Ms. Vanessa Countryman
Secretary
U.S. Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549

Re: File No. 4-698; Joint Industry Plan; Notice of Filing of Amendment to the National Market System Plan Governing the Consolidated Audit Trail by the Plan Participants—Comment Letter of the Securities Industry and Financial Markets Association

Dear Ms. Countryman:

On behalf of its member firms and the customers they represent, the Securities Industry and Financial Markets Association (“SIFMA”)1 respectfully submits this letter to the U.S. Securities and Exchange Commission (the “Commission”) to comment on the above-referenced proposed amendment (the “Proposal”) to the National Market System Plan Governing the Consolidated Audit Trail (the “CAT NMS Plan”).2 The Proposal seeks to force all industry members (“Industry Members”) that are obligated to report to the Consolidated Audit Trail (the “CAT”) pursuant to Commission and self-regulatory organization (“SRO”) rules effectively to assume all of the liability associated with a breach or misuse of data in the CAT System, which has been developed and is operated exclusively by the SROs.3 The Proposal would accomplish this by amending the CAT NMS Plan to require Industry Members and their reporting agents each to sign a mandatory agreement as a condition of reporting to the CAT that effectively eliminates the liability of CAT LLC and the SROs in the event of a breach or misuse of CAT Data. 4

If approved, the Proposal would effectively prevent Industry Members from seeking indemnification, contribution or other relief from CAT LLC and the SROs in connection with claims asserted against Industry Members by customers or others whose data is improperly obtained or misused due to a CAT System security breach. The limitations also could be used to preclude direct claims by Industry Members based on misconduct by CAT LLC, the SROs or their representatives in connection with the CAT System. The Proposal thus would result in fundamentally unfair outcomes and misaligned incentives because it is CAT LLC and the SROs that control the CAT System and the security measures implemented to protect CAT Data.

SIFMA has long supported the development of the CAT and believes that it will provide a critical market infrastructure resource for regulators to track equity and options trading activity across markets. At the same time, SIFMA long has been extremely concerned and vocal about the protection of CAT Data within the CAT System and about the potential liability of Industry Members in the event of a breach or misuse of CAT Data while under the control of the SROs.5