October 10, 2022

SIFMA Again Urges SEC to Reconsider CAT Funding Model

SIFMA reiterated its position that the SEC should reconsider the proposed fee split arrangement set out in the Consolidated Audit Trail ("CAT") Executed Share Funding Model. SIFMA previously identified several issues with the proposed breakdown (see prior coverage) and added to its arguments in a new supplemental comment letter.

In the new comment letter, SIFMA argued that the current proposed fee structure places an unfair financial burden on FINRA. SIFMA said that the "Commission should disapprove the proposed Executed Share Model as the Participants have not met their burden under the Exchange Act of demonstrating that the proposal (1) provides 'for the equitable allocation of reasonable dues, fees, and other charges,' (2) is 'not designed to permit unfair discrimination between customers, issuers, brokers or dealers,' and (3) does not 'impose any burden on competition not necessary or appropriate in furtherance of the purposes' of the Exchange Act."

SIFMA encouraged the SEC to solicit additional comments to determine whether a more fair fee structure can be achieved by reorganizing and reprioritizing the CAT Operating Committee. SIFMA also highlighted the opposition of market participants to the proposal and urged the SEC to continue to work closely with industry members to establish a viable CAT funding model.