Open Call – NYSE Comment Letter on CAT

Summary Report STA Open Call – May 27, 2021

An Alternative CAT Funding Proposal

Michael Blaugrund, NYSE Group & Jim Toes, STA

Audio Replay and Video Replay

2021 STA Charity – The Greenwood Project

The Greenwood Project introduces Black and Latinx college and high school students to careers within financial services. Today, GP is a national organization with a footprint in New York, Boston and Denver, and more than 350 students STA will promote Greenwood Project in various ways throughout the year. Find out more about Greenwood Project here

STA October 6 – 8 Market Structure Conference

Beginning in the middle of June, Washington DC will allow hotels to open to full occupancy. This means that we will be having an in-person event this year. STA will still provide a virtual platform for those unable to make the trip to DC. See you in DC!

Executive Summary

– On March 31, 2021, the SROs filed a Plan Amendment to the CAT NMS Plan with the SEC to adopt a revised funding model. Comment letters continue to be filed.  

– With us this evening is Michael Blaugrund, COO for NYSE Group who will be providing a synopsis of NYSE’s letter which opposes the Funding Proposal and offers an alternative.

– STA hosting tonight’s call should not be viewed as an endorsement of NYSE’s letter.

– The Funding Proposal is complex but its cornerstones of being based on message traffic and the break out of fees being 75% for Industry Members and 25% for Plan Participants are the primary elements we will be comparing to NYSE’s alternative recommendation.

– Excerpts from NYSE’s Letter:

  • The Amendment does not establish an adequate basis for its allocation methodology, nor does it adequately articulate the composition of the CAT costs it would allocate to the industry.
  • We recommend the SROs instead propose a structure that is (1) based on executed volume instead of message traffic and (2) administered like SEC Section 31 fees.
  • We recommend establishing a cost allocation model that evenly splits the per share cost three ways: 1/3 to the buyer, 1/3 to the seller, and 1/3 to the Exchange or TRF.

Helpful Links

All Comment Letters – Here