 2025-2 Period is reasonable.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for CAIS operating fees from the prior CAT Fee filing. Accordingly, this filing describes the changes in CAIS operating fees from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
CAIS operating fees are based on a recurring monthly rate payable to FCAT and are unchanged from the prior CAT Fee filing. The annual 2025 budgeted costs for CAIS operating fees as set forth in the Original 2025 CAT Budget were $20,749,848, and the annual 2025 budgeted costs for CAIS operating fees as set forth in the Updated 2025 CAT Budget are $20,749,848. Accordingly, the budgeted annual costs for CAIS operating fees are the same for both the Original 2025 CAT Budget and the Updated 2025 CAT Budget.
Correspondingly, the budgeted costs for CAIS operating fees for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget were $10,374,924, and the budgeted costs for CAIS operating fees for the third and fourth quarters of 2025 as set forth in the Updated 2025 CAT Budget are $10,374,924.
Accordingly, there were no changes in the line item for CAIS operating fees from the prior CAT Fee filing.
Section 11.3(a)(iii)(B)(B)(1) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the change request fees set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that included $500,000 in technology costs for change request fees for the CAT Fee 2025-2 Period. The technology costs related to change request fees include costs related to certain modifications, upgrades or other changes to the CAT.
Change requests are standard practice and necessary to reflect operational changes, including changes related to new market developments, such as new market participants. In general, if CAT LLC determines that a modification, upgrade or other changes to the functionality or service is necessary and appropriate, CAT LLC will submit a request for such a change to the Plan Processor. The Plan Processor will then respond to the request with a proposal for implementing the change, including the cost (if any) of such a change. CAT LLC then determines whether to approve the proposed change.
The change request budget line is established to include expected costs to be incurred in which the nature of the costs (
During the CAT Fee 2025-2 Period, it is anticipated that CAT LLC will engage FCAT to pursue certain change requests in accordance with the Plan Processor Agreement. The budget for change requests for the CAT Fee 2025-2 Period includes a placeholder of $500,000 for potential change request fees that may be necessary in accordance with the Plan Processor Agreement. The placeholder amount was determined based on prior experience with change requests related to the CAT.
CAT LLC estimates that the budget for change requests during the CAT Fee 2025-2 Period will be approximately $500,000. The budget for change requests during the CAT Fee 2025-2 Period is calculated based on the Updated 2025 CAT Budget. Specifically, this estimate was calculated by adding the budgeted amounts for the change requests for the third and fourth quarters of 2025 as set forth in the Updated 2025 CAT Budget.
CAT LLC estimated the budget for the potential change requests for the CAT
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for change request fees from the prior CAT Fee filing. Accordingly, this filing describes the changes in the change request fees from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budgeted costs for change requests as set forth in the Original 2025 CAT Budget were $750,000, and the annual 2025 budgeted costs for change requests as set forth in the Updated 2025 CAT Budget are $750,000. Accordingly, budgeted annual costs for change requests are the same for both the Original 2025 CAT Budget and the Updated 2025 CAT Budget.
Correspondingly, the budgeted costs for change requests for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget were $500,000, and the budgeted costs for change request for the third and fourth quarters of 2025 as set forth in the Updated 2025 CAT Budget are $500,000.
Accordingly, there were no changes in the line item for change requests from the prior CAT Fee filing.
Section 11.3(a)(iii)(B)(B)(1) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the capitalized developed technology costs set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that includes $0 in technology costs for capitalized developed technology costs for the CAT Fee 2025-2 Period. This category of costs includes the budget for capitalizable application development costs incurred in the development of the CAT. It is anticipated that such costs will include certain costs related to the software license fee for CAIS in accordance with the Plan Processor Agreement with FCAT, as well as costs related to a set of technology changes to be implemented by FCAT.
CAT LLC estimates that the budget for capitalized developed technology costs during the CAT Fee 2025-2 Period will be approximately $0. The budget for capitalized developed technology costs during the CAT Fee 2025-2 Period is calculated based on the Updated 2025 CAT Budget. Specifically, this estimate was calculated by adding the budgeted amounts for capitalized developed technology costs for the third and fourth quarters of 2025 as set forth in the Updated 2025 CAT Budget.
CAT LLC estimated the budget for capitalized developed technology costs for the CAT Fee 2025-2 Period based on an analysis of a variety of factors, including information related to potential technology costs and related contractual and Plan requirements, and discussions with FCAT regarding such potential technology costs. This process for estimating the budget for capitalized developed technology costs for the CAT Fee 2025-2 Period is the same process by which CAT LLC estimated the capitalized developed technology costs for the Original 2025 CAT Budget. The Original 2025 CAT Budget estimated a budget for capitalized developed technology costs of $3,923,360 for the first quarter of 2025.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for capitalized developed technology costs from the prior CAT Fee filing. Accordingly, this filing describes the changes in the capitalized developed technology costs from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budget for capitalized developed technology costs as set forth in the Original 2025 CAT Budget were $3,923,360,
In addition, the budget for capitalized developed technology costs for the third and fourth quarters of 2025 as set forth
Section 11.3(a)(iii)(B)(B)(2) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the legal costs set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that includes $3,631,342 in legal costs for the CAT Fee 2025-2 Period. This category of costs represents budgeted costs for legal services for this period. CAT LLC anticipates that it will receive legal services from two law firms, Wilmer Cutler Pickering Hale and Dorr LLP (“WilmerHale”) and Jenner & Block LLP (“Jenner”), during the CAT Fee 2025-2 Period.
During the CAT Fee 2025-2 Period, it is anticipated that WilmerHale will provide legal services related to the following:
• Assist with CAT fee filings and related funding issues;
• Draft exemptive requests from CAT NMS Plan requirements and/or proposed amendments to the CAT NMS Plan;
• Provide legal guidance with respect to interpretations of CAT NMS Plan requirements;
• Provide legal support for the Operating Committee, Compliance Subcommittee, working groups and Leadership Team;
• Draft SRO rule filings related to the CAT Compliance Rule;
• Manage corporate governance matters, including supporting Operating Committee meetings and preparing resolutions and consents;
• Assist with communications with the industry, including CAT Alerts and presentations;
• Provide guidance regarding the confidentiality of CAT Data;
• Assist with cost management analyses and proposals;
• Assist with commercial contract-related matters, including change orders and amendments, Plan Processor Agreement items, and subcontract matters;
• Provide support with regard to discussions with the SEC and its staff, including with respect to addressing interpretive and implementation issues;
• Provide legal guidance with respect to the CAT budgets;
• Provide background assistance to other counsel for CAT matters;
• Assist with legal responses related to third-party data requests; and
• Provide legal support regarding CAT policies and procedures.
CAT LLC estimated the budget for the legal costs for WilmerHale for the CAT Fee 2025-2 Period through an analysis of a variety of factors, including WilmerHale fee rates, historical legal fees, and information related to pending legal issues and potential future legal issues.
During the CAT Fee 2025-2 Period, it is anticipated that Jenner will continue to provide legal assistance to CAT LLC regarding certain litigation matters, including: (1) CAT LLC's defense against a lawsuit filed in the Western District of Texas against the SEC Chair, the SEC and CAT LLC challenging the validity of Rule 613 and the CAT and alleging various constitutional, statutory, and common law claims;
CAT LLC estimated the budget for the legal costs for Jenner for the CAT Fee 2025-2 Period through an analysis of a variety of factors, including Jenner's fee rates, historical legal fees, and information related to pending legal issues and potential future legal issues.
CAT LLC estimated the budget for the legal services for the CAT Fee 2025-2 Period based on an analysis of a variety of factors, including law firm fee rates, historical legal fees, and information related to pending legal issues and potential future legal issues. This process for estimating the budget for the legal services for CAT Fee 2025-2 Period is the same process by which CAT LLC estimated the legal cost for the Original 2025 CAT Budget. The Original 2025 CAT Budget estimated a budget for legal costs of $1,430,000 for the first quarter of 2025. The actual costs for legal services for the first quarter of 2025, which are set forth in the Updated
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for legal costs from the prior CAT Fee filing. Accordingly, this filing describes the changes in the legal costs from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budgeted legal costs as set forth in the Original 2025 CAT Budget were $5,720,000, and the annual 2025 budgeted legal costs as set forth in the Updated 2025 CAT Budget are $7,370,002. Accordingly, the annual budget for legal costs increased by $1,650,002 from the Original 2025 CAT Budget to the Updated 2025 CAT Budget for the full year of 2025.
Correspondingly, the budgeted legal costs for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget were $2,860,000,
This budgeted increase in the legal costs in the Updated 2025 CAT Budget from the Original 2025 Budget, both for the full year for 2025 and for the third and fourth quarters of 2025, was primarily due to an anticipated increase in legal costs related to litigation matters as well as regulatory and corporate legal matters.
Section 11.3(a)(iii)(B)(B)(3) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the consulting costs set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that included $866,167 in consulting costs for the CAT Fee 2025-2 Period. The consulting costs represent the fees estimated to be paid to the consulting firm Deloitte & Touche LLP (“Deloitte”) as project manager during the CAT Fee 2025-2 Period. These consulting costs include costs for advisory services related to the operation of the CAT, and meeting facilitation and communications coordination, vendor support and financial analyses.
It is anticipated that the costs for CAT during the CAT Fee 2025-2 Period will include costs related to consulting services performed by Deloitte. CAT LLC anticipates that it will continue to employ Deloitte during the CAT Fee 2025-2 Period based on, among other things, their expertise, long history with the project, and the recognition that it is anticipated that the consulting fees will remain in line with market rates for this type of specialized consulting work. Deloitte's fee rates are negotiated on an annual basis. CAT LLC assesses Deloitte's performance and reviews prospective budgets and staffing plans submitted by Deloitte on an annual basis. The consulting fees will be paid by CAT LLC to Deloitte.
It is anticipated that Deloitte will provide a variety of consulting services to the CAT during the CAT Fee 2025-2 Period, including the following:
• Implement program operations for the CAT project;
• Provide support to the Operating Committee, the Chair of the Operating Committee and the Leadership Team, including project management support, coordination and planning for meetings and communications, and interfacing with law firms and the SEC;
• Assist with cost and funding matters for the CAT, including assistance with loans and the CAT bank account for CAT funding;
• Provide support for updating the SEC on the progress of the development of the CAT; and
• Provide support for third party vendors for the CAT, including FCAT, Anchin and the law firms engaged by CAT LLC.
In addition, the consulting costs include the compensation for the Chair of the CAT Operating Committee.
CAT LLC estimates that the budget for consulting costs during the CAT Fee 2025-2 Period will be approximately $866,167. The budget for consulting costs during the CAT Fee 2025-2 Period is calculated based on the Updated 2025 CAT Budget. Specifically, this estimate was calculated by adding the budgeted amounts for consulting services for the third and fourth quarters of 2025 as set forth in the Updated 2025 CAT Budget.
CAT LLC estimates the budget for the consulting costs for Deloitte for the CAT Fee 2025-2 Period based on the current statement of work with Deloitte, which took into consideration past consulting costs, potential future consulting needs, the proposed rates and other contractual issues, as well as discussions with Deloitte. This process for estimating the budget for consulting costs for the CAT Fee 2025-2 Period is the same process by which CAT LLC estimated the consulting costs for the Original 2025 CAT Budget. The Original 2025 CAT Budget estimated a budget for consulting services of $437,500 for the first quarter of 2025. The actual costs for consulting services for the first quarter of 2025, which are set forth in the Updated 2025 CAT Budget, were $450,745. Therefore, the variance between budgeted and actual consulting costs for the first quarter of 2025 was approximately 3%. Accordingly, CAT LLC believes that the process for estimating the budgeted consulting costs for the CAT Fee 2025-2 Period is reasonable.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for consulting costs from the prior CAT Fee filing. Accordingly, this filing describes the changes in the consulting costs from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budget for consulting costs as set forth in the Original 2025 CAT Budget was $1,750,000, and the annual 2025 budget for consulting costs as set forth in the Updated 2025 CAT Budget is approximately $1,750,000. Accordingly, the annual budget for consulting costs has not changed from the Original 2025 CAT Budget to the Updated 2025 CAT Budget for the full year of 2025.
Correspondingly, the budget for consulting costs for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget was $875,000,
Section 11.3(a)(iii)(B)(B)(4) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the insurance costs set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that included $1,594,452 in insurance costs for the CAT Fee 2025-2 Period. The insurance costs represent the costs to be incurred for insurance for CAT during the CAT Fee 2025-2 Period.
It is anticipated that the insurance costs for CAT during the CAT Fee 2025-2 Period will include costs related to cyber security liability insurance, directors' and officers' liability insurance, and errors and omissions liability insurance brokered by USI Insurance Services LLC (“USI”). Such policies are standard for corporate entities, and cyber security liability insurance is important for the CAT System. CAT LLC anticipates that it will continue to maintain this insurance during the CAT Fee 2025-2 Period, and notes that the annual premiums for these policies were competitive for the coverage provided. CAT LLC estimated the budget for the insurance costs for the CAT Fee 2025-2 Period based on the insurance estimate from USI for 2025. The annual premiums would be paid by CAT LLC to USI.
The budgeted insurance costs for the CAT Fee 2025-2 Period are based on an insurance cost estimate from USI for 2025. Accordingly, CAT LLC believes that the process for estimating the budgeted insurance costs for the CAT Fee 2025-2 Period is reasonable.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for insurance costs from the prior CAT Fee filing. Accordingly, this filing describes the changes in the insurance costs from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budgeted insurance costs as set forth in the Original 2025 CAT Budget were $1,594,452, and the annual 2025 budgeted insurance costs as set forth in the Updated 2025 CAT Budget are $1,594,452. Accordingly, the annual budgeted insurance costs remained the same for the Original 2025 CAT Budget and the Updated 2025 CAT Budget for the full year of 2025.
Correspondingly, the budgeted insurance costs for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget were $1,594,452,
Section 11.3(a)(iii)(B)(B)(5) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the professional and administration costs set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that included $609,818 in professional and administration costs for the CAT Fee 2025-2 Period. In adopting the CAT NMS Plan, the Commission amended the Plan to add a requirement that CAT LLC's financial statements be prepared in compliance with GAAP, audited by an independent public accounting firm, and made publicly available.
It is anticipated that Anchin will provide a variety of services to the CAT during the CAT Fee 2025-2 Period, including the following:
• Update and maintain internal controls;
• Provide cash management and treasury functions;
• Facilitate bill payments to vendors;
• Facilitate repayments of promissory notes to Participants;
• Provide monthly bookkeeping;
• Review vendor invoices and documentation in support of cash disbursements;
• Review documentation to ensure that repayments of promissory notes to Participants are in accordance with established policies and procedures;
• Provide accounting research and consultations on various accounting, financial reporting and tax matters;
• Address not-for-profit tax and accounting considerations;
• Prepare tax returns;
• Address various accounting, financial reporting and operating inquiries from Participants;
• Develop and maintain annual operating and financial budgets, including budget to actual fluctuation analyses;
• Support compliance with the CAT NMS Plan;
• Work with and provide support to the Operating Committee and various CAT working groups;
• Prepare monthly, quarterly and annual financial statements;
• Review and reconcile the monthly FINRA CAT reports/analyses related to billings, collections, outstanding accounts receivable and cash account;
• Perform certain verification, completeness, and validation testing related to the monthly FINRA CAT reports/analyses related to billings;
• Support the annual financial statement audits by an independent auditor;
• Review historical costs from inception;
• Provide accounting and financial information in support of SEC filings; and
• Perform additional ad hoc accounting and financial advisory services, as requested by CAT LLC.
CAT LLC estimated the annual budget for the costs for Anchin based on historical costs adjusted for cost of living rate increases, and projected incremental advisory and support services.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for professional and administration costs from the prior CAT Fee filing. Accordingly, this filing describes the changes in the professional and administration costs from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budgeted professional and administration costs as set forth in the Original 2025 CAT Budget were $882,456, and the annual 2025 budgeted professional and administration costs as set forth in the Updated 2025 CAT Budget are $1,193,090. Accordingly, the budgeted annual costs for professional and administration services increased by $310,634 from the Original 2025 CAT Budget to the Updated 2025 CAT Budget for the full year of 2025.
Correspondingly, the budgeted costs for professional and administration services for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget were $444,246,
This budgeted increase in the professional and administration costs in the Updated 2025 CAT Budget from the Original 2025 Budget, both for the full year for 2025 and for the third and fourth quarters of 2025, was primarily due to increases in both financial advisory costs and accounting costs as a result of additional anticipated efforts related to billings and collections of fees from Participants and Industry Members, coupled with expected incremental efforts related to supporting CAT LLC's independent auditors for the 2024 audit.
Section 11.3(a)(iii)(B)(B)(6) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for public relations costs from the prior CAT Fee filing. Accordingly, this filing describes the changes in the public relations costs from the Updated 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual budgeted public relations costs for 2025 as set forth in the Original 2025 CAT Budget were $50,000, and the annual budgeted public relations costs for 2025 as set forth in the Updated 2025 CAT Budget are $6,575. Accordingly, the annual budget for public relations cost for 2025 decreased by $43,425 from the Original 2025 CAT Budget to the Updated 2025 CAT Budget for the full year of 2025.
Correspondingly, the budgeted costs for public relations services for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget were $25,000,
This budgeted decrease in the public relations costs from the Original 2025 CAT Budget to the Updated 2025 CAT Budget, both for the full year for 2025 and for the third and fourth quarters of 2025, was primarily due to CAT LLC's anticipation that it would not engage a public relations firm for the remainder of 2025.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the reserve costs set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that includes a reserve amount for 2025. Section 11.1(a)(i) of the CAT NMS Plan states that the budget shall include a reserve. Section 11.1(a)(ii) of the CAT NMS Plan further describes the reserve as follows:
For the reserve referenced in paragraph (a)(i) of this Section, the budget will include an amount reasonably necessary to allow the Company to maintain a reserve of not more than 25% of the annual budget. To the extent collected CAT fees exceed CAT costs, including the reserve of 25% of the annual budget, such surplus shall be used to offset future fees. For the avoidance of doubt, the Company will only include an amount for the reserve in the annual budget if the Company does not have a sufficient reserve (which shall be up to but not more than 25% of the annual budget). For the avoidance of doubt, the calculation of the amount of the reserve would exclude the amount of the reserve from the budget.
CAT LLC determined to maintain a reserve in the amount of 25% of the total expenses set forth in Updated 2025 CAT Budget (which does not include the reserve amount). Accordingly, the total 25% reserve was calculated by multiplying the total expenses set forth in the Updated 2025 CAT Budget (other than the reserve) by 25%, which is $57,083,638.
The Updated 2025 CAT Budget states that CAT LLC had accrued $70,942,596 for the reserve as of the beginning of 2025, and an additional $28,846,075 during the first quarter of 2025, from the collection of CAT Fees 2024-1 and 2025-1 and the related Participant CAT Fees. In addition, the Updated 2025 CAT Budget anticipates the collection of an additional $11,821,477 during the second quarter of 2025 via CAT Fee 2025-1 and the related Participant CAT Fee. Accordingly, the Updated 2025 CAT Budget estimates that CAT LLC would collect a surplus reserve amount through June 2025 of $54,526,412 over the 25% reserve amount of $57,083,638.
Such surplus was related, in part, to (i) the collection of CAT fees in excess of the budgeted CAT costs for 2024 and 2025 in light of the greater actual executed equivalent share volume than the projected executed equivalent share volume for CAT Fees 2024-1 and 2025-1, and (ii) a reduction in anticipated budgeted costs associated with the implementation of certain cost savings measures approved by the SEC pertaining to the processing of options market maker quotes and the storage of certain data.
As set forth in the Budgeted CAT Costs 2025-2, the surplus reserve balance of $54,526,412 would be used to offset a portion of CAT costs for the third and fourth quarters of 2025, thereby reducing the fee rate to be paid for CAT Fee 2025-2. Specifically, the
Accordingly, the fee rate for CAT Fee 2025-2 is calculated based on this reduced amount of $60,726,412, resulting in a fee rate of $0.000009 per executed equivalent share. If the fee rate for CAT Fee 2025-2 were calculated solely based on the reasonably budgeted costs for CAT for July—December 2025 excluding the reduction in that amount due to the surplus reserve offset (that is, based on $115,252,921, not $60,726,412), the fee rate would be the higher rate of $0.000017.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for a reserve from the prior CAT Fee filing. Accordingly, this filing describes the changes in the reserve from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
For the Original 2025 CAT Budget, CAT LLC determined to maintain a reserve in the amount of 25% of budgeted CAT costs (other than the reserve). Accordingly, the total 25% reserve was calculated by multiplying the budgeted CAT costs (other than the reserve) as set forth in the Original 2025 CAT Budget (which is $248,846,076) by 25%, for a target reserve amount of $62,211,519. However, the Original 2025 CAT Budget recognized that a portion of the reserve—$38,369,315—would have been previously collected, and therefore would not need to be included the budgeted CAT costs to be recovered by the CAT Fees. Specifically, the Original 2025 CAT Budget recognized that there was (i) a liquidity reserve balance of $27,695,385 at the beginning of 2025, (ii) a favorable variance of $10,084,698 for budgeted versus actual cloud hosting services costs covering the period from July 16, 2024 through September 30, 2024, and (iii) a Participation Fee from a new Participant in the CAT NMS Plan of $589,232. These three items totaled $38,369,315. Accordingly, the Original 2025 CAT Budget only included $23,842,200 to be collected towards the reserve via the CAT Fee. This $23,842,200 is calculated by reducing the total 25% reserve amount of $62,211,519 by the $38,369,315 previously collected for the reserve. In the Original 2025 CAT Budget, the budget anticipated collecting the remaining reserve amount of $23,842,200 evenly throughout the year, that is, $5,960,500 for each quarter.
As discussed above, CAT LLC determined to maintain a reserve in the amount of 25% of the budgeted CAT costs (other than the reserve). Accordingly, the total 25% reserve was calculated by multiplying the budgeted CAT costs (other than the reserve) as set forth in the Updated 2025 CAT Budget (which is $228,334,551) by 25%, for a target reserve amount of $57,083,638.
As discussed above, such surplus reserve balance of $54,526,412 would be used to offset a portion of CAT costs for the third and fourth quarters of 2025, thereby reducing the fee rate for CAT Fee 2025-2 in accordance with Section 11.1(a)(ii) of the CAT NMS Plan. Section 11.1(a)(ii) of the CAT NMS Plan states that “[t]o the extent collected CAT fees exceed CAT costs, including the reserve of 25% of the annual budget, such surplus shall be used to offset future fees.”
The calculation of Fee Rate 2025-2 also requires the determination of the projected total executed equivalent share volume of transactions in Eligible Securities for the CAT Fee 2025-2 Period. Under the CAT NMS Plan, the Operating Committee is required to “reasonably determine the projected total executed equivalent share volume of all transactions in Eligible Securities for each relevant period based on the executed equivalent share volume of all transactions in Eligible Securities for the prior twelve months.”
The total executed equivalent share volume of transactions in Eligible Securities for the 12-month period from April 2024 through March 2025 was 4,580,287,680,646.28 executed equivalent shares. The Operating Committee has determined to calculate the projected total executed equivalent share volume for the six-month recovery period for CAT Fee 2025-2 by multiplying by one-half the executed equivalent share volume for the 12-month period from April 2024 through March 2025. The Operating Committee determined that such an approach was reasonable as the CAT's annual executed equivalent share volume has remained relatively constant. For example, the executed equivalent share volume for 2021 was 3,963,697,612,395, the executed equivalent share volume for 2022 was 4,039,821,841,560.31, the executed equivalent share volume for 2023 was 3,868,940,345,680.6, and the executed equivalent share volume for
The projected total executed equivalent share volume of all transactions in Eligible Securities for the six-month recovery period for CAT Fee 2025-2 and a description of the calculation of the projection is provided in this filing in accordance with the requirement in the CAT NMS Plan to provide such information in a fee filing for a CAT Fee.
Fee Rate 2025-2 would be calculated by dividing the Budgeted CAT Costs 2025-2 by the reasonably projected total executed equivalent share volume of all transactions in Eligible Securities for the six-month recovery period for CAT Fee 2025-2, as described in detail above.
CEBBs and CEBSs would be required to pay fees for CAT Fee 2025-2 on a monthly basis for six months, from August 2025 until January 2026. A CEBB's or CEBS's fee for each month would be calculated based on the transactions in Eligible Securities executed by the CEBB or CEBS from the prior month.
To implement CAT Fee 2025-2, the Exchange proposes to add a new paragraph to the “Consolidated Audit Trail Funding Fees” section of the Exchange's Fee Schedule, to include the proposed paragraphs described below.
The CAT NMS Plan states that:
Each Industry Member that is the CAT Executing Broker for the buyer in a transaction in Eligible Securities (“CAT Executing Broker for the Buyer” or “CEBB”) and each Industry Member that is the CAT Executing Broker for the seller in a transaction in Eligible Securities (“CAT Executing Broker for the Seller” or “CEBS”) will be required to pay a CAT Fee for each such transaction in Eligible Securities in the prior month based on CAT Data. The CEBB's CAT Fee or CEBS's CAT Fee (as applicable) for each transaction in Eligible Securities will be calculated by multiplying the number of executed equivalent shares in the transaction by one-third and by the Fee Rate reasonably determined pursuant to paragraph (a)(i) of this Section 11.3.
Accordingly, based on the factors discussed above, the Exchange proposes to add paragraph (a)(5) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule. Proposed paragraph (a)(5) would state the following:
(A) Each CAT Executing Broker shall receive its first invoice for CAT Fee 2025-2 in August 2025, which shall set forth the CAT Fee 2025-2 fees calculated based on transactions in July 2025, and shall receive an invoice for CAT Fee 2025-2 for each month thereafter until January 2026.
(B) Consolidated Audit Trail, LLC shall provide each CAT Executing Broker with an invoice for CAT Fee 2025-2 on a monthly basis. Each month, such invoices shall set forth a fee for each transaction in Eligible Securities executed by the CAT Executing Broker in its capacity as a CAT Executing Broker for the Buyer (“CEBB”) and/or the CAT Executing Broker for the Seller (“CEBS”) (as applicable) from the prior month as set forth in CAT Data. The fee for each such transaction will be calculated by multiplying the number of executed equivalent shares in the transaction by the fee rate of $0.000009 per executed equivalent share.
(C) Notwithstanding the last invoice date of January 2026 for CAT Fee 2025-2 in paragraph 5(A), CAT Fee 2025-2 shall continue in effect after January 2026, with each CAT Executing Broker receiving an invoice for CAT Fee 2025-2 each month, until a new subsequent CAT Fee is in effect with regard to Industry Members in accordance with Section 19(b) of the Exchange Act. Consolidated Audit Trail, LLC will provide notice when CAT Fee 2025-2 will no longer be in effect.
(D) Each CAT Executing Broker shall be required to pay each invoice for CAT Fee 2025-2 in accordance with paragraph (b).
As noted in the Plan amendment for the CAT Funding Model, “[a]s a practical matter, the fee filing would provide the exact fee per executed equivalent share to be paid for the CAT Fees, by multiplying the Fee Rate by one-third and describing the relevant number of decimal places for the fee.”
The proposed language in paragraph (a)(5)(A) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule would describe when CAT Executing Brokers would receive their first monthly invoice for CAT Fee 2025-2. Specifically, CAT Executing Brokers would receive their first monthly invoice for CAT Fee 2025-2 in August 2025 and the fees set forth in that invoice would be calculated based on transactions executed in July 2025. The payment for the first invoice would be required within 30 days after the receipt of the first invoice (unless a longer period is indicated), as described in paragraph (b)(2) of the Fee Schedule.
Proposed paragraph (a)(5)(A) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule also would describe the monthly cadence of the invoices for CAT Fee 2025-2. Specifically, after the first invoices are
Proposed paragraph (a)(5)(B) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule would describe the invoices for CAT Fee 2025-2. Proposed paragraph (a)(5)(B) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule would state that “Consolidated Audit Trail, LLC shall provide each CAT Executing Broker with an invoice for CAT Fee 2025-2 on a monthly basis.” Proposed paragraph (a)(5)(B) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule also would describe the fees to be set forth in the invoices for CAT Fee 2025-2. Specifically, it would state that “[e]ach month, such invoices shall set forth a fee for each transaction in Eligible Securities executed by the CAT Executing Broker in its capacity as a CAT Executing Broker for the Buyer (`CEBB') and/or the CAT Executing Broker for the Seller (`CEBS') (as applicable) from the prior month as set forth in CAT Data. The fee for each such transaction will be calculated by multiplying the number of executed equivalent shares in the transaction by the fee rate of $0.000009 per executed equivalent share.”
Since CAT Fee 2025-2 is a monthly fee based on actual transaction volume from the prior month, CAT Fee 2025-2 may collect more or less than two-thirds of the Budgeted CAT Costs 2025-2. To the extent that CAT Fee 2025-2 collects more than two-thirds of the Budgeted CAT Costs 2025-2, any excess money collected will be used to offset future fees and/or to fund the reserve for the CAT. To the extent that CAT Fee 2025-2 collects less than two-thirds of the Budgeted CAT Costs 2025-2, the budget for the CAT in the ensuing months will reflect such shortfall.
Furthermore, proposed paragraph (a)(5)(C) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule would describe how long CAT Fee 2025-2 would remain in effect. It would state that “[n]otwithstanding the last invoice date of January 2026 for CAT Fee 2025-2 in paragraph 5(A), CAT Fee 2025-2 shall continue in effect after January 2026, with each CAT Executing Broker receiving an invoice for CAT Fee 2025-2 each month, until a new subsequent CAT Fee is in effect with regard to Industry Members in accordance with Section 19(b) of the Exchange Act. Consolidated Audit Trail, LLC will provide notice when CAT Fee 2025-2 will no longer be in effect.”
Finally, proposed paragraph (a)(5)(D) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule would set forth the requirement for the CAT Executing Brokers to pay the invoices for CAT Fee 2025-2. It would state that “[e]ach CAT Executing Broker shall be required to pay each invoice for CAT Fee 2025-2 in accordance with paragraph (b).”
Paragraph (b)(1) of the “Consolidated Audit Trail Funding Fees” section of the Fee Schedule describes the manner of payment of Industry Member CAT fees. It states that “[e]ach CAT Executing Broker shall pay its CAT fees as required pursuant to paragraph (a) each month to the Consolidated Audit Trail, LLC in the manner prescribed by the Consolidated Audit Trail, LLC.” The CAT NMS Plan requires the Operating Committee to establish a system for the collection of CAT fees.
The CAT NMS Plan further states that:
Participants shall require each Industry Member to pay all applicable fees authorized under this Article XI within thirty (30) days after receipt of an invoice or other notice indicating payment is due (unless a longer payment period is otherwise indicated). If an Industry Member fails to pay any such fee when due (as determined in accordance with the preceding sentence), such Industry Member shall pay interest on the outstanding balance from such due date until such fee is paid at a per annum rate equal to the lesser of: (a) the Prime Rate plus 300 basis points; or (b) the maximum rate permitted by applicable law.
Paragraph (b)(2) of the Consolidated Audit Trail Funding Fees section of the Fee Schedule states that:
Each CAT Executing Broker shall pay the CAT fees required pursuant to paragraph (a) within thirty days after receipt of an invoice or other notice indicating payment is due (unless a longer payment period is otherwise indicated). If a CAT Executing Broker fails to pay any such CAT fee when due, such CAT Executing Broker shall pay interest on the outstanding balance from such due date until such fee is paid at a per annum rate equal to the lesser of (i) the Prime Rate plus 300 basis points, or (ii) the maximum rate permitted by applicable law.
The requirements of paragraph (b)(2) would apply to CAT Fee 2025-2.
The CAT NMS Plan states that:
Details regarding the calculation of a Participant or CAT Executing Broker's CAT Fees will be provided upon request to such Participant or CAT Executing Broker. At a minimum, such details would include each Participant or CAT Executing Broker's executed equivalent share volume and corresponding fee by (1) Listed Options, NMS Stocks and OTC Equity Securities, (2) by transactions executed on each exchange and transactions executed otherwise than on an exchange, and (3) by buy-side transactions and sell-side transactions.
Such information would provide CEBBs and CEBSs with the ability to understand the details regarding the calculation of their CAT Fee.
In addition, CAT LLC will make certain aggregate statistics regarding CAT Fees publicly available. Specifically, the CAT NMS Plan states that, “[f]or each CAT Fee, at a minimum, CAT LLC will make publicly available the aggregate executed equivalent share volume and corresponding aggregate fee by (1) Listed Options, NMS Stocks and OTC Equity Securities, (2) by transactions executed on each exchange and transactions executed otherwise than on an exchange, and (3) by buy-side transactions and sell-side transactions.”
Furthermore, CAT LLC will make publicly available on the CAT website the total amount invoiced each month that CAT Fee 2025-2 is in effect as well as the total amount invoiced for CAT Fee 2025-2 for all months since its commencement. CAT LLC also will make publicly available on the CAT
The CAT NMS Plan states that “[n]o Participant will make a filing with the SEC pursuant to Section 19(b) of the Exchange Act regarding any CAT Fee related to Prospective CAT Costs until the Financial Accountability Milestone related to Period 4 described in Section 11.6 has been satisfied.”
CAT LLC intends for CAT Fee 2025-2 to replace CAT Fee 2025-1 (which has a fee rate of $0.000022).
While CAT Fees charged to Industry Members become effective in accordance with the requirements of Section 19(b) of the Exchange Act,
[e]ach Participant shall pay all fees or other amounts required to be paid under this Agreement within thirty (30) days after receipt of an invoice or other notice indicating payment is due (unless a longer payment period is otherwise indicated) (the “Payment Date”). The Participant shall pay interest on the outstanding balance from the Payment Date until such fee or amount is paid at a per annum rate equal to the lesser of: (i) Prime Rate plus 300 basis points; or (ii) the maximum rate permitted by applicable law.
The Exchange believes the proposed rule change is consistent with the requirements of the Exchange Act. The Exchange believes that the proposed rule change is consistent with Section 6(b)(5) of the Act,
The Exchange believes that this proposal is consistent with the Act because it implements provisions of the Plan and is designed to assist the Exchange in meeting regulatory obligations pursuant to the Plan. In approving the Plan, the SEC noted that the Plan “is necessary and appropriate in the public interest, for the protection of investors and the maintenance of fair and orderly markets, to remove impediments to, and perfect the mechanism of a national market system, or is otherwise in furtherance of the purposes of the Act.”
The Exchange believes that the proposed fees to be paid by the CEBBs and CEBSs are reasonable, equitably allocated and not unfairly discriminatory. First, the CAT Fee
The proposed CAT Fee 2025-2 fees would be charged to Industry Members in support of the maintenance of a consolidated audit trail for regulatory purposes. The proposed fees, therefore, are consistent with the Commission's view that regulatory fees be used for regulatory purposes and not to support the Exchange's business operations. The proposed fees would not cover Exchange services unrelated to the CAT. In addition, any surplus would be used as a reserve to offset future fees. Given the direct relationship between CAT fees and CAT costs, the Exchange believes that the proposed fees are reasonable, equitable and not unfairly discriminatory.
As further discussed below, the SEC approved the CAT Funding Model, finding it was reasonable and that it equitably allocates fees among Participants and Industry Members. The Exchange believes that the proposed fees adopted pursuant to the CAT Funding Model approved by the SEC are reasonable, equitably allocated and not unfairly discriminatory.
Section 11.1(b) of the CAT NMS Plan states that “[t]he Participants shall file with the SEC under Section 19(b) of the Exchange Act any such fees on Industry Members that the Operating Committee approves.” Per Section 11.1(b) of the CAT NMS Plan, the Exchange has filed this fee filing to implement the Industry Member CAT fees included in the CAT Funding Model. The Exchange believes that this proposal is consistent with the Exchange Act because it is consistent with, and implements, the CAT Funding Model in the CAT NMS Plan, and is designed to assist the Exchange and its Industry Members in meeting regulatory obligations pursuant to the CAT NMS Plan. In approving the CAT NMS Plan, the SEC noted that the Plan “is necessary and appropriate in the public interest, for the protection of investors and the maintenance of fair and orderly markets, to remove impediments to, and perfect the mechanism of a national market system, or is otherwise in furtherance of the purposes of the Act.”
The SEC has determined that the CAT Funding Model is reasonable and satisfies the requirements of the Exchange Act. Specifically, the SEC has concluded that the method for determining CAT Fees as set forth in Section 11.3 of the CAT NMS Plan, including the formula for calculating the Fee Rate, the identification of the parties responsible for payment and the transactions subject to the fee rate for CAT Fees, is reasonable and satisfies the Exchange Act.
The formula for calculating a Fee Rate requires the amount of Budgeted CAT Costs to be recovered. Specifically, Section 11.3(a)(iii)(B) of the CAT NMS Plan requires a fee filing to provide:
In accordance with this requirement, the Exchange has set forth the amount and type of Budgeted CAT Costs 2025-2 for each of these categories above.
Section 11.3(a)(iii)(B) of the CAT NMS Plan also requires that the fee filing provide “sufficient detail to demonstrate that the budget for the upcoming year, or part of year, as applicable, is reasonable and appropriate.” As discussed below, the Exchange believes that the budget for the CAT Fee 2025-2 Period is “reasonable and appropriate.” Each of the costs included in CAT Fee 2025-2 are reasonable and appropriate because the costs are consistent with standard industry practice, based on the need to comply with the requirements of the CAT NMS Plan, incurred subject to negotiations performed on an arm's length basis, and/or are consistent with the needs of any legal entity, particularly one with no employees.
In approving the CAT Funding Model, the Commission recognized that it is appropriate to recover budgeted costs related to cloud hosting services as a part of CAT Fees.
To comply with the requirements of the Plan, the breadth of the cloud activities related to the CAT is substantial. The cloud services not only include the production environment for the CAT, but they also include two industry testing environments, support environments for quality assurance and stress testing and disaster recovery capabilities. Moreover, the cloud storage costs are driven by the requirements of the Plan, which requires the storage of multiple versions of the data, from the original submitted version of the data through various processing steps, to the final version of the data.
Data volume is a significant driver of costs for cloud hosting services. When the Commission adopted the CAT NMS Plan in 2016, it estimated that the CAT would need to receive 58 billion records per day
In addition to the effect of the data volume on the cloud hosting costs, the processing timelines set forth in the Plan contribute to the cloud hosting costs. Although CAT LLC has proactively sought to manage cloud hosting costs while complying with the Plan, including through requests to the Commission for exemptive relief and amendments to the CAT NMS Plan to reduce costs, stringent CAT NMS Plan requirements do not allow for any material flexibility in cloud architecture design choices, processing timelines (
The costs for cloud hosting services also reflect the need for specialized cloud hosting services given the data volume and unique processing needs of the CAT. The data volume as well as the data processing needs of the CAT necessitate the use of cloud hosting services. The equipment, power and services required for an on-premises data model, the alternative to cloud hosting services, would be cost prohibitive. Moreover, as CAT was being developed, there were limited cloud hosting providers that could satisfy all the necessary CAT requirements, including the operational and security criteria. Over time, more providers offering cloud hosting services that would satisfy these criteria have entered the market. CAT LLC will continue to evaluate alternative cloud hosting services, recognizing that the time and cost to move to an alternative cloud provider would be substantial.
The reasonableness of the cloud hosting services costs is further supported by key cost discipline mechanisms for the CAT—a cost-based funding structure, cost transparency, cost management efforts (including regular efforts to lower compute and storage costs where permitted by the Plan) and oversight. Together, these mechanisms help ensure the ongoing reasonableness of the CAT's costs and the level of fees assessed to support those costs.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted costs related to operating fees as a part of CAT Fees.
The operating fees would include the negotiated fees paid by CAT LLC to the Plan Processor to operate and maintain the system for order-related information and to perform business operations related to the system, including compliance, security, testing, training, communications with the industry (
The operating costs also include costs related to the receipt of market data. CAT LLC anticipates receiving certain market data from Algoseek during the CAT Fee 2025-2 Period. CAT LLC anticipates that Algoseek will provide data as set forth in the SIP Data requirements of the CAT NMS Plan and that the fees are reasonable and in line with market rates for market data received.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted costs related to CAIS operating fees as a part of CAT Fees.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted costs related to change request fees as a part of CAT Fees.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted costs related to capitalized developed technology costs as a part of CAT Fees.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted costs related to legal fees as a part of CAT Fees.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted consulting costs as a part of CAT Fees.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted insurance costs as a part of CAT Fees.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted professional and administration costs as a part of CAT Fees.
CAT LLC anticipates continuing to make use of Anchin, a financial advisory firm, to assist with financial matters for the CAT. CAT LLC determined that the budgeted costs for Anchin were appropriate, as the financial advisory services were to be provided at reasonable market rates that were comparable to the rates charged by other such firms for similar work. Moreover, the total budgeted costs for such financial advisory services were appropriate in light of the breadth of
CAT LLC anticipates continuing to make use of Grant Thornton, an independent accounting firm, to complete the audit of CAT LLC's financial statements, in accordance with the requirements of the CAT NMS Plan. CAT LLC determined that the budgeted costs for Grant Thornton were appropriate, as the accounting services were to be provided at reasonable market rates that were comparable to the rates charged by other such firms for similar work. Moreover, the total budgeted costs for such accounting services were appropriate in light of the breadth of services provided by Grant Thornton. The services budgeted to be performed by Grant Thornton and the budgeted costs related to such services are described above.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted public relations costs as a part of CAT Fees.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted reserve costs as a part of CAT Fees.
In its approval order for the CAT Funding Model, the Commission stated that it would be reasonable for the annual operating budget for the CAT to “include a reserve of not more than 25% of the annual budget.”
Because the CAT is a critical regulatory tool/system, the CAT needs to have a stable funding source to build financial stability to support the Company as a going concern. Funding for the CAT, as noted in Section 11.1(b), is the responsibility of the Participants and the industry. Because CAT fees are charged based on the budget, which is based on anticipated volume, it is reasonable to have a reserve on hand to prevent a shortfall in the event there is an unexpectedly high volume in a given year. A reserve would help to assure that the CAT has sufficient resources to cover costs should there be unanticipated costs or costs that are higher than expected.
The SEC also recognized that a reserve would help address the difficulty in predicting certain variable CAT costs, like trading volume.
As discussed further below,
The CAT NMS Plan also requires fee filings for Prospective CAT Fees to include “a discussion of how the budget is reconciled to the collected fees.”
The total executed equivalent share volume of transactions in Eligible Securities for the period from April 2024 through March 2025 was 4,580,287,680,646.28 executed equivalent shares. CAT LLC determined the total executed equivalent share volume for the prior twelve months by counting executed equivalent shares in the same manner as it counts executed equivalent shares for CAT billing purposes.
CAT LLC has determined that the projected total executed equivalent share volume for the six months of CAT Fee 2025-2 Period by multiplying by one-half the executed equivalent share volume for the prior twelve months: one-half times 4,580,287,680,646.28 executed equivalent shares.
As noted in the approval order for the CAT Funding Model, as a practical matter, the fee filing for a CAT Fee would provide the exact fee per executed equivalent share to be paid for each CAT Fee, by multiplying the Fee Rate by one-third and describing the relevant number of decimal places for the fee rate.
The Exchange believes that charging CAT Fee 2025-2 with a fee rate of $0.000009 per executed equivalent share is reasonable because it provides for a revenue stream for the Company that is aligned with the Budgeted CAT Costs 2025-2. Moreover, the Exchange believes that the level of the fee rate is reasonable, as it is less than CAT Fee 2025-1 and is comparable to other transaction-based fees. Indeed, CAT Fee 2025-2 is significantly lower than fees previously assessed pursuant to Section 31 (
CAT Fee 2025-2 provides for an equitable allocation of fees, as it equitably allocates CAT costs between and among the Participants and Industry Members. The SEC approved the CAT Funding Model, finding that each aspect of the CAT Funding Model satisfied the requirements of the Exchange Act, including the formula for calculating CAT Fees as well as the Industry Members to be charged the CAT Fees.
CAT Fee 2025-2 provides for an equitable allocation of fees as it complies with the requirements regarding the calculation of CAT Fees as set forth in the CAT NMS Plan. For example, as described above, the calculation of CAT Fee 2025-2 complies with the formula set forth in Section 11.3(a) of the CAT NMS Plan. In addition, CAT Fee 2025-2 would be charged to CEBBs and CEBSs in accordance with Section 11.3(a) of the CAT NMS Plan. Furthermore, the Participants would be charged for their designated share of the Budgeted CAT Costs 2025-2 through a fee implemented via the CAT NMS Plan, which would have the same fee rate as CAT Fee 2025-2.
In addition, as discussed above, each of the inputs into the calculation of CAT Fee 2025-2—the Budgeted CAT Costs 2025-2, the count for the executed equivalent share volume for the prior 12 months, and the projected executed equivalent share volume for the CAT Fee 2025-2 Period—are reasonable. Moreover, these inputs lead to a reasonable fee rate for CAT Fee 2025-2 that is lower than other fee rates for transaction-based fees. A reasonable fee rate allocated in accordance with the requirements of the CAT Funding Model provides for an equitable allocation of fees.
CAT Fee 2025-2 is not an unfairly discriminatory fee. The SEC approved the CAT Funding Model, finding that each aspect of the CAT Funding Model satisfies the requirements of the Exchange Act. In reaching this conclusion, the SEC analyzed the potential effect of CAT Fees calculated pursuant to the CAT Funding Model on affected categories of market participants, including Participants (including exchanges and FINRA), Industry Members (including subcategories of Industry Members, such as alternative trading systems, CAT Executing Brokers and market makers), and investors generally, and considered market effects related to equities and options, among other things. CAT Fee 2025-2 complies with the requirements regarding the calculation of CAT Fees as set forth in the CAT NMS Plan. In addition, as discussed above, each of the inputs into the calculation of CAT Fee 2025-2 and the resulting fee rate for CAT Fee 2025-2 is reasonable. Therefore, CAT Fee 2025-2 does not impose an unfairly discriminatory fee on Industry Members.
The Exchange believes the proposed fees established pursuant to the CAT Funding Model promote just and equitable principles of trade, and, in general, protect investors and the public interest, and are provided in a transparent manner and with specificity in the Fee Schedule. The Exchange also believes that the proposed fees are reasonable because they would provide ease of calculation, ease of billing and other administrative functions, and predictability of a fee based on fixed rate per executed equivalent share. Such factors are crucial to estimating a reliable revenue stream for CAT LLC and for permitting Exchange members to reasonably predict their payment obligations for budgeting purposes.
Section 6(b)(8) of the Act
In addition, all Participants (including exchanges and FINRA) are proposing to introduce CAT Fee 2025-2 on behalf of
Furthermore, in approving the CAT Funding Model, the SEC analyzed the potential competitive impact of the CAT Funding Model, including competitive issues related to market services, trading services and regulatory services, efficiency concerns, and capital formation.
As discussed above, each of the inputs into the calculation of CAT Fee 2025-2 is reasonable and the resulting fee rate for CAT Fee 2025-2 calculated in accordance with the CAT Funding Model is reasonable. Therefore, CAT Fee 2025-2 would not impose any burden on competition that is not necessary or appropriate in furtherance of the purpose of the Exchange Act.
No written comments were solicited or received with respect to the proposed rule change.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
On May 9, 2025, The Nasdaq Stock Market LLC (“Exchange”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
On July 1, 2025, the Exchange filed Amendment No. 1 to the proposed rule change, which replaces and supersedes the original filing. The proposed rule change, as modified by Amendment No. 1, is described in Items I and II below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change, as modified by Amendment No. 1, from interested persons.
The Exchange proposes to update certain representations made in the proposed rule change previously filed with and approved by the Commission relating to the shares of the iShares Ethereum Trust (the “Trust”) to allow for “in-kind” transfers of the Trust's ether. Shares of the Trust (“Shares”) are currently listed and traded on the Exchange under Nasdaq Rule 5711(d). This Amendment No. 1 supersedes the original filing in its entirety.
The text of the proposed rule change is available on the Exchange's website at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The Commission approved the listing and trading of the Shares on the Exchange pursuant to Nasdaq Rule 5711(d)
Coinbase Custody Trust Company, LLC (the “Ether Custodian”) is the custodian for the Trust's ether holdings, and maintains a custody account for the Trust (“Custody Account”); Coinbase, Inc. (the “Prime Execution Agent”), an affiliate of the Ether Custodian, is the prime broker for the Trust and maintains a trading account for the Trust (“Trading Account”); and The Bank of New York Mellon is the custodian for the Trust's cash holdings (the “Cash Custodian”) and the administrator of the Trust (the “Trust Administrator”).
The Exchange now proposes to amend representations regarding the Trust's creation and redemption process as set forth in the previous rule filing to list and trade Shares to allow for in-kind transfers of the Trust's ether.
The Exchange proposes to amend the Original ETHA Filing section entitled “Custody of the Trust's Ether and Creation and Redemption” to add more detail on how the Trust will handle transfers of ether in connection with the proposed in-kind creation and redemption process, and make certain conforming changes to the description of the cash creation and redemption process. As proposed, the language in the “Custody of the Trust's Ether and Creation and Redemption” section from the Original ETHA Filing will be deleted and replaced with the following language.
An investment in the Shares is backed by ether held by the Ether Custodian on behalf of the Trust. All of the Trust's ether will be held in the Custody Account, other than the Trust's ether which is temporarily maintained in the Trading Account under limited circumstances,
The Trust's ether holdings and cash holdings from time to time may temporarily be maintained in the Trading Account held with the Prime Execution Agent, an affiliate of the Ether Custodian. Coinbase Inc. serves as the Trust's Prime Execution Agent pursuant to the Trust's agreement with the Prime Execution Agent (“Prime Execution Agent Agreement”). In this capacity, the Prime Execution Agent facilitates (1) the buying and selling of ether by the Trust in response to cash creations and redemptions between the Trust and registered broker-dealers that are Depositary Trust Company (“DTC”) participants that enter into an authorized participant agreement with the Sponsor and the Trustee (“Authorized Participants”), (2) the transfer of ether between the Trust and an Authorized Participant, its designated agent or client as part of in-kind creations and redemptions, and (3) the sale of ether to pay the Sponsor's fee, any other Trust expenses not assumed by the Sponsor, to the extent applicable, and in extraordinary circumstances, in connection with the liquidation of the Trust's ether.
The Authorized Participants will deliver cash or ether to create shares and will receive cash or ether when redeeming shares.
For a cash creation or redemption of a Basket of Shares, the Authorized Participant will be required to submit the cash creation or redemption order by an early order cutoff time (the “Cash Order Cutoff Time”). The Cash Order Cutoff Time will initially be 6:00 p.m. ET on the business day prior to trade date.
For an in-kind creation or redemption of a Basket of Shares, the Authorized Participant will be required to submit the in-kind creation or redemption order by an order cutoff (“In-Kind Order Cutoff Time”). The In-Kind Order Cutoff Time will initially be 3:59 p.m. ET on the trade date.
In connection with cash creations and cash redemptions, the Authorized Participants will submit orders to create or redeem Baskets of Shares exclusively in exchange for cash. The Trust will engage in ether transactions to convert cash into ether (in association with creation orders) and ether into cash (in association with redemption orders). The Trust will conduct its ether purchase and sale transactions by, in its sole discretion, choosing to trade directly with designated third parties (each, an “Ether Trading Counterparty”), pursuant to written agreements between each such Ether Trading Counterparty and the Trust, or choosing to trade through the Prime Execution Agent acting in an agency capacity with third parties through its Coinbase Prime service
Following the Cash Order Cutoff Time for a creation order, the Trust will choose, in its sole discretion, to enter into a transaction with an Ether Trading Counterparty or the Prime Execution Agent to buy ether in exchange for the cash proceeds from such cash creation order. On settlement date for a cash creation, the Trust delivers Shares to the Authorized Participant in exchange for cash received from the Authorized Participant. Also, on or around the settlement date, the Ether Trading Counterparty or Prime Execution Agent, as applicable, deposits the required ether pursuant to its trade with the Trust into the Trust's Trading Account in exchange for cash. In the event the Trust has not been able to successfully execute and complete settlement of an ether transaction by the settlement date of the cash creation order, the Authorized Participant will be given the option to (1) cancel the cash creation order, or (2) accept that the Trust will continue to attempt to complete the execution, which will delay the settlement date of the cash creation order. With respect to a cash creation order, as between the Trust and the Authorized Participant, the Authorized Participant is responsible for the dollar cost of the difference between the ether price utilized in calculating NAV per Share on trade date and the price at which the Trust acquires the ether to the extent the price realized in buying the ether is higher than the ether price utilized in the NAV. To the extent the price realized in buying the ether is lower than the price utilized in the NAV, the Authorized Participant shall get to keep the dollar impact of any such difference.
Because the Trust's Trading Account may not be funded with cash on trade date for the purchase of ether associated with a cash creation order, the Trust may borrow trade credits (“Trade Credits”) in the form of cash from Coinbase Credit, Inc. (the “Trade Credit Lender”), an affiliate of the Prime Execution Agent, under the trade financing agreement (“Trade Financing Agreement”) or may require the Authorized Participant to deliver the required cash for the cash creation order on trade date. The extension of Trade Credits on trade date allows the Trust to purchase ether through the Prime Execution Agent on trade date, with such ether being deposited in the Trust's Trading Account. On settlement date for a cash creation order, the Trust delivers Shares to the Authorized Participant in exchange for cash received from the Authorized Participant. To the extent Trade Credits were utilized, the Trust uses the cash to repay the Trade Credits borrowed from the Trade Credit Lender. On settlement date for a cash creation order, the ether purchased is swept from the Trust's Trading Account to the Trust's Custody Account pursuant to a regular end-of-day sweep process.
In connection with in-kind creations, the Authorized Participants will submit orders by the In-Kind Order Cutoff Time to create Baskets of Shares in exchange for ether.
On settlement date for an in-kind creation, the Trust delivers Shares to the Authorized Participant in exchange for ether received from the Authorized Participant, or its designated agent or client. The Authorized Participant or its designated agent or client will deposit such ether to the Trust's Trading Account at the Prime Execution Agent. In the event the Authorized Participant, its designated agent or client, has not deposited the ether to the Trust's Trading Account at the Prime Execution Agent by the applicable time on the settlement date of the in-kind creation order, the Authorized Participant will be given the option to (1) cancel the in-kind creation order, (2) delay settlement of the order to enable delivery of ether at a later date, or (3) accept that the Trust will execute a ether transaction required for the creation and the Authorized Participant will deliver the U.S. dollars required for this purchase. In the case of (3) only, the Authorized Participant is responsible for the dollar cost of the difference between the ether price utilized in calculating NAV per Share on trade date and the price at which the Trust acquires the ether to the extent the price realized in buying the ether is higher than the ether price utilized in the NAV. To the extent the price realized in buying the ether is lower than the price utilized in the NAV, the Authorized Participant shall get to keep the dollar impact of any such difference.
Following the Cash Order Cutoff Time for a cash redemption order, the Trust may choose, in its sole discretion, to enter into a transaction with an Ether Trading Counterparty or the Prime Execution Agent, to sell ether in exchange for cash. After the Cash Order Cutoff Time, the Trust instructs the Ether Custodian to prepare to move the associated ether from the Trust's Custody Account to the Trust's Trading Account. On settlement date for a cash redemption order, the Authorized Participant delivers the necessary Shares to the Trust, and on or around settlement date, an Ether Trading Counterparty or Prime Execution Agent, as applicable, delivers the cash associated with the Trust's sale of ether to the Trust in exchange for the Trust's ether, and the Trust delivers cash to the Authorized Participant. In the event the
The Trust may use financing in connection with a cash redemption order when ether remains in the Trust's Custody Account at the point of intended execution of a sale of ether. In those circumstances, the Trust may borrow Trade Credits in the form of ether from the Trade Credit Lender, which allows the Trust to sell ether through the Prime Execution Agent on trade date, and the cash proceeds are deposited in the Trust's Trading Account. On settlement date for a cash redemption order, the Trust delivers cash to the Authorized Participant in exchange for Shares received from the Authorized Participant. In the event financing was used, the Trust will use the ether moved from the Trust's Custody Account to the Trading Account to repay the Trade Credits borrowed from the Trade Credit Lender.
In connection with in-kind redemptions, the Authorized Participants will submit orders by the In-Kind Order Cutoff Time to redeem Baskets of Shares in exchange for ether.
On settlement date for an in-kind redemption, the Trust delivers ether to the account of the Authorized Participant or its designated agent or client at the Prime Execution Agent in exchange for Shares received from the Authorized Participant.
The Exchange also proposes to modify the Original ETHA Filing section “Creation and Redemption of Shares” to integrate the proposed in-kind creation and redemption process. Specifically, the Original ETHA Filing currently states that Baskets are only issued or redeemed in exchange for an amount of cash determined by the Trustee on each day that Nasdaq is open for regular trading. No Shares are issued unless the Cash Custodian has allocated to the Trust's account the corresponding amount of cash. The amount of cash necessary for the creation of a Basket, or to be received upon redemption of a Basket, will decrease over the life of the Trust, due to the payment or accrual of fees and other expenses or liabilities payable by the Trust.
The Exchange now proposes to delete the above language from the Original ETHA Filing, and replace it with the following: Baskets are only issued or redeemed in exchange for an amount of ether and/or cash determined by the Trustee on each day that Nasdaq is open for regular trading. No Shares are issued unless the Authorized Participant has properly delivered the requisite amount of cash or ether to the Trust's account.
The Exchange believes that its proposal is consistent with Section 6(b) of the Act,
The Exchange believes that permitting in-kind transfers with respect to the Trust's creation and redemption process promotes just and equitable principles of trade and helps remove impediments to and perfect the mechanism of a free and open market and a national market system. As discussed above, the proposed changes would permit the Trust to utilize an in-kind creation and redemption process in addition to the cash creation and redemption process. This added ability would make the Trust (and the market more generally) operate more efficiently because Authorized Participants, their designated agents or clients, would be able to source ether rather than to provide cash to the Trust and/or receive ether from the Trust. This means that the Authorized Participant, its designated agent or client, would be responsible for buying and selling the ether rather than the Trust itself, which would potentially lessen the impact on the market of the Trust on both sides of the transaction by allowing the Authorized Participant to decide how and where to source the underlying ether for creations and deciding how, where, and whether to sell the underlying ether for redemptions. This could lead to improvements in the creation and redemption process for both Authorized Participants and the Trust, and could potentially increase efficiency, and ultimately benefit the end investors in the Trust.
Except for the changes described above, all other representations in the Original ETHA Filing remain unchanged and will continue to constitute continued listing requirements. In addition, the Trust will continue to comply with the terms of the Original ETHA Filing and the requirements in Rule 5711(d).
The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. As discussed above, the proposed amendments are intended to allow for in-kind transfers. The Exchange believes that the proposed changes would increase operational efficiencies for the Trust (and the market more generally). The Exchange believes the changes proposed herein will not impose any burden on competition.
No written comments were either solicited or received.
Section 19(b)(2) of the Act
The Commission finds it appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change and the issues raised therein. Accordingly, the Commission, pursuant to Section 19(b)(2) of the Act,
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change, as modified by Amendment No. 1, is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
The Exchange proposes to establish fees for Industry Members
The text of the proposed rule change is available on the Exchange's website at
In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at
On July 11, 2012, the Commission adopted Rule 613 of Regulation NMS, which required the self-regulatory organizations (“SROs”) to submit a national market system (“NMS”) plan to create, implement and maintain a consolidated audit trail that would capture customer and order event information for orders in NMS securities across all markets, from the time of order inception through routing, cancellation, modification or execution.
The CAT Funding Model provides a framework for the recovery of the costs to create, develop and maintain the CAT, including providing a method for allocating costs to fund the CAT among Participants and Industry Members. The CAT Funding Model establishes two categories of fees: (1) CAT fees assessed by CAT LLC and payable by certain Industry Members to recover a portion of historical CAT costs previously paid by the Participants (“Historical CAT Assessment” fees); and (2) CAT fees assessed by CAT LLC and payable by Participants and Industry Members to fund prospective CAT costs (“CAT Fees”).
Under the CAT Funding Model, Participants, CEBBs and CEBSs are subject to fees designed to cover the ongoing budgeted costs of the CAT, as determined by the Operating Committee. “The Operating Committee will establish fees (`CAT Fees') to be payable by Participants and Industry Members with regard to CAT costs not previously paid by the Participants (`Prospective CAT Costs').”
The CAT Fees to be paid by CEBBs and CEBSs are designed to contribute toward the recovery of two-thirds of the budgeted CAT costs for the relevant period.
CAT LLC proposes to charge CEBBs and CEBSs (as described in more detail below) CAT Fee 2025-2 to recover the reasonably budgeted CAT costs for the period from July 1, 2025 through December 31, 2025 in accordance with the CAT Funding Model. To implement this fee on behalf of CAT LLC, the CAT NMS Plan requires the Participants to “file with the SEC under Section 19(b) of the Exchange Act any such fees on Industry Members that the Operating Committee approves, and such fees shall be labeled as ‘Consolidated Audit Trail Funding Fees.’ ”
CAT Fee 2025-2 will be charged to each CEBB and CEBS for each applicable transaction in Eligible Securities.
(a) with respect to a transaction in an Eligible Security that is executed on an exchange, the Industry Member identified as the Industry Member responsible for the order on the buy-side of the transaction and the Industry Member responsible for the sell-side of the transaction in the equity order trade event and option trade event in the CAT Data submitted to the CAT by the relevant exchange pursuant to the Participant Technical Specifications; and (b) with respect to a transaction in an Eligible Security that is executed otherwise than on an exchange and required to be reported to an equity trade reporting facility of a registered national securities association, the Industry Member identified as the executing broker and the Industry Member identified as the contra-side executing broker in the TRF/ORF/ADF transaction data event in the CAT Data submitted to the CAT by FINRA pursuant to the Participant Technical Specifications; provided, however, in those
The following fields of the Participant Technical Specifications indicate the CAT Executing Brokers for the transactions executed on an exchange:
In addition,
The Operating Committee determined the Fee Rate to be used in calculating CAT Fee 2025-2 (“Fee Rate 2025-2”) by dividing the reasonably budgeted CAT costs (“Budgeted CAT Costs 2025-2”) for the period from July 1, 2025 through December 31, 2025 (“CAT Fee 2025-2 Period”) by the reasonably projected total executed share volume of all transactions in Eligible Securities for the six-month recovery period, as discussed in detail below.
CAT LLC proposes to implement CAT Fee 2025-2 as the third CAT Fee related to Prospective CAT Costs. CAT LLC proposes to commence CAT Fee 2025-2 during the year, rather than at the beginning of the year. Accordingly, CAT Fee 2025-2 “would be calculated as described in paragraph (II)” of Section 11.3(a)(i)(A) of the CAT NMS Plan,
Under the CAT NMS Plan, for purposes of calculating CAT Fees, executed equivalent shares in a transaction in Eligible Securities will be reasonably counted as follows: (1) each executed share for a transaction in NMS Stocks will be counted as one executed equivalent share; (2) each executed contract for a transaction in Listed Options will be counted based on the multiplier applicable to the specific Listed Options (
The CAT NMS Plan states that “[t]he budgeted CAT costs for the year shall be comprised of all reasonable fees, costs and expenses reasonably budgeted to be incurred by or for the Company in connection with the development, implementation and operation of the CAT as set forth in the annual operating budget approved by the Operating Committee pursuant to Section 11.1(a) of the CAT NMS Plan, or as adjusted during the year by the Operating Committee.”
Operating Committee to approve an operating budget for CAT LLC on an annual basis. It requires the budget to “include the projected costs of the Company, including the costs of developing and operating the CAT for the upcoming year, and the sources of all revenues to cover such costs, as well as the funding of any reserve that the Operating Committee reasonably deems appropriate for the prudent operation of the Company.” Section 11.1(a)(i) of the CAT NMS Plan further states that:
In accordance with the requirements under the CAT NMS Plan, the Operating Committee approved an annual budget for 2025 for CAT LLC (“Original 2025 CAT Budget”) in November 2024.
As described in detail below, the Budgeted CAT Costs 2025-2 would be $60,726,412. CEBBs collectively will be responsible for one-third of the Budged [
The following describes in detail the Budgeted CAT Costs 2025-2 for CAT Fee 2025-2. The following cost details are provided in accordance with the requirement in the CAT NMS Plan to provide in the fee filing the following:
Each of the costs described below are reasonable, appropriate and necessary for the creation, implementation and maintenance of CAT.
The following table breaks down the Budgeted CAT Costs 2025-2 into the categories set forth in Section 11.3(a)(iii)(B) of the CAT NMS Plan.
To the extent that CAT LLC enters into notes with Participants or others to pay costs incurred during the period in which CAT Fee 2025-2 is in effect, CAT LLC will use the proceeds from CAT Fee 2025-2 and the related Participant CAT fees to repay such notes.
The following table compares the annual budgeted CAT costs as set forth in the updated annual CAT budget for 2024 approved by the Operating Committee in July 2024 (“Updated 2024 CAT Budget”),
In addition, the following table compares the first quarter of the Original 2025 CAT Budget with the first quarter of the Updated 2025 CAT Budget. The Updated 2025 CAT Budget includes actual costs for January, February and March 2025, whereas the Original 2025 CAT Budget included budgeted costs for these three months. The variance from the first quarter of the Original 2025 CAT Budget to the actuals for the first quarter of 2025 (as set forth in the Updated 2025 CAT Budget) in the last column of the following chart are used in this filing in supporting the reasonableness of the estimates for each category of costs.
Section 11.3(a)(iii)(B)(B)(1) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the cloud hosting services costs set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that included $82,222,276 in technology costs for cloud hosting services for the CAT Fee 2025-2 Period. The technology costs for cloud hosting services represent costs reasonably budgeted to be incurred for services provided by the cloud services provider for the CAT, Amazon Web Services, Inc. (“AWS”) during the CAT Fee 2025-2 Period.
In the agreement between CAT LLC and the Plan Processor for the CAT (“Plan Processor Agreement”), FINRA CAT, LLC (“FCAT”), AWS was named as the subcontractor to provide cloud hosting services. Under the Plan Processor Agreement, CAT LLC is required to pay FCAT the fees incurred by the Plan Processor for cloud hosting services provided by AWS as FCAT's subcontractor on a monthly basis for the cloud hosting services, and FCAT, in turn, pays such fees to AWS. The fees for cloud hosting services were negotiated by FCAT on an arm's length basis with the goals of managing costs and receiving services required to comply with the CAT NMS Plan and Rule 613, taking into consideration a variety of factors, including the expected volume of data, the breadth of services provided and market rates for similar services. Services provided by AWS include storage services, databases, compute services and other services (such as networking, management tools and DevOps tools), as well as various environments for CAT, such as development, performance testing, test, and production environments. FCAT utilizes such cloud hosting services for a broad array of services for the CAT, such as data ingestion, data management, and analytic tools for the CAT. AWS performs cloud hosting services for both the CAT transaction database as well as the CAT Customer and Account Information System (“CAIS”). It is anticipated that such cloud hosting services will continue during the CAT Fee 2025-2 Period.
The cost for AWS cloud services for the CAT is a function of the volume of CAT Data, largely as a result of the processing and storage of the CAT Data.
CAT LLC estimates that the budget for cloud hosting services costs during the CAT Fee 2025-2 Period will be approximately $82,222,276. The budget for cloud hosting services costs during the CAT Fee 2025-2 Period is calculated based on the Updated 2025 CAT Budget. Specifically, this estimate was calculated by adding the budgeted amounts for cloud hosting services costs for the third and fourth quarters of 2025 as set forth in the Updated 2025 CAT Budget.
CAT LLC estimated the budget for the cost for cloud hosting services for the CAT Fee 2025-2 Period based on an assumption of 40% annual year-over-year volume growth for the transaction database and an assumption of 5% annual year-over-year volume growth for CAIS. CAT LLC determined these growth assumptions in coordination with FCAT based on an analysis of a variety of existing data and alternative growth scenarios. In particular, in determining to use the 40% annual year-over-year volume growth in events per day, CAT LLC considered, among other things, the average annual year-over-year volume growth for 2019 through 2024 of approximately 45%, the average annual year-over-year volume growth for 2020 through 2024 of approximately 30%, and the average monthly growth rate for 2024 of approximately 50%.
This process for estimating the budget for cloud hosting services costs for the CAT Fee 2025-2 Period is the same process by which CAT LLC estimated the cloud hosting services costs for the Original 2025 CAT Budget. The Original 2025 CAT Budget estimated a budget for cloud hosting services of $39,640,542 for the first quarter of 2025. The actual costs for cloud hosting services for the first quarter of 2025, which are set forth in the Updated 2025 CAT Budget, were $36,357,017. Therefore, the variance between budgeted and actual cloud hosting services costs for this period was an approximate decrease of 8%. Accordingly, CAT LLC believes that the process for estimating the budgeted cloud hosting services costs for the CAT Fee 2025-2 Period is reasonable.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for cloud hosting services costs from the prior CAT Fee filing. Accordingly, this filing describes the changes in the cloud hosting services costs from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budgeted costs for cloud hosting services as set forth in the Original 2025 CAT Budget were $182,594,630, and the annual 2025 budgeted costs for cloud hosting services as set forth in the Updated 2025 CAT Budget are $159,230,937. Accordingly, budgeted annual costs for cloud hosting services decreased by $23,363,693 from the Original 2025 CAT Budget to the Updated 2025 CAT Budget, which is an approximate 13% reduction in cloud hosting services costs for the full year of 2025.
Correspondingly, the budgeted costs for cloud hosting services for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget were $97,748,713,
The decrease in costs for cloud hosting services from the Original 2025 CAT Budget to the Updated 2025 CAT Budget, both for the full year for 2025 and for the third and fourth quarters of 2025, reflects (1) a decrease in costs related to changes made pursuant to the Cost Savings Amendment; (2) cost decreases related to optimizations resulting in reduced procesing [
Section 11.3(a)(iii)(B)(B)(1) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the operating fees set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that included $15,453,942 in technology costs for operating fees for the CAT Fee 2025-2 Period. Operating fees are those fees paid by CAT LLC to FCAT as the Plan Processor to operate and maintain the CAT and to perform business operations related to the system, including compliance, security, testing, training, communications with the industry (
• Provide the CAT-related functions and services as the Plan Processor as required by SEC Rule 613 and the CAT NMS Plan in connection with the operation and maintenance of the CAT;
• Address compliance items, including drafting CAT policies and procedures, and addressing Regulation SCI requirements;
• Provide support to the Operating Committee, the Compliance Subcommittee and CAT working groups;
• Assist with interpretive efforts, exemptive requests and amendments regarding the CAT NMS Plan;
• Oversee the security of the CAT;
• Monitor the operation of the CAT, including with regard to Participant and Industry Member reporting;
• Provide support to subcontractors under the Plan Processor Agreement;
• Provide support in discussions with the Participants and the SEC and its staff;
• Operate the FINRA CAT Helpdesk;
• Facilitate communications with the industry, including via FAQs, CAT Alerts, meetings, presentations and webinars;
• Administer the CAT website and all of its content;
• Maintain cyber security insurance related to the CAT;
• Assist with billing, collection and other CAT fee-related activity; and
• Provide technical support and assistance with connectivity, data access, and user support, including the use of CAT Data and query tools, for Participants and the SEC staff.
CAT LLC calculated the budget for the FCAT technology costs for operating fees for the CAT Fee 2025-2 Period based on the recurring monthly operating fees under the Plan Processor Agreement.
As discussed above, CAT LLC estimated the budget for the operating fees during the CAT Fee 2025-2 Period based on monthly rates set forth in the Plan Processor Agreement and the agreement with Algoseek. CAT LLC also recognized that the operating fees are generally consistent throughout the year. This process for estimating the budget for the operating fees for the CAT Fee 2025-2 Period is the same process by which CAT LLC estimated the operating fees for the Original 2025 CAT Budget. The Original 2025 CAT Budget estimated a budget for operating fees of $7,662,270 for the first quarter of 2025.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for operating fees from the prior CAT Fee filing. Accordingly, this filing describes the changes from the operating fees set forth in the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budgeted costs for operating fees as set forth in the Original 2025 CAT Budget were $30,831,330,
Correspondingly, the budgeted costs for operating fees for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget were $15,446,040,
Section 11.3(a)(iii)(B)(B)(1) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the CAIS operating fees set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that included $10,374,924 in technology costs for CAIS operating fees for the CAT Fee 2025-2 Period. CAIS operating fees represent the fees paid to FCAT for services provided with regard to the operation and maintenance of CAIS, and to perform the business operations related to the system, including compliance, security, testing, training, communications with the industry (
During the CAT Fee 2025-2 Period, it is anticipated that FCAT will provide CAIS-related services. Under the Plan Processor Agreement with FCAT, CAT LLC is required to pay FCAT for CAIS-related services provided by FCAT on a monthly basis. CAT LLC negotiated the fees for FCAT's CAIS-related services on an arm's length basis with the goals of managing costs and receiving services required to comply with the CAT NMS Plan, taking into consideration a variety of factors, including the services to be provided and market rates for similar types of activity. During the CAT Fee 2025-2 Period, it is anticipated that FCAT will continue to provide services relating to the ongoing operation, maintenance and support of CAIS.
CAT LLC estimates that the budget for CAIS operating fees during the CAT Fee 2025-2 Period will be approximately $10,374,924. The budget for CAIS operating fees during the CAT Fee
CAT LLC calculated the budget for FCAT's CAIS-related services for the CAT Fee 2025-2 Period based on the recurring monthly CAIS operating fees under the Plan Processor Agreement. This process for estimating the budget for the CAIS operating fees for the CAT Fee 2025-2 Period is the same process by which CAT LLC estimated the CAIS operating fees for the Original 2025 CAT Budget. The Original 2025 CAT Budget estimated a budget of $5,187,462 for CAIS operating fees for the first quarter of 2025. The actual costs for CAIS operating fees for the first quarter of 2025, which are set forth in the Updated 2025 CAT Budget, were $5,187,462. There was no variance between budgeted and actual CAIS operating fees for the first quarter of 2025. Accordingly, CAT LLC believes that the process for estimating the budgeted CAIS operating fees for the CAT Fee 2025-2 Period is reasonable.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for CAIS operating fees from the prior CAT Fee filing. Accordingly, this filing describes the changes in CAIS operating fees from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
CAIS operating fees are based on a recurring monthly rate payable to FCAT and are unchanged from the prior CAT Fee filing. The annual 2025 budgeted costs for CAIS operating fees as set forth in the Original 2025 CAT Budget were $20,749,848, and the annual 2025 budgeted costs for CAIS operating fees as set forth in the Updated 2025 CAT Budget are $20,749,848. Accordingly, the budgeted annual costs for CAIS operating fees are the same for both the Original 2025 CAT Budget and the Updated 2025 CAT Budget.
Correspondingly, the budgeted costs for CAIS operating fees for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget were $10,374,924, and the budgeted costs for CAIS operating fees for the third and fourth quarters of 2025 as set forth in the Updated 2025 CAT Budget are $10,374,924.
Accordingly, there were no changes in the line item for CAIS operating fees from the prior CAT Fee filing.
Section 11.3(a)(iii)(B)(B)(1) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the change request fees set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that included $500,000 in technology costs for change request fees for the CAT Fee 2025-2 Period. The technology costs related to change request fees include costs related to certain modifications, upgrades or other changes to the CAT.
Change requests are standard practice and necessary to reflect operational changes, including changes related to new market developments, such as new market participants. In general, if CAT LLC determines that a modification, upgrade or other changes to the functionality or service is necessary and appropriate, CAT LLC will submit a request for such a change to the Plan Processor. The Plan Processor will then respond to the request with a proposal for implementing the change, including the cost (if any) of such a change. CAT LLC then determines whether to approve the proposed change.
The change request budget line is established to include expected costs to be incurred in which the nature of the costs (
During the CAT Fee 2025-2 Period, it is anticipated that CAT LLC will engage FCAT to pursue certain change requests in accordance with the Plan Processor Agreement. The budget for change requests for the CAT Fee 2025-2 Period includes a placeholder of $500,000 for potential change request fees that may be necessary in accordance with the Plan Processor Agreement. The placeholder amount was determined based on prior experience with change requests related to the CAT.
CAT LLC estimates that the budget for change requests during the CAT Fee 2025-2 Period will be approximately $500,000. The budget for change requests during the CAT Fee 2025-2 Period is calculated based on the Updated 2025 CAT Budget. Specifically, this estimate was calculated by adding the budgeted amounts for the change requests for the third and fourth quarters of 2025 as set forth in the Updated 2025 CAT Budget.
CAT LLC estimated the budget for the potential change requests for the CAT Fee 2025-2 Period based on, among other things, a review of past change requests and potential future change request needs, as well as discussions with FCAT. This process for estimating the budget for the change requests for the CAT Fee 2025-2 Period is the same process by which CAT LLC estimated the change requests cost for the Original 2025 CAT Budget. The Original 2025 CAT Budget estimated a change request budget of $0 for the the [
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for change request fees from the prior CAT Fee filing. Accordingly, this filing describes the changes in the change request fees from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budgeted costs for change requests as set forth in the Original 2025 CAT Budget were $750,000, and the annual 2025 budgeted costs for change requests as set forth in the Updated 2025 CAT Budget are $750,000. Accordingly, budgeted annual costs for change requests are the same for both the Original 2025 CAT Budget and the Updated 2025 CAT Budget.
Correspondingly, the budgeted costs for change requests for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget were $500,000, and the budgeted costs for change request for the third and fourth quarters of 2025 as set forth in the Updated 2025 CAT Budget are $500,000.
Accordingly, there were no changes in the line item for change requests from the prior CAT Fee filing.
Section 11.3(a)(iii)(B)(B)(1) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the capitalized developed technology costs set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that includes $0 in technology costs for capitalized developed technology costs for the CAT Fee 2025-2 Period. This category of costs includes the budget for capitalizable application development costs incurred in the development of the CAT. It is anticipated that such costs will include certain costs related to the software license fee for CAIS in accordance with the Plan Processor Agreement with FCAT, as well as costs related to a set of technology changes to be implemented by FCAT.
CAT LLC estimates that the budget for capitalized developed technology costs during the CAT Fee 2025-2 Period will be approximately $0. The budget for capitalized developed technology costs during the CAT Fee 2025-2 Period is calculated based on the Updated 2025 CAT Budget. Specifically, this estimate was calculated by adding the budgeted amounts for capitalized developed technology costs for the third and fourth quarters of 2025 as set forth in the Updated 2025 CAT Budget.
CAT LLC estimated the budget for capitalized developed technology costs for the CAT Fee 2025-2 Period based on an analysis of a variety of factors, including information related to potential technology costs and related contractual and Plan requirements, and discussions with FCAT regarding such potential technology costs. This process for estimating the budget for capitalized developed technology costs for the CAT Fee 2025-2 Period is the same process by which CAT LLC estimated the capitalized developed technology costs for the Original 2025 CAT Budget. The Original 2025 CAT Budget estimated a budget for capitalized developed technology costs of $3,923,360 for the first quarter of 2025.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for capitalized developed technology costs from the prior CAT Fee filing. Accordingly, this filing describes the changes in the capitalized developed technology costs from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budget for capitalized developed technology costs as set forth in the Original 2025 CAT Budget were $3,923,360,
In addition, the budget for capitalized developed technology costs for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget was $0,
Section 11.3(a)(iii)(B)(B)(2) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the legal costs set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that includes $3,631,342 in legal costs for the CAT Fee 2025-2 Period. This category of costs represents budgeted costs for legal services for this period. CAT LLC anticipates that it will receive legal services from two law firms, Wilmer Cutler Pickering Hale and Dorr LLP (“WilmerHale”) and Jenner & Block LLP (“Jenner”), during the CAT Fee 2025-2 Period.
During the CAT Fee 2025-2 Period, it is anticipated that WilmerHale will provide legal services related to the following:
• Assist with CAT fee filings and related funding issues;
• Draft exemptive requests from CAT NMS Plan requirements and/or proposed amendments to the CAT NMS Plan;
• Provide legal guidance with respect to interpretations of CAT NMS Plan requirements;
• Provide legal support for the Operating Committee, Compliance Subcommittee, working groups and Leadership Team;
• Draft SRO rule filings related to the CAT Compliance Rule;
• Manage corporate governance matters, including supporting Operating Committee meetings and preparing resolutions and consents;
• Assist with communications with the industry, including CAT Alerts and presentations;
• Provide guidance regarding the confidentiality of CAT Data;
• Assist with cost management analyses and proposals;
• Assist with commercial contract-related matters, including change orders and amendments, Plan Processor Agreement items, and subcontract matters;
• Provide support with regard to discussions with the SEC and its staff, including with respect to addressing interpretive and implementation issues;
• Provide legal guidance with respect to the CAT budgets;
• Provide background assistance to other counsel for CAT matters;
• Assist with legal responses related to third-party data requests; and
• Provide legal support regarding CAT policies and procedures.
CAT LLC estimated the budget for the legal costs for WilmerHale for the CAT Fee 2025-2 Period through an analysis of a variety of factors, including WilmerHale fee rates, historical legal fees, and information related to pending legal issues and potential future legal issues.
During the CAT Fee 2025-2 Period, it is anticipated that Jenner will continue to provide legal assistance to CAT LLC regarding certain litigation matters, including: (1) CAT LLC's defense against a lawsuit filed in the Western District of Texas against the SEC Chair, the SEC and CAT LLC challenging the validity of Rule 613 and the CAT and alleging various constitutional, statutory, and common law claims;
CAT LLC estimated the budget for the legal costs for Jenner for the CAT Fee 2025-2 Period through an analysis of a variety of factors, including Jenner's fee rates, historical legal fees, and information related to pending legal issues and potential future legal issues.
CAT LLC estimated the budget for the legal services for the CAT Fee 2025-2 Period based on an analysis of a variety of factors, including law firm fee rates, historical legal fees, and information related to pending legal issues and potential future legal issues. This process for estimating the budget for the legal services for CAT Fee 2025-2 Period is the same process by which CAT LLC estimated the legal cost for the Original 2025 CAT Budget. The Original 2025 CAT Budget estimated a budget for legal costs of $1,430,000 for the first quarter of 2025. The actual costs for legal services for the first quarter of 2025, which are set forth in the Updated 2025 Budget, were $1,922,990. The increase of $492,990 was due to unanticipated issues that required additional legal efforts on behalf of CAT LLC that developed after the budget was created. Such additional costs were primarily due to additional legal work in responding to an SEC examination related to the CAT, for commercial contract-related matters, including with regard to the Plan Processor Agreement, and related to cost savings initiatives. Accordingly, CAT LLC believes that the process for estimating the budgeted legal costs for the CAT Fee 2025-2 Period is reasonable.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for legal costs from the prior CAT Fee filing. Accordingly, this filing describes the changes in the legal costs from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budgeted legal costs as set forth in the Original 2025 CAT Budget were $5,720,000, and the annual 2025 budgeted legal costs as set forth in the Updated 2025 CAT Budget are $7,370,002. Accordingly, the annual
Correspondingly, the budgeted legal costs for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget were $2,860,000,
This budgeted increase in the legal costs in the Updated 2025 CAT Budget from the Original 2025 Budget, both for the full year for 2025 and for the third and fourth quarters of 2025, was primarily due to an anticipated increase in legal costs related to litigation matters as well as regulatory and corporate legal matters.
Section 11.3(a)(iii)(B)(B)(3) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the consulting costs set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that included $866,167 in consulting costs for the CAT Fee 2025-2 Period. The consulting costs represent the fees estimated to be paid to the consulting firm Deloitte & Touche LLP (“Deloitte”) as project manager during the CAT Fee 2025-2 Period. These consulting costs include costs for advisory services related to the operation of the CAT, and meeting facilitation and communications coordination, vendor support and financial analyses.
It is anticipated that the costs for CAT during the CAT Fee 2025-2 Period will include costs related to consulting services performed by Deloitte. CAT LLC anticipates that it will continue to employ Deloitte during the CAT Fee 2025-2 Period based on, among other things, their expertise, long history with the project, and the recognition that it is anticipated that the consulting fees will remain in line with market rates for this type of specialized consulting work. Deloitte's fee rates are negotiated on an annual basis. CAT LLC assesses Deloitte's performance and reviews prospective budgets and staffing plans submitted by Deloitte on an annual basis. The consulting fees will be paid by CAT LLC to Deloitte.
It is anticipated that Deloitte will provide a variety of consulting services to the CAT during the CAT Fee 2025-2 Period, including the following:
• Implement program operations for the CAT project;
• Provide support to the Operating Committee, the Chair of the Operating Committee and the Leadership Team, including project management support, coordination and planning for meetings and communications, and interfacing with law firms and the SEC;
• Assist with cost and funding matters for the CAT, including assistance with loans and the CAT bank account for CAT funding;
• Provide support for updating the SEC on the progress of the development of the CAT; and
• Provide support for third party vendors for the CAT, including FCAT, Anchin and the law firms engaged by CAT LLC.
In addition, the consulting costs include the compensation for the Chair of the CAT Operating Committee.
CAT LLC estimates that the budget for consulting costs during the CAT Fee 2025-2 Period will be approximately $866,167. The budget for consulting costs during the CAT Fee 2025-2 Period is calculated based on the Updated 2025 CAT Budget. Specifically, this estimate was calculated by adding the budgeted amounts for consulting services for the third and fourth quarters of 2025 as set forth in the Updated 2025 CAT Budget.
CAT LLC estimates the budget for the consulting costs for Deloitte for the CAT Fee 2025-2 Period based on the current statement of work with Deloitte, which took into consideration past consulting costs, potential future consulting needs, the proposed rates and other contractual issues, as well as discussions with Deloitte. This process for estimating the budget for consulting costs for the CAT Fee 2025-2 Period is the same process by which CAT LLC estimated the consulting costs for the Original 2025 CAT Budget. The Original 2025 CAT Budget estimated a budget for consulting services of $437,500 for the first quarter of 2025. The actual costs for consulting services for the first quarter of 2025, which are set forth in the Updated 2025 CAT Budget, were $450,745. Therefore, the variance between budgeted and actual consulting costs for the first quarter of 2025 was approximately 3%. Accordingly, CAT LLC believes that the process for estimating the budgeted consulting costs for the CAT Fee 2025-2 Period is reasonable.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for consulting costs from the prior CAT Fee filing. Accordingly, this filing describes the changes in the consulting costs from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budget for consulting costs as set forth in the Original 2025 CAT Budget was $1,750,000, and the annual 2025 budget for consulting costs as set forth in the Updated 2025 CAT Budget is approximately $1,750,000. Accordingly, the annual budget for consulting costs has not changed from the Original 2025 CAT Budget to the Updated 2025 CAT Budget for the full year of 2025.
Correspondingly, the budget for consulting costs for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget was $875,000,
Section 11.3(a)(iii)(B)(B)(4) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the insurance costs set forth in the budget. The Operating
It is anticipated that the insurance costs for CAT during the CAT Fee 2025-2 Period will include costs related to cyber security liability insurance, directors' and officers' liability insurance, and errors and omissions liability insurance brokered by USI Insurance Services LLC (“USI”). Such policies are standard for corporate entities, and cyber security liability insurance is important for the CAT System. CAT LLC anticipates that it will continue to maintain this insurance during the CAT Fee 2025-2 Period, and notes that the annual premiums for these policies were competitive for the coverage provided. CAT LLC estimated the budget for the insurance costs for the CAT Fee 2025-2 Period based on the insurance estimate from USI for 2025. The annual premiums would be paid by CAT LLC to USI.
The budgeted insurance costs for the CAT Fee 2025-2 Period are based on an insurance cost estimate from USI for 2025. Accordingly, CAT LLC believes that the process for estimating the budgeted insurance costs for the CAT Fee 2025-2 Period is reasonable.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for insurance costs from the prior CAT Fee filing. Accordingly, this filing describes the changes in the insurance costs from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budgeted insurance costs as set forth in the Original 2025 CAT Budget were $1,594,452, and the annual 2025 budgeted insurance costs as set forth in the Updated 2025 CAT Budget are $1,594,452. Accordingly, the annual budgeted insurance costs remained the same for the Original 2025 CAT Budget and the Updated 2025 CAT Budget for the full year of 2025.
Correspondingly, the budgeted insurance costs for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget were $1,594,452,
Section 11.3(a)(iii)(B)(B)(5) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the professional and administration costs set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that included $609,818 in professional and administration costs for the CAT Fee 2025-2 Period. In adopting the CAT NMS Plan, the Commission amended the Plan to add a requirement that CAT LLC's financial statements be prepared in compliance with GAAP, audited by an independent public accounting firm, and made publicly available.
It is anticipated that Anchin will provide a variety of services to the CAT during the CAT Fee 2025-2 Period, including the following:
• Update and maintain internal controls;
• Provide cash management and treasury functions;
• Facilitate bill payments to vendors;
• Facilitate repayments of promissory notes to Participants;
• Provide monthly bookkeeping;
• Review vendor invoices and documentation in support of cash disbursements;
• Review documentation to ensure that repayments of promissory notes to Participants are in accordance with established policies and procedures;
• Provide accounting research and consultations on various accounting, financial reporting and tax matters;
• Address not-for-profit tax and accounting considerations;
• Prepare tax returns;
• Address various accounting, financial reporting and operating inquiries from Participants;
• Develop and maintain annual operating and financial budgets, including budget to actual fluctuation analyses;
• Support compliance with the CAT NMS Plan;
• Work with and provide support to the Operating Committee and various CAT working groups;
• Prepare monthly, quarterly and annual financial statements;
• Review and reconcile the monthly FINRA CAT reports/analyses related to billings, collections, outstanding accounts receivable and cash account;
• Perform certain verification, completeness, and validation testing related to the monthly FINRA CAT reports/analyses related to billings;
• Support the annual financial statement audits by an independent auditor;
• Review historical costs from inception;
• Provide accounting and financial information in support of SEC filings; and
• Perform additional ad hoc accounting and financial advisory services, as requested by CAT LLC.
CAT LLC estimated the annual budget for the costs for Anchin based on historical costs adjusted for cost of living rate increases, and projected incremental advisory and support services.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for professional and administration costs from the prior CAT Fee filing. Accordingly, this filing describes the changes in the professional and administration costs from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual 2025 budgeted professional and administration costs as set forth in the Original 2025 CAT Budget were $882,456, and the annual 2025 budgeted professional and administration costs as set forth in the Updated 2025 CAT Budget are $1,193,090. Accordingly, the budgeted annual costs for professional and administration services increased by $310,634 from the Original 2025 CAT Budget to the Updated 2025 CAT Budget for the full year of 2025.
Correspondingly, the budgeted costs for professional and administration services for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget were $444,246,
This budgeted increase in the professional and administration costs in the Updated 2025 CAT Budget from the Original 2025 Budget, both for the full year for 2025 and for the third and fourth quarters of 2025, was primarily due to increases in both financial advisory costs and accounting costs as a result of additional anticipated efforts related to billings and collections of fees from Participants and Industry Members, coupled with expected incremental efforts related to supporting CAT LLC's independent auditors for the 2024 audit.
Section 11.3(a)(iii)(B)(B)(6) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the public relations costs set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that included $0 in public relations costs for the CAT Fee 2025-2 Period. The public relations costs represent the fees paid to a public relations firm for professional communications services to CAT, including media relations consulting, strategy and execution. Because CAT LLC anticipates that it will not engage a public relations firm for the third and fourth quarters of 2025, the budget for public relations costs for this period is $0.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for public relations costs from the prior CAT Fee filing. Accordingly, this filing describes the changes in the public relations costs from the Updated 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
The annual budgeted public relations costs for 2025 as set forth in the Original 2025 CAT Budget were $50,000, and the annual budgeted public relations costs for 2025 as set forth in the Updated 2025 CAT Budget are $6,575. Accordingly, the annual budget for public relations cost for 2025 decreased by $43,425 from the Original 2025 CAT
Correspondingly, the budgeted costs for public relations services for the third and fourth quarters of 2025 as set forth in the Original 2025 CAT Budget were $25,000,
This budgeted decrease in the public relations costs from the Original 2025 CAT Budget to the Updated 2025 CAT Budget, both for the full year for 2025 and for the third and fourth quarters of 2025, was primarily due to CAT LLC's anticipation that it would not engage a public relations firm for the remainder of 2025.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to provide a brief description of the reserve costs set forth in the budget. The Operating Committee approved an operating budget for the CAT pursuant to Section 11.1(a) of the CAT NMS Plan that includes a reserve amount for 2025. Section 11.1(a)(i) of the CAT NMS Plan states that the budget shall include a reserve. Section 11.1(a)(ii) of the CAT NMS Plan further describes the reserve as follows:
For the reserve referenced in paragraph (a)(i) of this Section, the budget will include an amount reasonably necessary to allow the Company to maintain a reserve of not more than 25% of the annual budget. To the extent collected CAT fees exceed CAT costs, including the reserve of 25% of the annual budget, such surplus shall be used to offset future fees. For the avoidance of doubt, the Company will only include an amount for the reserve in the annual budget if the Company does not have a sufficient reserve (which shall be up to but not more than 25% of the annual budget). For the avoidance of doubt, the calculation of the amount of the reserve would exclude the amount of the reserve from the budget.
CAT LLC determined to maintain a reserve in the amount of 25% of the total expenses set forth in Updated 2025 CAT Budget (which does not include the reserve amount). Accordingly, the total 25% reserve was calculated by multiplying the total expenses set forth in the Updated 2025 CAT Budget (other than the reserve) by 25%, which is $57,083,638.
The Updated 2025 CAT Budget states that CAT LLC had accrued $70,942,596 for the reserve as of the beginning of 2025, and an additional $28,846,075 during the first quarter of 2025, from the collection of CAT Fees 2024-1 and 2025-1 and the related Participant CAT Fees. In addition, the Updated 2025 CAT Budget anticipates the collection of an additional $11,821,477 during the second quarter of 2025 via CAT Fee 2025-1 and the related Participant CAT Fee. Accordingly, the Updated 2025 CAT Budget estimates that CAT LLC would collect a surplus reserve amount through June 2025 of $54,526,412 over the 25% reserve amount of $57,083,638.
Such surplus was related, in part, to (i) the collection of CAT fees in excess of the budgeted CAT costs for 2024 and 2025 in light of the greater actual executed equivalent share volume than the projected executed equivalent share volume for CAT Fees 2024-1 and 2025-1, and (ii) a reduction in anticipated budgeted costs associated with the implementation of certain cost savings measures approved by the SEC pertaining to the processing of options market maker quotes and the storage of certain data.
As set forth in the Budgeted CAT Costs 2025-2, the surplus reserve balance of $54,526,412 would be used to offset a portion of CAT costs for the third and fourth quarters of 2025, thereby reducing the fee rate to be paid for CAT Fee 2025-2. Specifically, the total costs used to calculate the fee rate for CAT Fee 2025-2 would be reduced by the amount of the surplus reserve as set forth in the following table:
Accordingly, the fee rate for CAT Fee 2025-2 is calculated based on this reduced amount of $60,726,412, resulting in a fee rate of $0.000009 per executed equivalent share. If the fee rate for CAT Fee 2025-2 were calculated solely based on the reasonably budgeted costs for CAT for July-December 2025 excluding the reduction in that amount due to the surplus reserve offset (that is, based on $115,252,921, not $60,726,412), the fee rate would be the higher rate of $0.000017.
Section 11.3(a)(iii)(B)(B) of the CAT NMS Plan requires the fee filing for a Prospective CAT Fee to describe the reason for changes in the line item for a reserve from the prior CAT Fee filing. Accordingly, this filing describes the changes in the reserve from the Original 2025 CAT Budget, which was used in the calculation of the prior Prospective CAT Fee, CAT Fee 2025-1.
For the Original 2025 CAT Budget, CAT LLC determined to maintain a reserve in the amount of 25% of budgeted CAT costs (other than the reserve). Accordingly, the total 25% reserve was calculated by multiplying the budgeted CAT costs (other than the reserve) as set forth in the Original 2025 CAT Budget (which is $248,846,076) by 25%, for a target reserve amount of $62,211,519. However, the Original 2025 CAT Budget recognized that a portion of the reserve—$38,369,315—would have been previously collected, and therefore would not need to be included the budgeted CAT costs to be recovered by the CAT Fees. Specifically, the Original 2025 CAT Budget recognized that there was (i) a liquidity reserve balance of $27,695,385 at the beginning of 2025, (ii) a favorable variance of $10,084,698 for budgeted versus actual cloud hosting services costs covering the period from July 16, 2024 through September 30, 2024, and (iii) a Participation Fee from a new Participant in the CAT NMS Plan of $589,232. These three items totaled $38,369,315. Accordingly, the Original 2025 CAT Budget only included $23,842,200 to be collected towards the reserve via the CAT Fee. This $23,842,200 is calculated by reducing the total 25% reserve amount of $62,211,519 by the $38,369,315 previously collected for the reserve. In the Original 2025 CAT Budget, the budget anticipated collecting the remaining reserve amount of $23,842,200 evenly throughout the year, that is, $5,960,500 for each quarter.
As discussed above, CAT LLC determined to maintain a reserve in the amount of 25% of the budgeted CAT costs (other than the reserve). Accordingly, the total 25% reserve was calculated by multiplying the budgeted CAT costs (other than the reserve) as set forth in the Updated 2025 CAT Budget (which is $228,334,551) by 25%, for a target reserve amount of $57,083,638.
As discussed above, such surplus reserve balance of $54,526,412 would be used to offset a portion of CAT costs for the third and fourth quarters of 2025, thereby reducing the fee rate for CAT Fee 2025-2 in accordance with Section 11.1(a)(ii) of the CAT NMS Plan. Section 11.1(a)(ii) of the CAT NMS Plan states that “[t]o the extent collected CAT fees exceed CAT costs, including the reserve of 25% of the annual budget, such surplus shall be used to offset future fees.”
The calculation of Fee Rate 2025-2 also requires the determination of the projected total executed equivalent share volume of transactions in Eligible Securities for the CAT Fee 2025-2 Period. Under the CAT NMS Plan, the Operating Committee is required to “reasonably determine the projected total executed equivalent share volume of all transactions in Eligible Securities for each relevant period based on the executed equivalent share volume of all transactions in Eligible Securities for the prior twelve months.”
The total executed equivalent share volume of transactions in Eligible Securities for the 12-month period from April 2024 through March 2025 was 4,580,287,680,646.28 executed equivalent shares. The Operating Committee has determined to calculate the projected total executed equivalent share volume for the six-month recovery period for CAT Fee 2025-2 by multiplying by one-half the executed equivalent share volume for the 12-month period from April 2024 through March 2025. The Operating Committee determined that such an approach was reasonable as the CAT's annual executed equivalent share volume has remained relatively constant. For example, the executed equivalent share volume for 2021 was 3,963,697,612,395, the executed equivalent share volume for 2022 was 4,039,821,841,560.31, the executed equivalent share volume for 2023 was 3,868,940,345,680.6, and the executed equivalent share volume for 2024 was 4,295,884,600,069.41. Accordingly, the projected total executed equivalent share volume for the six-month period for CAT Fee 2025-2 is projected to be 2,290,143,840,323.14 executed equivalent shares.
The projected total executed equivalent share volume of all transactions in Eligible Securities for the six-month recovery period for CAT Fee 2025-2 and a description of the calculation of the projection is provided in this filing in accordance with the requirement in the CAT NMS Plan to provide such information in a fee filing for a CAT Fee.
Fee Rate 2025-2 would be calculated by dividing the Budgeted CAT Costs 2025-2 by the reasonably projected total executed equivalent share volume of all transactions in Eligible Securities for the six-month recovery period for CAT Fee 2025-2, as described in detail above.
CEBBs and CEBSs would be required to pay fees for CAT Fee 2025-2 on a monthly basis for six months, from August 2025 until January 2026. A CEBB's or CEBS's fee for each month would be calculated based on the transactions in Eligible Securities executed by the CEBB or CEBS from the prior month.
To implement CAT Fee 2025-2, the Exchange proposes to add a new paragraph to the “Consolidated Audit Trail Funding Fees” section of the Exchange's Fee Schedule, to include the proposed paragraphs described below.
The CAT NMS Plan states that:
Each Industry Member that is the CAT Executing Broker for the buyer in a transaction in Eligible Securities (“CAT Executing Broker for the Buyer” or “CEBB”) and each Industry Member that is the CAT Executing Broker for the seller in a transaction in Eligible Securities (“CAT Executing Broker for the Seller” or “CEBS”) will be required to pay a CAT Fee for each such transaction in Eligible Securities in the prior month based on CAT Data. The CEBB's CAT Fee or CEBS's CAT Fee (as applicable) for each transaction in Eligible Securities will be calculated by multiplying the number of executed equivalent shares in the transaction by one-third and by the Fee Rate reasonably determined pursuant to paragraph (a)(i) of this Section 11.3.
Accordingly, based on the factors discussed above, the Exchange proposes to add paragraph (a)(5) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule. Proposed paragraph (a)(5) would state the following:
(A) Each CAT Executing Broker shall receive its first invoice for CAT Fee 2025-2 in August 2025, which shall set forth the CAT Fee 2025-2 fees calculated based on transactions in July 2025, and shall receive an invoice for CAT Fee 2025-2 for each month thereafter until January 2026.
(B) Consolidated Audit Trail, LLC shall provide each CAT Executing Broker with an invoice for CAT Fee 2025-2 on a monthly basis. Each month, such invoices shall set forth a fee for each transaction in Eligible Securities executed by the CAT Executing Broker in its capacity as a CAT Executing Broker for the Buyer (“CEBB”) and/or the CAT Executing Broker for the Seller (“CEBS”) (as applicable) from the prior month as set forth in CAT Data. The fee for each such transaction will be calculated by multiplying the number of executed equivalent shares in the transaction by the fee rate of $0.000009 per executed equivalent share.
(C) Notwithstanding the last invoice date of January 2026 for CAT Fee 2025-2 in paragraph 5(A), CAT Fee 2025-2 shall continue in effect after January 2026, with each CAT Executing Broker receiving an invoice for CAT Fee 2025-2 each month, until a new subsequent CAT Fee is in effect with regard to Industry Members in accordance with Section 19(b) of the Exchange Act. Consolidated Audit Trail, LLC will provide notice when CAT Fee 2025-2 will no longer be in effect.
(D) Each CAT Executing Broker shall be required to pay each invoice for CAT Fee 2025-2 in accordance with paragraph (b).
As noted in the Plan amendment for the CAT Funding Model, “[a]s a practical matter, the fee filing would provide the exact fee per executed equivalent share to be paid for the CAT Fees, by multiplying the Fee Rate by one-third and describing the relevant number of decimal places for the fee.”
The proposed language in paragraph (a)(5)(A) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule would describe when CAT Executing Brokers would receive their first monthly invoice for CAT Fee 2025-2. Specifically, CAT Executing Brokers would receive their first monthly invoice for CAT Fee 2025-2 in August 2025 and the fees set forth in that invoice would be calculated based on transactions executed in July 2025. The payment for the first invoice would be required within 30 days after the receipt of the first invoice (unless a longer period is indicated), as described in paragraph (b)(2) of the Fee Schedule.
Proposed paragraph (a)(5)(A) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule also would describe the monthly cadence of the invoices for CAT Fee 2025-2. Specifically, after the first invoices are provided to CAT Executing Brokers in August 2025, invoices will be sent to CAT Executing Brokers each month thereafter until January 2026.
Proposed paragraph (a)(5)(B) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule would describe the invoices for CAT Fee 2025-2. Proposed paragraph (a)(5)(B) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule would state that “Consolidated Audit Trail, LLC shall provide each CAT Executing Broker with an invoice for CAT Fee 2025-2 on a monthly basis.” Proposed paragraph (a)(5)(B) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule also would describe the fees to be set forth in the invoices for CAT Fee 2025-2. Specifically, it would state that “[e]ach month, such invoices shall set forth a fee for each transaction in Eligible Securities executed by the CAT Executing Broker in its capacity as a CAT Executing Broker for the Buyer (`CEBB') and/or the CAT Executing Broker for the Seller (`CEBS') (as applicable) from the prior month as set forth in CAT Data. The fee for each such transaction will be calculated by multiplying the number of executed equivalent shares in the transaction by the fee rate of $0.000009 per executed equivalent share.”
Since CAT Fee 2025-2 is a monthly fee based on actual transaction volume from the prior month, CAT Fee 2025-2 may collect more or less than two-thirds of the Budgeted CAT Costs 2025-2. To the extent that CAT Fee 2025-2 collects
Furthermore, proposed paragraph (a)(5)(C) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule would describe how long CAT Fee 2025-2 would remain in effect. It would state that “[n]otwithstanding the last invoice date of January 2026 for CAT Fee 2025-2 in paragraph 5(A), CAT Fee 2025-2 shall continue in effect after January 2026, with each CAT Executing Broker receiving an invoice for CAT Fee 2025-2 each month, until a new subsequent CAT Fee is in effect with regard to Industry Members in accordance with Section 19(b) of the Exchange Act. Consolidated Audit Trail, LLC will provide notice when CAT Fee 2025-2 will no longer be in effect.”
Finally, proposed paragraph (a)(5)(D) to the Consolidated Audit Trail Funding Fees section of the Fee Schedule would set forth the requirement for the CAT Executing Brokers to pay the invoices for CAT Fee 2025-2. It would state that “[e]ach CAT Executing Broker shall be required to pay each invoice for CAT Fee 2025-2 in accordance with paragraph (b).”
Paragraph (b)(1) of the “Consolidated Audit Trail Funding Fees” section of the Fee Schedule describes the manner of payment of Industry Member CAT fees. It states that “[e]ach CAT Executing Broker shall pay its CAT fees as required pursuant to paragraph (a) each month to the Consolidated Audit Trail, LLC in the manner prescribed by the Consolidated Audit Trail, LLC.” The CAT NMS Plan requires the Operating Committee to establish a system for the collection of CAT fees.
The CAT NMS Plan further states that:
Participants shall require each Industry Member to pay all applicable fees authorized under this Article XI within thirty (30) days after receipt of an invoice or other notice indicating payment is due (unless a longer payment period is otherwise indicated). If an Industry Member fails to pay any such fee when due (as determined in accordance with the preceding sentence), such Industry Member shall pay interest on the outstanding balance from such due date until such fee is paid at a per annum rate equal to the lesser of: (a) the Prime Rate plus 300 basis points; or (b) the maximum rate permitted by applicable law.
Paragraph (b)(2) of the Consolidated Audit Trail Funding Fees section of the Fee Schedule states that:
Each CAT Executing Broker shall pay the CAT fees required pursuant to paragraph (a) within thirty days after receipt of an invoice or other notice indicating payment is due (unless a longer payment period is otherwise indicated). If a CAT Executing Broker fails to pay any such CAT fee when due, such CAT Executing Broker shall pay interest on the outstanding balance from such due date until such fee is paid at a per annum rate equal to the lesser of (i) the Prime Rate plus 300 basis points, or (ii) the maximum rate permitted by applicable law.
The requirements of paragraph (b)(2) would apply to CAT Fee 2025-2.
The CAT NMS Plan states that:
Details regarding the calculation of a Participant or CAT Executing Broker's CAT Fees will be provided upon request to such Participant or CAT Executing Broker. At a minimum, such details would include each Participant or CAT Executing Broker's executed equivalent share volume and corresponding fee by (1) Listed Options, NMS Stocks and OTC Equity Securities, (2) by transactions executed on each exchange and transactions executed otherwise than on an exchange, and (3) by buy-side transactions and sell-side transactions.
Such information would provide CEBBs and CEBSs with the ability to understand the details regarding the calculation of their CAT Fee.
In addition, CAT LLC will make certain aggregate statistics regarding CAT Fees publicly available. Specifically, the CAT NMS Plan states that, “[f]or each CAT Fee, at a minimum, CAT LLC will make publicly available the aggregate executed equivalent share volume and corresponding aggregate fee by (1) Listed Options, NMS Stocks and OTC Equity Securities, (2) by transactions executed on each exchange and transactions executed otherwise than on an exchange, and (3) by buy-side transactions and sell-side transactions.”
Furthermore, CAT LLC will make publicly available on the CAT website the total amount invoiced each month that CAT Fee 2025-2 is in effect as well as the total amount invoiced for CAT Fee 2025-2 for all months since its commencement. CAT LLC also will make publicly available on the CAT website the total costs to be collected from Industry Members for CAT Fee 2025-2.
The CAT NMS Plan states that “[n]o Participant will make a filing with the SEC pursuant to Section 19(b) of the Exchange Act regarding any CAT Fee related to Prospective CAT Costs until the Financial Accountability Milestone related to Period 4 described in Section 11.6 has been satisfied.”
CAT LLC intends for CAT Fee 2025-2 to replace CAT Fee 2025-1 (which has a fee rate of $0.000022).
While CAT Fees charged to Industry Members become effective in accordance with the requirements of Section 19(b) of the Exchange Act,
The Exchange believes the proposed rule change is consistent with the requirements of the Exchange Act. The Exchange believes that the proposed rule change is consistent with Section 6(b)(5) of the Act,
The Exchange believes that this proposal is consistent with the Act because it implements provisions of the Plan and is designed to assist the Exchange in meeting regulatory obligations pursuant to the Plan. In approving the Plan, the SEC noted that the Plan “is necessary and appropriate in the public interest, for the protection of investors and the maintenance of fair and orderly markets, to remove impediments to, and perfect the mechanism of a national market system, or is otherwise in furtherance of the purposes of the Act.”
The Exchange believes that the proposed fees to be paid by the CEBBs and CEBSs are reasonable, equitably allocated and not unfairly discriminatory. First, the CAT Fee 2025-2 fees to be collected are directly associated with the budgeted costs of establishing and maintaining the CAT, where such costs include Plan Processor costs and costs related to technology, legal, consulting, insurance, professional and administration, and public relations costs.
The proposed CAT Fee 2025-2 fees would be charged to Industry Members in support of the maintenance of a consolidated audit trail for regulatory purposes. The proposed fees, therefore, are consistent with the Commission's view that regulatory fees be used for regulatory purposes and not to support the Exchange's business operations. The proposed fees would not cover Exchange services unrelated to the CAT. In addition, any surplus would be used as a reserve to offset future fees. Given the direct relationship between CAT fees and CAT costs, the Exchange believes that the proposed fees are reasonable, equitable and not unfairly discriminatory.
As further discussed below, the SEC approved the CAT Funding Model, finding it was reasonable and that it equitably allocates fees among Participants and Industry Members. The Exchange believes that the proposed fees adopted pursuant to the CAT Funding Model approved by the SEC are reasonable, equitably allocated and not unfairly discriminatory.
Section 11.1(b) of the CAT NMS Plan states that “[t]he Participants shall file with the SEC under Section 19(b) of the Exchange Act any such fees on Industry Members that the Operating Committee approves.” Per Section 11.1(b) of the CAT NMS Plan, the Exchange has filed this fee filing to implement the Industry Member CAT fees included in the CAT Funding Model. The Exchange believes that this proposal is consistent with the Exchange Act because it is consistent with, and implements, the CAT Funding Model in the CAT NMS Plan, and is designed to assist the Exchange and its Industry Members in meeting regulatory obligations pursuant to the CAT NMS Plan. In approving the CAT NMS Plan, the SEC noted that the Plan “is necessary and appropriate in the public interest, for the protection of investors and the maintenance of fair and orderly markets, to remove impediments to, and perfect the mechanism of a national market system, or is otherwise in furtherance of the purposes of the Act.”
The SEC has determined that the CAT Funding Model is reasonable and satisfies the requirements of the Exchange Act. Specifically, the SEC has concluded that the method for determining CAT Fees as set forth in Section 11.3 of the CAT NMS Plan, including the formula for calculating the Fee Rate, the identification of the parties responsible for payment and the transactions subject to the fee rate for CAT Fees, is reasonable and satisfies the Exchange Act.
The formula for calculating a Fee Rate requires the amount of Budgeted CAT Costs to be recovered. Specifically, Section 11.3(a)(iii)(B) of the CAT NMS Plan requires a fee filing to provide:
In accordance with this requirement, the Exchange has set forth the amount and type of Budgeted CAT Costs 2025-2 for each of these categories above.
Section 11.3(a)(iii)(B) of the CAT NMS Plan also requires that the fee filing provide “sufficient detail to demonstrate that the budget for the upcoming year, or part of year, as applicable, is reasonable and appropriate.” As discussed below, the Exchange believes that the budget for the CAT Fee 2025-2 Period is “reasonable and appropriate.” Each of the costs included in CAT Fee 2025-2 are reasonable and appropriate because the costs are consistent with standard industry practice, based on the need to comply with the requirements of the CAT NMS Plan, incurred subject to negotiations performed on an arm's length basis, and/or are consistent with the needs of any legal entity, particularly one with no employees.
In approving the CAT Funding Model, the Commission recognized that it is appropriate to recover budgeted costs related to cloud hosting services as a part of CAT Fees.
To comply with the requirements of the Plan, the breadth of the cloud activities related to the CAT is substantial. The cloud services not only include the production environment for the CAT, but they also include two industry testing environments, support environments for quality assurance and stress testing and disaster recovery capabilities. Moreover, the cloud storage costs are driven by the requirements of the Plan, which requires the storage of multiple versions of the data, from the original submitted version of the data through various processing steps, to the final version of the data.
Data volume is a significant driver of costs for cloud hosting services. When the Commission adopted the CAT NMS Plan in 2016, it estimated that the CAT would need to receive 58 billion records per day
In addition to the effect of the data volume on the cloud hosting costs, the processing timelines set forth in the
The costs for cloud hosting services also reflect the need for specialized cloud hosting services given the data volume and unique processing needs of the CAT. The data volume as well as the data processing needs of the CAT necessitate the use of cloud hosting services. The equipment, power and services required for an on-premises data model, the alternative to cloud hosting services, would be cost prohibitive. Moreover, as CAT was being developed, there were limited cloud hosting providers that could satisfy all the necessary CAT requirements, including the operational and security criteria. Over time, more providers offering cloud hosting services that would satisfy these criteria have entered the market. CAT LLC will continue to evaluate alternative cloud hosting services, recognizing that the time and cost to move to an alternative cloud provider would be substantial.
The reasonableness of the cloud hosting services costs is further supported by key cost discipline mechanisms for the CAT—a cost-based funding structure, cost transparency, cost management efforts (including regular efforts to lower compute and storage costs where permitted by the Plan) and oversight. Together, these mechanisms help ensure the ongoing reasonableness of the CAT's costs and the level of fees assessed to support those costs.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted costs related to operating fees as a part of CAT Fees.
The operating fees would include the negotiated fees paid by CAT LLC to the Plan Processor to operate and maintain the system for order-related information and to perform business operations related to the system, including compliance, security, testing, training, communications with the industry (
The operating costs also include costs related to the receipt of market data. CAT LLC anticipates receiving certain market data from Algoseek during the CAT Fee 2025-2 Period. CAT LLC anticipates that Algoseek will provide data as set forth in the SIP Data requirements of the CAT NMS Plan and that the fees are reasonable and in line with market rates for market data received.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted costs related to CAIS operating fees as a part of CAT Fees.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted costs related to change request fees as a part of CAT Fees.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted costs related to capitalized developed technology costs as a part of CAT Fees.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted costs related to legal fees as a part of CAT Fees.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted consulting costs as a part of CAT Fees.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted insurance costs as a part of CAT Fees.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted professional and administration costs as a part of CAT Fees.
CAT LLC anticipates continuing to make use of Anchin, a financial advisory firm, to assist with financial matters for the CAT. CAT LLC determined that the budgeted costs for Anchin were appropriate, as the financial advisory services were to be provided at reasonable market rates that were comparable to the rates charged by other such firms for similar work. Moreover, the total budgeted costs for such financial advisory services were appropriate in light of the breadth of services provided by Anchin. The services budgeted to be performed by Anchin and the budgeted costs related to such services are described above.
CAT LLC anticipates continuing to make use of Grant Thornton, an independent accounting firm, to complete the audit of CAT LLC's financial statements, in accordance with the requirements of the CAT NMS Plan. CAT LLC determined that the budgeted costs for Grant Thornton were appropriate, as the accounting services were to be provided at reasonable market rates that were comparable to the rates charged by other such firms for similar work. Moreover, the total budgeted costs for such accounting services were appropriate in light of the breadth of services provided by Grant Thornton. The services budgeted to be performed by Grant Thornton and the budgeted costs related to such services are described above.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted public relations costs as a part of CAT Fees.
In approving the CAT Funding Model, the SEC recognized that it is appropriate to recover budgeted reserve costs as a part of CAT Fees.
In its approval order for the CAT Funding Model, the Commission stated that it would be reasonable for the annual operating budget for the CAT to “include a reserve of not more than 25% of the annual budget.”
Because the CAT is a critical regulatory tool/system, the CAT needs to have a stable funding source to build financial stability to support the Company as a going concern. Funding for the CAT, as noted in Section 11.1(b), is the responsibility of the Participants and the industry. Because CAT fees are charged based on the budget, which is based on anticipated volume, it is reasonable to have a reserve on hand to prevent a shortfall in the event there is an unexpectedly high volume in a given year. A reserve would help to assure that the CAT has sufficient resources to cover costs should there be unanticipated costs or costs that are higher than expected.
The SEC also recognized that a reserve would help address the difficulty in predicting certain variable CAT costs, like trading volume.
As discussed further below,
The CAT NMS Plan also requires fee filings for Prospective CAT Fees to include “a discussion of how the budget is reconciled to the collected fees.”
The total executed equivalent share volume of transactions in Eligible Securities for the period from April 2024 through March 2025 was 4,580,287,680,646.28 executed equivalent shares. CAT LLC determined the total executed equivalent share volume for the prior twelve months by counting executed equivalent shares in the same manner as it counts executed equivalent shares for CAT billing purposes.
CAT LLC has determined that the projected total executed equivalent share volume for the six months of CAT Fee 2025-2 Period by multiplying by one-half the executed equivalent share volume for the prior twelve months: one-half times 4,580,287,680,646.28 executed equivalent shares.
As noted in the approval order for the CAT Funding Model, as a practical matter, the fee filing for a CAT Fee would provide the exact fee per executed equivalent share to be paid for each CAT Fee, by multiplying the Fee Rate by one-third and describing the relevant number of decimal places for the fee rate.
The Exchange believes that charging CAT Fee 2025-2 with a fee rate of $0.000009 per executed equivalent share is reasonable because it provides for a revenue stream for the Company
CAT Fee 2025-2 provides for an equitable allocation of fees, as it equitably allocates CAT costs between and among the Participants and Industry Members. The SEC approved the CAT Funding Model, finding that each aspect of the CAT Funding Model satisfied the requirements of the Exchange Act, including the formula for calculating CAT Fees as well as the Industry Members to be charged the CAT Fees.
CAT Fee 2025-2 provides for an equitable allocation of fees as it complies with the requirements regarding the calculation of CAT Fees as set forth in the CAT NMS Plan. For example, as described above, the calculation of CAT Fee 2025-2 complies with the formula set forth in Section 11.3(a) of the CAT NMS Plan. In addition, CAT Fee 2025-2 would be charged to CEBBs and CEBSs in accordance with Section 11.3(a) of the CAT NMS Plan. Furthermore, the Participants would be charged for their designated share of the Budgeted CAT Costs 2025-2 through a fee implemented via the CAT NMS Plan, which would have the same fee rate as CAT Fee 2025-2.
In addition, as discussed above, each of the inputs into the calculation of CAT Fee 2025-2—the Budgeted CAT Costs 2025-2, the count for the executed equivalent share volume for the prior 12 months, and the projected executed equivalent share volume for the CAT Fee 2025-2 Period—are reasonable. Moreover, these inputs lead to a reasonable fee rate for CAT Fee 2025-2 that is lower than other fee rates for transaction-based fees. A reasonable fee rate allocated in accordance with the requirements of the CAT Funding Model provides for an equitable allocation of fees.
CAT Fee 2025-2 is not an unfairly discriminatory fee. The SEC approved the CAT Funding Model, finding that each aspect of the CAT Funding Model satisfies the requirements of the Exchange Act. In reaching this conclusion, the SEC analyzed the potential effect of CAT Fees calculated pursuant to the CAT Funding Model on affected categories of market participants, including Participants (including exchanges and FINRA), Industry Members (including subcategories of Industry Members, such as alternative trading systems, CAT Executing Brokers and market makers), and investors generally, and considered market effects related to equities and options, among other things. CAT Fee 2025-2 complies with the requirements regarding the calculation of CAT Fees as set forth in the CAT NMS Plan. In addition, as discussed above, each of the inputs into the calculation of CAT Fee 2025-2 and the resulting fee rate for CAT Fee 2025-2 is reasonable. Therefore, CAT Fee 2025-2 does not impose an unfairly discriminatory fee on Industry Members.
The Exchange believes the proposed fees established pursuant to the CAT Funding Model promote just and equitable principles of trade, and, in general, protect investors and the public interest, and are provided in a transparent manner and with specificity in the Fee Schedule. The Exchange also believes that the proposed fees are reasonable because they would provide ease of calculation, ease of billing and other administrative functions, and predictability of a fee based on fixed rate per executed equivalent share. Such factors are crucial to estimating a reliable revenue stream for CAT LLC and for permitting Exchange members to reasonably predict their payment obligations for budgeting purposes.
Section 6(b)(8) of the Act
In addition, all Participants (including exchanges and FINRA) are proposing to introduce CAT Fee 2025-2 on behalf of CAT LLC to implement the requirements of the CAT NMS Plan. Therefore, this is not a competitive fee filing, and, therefore, it does not raise competition issues between and among the Participants.
Furthermore, in approving the CAT Funding Model, the SEC analyzed the potential competitive impact of the CAT Funding Model, including competitive issues related to market services, trading services and regulatory services, efficiency concerns, and capital formation.
As discussed above, each of the inputs into the calculation of CAT Fee 2025-2 is reasonable and the resulting fee rate for CAT Fee 2025-2 calculated in accordance with the CAT Funding
No written comments were solicited or received with respect to the proposed rule change.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1)
The Exchange proposes to amend the Connectivity Fee Schedule to amend the list of third party systems and third party data feeds to which Users can connect, related fees and a reference to who can charge redistribution fees. The proposed rule change is available on the Exchange's website at
In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements.
The Exchange proposes to amend the Connectivity Fee Schedule to amend the list of third party systems and third party data feeds to which Users
Currently, Users are offered connectivity to the execution systems of third party markets and other service providers (“Third Party Systems”) and connectivity to data feeds from third
The Exchange proposes to make the following changes to the list of Third Party Systems:
• Add Blue Ocean ATS (BOATS), Canadian Imperial Bank of Commerce (CIBC), Long Term Stock Exchange,
• To reflect Cboe Canada`s integration of Cboe Canada and Cboe MATCHNow into one entity,
To make these changes, the list of available Third Party Systems would be amended as follows (proposed deletions bracketed, proposed additions italicized):
The Exchange does not propose to change the monthly recurring fee Users pay for access to each Third Party System. Although the proposed changes to the list of Third Party Systems would combine Cboe MATCHNow with Cboe Canada to reflect their integration by Cboe Canada, thereby removing Cboe MATCHNow from the current list of Third Party Systems, no User would be charged more as a consequence. A User would continue to be able to choose which systems it wants from any Third Party System. It would not have to receive any systems, or pay for any bandwidth, that it did not choose.
The Exchange expects that the connectivity partner of BOATS will charge a redistribution fee, which will be passed through to the User. Accordingly, the Exchange proposes to add “and their partners” to the first sentence of the second paragraph under “Connectivity to Third Party Data Feeds,” which describes who can charge redistribution fees, so that it includes connectivity partners.
The Exchange proposes to make the following changes to the list of Third Party Data Feeds (together, the “Proposed Third Party Data Feeds”):
• Add the following Third Party Data Feeds with the following fees for monthly recurring connectivity:
○ Blue Ocean ATS (BOATS), for $750 a month;
○ Cboe CFE Futures, for $1,500 per month;
○ Long Term Stock Exchange, for $2,600 per month;
○ MEMX Equities, for $2,000 per month;
○ MEMX Options, for $2,000 per month;
○ Small Exchange, for $1,000 per month.
• To reflect Cboe Canada's integration of Cboe Canada and Cboe MATCHNow into one entity,
• Combine Nasdaq Stock Market with Nasdaq ISE under the name “Nasdaq Stock Market” and change the combined monthly recurring connectivity fee to $3,000 per month.
• Combine TMX Group and Montreal Exchange
In addition, the Exchange proposes to change the monthly recurring connectivity fee per Third Party Data Feed for 18 feeds.
To make these changes, the text under “Connectivity to Third Party Data Feeds” and list of available Third Party Data Feeds would be amended as follows (proposed deletions bracketed, proposed additions italicized):
Third Party Data Feed providers
The Exchange would provide access to the Proposed Third Party Systems as conveniences to Users.
As with the current Third Party Systems, Users would connect to the Proposed Third Party Systems over the internet protocol (“IP”) network, a local area network available in the MDC.
As with the current Third Party Systems, in order to obtain access to a Proposed Third Party System, the User would enter into an agreement with the relevant proposed third party, pursuant to which it would charge the User for access to the Proposed Third Party System. The Exchange would then enable unicast connectivity between the User and the Proposed Third Party System over the IP network.
The Exchange has no affiliation with the providers of any of the Proposed Third Party Systems. Establishing a User's access to a Proposed Third Party System would not give the Exchange any right to use the Proposed Third Party System. Connectivity to a Proposed Third Party System would not provide access or order entry to the Exchange's execution system, and a User's connection to a Proposed Third Party System would not be through the Exchange's execution system.
The Exchange proposes to charge the same monthly recurring fee for connectivity to the Proposed Third Party Systems that it does for the current Third Party Systems. Specifically, when a User requested access to a Proposed Third Party System, it would identify the applicable third party and what bandwidth connection would be required. The fees for such bandwidth connection would vary based on the size of the connection, not on the particular Third Party System the User chooses. The Exchange is not proposing to change the pricing of any of these bandwidth connections; the Exchange is simply expanding the list of Third Party Systems that Users may access via these bandwidth connections.
The Exchange would provide connectivity to the Proposed Third Party Data Feeds as a convenience to Users.
As with the existing connections to Third Party Data Feeds, the Exchange would receive a Proposed Third Party Data Feed from the content service provider at the relevant source. The Exchange would then provide connectivity to that data to Users for a fee. Users would connect to the Proposed Third Party Data Feeds over the IP network. The Proposed Third Party Data Feeds would include trading and other information concerning the securities that are traded on the relevant third party systems.
As with the existing connections to Third Party Data Feeds, in order to connect to a Proposed Third Party Data Feed, a User would enter into a contract with the third party content service provider, pursuant to which it may charge the User for the data feed. The Exchange would receive the Proposed Third Party Data Feed in remote locations and transport it over its fiber optic network to the MDC. After the
The Exchange has no affiliation with the sellers of the Proposed Third Party Data Feeds and would have no right to use those feeds other than as a redistributor of the data. None of the Proposed Third Party Data Feeds would provide access or order entry to the Exchange's execution system. The Proposed Third Party Data Feeds would not provide access or order entry service to the execution systems of the third parties generating the feeds. The Exchange would receive the Proposed Third Party Data Feeds via arms-length agreements and would have no inherent advantage over any other distributor of such data.
The proposed rule change would not apply differently to distinct types or sizes of market participants. Rather, it would apply to all Users equally. As is currently the case, the purchase of any colocation service is completely voluntary and the Connectivity Fee Schedule is applied uniformly to all Users.
Access to most of the Proposed Third Party Systems and connectivity to most of the Proposed Third Party Data Feeds were requested by Users, but the Exchange believes that it would gain at most a handful of new customers among Users due to the proposed change.
The Commission has repeatedly expressed its preference for competition over regulatory intervention in determining prices, products, and services in the securities markets. Specifically, in Regulation NMS, the Commission highlighted the importance of market forces in determining prices and SRO revenues and, also, recognized that current regulation of the market system “has been remarkably successful in promoting market competition in its broader forms that are most important to investors and listed companies.”
The Exchange's provision of access to the Proposed Third Party Systems (“Access”) and connectivity to the Proposed Third Party Data Feeds (“Connectivity”) is subject to competition from access and connectivity that Users can obtain through the third-party telecommunications service providers that have installed their equipment in the MDC's two meet-me-rooms (“Telecoms”).
More specifically, a User may access a Proposed Third Party System by, first, entering into an agreement with the relevant proposed third party, pursuant to which the third party would charge the User for access to the Proposed Third Party System, and second, accessing the Proposed Third Party System through one of the Telecoms. Likewise, a User may connect to a Proposed Third Party Data Feed by, first, entering into a contract with the third party content service provider, if required, pursuant to which the third party may charge the User for the Proposed Third Party Data Feed, and second, connecting to the Proposed Third Party Data Feed through one of the Telecoms.
In both cases, the User would be able to access any of the Proposed Third Party Systems or connect to any of the Proposed Third Party Feeds independent of the Access or Connectivity provided by the Exchange. Users that already have or establish access or connectivity are not at any competitive disadvantage created by the Exchange.
The proposed change is not otherwise intended to address any other issues relating to colocation services or related fees, and the Exchange is not aware of any problems that Users would have in complying with the proposed change.
The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,
The Exchange believes that the proposed rule change is reasonable.
In considering the reasonableness of proposed services and fees, the Commission's market-based test considers “whether the exchange was subject to significant competitive forces in setting the terms of its proposal . . . , including the level of any fees.”
As described above,
Because Users are third parties and are not required to make such information public, the Exchange does not have visibility into how many Users currently access the Proposed Third Party Systems or connect to the Proposed Third Party Data Feeds independently, as described above.
Such Users compete, or would compete, with the Exchange's Access and Connectivity and exert, or would exert, significant competitive forces on the Exchange in setting the terms of its proposal, including the level of the Exchange's proposed fees.
The Exchange does not believe that FIDS would have any competitive advantage over Users that establish independent access to Proposed Third Party Systems or connectivity to Proposed Third Party Data Feeds. The Exchange's proposed service for Access and Connectivity does not have (a) any special access to the Proposed Third Party Systems and Proposed Third Party Data Feeds or (b) advantage within the MDC, as all distances in the MDC are normalized.
Moreover, the Exchange does not believe that FIDS would have any competitive advantage because it would charge for connectivity only, not the Proposed Third Party System or Proposed Third Party Data Feed itself. All Users that connect to a Proposed Third Party System or Proposed Third Party Data Feed, whether they elect to connect using the Exchange's proposed service or not, would have to pay a third party for the Proposed Third Party System or Proposed Third Party Data Feed.
Nor does the Exchange believe that FIDS has a competitive advantage by virtue of the fact that ICE owns and operates the MDC's meet-me-rooms. Users purchasing Access or Connectivity—like Users of any other colocation service—would require a circuit connecting out of the MDC, and in most cases, such circuits are provided by Telecoms.
If anything, the Exchange would be subject to a competitive disadvantage vis-à-vis Users regarding access to the Proposed Third Party Systems or connectivity to the Proposed Third Party Data Feeds. Users that choose to independently establish access or connectivity may negotiate terms with the Telecoms through whom such access and connectivity is delivered, in response to competitive forces. Such prices are not required to be filed by any party with the Commission. In contrast, the Exchange's service and pricing would be standardized as set out in this filing, and the Exchange would be unable to respond to pricing pressure from its competitors without seeking a formal fee change in a filing before the Commission.
In sum, because the Exchange is subject to significant competitive forces in setting the terms on which it offers its proposal, in particular because the Exchange believes that a substantially similar substitute is available, and the Exchange has not placed actual or proposed Users that already have or establish access or connectivity at a competitive disadvantage created by the Exchange, the proposed fees for the Exchange's connectivity to Proposed Third Party Systems and Proposed Third Party Data Feeds are reasonable.
The Exchange believes that it is reasonable to add “and their partners” to the second paragraph under “Connectivity to Third Party Data Feeds” (“Proposed Pass-Through Edit”) as that would add clarity as to who may charge redistribution fees, making the paragraph more precise.
The Exchange believes that it is reasonable to make the proposed changes, as connectivity to the Proposed Third Party Systems and access to the Proposed Third Party Data Feeds was generally requested by Users.
The Exchange believes that the proposed rule change is equitable.
The Exchange believes that the fees for connectivity to the Proposed Third Party Data Feeds are an equitable allocation of fees. The Exchange recognizes that the monthly recurring fee Users pay for access to the below Proposed Third Party Data Feeds will increase if they connect to one, but not both, of the current Third Data Feeds, but believes that they are equitable, for the following reasons:
• The combination of Cboe MATCHNow into Cboe Canada reflects the integration by Cboe Canada of those two entities into one entity.
• Nasdaq Stock Market and Nasdaq ISE are proposed to be combined. With this combination, Nasdaq ISE as well as Nasdaq BX, Nasdaq GEMX, Nasdaq MRX, Nasdaq PHLX and the Nasdaq Stock Market—which are all distinct self-regulatory organizations—will all be available under “Nasdaq Stock Market”. The proposed fee for the combination of the Nasdaq Stock Market and Nasdaq ISE is equal to the sum of the current fees for those feeds.
• The Montreal Exchange is a subsidiary of TMX Group.
The Exchange believes it is equitable to propose to increase the fee for ICE Data Services Consolidated Feed Shared Farm >1 Gb to $2,000
The Exchange does not propose to change the monthly recurring fee Users pay for access to each Third Party System. Although the proposed changes to the list of Third Party Systems would combine Cboe MATCHNow with Cboe Canada to reflect their integration by Cboe Canada, thereby removing Cboe MATCHNow from the current list of Third Party Systems, no User would be charged more as a consequence. A User would continue to be able to choose which systems it wants from any Third Party System. It would not have to receive any systems, or pay for any bandwidth, that it did not choose.
The Exchange believes that the Proposed Pass-Through Edit is equitable as it would add clarity as to who may charge redistribution fees, making the paragraph more precise and thereby ensuring the accuracy of, and adding clarity and transparency to, the Connectivity Fee Schedule.
Without this proposed rule change, Users would have fewer options for connectivity to the Proposed Third Party Systems and Proposed Third Party Data Feeds. By offering Access and Connectivity, the Exchange gives each User additional options for addressing its needs, responding to User demand for options. Offering these additional services would help each User tailor its data center operations to the requirements of its business operations by allowing it to select the form and latency of connectivity that best suits its needs. Users that do not opt to utilize the Exchange's proposed Access or Connectivity would still be able to access Proposed Third Party Systems or connect to Proposed Third Party Data Feeds using Telecoms.
The Exchange believes that the proposed change is equitable because it will result in fees being charged only to Users that voluntarily select to receive the corresponding services and because those services will be available to all Users.
Furthermore, the Exchange believes that the services and fees proposed herein are equitably allocated because, in addition to the services being completely voluntary, they are available to all Users on an equal basis (
The Exchange believes that the proposed rule change is not unfairly discriminatory, for the following reasons.
The Exchange believes that the Proposed Pass-Through Edit is not unfairly discriminatory as it would add clarity as to who may charge redistribution fees, making the paragraph more precise and thereby ensuring the accuracy of, and adding clarity and transparency to, the Connectivity Fee Schedule to all market participants.
Without this proposed rule change, Users would have fewer options for access to Proposed Third Party Systems or connectivity to Proposed Third Party Data Feeds. The proposed change would provide Users with an additional choice with respect to the form and optimal latency of the access they use to connect to Proposed Third Party Systems or connectivity to Proposed Third Party Data Feeds, allowing a User to select the connectivity that better suits its needs, helping it tailor its colocation operations to the requirements of its business operations. Users that do not opt to utilize the Exchange's proposed Access or Connectivity would still be able to access the Proposed Third Party Systems or connect to Proposed Third Party Data Feeds using Telecoms.
The Exchange believes that the proposed change is not unfairly discriminatory because it will result in fees being charged only to Users that voluntarily select to receive the corresponding services and because those services will be available to all Users. Furthermore, the Exchange believes that the services and fees proposed herein are not unfairly discriminatory because, in addition to the services being completely voluntary,
For all these reasons, the Exchange believes that the proposal is consistent with the Act.
In accordance with Section 6(b)(8) of the Act,
The Exchange does not believe that FIDS would have any competitive advantage over Users that establish independent access to Proposed Third Party Systems or connectivity to Proposed Third Party Data Feeds. The Exchange's proposed service for Access and Connectivity does not have (a) any special access to the Proposed Third Party Systems and Proposed Third Party Data Feeds or (b) advantage within the MDC, as all distances in the MDC are normalized.
Moreover, the Exchange does not believe that FIDS would have any competitive advantage because it would charge for connectivity only, not the Proposed Third Party System or Proposed Third Party Data Feed itself. All Users that connect to a Proposed Third Party System or Proposed Third Party Data Feed, whether they elect to connect using the Exchange's proposed service or not, would have to pay a third party for the Proposed Third Party System or Proposed Third Party Data Feed.
Nor does the Exchange believe that FIDS has a competitive advantage over any third-party competitors offering access to the Proposed Third Party Systems or connectivity to the Proposed Third Party Data Feeds by virtue of the fact that ICE owns and operates the MDC's meet-me-rooms. Users purchasing Access or Connectivity-like Users of any other colocation service—would require a circuit connecting out of the MDC, and in most cases, such circuits are provided by third-party Telecoms. Currently, 16 Telecoms operate in the meet-me-rooms and provide a variety of circuit choices. It is in the Exchange's best interest to set the fees that Telecoms pay to operate in the meet-me-rooms at a reasonable level
If anything, the Exchange would be subject to a competitive disadvantage vis-à-vis Users regarding access to the Proposed Third Party Systems or connectivity to the Proposed Third Party Data Feeds. Users that choose to independently establish access or connectivity may negotiate terms with the Telecoms or other Users through whom such access and connectivity is delivered, in response to competitive forces. Such prices are not required to be filed by any party with the Commission. In contrast, the Exchange's service and pricing would be standardized as set out in this filing, and the Exchange would be unable to respond to pricing pressure from its competitors without seeking a formal fee change in a filing before the Commission.
The Proposed Pass-Through Edit would not impose any burden on competition. It is not intended to address competitive issues but rather is concerned solely with adding clarity as to who may charge redistribution fees.
The changes would not put any market participants at a relative disadvantage compared to other market participants or penalize one or more categories of market participants in a manner that would impose an undue burden on competition.
No written comments were solicited or received with respect to the proposed rule change.
The Exchange has filed the proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act
At any time within 60 days of the filing of such proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
On June 25, 2025, Cboe BZX Exchange, Inc. (“Exchange” or “BZX”) filed with the Securities and Exchange Commission (the “Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),
(a) Pursuant to the provisions of Section 19(b)(1) under the Securities Exchange Act of 1934 (“Exchange Act” or the “Act”),
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The text of the proposed rule change is also available on the Exchange's website (
This Amendment No. 2 to SR-CboeBZX-2025-081 amends and replaces in its entirety the proposal as originally submitted on June 25, 2025, and as amended by Amendment No. 1 on July 7, 2025. The Exchange submits this Amendment No. 2 in order to clarify certain points and add additional details to the proposal.
The Exchange proposes to list and trade the Shares under BZX Rule 14.11(e)(4),
Since 2017, the Commission has approved or disapproved exchange filings to list and trade series of Trust Issued Receipts, including spot-based Commodity-Based Trust Shares, on the basis of whether the listing exchange has in place a comprehensive surveillance sharing agreement with a regulated market of significant size related to the underlying commodity to be held (the “Winklevoss Test”).
The Commission recently issued orders granting approval for proposals to list bitcoin- and ether-based commodity trust shares and bitcoin-based, ether-based, and a combination of bitcoin- and ether-based trust issued receipts (“Spot Bitcoin ETPs” and “Spot ETH ETPs”).In both the Spot Bitcoin ETP Approval Order and Spot ETH ETP Approval Order, the Commission found that sufficient “other means” of preventing fraud and manipulation had been demonstrated that justified dispensing with a surveillance-sharing agreement of significant size. Specifically, the Commission found that while the Chicago Mercantile Exchange (“CME”) futures market for both bitcoin and ether were not of “significant size” related to the spot market, the Exchange demonstrated that other means could be reasonably expected to assist in surveilling for fraudulent and manipulative acts and practices in the specific context of the proposals.
The Exchange notes that the Commission has also previously approved the listing and trading of a series of Commodity-Based Trust Shares that, like the Trust, holds multiple commodities,
The Trust will hold PENGU, Pudgy Penguin non-fungible tokens (“Pudgy Penguin NFTs”), SOL, and ETH (the “Portfolio Digital Assets”). The Trust is expected to hold approximately 80-95% of its total assets in PENGU and 5-15% of its total assets in Pudgy Penguin NFTS. The Trust expects that under normal circumstances at least 95% of the Trust's total assets will be invested in PENGU and Pudgy Penguin NFTs. Because PENGU and Pudgy Penguin NFTs are tokens on the Solana and Ethereum Networks, respectively, it may be necessary from time to time for the Trust to hold SOL or ETH in order to pay the respective network transactions fees. Furthermore, as many Pudgy Penguin NFT marketplaces conduct auction denominated in ETH, it may be necessary for the Trust to convert cash to ETH in order to purchase Pudgy Penguin NFTs. Similarly, when the Trust sells Pudgy Penguin NFTs, the sales proceeds may be in ETH. The Trust intend to hold only as much SOL or ETH as the Sponsor believes is necessary to pay for anticipated transaction expenses or to purchase Pudgy Penguin NFTs.
PENGU is a digital asset created and transmitted through the Solana Network, a peer-to-peer, decentralized computer network operating on cryptographic protocols. Introduced in December 2024 by Pudgy Penguins (the public identity of LSLTT Holdings LLC), PENGU differs from native cryptocurrencies like bitcoin, ETH, and SOL as it doesn't have its own underlying network or blockchain. Instead, PENGU exists as an SPL token on the Solana Network, utilizing its underlying technology. PENGU can facilitate payments for goods and services or be converted to fiat currencies at rates determined by digital asset trading platforms or through individual barter transactions. Due to its association with Pudgy Penguins, PENGU is often considered a digital collector's item. Classified as a “utility token” PENGU theoretically grants holders access to specific services within its ecosystem, similar to a ticket for particular products or services.
PENGU launched with a total supply of 88,888,888,888 tokens. As a “solana program library (“SPL”) token, PENGU depends entirely on the Solana Network, which is maintained by a decentralized user base rather than a single entity. The Solana Network enables value token exchanges recorded on its public blockchain ledger and supports smart contracts—code that executes across the network to manage information and value transfers based on programmed conditions. Through these smart contracts, users can create markets, store registries, represent ownership, transfer funds conditionally, and create digital assets beyond SOL, with operations executed in exchange for SOL payments. Like Eth, SOL represents broader efforts to expand blockchain technology beyond simple peer-to-peer money systems.
Non-fungible tokens, or NFTs, are a type of digital asset that represents ownership or proof of authenticity of a unique item or piece of content, typically stored on a blockchain. Unlike cryptocurrencies such as bitcoin and ether, which are fungible and can be exchanged on a one-to-one basis, NFTs are unique and cannot be exchanged like-for-like. Pudgy Penguin NFTs are a collection of 8,888 NFTs launched in July 2021 by a team of four pseudonymous developers. The collection consists of unique, hand-drawn penguins, each having distinct traits and characteristics, and quickly gained the attention of the NFT community due to its charming and whimsical artwork. These Pudgy Penguin NFTs are ERC-721 tokens that are recorded and transferred through the operation of the peer-to-peer Ethereum Network, which is not owned or operated by any single entity but rather maintained collectively by a distributed user base in a decentralized manner. Ether is not issued by governments, banks or any other centralized authority, and the Ethereum Network allows people to exchange tokens of value, called ether, which are recorded on a public transaction ledger known as the Ethereum Blockchain. Ether, the native cryptocurrency of the Ethereum Network, can be used to pay for goods and services, including computational power on the Ethereum Network, or it can be converted to fiat currencies, such as the U.S. dollar, at rates determined on digital asset exchanges or in individual end-user-to-end-user transactions under a barter system.
The Commission has approved numerous series of Trust Issued Receipts,
More recently, the Commission has applied the Winklevoss Test while also recognizing that the “regulated market of significant size” standard is not the only means for satisfying Section 6(b)(5) of the Act. In the specifically providing that a listing exchange could demonstrate that “other means to prevent fraudulent and manipulative acts and practices” are sufficient to justify dispensing with the requisite surveillance-sharing agreement.
Over the past months years, U.S. investor exposure to PENGU has grown into millions of dollars with a fully diluted market cap of greater than $563 million. The Exchange believes that approving this proposal (and comparable proposals) provides the Commission with the opportunity to allow U.S. investors with access to
The policy concerns that the Exchange Act is designed to address are also otherwise mitigated by the fact that the size of the market for the primary underlying reference asset ($563+ million fully diluted value) and the nature of the PENGU ecosystem reduces its susceptibility to manipulation. The geographically diverse and continuous nature of the PENGU trading makes it difficult and prohibitively costly to manipulate the price of PENGU and, in many instances, PENGU markets can be less susceptible to manipulation than the equity, fixed income, and commodity futures markets. There are a number of reasons this is the case, including that there is not inside information about revenue, earnings, corporate activities, or sources of supply; manipulation of the price on any single venue would require manipulation of the global PENGU price in order to be effective; a substantial over-the-counter market provides liquidity and shock-absorbing capacity; PENGU's 24/7/365 nature provides constant arbitrage opportunities across all trading venues; and it is unlikely that any one actor could obtain a dominant market share.
Further, PENGU is arguably less susceptible to manipulation than other commodities that underlie ETPs; there may be inside information relating to the supply of the physical commodity such as the discovery of new sources of supply or significant disruptions at mining facilities that supply the commodity that simply are inapplicable as it relates to certain cryptoassets, including PENGU. Further, the Exchange believes that the fragmentation across the PENGU trading platforms and increased adoption of the PENGU, as displayed through increased user engagement and trading volumes, and the Solana Network make manipulation of PENGU prices through continuous trading activity more difficult. Moreover, the linkage between the PENGU markets and the presence of arbitrageurs in those markets means that the manipulation of the price of the PENGU prices on any single venue would require manipulation of the global PENGU prices in order to be effective. Arbitrageurs must have funds distributed across multiple spot trading platforms in order to take advantage of temporary price dislocations, thereby making it unlikely that there will be strong concentration of funds on any particular spot trading platform. As a result, the potential for manipulation on a particular spot trading platform would require overcoming the liquidity supply of such arbitrageurs who are effectively eliminating any cross-market pricing differences. For all of these reasons, PENGU is not particularly susceptible to manipulation, especially as compared to other approved ETP reference assets.
CSC Delaware Trust Company is the trustee (“Trustee”). A third party will be the administrator (“Administrator”) and transfer agent (“Transfer Agent”) and will be responsible for the custody of the Trust's cash and cash equivalents
According to the Registration Statement, each Share will represent a fractional undivided beneficial interest in and ownership of the Trust.
According to the Registration Statement, the Trust will be neither an investment company registered under the Investment Company Act of 1940, as amended,
Neither the Trust, nor the Sponsor, nor the Custodian, nor any other person associated with the Trust will, directly or indirectly, engage in action where any portion of the Trust's Portfolio Digital Assets becomes subject to the proof-of-stake validation or is used to earn additional Portfolio Digital Assets or generate income or other earnings. The Trust will not acquire and will disclaim any incidental right (“IR”) or IR asset received, for example as a result of forks or airdrops, and such assets will not be taken into account for purposes of determining the Trust's net asset value (“NAV”).
When the Trust sells or redeems its Shares, it will do so in cash transactions in blocks of 10,000 Shares (a “Creation Basket”) at the Trust's net asset value (“NAV”). For creations, authorized participants will deliver cash to the Trust's account with the Cash Custodian in exchange for Shares. Upon receipt of an approved creation order, the Sponsor, on behalf of the Trust, will submit an order to buy the amount of Portfolio Digital Assets represented by a Creation Basket. Based off Portfolio Digital Asset executions, the Cash Custodian will request the required cash from the authorized participant; the Transfer Agent will only issue Shares when the authorized participant has made delivery of the cash. Following receipt by the Cash Custodian of the cash from an authorized participant, the Sponsor, on behalf of the Trust, will approve an order with one or more previously onboarded trading partners to purchase the amount of Portfolio Digital Assets represented by the Creation Basket. This purchase of Portfolio Digital Assets will normally be cleared through an affiliate of the Custodian (although the purchase may also occur directly with the trading partner) and the Portfolio Digital Assets will settle directly into the Trust's account at the Custodian.
According to the Registration Statement and as further described below, the Trust's investment objective is provide capital appreciation. In seeking to achieve its investment objective, the Trust will hold PENGU, Pudgy Penguin NFTs, SOL, and ETH.
The Trust is expected to hold approximately 80-95% of its total assets in PENGU and 5-15% of its total assets in Pudgy Penguin NFTS. The Trust expects that under normal circumstances at least 95% of the Trust's total assets will be invested in PENGU and Pudgy Penguin NFTs. Because PENGU and Pudgy Penguin NFTs are tokens on the Solana and Ethereum Networks, respectively, it may be necessary from time to time for the Trust to hold SOL or ETH in order to pay the respective network transactions fees. Furthermore, as many Pudgy Penguin NFT marketplaces conduct auction denominated in ETH, it may be necessary for the Trust to convert cash to ETH in order to purchase Pudgy Penguin NFTs. Similarly, when the Trust sells Pudgy Penguin NFTs, the sales proceeds may be in ETH. The Trust intend to hold only as much SOL or ETH as the Sponsor believes is
With respect to the Pudgy Penguin NFTs, the Sponsor will select which NFTs to purchase by considering factors such as price, relative rarity, perceived desirability of a particular NFTs traits and characteristics, and the overall collection value. The Sponsor will periodically rebalance the Trust's portfolio to bring the portfolio within these ranges if it becomes out of compliance due to market changes. Within these ranges, the Sponsor has discretion to adjust the relative weightings of PENGU and Pudgy Penguin NFTs. Furthermore, within these ranges the Sponsor has discretion to speculatively buy and sell Pudgy Penguin NFTs based on its own analysis of market for Pudgy Penguin NFTs. The Trust will also hold SOL and ETH as necessary or incidental to the purchase, sale and transfer of the Trust's PENGU and Pudgy Penguins NFTs.
In seeking to achieve its investment objective, the Trust will hold the Portfolio Digital Assets and will value its Shares daily as of 4:00 p.m. ET using the Trust's valuation policy. All of the Trust's Portfolio Digital Assets will be held by the Custodian(s).
The Trust will value its PENGU, SOL and ETH, based on certain pricing benchmarks. The Trust will value the Pudgy Penguin NFT will be valued by a third-party NFT pricing service. The Trust will determine the price of the Portfolio Digital Assets and value its Shares daily based on the value of each applicable benchmark price and the price of Pudgy Penguins NFT as reflected by the third-party pricing service.
NAV means the total assets of the Trust (which includes all Portfolio Digital Assets and cash and cash equivalents) less total liabilities of the Trust. The Administrator determines the NAV of the Trust on each day that the Exchange is open for regular trading, as promptly as practical after 4:00 p.m. ET using the aggregate value of the Trust's assets less its accrued but unpaid liabilities based on the Trust's valuation policy, which as described above is based on the value of each applicable benchmark price and the price of Pudgy Penguins NFT as reflected by the third-party pricing service. The Administrator also determines the NAV per Share. The NAV for the Trust will be calculated by the Administrator once a day and will be disseminated daily to all market participants at the same time.
The Trust will provide information regarding the Trust's Portfolio Digital Assets holdings as well as additional data regarding the Trust. The website for the Trust, which will be publicly accessible at no charge, will contain the following information: (a) the current NAV per Share daily and the prior business day's NAV per Share and the reported BZX Official Closing Price;
The Intraday Indicative Value (“IIV”) will be updated during Regular Trading Hours to reflect changes in the value of the Trust's PENGU, SOL, and ETH holdings (the “Portfolio Cryptocurrencies”) during the trading day. The IIV disseminated during Regular Trading Hours should not be viewed as an actual real-time update of the NAV, which will be calculated only once at the end of each trading day. The IIV may differ from the NAV because NAV is calculated, using the closing value of the Portfolio Digital Assets, once a day at 4 p.m. ET, whereas the IIV draws prices from the last trade on each constituent platform for each benchmark price in an effort to produce a relevant, real-time price. The Trust will provide an IIV per Share updated every 15 seconds, as calculated by the Exchange or a third-party financial data provider during the Exchange's Regular Trading Hours (9:30 a.m. to 4:00 p.m. E.T.). The IIV will be widely disseminated on a per Share basis every 15 seconds during the Exchange's Regular Trading Hours through the facilities of the CTA and Consolidated Quotation System (CQS) high speed lines. In addition, the IIV will be available through on-line information services, such as Bloomberg and Reuters.
The price of the Portfolio Cryptocurrencies will be made available by one or more major market data vendors, updated at least every 15 seconds during Regular Trading Hours.
Quotation and last sale information for the Portfolio Cryptocurrencies is widely disseminated through a variety of major market data vendors, including Bloomberg and Reuters. Information relating to trading, including price and volume information, in the Portfolio Cryptocurrencies is available from major market data vendors and from the trading platforms on which the Portfolio Cryptocurrencies are traded. Depth of book information is also available from the Portfolio Cryptocurrencies trading platforms. The normal trading hours for the Portfolio Cryptocurrencies trading platforms are 24 hours per day, 365 days per year.
Information regarding market price and trading volume of the Shares will be continually available on a real-time basis throughout the day on brokers' computer screens and other electronic services. Information regarding the previous day's BZX Official Closing Price and trading volume information for the Shares will be published daily in the financial section of newspapers. Quotation and last-sale information regarding the Shares will be disseminated through the facilities of the CTA.
The Custodian's services (i) allow the Portfolio Digital Assets to be deposited from a public blockchain address to the Trust's Portfolio Digital Assets account; and (ii) allow Portfolio Digital Assets to be withdrawn from the Portfolio Digital Assets account to a public blockchain address as instructed by the Trust. The custody agreement requires the Custodian to hold the Trust's Portfolio Digital Assets in cold storage, unless required to facilitate withdrawals as a temporary measure. The Custodian will use segregated cold storage Portfolio Digital Assets addresses for the Trust which are separate from the Portfolio Digital Assets addresses that the
When the Trust sells or redeems its Shares, it will do so in cash transactions in 10,000 Share increments (a Creation Basket) that are based on the amount of Portfolio Digital Assets held by the Trust on a per Creation Basket basis. According to the Registration Statement, on any business day, an authorized participant may place an order to create one or more Creation Baskets. Purchase orders must be placed by 4:00 p.m. ET, or the close of regular trading on the Exchange, whichever is earlier. The day on which an order is received is considered the purchase order date. The total deposit of cash required is based on the combined NAV of the number of Shares included in the Creation Baskets being created determined as of 4:00 p.m. ET on the date the order to purchase is properly received. The Administrator determines the quantity of Portfolio Digital Assets associated with a Creation Basket for a given day by dividing the number of Portfolio Digital Assets held by the Trust as of the opening of business on that business day, adjusted for the amount of Portfolio Digital Assets constituting estimated accrued but unpaid fees and expenses of the Trust as of the opening of business on that business day, by the quotient of the number of Shares outstanding at the opening of business divided by the number of Shares in a Creation Basket.
The authorized participants will deliver only cash to create Shares and will receive only cash when redeeming Shares. Further, authorized participants will not directly or indirectly purchase, hold, deliver, or receive the Portfolio Digital Assets as part of the creation or redemption process or otherwise direct the Trust or a third party with respect to purchasing, holding, delivering, or receiving the Portfolio Digital Assets as part of the creation or redemption process.
The Trust will create Shares by receiving the Portfolio Digital Assets from a third party that is not the authorized participant and the Trust—not the authorized participant—is responsible for selecting the third party to facilitate the delivery of Portfolio Digital Assets. Further, the third party will not be acting as an agent of the authorized participant with respect to the delivery of the Portfolio Digital Assets to the Trust or acting at the direction of the authorized participant with respect to the delivery of the Portfolio Digital Assets to the Trust. When fulfilling a redemption request, the Trust will redeem shares by delivering the Portfolio Digital Assets to a third party that is not the authorized participant and the Trust—not the authorized participant—is responsible for selecting such third party to receive the Portfolio Digital Assets. Further, the third party will not be acting as an agent of the authorized participant with respect to the receipt of the Portfolio Digital Assets from the Trust or acting at the direction of the authorized participant with respect to the receipt of the Portfolio Digital Assets from the Trust.
The procedures by which an authorized participant can redeem one or more Creation Baskets mirror the procedures for the creation of Creation Baskets.
The Sponsor will maintain ownership and control of the Portfolio Digital Assets in a manner consistent with good delivery requirements for spot commodity transactions.
The Shares will be subject to BZX Rule 14.11(e)(4), which sets forth the initial and continued listing criteria applicable to Commodity-Based Trust Shares. The Exchange represents that, for initial and continued listing, the Trust must be in compliance with Rule 10A-3 under the Act. A minimum of 100,000 Shares will be outstanding at the commencement of listing on the Exchange. The Exchange will obtain a representation that the NAV will be calculated daily and that the NAV and information about the assets of the Trust will be made available to all market participants at the same time. The Exchange notes that, as defined in Rule 14.11(e)(4)(C)(i), the Shares will be: (a) issued by a trust that holds (1) four specified commodities
Upon termination of the Trust, the Shares will be removed from listing. The Trustee, CSC Delaware Trust Company, is a trust company having substantial capital and surplus and the experience and facilities for handling corporate trust business, as required under Rule 14.11(e)(4)(E)(iv)(a) and that no change will be made to the trustee without prior notice to and approval of the Exchange. The Exchange also notes that, pursuant to Rule 14.11(e)(4)(F), neither the Exchange nor any agent of the Exchange shall have any liability for damages, claims, losses or expenses caused by any errors, omissions or delays in calculating or disseminating any underlying commodity value, the current value of the underlying commodity required to be deposited to the Trust in connection with issuance of Commodity-Based Trust Shares; resulting from any negligent act or omission by the Exchange, or any agent of the Exchange, or any act, condition or cause beyond the reasonable control of the Exchange, its agent, including, but not limited to, an act of God; fire; flood; extraordinary weather conditions; war; insurrection; riot; strike; accident; action of government; communications or power failure; equipment or software malfunction; or any error, omission or delay in the reports of transactions in an underlying commodity. Finally, as required in Rule 14.11(e)(4)(G), the Exchange notes that any registered market maker (“Market Maker”) in the Shares must file with the Exchange in a manner prescribed by the Exchange and keep current a list identifying all accounts for trading in an underlying commodity, related commodity futures or options on commodity futures, or any other related commodity derivatives, which the registered Market Maker may have or over which it may exercise investment discretion. No registered Market Maker shall trade in an underlying commodity, related commodity futures or options on
The Exchange is able to obtain information regarding trading in the Shares and the underlying Portfolio Digital Assets or any other derivative of the Portfolio Digital Assets through members acting as registered Market Makers, in connection with their proprietary or customer trades.
As a general matter, the Exchange has regulatory jurisdiction over its Members and their associated persons, which include any person or entity controlling a Member. To the extent the Exchange may be found to lack jurisdiction over a subsidiary or affiliate of a Member that does business only in commodities or futures contracts, the Exchange could obtain information regarding the activities of such subsidiary or affiliate through surveillance sharing agreements with regulatory organizations of which such subsidiary or affiliate is a member.
With respect to trading halts, the Exchange may consider all relevant factors in exercising its discretion to halt or suspend trading in the Shares. The Exchange will halt trading in the Shares under the conditions specified in BZX Rule 11.18. Trading may be halted because of market conditions or for reasons that, in the view of the Exchange, make trading in the Shares inadvisable. These may include: (1) the extent to which trading is not occurring in the Portfolio Digital Assets underlying the Shares; or (2) whether other unusual conditions or circumstances detrimental to the maintenance of a fair and orderly market are present. Trading in the Shares also will be subject to Rule 14.11(e)(4)(E)(ii), which sets forth circumstances under which trading in the Shares may be halted.
If the IIV is not being disseminated as required, the Exchange may halt trading during the day in which the interruption to the dissemination of the IIV occurs. If the interruption to the dissemination of the IIV persists past the trading day in which it occurred, the Exchange will halt trading no later than the beginning of the trading day following the interruption.
In addition, if the Exchange becomes aware that the NAV with respect to the Shares is not disseminated to all market participants at the same time, it will halt trading in the Shares until such time as the NAV is available to all market participants.
The Exchange deems the Shares to be equity securities, thus rendering trading in the Shares subject to the Exchange's existing rules governing the trading of equity securities. BZX will allow trading in the Shares during all trading sessions on the Exchange. The Exchange has appropriate rules to facilitate transactions in the Shares during all trading sessions. As provided in BZX Rule 11.11(a) the minimum price variation for quoting and entry of orders in securities traded on the Exchange is $0.01 where the price is greater than $1.00 per share or $0.0001 where the price is less than $1.00 per share. The Shares of the Trust will conform to the initial and continued listing criteria set forth in BZX Rule 14.11(e)(4).
The Exchange represents that its surveillance procedures are adequate to properly monitor the trading of the Shares on the Exchange during all trading sessions and to deter and detect violations of Exchange rules and the applicable federal securities laws. Trading of the Shares through the Exchange will be subject to the Exchange's surveillance procedures for derivative products, including Commodity-Based Trust Shares. FINRA conducts certain cross-market surveillances on behalf of the Exchange pursuant to a regulatory services agreement. The Exchange is responsible for FINRA's performance under this regulatory services agreement.
The Exchange or FINRA, on behalf of the Exchange, or both, will communicate as needed regarding trading in the Shares or any other derivative of the Portfolio Digital Assets with other markets and other entities that are members of the ISG, and the Exchange, or FINRA, on behalf of the Exchange, or both, may obtain trading information regarding trading in the Shares or any other derivative of the Portfolio Digital Assets from such markets and other entities.
In addition, the Exchange also has a general policy prohibiting the distribution of material, non-public information by its employees.
The Sponsor has represented to the Exchange that it will advise the Exchange of any failure by the Trust or the Shares to comply with the continued listing requirements, and, pursuant to its obligations under Section 19(g)(1) of the Exchange Act, the Exchange will surveil for compliance with the continued listing requirements. If the Trust or the Shares are not in compliance with the applicable listing requirements, the Exchange will commence delisting procedures under Exchange Rule 14.12.
Prior to the commencement of trading, the Exchange will inform its members in an Information Circular of the special characteristics and risks associated with trading the Shares. Specifically, the Information Circular will discuss the following: (i) the procedures for the creation and redemption of Creation Baskets (and that the Shares are not individually redeemable); (ii) BZX Rule 3.7, which imposes suitability obligations on Exchange members with respect to recommending transactions in the Shares to customers; (iii) how information regarding the IIV and the Trust's NAV are disseminated; (iv) the risks involved in trading the Shares outside of Regular Trading Hours
In addition, the Information Circular will advise members, prior to the commencement of trading, of the prospectus delivery requirements applicable to the Shares. Members purchasing the Shares for resale to investors will deliver a prospectus to such investors. The Information Circular will also discuss any exemptive, no-action and interpretive relief granted by the Commission from any rules under the Act.
The Exchange believes that the proposal is consistent with Section 6(b) of the Act
The Commission has approved numerous series of Trust Issued Receipts,
More recently, the Commission has applied the Winklevoss Test while also recognizing that the “regulated market of significant size” standard is not the only means for satisfying Section 6(b)(5) of the Act. In the specifically providing that a listing exchange could demonstrate that “other means to prevent fraudulent and manipulative acts and practices” are sufficient to justify dispensing with the requisite surveillance-sharing agreement.
The Exchange believes that the proposal is designed to protect investors and the public interest. Over the past months years, U.S. investor exposure to PENGU has grown into millions of dollars with a fully diluted market cap of greater than $563 million. The Exchange believes that approving this proposal (and comparable proposals) provides the Commission with the opportunity to allow U.S. investors with access to the Portfolio Digital Assets in a regulated and transparent exchange-traded vehicle that would act to limit risk to U.S. investors.
The Exchange believes that the policy concerns are mitigated by the fact that the size of the market for the primary underlying reference asset ($563+ million fully diluted value) and the nature of the PENGU ecosystem reduces its susceptibility to manipulation. The geographically diverse and continuous nature of the Portfolio Digital Assets trading makes it difficult and prohibitively costly to manipulate the price of the Portfolio Digital Assets and, in many instances, the Portfolio Digital Asset markets can be less susceptible to manipulation than the equity, fixed income, and commodity futures markets. There are a number of reasons this is the case, including that there is not inside information about revenue, earnings, corporate activities, or sources of supply; manipulation of the price on any single venue would require manipulation of the global Portfolio Digital Asset prices in order to be effective; a substantial over-the-counter market provides liquidity and shock-absorbing capacity; the Portfolio Digital Asset's 24/7/365 nature provides constant arbitrage opportunities across all trading venues; and it is unlikely that any one actor could obtain a dominant market share.
Further, the Portfolio Digital Assets are arguably less susceptible to manipulation than other commodities that underlie ETPs; there may be inside information relating to the supply of the physical commodity such as the discovery of new sources of supply or significant disruptions at mining facilities that supply the commodity that simply are inapplicable as it relates to certain cryptoassets, including the Portfolio Digital Assets. Further, the Exchange believes that the fragmentation across the Portfolio Digital Asset trading platforms and increased adoption of the Portfolio Digital Assets, as displayed through increased user engagement and trading volumes, and the Solana Network make manipulation of the Portfolio Digital
The Exchange believes that the proposed rule change is designed to prevent fraudulent and manipulative acts and practices in that the Shares will be listed on the Exchange pursuant to the initial and continued listing criteria in Exchange Rule 14.11(e)(4). The Exchange believes that its surveillance procedures are adequate to properly monitor the trading of the Shares on the Exchange during all trading sessions and to deter and detect violations of Exchange rules and the applicable federal securities laws. Trading of the Shares through the Exchange will be subject to the Exchange's surveillance procedures for derivative products, including Commodity-Based Trust Shares. The issuer has represented to the Exchange that it will advise the Exchange of any failure by the Trust or the Shares to comply with the continued listing requirements, and, pursuant to its obligations under Section 19(g)(1) of the Exchange Act, the Exchange will surveil for compliance with the continued listing requirements. If the Trust or the Shares are not in compliance with the applicable listing requirements, the Exchange will commence delisting procedures under Exchange Rule 14.12. The Exchange may obtain information regarding trading in the Shares or any other derivative of the Portfolio Digital Assets via ISG, from other exchanges who are members or affiliates of the ISG, or with which the Exchange has entered into a comprehensive surveillance sharing agreement.
The Trust will provide information regarding the Trust's Portfolio Digital Assets holdings as well as additional data regarding the Trust. The website for the Trust, which will be publicly accessible at no charge, will contain the following information: (a) the current NAV per Share daily and the prior business day's NAV per Share and the reported BZX Official Closing Price;
The IIV will be updated during Regular Trading Hours to reflect changes in the value of the Trust's Portfolio Cryptocurrencies during the trading day. The IIV disseminated during Regular Trading Hours should not be viewed as an actual real-time update of the NAV, which will be calculated only once at the end of each trading day. The IIV may differ from the NAV because NAV is calculated, using the closing value of the Portfolio Digital Assets, once a day at 4 p.m. ET, whereas the IIV draws prices from the last trade on each constituent platform for each benchmark price in an effort to produce a relevant, real-time price. The Trust will provide an IIV per Share updated every 15 seconds, as calculated by the Exchange or a third-party financial data provider during the Exchange's Regular Trading Hours (9:30 a.m. to 4:00 p.m. E.T.). The IIV will be widely disseminated on a per Share basis every 15 seconds during the Exchange's Regular Trading Hours through the facilities of the CTA and Consolidated Quotation System (CQS) high speed lines. In addition, the IIV will be available through on-line information services, such as Bloomberg and Reuters.
The price of the Portfolio Cryptocurrencies will be made available by one or more major market data vendors, updated at least every 15 seconds during Regular Trading Hours.
Quotation and last sale information for the Portfolio Cryptocurrencies is widely disseminated through a variety of major market data vendors, including Bloomberg and Reuters. Information relating to trading, including price and volume information, in the Portfolio Cryptocurrencies is available from major market data vendors and from the trading platforms on which the Portfolio Cryptocurrencies are traded. Depth of book information is also available from the Portfolio Cryptocurrencies trading platforms. The normal trading hours for the Portfolio Cryptocurrencies trading platforms are 24 hours per day, 365 days per year.
Information regarding market price and trading volume of the Shares will be continually available on a real-time basis throughout the day on brokers' computer screens and other electronic services. Information regarding the previous day's BZX Official Closing Price and trading volume information for the Shares will be published daily in the financial section of newspapers. Quotation and last-sale information regarding the Shares will be disseminated through the facilities of the CTA.
In sum, the Exchange believes that this proposal is consistent with the requirements of Section 6(b)(5) of the Act, that on the whole the manipulation concerns previously articulated by the Commission are sufficiently mitigated to the point that they are outweighed by investor protection issues that would be resolved by approving this proposal.
For the above reasons, the Exchange believes that the proposed rule change is consistent with the requirements of Section 6(b)(5) of the Act.
The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purpose of the Act. The Exchange notes that the proposed rule change, rather will facilitate the listing and trading of an additional exchange-traded
The Exchange neither solicited nor received comments on the proposed rule change.
Within 45 days of the date of publication of this notice in the
A. by order approve or disapprove such proposed rule change, or
B. institute proceedings to determine whether the proposed rule change should be disapproved.
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change, as modified by Amendment No. 2, is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Selective Service System.
Notice.
The following forms have been submitted to the Office of Management and Budget (OMB) for reinstating an expired collection clearance in compliance with the Paperwork Reduction Act (44 U.S.C. Chapter 35):
Copies of the above-identified forms can be obtained upon written request to the Selective Service System, Public & Intergovernmental Affairs Directorate, 1501 Wilson Boulevard, Arlington, Virginia 22209.
Written comments and recommendations for the proposed reinstating an expired collection clearance of the forms should be sent within 30 days of the publication of this notice to: Selective Service System, Public & Intergovernmental Affairs Directorate, 1501 Wilson Boulevard, Arlington, Virginia 22209.
A copy of the comments should be sent to the Office of Information and Regulatory Affairs, Attention: Desk Officer, Selective Service System, Office of Management and Budget, New Executive Office Building, Room 3235, Washington, DC 20503.
Small Business Administration.
30-Day notice.
The Small Business Administration (SBA) is seeking approval from the Office of Management and Budget (OMB) for the information collection described below. In accordance with the Paperwork Reduction Act and OMB procedures, SBA is publishing this notice to allow all interested member of the public an additional 30 days to provide comments on the proposed collection of information.
Submit comments on or before August 13, 2025.
Written comments and recommendations for this information collection request should be sent within 30 days of publication of this notice to
You may obtain a copy of the information collection and supporting documents from the Agency Clearance Office at
The Federal and State Technology Partnership (FAST) Program is a competitive grants program designed to strengthen the technological competitiveness of small businesses seeking funding from the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs. FAST provides funding to organizations to execute state/regional programs that increase the number of SBIR/STTR proposals (through outreach and financial support); increase the number of SBIR/STTR awards (through technical assistance and mentoring); and better prepare SBIR/STTR awardees for commercialization success (through technical assistance and mentoring).
Comments may be submitted on (a) whether the collection of information is necessary for the agency to properly perform its functions; (b) whether the burden estimates are accurate; (c) whether there are ways to minimize the burden, including through the use of automated techniques or other forms of information technology; and (d) whether there are ways to enhance the quality, utility, and clarity of the information.
The Department of State is adding 11 properties to its Cuba Prohibited Accommodations List (CPA List). The Cuban Assets Control Regulations generally prohibit persons subject to U.S. jurisdiction from lodging, paying for lodging, or making any reservation for, or on behalf of, a third party to lodge at any property in Cuba on the CPA List.
Robert Haas, Office of the Coordinator for Cuban Affairs, tel.: 771-204-7384,
On September 24, 2020, the Department of the Treasury amended its Cuba sanctions with a regulatory amendment to the CACR, adding § 515.10 to generally prohibit persons subject to U.S. jurisdiction from lodging, paying for lodging, or making any reservation for, or on behalf of, a third party to lodge at any property in Cuba on the CPA List. The State Department, on behalf of the Secretary of State, is now updating the CPA List, as published below and available on the State Department's website:
This update includes eleven additional accommodations, one address correction, four name refinements, and one merging of duplicative entries. The State Department continues to update the Cuba Prohibited Accommodations List periodically.
This document and additional information concerning the CPA List are available from the Department of State's website: (
Below is the U.S. Department of State's Cuba Prohibited Accommodations List, a list of properties in Cuba at which the Cuban Assets Control Regulations generally prohibit persons subject to U.S. jurisdiction from lodging, paying for lodging, or making any reservation for, or on behalf of, a third party to lodge. The properties are owned or controlled by the Cuban government, a prohibited official of the Government of Cuba, as defined in 31 CFR 515.337, a prohibited member of the Cuban Communist Party, as defined in 31 CFR 515.338, a close relative, as defined in 31 CFR 515.339, of a prohibited official of the Government of Cuba, or a close relative of a prohibited member of the Cuban Communist Party. For information regarding the restrictions on transactions with these properties, please see 31 CFR 515.210. All properties were listed effective September 28, 2020, unless otherwise indicated.
* Property is marketed as a “casa” but is owned or controlled by the Cuban government and is not an independent “casa particular.”
^ Property is a “casa particular” but it nonetheless meets the criteria for inclusion on the Cuba Prohibited Accommodations List.
The Department of State is adding seven Cuban military-controlled hotels to the List of Restricted Entities and Sub entities Associated With Cuba (Cuba Restricted List or CRL) identifying entities and sub entities under the control of, or acting for or on behalf of, the Cuban military, intelligence, or security services or personnel with which direct financial transactions would disproportionately benefit such services or personnel at the expense of the Cuban people or private enterprise in Cuba. The Cuban Assets Control Regulations generally prohibit a person subject to U.S. jurisdiction from having direct financial transactions with the entities and sub entities on the CRL. The Department of Commerce's Bureau of Industry and Security generally will deny applications to export or reexport items for use by entities or sub entities on the CRL.
Robert Haas, Office of the Coordinator for Cuban Affairs, tel.: 771-204-7384,
On June 16, 2017, the President signed National Security Presidential Memorandum 5 (NSPM-5) on Strengthening the Policy of the United States Toward Cuba. As directed by NSPM-5, on November 9, 2017, the Department of the Treasury's Office of Foreign Assets Control (OFAC) published a final rule in the
The State Department, on behalf of the Secretary of State, is now updating the CRL, as published below and available on the State Department's website: (
This update includes seven additional entries and is re-organized by province for ease of accessibility to the public. The State Department continues to update the CRL periodically.
This document and additional information concerning the CRL are available from the Department of State's website (
Below is the U.S. Department of State's “Cuba Restricted List” of entities and sub entities with which the Cuban Assets Control Regulations (31 CFR 515.209) generally prohibit direct financial transactions. These entities are under the control of, or acting for or on behalf of, the Cuban military, intelligence, or security services or personnel with which direct financial transactions would disproportionately benefit such services or personnel at the expense of the Cuban people or private enterprise in Cuba. All entities and sub entities were listed effective February 6, 2025, unless otherwise indicated.
In April 2014, the Board instituted a proceeding in Docket No. EP 722 and invited interested persons to comment on “the Board's methodology in fulfilling its statutory mandate to determine railroad revenue adequacy, as well as the revenue adequacy component of the Board's standard for judging the reasonableness of rail freight rates, with a view to what, if any, changes the Board can and should consider.”
On September 1, 2020, in Docket No. EP 766,
For the reasons stated below, the Board will discontinue these proceedings.
Pursuant to 49 U.S.C. 10704(a)(3), the Board annually determines which Class I rail carriers are earning adequate revenues, most recently in
To make the annual revenue adequacy determination, the Board compares a carrier's return on net investment (ROI) with the rail industry's after-tax cost of capital for that year.
On September 5, 2014, the Board received opening comments in
In
On September 21, 2020, the Board received replies to the petition from CSXT and the Western Coal Traffic League (WCTL), and a joint reply from the American Chemistry Council, Corn Refiners Association, American Fuel & Petrochemical Manufacturers, the National Industrial Transportation League, the Chlorine Institute, and the Fertilizer Institute (collectively, Joint Shippers). CSXT supports the petition, while WCTL and Joint Shippers oppose it. On October 13, 2020, Joint Carriers responded to WCTL's and Joint Shippers' arguments against their petition.
After initiating the proceeding, the Board received opening comments on May 17, 2021, from the Association of American Railroads (AAR), Dow, Inc., Industrial Minerals Association, Joint Carriers, Joint Shippers, Olin Corporation, the United States Department of Agriculture (USDA), and jointly from WCTL and Seminole Electric Cooperative, Inc. (Seminole Electric), and replies on August 16, 2021, from AAR, Joint Carriers, Joint Shippers, and jointly from WCTL and Seminole Electric.
The Board appreciates the effort undertaken by stakeholders in these exploratory dockets to provide additional information and arguments for the Board's consideration. While the Board continues to explore ideas related to revenue adequacy, at this time, the Board has determined that the public interest would be better served by the Board devoting its limited resources to other reform and potential rulemaking matters. For example, the agency recently initiated a reform initiative aimed at streamlining its processes and procedures, including those used in rate, service, and other cases.
The Board's docket prioritization is guided in part by the fact that revenue adequacy issues have been raised in individual matters.
This action will not significantly affect either the quality of the human environment or the conservation of energy resources.
1. Docket No. EP 722 and Docket No. EP 766 are discontinued.
2. This decision is effective on its date of service.
By the Board, Board Members Fuchs, Hedlund, Primus, and Schultz.
The Surface Transportation Board has received a request from Princeton University, (WB25-38-07/09/2025) for permission to use select data from the Board's 1984-2025 masked Carload Waybill Samples. A copy of this request may be obtained from the Board's website under docket no. WB25-27.
The waybill sample contains confidential railroad and shipper data; therefore, if any parties object to these requests, they should file their objections with the Director of the Board's Office of Economics within 14 calendar days of the date of this notice. The rules for release of waybill data are codified at 49 CFR 1244.9.
Any inquiries on this request should be directed to
CSX Transportation, Inc. (CSXT), has filed a verified notice of exemption under 49 CFR part 1152 subpart F—
CSXT has certified that: (1) no local rail traffic has moved over the Line during the past two years; (2) because the Line is not a “through line,” there is no overhead traffic that would need to be rerouted; (3) no formal complaint filed by a user of rail service on the Line (or by a state or local government on behalf of such user) regarding cessation of service over the Line is pending with either the Surface Transportation Board (Board) or any U.S. District Court or has been decided in favor of a complainant within the two-year period; and (4) the requirements at 49 CFR 1105.7(b) and 1105.8(c) (notice of environmental and historic reports), 49 CFR 1105.12 (newspaper publication), and 49 CFR 1152.50(d)(1) (notice to government agencies) have been met.
As a condition to this exemption, any employee adversely affected by the abandonment shall be protected under
Provided no formal expression of intent to file an offer of financial assistance (OFA) has been received,
CFR 1152.27(c)(2), and interim trail use/railbanking requests under 49 CFR 1152.29 must be filed by July 24, 2025.
All pleadings, referring to Docket No. AB 55 (Sub-No. 819X), must be filed with the Surface Transportation Board either via e-filing on the Board's website or in writing addressed to 395 E Street SW, Washington, DC 20423-0001. In addition, a copy of each pleading must be served on CSXT's representative, Louis E. Gitomer, Law Offices of Louis E. Gitomer, LLC, 600 Baltimore Avenue, Suite 301, Towson, MD 21204.
If the verified notice contains false or misleading information, the exemption is void ab initio.
CSXT has filed a combined environmental and historic report that addresses the potential effects, if any, of the abandonment on the environment and historic resources. OEA will issue a Draft Environmental Assessment (Draft EA) by July 18, 2025. The Draft EA will be available to interested persons on the Board's website, by writing to OEA, or by calling OEA at (202) 245-0294. If you require an accommodation under the Americans with Disabilities Act, please call (202) 245-0245. Comments on environmental or historic preservation matters must be filed within 15 days after the Draft EA becomes available to the public.
Environmental, historic preservation, public use, or trail use/railbanking conditions will be imposed, where appropriate, in a subsequent decision.
Pursuant to the provisions of 49 CFR 1152.29(e)(2), CSXT shall file a notice of consummation with the Board to signify that it has exercised the authority granted and fully abandoned the Line. If consummation has not been effected by CSXT's filing of a notice of consummation by July 14, 2026, and there are no legal or regulatory barriers to consummation, the authority to abandon will automatically expire.
Board decisions and notices are available at
Decided: July 8, 2025.
By the Board, Scott M. Zimmerman, Acting Director, Office of Proceedings.
Federal Aviation Administration (FAA), DOT.
Notice of intent to withdrawal cancellation of TSO-C122a.
This notice announces the FAA's withdrawal of the notice of intent to cancel Technical Standard Order (TSO-)C122a, “Equipment That Prevent Blocked Channels Used in Two-Way Radio Communications Due to Simultaneous Transmissions,” dated June 18, 2012. Retaining TSO-C122a as an active TSO allows the continued design or production of articles authorized under the existing TSO approval. This withdrawal reflects the FAA's decision to maintain support for existing authorizations under TSO-C122a.
Comments on this notice must identify the notice docket number and must be received on or before August 13, 2025 or as applicable.
Send comments identified by docket number FAA-2025-1741 using any of the following methods:
•
•
•
•
•
•
•
Stephen P. Van Trees, AIR-626C, Federal Aviation Administration, 800 Independence Ave., 8th Floor, Washington, DC 20591; phone (202)
TSO-C122 provides standards for equipment designed to prevent blocked channels in two-way radio communications caused by simultaneous transmissions. Originally issued in April 1994, the current revision, TSO-C122a, was issued on August 26, 2005.
On June 18, 2012, the FAA issued a Notice of Intent to Cancel TSO-C122a (77 FR 37734), citing that only one manufacturer has been issued a letter of TSO design approval since the original issuance of TSO-C122 in 1994. The FAA also cited “the eventual obsolescence of TSO-C122a equipment.”
The FAA received no public comments in response to TSO-C122a and has not granted any new authorizations or letter of TSO design approvals since the notice was published. As a result, the FAA has not finalized the cancellation of the TSO. TSO-C122a remains active, and manufacturers may continue to use TSO-C122a when designing and producing equipment for TSO authorization or letters of TSO design approval.
The National Transportation Safety Board (NTSB) in 2025 investigated a midair collision. According to the NTSB's investigation preliminary report, the flightcrew of an aircraft involved in a midair collision may not have received a critical air traffic control instruction shortly before the collision due to simultaneous radio transmissions.
TSO-C122a equipment is designed to prevent blocked communications caused by simultaneous transmissions. As a result, this TSO-C122a equipment could reduce the risk of similar incidents in the future.
In light of the NTSB's findings, the FAA is withdrawing its prior intent to cancel TSO-C122a and is also reopening the associated comment period.
RTCA Special Committee 226, Audio Systems and Equipment, which was referenced in TSO-C122a, dated June 18, 2012, is no longer active. When the committee was active, the FAA intended to “continue to coordinate . . . for any new developments on other means being used to address blocked channels caused by simultaneous transmissions.” The FAA now invites stakeholder input on current technical standards or operational practices that serve a similar function.
The FAA seeks further public comments on the technical implementation and operational considerations related to TSO-C122a. Given that TSO-C122a, dated June 18, 2012, cited “the eventual obsolescence of TSO-C122a equipment” as part of the rationale for the original intent to withdraw the TSO, the FAA specifically invites comments on whether TSO-C122a and the standard it references, RTCA/DO-209 (“Minimum Operational Performance Standards For Devices That Prevent Blocked Channels Used In Two-Way Radio Communications Due To Simultaneous Transmissions,” dated April 23, 1992), are obsolete or obsolescent. If so, the FAA welcomes input to identify current technologies that may have replaced them.
Federal Aviation Administration (FAA), DOT.
Notice.
The FAA is considering a proposal to change approximately 218 acres of airport land from aeronautical use to non-aeronautical use and to authorize the sale of airport property located at Lorain County Regional Airport, Elyria, Ohio. The aforementioned land is not needed for aeronautical use. The subject property is located north of Runway 7/25 and is currently being used for agricultural purposes. The intent is to sell the land to the Lorain County Port Authority to market the property for future light industrial uses.
Comments must be received on or before August 13, 2025.
All requisite and supporting documentation will be made available for review by appointment at the FAA Detroit Airports District Office, Alex Erskine, Program Manager, 11677 S Wayne Rd., Ste. 107, Romulus, MI 48174. Telephone: (734) 229-2900/Fax: (734) 229-2950 and Lorain County Board of Commissioners, Karen L. Perkins, Deputy Administrator, 226 Middle Avenue, Elyria, OH. Telephone: (440) 328-2499.
Written comments on the Sponsor's request may be submitted using any of the following methods:
•
•
•
•
Alex Erskine, Program Manager, Federal Aviation Administration, Detroit Airports District Office, 11677 S Wayne Rd., Ste. 107, Romulus, MI 48174. Telephone: (734) 229-2900/Fax: (734) 229-2950.
In accordance with section 47107(h) of Title 49, United States Code, this notice is required to be published in the
The approximately 218-acre subject property is comprised of airport Parcels 8, 38, 39-40, and portions of airport Parcels 4, 5, 6, 7, 28, and 29. These airport Parcels were acquired with Federal funds under grant numbers 9-33-049-D801 (Parcels 4, 5, 6, 7, 28 and 29), 7-39-0048-01 (Parcel 8) and 3-39-0048-07 (Parcels 38, 39 and 40). The land is currently used for agricultural purposes and is proposed to be sold to the Lorain County Port Authority to market for future non-aeronautical light industrial purposes compatible with airport operations.
The Lorain County Regional Airport will receive fair market value for the sale of the land. The disposition of proceeds from the sale of this airport property will be in accordance with section 47107(b) of Title 49, United States Code.
This notice announces that the FAA is considering the release of the subject airport property at the Lorain County Regional Airport, Elyria, Ohio from federal land covenants, subject to a reservation for continuing right of flight as well as restrictions on the released
Situated in the Township of New Russia, County of Lorain and State of Ohio, and known as being part of Original Russia Township Lot No. 9. Also being part of a 78.60 acre tract conveyed to Lorain County Board of Commissioners as recorded in Instrument No. 2006-0175132 of the Lorain County Records, being more definitely described as follows;
Commencing at a 1″ iron pin with brass cap in monument box found at the intersection of the centerline of Bechtel Road (60 feet wide) and the centerline of Albrecht Road (60 feet wide), also being the northeasterly corner of Original Russia Township Lot No. 9;
Thence, along the centerline of Albrecht Road and the northerly line of Original Russia Township Lot No. 9, North 89°27′19″ West, 997.66 feet to the northeasterly corner of land conveyed to Abby M. Lesniak as recorded in Instrument No. 2017-0649681 of the Lorain County Records;
Thence, leaving the centerline of Albrecht Road and the northerly line of Original Russia Township Lot No. 9, along Abby M. Lesniak's easterly line, South 01°32′37″ West, 400.06 feet to the northerly line of said 78.60 acre tract, and being the True Point of Beginning for the parcel herein described;
Thence, leaving Abby M. Lesniak's easterly line, along the northerly line of said 78.60 acre tract, South 01°32′37″ West, 147.94 feet to an iron pin set;
Thence, continuing along the northerly line of said 78.60 acre tract, South 89°27′19″ East, 600.10 feet to an iron pin set at the northeasterly corner thereof;
Thence, along the easterly line of said 78.60 acre tract, South 01°30′01″ West, 1413.77 feet to an iron pin set;
Thence, leaving the easterly line of said 78.60 acre tract, along the arc of a curve which deflects to the left, 1812.13 feet to an iron pin set, said curve having a radius of 500.00 feet, a central angle of 207°39′19″, and a chord of 971.02 feet which bears South 43°21′41″ West;
Thence, North 89°03′19″ West, 859.00 feet to an iron pin set in the westerly line of said 78.60 acre tract;
Thence, along the westerly line of said 78.60 acre tract, North 01°03′21″ East, 2267.86 feet to the northwesterly corner thereof, said point being referenced by a
Thence, along the northerly line of said 78.60 acre tract, South 89°27′19″ East, 924.77 feet to the point of beginning, and passing through a
Containing within said bounds 60.0021 acres of land as surveyed by KS Associates, Inc. under the supervision of Trevor A. Bixler, Professional Surveyor, No. 7730 in August, 2024.
Bearings are based on the Ohio State Plane, North Zone, NAD83(2011) Grid North.
All iron pins set are
Situated in the Township of New Russia, County of Lorain and State of Ohio, and known as being part of Original Russia Township Lot No. 9. Also being part of a 45.56 acre tract conveyed to Lorain County Board of Commissioners as recorded in Instrument No. 2006-0175132 of the Lorain County Records, being more definitely described as follows;
Commencing at a 1″ iron pin with brass cap in monument box found at the intersection of the centerline of Bechtel Road (60 feet wide) and the centerline of Albrecht Road (60 feet wide), also being the northeasterly corner of Original Russia Township Lot No. 9;
Thence, along the easterly line of Original Russia Township Lot No. 9, South 01°12′29″ West, 249.74 feet to an iron pin set in the northerly line of said 45.56 acre tract, and being the True Point of Beginning for the parcel herein described;
Thence, continuing along the easterly line of Original Russia Township Lot No. 9, South 01°12′29″ West,1933.19 feet to an iron pin set;
Thence, leaving the easterly line of Original Russia Township Lot No. 9, South 64°47′48″ West, 371.74 feet to an iron pin set;
Thence, along the arc of a curve which deflects to the left, 399.81 feet to an iron pin set in the westerly line of said 45.56 acre tract, said curve having a radius of 500.00 feet, a central angle of 45°48′54″, and a chord of 389.24 feet which bears North 09°54′13″ West;
Thence, along the westerly line of said 45.56 acre tract, North 01°30′01″ East, 1413.77 feet to an iron pin set;
Thence, long a southerly line of said 45.56 acre tract, North 89°27′19″ West, 600.10 feet to an iron pin set in the westerly line of said 45.56 acre tract;
Thence, along the westerly line of said 45.56 acre tract, North 01°32′37″ East, 298.00 feet to a 1″ iron pipe found at the northwesterly corner of said 45.56 acre tract;
Thence, along the northerly line of said 45.56 acre tract, South 89°27′19″ East, 599.87 feet to a
Thence, continuing along the northerly line of said 45.56 acre tract, South 89°29′19″ East, 399.25 feet to the point of beginning.
Containing within said bounds 22.3653 acres of land as surveyed by KS Associates, Inc. under the supervision of Trevor A. Bixler, Professional Surveyor, No. 7730 in August, 2024.
Bearings are based on the Ohio State Plane, North Zone, NAD83(2011) Grid North.
All iron pins set are
Situated in the Township of New Russia, County of Lorain and State of Ohio, and known as being part of Original Russia Township Lot No. 10. Also being part of a 45.56 acre tract conveyed to Lorain County Board of Commissioners as recorded in Instrument No. 2006-0175132 of the Lorain County Records, being more definitely described as follows;
Commencing at a 1″ iron pin with brass cap in monument box found at the intersection of the centerline of Bechtel Road (60 feet wide) and the centerline of Albrecht Road (60 feet wide), also being the northwesterly corner of Original Russia Township Lot No. 10;
Thence, along the westerly line of Original Russia Township Lot No. 10, South 01°12′29″ West, 249.74 feet to an iron pin set in the northerly line of said 45.56 acre tract, and being the True Point of Beginning for the parcel herein described;
Thence, leaving the westerly line of Original Russia Township Lot No. 10, along the northerly line of said 45.56 acre tract, South 89°29′19″ East, 344.41 feet to a
Thence, along the easterly line of said 45.56 acre tract, South 00°17′41″ West, 1752.69 feet to an iron pin set;
Thence, leaving the easterly line of said 45.56 acre tract, South 64°47′48″ West, 415.72 feet to an iron pin set in the westerly line of Original Russia Township Lot No. 10;
Thence, along the westerly line of Original Russia Township Lot No. 10,
Containing within said bounds 15.1907 acres of land as surveyed by KS Associates, Inc. under the supervision of Trevor A. Bixler, Professional Surveyor, No. 7730 in August, 2024. Bearings are based on the Ohio State Plane, North Zone, NAD83(2011) Grid North.
Situated in the Township of New Russia, County of Lorain and State of Ohio, and known as being part of Original Russia Township Lot No. 10. Also being part of a 27.82 acre tract conveyed to Lorain County Board of Commissioners as recorded in Instrument No. 2006-0175132 of the Lorain County Records, being more definitely described as follows;
Commencing at a 1″ iron pin with brass cap in monument box found at the intersection of the centerline of Fowl Road (60 feet wide) and the centerline of Albrecht Road (60 feet wide), also being the northeasterly corner of Original Russia Township Lot No. 10;
Thence, along the centerline of Albrecht Road and the northerly line of Original Russia Township Lot No. 10, North 89°32′04″ West, 1603.56 feet to the northwesterly corner of a 50.12 acre tract conveyed to Lorain County Board of Commissioners as recorded in Instrument No. 2006-0175132 of the Lorain County Records, said point being referenced by a railroad spike found 0.06 feet South and 0.28 feet East;
Thence, leaving the centerline of Albrecht Road and the northerly line of Original Russia Township Lot No. 10, along the westerly line of said 50.12 acre tract, South 00°14′49″ West, 1348.05 feet to a
Thence, along the easterly line of said 27.82 acre tract, South 00°14′49″ West, 269.87 feet to an iron pin set;
Thence, leaving the easterly line of said 27.82 acre tract, South 64°47′48″ West, 888.27 feet to an iron pin set in the westerly line of said 27.82 acre tract;
Thence, along the westerly line of said 27.82 acre tract, North 00°17′41″ East, 654.64 feet to a
Thence, along the northerly line of said 27.82 acre tract, South 89°32′04″ East, 801.53 feet to the point of beginning.
Containing within said bounds 8.5073 acres of land as surveyed by KS Associates, Inc. under the supervision of Trevor A. Bixler, Professional Surveyor, No. 7730 in August, 2024.
Bearings are based on the Ohio State Plane, North Zone, NAD83(2011) Grid North.
All iron pins set are
Situated in the Township of New Russia, County of Lorain and State of Ohio, and known as being part of Original Russia Township Lot No. 10. Also being part of a 50.12 acre tract conveyed to Lorain County Board of Commissioners as recorded in Instrument No. 2006-0175132 of the Lorain County Records, being more definitely described as follows;
Commencing at a 1″ iron pin with brass cap in monument box found at the intersection of the centerline of Fowl Road (60 feet wide) and the centerline of Albrecht Road (60 feet wide), also being the northeasterly corner of Original Russia Township Lot No. 10;
Thence, along the centerline of Albrecht Road and the northerly line of Original Russia Township Lot No. 10, North 89°32′04″ West, 804.32 feet to the northeasterly corner of said 50.12 acre tract and being the True Point of Beginning for the parcel herein described;
Thence, leaving the centerline of Albrecht Road and the northerly line of Original Russia Township Lot No. 10, along the easterly line of said 50.12 acre tract, South 00°18′56″ West, 1176.61 feet to an iron pin set;
Thence, leaving the easterly line of said 50.12 acre tract, South 56°15′58″ West, 356.52 feet to an iron pin set;
Thence, South 64°47′48″ West, 556.16 feet to an iron pin set in the westerly line of said 50.12 acre tract;
Thence, along the westerly line of said 50.12 acre tract, North 00°14′49″ East, 1617.92 feet to the centerline of Albrecht Road and the northerly line of Original Russia Township Lot No. 10, said point being referenced by a railroad spike found 0.06 feet South, 0.28 feet East;
Thence, along the centerline of Albrecht Road and the northerly line of Original Russia Township Lot No. 10, South 89°32′04″ East, 799.24 feet to the point of beginning.
Containing within said bounds 25.9483 acres of land including right of way and 25.3979 acres of land excluding right of way as surveyed by KS Associates, Inc. under the supervision of Trevor A. Bixler, Professional Surveyor, No. 7730 in August, 2024.
Bearings are based on the Ohio State Plane, North Zone, NAD83(2011) Grid North.
All iron pins set are
Situated in the Township of Elyria, County of Lorain, and State of Ohio:
And being a part of Original Township Lot No. 1, west of the West Branch of Black River, bounded and described as follows:
Beginning at an iron pin at the Southeast corner of said Lot No. 1, being also the Southwest corner of Elyria Township and at the intersection of the center of Albrecht Road and Fowl Road; thence in the center of said Fowl Road and along the Westerly line of said lot, North 0°02′ East, a distance of 224.4 feet to a point; thence in the center of a ditch, North 88°22′ East, a distance of 1025.79 feet to the Westerly line of premises in said lot as deeded to Russell H. Manns and Thelma H. Manns, by deed dated June 24, 1936 and recorded in Volume 281, Page 67 of Lorain County Record of Deeds; thence along the Easterly line of premises so deeded to Russell H. Manns and Thelma H. Manns, South 0°07′ West and passing through an iron pin on the Northerly line of said Albrecht Road, a distance of 253.61 feet to the center of said road; thence in the center of Said Albrecht Road and Southerly line of said Lot. No. 1, West a distance of 1024.98 feet to the place of beginning, containing within said bounds 5.624 acres of land as surveyed J.W. Warden, Registered Surveyor, July 29, 1941, be the same more or less, but subject to all legal highways.
Situated in the Township of New Russia, County of Lorain and State of Ohio, and known as being part of Original Russia Township Lot No. 18. Also being part of a 70.30 acre tract conveyed to Lorain County Board of Commissioners as recorded in Instrument No. 2006-0175132 of the Lorain County Records, being more definitely described as follows;
Beginning at a point in the centerline of Oberlin Road (60 feet wide) at the northwesterly corner of Original Russia Township Lot No. 18, said point being referenced by a 1″ iron pin with brass cap in monument box found 0.22 feet West;
Thence, along the northerly line Original Russia Township Lot No. 18, South 89°03′19″ East, 1633.44 feet to an iron pin set at the northeasterly corner of said 70.30 acre tract and passing
Thence, leaving the northerly line Original Russia Township Lot No. 18, along the easterly line of said 70.30 acre tract, South 01°22′40″ West, 1205.26 feet to an iron pin set;
Thence, leaving the easterly line of said 70.30 acre tract, South 73°19′39″ West, 1013.26 feet to an iron pin set in westerly line of said 70.30 acre tract;
Thence, along the westerly line of said 70.30 acre tract, North 01°20′41″ East, 880.93 feet to a 1″ iron pipe found;
Thence, along a southerly line of said 70.30 acre tract, South 89°24′34″ West, 667.27 feet to the centerline of Oberlin Road and passing through a
Thence, along the centerline of Oberlin Road and the westerly line of Original Russia Township Lot No. 18, North 01°08′48″ East, 648.87 feet to the point of beginning.
Containing within said bounds 39.8765 acres of land including right of way and 39.4299 acres of land excluding right of way as surveyed by KS Associates, Inc. under the supervision of Trevor A. Bixler, Professional Surveyor, No. 7730 in August, 2024.
Bearings are based on the Ohio State Plane, North Zone, NAD83(2011) Grid North.
All iron pins set are
Situated in the Township of New Russia, County of Lorain and State of Ohio, and known as being part of Original Russia Township Lot Nos. 18 and 19. Also being part of a 67.92 acre tract conveyed to Lorain County Board of Commissioners as recorded in Instrument No. 2006-0175132 of the Lorain County Records, being more definitely described as follows;
Commencing at a 1″ iron pin w/brass cap in monument box found at the intersection of the centerline of Oberlin Road (60 feet wide) and the centerline of Russia Road (60 feet wide), also being the southwesterly corner of Original Russia Township Lot No. 18;
Thence, along the centerline of Russia Road and the southerly line of Original Russia Township Lot No. 18, South 89°33′05″ East, 1622.54 feet to the southeasterly corner of a 70.30 acre tract conveyed to Lorain County Board of Commissioners as recorded in Instrument No. 2006-0175132 of the Lorain County Records,
Thence, leaving the centerline of Russia Road and the southerly line of Original Russia Township Lot No. 18, along the easterly line of said 70.30 acre tract, North 01°22′40″ East, 1525.11 feet to an iron pin set, and being the True Point of Beginning for the parcel herein described;
Thence, continuing along the easterly line of said 70.30 acre tract, North 01°22′40″ East, 1205.26 feet to an iron pin set in the northerly line of Original Russia Township Lot No. 18 at the northwesterly corner of said 67.92 acre tract;
Thence, leaving the easterly line of said 70.30 acre tract, along the northerly line of Original Russia Township Lot Nos. 18 and 19, South 89°03′19″ East, 1221.81 feet to an iron pin set at the northeasterly corner of said 67.92 acre tract;
Thence, leaving the northerly line of Original Russia Township Lot No. 19, along the easterly line of said 67.92 acre tract, South 01°27′11″ West, 422.47 feet to an iron pin set;
Thence, leaving the easterly line of said 67.92 acre tract, South 62°42′39″ West, 713.72 feet to an iron pin set;
Thence, South 00°30′37″ West, 254.52 feet to an iron pin set;
Thence, South 73°19′39″ West, 629.84 feet to the point of beginning.
Containing within said bounds 23.6837 acres as surveyed by KS Associates, Inc. under the supervision of Trevor A. Bixler, Professional Surveyor, No. 7730 in August, 2024.
Bearings are based on the Ohio State Plane, North Zone, NAD83(2011) Grid North.
All iron pins set are
Situated in the Township of Russia and Township of Carlisle, County of Lorain and State of Ohio:
and being known as a part of original Russia Township Lot No. 10 and a part of Original Carlisle Township Section No. 1 and more fully described as follows:
Commencing for boundary at a monument box with an iron pin found at the Northwest corner of Original Carlisle Township No. 1, said pin being at the point of intersection of the centerline of Fowl Road and Albrecht Road; thence North 89°57′10″ East, along the centerline of Albrecht Road, a distance of 791.97 feet, to a railroad spike set; thence South 00°10′24″ East, passing thru an iron pin found at a distance of 30.00 feet, a total distance of 200.32 feet to an iron pin found; thence South 64°20′58″ West, a distance of 1768.67 feet to an iron pin found; thence North 00°08′21″ West, a distance of 655.15 feet to an iron pin found; thence South 89°59′20″ East a distance of 560.80 feet to an iron pin found; thence North 00°08′21″ West, passing thru an iron pin found at a distance of 280.30 feet, a total distance of 310.30 feet to a railroad spike set, said spike being on the North line of Original Russia Township Lot No. 10 and on the centerline of Albrecht Road; thence South 89°59′20″ East, along said lot line and road centerline, a distance of 243.34 feet to the true place of beginning containing 17.357 Acres, there being 7.090 Acres in Original Carlisle Township Section No. 1 and 10.267 Acres in Original Russia Township Lot No. 10, but subject to all legal highways, as surveyed by Lowell E Bender, Registered Surveyor No. 4978 on December 4, 1990.
All bearings are assumed and are for the determination of angles only.
Maritime Administration, DOT.
Notice and request for comments.
The Secretary of Transportation, as represented by the Maritime Administration (MARAD), is authorized to make determinations regarding the coastwise use of foreign built; certain U.S. built; and U.S. and foreign rebuilt vessels that solely carry no more than twelve passengers for hire. MARAD has received such a determination request and is publishing this notice to solicit comments to assist with determining whether the proposed use of the vessel set forth in the request would have an adverse effect on U.S. vessel builders or U.S. coastwise trade businesses that use U.S.-built vessels in those businesses. Information about the requestor's vessel, including a description of the proposed service, is in the
Submit comments on or before August 13, 2025.
You may submit comments identified by DOT Docket Number MARAD-2025-0138 by any one of the following methods:
•
•
If you mail or hand-deliver your comments, we recommend that you include your name and a mailing address, an email address, or a telephone number in the body of your document so that we can contact you if we have questions regarding your submission.
Patricia Hagerty, U.S. Department of Transportation, Maritime Administration, 1200 New Jersey Avenue SE, Mail Stop 2, MAR-620, Washington, DC 20590. Telephone: (202) 366-5400. Email:
Pursuant to 46 U.S.C. 12121(b), the U.S. Coast Guard may issue a certificate of documentation with a coastwise trade endorsement for eligible, small passenger vessels authorized to carry no more than 12 passengers for hire if the Maritime Administration (MARAD), after notice and an opportunity for public comment, determines the use of the small passenger vessel in the coastwise trade will not adversely affect United States vessel builders or the coastwise trade business of any person that employs vessels built in the United States in that business.
MARAD has received an eligibility determination request. Further details about the requester's vessel and its proposed operations may be found in the determination request posted in the DOT docket as MARAD-2025-0138 at
Please submit comments, including the attachments, following the instructions provided under the above heading entitled
The docket online is located at
Yes. Your entire comment, including your personal identifying information, will be made publicly available.
You may request that MARAD treat your comments as commercially confidential by submitting them to
If MARAD receives a Freedom of Information Act (FOIA) request for the information, procedures described in the Department's FOIA regulation at 49 CFR 7.29 will be followed. Only information that is ultimately determined to be confidential under those procedures will be exempt from disclosure under FOIA.
Anyone can search the electronic form of all comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). For information on DOT's compliance with the Privacy Act, please visit
By Order of the Maritime Administrator.
Maritime Administration, DOT.
Notice and request for comments.
The Secretary of Transportation, as represented by the Maritime Administration (MARAD), is authorized to make determinations regarding the coastwise use of foreign built; certain U.S. built; and U.S. and foreign rebuilt vessels that solely carry no more than twelve passengers for hire. MARAD has received such a determination request and is publishing this notice to solicit comments to assist with determining whether the proposed use of the vessel set forth in the request would have an adverse effect on U.S. vessel builders or U.S. coastwise trade businesses that use U.S.-built vessels in those businesses. Information about the requestor's vessel, including a description of the proposed service, is in the
Submit comments on or before August 13, 2025.
You may submit comments identified by DOT Docket Number MARAD-2025-0137 by any one of the following methods:
•
•
If you mail or hand-deliver your comments, we recommend that you include your name and a mailing address, an email address, or a telephone number in the body of your document so that we can contact you if we have questions regarding your submission.
Patricia Hagerty, U.S. Department of Transportation, Maritime Administration, 1200 New Jersey Avenue SE, Mail Stop 2, MAR-620, Washington, DC 20590. Telephone: (202) 366-5400. Email:
Pursuant to 46 U.S.C. 12121(b), the U.S. Coast Guard may issue a certificate of documentation with a coastwise trade endorsement for eligible, small passenger vessels authorized to carry no more than 12 passengers for hire if the Maritime Administration (MARAD), after notice and an opportunity for public comment, determines the use of the small passenger vessel in the coastwise trade will not adversely affect United States vessel builders or the coastwise trade business of any person that employs vessels built in the United States in that business.
MARAD has received an eligibility determination request. Further details about the requester's vessel and its proposed operations may be found in the determination request posted in the DOT docket as MARAD-2025-0137 at
Please submit comments, including the attachments, following the instructions provided under the above heading entitled
The docket online is located at
Yes. Your entire comment, including your personal identifying information, will be made publicly available.
You may request that MARAD treat your comments as commercially confidential by submitting them to
If MARAD receives a Freedom of Information Act (FOIA) request for the information, procedures described in the Department's FOIA regulation at 49 CFR 7.29 will be followed. Only information that is ultimately determined to be confidential under those procedures will be exempt from disclosure under FOIA.
Anyone can search the electronic form of all comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). For information on DOT's compliance with the Privacy Act, please visit
By Order of the Maritime Administrator.
Maritime Administration, DOT.
Notice and request for comments.
The Secretary of Transportation, as represented by the Maritime Administration (MARAD), is authorized to make determinations regarding the coastwise use of foreign built; certain U.S. built; and U.S. and foreign rebuilt vessels that solely carry no more than twelve passengers for hire. MARAD has received such a determination request and is publishing this notice to solicit comments to assist with determining whether the proposed use of the vessel set forth in the request would have an adverse effect on U.S. vessel builders or U.S. coastwise trade businesses that use U.S.-built vessels in those businesses. Information about the requestor's vessel, including a description of the proposed service, is in the
Submit comments on or before August 13, 2025.
You may submit comments identified by DOT Docket Number MARAD-2025-0136 by any one of the following methods:
•
•
If you mail or hand-deliver your comments, we recommend that you include your name and a mailing address, an email address, or a telephone number in the body of your document so that we can contact you if we have questions regarding your submission.
Patricia Hagerty, U.S. Department of Transportation, Maritime Administration, 1200 New Jersey Avenue SE, Mail Stop 2, MAR-620, Washington, DC 20590. Telephone: (202) 366-5400. Email:
Pursuant to 46 U.S.C. 12121(b), the U.S. Coast Guard may issue a certificate of documentation with a coastwise trade endorsement for eligible, small passenger vessels authorized to carry no more than 12 passengers for hire if the Maritime Administration (MARAD), after notice and an opportunity for public comment, determines the use of the small passenger vessel in the coastwise trade will not adversely affect United States vessel builders or the coastwise trade business of any person that employs vessels built in the United States in that business.
MARAD has received an eligibility determination request. Further details about the requester's vessel and its proposed operations may be found in the determination request posted in the DOT docket as MARAD-2025-0136 at
Please submit comments, including the attachments, following the instructions provided under the above heading entitled
The docket online is located at
Yes. Your entire comment, including your personal identifying information, will be made publicly available.
You may request that MARAD treat your comments as commercially confidential by submitting them to
If MARAD receives a Freedom of Information Act (FOIA) request for the information, procedures described in the Department's FOIA regulation at 49 CFR 7.29 will be followed. Only information that is ultimately determined to be confidential under those procedures will be exempt from disclosure under FOIA.
Anyone can search the electronic form of all comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). For information on DOT's compliance with the Privacy Act, please visit
By Order of the Maritime Administrator.
Maritime Administration, DOT.
Notice and request for comments.
The Secretary of Transportation, as represented by the Maritime Administration (MARAD), is authorized to make determinations regarding the coastwise use of foreign built; certain U.S. built; and U.S. and foreign rebuilt vessels that solely carry no more than twelve passengers for hire. MARAD has received such a determination request and is publishing this notice to solicit comments to assist with determining whether the proposed use of the vessel set forth in the request would have an adverse effect on U.S. vessel builders or U.S. coastwise trade businesses that use U.S.-built vessels in those businesses. Information about the requestor's vessel, including a description of the proposed service, is in the
Submit comments on or before August 13, 2025.
You may submit comments identified by DOT Docket Number MARAD-2025-0135 by any one of the following methods:
•
•
If you mail or hand-deliver your comments, we recommend that you include your name and a mailing address, an email address, or a telephone number in the body of your document so that we can contact you
Patricia Hagerty, U.S. Department of Transportation, Maritime Administration, 1200 New Jersey Avenue SE, Mail Stop 2, MAR-620, Washington, DC 20590. Telephone: (202) 366-5400. Email:
Pursuant to 46 U.S.C. 12121(b), the U.S. Coast Guard may issue a certificate of documentation with a coastwise trade endorsement for eligible, small passenger vessels authorized to carry no more than 12 passengers for hire if the Maritime Administration (MARAD), after notice and an opportunity for public comment, determines the use of the small passenger vessel in the coastwise trade will not adversely affect United States vessel builders or the coastwise trade business of any person that employs vessels built in the United States in that business.
MARAD has received an eligibility determination request. Further details about the requester's vessel and its proposed operations may be found in the determination request posted in the DOT docket as MARAD-2025-0135 at
Please submit comments, including the attachments, following the instructions provided under the above heading entitled
The docket online is located at
Yes. Your entire comment, including your personal identifying information, will be made publicly available.
You may request that MARAD treat your comments as commercially confidential by submitting them to
If MARAD receives a Freedom of Information Act (FOIA) request for the information, procedures described in the Department's FOIA regulation at 49 CFR 7.29 will be followed. Only information that is ultimately determined to be confidential under those procedures will be exempt from disclosure under FOIA.
Anyone can search the electronic form of all comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). For information on DOT's compliance with the Privacy Act, please visit
By Order of the Maritime Administrator.
Office of Foreign Assets Control, Treasury.
Notice.
The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) is publishing the names of one or more persons and vessels that have been placed on OFAC's Specially Designated Nationals and Blocked Persons List (SDN List) based on OFAC's determination that one or more applicable legal criteria were satisfied. All property and interests in property subject to U.S. jurisdiction of these persons are blocked, and U.S. persons are generally prohibited from engaging in transactions with them.
This action was issued on July 9, 2025. See Supplementary Information for relevant dates.
OFAC: Associate Director for Global Targeting, 202-622-2420; Assistant Director for Licensing, 202-622-2480; Assistant Director for Sanctions Compliance, 202-622-2490; or
The SDN List and additional information concerning OFAC sanctions programs are available on OFAC's website:
On July 9, 2025, OFAC determined that the property and interests in property subject to U.S. jurisdiction of the following persons are blocked under the relevant sanctions authorities listed below.
Internal Revenue Service (IRS) Treasury.
Notice of meeting: correction.
In the
The meeting will be held on Wednesday, July 9, 2025, at 1:00 p.m. Eastern Time.
Matthew O'Sullivan at 1-888-912-1227 or (510) 907-5274, or by email at
Notice is hereby given pursuant to Section 10(a)(2) of the Federal Advisory Committee Act, 5 U.S.C. App. (1988), that an open meeting of the Taxpayer Advocacy Panel Taxpayer Assistance Center Improvements Project Committee will be held on Wednesday, July 9, 2025, at 1:00 p.m. Eastern Time.
The public is invited to attend the meeting virtually, or by phone, and may provide oral comments or submit written statements for consideration. Due to meeting structure and time limitations, advance registration is required to attend or make public comments during the meeting. To register and receive meeting access information, please contact Matthew O'Sullivan at the contact information above no later than Thursday, July 3, 2025.
Meeting materials, including the agenda and any handouts, will be made available prior to the meeting at
The agenda will include a committee discussion of new and continuing issues and other activities related to the new TAP year.
Internal Revenue Service (IRS) Treasury.
Notice of meeting: correction.
In the
The meeting will be held on Tuesday, July 8, 2025, at 2:00 p.m. Eastern Time.
Ann Tabat at 1-888-912-1227 or (602) 636-9143, or by email at
Notice is hereby given pursuant to Section 10(a)(2) of the Federal Advisory Committee Act, 5 U.S.C. App. (1988), that an open meeting of the Taxpayer Advocacy Panel Tax Forms and Publications Project Committee will be held on Tuesday, July 8, 2025, at 2:00 p.m. Eastern Time.
The public is invited to attend the meeting virtually, or by phone, and may provide oral comments or submit written statements for consideration. Due to meeting structure and time limitations, advance registration is required to attend or make public comments during the meeting. To register and receive meeting access information, please contact Ann Tabat at the contact information above no later than Thursday, July 3, 2025.
Meeting materials, including the agenda and any handouts, will be made available prior to the meeting at
The agenda will include a committee discussion of new and old referrals and other activities related to the new TAP year.
Internal Revenue Service (IRS), Treasury.
Notice of meeting.
In the
The meeting will be held on Thursday, July 10, 2025, at 2:00 p.m. Eastern Time.
Jose Cintron-Santiago at 1-888-912-1227 or 787-522-8607, or by email at
Notice is hereby given pursuant to Section 10(a)(2) of the Federal Advisory Committee Act, 5 U.S.C. App. (1988), that an open meeting of the Taxpayer Advocacy Panel Taxpayer Communications Project Committee will be held on Thursday, July 10, 2025, at 2:00 p.m. Eastern Time.
The public is invited to attend the meeting virtually, or by phone, and may provide oral comments or submit written statements for consideration. Due to meeting structure and time limitations, advance registration is required to attend or make public comments during the meeting. To register and receive meeting access information, please contact Jose Cintron-Santiago at the contact information above no later than Thursday, July 3, 2025.
Meeting materials, including the agenda and any handouts, will be made available prior to the meeting at
The agenda will include a committee discussion of new and continuing issues and other activities related to the new TAP year.
Internal Revenue Service (IRS), Treasury.
Notice of information collection; request for comments.
In accordance with the Paperwork Reduction Act of 1995, the IRS is inviting comments on the information collection request outlined in this notice.
Written comments should be received on or before September 12, 2025 to be assured of consideration.
Direct all written comments to Andres Garcia, Internal Revenue Service, Room 6526, 1111 Constitution Avenue NW, Washington, DC 20224, or by email to
Requests for additional information or copies of this collection should be directed to Jason Schoonmaker, (801) 620-2128.
The IRS, in accordance with the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3506(c)(2)(A)), provides the general public and Federal agencies with an opportunity to comment on proposed, revised, and continuing collections of information. This helps the IRS assess the impact and minimize the burden of its information collection requirements. Comments submitted in response to this notice will be summarized and/or included in the request for OMB approval. All comments will become a matter of public record.
Internal Revenue Service (IRS) Treasury.
Notice of meeting: correction.
In the
The meeting will be held Thursday, July 10, 2025, at 11:00 a.m. Eastern Time.
Ann Tabat at 1-888-912-1227, (602) 636-9143, or by email at
Notice is hereby given pursuant to Section 10(a)(2) of the Federal Advisory Committee Act, 5 U.S.C. App. (1988), that an open meeting of the Taxpayer Advocacy Panel Special Projects Project Committee will be held on Thursday, July 10, 2025, at 11:00 a.m. Eastern Time.
The public is invited to attend the meeting virtually, or by phone, and may provide oral comments or submit written statements for consideration. Due to meeting structure and time limitations, advance registration is required to attend or make public comments during the meeting. To register and receive meeting access information, please contact Ann Tabat at the contact information above no later than Thursday, July 3, 2025.
Meeting materials, including the agenda and any handouts, will be made available prior to the meeting at
The agenda will include a committee discussion of new and continuing issues and other activities related to the new TAP year.
Internal Revenue Service (IRS) Treasury.
Notice of meeting: correction.
In the
The meeting will be held Wednesday, July 23, 2025, at 3:00 p.m. Eastern Time.
Rosalind Matherne at 1-888-912-1227, 202-317-4115, or by email at
Notice is hereby given pursuant to Section 10(a)(2) of the Federal Advisory Committee Act, 5 U.S.C. App. (1988), that an open meeting of the Taxpayer Advocacy Panel Joint Committee Project Committee will be held on Wednesday, July 23, 2025, at 3:00 p.m. Eastern Time.
The public is invited to attend the meeting virtually, or by phone, and may provide oral comments or submit written statements for consideration. Due to meeting structure and time limitations, advance registration is required to attend or make public comments during the meeting. To register and receive meeting access information, please contact Rosalind Matherne at the contact information above no later than Thursday, July 18, 2025.
Meeting materials, including the agenda and any handouts, will be made available prior to the meeting at
The agenda will include a committee discussion of new and continuing issues and other activities related to the new TAP year.
Internal Revenue Service (IRS), Treasury.
Notice of meeting: correction.
In the
The meeting will be held on Tuesday, July 8, 2025, at 3:00 p.m. Eastern Time.
Rosalind Matherne at 1-888-912-1227, 202-317-4115, or by email at
Notice is hereby given pursuant to Section 10(a)(2) of the Federal Advisory Committee Act, 5 U.S.C. App. (1988), that an open meeting of the Taxpayer Advocacy Panel Toll-Free Phone Lines Project Committee will be held on Tuesday, July 8, 2025, at 3:00 p.m. Eastern Time.
The public is invited to attend the meeting virtually, or by phone, and may provide oral comments or submit written statements for consideration. Due to meeting structure and time limitations, advance registration is required to attend or make public comments during the meeting. To register and receive meeting access information, please contact Rosalind Matherne at the contact information above no later than Thursday, July 3, 2025.
Meeting materials, including the agenda and any handouts, will be made available prior to the meeting at
The agenda will include a committee discussion of new and continuing issues and other activities related to the new TAP year.
Internal Revenue Service (IRS) Treasury.
Notice of meeting: correction.
In the
The meeting will be held on Wednesday, July 9, 2025, at 11:00 a.m. Eastern Time.
Robert Rosalia at 1-888-912-1227, or by email at
Notice is hereby given pursuant to Section 10(a)(2) of the Federal Advisory Committee Act, 5 U.S.C. App. (1988), that an open meeting of the Taxpayer Advocacy Panel Notices and Correspondence Project Committee will be held on Wednesday, July 9, 2025, at 11:00 a.m. Eastern Time.
The public is invited to attend the meeting virtually, or by phone, and may provide oral comments or submit written statements for consideration. Due to meeting structure and time limitations, advance registration is required to attend or make public comments during the meeting. To register and receive meeting access information, please contact Robert Rosalia at the contact information above no later than Thursday, July 3, 2025.
Meeting materials, including the agenda and any handouts, will be made available prior to the meeting at
The agenda will include a committee discussion of new and continuing issues and other activities related to the new TAP year.
Veterans Benefits Administration, Department of Veterans Affairs.
Notice.
Veterans Benefits Administration, Department of Veterans Affairs (VA), is announcing an opportunity for public comment on the proposed collection of certain information by the agency. Under the Paperwork Reduction Act (PRA) of 1995, Federal agencies are required to publish notice in the
Written comments and recommendations on the proposed collection of information should be received on or before September 12, 2025.
Comments must be submitted through
Under the PRA of 1995, Federal agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. This request for comment is being made pursuant to Section 3506(c)(2)(A) of the PRA.
With respect to the following collection of information, VBA invites comments on: (1) whether the proposed collection of information is necessary for the proper performance of VBA's functions, including whether the information will have practical utility; (2) the accuracy of VBA's estimate of the burden of the proposed collection of information; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or the use of other forms of information technology.
Veterans Benefits Administration, Department of Veterans Affairs.
Notice.
Veterans Benefits Administration, Department of Veterans Affairs (VA), is announcing an opportunity for public comment on the proposed collection of certain information by the agency. Under the Paperwork Reduction Act (PRA) of 1995, Federal agencies are required to publish notice in the
Written comments and recommendations on the proposed collection of information should be received on or before September 12, 2025.
Comments must be submitted through
Under the PRA of 1995, Federal agencies must obtain approval from the Office of
With respect to the following collection of information, VBA invites comments on: (1) whether the proposed collection of information is necessary for the proper performance of VBA's functions, including whether the information will have practical utility; (2) the accuracy of VBA's estimate of the burden of the proposed collection of information; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or the use of other forms of information technology. This is a revision due to the burden decreasing since the last submission due to market conditions.
Veterans Benefits Administration, Department of Veterans Affairs.
Notice.
Veterans Benefits Administration(VBA), Department of Veterans Affairs (VA), is announcing an opportunity for public comment on the proposed collection of certain information by the agency. Under the Paperwork Reduction Act (PRA) of 1995, Federal agencies are required to publish notice in the
Comments must be received on or before September 12, 2025.
Comments must be submitted through
Under the PRA of 1995, Federal agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. This request for comment is being made pursuant to Section 3506(c)(2)(A) of the PRA.
With respect to the following collection of information, VBA invites comments on: (1) whether the proposed collection of information is necessary for the proper performance of VBA's functions, including whether the information will have practical utility; (2) the accuracy of VBA's estimate of the burden of the proposed collection of information; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or the use of other forms of information technology.