14 December 2017
visit www.aciworldwide.com

OTC Markets cries foul over SEC funding demands

20 June 2017  |  7582 views  |  0 New York Skyline 1

Alternative trading system (ATS) operator OTC Markets Group has argued that the Securities and Exchange Commission should revise the proposed fee schedule for the Consolidated Audit Trail (CAT) system the SEC is creating to monitor trading in all exchange-listed equities and options following the 2010 "flash crash".

OTC Markets claims that the CAT Plan Operating Committee, which is comprised primarily of representatives from the national securities exchanges, "abused its discretion" and allocated a disproportionate percentage of total funding to the operator of the OTC Link ATS.

It said in a letter filed with the SEC last week that given its share of the combined market for exchange-listed securities based on trade volume is less than 1%, it should not have been placed in the first tier of execution venues along with the New York Stock Exchange and Nasdaq and assigned as the largest execution venue, at 29.9%, for the purposes of funding the CAT.

As OTC Markets' General Counsel outlines in the letter: "The Operating Committee’s failure to take into account the disconnect between costs to the CAT system and the burden being placed on OTC Link ATS, as well as the unfair burden being placed on the OTC Equity securities market generally, likely can be explained by considering the make-up of the Operating Committee.

"The Members of the CAT Company (the “Participants”), which is governed by the National Market System Plan
that excludes OTC Link ATS and other ATS, consist of national securities exchanges, except for FINRA, a national securities association. The members of the Operating Committee are representatives of the Participants.... Therefore, the Operating Committee overwhelmingly consists of representatives of Participants that have a strong financial incentive to allocate the costs of CAT to ATS and the OTC equity markets, where they have few interests. Neither OTC Markets Group nor any other operator of an ATS is a Participant and there is no ATS representative to the CAT NMS Plan or on the Operating Committee."

The SEC was approached for this story but declined to comment.

Comments: (0)

Comment on this story (membership required)

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board: sign up now

Related stories

US SROs pick Thesys to build massive audit trail

US SROs pick Thesys to build massive audit trail

18 January 2017  |  6587 views  |  0 comments | 3 tweets | 4 linkedin
SEC pushes through plans to build giant audit trail

SEC pushes through plans to build giant audit trail

16 November 2016  |  4656 views  |  1 comments | 9 tweets | 12 linkedin
Google joins bidders to build US consolidated audit trail system

Google joins bidders to build US consolidated audit trail system

07 March 2013  |  10239 views  |  0 comments | 9 tweets | 3 linkedin
SEC votes for consolidated audit trail system

SEC votes for consolidated audit trail system

12 July 2012  |  5844 views  |  0 comments

Related company news

 

Related blogs

Create a blog about this story (membership required)
visit www.niceactimize.comvisit www.response.ncr.comvisit www.solutions.lexisnexis.com

Top topics

Most viewed Most shared
Saxo Bank's 'Outrageous Prediction': Bitcoin to peak at $60k next year before spectacular crashSaxo Bank's 'Outrageous Prediction': Bitco...
12306 views comments | 7 tweets | 7 linkedin
Deutsche Bank paper hails 'huge' blockchain potentialDeutsche Bank paper hails 'huge' blockchai...
9658 views comments | 16 tweets | 22 linkedin
PSD2: Laying the regulatory foundation for a new age in paymentsPSD2: Laying the regulatory foundation for...
8313 views comments | 17 tweets | 36 linkedin
Santander UK poaches Barclays innovation chief Michael HarteSantander UK poaches Barclays innovation c...
7438 views comments | 8 tweets | 17 linkedin
Alior Bank to use Open API platform and accelerator to create fintech marketplaceAlior Bank to use Open API platform and ac...
7360 views comments | 20 tweets | 11 linkedin

Featured job

Competitive
Germany, Austria or Switzerland

Find your next job