In an amicus brief, SIFMA outlines its assist of the litigation introduced by the American Securities Association and Citadel towards the SEC for the approval of the CAT NMS Plan funding mannequin.
The temporary, which was filed by SIFMA, the Alternative Management Association, the Committee on Capital Markets Regulation, the Investment Company Institute, the Managed Funds Association, and Virtu Financial, raises the next factors:
- The SEC’s order is invalid as a result of it inequitably and unjustifiably imposes large prices on broker-dealers and traders whereas affording them no real function in establishing the CAT’s price range.
- The Commission failed to handle the impact of the CAT’s construction on CAT prices.
- The Commission didn’t adequately take into account different cost-control mechanisms.
- The allocation of greater than two-thirds and doubtlessly 100% of CAT prices to broker-dealers is opposite to legislation and arbitrary and capricious.
- The Commission’s allocation of prices is inequitable and unreasonable.
- The Commission failed adequately to contemplate the impact of contributors passing via their share of prices.
SIFMA president and CEO Kenneth E. Bentsen, Jr., stated: “The CAT funding mannequin authorized by the SEC is deeply flawed and we assist the litigation difficult it for a number of causes.
First, as defined in our June 2023 comment letter, the funding mannequin supplies for inequitable allocation of CAT prices between business member broker-dealers and the SROs. Taking under consideration business member funding of FINRA, the mannequin assigns over 80% of CAT prices to business member broker-dealers.
Second, as outlined in our May 2023 comment letter, we strongly disagree with the SROs dedication of which business member broker-dealer might be assessed CAT charges. We consider probably the most affordable method to allocate CAT prices amongst business members is to make the business member that originated the in the end executed order the one accountable for CAT charges.
And third, as famous in our July 2023 comment letter, rising CAT prices, which at present don’t have any authorized restrict or mechanism for management that’s being applied, have to be addressed.
“When fully implemented, the CAT will be the largest database of retail and institutional trading data ever created. It also will include personal information on every retail brokerage customer in America, as well as identifying information for every pension fund, mutual fund, and other institutional account in America. For years SIFMA has pointed out time and again the need to address fundamental issues with the CAT, weighing in on the security of investors’ personal data, liability and funding, among other topics. It is essential to get this right.”
Source: SIFMA
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