[Federal Register Volume 84, Number 192 (Thursday, October 3, 2019)]
[Notices]
[Pages 52905-52915]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-21492]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-87149; File No. 4-698]


Joint Industry Plan; Notice of Filing and Immediate Effectiveness 
of Amendment to the National Market System Plan Governing the 
Consolidated Audit Trail by Cboe BYX Exchange, Inc., Cboe BZX Exchange, 
Inc., Cboe EDGA Exchange, Inc., Cboe EDGX Exchange, Inc., BOX Options 
Exchange LLC, Cboe C2 Options Exchange, Inc., Cboe Exchange, Inc., 
Financial Industry Regulatory Authority, Inc., Investors' Exchange LLC, 
Miami International Securities Exchange, LLC, MIAX EMERALD, LLC, MIAX 
PEARL, LLC, Nasdaq BX, Inc., Nasdaq GEMX, LLC, Nasdaq ISE, LLC, Nasdaq 
MRX, LLC, Nasdaq PHLX LLC, The Nasdaq Stock Market LLC, New York Stock 
Exchange LLC, NYSE Arca, Inc., NYSE American, LLC, NYSE Chicago, Inc. 
and NYSE National, Inc.

 September 27, 2019.

I. Introduction

    On August 29, 2019, the Operating Committee for CAT NMS, LLC (the 
``Company''), on behalf of the following parties to the National Market 
System Plan Governing the Consolidated Audit Trail (the ``CAT NMS 
Plan'' or ``Plan''): \1\

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Cboe BYX Exchange, Inc., (previously known as Bats BYX Exchange, Inc.), 
Cboe BZX Exchange, Inc. (previously known as Bats BZX Exchange), Inc., 
Cboe EDGA Exchange, Inc. (previously known as Bats EDGA Exchange, 
Inc.), Cboe EDGX Exchange, Inc. (previously known as Bats EDGX 
Exchange, Inc.), BOX Options Exchange LLC, Cboe C2 Options Exchange, 
Inc., Cboe Exchange, Inc., Financial Industry Regulatory Authority, 
Inc., Investors' Exchange, LLC, Miami International Securities 
Exchange, LLC, MIAX EMERALD, LLC, MIAX PEARL, LLC, Nasdaq ISE, LLC 
(previously known as International Securities Exchange, Inc.), Nasdaq 
GEMX (previously known as ISE Gemini, LLC), Nasdaq MRX (previously 
known as ISE Mercury, LLC), Nasdaq BX, Inc. (previously known as NASDAQ 
BX, Inc.), Nasdaq PHLX LLC (previously known as NASDAQ PHLX LLC), The 
NASDAQ Stock Market LLC, New York Stock Exchange LLC, NYSE Arca, Inc., 
NYSE Chicago, Inc. (previously known as Chicago Stock Exchange, Inc.), 
NYSE American, LLC (previously known as NYSE MKT, LLC) and NYSE 
National, Inc. (previously known as National Stock Exchange, Inc.) 
(collectively, the ``Participants,'' ``self-regulatory organizations,'' 
or ``SROs'') filed with the Securities and Exchange Commission 
(``Commission'' or ``SEC'') pursuant to Section 11A(a)(3) of the 
Securities Exchange Act of 1934 (``Exchange Act''),\2\ and Rule 608 
thereunder,\3\ a proposed amendment to the CAT NMS Plan to accommodate 
the creation of a new Delaware limited liability company, named 
Consolidated Audit Trail, LLC, for the purpose of conducting activities 
related to the CAT.\4\ A copy of the proposed revisions to the CAT NMS 
Plan is attached as Appendix A hereto. The Commission is publishing 
this notice to solicit comments from interested persons on the 
amendment.\5\
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    \1\ On February 27, 2015, BATS-Y Exchange, Inc. (n/k/a Cboe BYX 
Exchange, Inc.), BATS Exchange, Inc. (n/k/a Cboe BZX Exchange, 
Inc.), BOX Options Exchange LLC, C2 Options Exchange, Incorporated 
(n/k/a Cboe C2 Options Exchange, Inc.), Chicago Board Options 
Exchange, Incorporated (n/k/a Cboe Exchange Inc.), Chicago Stock 
Exchange, Inc. (n/k/a NYSE Chicago, Inc.), EDGA Exchange, Inc. (n/k/
a Cboe EDGA Exchange, Inc.), EDGX Exchange, Inc. (n/k/a Cboe EDGX 
Exchange, Inc.), Financial Industry Regulatory Authority, Inc., 
International Securities Exchange, LLC (n/k/a Nasdaq ISE LLC), ISE 
Gemini, LLC (n/k/a Nasdaq GEMX, LLC), Miami International Securities 
Exchange LLC, NASDAQ OMX BX, Inc. (n/k/a Nasdaq BX, Inc.), NASDAQ 
OMX PHLX LLC (n/k/a Nasdaq PHLX LLC), The NASDAQ Stock Market LLC, 
National Stock Exchange, Inc. (n/k/a NYSE National, Inc.), New York 
Stock Exchange LLC, NYSE MKT LLC (n/k/a NYSE American, LLC), and 
NYSE Arca, Inc. filed with the Commission, pursuant to Section 11A 
of the Exchange Act and Rule 608 of Regulation NMS thereunder, the 
CAT NMS Plan. 15 U.S.C. 78k-1; 17 CFR 242.608. The Plan was 
published for comment in the Federal Register on May 17, 2016, and 
approved by the Commission, as modified, on November 15, 2016. See 
Securities Exchange Act Release Nos. 77724 (April 27, 2016), 81 FR 
30614 (May 17, 2016); 79318 (November 15, 2016), 81 FR 84696 
(November 23, 2016) (``CAT NMS Plan Approval Order''). On January 
30, 2017, the Commission noticed for immediate effectiveness an 
amendment to the Plan to add MIAX PEARL, LLC as a Participant. See 
Securities Exchange Act Release No. 79898, 82 FR 9250 (February 3, 
2017). On March 1, 2019, the Commission noticed for immediate 
effectiveness an amendment to the Plan to add MIAX Emerald, LLC as a 
Participant. See Securities Exchange Act Release No. 85230, 84 FR 
8356 (March 7, 2019).
    \2\ 15 U.S.C. 78k-1(a)(3).
    \3\ 17 CFR 242.608.
    \4\ See Letter from Michael Simon, CAT NMS Plan Operating 
Committee Chair, to Brent J. Fields, Secretary, Commission, dated 
May 8, 2017 (``Transmittal Letter'').
    \5\ 17 CFR 242.608.
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II. Description of the Plan

    Set forth in this Section II is the statement of the purpose and 
summary of the amendment, along with information required by Rule 
608(a)(4) and (5) under the Exchange Act,\6\ substantially as prepared 
and submitted by the Participants to the Commission.\7\
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    \6\ See 17 CFR 242.608(a)(4) and (a)(5).
    \7\ See Letter from Michael Simon, Chair, CAT NMS Plan Operating 
Committee, to Ms. Vanessa Countryman, Secretary, Commission, dated 
August 29, 2019.
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A. Description of the Amendments to the CAT NMS Plan

    The Participants previously formed a Delaware limited liability 
company named CAT NMS, LLC for the purpose of conducting activities 
related to the consolidated audit trail (``CAT''), and CAT NMS, LLC 
currently conducts those activities.\8\ The Participants are the 
limited liability company members of CAT NMS, LLC. The Limited 
Liability Company Agreement of CAT NMS, LLC, itself, including its 
appendices, is the CAT NMS Plan, the national market system plan as 
defined in Rule 600(b)(43) of Regulation NMS under the Exchange Act.\9\ 
The Participants propose to form a new Delaware limited liability 
company named Consolidated Audit Trail, LLC for the purpose of 
conducting activities related to the CAT from and after the 
effectiveness of the proposed amendment of the CAT NMS Plan, and 
Consolidated Audit Trail, LLC will conduct those activities from and 
after that time. The Participants will be the limited liability company 
members of Consolidated Audit Trail, LLC. Upon the effectiveness of the 
proposed amendment of the CAT NMS Plan, the Limited Liability Company 
Agreement of Consolidated Audit Trail, LLC would serve as the CAT NMS 
Plan, and the Limited Liability Company Agreement of CAT NMS, LLC would 
no longer serve as the CAT NMS Plan.
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    \8\ CAT NMS Plan Approval Order at 84699.
    \9\ Id.
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    The language of the Limited Liability Company Agreement of 
Consolidated Audit Trail, LLC is the same as the language of the 
Limited Liability Company Agreement of CAT NMS, LLC except for changes 
related to the name of the new limited liability company and the date 
of the agreement.\10\ Specifically, the proposed amendment would 
replace the name CAT NMS, LLC with the name Consolidated Audit Trail, 
LLC in the title, opening paragraph, Section 2.3 and the title of 
Exhibit A of the new limited liability company agreement. In addition, 
the proposed amendment would replace the current date of the agreement 
in the opening paragraph with the date of the new agreement with 
Consolidated Audit Trail, LLC. Accordingly, the proposed revisions to 
the current CAT NMS Plan are limited only to those that are necessary 
to accommodate the creation of the new limited liability company, not 
to change any of the substantive provisions of the CAT NMS Plan that 
govern the way activities with regard to the CAT are performed, 
including, for example, provisions related to governance, fees, the 
Plan Processor, and CAT Data. The proposed revisions to the CAT NMS 
Plan are attached as the Appendix A to this filing.
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    \10\ In addition to these name changes, the Operating Committee 
notes that the names and addresses of the Participants have been 
updated in the signature block and Exhibit A of the Limited 
Liability Company Agreement of Consolidated Audit Trail, LLC to 
reflect the current names and addresses of the Participants. These 
changes are set forth in the Appendix A to this letter.
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    The Operating Committee proposes to amend the CAT NMS Plan for 
several reasons. On February 26, 2019, the Operating Committee selected 
a successor Plan Processor for the CAT, FINRA CAT LLC. With FINRA CAT 
LLC as the successor Plan Processor, a new CAT System will be used to 
conduct the activities related to the CAT. With a successor Plan 
Processor and new CAT System, the Operating Committee has been advised 
that it would be appropriate to utilize a new entity to implement the 
CAT NMS Plan. The Operating Committee also proposes to create 
Consolidated Audit Trail, LLC to ensure that fees collected by that 
entity will fund the development and operation of the CAT System.

B. Governing or Constituent Documents

    The governing document for Consolidated Audit Trail, LLC, the 
Limited Liability Company Agreement for Consolidated Audit Trail, LLC, 
is the same as the Limited Liability Agreement for CAT NMS, LLC except 
for the changes set forth in the Appendix A to this letter. In 
addition, the changes made to the Limited Liability Company Agreement 
of CAT NMS, LLC are described above in Section A.

C. Implementation of Amendment

    The terms of the proposed amendment will become effective upon 
filing pursuant to Rule 608(b)(3)(ii) of the Exchange Act because it is 
concerned solely with the administration of the Plan, or involving the 
governing or constituent documents relating to any person authorized to 
implement or administer the Plan on behalf of its sponsors.\11\ The 
Limited Liability Company Agreement of Consolidated Audit Trail, LLC 
will become the CAT NMS Plan immediately upon filing the proposed 
amendment with the Commission. To effectuate the proposed amendment 
upon filing, the Participants have previously filed the necessary 
documents with the State of Delaware to form Consolidated Audit Trail, 
LLC. In addition, CAT NMS, LLC

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has taken the necessary steps to assign its agreement with the Plan 
Processor, FINRA CAT LLC, and the Technical Specifications for the CAT 
System to Consolidated Audit Trail, LLC and for Consolidated Audit 
Trail, LLC to guarantee the payment obligations under the promissory 
notes made by CAT NMS, LLC to the Participants for development costs 
related to the CAT for the period prior to the creation of Consolidated 
Audit Trail, LLC. Consolidated Audit Trail, LLC also has taken the 
necessary steps to enter into new contracts with other third parties 
performing administrative and other functions on behalf of Consolidated 
Audit Trail, LLC.
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    \11\ 17 CFR 242.608(b)(3)(ii).
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    At any time within sixty days of the filing of this amendment, the 
Commission may summarily abrogate the amendment and require that it be 
refiled in accordance with paragraph (a)(1) of Rule 608 and reviewed in 
accordance with paragraph (b)(1) of Rule 608, if it appears to the 
Commission that such action is necessary or appropriate in the public 
interest, for the protection of investors or the maintenance of fair 
and orderly markets, to remove impediments to, and perfect the 
mechanisms of, a national market system or otherwise in furtherance of 
the purposes of the Exchange Act.

D. Development and Implementation Phases

    Not applicable.

E. Analysis of Impact on Competition

    The Participants do not believe the proposed amendments will have 
any impact on competition, that the proposed amendment is a technical 
amendment related to the entity which would conduct the activities 
related to the CAT, and that the proposed amendment does not make 
substantive changes to the CAT NMS Plan or the operation of the CAT.

F. Written Understanding or Agreements Relating to Interpretation of, 
or Participation in, Plan

    Not applicable.

G. Approval by Plan Sponsors in Accordance With Plan

    Section 12.3 of the CAT NMS Plan states that, subject to certain 
exceptions, the Plan may be amended from time to time only by a written 
amendment, authorized by the affirmative vote of not less than two-
thirds of all of the Participants, that has been approved by the SEC 
pursuant to Rule 608 or has otherwise become effective under Rule 608. 
The Participants, by a vote of the Operating Committee taken at a 
meeting on August 29, 2019, has authorized the filing of this proposed 
amendment with the SEC in accordance with the Plan.

H. Description of Operation of Facility Contemplated by the Proposed 
Amendment

    Not applicable.

I. Terms and Conditions of Access

    Not applicable.

J. Method and Frequency of Processor Evaluation

    Not applicable.

K. Dispute Resolution

    Not applicable.

III. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the amendment is 
consistent with the Exchange Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number 4-698 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to File Number 4-698. This file number 
should be included on the subject line if email is used. To help the 
Commission process and review your comments more efficiently, please 
use only one method. The Commission will post all comments on the 
Commission's internet website (http://www.sec.gov/rules/sro.shtml). 
Copies of the submission, all subsequent amendments, all written 
statements with respect to the proposed plan amendment that are filed 
with the Commission, and all written communications relating to the 
amendment between the Commission and any person, other than those that 
may be withheld from the public in accordance with the provisions of 5 
U.S.C. 552, will be available for website viewing and printing in the 
Commission's Public Reference Room, 100 F Street NE, Washington, DC 
20549, on official business days between the hours of 10:00 a.m. and 
3:00 p.m. Copies of such filing also will be available for inspection 
and copying at the Participants' offices. All comments received will be 
posted without change. Persons submitting comments are cautioned that 
we do not redact or edit personal identifying information from comment 
submissions. You should submit only information that you wish to make 
available publicly. All submissions should refer to File Number 4-698 
and should be submitted on or before October 24, 2019.

    By the Commission.
Eduardo A. Aleman,
Deputy Secretary.
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[FR Doc. 2019-21492 Filed 10-2-19; 8:45 am]
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