The Nasdaq Stock Market LLC filed a proposed rule change with the Securities and Exchange Commission (SEC) to amend its Compliance Rule related to the Consolidated Audit Trail (CAT). This proposal seeks to implement an "Allocation Alternative," which changes the reporting requirements for brokers when allocating shares or contracts to client accounts. The changes aim to ease the reporting burden on executing brokers who do not have the necessary data to submit Allocation Reports, ensuring that those with the relevant information, like clearing brokers, take on this task instead. This approach is intended to maintain the regulatory utility of CAT while reducing compliance costs for brokers.
Simple Explanation
Nasdaq wants to change a rule so that brokers who don't have enough information don’t need to report certain stock trades. Instead, they want the brokers who have all the details to do the reporting, making the whole process easier and less costly for everyone.