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OTC Markets Group, operator of the over-the-counter (OTC) equity markets OTCQX, OTCQB and Pink, has submitted a comment letter to the SEC opposing the proposed fee schedule for the Consolidated Audit Trail (CAT), which sets the fees participants and other industry organizations must pay to fund the CAT NMS Plan: https://www.sec.gov/comments/sr-finra-2017-011/finra2017011-1801717-153703.pdf
OTC Markets argues that the CAT Plan Operating Committee abused its discretion by placing OTC Markets' OTC Link ATS in the first tier of execution venues along with the New York Stock Exchange and Nasdaq and that it incorrectly assigned OTC Link ATS to be the LARGEST execution venue, at 29.9%, for the purposes of funding the CAT (see page 62 from the FINRA filing here: http://www.finra.org/sites/default/files/rule_filing_file/SR-FINRA-2017-011.pdf and pasted image below), despite the fact that the share of OTC Link ATS in the combined market for NMS Stocks and OTC equity securities based on trade volume is less than 1% and that the revenues the NYSE and Nasdaq derive from trading NMS securities is 20x greater than the revenues OTC Link ATS derives from trading OTC equity securities. OTC Markets argues that a more equitable approach would align fees with the resource usage and costs associated with each execution venue.
In conclusion, OTC Markets argues that the SEC must abrogate the CAT Fee Schedule and refile it in accordance with Rule 608(a)(1) and reviewed in accordance with Rule 608(b)(2) of Regulation NMS. While the the CAT Fee Schedule is effective upon filing with the SEC, it can abrogate the CAT Fee Schedule within 60 days of its filing and require that it be refiled if it appears to the SEC that such action is "necessary or appropriate in the public interest, for the protection of investors, or the maintenance of fair and orderly markets, to remove impediments to, and perfect the mechanisms of, a national market system or otherwise in furtherance of the purposes of the Exchange Act."
