December 22, 2017

Via Electronic Mail ([email protected])
Mr. Brent J. Fields
Secretary
U.S. Securities & Exchange Commission
100 F Street, N.E.
Washington, D.C. 20549-1090

Re: File No. SR-BatsBYX-2017-11; File No. SR-BatsBZX-2017-38; File No. SRBatsEDGA-2017-13; File No. SR-BatsEDGX-2017-22; File No. SR-BOX-2017-16; File No. SR-C2-2017-017; File No. SR-CBOE-2017-040; File No. SR-CHX-2017-08; File No. SR-IEX-2017-16; File No. SR-MIAX-2017-18; File No. SR-PEARL-2017-20; File No. SR-BX-2017-023; File No. SR-GEMX-2017-17; File No. SR-ISE-2017-45; File No. SR-MRX-2017-04; File No. SR-PHLX-2017-37; File No. SR-NASDAQ-2017-046; File No. SR- NYSE-2017-22; File No. SR-NYSEARCA-2017-52; File No. SR-NYSEMKT2017-26; File No. SR-FINRA-2017-011; Self-Regulatory Organizations; Amendments to the Fee Schedule for Industry Members Related to the National Market System Plan Governing the Consolidated Audit Trail

Dear Mr. Fields:

The Securities Industry and Financial Markets Association (“SIFMA”)1 submits this letter to the Securities and Exchange Commission (“Commission”) to provide further comments on the above-referenced proposed rule change filed by the Self-Regulatory Organizations
(“SROs”) that are the Plan Participants to the Consolidated Audit Trail (“CAT”) National Market System (“NMS”) Plan. We appreciate that the Plan Participants have made some changes to the funding of the CAT, particularly the additional CAT Fee tiers for equity execution venues, the discount for Alternative Trading Systems (“ATSs”), and adjustments for options and equity market makers. However, most of our concerns, as expressed in our previous comment letters on the proposal still exist.2 At a fundamental level, the Plan Participants have yet to justify the need to impose any additional fees on the industry participants, let alone an unequitable portion of the total cost, to fund the development and operation of the CAT. We request that the Commission disapprove the proposals because, as discussed in further detail below, we believe the proposals do not satisfy the requirements of the Securities Exchange Act of 1934 (“Exchange Act”).

Policy Concerns with CAT NMS Plan Fees

As we have stated previously, the Plan Participants have offered no justification for requiring broker-dealers to bear any of the financial burden of funding a system that exists to receive and process information that the broker-dealers are legally obligated to report. The
Exchange Act does not require broker-dealer funding of SROs and, under current rules and practices, the SROs do not have an unlimited right of recovery of regulatory costs. Historically, the Commission has allowed SROs to recover regulatory costs through the collection of fees from member firms.3 However, nothing under Rule 613 of the CAT NMS plan directs or “requires” the Plan Participants to impose a broker-dealer fee to cover the costs.

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