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SIFMA and FIF Ask SEC to Reconsider the Costs of Funding the NMS CAT

Article from Regulatory Intelligence:

SIFMA and the Financial Information Forum ("FIF") urged the SEC to better understand the "magnitude" of the costs associated with changing the funding model for the National Market System Plan Governing the Consolidated Audit Trail ("CAT NMS Plan").

The associations filed the joint comment letter in response to the SEC's June 16, 2023 Order to institute proceedings on whether to approve proposed amendments to the CAT NMS Plan filed by CAT, LLC. Under the proposal, the funding model under the CAT NMS Plan would be replaced with the executed share model.

SIFMA and FIF recommended that the SEC examine:

  • mandating public disclosure of financial terms in contracts between CAT NMS Plan participants and its cloud services provider, Amazon Web Services;
  • addressing the fact that projected operating costs far exceed the projected costs under the CAT NMS Plan;
  • directing CAT NMS participants to analyze the reasoning for operation cost increases over the past three years and expected operation costs for future years based on current CAT requirements; and
  • requiring all future reporting requirements that would "result in a significant increase in CAT costs" to undergo a cost-benefit analysis from CAT NMS Plan participants.

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