As stated in FAQ B44, any equity bid or offer that is accessible electronically by customers or other market participants and is immediately actionable (i.e., no further manual or electronic action is required by the responder providing the quote in order to execute or cause a trade to be executed) is reportable starting in Phase 2c; and any listed option bid or offer which is accessible electronically by customers or other market participants and is immediately actionable (i.e., no further action is required by the responder providing the quote in order to execute or cause a trade to be executed ) is reportable starting in Phase 2d. Accordingly, any response to an RFQ or other form of solicitation response provided in a standard electronic format (i.e. FIX) that meets this definition would be reportable starting in Phase 2c for equities and Phase 2d for options.

Responses communicated in standard electronic format are reportable by both the CAT Reporter issuing the RFQ or solicitation (solicitor) and the CAT Reporter responding to the RFQ or solicitation (responder). Specifically, the solicitor must report the receipt of all responses, even those that were not ultimately selected. 

It is important to note that regardless of the form (electronic or manual) of any RFQ or solicitation response, all orders received or originated as the result of such RFQ or solicitation process must be reported as set forth in the CAT Reporting Technical Specifications for Industry Members. For equities, both manual and electronic orders must be reported starting in Phase 2a. For options, simple, electronic orders must be reported starting in Phase 2b and all other orders, including manual, complex and paired orders, are reportable starting in Phase 2d.

Example 1:

A CAT Reporter issues an RFQ through a 3rd party vendor RFQ platform not operated by a broker-dealer. In response to the RFQ, multiple CAT Reporters respond by sending FIX messages directly to the requesting CAT Reporter. Upon selection of a response (either by the trader or automatically by the firm’s trading system), the FIX order from the winning bidder is executed (manually or electronically) OR is routed (manually or electronically) to another broker-dealer or exchange for execution without any further action required by the winning bidder.

The electronically provided responses are reportable by all bidders, even those that were not selected, starting in Phase 2c for equities and Phase 2d for options. Further, the CAT Reporter that issued the RFQ would report the receipt of all responses, as well as any subsequent actions taken to process the order starting in Phase 2a for equities, Phase 2b for simple, electronic orders and Phase 2d for all other options orders.

Example 2:

A CAT Reporter issues an RFQ and receives several quotes in response through a 3rd party vendor RFQ platform not operated by a broker-dealer. Upon selection of a response, the CAT Reporter either:

• initiates and routes an order electronically to the winning bidder,
• the RFQ platform automatically sends a routed order to the winning bidder, or
• the winning bidder has standing instructions to create a new order acceptance once it receives a message from the RFQ platform that it has won.

Because the RFQ responses were sent through an RFQ platform and not via standard electronic format directly to the solicitor/CAT Reporter, none of the responses are reportable in 2c.

However, the origination of the new order by the solicitor/CAT Reporter, the route of that new order to the winning bidder, and the acceptance of that order by the winning bidder are all reportable events in the phase that order would otherwise become reportable. The solicitor/CAT Reporter would report the new order and route events; the winning bidder would report the order acceptance, as well as any subsequent actions taken to process the order.

Example 3

A CAT Reporter issues an RFQ through a 3rd party vendor RFQ platform not operated by a broker-dealer. In response to the RFQ, multiple CAT Reporters respond by sending FIX messages directly to the requesting CAT Reporter’s OMS. Upon selection of a response, the solicitor CAT Reporter either:

• initiates and routes an order electronically to the winning bidder,
• the RFQ platform automatically sends a routed order to the winning bidder, or
• the winning bidder has standing instructions to create a new order acceptance once it receives a message from the RFQ platform that it has won.

Although the RFQ responses were sent via standard electronic format directly to the solicitor/CAT Reporter’s OMS/EMS, the responses are not reportable in Phase 2c because the CAT Reporters sending the responses would be required to take additional action by accepting a separate order from the requestor before any execution can occur, and would therefore not be considered immediately actionable.

However, the origination of the new order by the solicitor/CAT Reporter, the route of that new order to the winning bidder, and the acceptance of that order by the winning bidder are all reportable events in the phase that order would otherwise become reportable. The solicitor/CAT Reporter would report the new order and route events; the winning bidder would report the order acceptance, as well as any subsequent actions taken to process the order.

Example 4

An Asset Manager (non-CAT Reporter) issues and receives several quotes in response through a 3rd party vendor RFQ platform that is not part of any CAT Reporter’s OMS/EMS. Upon selection of a response, the Asset Manager either:

• sends a new order request electronically to the winning bidder,
• the RFQ platform automatically sends the new order request to the winning bidder, or
• the winning bidder has standing instructions to create a new order for this Asset Manager once it receives a message from the RFQ platform that it has won.

Because the RFQ responses were sent through an RFQ platform and not via standard electronic format directly to or from a CAT Reporter’s OMS/EMS, none of the responses are reportable in Phase 2c or Phase 2d.

However, the receipt of the order from the Asset Manager, as well as any subsequent actions taken by the winning bidder to process the order are reportable events in the phase that order would otherwise become reportable.