6897. Consolidated Audit Trail Funding Fees

(a) CAT Industry Member Fees

(1) Fee Assessments

(A) Historical CAT Assessment 1.

(i) Each CAT Executing Broker shall receive its first invoice for Historical CAT Assessment 1 in November 2024, which shall set forth the Historical CAT Assessment 1 fees calculated based on transactions in October 2024, and shall receive an invoice for Historical CAT Assessment 1 for each month thereafter in which Historical CAT Assessment 1 is in effect.

(ii) Consolidated Audit Trail, LLC shall provide each CAT Executing Broker with an invoice for Historical CAT Assessment 1 on a monthly basis. Each month, such invoices shall set forth a fee for each transaction in Eligible Securities executed by the CAT Executing Broker in its capacity as a CAT Executing Broker for the Buyer (“CEBB”) and/or the CAT Executing Broker for the Seller (“CEBS”) (as applicable) from the prior month as set forth in CAT Data. The fee for each such transaction will be calculated by multiplying the number of executed equivalent shares in the transaction by the fee rate of $0.000013 per executed equivalent share.

(iii) Historical CAT Assessment 1 will remain in effect until $212,039,879.34 (two-thirds of Historical CAT Costs 1) are collected from CAT Executing Brokers collectively, which is estimated to be approximately two years, but could be for a longer or shorter period of time. Consolidated Audit Trail, LLC will provide notice when Historical CAT Assessment 1 will no longer be in effect.

(iv) Each CAT Executing Broker shall be required to pay each invoice for Historical CAT Assessment 1 in accordance with paragraph (a)(2) of this Rule.

(B) Reserved.

(i) Each CAT Executing Broker shall receive its first invoice for CAT Fee 2024-1 in October 2024, which shall set forth the CAT Fee 2024-1 fees calculated based on transactions in September 2024, and shall receive an invoice for CAT Fee 2024-1 for each month thereafter until January 2025.

(ii) Consolidated Audit Trail, LLC shall provide each CAT Executing Broker with an invoice for CAT Fee 2024-1 on a monthly basis. Each month, such invoices shall set forth a fee for each transaction in Eligible Securities executed by the CAT Executing Broker in its capacity as a CAT Executing Broker for the Buyer (“CEBB”) and/or the CAT Executing Broker for the Seller (“CEBS”) (as applicable) from the prior month as set forth in CAT Data. The fee for each such transaction will be calculated by multiplying the number of executed equivalent shares in the transaction by the fee rate of $0.000035 per executed equivalent share.

(iii) Notwithstanding the last invoice date of January 2025 for CAT Fee 2024-1 in paragraph (a)(1)(C)(i) of this Rule, CAT Fee 2024-1 shall continue in effect after January 2025, with each CAT Executing Broker receiving an invoice for CAT Fee 2024-1 each month, until a new subsequent CAT Fee is in effect with regard to Industry Members in accordance with Section 19(b) of the Exchange Act. Consolidated Audit Trail, LLC will provide notice when CAT Fee 2024-1 will no longer be in effect.

(iv) Each CAT Executing Broker shall be required to pay each invoice for CAT Fee 2024-1 in accordance with paragraph (a)(2) of this Rule.

(2) Timing and Manner of Payments

(A) Each CAT Executing Broker shall pay its CAT fees as required pursuant to paragraph (a)(1) of this Rule each month to the Consolidated Audit Trail, LLC in the manner prescribed by the Consolidated Audit Trail, LLC.

(B) Each CAT Executing Broker shall pay the CAT fees required pursuant to paragraph (a)(1) of this Rule within 30 days after receipt of an invoice or other notice indicating payment is due (unless a longer payment period is otherwise indicated). If a CAT Executing Broker fails to pay any such CAT fee when due, such CAT Executing Broker shall pay interest on the outstanding balance from such due date until such fee is paid at a per annum rate equal to the lesser of (i) the Prime Rate plus 300 basis points, or (ii) the maximum rate permitted by applicable law.

(b) CAT Cost Recovery Fees

(1) Fee Assessments

(A) Historical CAT Cost Recovery Assessment 1.

(i) Each member CAT Executing Broker shall receive its first invoice for Historical CAT Cost Recovery Assessment 1 in November 2024, which shall set forth the Historical CAT Cost Recovery Assessment 1 fees calculated based on transactions in October 2024, and shall receive an invoice for Historical CAT Cost Recovery Assessment 1 for each month thereafter in which Historical CAT Cost Recovery Assessment 1 is in effect.

(ii) FINRA shall provide each member CAT Executing Broker with an invoice for Historical CAT Cost Recovery Assessment 1 on a monthly basis. Each month, such invoices shall set forth a fee for each transaction in Eligible Securities executed by the CAT Executing Broker in its capacity as a CAT Executing Broker for the Buyer and/or the CAT Executing Broker for the Seller (as applicable) otherwise than on an exchange from the prior month as set forth in CAT Data. The fee for each such transaction will be calculated by multiplying the number of executed equivalent shares in the transaction by the fee rate of $0.000007 per executed equivalent share.

(iii) Historical CAT Cost Recovery Assessment 1 will remain in effect until $4,391,414 (FINRA’s contribution to the one-third share of Historical CAT Costs 1 assessed to the Plan Participants) is collected from member CAT Executing Brokers collectively, which is estimated to be four months, but could be for a longer or shorter period of time. FINRA will provide notice when Historical CAT Cost Recovery Assessment 1 will no longer be in effect.

(iv) Each member CAT Executing Broker shall be required to pay each invoice for Historical CAT Cost Recovery Assessment 1 in accordance with paragraph (b)(2) of this Rule.

(B) Reserved.

(i) Each member CAT Executing Broker shall receive its first invoice for Prospective CAT Cost Recovery Fee 2024-1 in October 2024, which shall set forth the Prospective CAT Cost Recovery Fee 2024-1 fees calculated based on transactions in September 2024, and shall receive an invoice for Prospective CAT Cost Recovery Fee 2024-1 for each month thereafter until January 2025.

(ii) FINRA shall provide each member CAT Executing Broker with an invoice for Prospective CAT Cost Recovery Fee 2024-1 on a monthly basis. Each month, such invoices shall set forth a fee for each transaction in Eligible Securities executed by the CAT Executing Broker in its capacity as a CAT Executing Broker for the Buyer and/or the CAT Executing Broker for the Seller (as applicable) otherwise than on an exchange from the prior month as set forth in CAT Data. The fee for each such transaction will be calculated by multiplying the number of executed equivalent shares in the transaction by the fee rate of $0.000017 per executed equivalent share.

(iii) Notwithstanding the last invoice date of January 2025 for Prospective CAT Cost Recovery Fee 2024-1 in paragraph (b)(1)(C)(i) of this Rule, Prospective CAT Cost Recovery Fee 2024-1 shall continue in effect after January 2025, with each CAT Executing Broker receiving an invoice for Prospective CAT Cost Recovery Fee 2024-1 each month, until a new subsequent Prospective CAT Cost Recovery Fee is in effect with regard to members in accordance with Section 19(b) of the Exchange Act. FINRA will provide notice when Prospective CAT Cost Recovery Fee 2024-1 will no longer be in effect.

(iv) Each member CAT Executing Broker shall be required to pay each invoice for Prospective CAT Cost Recovery Fee 2024-1 in accordance with paragraph (b)(2) of this Rule.

(2) Timing and Manner of Payments

(A) Each member CAT Executing Broker shall pay the CAT Cost Recovery Fees as required pursuant to paragraph (b)(1) of this Rule each month to FINRA in the manner prescribed by FINRA.

(B) Each member CAT Executing Broker shall pay the CAT Cost Recovery Fees required pursuant to paragraph (b)(1) of this Rule within 30 days after receipt of an invoice or other notice indicating payment is due (unless a longer payment period is otherwise indicated).

• • • Supplementary Material: --------------

.01 Determination of CAT Executing Brokers for Transactions Executed Otherwise Than on An Exchange. For a transaction in an Eligible Security executed otherwise than on an exchange and required to be reported to an equity trade reporting facility of a registered national securities association, i.e., one of FINRA’s Trade Reporting Facilities (each a “TRF”), OTC Reporting Facility (“ORF”) or Alternative Display Facility (“ADF”), the CEBB and CEBS are the members identified as the executing broker and the contra-side executing broker in the TRF/ORF/ADF transaction data event in CAT Data. In those circumstances where there is a non-member identified as the contra-side executing broker in the TRF/ORF/ADF transaction data event or no contra-side executing broker is identified in the TRF/ORF/ADF transaction data event, then the member identified as the executing broker in the TRF/ORF/ADF transaction data event would be treated as, and be required to pay the fee assessed to, both the CEBB and CEBS.

Amended by SR-FINRA-2024-014 eff. Sept. 5, 2024.
Amended by SR-FINRA-2024-013 eff. Sept. 5, 2024.
Amended by SR-FINRA-2024-012 eff. Aug. 26, 2024.
Adopted by SR-FINRA-2024-011 eff. Aug. 26, 2024.