ATS-N/MA 0001767041-25-000023 LIVE 0001767041 XXXXXXXX 013-00206 false false Bruce Markets LLC Material Amendment, Part III, Item 10. is amended to reflect that the Bruce ATS no longer disseminates passive orders outside of the 20% reference price bands. Part II Item 5. and Part III Item 15. are revised to reflect that Level 1 and Level 2 feeds no longer display passive quotes that are outside the 20% reference price bands. The changes apply to all Subscribers and the Broker-Dealer Operator. Y BRUCE MARKETS LLC 008-70286 000300209 FINRA 11/10/2020 BOSS https://www.brucemarkets.com/ Equinix NY4 Data Center Secaucus 07094 US-NJ false false N N Bruce Markets LLC ("BDO") is the Broker-Dealer operator of the NMS Stock ATS and is referred to as the "BDO" throughout this Form. The MPID for the BDO is "BOSS." The NMS Stock ATS is known as Bruce ATS and referred to as such throughout this Form. Apex Clearing Corporation ("Apex Clearing") is a registered broker-dealer and correspondent clearing firm (CRD 13071, SEC 8-23522), regulated by the U.S. Securities and Exchange Commission ("SEC"), the Financial Institution Regulatory Authority ("FINRA"), and various national securities exchanges of which it is a member. Apex Clearing is a Bruce ATS Subscriber and permitted to enter orders to Bruce ATS in an agency or principal capacity under the MPIDs "APCC" and "PFCM." PEAK6 Capital Management LLC ("CapMan") is a registered broker-dealer (CRD 43773, SEC 8-50422), regulated by SEC, FINRA, and various national securities exchanges of which it is a member. CapMan is a Bruce ATS Subscriber and permitted to enter orders to Bruce ATS in a Principal capacity under the MPIDs "PKCM" and "PXAX." The BDO, Apex Clearing, and CapMan are all under common majority ultimate beneficial ownership and thereby recognized as Affiliates. Y N N N N N The BDO provides Bruce ATS market data to Bruce Markets Holdings LLC ("Bruce Holdings"), the parent company of the BDO. The BDO is solely responsible for the creation and organization of market data and provides that data to Bruce Holdings for real-time distribution. Additionally, the BDO provides non-real-time market data via SFTP files for both Subscribers and non-subscribers. For example, Subscribers may receive information such as billing information, daily trade files, stock locate file, etc. In addition, non-Subscribers may receive non-real-time reference-price band files, and/or stock locate files via SFTP distribution. Bruce Holdings has engaged Nasdaq Data Business Inc. as a service provider to facilitate the distribution of Bruce ATS market data. Bruce ATS Market Data Subscribers can include Bruce ATS Subscribers, non-Bruce ATS Subscriber participants, market data vendors and information portals (e.g., media companies). Bruce Holdings distributes two types of Bruce ATS market data feeds: i) top-of-book (i.e., "Level 1") and ii) depth-of-book (i.e., "Level 2") (collectively "Bruce ATS Market Data Feeds"). Level 1data includes the most aggressively priced aggregated bid and offer. If the order that would otherwise be the displayed quote outside of the 20% reference price bands, i.e. a passive order, the order is accepted, but not executable and not displayed (as described in Part III. Item 10). Level 2 includes information (described below) about when an order is added, replaced, canceled, and/or executed. Level 2 data does not include passive orders (as described in Part III. Item 10) that are priced outside of the 20% price bands that are accepted but are not executable and not displayed. All of the market data is not attributed to any Subscriber. Information on orders displayed includes: 1) Time, 2) Order ID, 3) Side Indicator, 4) Quantity, 5) Symbol, 6) Price. See Part III, Item 11(a) and Part II, Item 7 above for more information. Recipients of the Bruce ATS Market Data Feeds must subscribe for the data by entering into a market data agreement with Bruce Holdings or a third party (collectively "Bruce ATS Market Data Subscribers"). Bruce ATS Market Data Subscribers include broker-dealers that also subscribe to Bruce ATS for the purpose of transacting in securities, as well as recipients that subscribe solely for access to the data. It is not a requirement for a Bruce ATS Market Data Subscriber to be a broker-dealer. Each Bruce ATS Market Data Subscriber is subject to the same terms of use. Bruce Holdings disseminates the Bruce ATS Market Data Feeds to Bruce ATS Market Data Subscribers in one of two ways: i) directly from Bruce Holdings to the Bruce ATS Market Data Subscriber, or ii) indirectly via third-party distributors. Third-party distributors include vendors or service providers that redistribute market data. Bruce ATS Market Data Subscribers receiving market data via third-party distributors may experience additional latency compared to those receiving data directly from Bruce Holdings. For further information regarding market data dissemination, please see Part III, Item 15. Additionally, the BDO provides its Subscribers with access to various data, including but not limited to, post-execution trade data files, fees/billing summaries, reference prices, that may include confidential trading information (CTI), via a third-party platform called Egnyte. The BDO also provides non-subscribers with non-CTI, for example including but not limited to stock locate file, FIX specifications, etc. For more information see Part II, Item 6(b). Y As discussed in Part II, Item 5a, Bruce ATS Market Data Subscribers, who could include Bruce ATS Subscribers, must subscribe by entering into a market data agreement with Bruce Holdings or a third party. Bruce ATS Market Data Subscribers include broker-dealers that also subscribe to Bruce ATS for the purpose of transacting in securities, as well as recipients that subscribe solely for access to the data. It is not a requirement for a Bruce ATS Market Data Subscriber to be a broker-dealer or Bruce ATS Subscriber. Bruce Holdings offers Bruce ATS Market Data Subscribers the option to receive Bruce ATS Market Data Feeds either directly from Bruce Holdings or indirectly via third-party distributors. For further information regarding market data dissemination, please see Part III, Item 15. Y The BDO has fully-dedicated personnel that support Bruce ATS. The BDO solely exists to support the ATS and has no other business lines besides the ATS. Additional personnel that support the BDO are employed by either PEAK6 Services LLC or Apex Fintech Services LLC. Pursuant to services agreements between the BDO and PEAK6 Group LLC, PEAK6 Investments LLC, and PEAK6 Services LLC (collectively "PEAK6") as well as the BDO and Apex Fintech Solutions Inc. and Apex Fintech Services LLC (collectively "AFS"), PEAK6 and AFS personnel provide certain services to the BDO and Bruce ATS. These personnel provide services that include technology, compliance, finance, and legal, collectively "Shared Employees"). Shared Employees generally function in similar or equivalent capacities at PEAK6 or AFS as they do at the BDO. Shared Employees may have access to Subscriber Confidential Trading Information (see Part II, Item 7) in connection with their roles at Bruce ATS. All Shared Employees are subject to the written safeguards and written procedures to protect Subscriber Confidential Trading Information described in Part II, Item 7, and are not permitted to use Subscriber Confidential Trading Information that they have access to for unauthorized purposes. The BDO maintains a fully-disclosed clearing agreement with Apex Clearing, an affiliate. Bruce ATS's clearing and settlement procedures are discussed in detail in Part III, Item 22. Nasdaq Execution Platform, also known as "Ocean," a service provided by Operations & Compliance Network, LLC,. (together, "Ocean"), provides software and support services to the BDO that support the operations of Bruce ATS's Data Feeds, Order Book, and Matching Engine (Part III, Item 11). This includes the infrastructure and support services for the following items within Part III, all subject to the direction and oversight of the BDO: Item 5 - Financial Information eXchange ("FIX") connectivity to Subscribers; Item 10, 17, and 20 - The technical process of opening and closing of the ATS for regular hours, and in the event a system stoppage (e.g., for a regulatory trading halt, a triggered market-wide circuit breaker, or for an internal reason) is triggered; Item 11 - Daily management of the ATS, including all the hardware and systems required for the operation of the ATS; Item 15 - Display; Item 21 - Trade reporting (done via an outsourcing arrangement with S3, discussed below in Part II, Item 7); and Item 23 - Securities Information Processor ("SIP") feed handler software (CTA and UTP) that enables the ATS to consume market data. Ocean also provides certain support services relating to the BDO's supervisory, compliance, surveillance, recordkeeping, and reporting obligations. The BDO remains responsible for decision making, oversight supervision, and compliance with regulatory requirements. Pursuant to an agreement with Bruce Holdings, Nasdaq Data Business Inc. is a third party that facilitates market data dissemination on behalf of Bruce Holdings (refer to Part III, Items 15 and 23). Both Ocean and Nasdaq Data Business Inc. are affiliates of Nasdaq, Inc. The BDO maintains a fully-disclosed clearing agreement with Apex Clearing. Bruce ATS's clearing and settlement procedures are discussed in detail in Part III, Item 22. Additionally, the BDO provides its Subscribers with access to various data, including but not limited to, post-execution trade data files, fees/billing summaries, reference prices, that may include confidential trading information, via a third-party platform called Egnyte. Egnyte is a third-party service provider that offers a secure, fully encrypted Secure File Transfer Protocol (SFTP) data file transfer solution for Bruce Subscribers and non-subscribers via a secure log-in. Egnyte does not have direct access to CTI. All Subscriber and non-subscribers' access to Egnyte is approved by the ATS Supervisor (or Series 24 delegate) and CCO. Subscribers and non-subscribers must opt-in to access Egnyte and maintain a secure log-in to the platform. Access to Egnyte will be reviewed quarterly as described in Part II, Item 7. Part (a). As noted in response to Item 6(a), Apex Clearing is a service provider to Bruce ATS. Apex Clearing is an affiliate of the BDO and also a Subscriber and user of Bruce ATS. Y Subscribers' Confidential Trading Information ("CTI") includes: - Subscriber order and execution information (i.e., symbol, side, size, quantity, price, type) (discussed in detail in Part III, Item 7(a)); - Subscriber-attributed execution detail; - Individual Subscriber order and execution statistics; - FIX messages sent to Bruce ATS from Subscribers; and - FIX messages sent from Bruce ATS to Subscribers The BDO does not consider post-execution information typically of the type made public under Bruce ATS's Market Data Feeds, reporting, or regulation (e.g., information that is reported to the consolidated tape pursuant to FINRA trade reporting requirements), or information of an aggregated nature (e.g., aggregated and anonymous execution statistics and the information disclosed as described in Part II, Item 7(b), below) to be classified as CTI. Furthermore, CTI originates from Bruce ATS, where orders are received and processed almost instantaneously by the BDO before being immediately made available to Nasdaq Data Business Inc. as market data. Nasdaq Data Business Inc. disseminates the order information via a multicast feed within milliseconds following the submission of an order. As a result, the window during which this data qualifies as "confidential" is so brief that the opportunity for CTI misuse is de minimus. As discussed in Part II, Item 5(a), Bruce ATS provides Subscribers with reports containing data that includes or is derived from CTI specific to the respective Subscriber. All such reports adhere to Bruce ATS's policies pertaining to the protection of CTI. Report content containing only aggregated or non-attributed data are not classified as CTI. Reports containing non-aggregated information that reflects an individual Subscriber's experience will be shared, confidentially, only with that Subscriber and any authorized parties of a Subscriber (e.g., a Subscriber's clearing firm or a Subscriber's customer). The BDO has established confidentiality and information security policies and procedures, including the protection of subscriber confidential trading information, which apply to all BDO personnel and Shared Employees with access to CTI until such information is published on the Bruce ATS Market Data Feeds. Subscriber CTI is encrypted and access-controlled with access only granted upon Compliance personnel approval based on a "rights of least privilege" methodology and on a "needs to know" basis in order to perform required job duties. Refer to Part III, Item 7(d) for additional information. Furthermore, personnel with CTI access must complete mandatory security awareness training. Third Party Access Protections: Certain Ocean employees have access to CTI, including information regarding individual orders and executions, names of Subscribers, and volume of orders in the ATS. Such employees include Ocean staff from compliance, operations, technology development (including trading and surrounding systems), product management, and business management. Ocean's policies and procedures (i) restrict which Ocean employees have access to CTI, and (ii) implement information barriers that prohibit employees with CTI from sharing such information in an unauthorized fashion, as well as (iii) impose personal trading limitations. Ocean's policies and procedures employ a three-pronged approach to permission access to the Bruce ATS. First, an Ocean employee must complete Compliance training specific to the Ocean business unit. Second, an Ocean employee must request, and Ocean Compliance must approve, access to each Bruce ATS system operated by Ocean based on the employee's designated role and responsibilities where such role and responsibilities require access to the Bruce ATS. No other Ocean employees have access to the Bruce ATS or Subscriber Confidential Information. Third, once approved, the Ocean employee must complete Ocean's annual compliance training. Furthermore, the BDO requires that Ocean obtain express approval from the BDO's Chief Compliance Officer or designee before granting access to CTI for any user and to perform quarterly reviews to confirm system access or entitlements remain accurate and terminate systems access or entitlements that are no longer necessary. Ocean employees who have access to CTI are subject to Ocean's "Information Barriers and Conflict Management Policies and Procedures." Pursuant to these procedures, Ocean employees are prohibited from sharing CTI with other employees (including at Nasdaq) who are not expressly authorized to receive such information. All Ocean employees are also subject to Nasdaq's Global Trading Policy ("GTP"), which outlines all requirements and restrictions related to personal trading activity, including holding periods, annual attestations, IPO restrictions, and a prohibited list. Ocean employees are required to disclose personal investment and brokerage accounts, positions, and transactions. Nasdaq's Global Ethics Team monitors personal trade activities against GTP. Ocean also conducts electronic communications reviews to identify policy violations, including non-compliance with the above-referenced policies and procedures. In addition to the foregoing, Ocean maintains written policies and procedures concerning unauthorized disclosures, which include escalation procedures for such incidents. In this regard, Ocean will promptly notify the BDO of any actual or suspected unauthorized disclosure of confidential information, which includes Subscriber CTI (so long as not prohibited by applicable laws, rules, or regulations). The BDO has the right to audit Ocean's operation of the ATS, including Ocean's access to and use of CTI, either through audits conducted by the BDO's own audit team or by third-party auditors. Such audits may be conducted onsite or offsite. In addition to Ocean personnel, Ocean has retained S3 to submit trade reports to the Consolidated Audit Trail ("CAT") on the BDO's behalf. Accordingly, certain S3 personnel have access to Bruce ATS and order and trade information, which are components of CTI. Only S3 personnel that are required to perform approved tasks (i.e., performing the trade reporting functions on the BDO's behalf via its relationship with Ocean) are authorized to access the relevant CTI (as described above). To ensure that only authorized personnel access the relevant CTI, and that authorized personnel only use such access to perform approved functions, S3 performs periodic access audits. An attestation setting forth the results of these audits are provided to the BDO. In addition to the results of these audits, S3 will notify the BDO of any actual or suspected unauthorized disclosure of CTI. Ocean also conducts electronic communications reviews monthly, or additionally as necessary, for potential policy violations, including non-compliance with the referenced policies and procedure and will promptly notify Bruce ATS senior management of any actual or suspected unauthorized disclosure of Subscriber CTI. Bruce ATS has the right to audit Ocean's operation of the ATS matching engine, including access to and use of Subscriber CTI, either through audits by Bruce ATS or a third-party auditor. As noted earlier in Part II, Item 7(a), the window during which Nasdaq Data Business Inc. has access to CTI of Bruce ATS is so brief that the opportunity for CTI misuse is de minimus. Nevertheless, Nasdaq Data Business Inc.'s receipt and usage of Bruce ATS data is subject to (i) contractual confidentiality provisions pursuant to our data distribution agreement, which includes restrictive covenants requiring that Nasdaq Data Business Inc. protect and use substantially equivalent steps it takes to protect its own proprietary information to prevent any disclosure of Bruce ATS data, including CTI, (other than to those individuals who must have access to perform its duties under the agreement, and each such person must also affirmatively agree to comply with such restrictions); and (ii) Nasdaq Data Business Inc. personnel are subject to Nasdaq's Global Trading Policy, which outlines all requirements and restrictions related to personal trading activity, including holding periods, annual attestations, IPO restrictions, and a prohibited list. Responsibilities For Users with CTI Access Users with access to CTI, including BDO personnel, Shared Employees and third-party service providers, must adhere to the following: 1. Protecting CTI from unauthorized and even inadvertent access; 2. Remaining familiar with and adhering to information barriers; 3. Having CTI access removed or reduced when no longer needed; 4. Reporting breaches of CTI or other issues of non-compliance or potential non-compliance with this policy to the CCO. Supervision Quarterly, the Chief Compliance Officer or qualified designee will review users with access to CTI to confirm system access or entitlements remain accurate and terminate systems access or entitlements that are no longer necessary. Avoiding Conflicts of Interest In order to prevent the misuse of CTI and other potential conflicts of interest, the BDO has implemented the following policies and procedures, which are applicable to BDO personnel and Shared Employees: 1. Any personnel, including personnel of parent or affiliated companies, who directly or indirectly trade for or have influence over the trading decisions of a Subscriber or other trading entity are strictly prohibited from accessing CTI. 2. Everyone with access to CTI is prohibited from accessing and using CTI for any reason other than providing support and supervision of the ATS. 3. BDO personnel and Shared Employees are required to obtain compliance approval prior to establishing brokerage accounts, and approved accounts are subject to ongoing monitoring by the compliance department of the BDO or an affiliated company. Annually, each employee must attest in writing that they have disclosed to all their brokerage accounts and that they understand and will abide by company personal trading policies, including the prohibition of trading on material, non-public information which can include CTI. 4. No one with access to real-time CTI may trade for their own account during Bruce ATS's Trading Session whether through the ATS or elsewhere, unless an exception is granted for nominally-sized trades (less than $1,000 notional) entered for bona fide testing and observation purposes. 5. The BDO provides training to new hires and on an ongoing basis (no less than annually) regarding safeguarding CTI, information barriers, personal trading policies, material non-public information, and information and cyber security. N The BDO's Compliance personnel grants access to CTI on a "rights of least privilege" basis when necessary to support Bruce ATS's: - Operations; - Risk management; - Subscriber support services; - Business and technological development and support; - Systemic testing; and - Regulatory reviews, testing, investigations, surveillances, and reporting. The below personnel teams or units have access to CTI. The BDO's management, comprised of the CEO, COO, CCO and the Chair of the Board of Directors of Bruce Markets Holdings LLC ("Chair"). Management of the BDO have routine and supervisory responsibilities of the BDO and Bruce ATS, requiring access to all CTI. The Chair's responsibilities will include, but are not limited to, operations, client engagement and processes of the BDO and Bruce ATS, inclusive of real-time data and CTI. The Chair's responsibilities will include, but are not limited to, operations, client engagement and processes of the BDO and Bruce ATS, inclusive of real-time data and CTI. The Chief Executive Officer of the BDO is responsible for all aspects of the BDO and Bruce ATS business and requires access to real-time and post-trade data to carry out his duties and responsibilities. Those responsibilities include but are not limited to Subscriber onboarding and support, monitoring system performance, surveillance, and supervision. The Chief Compliance Officer of the BDO and additional compliance personnel who have responsibilities for the BDO require access to both real-time and post-trade data. Those responsibilities include, but are not limited to, the supervision of the BDO and Bruce ATS's compliance program, supervisory reviews and testing, trade surveillance, transaction and regulatory reporting, electronic communications review, research, investigation and the preparation and analysis of trade data. The Chief Operating Officer along with the Operations & Support team of the BDO have access to both real-time and post-trade data. The Operations & Support team is the first point of contact for Subscriber and trade support, including Subscriber onboarding and use and implementation of Bruce ATS protocols. Access to real-time and post-trade data is essential to provide Bruce ATS Subscribers with fast and efficient support while resolving any issues. These personnel monitor system performance and connectivity throughout the Trading Session as well. Shared Employees: Technology personnel may require access to all CTI to maintain network security, investigate any technical issues, provide software development and support, and manage the database infrastructure. Legal personnel may require access to post-trade CTI in connection with a litigation or regulatory matter, legal advice, or a merger or acquisition opportunity. Finance and accounting personnel require access to post-trade CTI in connection with the maintenance of the BDO's books and records as well as subscriber billing activities. All Shared Employees are subject to the written safeguards and written procedures to protect CTI described in this section, and are not permitted to use CTI that they have access to for unauthorized purposes. Any personnel, including personnel of parent of affiliated companies, who directly or indirectly trade for or have influence over the trading decisions of a Subscriber or other trading entity are strictly prohibited from accessing CTI. All BDO personnel and Shared Employees will receive annual training on CTI. With respect to service-providers, Ocean, S3 (via arrangement with Ocean), Nasdaq Data Business Inc., and Apex Clearing (the BDO's fully-disclosed clearing broker) will have access to CTI. The BDO has engaged Ocean to host, operate, and support the ATS and provide intraday surveillance monitoring tools and reports through its SMART platform, which necessitates that Ocean receive real-time order and execution data. Designated Ocean employees have access to intraday and historical Bruce ATS order and matching information in order to perform and manage various day-to-day troubleshooting, incident management and market operations tasks, software development, quality assurance, and maintenance activities. Such access also is required by Ocean in connection with conducting surveillance activities and managing Ocean's access entitlements for Bruce ATS. In addition, Ocean Compliance is responsible for managing requests for access and entitlements from within the Nasdaq organization and for overseeing Ocean's Information Barriers and Conflict Management policies and procedures, which are designed to control the potential breach and misuse of Bruce ATS's and other clients' confidential data. Ocean's receipt and usage of Bruce ATS data is subject to a confidentiality agreement. Designated employees of S3, a subcontractor of Ocean, have access to Bruce ATS CTI for CAT and other reporting purposes on behalf of the BDO. These personnel have access to certain Subscriber identity and intraday and historical order and matching information. S3's receipt and usage of Bruce ATS data is subject to a confidentiality agreement. Nasdaq Data Business Inc. has access to non-attributed quotes and non-attributed post-trade execution information, and its usage of Bruce ATS data is subject to contractual confidentiality provisions. In connection with clearing services provided, the BDO's fully disclosed clearing broker, Apex Clearing, receives all of the executions of Bruce ATS's Subscribers. Those details include the Subscriber, quantity, side, symbol, time, and price of execution. As part of its relationship with the BDO, Apex Clearing is obligated to protect all CTI, including data and information related to Subscribers. Further, Apex Clearing is an SEC and FINRA-registered broker-dealer, and subject to applicable laws, rules, and regulations concerning information security standards and obligations. Brokers Principal Trading Firms Market Makers Dealers Y Firms accessing and trading at Bruce ATS in this manner are referred to as "Subscribers" in this Form. The BDO and Bruce ATS require the following of Subscribers before accessing Bruce ATS in their own MPID (broker of record): 1. Be a registered broker-dealer with the SEC in good standing and at least one self-regulatory organization. 2. Complete and execute a Subscriber Agreement. 3. Have clearing and settlement systems in place to support participation on the ATS. 4. Execute an appropriate "give-up" agreement with the BDO (e.g., an executed Uniform Trade Reporting Facility Service Bureau/Executing Broker Agreement or NASDAQ AGU/Attachment 2 Agreement). A give-up agreement is required when a FINRA member firm reports transactions to a FINRA Trade Reporting Facility ("TRF") on behalf of another FINRA member firm. This requirement allows Bruce Markets to fulfill its trade reporting obligations. 5. Satisfy any technical or system requirements that Bruce Markets may prescribe (e.g., connectivity certification, certification of applicable order and trade functionality, ability to receive trades/cancellations, rejects and trade breaks from the ATS). 6. Pass the BDO's due diligence assessment, including reviews of regulatory disclosures and compliance and AML programs. 7. Provide additional information that may be required by the BDO in certain circumstances, including financial statements and/or FOCUS Reports and Rule 15c3-5 controls and related documentation. The BDO will set pre-trade credit and risks limits based for each Subscriber as determined by the BDO or upon a more restrictive request by the Subscriber. Y Y A Subscriber can be excluded from Bruce ATS if the Subscriber no longer satisfies the eligibility requirements outlined in Part III, Item 2. Furthermore, the BDO maintains the right to exclude, at its discretion, Subscribers from using any feature of the ATS including access to Bruce ATS, use of specific order types, trading in any capacity (discussed in Part III, Item 11). The BDO reserves the right to modify this list at any time. Examples of why the BDO may choose to exclude a Subscriber include, but are not limited to: - The BDO determines a Subscriber's usage of the system is a risk to Bruce ATS systems and/or other participants. - A Subscriber loses their FINRA (or other SRO) membership or engages in behavior that potentially violates federal securities laws, regulations, and/or rules, or applicable FINRA rules. - A Subscriber fails to meet their settlement obligations. - A Subscriber breaches the Subscriber Agreement or violates trading rules of Bruce ATS. - A Subscriber with trading activities that could negatively affect Bruce ATS's trading system's capacity or ability to function. Examples include a Subscriber sending too many orders in a short window of time and flooding the trading system, or a Subscriber sending and cancelling orders in rapid repetition with no opportunity to execute. Y The Bruce ATS trading session is from Sunday evening through Friday morning from 8:00:00 P.M. ET to 4:00:00 A.M. ET. These hours constitute the "Trading Session" as used herein, and these are the regular hours of Bruce ATS; Bruce ATS does not operate outside of these hours or during the regular trading hours of the national securities exchanges. Bruce ATS is available for connectivity beginning at 7:00:00 P.M. ET and accepts orders beginning at 7:50:00 P.M. ET. Orders received between 7:50:00 P.M. ET and 8:00:00 P.M. ET are accepted in Bruce ATS's Order Book and queued based on price and time priority until the start of the Trading Session. At that time, the orders become eligible for execution. All orders received outside of the applicable operating hours are rejected. Open orders in the overnight Trading Session remaining at 4:00:00 A.M. ET expire at that time and do not carry over to the following overnight session. At 4:00:00 A.M. ET, Bruce ATS cancels all orders in Bruce ATS. Bruce ATS observes the holiday schedule followed by the national securities exchanges and does not operate on the day immediately preceding an exchange holiday. However, Bruce ATS does not adjust its hours of operation on days the exchanges are scheduled early close. For example, there is no overnight Trading Session on Christmas Eve (December 24th) since the TRF is not open on Christmas Day (December 25th). However, Bruce ATS may operate in its overnight Trading Session beginning on Christmas night (i.e., at 7:50 P.M. ET on December 25th) assuming the TRF is open and available for trade reporting the following day on December 26th. Y Bruce ATS requires all orders to be entered via Financial Information eXchange ("FIX") protocol. Bruce ATS supports FIX 4.2. This applies to and is the same for all Subscribers, including Apex Clearing. Bruce ATS does not accept orders via telephone, email, instant message, or other form of communication. Y N N N N ORDER TYPES, ORDER HANDLING, PRIORITY AND TIME-IN-FORCE Bruce ATS only accepts firm limit orders with Time-in-Force of "Day" or Immediate-or-Cancel ("IOC"). For the purposes of Bruce ATS, "Day and IOC" order refers to the full trading session of 8:00:00 P.M. ET to 4:00:00 A.M. ET the following day (the "Trading Session"). All orders and messages are handled via single thread processing. Bruce ATS automatically cancels all resting orders that have not been executed by 4:00:00 A.M. Except for trading in stocks priced below $1.00, Bruce ATS does not accept orders with sub-penny values in the price field. Bruce ATS does not route away. Bruce ATS Order Book ranks orders by price / time based and are matched by price / time as well. Time priority is determined by the order receipt time. Trades are not priced or relate to NBBO, which is not available during the operation hours of Bruce ATS. Order types cannot be modified since Bruce ATS only accepts limit orders. Day Orders: For Day orders, the order will remain in the Bruce ATS until it is cancelled, the full quantity is executed, or the trading session closes. If a partial match of a Day Order occurs, the remainder of the Day Order will stay open in the ATS until it is matched, cancelled or expires. Immediate-or-Cancel ("IOC") Orders: IOC orders will match immediately with eligible resting contra-side orders and Bruce ATS will cancel back the remaining balance. IOC orders may not be modified, replaced, cancelled or routed by the Subscriber. Subscribers can cancel unexecuted Day orders at their discretion during the Trading Session. Subscribers can cancel unexecuted orders at their discretion during the Trading Session. Modifications to decrease an order's size through a cancel/replace instruction will maintain the original time priority of an order. Modifications that increase an order's size will result in a new time priority. Additionally, modifications to an order's price results in a new time priority. Bruce ATS will process cancel requests immediately upon receipt, but executions may occur before the cancel request is fully processed Order types may be rejected for several reasons, including but not limited to, a violation of Bruce ATS's FIX specification or Subscribers' pre-trade credit and risk limits as set by the BDO (discussed in Part III, Item 2). Y Bruce ATS enforces a maximum per order quantity and notional value as part of its inbound pre-trade credit and risk checks per Subscriber. The minimum order quantity is 1 share and maximum single order notional value of $5,000,000 per Subscriber. Individual Subscribers may have a more restrictive limit than $5,000,000 per order, as set and determined by the BDO or as set by the BDO upon request by the Subscriber. Y Bruce ATS accepts and executes odd-lot orders. Odd lots are treated the same as round lots. Y Bruce ATS accepts and executes mixed lot orders. Mixed lots are treated the same as round lots. Y N Bruce ATS is available for connectivity beginning at 7:00:00 P.M. ET and begins accepting orders at 7:50:00 P.M. ET on each day the ATS is open for business. Bruce ATS does not accept and will reject all orders sent by Subscribers to Bruce ATS prior to 7:50:00 P.M. ET. Orders received between 7:50:00 P.M. and 8:00:00 P.M. ET are held in the order book until the Trading Session begins at 8:00:00 P.M. ET and ranked by price/time. When the Trading Session opens at 8:00:00 P.M. ET, Bruce ATS begins matching orders based on the terms of the orders and price and time priority. Bruce ATS establishes a 20% reference price band for each NMS stock using the last print reported to the SIP at or prior to 7:30:00 P.M. ET during the post session (i.e. 4:00:00 P.M ET- 8:00:00pm ET). These reference prices are set before the opening of the Trading Session and do not change after the trading session begins. In order to maintain a fair and orderly market the BDO may in limited circumstances update the reference price to reflect market news, corporate actions, system errors where the reference price is missing or incorrect, and significant price movements subsequent to the prior regular day's session and prior to the beginning of the Trading Session. The 20% reference price bands are established once the reference price is set. If the reference price is updated (for reasons mentioned above), the band will also update for that security. If the reference price or band can't be established for a security before the Trading Session, the ATS will not trade in that security. The ATS will reject orders outside the 20% reference price bands but will accept passive orders under certain circumstances. Accepting passive orders means Bruce ATS accepts all buy orders with prices at or below the upper band, which include unexecutable passive buy orders with prices below the lower band. Bruce ATS accepts all sell orders with prices above the lower band, including unexecutable passive sell orders with prices above the upper band. These passive orders are accepted and prioritized by price and time, but the ATS does not disseminate passive orders outside of the 20% reference price bands. For passive orders to become executable, they need to be canceled and replaced in order to become marketable. Bruce ATS automatically rejects any order priced aggressively outside of the price band (i.e. sell orders with prices below the lower band will be rejected and buy orders with prices above the upper band will be rejected). At its discretion, the BDO may halt trading in one or more securities or all securities trading through Bruce ATS in order to manage risk as discussed further in Part III, Item 20. If trading in an NMS stock is halted by an exchange during the regular day session, that stock is not eligible for trading during the subsequent overnight session. Bruce ATS does not operate during regular and extended trading hours of the national securities exchanges, and trading halts are uncommon but possible during Bruce ATS's Trading Session. In the event an NMS stock is halted by an exchange during an overnight trading session, Bruce ATS cancels all orders for the affected NMS stock on the Bruce ATS's Order Book at the time of the trading halt and all new incoming orders are rejected. In the event that the halt is lifted, orders are accepted in the impacted security. If a halt is imposed, Bruce ATS will notify all Subscribers and automatically cancel all orders in the Order Book for the subject security. Once the halt is lifted, Bruce ATS will notify all Subscribers that the halt has been lifted and that the subject security is available for trading. Bruce ATS employs the same policies and procedures for order handling, pricing, priority, etc. as described in Part III, Item 7 once it re-opens and when a halt is lifted. Bruce ATS does not use any special order acceptance, handling or execution procedures at the open, during a re-open or following stoppage of trading during regular trading hours. At the open, during a re-open or following a stoppage, Bruce ATS accepts, handles, and executes orders and trading interests as described in Part III, Item 11(c). Y Bruce ATS does not operate during regular and extended trading hours of the national securities exchanges, and Bruce ATS accepts "Day and IOC" orders. At the end of each Bruce ATS Trading Session, Bruce ATS automatically cancels all unexecuted orders. As described in Part III, Item 10, orders received between 7:50:00 P.M. and 8:00:00 P.M. ET are held in the order book until the Trading Session begins at 8:00:00 P.M. ET. At that time, orders are matched based on the terms of the orders and price and time priority. There is no unique handling of orders at the start of Bruce ATS's Trading Session hours, other than immediately executing any executable orders received between 7:50:00 P.M. ET and 8:00:00 P.M ET. Following a stoppage of trading in a security during Bruce ATS's Trading Session, all orders are automatically canceled and upon the stoppage being lifted, Subscribers are notified that the security is available for trading. All orders are handled in the same manner when trading reopens. Y N The BDO operates Bruce ATS with support from its affiliates. The BDO licenses the technology and software used to operate Bruce ATS Market Data Feeds, Order Book, and Matching Engine from Ocean. Ocean provides operational support as instructed by the BDO and does not have any discretionary or management authority of Bruce ATS. Bruce ATS is a non-attributed display venue that matches limit orders based on price / time priority. Subscribers cannot opt out of order display. Bruce ATS provides execution and liquidity for NMS stocks solely outside of normal and extended trading hours of the national securities exchanges. As part of the launch of Bruce ATS, securities available for trading will be rolled out in phases. Bruce ATS publishes a list of NMS stocks available for trading each Trading Session on its website at https://brucemarkets.com/ and provides to Subscribers via API. The Order Book holds resting orders that will match with marketable limit orders resting in the Order Book. When orders match, Bruce ATS will cross the two orders, execute the trade with the BDO serving as counterparty to both sides of the transaction, and will record the trade for reporting to the TRF when it becomes available, as discussed in Item 21 below. Y Minimum size Except for trading in stocks priced below $1.00, Bruce ATS does not accept orders with sub-penny values in the price field. Priority and Price Bruce ATS Order Book ranks and matches orders based on price / time priority. Bruce ATS's best bid and offer reflects the highest bid price and the lowest offer price available within Bruce ATS's Order Book. The pricing methodology is determined by the limit prices submitted by Subscribers, with execution allocated to the best available prices within Bruce ATS's Order Book. Bruce ATS does not offer price improvement functionality. Time Stamping All orders and order events are time-stamped to the millisecond upon receipt for prioritization purposes and for transaction reporting. Locked or Crossed Markets FINRA Rule 6420 regarding locked or crossed markets only covers the time period of 8:00 A.M. ET through 6:30 P.M. ET, and Bruce ATS does not operate during these hours. Nevertheless, to the extent that any Bruce ATS order may not be crossed with another order (e.g., self-trade prevention), or may not be crossed at a particular price, then such orders will be ineligible for matching. Bruce ATS will apply the priorities detailed above with respect to eligible orders and prices only. Orders submitted at prices that are impermissible by law or rule (e.g., Rule 612 of Regulation NMS) will be rejected. Short Sales The requirements of Regulation SHO, as applicable, apply to orders submitted to the ATS. However, as the national market system plan does not disseminate a national best bid during the hours of Bruce ATS's Trading Session, the "circuit breaker" restrictions of rule 201 of the Exchange Act do not, by their terms, apply to activity in the ATS. However, issuers that are subject to a short sale "circuit breaker" restriction during covered trading hours will be restricted during Bruce ATS's Trading Session as well. All orders must be marked "Buy", "Sell", or "Short Sale." Bruce Markets is not responsible for the compliance of Subscribers' trades with all short sale locate and delivery rules and obligations. Price Improvement: In the event of a match, the order deemed to be removing liquidity receives all available price improvement. For two given orders to a match, the order received first by the ATS is deemed to be adding liquidity. Errors The BDO has written supervisory policies and procedures in place to handle erroneous trade executions. The BDO will handle clearly erroneous executions (e.g., executions outside of the 20% reference price band) by correcting at prices consistent with the applicable rules of the self-regulatory organizations. Bona fide errors can be raised by Subscribers or identified by Bruce ATS systems or the BDO personnel. Bona fide errors (e.g., wrong security or side of the market, execution outside the limit price of an order, executions at erroneous prices that are due to a systemic or third-party service provider issues) are evaluated by BDO personnel on a case-by-case basis. Following a bona fide error on a trade executed on Bruce ATS, the BDO will contact the affected Subscribers and ask whether or not they want to maintain (keep) the trade. If the Subscribers do not want to maintain the trade, the BDO will determine whether to take the affected Subscribers' positions and book it to the BDO's Bruce ATS error account. In making the decision, the BDO will consider, among other factors, the number of affected Subscribers, the size of the error, the symbols involved, the price of the execution, and the reason for the error provided by the Subscriber. If so, the BDO will then trade out of the error position. The BDO utilizes Apex Clearing as a broker for handling the BDO's error positions under the MPID "PFCM." Apex Clearing can send the BDO's orders to any destination, at their own discretion, including but not limited to Bruce ATS. The BDO procedures are designed to ensure applicable reporting and clearing obligations are amended accordingly. The BDO reviews execution errors daily or as they occur to ensure that they are handled in accordance with the BDO's procedures. Y N N N Bruce ATS enforces self-trade prevention by default. Self-trade prevention prevents Subscriber orders from crossing with other orders from the same Subscriber. Subscribers can elect to opt out of self-trade prevention on Bruce ATS for all the Subscriber's orders, or a subset(s) of the Subscriber's orders. For example, a Subscriber can choose to have the ATS not enforce self-trade prevention only on orders from a particular business unit of the Subscriber (e.g., do not enforce for the agency trading desk; enforce for the proprietary trading desk) or only on orders from a specific customer(s) of the Subscriber. Subscribers can instruct the BDO to not enforce default self-trade prevention on Bruce ATS in either of two ways: i. By contacting the BDO's Subscriber support team during onboarding or at any time thereafter and requesting that Bruce ATS not enforce self-trade prevention for all or a subset of orders. This request is implemented by the BDO support team in the trading system. ii. By sending a FIX tag and value as specified in the Bruce ATS FIX specification in order to opt out of default self-trade prevention on an order-by-order basis. A cross between a buy and sell order from the same Subscriber will only occur if the Subscriber has requested that the ATS not enforce self-trade prevention on both the buy and sell order. No other counter-party selection or restrictions are available. Y N Bruce ATS is a non-attributed display venue providing Bruce ATS Market Data Feeds containing market data during Bruce ATS's Trading Session to Subscribers and third parties that consume or redistribute market data. This includes information on Level 1 and Level 2 data that describes display and order acceptance in Part II, Item 5. When a Subscriber submits an order to Bruce ATS, the order will be displayed only if the order is within the 20% reference price band (including odd and mixed lot orders). Subscribers cannot opt out of order display. Orders are displayed until canceled, cancel/replaced, executed, or expired. Information on orders displayed includes: 1) Time, 2) Order ID, 3) Side Indicator, 4) Quantity, 5) Symbol, 6) Price. See Part III, Item 11(a) and Part II, Item 7 above for more information. Bruce ATS disseminates security eligibility information prior to accepting orders at 7:50:00 P.M. ET (the "Opening Message"), which indicates all securities eligible to trade during that session. Following the Opening Message until 8:00 P.M. ET, Bruce ATS only sends updates to the eligible security list, if any. From 8:00:00 P.M. to 4:00:00 A.M. ET, Bruce Holdings sends the Bruce ATS Market Data Feeds that include the order information described above as well as execution information indicating that an order previously displayed has been executed. The counterparties for executions are not displayed. Bruce ATS Market Data Subscribers include Bruce ATS broker-dealer subscribers that subscribe to Bruce ATS for the purpose of transacting in securities, as well as recipients that subscribe solely for access to the data. It is not a requirement for a Bruce ATS Market Data Subscriber to be a broker-dealer or Bruce ATS Subscriber. Each Bruce ATS Market Data Subscriber is subject to the same terms of use. Bruce ATS Market Data Subscribers must subscribe by entering into a market data agreement with Bruce Holdings. Bruce Holdings disseminates the Bruce ATS Market Data Feeds to Bruce ATS Market Data Subscribers in one of two ways: directly from Bruce Holdings to the Bruce ATS Market Data Subscriber, or indirectly via third-party distributors. Third-party distributors include vendors or service providers that redistribute market data. Bruce ATS Market Data Subscribers receiving market data via third-party distributors may experience additional latency compared to those receiving data directly from Bruce Holdings. Bruce Holdings offers Bruce ATS Market Data Subscribers the option to receive market data either directly from Bruce Holdings or indirectly via third-party distributors. For further information regarding market data dissemination, please see Part II, Item 5. Y N N Y N Transaction Fees The BDO assesses a negotiated per-executed-share fee to Subscribers for shares traded in Bruce ATS that remove liquidity (taking). For transactions in stocks priced greater than or equal to $1.00 that remove liquidity, there is a charge of $0.00 up to $0.0020. For transactions in stocks priced below $1.00 that remove liquidity, the BDO assesses a negotiated fee of $0.00 up to 0.3% (30 basis points) of the total notional dollar volume. Fees may be reduced for Subscribers at the BDO's discretion based on factors, including being an early adopter to Bruce ATS, the historical trading volume on Bruce ATS, and expected future trading volume on Bruce ATS. The BDO passes through certain regulatory fees, including Consolidated Audit Trail (CAT) fees and SEC's Section 31 fees and FINRA's Trading Activity Fee ("TAF") for subscribers who are not FINRA members. As the CAT Executing Broker for all trades on Bruce ATS, the BDO reports a cross trade as the buyer and seller for trade reporting purposes (i.e., "Alternative #1" method under FINRA guidance). Bruce ATS incurs charges on both sides of the cross, and the BDO passes the allocated regulatory fees back to the Subscribers on both sides of the transaction. As previously referenced, the applicable fees are a pass through of the fees charged to the BDO, with no markup applied to Subscribers. Market Data Fees The BDO's parent company, Bruce Markets Holdings LLC ("Bruce Holdings"), distributes Bruce ATS Market Data Feeds to Bruce ATS Market Data Subscribers either directly or via third-party distributors. Bruce Holdings charges recipients for Bruce ATS Market Data Feeds, assessed monthly. The monthly fees for Bruce ATS Market Data for Subscriber and non-subscriber participants are as follows: Level 1 and Level 2 non-display license (for internal use only): $5,000 for both Level 1 display license: $7,500 to $20,000 Level 2 display license: $10,000 to $22,000 Last sale price only: $5,000 to $7,500 The monthly fees for Bruce ATS Market Data for market data vendors and information portals are as follows: Level 1 and Level 2 non-display license (for internal use only): $5,000 for both Level 1 display license: $5,000 to $20,000 Level 2 display license: $10,000 to $22,000 Last sale price only: $5,000 to $7,500 A display license permits market data to be displayed on a screen or terminal, while a non-display license permits data to be used by systems or devices, but not displayed to end-users. Bruce Holdings determines pricing for Bruce ATS Market Data within the ranges above based on several factors, including client type (i.e., Bruce ATS Subscriber, non-Bruce ATS Subscriber, or media company), data usage (e.g., displayed or non-displayed), distribution (internal or external), data content (Level 1 or Level 2), and the historical and/or forecasted participation statistics of trading on ATS, number of terminals on which the data is displayed, open/public distribution or access restricted (e.g., distribution behind a paywall / login). The BDO assesses a negotiated per-executed-share rebate to Subscribers for shares traded in Bruce ATS that add liquidity (resting). For transactions in stocks priced greater than or equal to $1.00 that add liquidity, there is a rebate of up to $0.0006. For transactions in stocks priced below $1.00 that add liquidity, there is no rebate. All Bruce ATS Market Data Subscribers are eligible for potential discounts (e.g., those consuming a higher number of Bruce ATS data products from Bruce Holdings or as an incentive for new Subscribers). These are impacted by the factors in Part III, Item 19(a) above. The BDO assesses a negotiated per-executed-share rebate to Subscribers for shares traded in Bruce ATS that add liquidity (resting). For transactions in stocks priced greater than or equal to $1.00 that add liquidity, there is a rebate of up to $0.0006. For transactions in stocks priced below $1.00 that add liquidity, there is no rebate. All Bruce ATS Market Data Subscribers are eligible for potential discounts (e.g., those consuming a higher number of Bruce ATS data products from Bruce Holdings or as an incentive for new Subscribers). These are impacted by the factors in Part III, Item 19(a) above. The BDO, at its discretion, may choose to limit, suspend, or stop trading on Bruce ATS in all or individual NMS stocks. Reasons for the stoppage may include regulatory, active street-wide trade halts, short shale restrictions (SSRs), unreliable market data, internal technology or platform issues including from service provider Ocean, programming errors, or systemic issues. Additionally, Bruce ATS also reserves the right to suspend trading when approaching Fair Access or Regulation SCI thresholds as described in Item III, Part 10. Y Bruce ATS executes trades when matching two Subscriber orders. Following an execution, all sides of the trade are reported by 8:15:00 A.M. ET on the next business day to a Trade Reporting Facility ("TRF"). The BDO becomes a counterparty to both sides on each trade. Bruce ATS reports executed trades to the FINRA/Nasdaq TRF1 (Carteret) as its primary facility but also has the ability to use the Nasdaq TRF2 (Chicago) as a secondary or backup facility. Bruce ATS matches buyers and sellers in a single cross and reports such trades pursuant to FINRA trade reporting guidance. Through its service provider, Ocean, Bruce ATS sends a single cross report to the TRF and reports two non-media reports for each participant involved in the transaction. Bruce ATS reports all executions on its ATS under the MPID, "BOSS" with a modifier to denote their executions outside of normal market hours. Trades that are executed from 8:00:00 P.M. ET through 11:59:59 P.M. ET are reported to the Trade Reporting Facility ("TRF") by 8:15:00 A.M. ET on the following business day. Trades that are executed between 12:00:00 A.M. ET and 4:00:00 A.M. ET on exchange business days (i.e., not a weekend or exchange holiday) are reported to the TRF by 8:15:00 A.M. ET on the day of execution. Trades executed on weekends and exchange holidays are reported to the TRF on an "as/of" basis by 8:15:00 A.M. ET the next business day following execution. Y The BDO does not clear or settle transactions for itself or its Subscribers. All Subscribers are either self-clearing or have a clearing relationship for their transactions (e.g., Apex Clearing or another clearing firm). Subscribers must execute "give-up" agreements with the BDO to establish an "on behalf of" reporting relationship (e.g., an executed Uniform Trade Reporting Facility Service Bureau/Executing Broker Agreement or Nasdaq AGU/Attachment 2 Agreement). Bruce ATS will cross the two orders, execute the trade with the BDO serving as counterparty to both sides of the transaction. The executed trade reports also instruct the FINRA/NASDAQ TRF to submit trade information to NSCC or DTC on behalf of the BDO and Apex Clearing, which facilitates settlement of equity securities. Apex Clearing is a member of the National Securities Clearing Corporation ("NSCC") and The Depository Trust Company ("DTC"). Settlement of trades executed on the ATS occurs through the Continuous Net Settlement (CNS) system operated by DTC and generally settle on the first business day following a trade. The BDO, as counterparty to all trades, uses Apex Clearing to submit trades on behalf of the BDO to NSCC for clearing and DTC for settlement. Additionally, all Subscribers are either self-clearing or have their own clearing relationship, but the BDO does not require Subscribers to use any specific clearing member. The BDO clears trades with Subscribers through QSR, Correspondent or ACT clearing methodologies. Bruce ATS does not operate during regular or extended trading hours of the national securities exchanges, and there is no NBBO available for hours in which Bruce ATS operates. Bruce ATS obtains last print data from the Nasdaq SIP feed as of or near 7:30 P.M. ET that serves as the primary reference price for each NMS Stock that trades on Bruce ATS for that Trading Session. That reference price is the last sale price for each security printed on a national securities exchange or the closing price of the security on a national securities exchange if the former is not available. As discussed in Part III, Item 10 above, Bruce ATS only permits executions priced within 20% of the reference price. Y N N N