What's going on everyone? Charlie here I have the next section of regulation NMS the CT Plan
ready to go this section is going to cover management of the llc let's go ahead and break it
down look at that little blob it's so cute anyways duties and powers of the operating committee
article iv of the CTplan establishes the overall governance structure for the management of the llc
article iv section 4.1a proposes that the llc be managed by the operating committee
article iv section 4.1 also provides that the operating committee has the authority to
take actions it deems necessary to accomplish the purposes of the llc including number one
proposing amendments or implementing the policies and procedures number two selecting overseeing
specifying the role and responsibilities of and evaluating the performance of the administrator
number three developing fair and reasonable fees for equity market data number four reviewing the
performance of the processor and ensuring public reporting of the processor's performance and
other metrics and information about the processors number five assessing the marketplace for equity
data products and ensuring that the CT feeds are priced in a manner that is fair and reasonable and
designed to ensure the widespread availability of CT feeds data to investors and market participants
designing a fair and reasonable formula to be applied by the administrator
for allocating revenue and reviewing and revising the formula as needed interpreting the
llc agreement and its provisions and lastly other specific responsibilities provided for in the llc
agreement now the comment response to this one commenter states that operating committee should
be should function as a legislature with management to execute the plan and the sip
public purpose this commenter further states that the diversified operating committee will
be ill-equipped to run daily operation management functions to the detriment of the llc the terms of
the proposed CT plan do however contemplate that the operating committee will act as a general
decision-making body while the administrator and the processors will be responsible for the
day-to-day operational decisions another commenter expresses general support for the provision of the
CT plan that states the responsibilities of the operating committee include interpreting the llc
agreement and its provisions with the caveats that the non-sro voting representatives have the
opportunity to meaningfully participate in the process of interpreting a provision of the plan
and that the ct plan should provide more detail on what role the non-self-regulatory organization's
representatives would have with respect to such decisions this commenter also recommends that the
operating committee adopt policies and procedures distinguishing operational interpretations of
the ct plan from amendments required to be submitted to the commission under rule 608
of regulation nms now the sec responds to this they agree the sec agrees with commenter that
the concept of administrative functions of the operating committee should be limited to
prohibit certain delegations of authority and is therefore modifying section 4.1b to exclude
from the functions that may be delegated those administrative functions to be performed
by the independent administrator pursuant to section 6.1. Damn, Gary! Get him boy!
The commission finds that this modification is appropriate because the function's delegated to
the independent administrator particularly those who those that involve administering
vendor and subscriber contracts performing audits or assessing fees necessarily involve
access to sensitive information of significant commercial or competitive value and therefore
raise heightened concerns about conflicts of interest that can be adequately addressed
only if these functions are performed by the independent administrator damn in response to
the comment that suggests that any delegation to an sro voting representative or subcommittee
controlled by the sro voting representatives should be subject to a vote of the operating
committee the commission agrees and notes that the terms of the ct plan state the delegations
of administrative functions under the provision are subject to a vote of the operating committee
additionally in response to the comment that argues that administrative functions should
not be delegated to a subcommittee composed only of either s or voting representatives or non-sro
voting representatives so basically they're saying you should either make it one side or
the other either make it all non-self-regulatory organizations for voting or all self-regulatory
organizations and the point of this video is to show you that in the past it's always been
delegated to the SROs this is like the first time I've seen where you're getting non-sro voting
representatives to come in and give their peace of mind on the situation which is why we see all
these comments so more comment response the commission uh agrees with the comment that
states that a delegation under this provision does not convey any authority to take action
shuts authority resides with the operating committee and article 4 section 4.1 b
of the ct plan permits the operating committee to delegate authority only to implement a
decision by the operating committee develop a proposal for operating committee consideration
or perform other ministerial functions on the operating committee's behalf finally
article 4 section 4.1c provides that neither the company nor the operating committee will have
authority over any members proprietary systems or the collection and dissemination of quotation
or transaction information in eligible securities in any member's market or in the case of Finra,
from Finra participants the commission received no comments on this provision of the ct plan and
is approving it as proposed. Damn, Gary! Flex boy! Okay, composition and selection of the operating
committee here we go section 4.2a provides that each group of members that are affiliates
an sro group and each non-affiliated sro will select an sro voting representative to serve on
the operating committee and vote on its behalf the commission is approving this section as proposed
uh super note 216 gives examples of sro groups on the operating committee which is going to
be like New York Stock Exchange they might see American Chicago national things like
that then we have the non-affiliated SROs are Finra, IEX, LTSE, and MEMX.
now
sorry about that my kid came in the room uh anyways continuing inclusion of
non-sro voting representatives so section 4.2 b provides that non-sro voting representatives
will also be permitted to serve and vote on the operating committee matters several commenters
expressed support for including non-sro voting representatives on the operating committee one
commenter states that the requirement for voting representation by a diverse set of stakeholders
is a core element of the governance order with the purpose of reducing conflicts of interest
and providing more meaningful inclusion of key stakeholders views in new consolidated
data planned decision making another commenter similarly states that it supports expanding
voting representation to non-sros and having them participate as full voting members of the
operating committee to allow non-sros to have a role in the ct plan's decision-making process
and therefore help address conflicts of interest so these are all comments there's four non-sros
now let's take a look at comments against the non-sros these are going to be coming
from the sros themselves other commenters oppose the CT plans provisions that grant
non-sros voting rights on the operating committee the three commenters state
that these provisions are contrary to section 11a of the act these commenters state that section 11a
of the act authorizes the commission to direct only the sros to jointly develop and operate
nms plans and does not provide the authority to give non-sros voting power on the operating
committee of an nms plan they're saying you can't play that check while acknowledging that the
non-sros should have some voice in the operation of the ct plan one commenter argues that congress
determined to entrust the planning development operation and regulation of nms plans to sros
that have specific regulatory obligations to active furtherance of the public interest
let us do it man like you've always let us do it man we have the public interest at heart
man that's what they're saying and the set comes back with uh well actually this next slide sorry
first another comment argues that the act leaves no discretion for the commission
to grant votes to non-sros and that providing votes to non-sros would conflict with the design
purpose of the act which entrusted responsibility for the planning development operation regulation
of the nms system two sros which are subject to comprehensive regulation that you don't follow
go f yourself rather than have rather than to non-sros whose representatives would have no
obligation to act in the public interest and would be free to act in their own personal self-interest
that is completely calling the kettle black you mofos get [ __ ] on uh let's see who Gary
decides to side with about this sec response the commission specifically considered and addressed
these arguments in the governance order [ __ ] as stated therein the commission believes that
this is within its authority under section 11a to require the operating committee to include
voting rights for non-sros and here we go these findings had substantial support in the comment
file for the governance order as a diverse set of commenters expressed the view that the governance
of market data plans should include a broader array of viewpoints and the commission reiterates
those findings here and then i added in [ __ ] additionally nothing in the legislative history
of section 11a indicates that congress sought to preclude the commission from from directing
the sros to provide non-sros with a voice in enemies plain governance particularly where as
here the commission has reasonably concluded that doing so will promote the plan's effectiveness
consistent with section 11a's enumerated goals [ __ ] further the commission does not believe
that allowing a broader representation of market participants in the governance of the ct plan
by including non-sros as voting members on the operating committee will diminish the
sros ability to ensure that the ct plan meets the requirements of section 11a of the act in rule 608
of regulation in a mess beyotch therefore the commission continues to believe that
inclusion of non-sro voting representatives on the operating committee would not interfere with
the commission's ability to exercise its oversight over the ct plan yeah big [ __ ]
it'll be fine don't worry everyone it's gonna be fine
unless you're a bank didn't you [ __ ] you
and uh yep uh that's about it for this one there you go beast beast