Mosaic ATS

ats_name

Mosaic ATS, LLC

operator_crd

000335824

operator_name

MOSAIC ATS, LLC

order_types

ORDER CLASSIFICATIONS / LEVELS: Mosaic ATS classifies orders (i.e., 'Investor' or 'Risk Provider' orders) submitted to the ATS based on workflow attestations and corresponding certification of such classifications, as provided by Subscribers during the onboarding process. Mosaic ATS then independently evaluates Subscriber orders for trading compatibility with potential counterparties through its proprietary scoring and rating system called Market Execution Rating for Informed Trading ("MERIT"). The Mosaic ATS order book is organized into three interaction segments (i.e., 'Level 1', 'Level 2', and 'Level 3'), based upon the classifications of the Subscriber orders. Subscribers cannot opt-in or opt-out of the assigned segments. Please refer to Part III Item 13.a. for detailed descriptions of the Subscriber classifications and order interaction segments. ORDER TYPES: Mosaic ATS accepts Firm and Conditional orders. All orders entered into the ATS are non-displayed, and pegged to the midpoint of the current constructed National Best Bid and Offer ("NBBO") provided by Ocean (the "Constructed NBBO"). Mosaic ATS accepts midpoint-pegged orders with or without a limit price. For a Firm or Conditional order with a specified limit price, Mosaic ATS uses the more conservative of the limit price and midpoint of the current Constructed NBBO when determining trade eligibility. Market orders are executed at the midpoint of the current Constructed NBBO. ORDER PARAMETERS: For Firm orders, the ATS requires the following order parameters: * Side, Symbol, Order Quantity, Price, Order Type, Order Capacity, Execution Instruction, Handling Instruction, Locate Required, Locate Broker, and Subscriber ID.? * Furthermore, for Subscriber orders classified as Investor, the ATS requires the following order parameters: User Urgency (as defined below), and DMA or Directed. * Contra Category (as defined below) is a native and optional parameter, but is not required. For Conditional orders, the ATS requires the following order parameters: * Side, Symbol, Order Quantity, Price, Order Type, Order Capacity, Execution Instruction, Handling Instruction, Locate Required, Locate Broker, Subscriber ID, and a field specifying that the order is a Conditional Order. * Furthermore, for Subscriber orders classified as Investor, the ATS requires the following order parameters: 'User Urgency' (as defined below) and 'DMA or Directed'. * 'Contra Category' (as defined below) is a native and optional parameter, but is not required. Below are detailed descriptions of the two order parameters native to the Mosaic ATS, both of which are only applicable to Subscriber orders classified as Investor: 1. User Urgency is a mapped value based on a calculation of expected "participation rate" for the parent order a Subscriber is executing in the broader market. Participation rate is based on the parent order quantity received by the Subscriber (i.e., the 'numerator') compared to the Subscriber's expected broader market volume in the symbol over the Subscriber's expected duration of the parent order (i.e., the 'denominator'). User Urgency is a required order parameter native to the Mosaic ATS that Subscribers must supply for orders the ATS has classified as Investor. User Urgency must be supplied on an order-by-order basis, in accordance with the ATS's FIX Specifications. Specifically, upon order entry, Subscribers must supply one of the following three values for User Urgency: 'Low', 'Medium', or 'High'. The value of 'Low' maps to an expected participation rate of less than 5%. The value of 'Medium' maps to an expected participation rate between 5 and 15%. The value of 'High' maps to an expected participation rate greater than 15%. 2. To illustrate, if a Subscriber calculates an expected participation rate of above 15%, the Subscriber must supply a User Urgency value of 'High'. 3. Contra Category allows a Subscriber, on an order-by-order basis, to restrict interaction with orders from counterparties that have a relatively higher User Urgency that has been verified by MERIT. In accordance with the ATS's FIX Specifications, upon order entry, a Subscriber can provide one of the following three values for Contra Category: 'a', 'b', or 'c'. 'a' - The Subscriber order can only interact with Subscriber orders from counterparties with an identical or relatively lower User Urgency (e.g., Low versus Low), that has been verified by MERIT. 'b' - The Subscriber order can only interact with Subscriber orders from counterparties that have an identical User Urgency, relatively lower User Urgency, or one User Urgency relatively higher (e.g., Low versus Medium), all of which have been verified by MERIT. 'c' - The Subscriber order does not restrict interaction with Subscriber orders from counterparties. Contra Category is an optional order parameter for the Level 1 interaction segment. If Contra Category is not provided on an order entered by a Subscriber, the Contra Category will be defaulted as 'a', in accordance with the ATS's FIX Specifications. REQUIRED ORDER INPUT: For orders classified as Investor, the ATS requires an input in a native FIX field, 'Order Life' on an order-by-order basis for MERIT scoring purposes. Order Life represents the completion percentage of the parent order quantity the Subscriber is executing in the broader market, and completion percentage is based on or calculated as the executed quantity of the parent order the Subscriber is executing in the broader market (i.e., the 'numerator') versus parent order quantity (i.e., the 'denominator'). Specifically, upon order entry and in accordance with the ATS's FIX specifications, Subscribers must supply one of the following two values: '1' or '2' on an order-by-order basis. A value of '1' maps to a completion percentage of 50 or less. A value of '2' maps to a completion percentage of greater than 50. To illustrate, if the Subscriber calculates a completion percentage of 62%, the Subscriber would supply a value of '2. Order Life is used as a factor in MERIT scoring for Investor workflows in the Level 1 and Level 2 Trade segments. Order Life is only applicable to Subscriber orders classified as Investor for Firm orders, Conditional orders, and order amendments. ORDER PRIORITY: Please refer to Part III Items 11.c. and 13.a. for description of the ATS's trade priority criteria. TIME IN FORCE: Mosaic ATS supports "DAY" and "Immediate or Cancel" ("IOC") time-in-force ("TIF") instructions. Either TIF designation is valid for Firm orders. COs must be sent with a TIF of DAY, while Firm Up orders must be sent with a TIF of either DAY or IOC. Please refer to Part III Item 9.a. for additional details. After satisfying their "Minimum Resting Interval" ("MRI"), IOC orders are available to match with eligible resting DAY contra-side orders. Mosaic ATS then immediately cancels back the balance (see, Part III Item 11.c. for details on MRI). IOC orders do not interact with other IOC orders or COs. Firm Up orders remain on the ATS's order book until executed, but never live beyond the Conditional Timer period described in Part III Item 9.a. DAY orders remain on the ATS's order book until: (i) the market closes; (ii) the full quantity is executed; or (iii) the order is canceled. ORDER TYPES DESIGNED TO NOT REMOVE LIQUIDITY: Mosaic ATS does not offer any such order types. ROUTING TO OTHER MARKET CENTERS: Mosaic ATS does not route any orders to other market centers. ORDER AMENDMENTS: Subscribers may amend open orders on the ATS if received by the ATS before a match involving that order occurs. Order amendments are processed in the order they are received by the ATS. Match priority for orders classified as Investors or Risk Provider can be affected dependent upon the new order parameter value (i.e., size, price) supplied by the Subscriber. These changes in order values may impact the priority hierarchy in a given interaction segment. For orders classified as Investor, amendments to the order parameters User Urgency or Contra Category can affect matching priority within a Level 1 or Level 2 Trade segment. For orders classified as Risk Providers, an amendment to the parameter 'Order Quantity' can affect matching priority within a Level 2 Trade segment. Please refer to Part III Item 13.a. for additional information on segmentation. Specific to time priority, Mosaic ATS maintains an order's time priority when a Subscriber modifies the order to reduce order quantity; however, when amending any other value on the order, time priority is not preserved. Please refer to Part III Section 13.c. for additional match priority rules. OPEN ORDERS: All open orders are canceled at the end of the trading day. ORDER CANCELLATIONS: Subscribers may cancel open orders at any time, as long as the cancellation requests are received by the ATS before the orders are matched. Cancellations remove any remaining open quantities associated with the orders. ORDER REJECTS: In accordance with the FIX protocol, Firm orders and COs submitted to the ATS may be rejected or canceled by the ATS for a variety of reasons, including incomplete order instructions or invalid parameters provided by Subscribers. Orders priced below $1.00 per share, if priced in an increment of less than $.0001, are also rejected. For each "Reject" or "Unsolicited Cancel" event, the ATS sends a message to the Subscriber containing a Reason Code denoting the basis for the action. The Mosaic ATS FIX Specification, which is provided to Subscribers during the onboarding phase, details all applicable cancel and reject messages, their definitions, and the corresponding Reason Codes.

means_of_entry

Subscribers access Mosaic ATS directly via a standard FIX connection (FIX version 4.2) dedicated to Mosaic ATS, and utilize FIX protocol for Firm and Conditional order submission.

pricing_methodology

Mosaic ATS executes orders using the Constructed NBBO. Ocean builds the Constructed NBBO using a combination of fully redundant direct market data feeds and market data disseminated by the SIPs. Direct feeds are consumed for all exchanges. The Constructed NBBO is used to determine the midpoint price at which Mosaic ATS executes orders. MOAT continuously monitors and arbitrates between the SIP and direct feeds based on the detection of any market data latency or feed anomalies. In the event of an issue with the Constructed NBBO, transactions on Mosaic ATS are priced solely using the NBBO disseminated by the SIPs. Ocean maintains full network-redundant SIP feeds as a secondary NBBO source to ensure data resiliency and continuity.

counterparty_selection

Subscribers can control the counterparties with which their orders interact by applying specific order parameters and conditions. Subscribers may control Firm order interaction with COs, either by setting instructions on an order-by-order basis or applying settings at the session level by contacting a Registered Representative of Mosaic ATS (see, Part III Item 9.a.). Subscribers may also use the MinQty parameter to specify a minimum acceptable quantity that must be met by any single contra-side order. Mosaic ATS does not allow Subscribers to restrict interaction across an entire segment. For example, a Subscriber order classified as Investor cannot restrict interaction across all Subscriber orders classified as Risk Provider in Level 2 Trades, and a Subscriber order classified as a Risk Provider cannot restrict interaction across all Subscriber orders classified as Investor in Level 2 Trades. However, within the Level 1 Trade interaction segment, a Subscriber order classified as Investor can limit interaction with a subset of Level 1 Trade counterparties by designating its Contra Category parameter on an order-by-order basis, as noted in Part III Item 11.c. SELF-TRADE PREVENTION: Mosaic ATS offers Subscribers the ability to prevent executions between orders from the same Subscriber for regulatory or risk management purposes (e.g., to avoid wash trades). Subscribers may enable this STP setting on an order-by-order basis. The setting is not enabled by default, but can be enabled upon request. As detailed in Part III Item 11.c., the STP feature ensures that two orders from the same designated Subscriber MPID, or orders with the same permissible field and value, do not match within the ATS.

financial_condition_summary

MOAT charges a transaction fee of $0.0000 to $0.0020 per executed share on the Mosaic ATS. Mosaic ATS reserves the right to negotiate fee arrangements or modify fee arrangements with Subscribers based on a variety of factors, including, but not limited to, Subscriber classification, the date of Subscriber adoption, Subscriber volume traded in the ATS, and market conditions.

compliance_officer

MOAT's activities as a broker-dealer are limited to operation of the Mosaic ATS. Subscriber Confidential Trading Information is maintained in electronic form and protected by password entry. MOAT has also implemented and maintains Written Supervisory Procedures ("WSPs") that govern the use and protection of Subscriber Confidential Trading Information. Subscriber Confidential Trading Information is classified by MOAT as follows: Subscriber attributable intra-day and historical trade information (e.g., symbol, side, quantity, price, type), orders and order handling instructions, CO indications, executions, counterparties, clearing reports, non-tape TRF reports, billing instructions and invoices, and risk controls or configurations. Subscriber Confidential Trading Information may be available in real-time (via the ATS directly), post-trade (via other systems/tools or stored data), or both. Registered Representatives of MOAT are responsible for the operation of the Mosaic ATS, and for the ATS's compliance with Regulation ATS or other applicable rules. In accordance with the provisions of Regulation ATS Rule 301(b)(10), Registered Principals of MOAT restrict access to Subscriber Confidential Trading Information in order to protect such information. Specifically, determinations regarding granting access to Subscriber Confidential Trading Information are made on a case-by-case basis depending on the function or role of the individual and the nature of the information required to perform his or her job functions or role. Pursuant to MOAT's ESA with MP, Shared Employees are authorized to access real-time and post-trade Subscriber Confidential Trading Information when necessary to support the ATS, including in the following instances: 1. Market Operations. 2. Platform metrics and analytics. 3. Business and technological development and support. 4. System testing. 5. Regulatory reviews, testing, surveillance, investigations, and reporting. Shared Employees authorized to access to Subscriber Confidential Trading Information are strictly prohibited from discussing it with any persons not involved in the operation of Mosaic ATS or responsible for the ATS's compliance with applicable rules and regulations. The secured access to Subscriber Confidential Trading Information is maintained both physically and non-physically, as described below. PHYSICAL BARRIERS: MOAT's home office is restricted by keycard access. MOAT maintains additional physical information barriers to separate Shared Employees, consultants, vendors, and systems with access to Subscriber Confidential Trading Information from those not permitted to access such information. These information barriers serve as controls to protect Subscriber Confidential Trading Information. In particular, the Mosaic ATS matching engine is hosted and operated by Ocean, and is physically separate from the other MOAT systems with Subscriber Confidential Trading Information. Similarly, the ATS matching engine and order entry servers are on separate hardware from other systems hosted and operated by Ocean. Additionally, the Ocean employees that are responsible for the daily operation of the ATS, and that have access to the ATS's order book, are in a separate physical location from the Shared Employees. Mosaic ATS's servers and related infrastructure are located at Equinix NY3, and physical access to NY3 is limited to key personnel. Access to the building is granted to individuals with valid government issued photo identification. NY3 is subject to high security standards, including video surveillance and 24x7 security. In addition, access to the cages where the servers and related infrastructure operated by MOAT are located can only be accessed by keycard and palm print authorization. LOGICAL ACCESS BARRIERS: MOAT protects against unauthorized access to or use of Subscriber Confidential Trading Information by use of a password system. Login credentials and passwords are required to gain access to systems containing Subscriber Confidential Trading Information. Passwords are required to be changed periodically, and are promptly disabled for terminated individuals or those no longer requiring access. Requests for access to real-time Subscriber Confidential Trading Information must be approved by a Co-CEO or the CCO of the ATS, or their designees. The requests must be for individuals involved in the operation or compliance functions of the ATS. EMPLOYEE TRAINING: All Mosaic ATS employees, including Shared Employees, as well as certain consultants, receive at least annual training and guidance regarding the proper use of Subscriber Confidential Trading Information, and that Subscriber Confidential Trading Information may only be used with respect to the support and operation of the ATS. EMPLOYEE TRADING: All Shared Employees are subject to trading restrictions to ensure that such individuals' personal trading activities do not conflict with the interests of Mosaic ATS Subscribers. All Shared Employees are required to disclose to the CCO their outside brokerage accounts, and duplicate trade confirmations and account statements must be provided to the CCO. MOAT's CCO reviews all of the Shared Employee trade confirmations and account statements received for indications of potential misuse of Subscriber Confidential Trading Information. Certain trading restrictions, such as pre-approvals and mandatory hold periods, are in place for less liquid securities (generally, non-large cap securities). Exceptions to these restrictions must be approved in advance by the CCO, but the approval and hold period requirements do not apply to Shared Employee accounts managed by an advisor (human or automated) that has full investment discretion while the Shared Employee has none. All Shared Employees must also comply with other trading-related policies such as, but not limited to, the insider trading and personal securities transactions policies set forth in MOAT's WSPs. THIRD-PARTY ACCESS PROTECTIONS: As noted in Part II Item 6.a, MOAT has an ESA in place with MP, as well as agreements in place with third-party vendors providing services to Mosaic ATS. All of these agreements include confidentiality provisions that protect Subscriber Confidential Trading Information from potential misuse by Shared Employees and third-party vendors. Specific safeguards by MOAT's technology providers are detailed below: Ocean: Certain Ocean employees have access to Subscriber Confidential Trading Information, including real-time and historical information regarding individual orders and executions, names of Subscribers, and volume of orders in the ATS. Such employees include Ocean staff from Compliance, Operations, Technology Development (including trading and surrounding systems), Product Management, and Business Management. Ocean's policies and procedures (i) restrict which Ocean employees have access to Subscriber Confidential Trading Information; (ii) implement information barriers that prohibit employees with Subscriber Confidential Trading Information from sharing such information in an unauthorized fashion; and (iii) impose personal trading limitations. Ocean's policies and procedures employ a three-pronged approach to permission access to the Mosaic ATS. First, an Ocean employee must complete Compliance training specific to the Ocean business unit. Second, an Ocean employee must request, and Ocean Compliance must approve, access to each specific system based on the employee's designated role and responsibilities where such role and responsibilities require access to the Mosaic ATS. Third, once approved, the Ocean employee must complete Ocean's annual Compliance training. No other Ocean employees have access to the Mosaic ATS or Subscriber Confidential Trading Information. Ocean employees who have access to Subscriber Confidential Trading Information are subject to Ocean's "Information Barriers and Conflict Management Policies and Procedures". Pursuant to these procedures, Ocean employees are prohibited from sharing Subscriber Confidential Trading Information with other employees (including at Nasdaq) who are not expressly authorized to receive such information. All Ocean employees are also subject to Nasdaq's Global Trading Policy ("GTP"), which outlines all requirements and restrictions related to personal trading activity, including holding periods, annual attestations, initial public offering (IPO) restrictions, and a prohibited list. Ocean employees are required to disclose personal investment and brokerage accounts, positions, and transactions. Nasdaq's Global Ethics Team monitors personal trade activities against the GTP. Ocean also conducts electronic communications reviews to identify policy violations, including non-compliance with the above-referenced policies and procedures. In addition to the foregoing, Ocean maintains written policies and procedures concerning unauthorized disclosures, which include escalation procedures for such incidents. In this regard, Ocean will promptly notify MOAT of any actual or suspected unauthorized disclosure of confidential information, which includes Subscriber Confidential Trading Information (so long as not prohibited by applicable laws, rules, or regulations). MOAT has the right to audit Ocean's operation of the ATS, including Ocean's access to and use of Subscriber Confidential Trading Information, either through audits conducted by MOAT's own audit team or by third-party auditors. Such audits may be conducted onsite or offsite. S3: In addition to Ocean personnel, Ocean has retained S3 to submit trade reports to the CAT on MOAT's behalf. Accordingly, certain S3 personnel have access to MOAT Subscriber identifying information and order and trade information, which are components of Subscriber Confidential Trading Information. Only S3 personnel that are required to perform approved tasks (i.e., performing the trade reporting functions on MOAT's behalf via its relationship with Ocean) are authorized to access the relevant Subscriber Confidential Trading Information. To ensure that only authorized personnel access the relevant Subscriber Confidential Trading Information, and that authorized personnel only use such access to perform approved functions, S3 performs periodic access audits. An attestation setting forth the results of these audits are provided to MOAT. In addition to the results of these audits, S3 will notify MOAT of any actual or suspected unauthorized disclosure of confidential information, which includes Subscriber Confidential Trading Information. Instinet: Mosaic ATS uses Instinet as its clearing broker, wherein Instinet clears and settles all transactions executed on the ATS. Instinet's National Securities Clearing Corporation ("NSCC") membership facilitates these activities. Likewise, as part of the MOAT onboarding process, Instinet is provided identifying details of each new Subscriber for settlement purposes. In their capacity as MOAT's clearing broker, Instinet has access to Subscriber post-trade execution information for the clearance and settlement of these transactions. This access is limited to the staff of Instinet's Broker Dealer Clearing team. MOAT's clearing agreement with Instinet contains standard confidentiality provisions that protect Subscriber Confidential Trading Information. KX: MP's data and analytics software licensing agreement with KX contains standard confidentiality provisions that protect Subscriber Confidential Trading Information. KX's software is installed by MOAT staff, and operates exclusively on the Mosaic ATS infrastructure. KX personnel do not have direct or remote access to this infrastructure, nor the licensed KX software operating within the infrastructure.

nms_equity

true

subscriber_types

Brokers

hours_of_operation

The Mosaic ATS operates Monday through Friday from 8:00 a.m. to 4:00 p.m. Eastern Time ("ET"). The ATS follows the Nasdaq Exchange's holiday and early close schedule. Mosaic ATS accepts "Firm" and "Conditional" orders in NMS securities beginning at 8:00 a.m. ET, but matching only occurs during regular U.S. trading hours, which run from 9:30 a.m. to 4:00 p.m. ET. Orders that remain unexecuted after 4:00 p.m. ET will expire.

display_trading_interest

false

execution_services

Mosaic ATS accepts Firm and Conditional Orders beginning at 8:00 a.m. ET, but matching only occurs during regular U.S. trading hours (i.e., 9:30 a.m. to 4:00 p.m. ET). A match can occur when all of the following factors have been met: 1. Regular trading hours have begun. 2. An opening print on the primary exchange is detected. 3. Valid Limit Up Limit Down ("LULD") bands are detected. 4. There is at least one publicly displayed limit buy order. 5. There is at least one publicly displayed limit sell order. Following a stoppage of trading due to an NMS security being halted on a primary listing exchange pursuant to a halt, Mosaic ATS stops matching. In this scenario, matching resumes when both of the following factors are met: 1. A reopening print has been detected, indicating trading has resumed in the security. 2. Valid LULD bands are detected.