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WatersTechnology: SEC’s CT Plan Timetable is ‘Unrealistic’

Lindsey Patterson

Lindsey Patterson

The Securities and Exchange Commission has approved a new blueprint for the governance of the consolidated tapes produced for US equities, together with an aggressive timetable for its implementation. But industry observers say it is highly unlikely that full implementation of the plan is achievable within the regulator’s 12-month deadline.

On August 6, the SEC quietly approved a modified version of what it has dubbed the CT Plan, which effectively consolidates the three plans that currently govern the two Securities Information Processors, the US public feeds for exchange-listed equities market data.

The SEC ordered the exchanges and the Financial Industry Regulatory Authority—collectively known as the self-regulatory organizations, or SROs—to come up with this plan, which forms part of its wider efforts to modernize the Sips. Perhaps the most important of the SEC’s August 6 modifications was the inclusion of an implementation timetable for the plan, which was lacking in its draft form but demanded by market data consumers.

The CT Plan will take the form of a limited liability company (LLC) registered in Delaware. Within two months of the effective date, the LLC must form an operating committee to govern it, comprised of a balance of SRO and non-SRO voting representatives, including market participants.

“The commission went to great lengths to ensure that non-SRO voting members would have a meaningful role as full members of the operating committee. Several provisions of the plan that were formerly the decision of just the SROs are now the decision of the full operating committee,” says Manisha Kimmel, chief policy officer at market data infrastructure provider MayStreet. Kimmel was formerly a senior policy advisor at the SEC.

Once the committee is formed, it also must adhere to a series of deadlines. For one, it must set the fees it will charge subscribers to Sip data. Businesses like MayStreet will be watching out for this fee schedule so that they can build their business cases and offer services as competing consolidators under the SEC’s related infrastructure rule.

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