Rule 613 (Consolidated Audit Trail)
The Commission adopted Rule 613 to create a comprehensive consolidated audit trail that would allow regulators to efficiently and accurately track all activity throughout the U.S. markets in National Market System (NMS) securities. Among other things, the rule requires the self-regulatory organizations (SROs) to jointly submit a plan – called an NMS plan – to create, implement and maintain a consolidated audit trail. The rule specifies the type of data to be collected and when the data is to be reported to a central repository.
In particular, the rule mandates that the NMS plan:
The rule allows the SROs to determine the specifics of how market participants would report data to the central repository. While this might allow for multiple electronic formats, the data must be reported in a way that enables the central repository to send it to regulators in a uniform electronic format.
Under the rule, the SROs are required to submit the NMS plan to the Commission within 270 days of the date of publication of the adopting release in the Federal Register, which was April 29, 2013. On March 7, 2013, the Commission granted a request from the SROs for a temporary exemption so that the new deadline by which SROs must submit the NMS plan to the Commission is December 6, 2013. On December 6, 2013, the Commission granted another request from the SROs for a temporary exemption so that the new deadline by which the SROs must submit the NMS plan to the Commission is September 30, 2014.
If and when the Commission approves the NMS plan, the SROs are required to report the required data to the central repository within one year after effectiveness of the NMS plan. Members of the SROs are required to report the required data to the central repository within two years after effectiveness of the NMS plan, with a possible exception that would provide up to an additional year for members of the SROs that qualify as small broker-dealers.
On September 30, 2014, the SROs submitted to the Commission a proposed NMS plan and cover letter in accordance with Rule 613. Commission staff will review the proposed NMS plan and provide a recommendation to the Commission regarding publication of the plan for notice and comment in Federal Register. After the NMS plan is published in the Federal Register, commenters will be able to submit comment letters to the public file. Commission staff will then review the comments and provide a recommendation to the Commission regarding whether to approve the proposed NMS plan.
The SROs have made available a wide range of information about their process for developing the NMS plan at www.catnmsplan.com.