For CAT reporting purposes, the accountHolderType value of market maker (value ‘O’) is used to identify orders originated by registered market makers or firms displaying quotes on an IDQS in their market making account. The value of ‘O’ must be used for all activity in the firm’s market making account for a security in which it is registered, regardless of where the order is ultimately routed or executed, or whether the activity is directly related to maintenance of a firm’s market making obligations. For example, block facilitation and hedging activity in the market making account in a security the firm is a registered market maker should also be reported as ‘O’.

Because options market making is currently defined and identified through use of the OCC clearing range, a separate CAT reporting guideline for the use of the accountHolderType of 'O’ for options orders has been mandated.

The accountHolderType value of 'O’ is not intended to identify all forms of market making under various rules, such as short sales rules, Volker, etc. Further, it is not intended to identify all trading in any proprietary account that may be used for market making activity, including hedging activity in securities for which a firm is not a registered market maker or block positioning in securities for which the firm is not a registered market maker. It is also not intended to identify proprietary activity in securities in which a firm is registered as a market maker that originate from desks other than the Market Making Desk. For example, activity occurring on a program desk that is walled off from the market making desk in securities that a firm is a registered market should be marked with an ‘accountHolderType’ value of ‘P’ (Other Proprietary).

Specifically:

For CAT reporting purposes only, the accountHolderType value 'O' (Market Making) should be used as follows:

Simple Equities: The value 'O' should be used for any order originated in an Industry Member’s market making account in a security for which the Industry Member is registered as a market maker, designated market maker, lead market maker or similar capacity on a national securities exchange or in which the Industry Member displays quotations on an IDQS in an unlisted stock.

Simple Options: The value 'O' should be used for any order originated in an account of the Industry Member that clears in the OCC clearing range of 'M'.

Complex Options: The value ‘O’ should be used for any order originated in an account of the Industry Member where the option leg(s) clear(s) in the OCC clearing range of ‘M’. This guidance is also applicable to the equity leg of a complex option in Phase 2d when complex orders become reportable to CAT. 

In Phases 2a, 2b and 2c, the values of ‘P’ (Other Proprietary) or ‘O’ (Market Making) are both acceptable for the accountHolderType value for the equity leg of the complex order. 

See FAQ B68 for more information on how to populate the accountHolderType field if an Industry Member uses the same account for both market making and non-market making proprietary activity.