ATS-N/UA 0002065275-25-000011 LIVE 0002065275 XXXXXXXX 013-00210 false false Mosaic ATS, LLC Y MOSAIC ATS, LLC 008-71355 000335824 Financial Industry Regulatory Authority, Inc. ("FINRA") 09/22/2025 MOAT www.mosaicplatforms.com Equinix NY3 600 Jefferson Avenue Secaucus 07094 US-NJ false false N N N N N N N N N Mosaic ATS, LLC ("MOAT") is the broker-dealer operator of an alternative trading system (the "ATS" or "Mosaic ATS"). Only U.S.-registered broker-dealers are subscribers to the ATS (collectively, "Subscribers"). Mosaic Platforms Inc. ("MP") is a holding company and the parent company of Mosaic ATS, LLC. MP is not an operational business, but is a holding company and owner of the intellectual property used by the Mosaic ATS. The services provided to MOAT by MP involve use of certain shared personnel (collectively, "Shared Employees") and contribution to their salaries, as well as licensing the trading technology software utilized by Mosaic ATS. All MP employees are Shared Employees with MOAT (i.e., there are no MP employees who do not also service MOAT). The services provided to MOAT by these Shared Employees include, for example, management, human resources, finance and accounting, legal, facilities, corporate communications, information technology and security, operational support, administrative support, and project-based assistance. Shared Employees generally have equivalent titles at MP as they do at MOAT (e.g., MOAT management also serves as MP management). All Shared Employees have access to Subscriber Confidential Trading Information (as defined Part II Item 7.a.) in connection with their roles at MOAT, and they may also use such information in connection with their roles at MP, if needed. However, such Shared Employees only have access to certain Subscriber Confidential Trading Information created or maintained by Mosaic ATS necessary for them to provide services to the ATS (as discussed in Part II Item 7.d.). All Shared Employees are subject to the safeguards and procedures for protecting Subscriber Confidential Trading Information, and are strictly prohibited from using Subscriber Confidential Trading Information for unauthorized purposes. As indicated in Part II Item 7.a, MOAT has entered into an Expense Sharing Agreement ("ESA") with MP for the use of Shared Employees and ATS trading technology. In addition, MOAT has entered into agreements with the following technology vendors who each support the services and functionalities of the ATS: MOAT has entered into an agreement with Instinet, LLC ("Instinet") to provide the clearance and settlement services described in Part III Item 22. As described in Part III Item 7.a., the data center used by the ATS is provided by Equinix, Inc. ("Equinix"). Specifically, Equinix operates the NY3 ("NY3") in Secaucus, N.J., where the ATS matching engine is located and Subscribers connect to the ATS. MOAT has entered into an agreement with S3 Matching Technologies LP ("S3") to provide the Rule 605 and Consolidated Audit Trail ("CAT") reporting and surveillance services described in Part II Item 7.d. KX Systems, Inc. ("KX") is a technology company that licenses software to MP, which provides order and execution data and analytics solutions for MOAT pursuant to the ESA. KX offers MOAT related support, training, and consulting services, as described in Part II Item 7.d. As further described in Part III Item 21, MOAT has engaged Nasdaq, Inc. ("Nasdaq") as its trade reporting facility ("TRF"). Nasdaq's execution platform supported by Operations and Compliance Network, LLC (a/k/a "Ocean") also provides Mosaic ATS's infrastructure and support services for the following Item numbers in Part III, subject to the direction and oversight of MOAT as the broker-dealer operator of the ATS: Item 5 - Financial Information eXchange ("FIX") connectivity to Subscribers. Items 10, 17, and 20 - The technical process of opening and closing of the ATS for regular hours, and in the event a system stoppage is triggered (e.g., for a regulatory trading halt, a triggered market-wide circuit breaker, or for an internal reason). Item 11 - Daily management of the ATS, including all the hardware and systems required for the operation of the ATS. Item 15 - Display (limited to a Conditional Order ("CO") invite, as described in Part III Item 9). Item 18 - Trading outside of regular trading hours. Item 21 - Trade reporting (via an outsourcing arrangement with S3, discussed below in Part II Item 7.d.). Item 23 - Market data feed handler software that enables the ATS to consume market data. Mosaic ATS also utilizes Nasdaq's Trade Surveillance & Market Abuse Software ("SMARTS") surveillance system to monitor Subscriber trading activity for potential rule violations and market abuse. MOAT performs risk-based reviews of its third-party vendor relationships at the time of engagement, and periodically thereafter. The initial reviews include consideration of the service levels to be performed, potential strategic risk, and the security and confidentiality controls of the vendors. During these periodic reviews, Registered Principals (i.e., Series 24 licensed individuals) of MOAT review the security and confidentiality controls of MOAT's critical vendors. The following Item numbers do not apply to MOAT: Item 6 - Co-location. Item 12 - Liquidity providers. Item 16 - Routing. Item 24 - Order display and execution access. Item 25 - Fair access. Instinet provides clearing and settlement services to the Mosaic ATS, and is also a Subscriber of the ATS. Y 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. N MOAT's Management Team is comprised of two Co-CEOs and the CCO. The Management Team requires access to all Subscriber Confidential Trading Information (as described in Part II Item 7.a.) to perform its oversight functions. The following additional Shared Employees have access to the Subscriber Confidential Trading Information necessary to perform their roles and responsibilities: 1. The Sales Team requires access to all Subscriber Confidential Trading Information for trade support, customization, Subscriber education, and market oversight. These employees are the first point of contact for intraday Subscriber and trade support. Their access to both real-time and post-trade Subscriber Confidential Trading Information is essential to providing Subscribers with fast and efficient support while resolving any issues. 2. The Market Operations and Technical Operations Teams require access to all Subscriber Confidential Trading Information (i) for market surveillance and analysis; (ii) to ensure the ATS is operating as intended; and (iii) to provide support to Subscribers with respect to (a) onboarding, (b) use and implementation of the ATS protocols and specifications, and (c) order, transaction, and general functionality inquiries. 3. The Information Technology Team requires access to all Subscriber Confidential Trading Information to provide technical, testing, and development support. 4. The Engineering and Product Teams require access to all Subscriber Confidential Trading Information for development, support, and performance analysis of the ATS, as described in Part III Item 13.a. 5. The Finance and Accounting Teams require limited access to historical, post-trade Subscriber Confidential Trading Information to provide support for invoicing, accounts payable, financial reconciliation, and audits. 6. The Marketing Team requires limited access to historical post-trade Subscriber Confidential Trading Information in summary form for analysis of ATS participation. MOAT has contracted with the following consultants (the "Consultants") and third-party vendors, who also have access to Subscriber Confidential Trading Information: 1. Asgard Regulatory Group, LLC ("Asgard") has assigned an individual who serves as MOAT's Chief Compliance Officer ("CCO"). The CCO outsourced Asgard from requires access to all Subscriber Confidential Trading Information for purposes of Subscriber onboarding and trade surveillance, as well as when assisting with regulatory inquiries and examinations. The CCO is a Registered Representative of MOAT but not a Shared Employee. 2. Regulatory Ridge, LLC ("Regulatory Ridge") provides supplementary compliance assistance and regulatory guidance to MOAT as needed. Regulatory Ridge may have limited access to only the Subscriber Confidential Trading Information necessary for assisting the CCO with regulatory inquiries and examinations, or in conducting annual compliance reviews. No person affiliated with Regulatory Ridge is registered with MOAT. 3. Instinet provides clearance and settlement services, and requires access to real-time Subscriber Confidential Trading Information related to order executions, in order to perform clearing and settlement services for the ATS. 4. S3 provides CAT and Rule 605 reporting and surveillance services, and requires access to all Subscriber Confidential Trading Information for the purposes of CAT and Rule 605 reporting and trade surveillance. 5. Nasdaq serves as MOAT's TRF and, pursuant to the ESA, MOAT utilizes Nasdaq's Ocean and SMARTS platforms in connection with its ATS operations. In its capacity as TRF, Nasdaq requires access to post-trade Subscriber Confidential Trading Information. The Ocean platform processes and aggregates Subscriber order and execution data, performs trade reporting, supports compliance workflows, and facilitates regulatory submission and recordkeeping functions. The SMARTS platform monitors Subscriber trading activity for potential rule violations and market abuse. In connection with these functions, both Ocean and SMARTS require access to all Subscriber Confidential Trading Information. 6. KX provides support, training, and consulting services to MOAT, pursuant to the ESA, as it pertains to the data and analytics software licensed to MP. Designated KX personnel require access to all Subscriber Confidential Trading Information to perform these services. Brokers Dealers Y Subscribers to the Mosaic ATS must satisfy certain eligibility requirements prior to being granted access to the ATS. Specifically, an applicant must meet the following eligibility requirements: 1. Be a broker-dealer registered with the U.S. Securities and Exchange Commission (the "SEC") and a member in good standing with FINRA. 2. Pass Office of Foreign Asset Control (OFAC) checks and disciplinary/regulatory reviews. The disciplinary/regulatory reviews include reviewing public information to determine if the applicant has a disciplinary history. 3. Satisfy such technical or systems requirements specified by MOAT, including, but not limited to: connectivity certification, the ability to send orders and cancellations, and to receive matched trades, cancellations, rejects, and trade breaks from the ATS. 4. Have clearing and settlement systems and/or arrangements in place. 5. Execute a Mosaic ATS agreement (the "Subscriber Agreement"). 6. Execute all other applicable agreements required to facilitate clearance, settlement, trade reporting, error correction, and cancellation of trades effected on Mosaic ATS. MOAT, in its discretion, can approve or reject an applicant's request to become a Subscriber, or approve the subscription subject to specific conditions and/or restrictions as it considers appropriate (e.g., potentially limiting the number of orders a Subscriber may send) and in the best interests of all Subscribers and the Mosaic ATS. MOAT processes all agreements and completes its review and approval/denial process within thirty (30) calendar days of receipt of each signed Subscriber Agreement. MOAT maintains records of its decisions granting ATS access for each applicant (e.g., denying access or granting full, limited, or restricted access), and the reasons for so doing. Y Y MOAT reserves the right, at its discretion, to determine that any functionality or service of Mosaic ATS is not appropriate for a particular Subscriber. The basis for such a determination may vary among Subscribers, and could relate to (i) concerns with the specific trading activities or circumstances associated with the Subscriber whose access is being restricted; or (ii) attested workflow classification or characteristics of a Subscriber type: MOAT, in its sole discretion, may restrict a current Subscriber from accessing Mosaic ATS's services due to legal, credit, or trading activity concerns that its engagement could negatively affect the ATS's capacity, ability to effectively function, or overall execution quality for other Subscribers. Problematic trading activity includes, but is not limited to, excessive order entry, high cancellation rates relative to other Subscribers, high parameter modification rates, and low "Firm Up" rates associated with COs. MOAT uses a series of post-trade reports and tools to monitor for any such problematic behavior within the Mosaic ATS, and may exclude a Subscriber if the Subscriber is engaging in or has engaged in behavior that potentially violates the policies of the ATS, applicable federal securities laws, regulations, and/or rules, or FINRA rules. In support of this, the ATS monitors, on an absolute and relative basis, the number of orders entered by each Subscriber versus the number of orders matched, modified, and canceled by the Subscriber. If MOAT discovers problematic trading activity, it will take actions it deems appropriate, based on incident severity. Such actions could range from contacting the Subscriber to bring about a change in behavior, to immediately restricting the Subscriber from utilizing the Mosaic ATS. Y 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. Y 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. Y N Mosaic ATS does not directly offer co-location and related services, including cross-connects. However, MOAT does allow Subscribers to access the ATS through cross-connects. Such cross-connects are requested from and installed by Equinix. Cross-connects are provided via 10 gigabit single-mode optical fiber (SMF), through agreements directly between Subscribers and Equinix. Equinix charges fees for these connections directly to Subscribers. MOAT is not involved in the physical installation of the cross-connects, nor does it charge any related fees. Y N N 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. Y The minimum Firm or Conditional order size is one share. The maximum order size is 999,999 shares, subject to SEC Rule 15c3-5 related size limitations. Y Odd-lot orders are accepted and handled in the same manner as round-lot orders. Odd-lot orders follow the same priority, pricing, and execution procedures as round-lot orders, and the ATS does not apply any special handling, restrictions, or differentiated processing based on order size. Y Mixed-lot orders are accepted and handled in the same manner as round-lot orders. Mixed-lot orders follow the same priority, pricing, and execution procedures as round-lot orders, and the ATS does not apply any special handling, restrictions, or differentiated processing based on order size. Y A CO represents an intent to trade and cannot be modified from a CO to a Firm order (or vice versa). A Subscriber could cancel a CO and subsequently send a new Firm order (or vice versa) to the Mosaic ATS. Subscribers can send COs via FIX connection; however, only COs with a TIF of "DAY" are accepted by Mosaic ATS. As noted in Part III Item 7.a., 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 workflows classified as Investor, the ATS requires order parameters of User Urgency and DMA or Directed. * Contra Category is a native and optional order parameter, but is not required. COs are never matched. Instead, if eligible counterparties are found, the COs trigger "Invites" to be sent by the Mosaic ATS to the Subscribers that submitted the COs. Invites are not triggered by contra-side orders with a TIF of IOC. Invites are sent only after the Mosaic ATS's trade eligibility criteria, which is detailed in Part III Item 11.c., is satisfied. Trade eligibility criterion is identical between a CO and a Firm order. An Invite establishes a unique 'Invite ID' for the Subscriber involved. An Invite does not indicate the available quantity from the potential counterparty. An Invite entails a FIX protocol message of Unsolicited Cancel message back to the originating CO. Subsequent to the Unsolicited Cancel, the original CO does not remain on the order book. Subscribers may respond to Invites with Firm Up orders, but are not obligated to do so. If submitted, Firm Up orders must contain the Invite ID from the original Invite, or they will be rejected. Firm Up orders with a TIF of either DAY or IOC are accepted. Only Firm Up orders with limit prices that are identical to or more aggressive than the initial COs are accepted. Firm Up orders with Minimum Executable Quantities ("MinQty") (as defined in Part III Item 11.c.) that are identical or smaller than the initial COs are also accepted. For Firm Up orders, the ATS requires all of the aforementioned required order parameters of the originating CO, as well as parameters specifying that the order is a Firm Up order and an Invite ID. Furthermore, for Subscriber workflows classified as Investor, the ATS also requires additional order parameters of User Urgency and DMA or Directed. A Firm Up order must be received by Mosaic ATS within fifty (50) milliseconds of when the ATS sent the Invite to the Subscriber. This is the ATS's "Conditional Timer". Firm Up orders received after a Conditional Timer elapses are automatically rejected by the ATS. Likewise, any Firm Up orders that remain unexecuted or partially executed following expiration of the Conditional Timer are automatically canceled by the ATS. Firm Ups are also rejected if the following fields do not match the original CO: side, symbol, User Urgency, Contra Category, Subscriber ID, and Sub-Customer (i.e., a Subscriber's customer). Subscribers sending Firm orders are eligible to interact with COs by default, but can opt-out of this behavior on an order-by-order basis. Subscribers can also opt out of this behavior at the workflow level by contacting a Registered Representative of MOAT. Firm orders that have opted out of interacting with COs can still match with Firm Up orders. When COs match with Firm orders that have not opted out of interacting with COs, during the time interval between the Invites being sent and Firm Up orders being received, the Firm orders can potentially interact with other incoming contra-side Firm orders if they are at equivalent or better priority than the COs across the Mosaic ATS matching priority hierarchy (as described in Part III Item 11.c.). In these scenarios, the ATS does not allow the Firm orders to match with the contra-side orders that have lower priority than the COs that are in the process of firming up. However, Mosaic ATS permits cancellations or modifications of the Firm orders that triggered the CO Invite. If the Firm Up orders do not arrive by the time defined by the Conditional Timer, the aforementioned Firm orders can proceed to match against any eligible contra-side orders. In the same scenario of COs interacting with Firm orders, once Firm Up orders enter Mosaic ATS's order book, they are eligible to match with all active, eligible contra-side Firm Up orders, including, but not limited to, the orders that created the Invites, based upon ATS match eligibility and priority rules. If two COs interact and both Subscribers respond with Firm Up orders within the Conditional Timer, they will match. If one of the two Firm Up orders is partially executed following the match, it may continue to match against any eligible orders on the ATS's order book until the Conditional Timer expires. If only one of the two COs responds with a Firm Up order, the Firm Up order can match against all orders on the ATS order book that satisfy trade eligibility. Upon a match of a Firm Up order originated by a CO, the Subscribers receive standard execution reports with tags confirming that their related orders were CO Firm Up orders. The execution reports relay no information about the order instructions or details of the counterparties. In addition to the foregoing, Subscribers that (i) attest to being classified as Risk Providers; (ii) certify their workflow to the Risk Provider classification; and (iii) attest to their workflow as being market making activity, are not eligible to submit COs to the Mosaic ATS for those designated workflows. The Subscribers are not, however, prohibited from interacting with COs. Please refer to Part III Item 13.a. for additional information on Risk Provider orders. Y 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. Y At the start of regular trading, Firm and Conditional orders remain in an accepted state. The ATS begins matching when the conditions described in Part III Item 10.a. above are met, subject to Mosaic ATS's trade eligibility and trade priority rules described in Part III Items 11.c. and 13.a. If trading in a security is halted during regular market hours, Mosaic ATS will not facilitate matching until its matching engine receives a reopening print (in the case of an exchange-driven halt on the primary listing exchange) or updated pricing information (in the case of a Mosaic ATS-initiated pause) from the Constructed NBBO, along with an active LULD band from the primary listing exchange. Should the primary exchange remain closed, or pricing data remain unavailable after the halt, the ATS will not match either Firm orders or COs in that security. Y N Mosaic ATS operates a non-displayed central liquidity book, and provides anonymous matching of compatible orders in all eligible NMS securities. Order entry by Subscribers involves utilizing the FIX protocol for Firm and Conditional order submission. Orders are exclusively matched at the midpoint price of the prevailing NBBO at the time of the match. As noted in Part III Item 7.a., Mosaic ATS classifies orders submitted to the ATS based on Subscriber workflow attestations and corresponding certification of such classifications during the onboarding process. MERIT then independently evaluates the orders for trading compatibility with potential counterparties. Y Every Firm and Conditional order entered into the Mosaic ATS is subject to a symbol- and order-specific Minimum Resting Interval (MRI) before being available to match. The MRI does not apply to order cancellations or Firm Ups from COs; however, all order modifications are subject to the MRI, with the exception of reductions in order quantity. Mosaic ATS establishes an MRI range in microseconds for every symbol on a daily basis, based on expected market data latency. The MRI for any individual order will not exceed one (1) millisecond. Subscriber orders will not exceed the top of an MRI range nor fall below the bottom of an MRI range. Within the MRI range established for every symbol, an MRI will be randomized for every order. Following the expiration of the MRI, a Subscriber order is available to match on the ATS. A Subscriber order entered into the Mosaic ATS is classified as either an Investor or Risk Provider order based on the workflow attestation and certification during onboarding. As described in Part III Item 13.a., a Subscriber order classified as Investor is available to match in both Level 1 Trade and Level 2 Trade segments, and a Subscriber order classified as Risk Provider is available to match in both Level 2 Trade and a Level 3 Trade segments. Subscriber orders need to satisfy trade eligibility criteria in at least one of the three interaction segments in order to receive a match on the Mosaic ATS. TRADE ELIGIBILITY AND PRIORITY: Subscriber orders must meet trade eligibility criteria for Level 1 Trades, Level 2 Trades, and Level 3 Trades within the Mosaic ATS. This trade eligibility is determined by (i) attributable order information supplied to the ATS by Subscribers; and (ii) application of MERIT scoring and rating. MERIT Scoring Mosaic ATS utilizes the MERIT scoring model to independently measure and evaluate Subscriber orders for trade eligibility and priority in Level 1 Trades, Level 2 Trades, and Level 3 Trades. MERIT scoring is updated daily and uniformly applied across all Subscriber workflows in the same classification and same interaction segment (e.g., scoring is consistent across all Subscriber workflows classified as Investor in Level 1). The MERIT scoring model evaluates reasonably expected price effects of a Subscriber order on potential counterparties in a given interaction segment. The MERIT scoring model calculates a numeric value for each unique Subscriber workflow based on aggregate historical order data associated with that workflow, including attributable order information such as the Subscriber's MPID and other required order inputs and parameters supplied by the Subscriber. The MERIT score for each Subscriber workflow is updated daily before each trading session, based on the historical order data gathered. MERIT's scoring model considers and applies weightings to both quantitative and qualitative factors (the "Scoring Factors".) The qualitative Scoring Factors include required order inputs and order parameters submitted by the Subscriber (i.e., Side, Symbol, Order Quantity, Order Type, Order Capacity, User Urgency, Contra Category, Order Life), as discussed in detail in Part III, Item 7. The quantitative Scoring Factors include metrics that evaluate the price movement of each execution for a Subscriber workflow versus the benchmarks of (i) the midpoint price of the Constructed NBBO at various points in time; (ii) the volume weighted average price at various points in time; and (iii) the closing price in conjunction with the aforementioned qualitative Scoring Factors submitted by the Subscriber. The MERIT scoring model applies a default numeric value when onboarding new Subscribers that lack sufficient historical order data. Default values are uniformly applied within the scoring model to all Subscriber workflows with the same classification and interaction segments (e.g., all newly onboarded Subscriber workflows classified as Investor in Level 1 receive the same default values). MERIT Rating MERIT establishes scoring thresholds for ratings across the following Subscriber classification and interaction segments: (i) Subscriber workflows classified as Investor in Level 1 Trades (i.e., MERIT rating of User Urgency 'Low', 'Medium', or 'High'); (ii) Subscriber workflows classified as Investor in Level 2 Trades (i.e., MERIT rating of 'Eligible' or 'Ineligible'); (iii) Subscriber workflows classified as Risk Provider in Level 2 Trades (i.e., MERIT rating of 'Eligible', 'Top Tier Eligible', or 'Ineligible'); and (iv) Subscriber workflows classified as Risk Provider in Level 3 Trades (i.e., MERIT rating of 'Eligible', 'Top Tier Eligible', or 'Ineligible'). The Subscriber workflow score will be compared to a threshold or multiple thresholds to determine the MERIT rating. Upon a Subscriber entering an order, Mosaic ATS references the Subscriber MERIT rating specific to the Subscriber workflow to determine trade eligibility for the Subscriber order. Below is an overview of trade eligibility within each interaction segment (please refer to Part III Item 13.a. for additional information on segmentation): * For a Level 1 Trade, the User Urgency value supplied for a Subscriber order classified as Investor is subject to verification by MERIT in determining trade eligibility. * For a Level 2 Trade, the MERIT rating is used for a Subscriber order classified as Investor and a Subscriber order classified as Risk Provider. The Subscriber order classified as Investor requires a MERIT score that exceeds the established scoring threshold to be rated as eligible for a Level 2 Trade. The Subscriber order classified as Risk Provider requires a MERIT score that exceeds the established scoring threshold to be rated as eligible for a Level 2 Trade. * For a Level 3 Trade, the MERIT rating is used for a Subscriber order classified as Risk Provider. A Subscriber order classified as Risk Provider requires a MERIT score that exceeds the established MERIT scoring threshold to be rated as eligible for a Level 3 Trade. MOAT reviews, typically monthly, the MERIT scoring thresholds for ratings used for trade eligibility and priority across Level 1, Level 2, and Level 3 Trades. Upon review of historical aggregate data across all Subscribers, MOAT may determine to uniformly change the scoring threshold of the MERIT rating for a particular Subscriber classification in a specific interaction segment. MOAT will make reasonable efforts to provide its Subscribers with monthly updates on the MERIT scores and ratings attributable to their order data. To prevent reverse engineering and to protect the quality of the Mosaic ATS liquidity eco-system, MOAT does not disclose the specific factors, weightings, formulas, or thresholds used in the MERIT scoring and rating framework. To preserve the integrity and value proposition of the MERIT scoring and rating system MOAT may revise the factors, weightings, formulas, or thresholds involved. Any such revisions to the factors, weightings, or formulas used for scoring, or the thresholds used for ratings, go into effect the following trading session and are universally applied before the trading session begins. Once set, these MERIT ratings will not be changed intraday. Level 1 Trade Eligibility and Priority A Level 1 Trade occurs when both Subscriber orders are classified as Investor, and both sides satisfy the Mosaic ATS trade eligibility criteria. As noted in Part III Item 7.a., User Urgency is a mapped value based on a calculation of expected participation rate over the life of the parent order a Subscriber is executing in the broader market. It is a required order parameter native to the Mosaic ATS that Subscribers must supply 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 User Urgency values supplied by a Subscriber for orders classified as Investor are subject to verification by the MERIT scoring and rating system. MOAT utilizes the MERIT rating to determine trade eligibility between Subscriber orders classified as Investor in Level 1 Trades. When two Subscriber orders on the opposite side of the same symbol have identical User Urgency values that have been verified by MERIT rating, they are eligible to trade. When two Subscriber orders on the opposite side of the same symbol do not have identical User Urgency values verified by MERIT rating, Mosaic ATS refers to Contra Category to determine trade eligibility. As noted in Part III Item 7.a., 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 rating. '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 are subject to verification by MERIT rating. 'c' - The Subscriber order does not restrict interaction with Subscriber orders from counterparties. Contra Category is not a required parameter. 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. Level 1 Investor Priority When multiple Subscriber orders classified as Investor satisfy trade eligibility criteria for a Level 1 Trade, match priority determines a tiebreaker in the following sequence: 1. Broker: An Investor order interacting with the same Subscriber as the counterparty has priority. 2. User Urgency: An Investor order with a higher User Urgency value has priority over a Subscriber order with a lower User Urgency value. 3. Contra Category: An Investor order willing to interact with higher User Urgency counterparties has priority (e.g., Contra Category 'c' has priority over Contra Category 'a'). 4. Time: An Investor order with an earlier timestamp on the Mosaic ATS order book has priority. MERIT scoring and rating verifies the User Urgency supplied by the Subscriber for orders classified as Investor. If the MERIT rating differs from the User Urgency supplied by the Subscriber, the MERIT rating will determine match priority. Level 2 Trade Eligibility and Priority A Level 2 Trade occurs when one Subscriber order is classified as Investor, and the other Subscriber order is classified as Risk Provider, and both sides satisfy the Mosaic ATS trade eligibility criteria. For Subscriber orders classified as Investor, the MERIT rating will determine one of the following trade eligibility scenarios: (1) Investor order is ineligible for a Level 2 Trade with a rating of Ineligible. (2) Investor order is eligible for a Level 2 Trade with a rating of Eligible. For Subscriber orders classified as Risk Provider, the MERIT rating will determine one of the following trade eligibility scenarios: (1) Risk Provider order is ineligible for a Level 2 Trade with a rating of Ineligible. (2) Risk Provider order is eligible for a Level 2 Trade with a rating of Eligible or Top Tier Eligible. If both an Investor order is rated as Eligible and Risk Provider order is rated as Eligible or Top Tier Eligible for a Level 2 Trade, the orders are eligible to trade. Level 2 Investor Priority When multiple Subscriber orders classified as Investor satisfy trade eligibility criteria for a Level 2 Trade, match priority determines a tiebreaker in the following sequence: 1. Broker: An Investor order interacting with the same Subscriber as the counterparty has priority. 2. User Urgency: An Investor order with a higher User Urgency value has priority over a Subscriber order with a lower User Urgency value. 3. Contra Category: An Investor order willing to interact with higher User Urgency counterparties has priority. (e.g., Contra Category 'c' has priority over Contra Category 'a') 4. Time: An Investor order with an earlier timestamp on the Mosaic ATS order book has priority. MERIT scoring and rating verifies the User Urgency supplied by the Subscriber for orders classified as Investor. If the MERIT rating differs from the Subscriber-supplied User Urgency value, the MERIT rating will determine match priority. Level 2 Risk Provider Priority Risk Provider workflows are scored and rated by MERIT (i.e., Eligible, Top Tier Eligible, or Ineligible) for match priority in Level 2 Trades. When multiple Subscriber orders classified as Risk Provider satisfy trade eligibility criteria for a Level 2 Trade, match priority determines a tiebreaker in the following sequence: 1. Risk Provider Tier: A Risk Provider order rated as Top Tier Eligible has priority over an order rated as Eligible. 2. Broker: A Risk Provider order interacting with the same Subscriber as the counterparty has priority. 3. Liquidity Grade: A Risk Provider order with a 'Liquidity Grade' designation (as defined below) has priority. 4. Order Size: A Risk Provider order with a larger order quantity has priority over a Subscriber order with a smaller order quantity. 5. Time: A Risk Provider order with an earlier timestamp on the Mosaic ATS order book has priority. Liquidity Grade is a dynamic designation determined throughout the trading session on a symbol-by-symbol basis, based on a set of factors (the "Liquidity Grade Factors"). The Liquidity Grade Factors include the historical frequency of liquidity provided in the symbol, the historical average depth of liquidity provided in the symbol, and recency of the liquidity provided by a Risk Provider to a counterparty order in the particular symbol during the trading day. At the start of each trading session, after the initial Level 2 Trade in a given symbol, a Liquidity Grade designation is assigned to one Risk Provider workflow in that symbol. After each subsequent Level 2 Trade in a given symbol, the Liquidity Grade designation in that symbol is updated (i.e., the Liquidity Grade could be assigned to a different Risk Provider workflow based on the Liquidity Grade Factors). Liquidity Grade serves as a priority tiebreaker for Risk Providers when multiple orders satisfy trade eligibility criteria in a Level 2 Trade. Higher Liquidity Grade Factors allow a Risk Provider to achieve the Liquidity Grade designation, which in turn allows the Risk Provider to achieve priority. Subscribers classified as Risk Providers are not notified of their Liquidity Grade or any information regarding the designation, either in real-time or at any other point in time on trade date. However, MOAT will make reasonable efforts to provide Subscribers classified as Risk Providers with historical data and statistics attributable to their Liquidity Grade designation, on a monthly basis. To prevent reverse engineering and to protect the quality of the Mosaic ATS liquidity eco-system, MOAT does not disclose the specific factors, weightings, formulas, or thresholds used in the Liquidity Grade designation. To preserve the integrity and value proposition of the Liquidity Grade designation, MOAT may revise the factors, weightings, formulas, or thresholds involved. Any such revisions are uniformly applied to all Risk Provider workflows for Level 2 Trades. Any such revision to the factors, weightings, formulas or thresholds used for the Liquidity Grade designation go into effect before the following trading session across all symbols, and are applied upon the first Level 2 Trade of the trading session in a particular symbol (as well as updated intraday after each Level 2 Trade in the symbol). Once the ATS assigns or updates a Liquidity Grade, MOAT will not override it. Level 3 Trade Eligibility and Priority A Level 3 Trade occurs when both Subscriber orders are classified as Risk Provider and both sides meet the trade eligibility criteria. For each Subscriber order classified as Risk Provider, the MERIT rating will determine one of the following trade eligibility scenarios: (1) Risk Provider order is ineligible for a Level 3 Trade with a rating of Ineligible. (2) Risk Provider order is eligible for a Level 3 Trade with a rating of Eligible or Top Tier Eligible. If both Subscriber orders are classified as Risk Provider and their orders are determined Eligible or Top Tier Eligible for a Level 3 Trade by MERIT rating, they are eligible to trade. Level 3 Risk Provider Priority When multiple Subscriber orders classified as Risk Provider satisfy trade eligibility criteria for a Level 3 Trade, priority determines a tiebreaker in the following sequence: 1. Risk Provider Tier: A Subscriber order rated as Top Tier Eligible has priority over an order rated as Eligible. 2. Time: A Subscriber order with an earlier timestamp on the Mosaic ATS order book has priority. . ORDER INSTRUCTIONS: Minimum Executable Quantity - Mosaic ATS supports the use of a MinQty instruction, allowing Subscribers to specify a minimum number of shares that must be available from a single contra-side order to allow an execution. Subscribers may apply MinQty on an order-by-order basis. Mosaic ATS does not aggregate multiple contra-side orders to satisfy a MinQty instruction. For instance, if a Subscriber submits an order with a MinQty of 400 shares, that order will only execute against a single contra-side order offering 400 shares or larger. Smaller contra orders will not be combined to meet the MinQty. Subscribers may use the MinQtyInstruction tag to specify how an order should behave if the remaining ("leaves") quantity falls below the MinQty threshold: 1. A (All or None): The order converts to "All or None" ("AON") if the leaves quantity is less than the specified MinQty. 2. M (Cancel): The leaves quantity is canceled if it falls below the specified MinQty. If no specific instruction is provided, the ATS's default behavior is to convert the order to AON when the remaining (leaves) quantity is insufficient to satisfy the MinQty condition. Self-Trade Prevention ("STP") - Mosaic ATS provides Subscribers with the ability to prevent executions between orders entered by the same Subscriber for regulatory or risk management purposes (e.g., to avoid wash trades). Subscribers may enable the STP feature on an order-by-order basis. When active, STP prevents two orders from the same designated Subscriber MPID, or from orders sharing the same permissible field and value, from matching within the ATS. For Subscribers classified as Investors, the STP feature may also be extended to prevent a Sub-Customer from matching with itself or other designated Sub-Customers on the Mosaic ATS. STP functionality for Sub-Customers requires Subscribers to establish de-identified Sub-Customer profiles with MOAT in accordance with Mosaic ATS system access requirements. Locked/Crossed Markets - Mosaic ATS does not execute orders during locked or crossed markets. Errors - In the event of a Mosaic ATS system failure, an error on the part of a Subscriber, or an error with the Constructed NBBO used to price matches on the ATS, a Registered Principal of MOAT will determine the best course of action in accordance with internal error policy. The Registered Principal will consider the circumstances of the matched trade in his or her determination of whether to cancel both sides of the matched trade, adjust the price, or let the matched trade stand. In the event of a corrective transaction in which a trade needs to be adjusted or canceled, MOAT will contact the Subscribers involved to inform them of the ruling. In the event of a clearly erroneous trade (as defined by FINRA Rule 11891 - Clearly Erroneous Transactions in Exchange Listed Securities), a Registered Principal of MOAT may determine to cancel the matched trade for both sides. MOAT may use a designated error account to facilitate corrective transactions through its clearing broker. Under no circumstances will a corrective transaction result in a principal order from MOAT being traded in the Mosaic ATS. Timestamps - The Mosaic ATS timestamps all orders upon receipt and records executions at the precise time they occur, measured in microseconds. Y N (i) Based on Subscriber workflow attestations and certifications at onboarding, a Subscriber order entered into the Mosaic ATS is classified as either an Investor or Risk Provider order. An Investor order refers to a Subscriber broker-dealer acting in an agency or riskless principal capacity to represent an institutional or retail investor order. A Risk Provider order refers to a Subscriber broker-dealer acting on behalf of its own account in a principal capacity or market making capacity. Subscribers attest to the accuracy of these classification designations in their Subscriber Agreements, and certify to these designations across distinct workflows during onboarding. Mosaic ATS allows distinct workflows from the same Subscriber to be certified with different classification designations (i.e., the Subscriber can be classified as both an Investor and a Risk Provider for different workflows). The Mosaic ATS does not reclassify these classification designations once they have been made. Following onboarding, MOAT monitors whether the order activity on the ATS is consistent with the Subscriber classification under which a workflow is designated. Where Subscriber activity appears materially inconsistent with a designated workflow classification, Mosaic ATS may engage with the Subscriber to discuss such activity and its alignment with the Subscriber's designation. Mosaic ATS does not unilaterally reclassify Subscriber designations; however, the ATS may require that a Subscriber either (i) adjust its activity on the ATS to remain consistent with its existing designation, or (ii) voluntarily re-certify the applicable workflow under a new classification, as a condition of continued access to the ATS or certain ATS functionality. These procedures are intended to preserve the integrity of the ATS's classification-based market structure. As described in Part II Item 3, MOAT retains sole discretion to limit, condition, or restrict a Subscriber's access to, or interaction within, the ATS where necessary to protect the integrity of this classification framework. (ii) The Mosaic ATS order book is organized into three interaction segments, based upon the classifications of the Subscriber orders: 1. A Level 1 Trade entails a match between two Subscriber orders classified as Investor. 2. A Level 2 Trade entails a match between one Subscriber order classified as Investor and one Subscriber order classified as Risk Provider. 3. A Level 3 Trade entails a match between two Subscriber orders classified as Risk Provider. (iii) For as long as the price of the Subscriber order is marketable, a Subscriber order classified as Investor is available to match in both a Level 1 Trade and Level 2 Trade, and a Subscriber order classified as Risk Provider is available to match in both a Level 2 Trade and a Level 3 Trade. (iv) As described in Part III Item 11.c, each interaction segment has specific trade eligibility criteria. Mosaic ATS does not allow Subscribers to opt-in or opt-out of an interaction segment. A Subscriber order classified as Investor is evaluated for trade eligibility for both a Level 1 Trade and Level 2 Trade. A Subscriber order classified as Risk Provider is evaluated for trade eligibility for both a Level 2 Trade and Level 3 Trade. (v) Subscriber orders need to satisfy trade eligibility criteria in at least one of the three interaction segments in order to receive a match on the Mosaic ATS. In the event of multiple eligible trades, match priority rules determine the sequence of matching both across interaction segments and within an interaction segment. MATCHING PRIORITY: When multiple Subscriber orders satisfy Mosaic ATS trade eligibility criteria, priority determines the sequence of order matching. As described below, Mosaic ATS has match priority rules for both (1) Subscriber orders that satisfy trade eligibility criteria across multiple segments, and (2) multiple Subscriber orders that satisfy trade eligibility criteria within the same interaction segment. Matching Across Segments When Subscriber orders satisfy Mosaic trade eligibility criteria across multiple interaction segments, the order of matching priority across interaction segments is as follows: 1. Level 1 Trade 2. Level 2 Trade 3. Level 3 Trade For example, when a Subscriber order classified as Investor is eligible to trade with both a Subscriber order classified as Investor and a Subscriber order classified as Risk Provider, the Level 1 Trade receives match priority as between two Subscriber orders classified as Investor. Matching Within a Segment For a Level 1, Level 2, or Level 3 Trade, when multiple Subscriber orders classified as Investor or multiple orders classified as Risk Provider satisfy trade eligibility criteria, priority determines the tiebreaker, as detailed in Part III Item 11.c. Y As noted throughout this Form ATS-N, Subscriber workflows are classified as Investor or Risk Provider during onboarding, in accordance with Mosaic ATS's FIX Specification requirements for certification. Each Subscriber must also attest to the accuracy of its classification(s) in its Subscriber Agreement. The Subscriber may not thereafter contest the designated classification(s), and the ATS will not reclassify it/them. MOAT reviews, typically monthly, the MERIT scoring and rating thresholds used for trade eligibility and priority across Level 1 Trades, Level 2 Trades, and Level 3 Trades. Upon review of historical aggregate data across all Subscribers, MOAT may determine to uniformly change the scoring threshold of the MERIT rating for a particular Subscriber classification in a specific interaction segment. MOAT will make reasonable efforts to provide its Subscribers with monthly updates on the scores and ratings attributable to their order data. MOAT does not provide Subscribers with score and rating information attributable to any other Subscriber. Y Y 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. Y N Mosaic ATS does not display its order book. However, when a CO finds an eligible counterparty, the ATS communicates an Invite to notify the CO sender that contra-side interest meeting eligibility criteria is available (see, Part III Item 9.a.). The Invite will not contain any information on price or quantity available, and the ATS does not guarantee a match for specific price or quantity. Y N N Y N 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. MOAT does not provide any non-ATS products or services to Subscribers. There are no fees or charges related to additional services bundled with the use of the ATS. MOAT does not offer rebates. Mosaic ATS will suspend matching in the event of a system issue that necessitates such action. Mosaic ATS will also suspend matching functionality in a specific symbol if the symbol is subject to a trading pause or a regulatory halt. Mosaic ATS may further suspend trading to prevent triggering Regulation ATS Fair Access or Regulation SCI volume thresholds. Mosaic ATS is programmed to react to "halt" messages it receives from the Securities Information Processors ("SIPs") from all U.S. equities exchanges. It will not match transactions in a security during periods in which trading in the security is halted on the primary listing exchange (e.g., subject to a LULD trading halt, single stock circuit breaker, or regulatory halt). During the halt, the ATS will continue to accept new orders, cancels, and order amendments. Once the security is resumed by the primary listing exchange, it will be treated no differently than through the course of regular trading on the ATS. By default, if trading is suspended in a security during regular U.S. trading hours, open orders and trading interests in Mosaic ATS will be canceled. Any new orders received by the ATS while a security is disabled will be rejected. Mosaic ATS will make reasonable efforts to notify Subscribers following suspending, or subsequently resuming, matching on the ATS or for a particular symbol. Y When a match occurs, Mosaic ATS transmits electronic execution reports to the Subscribers that submitted the corresponding orders. In accordance with FINRA trade reporting requirements, Mosaic ATS reports all transactions to the Nasdaq TRF in Carteret, NJ, delivered through Ocean technology, under the MPID MOAT. The designated back-up facility is the Nasdaq TRF in Chicago, IL. Y MOAT maintains an agreement with Instinet, a member of the National Securities Clearing Corporation ("NSCC"), to act on behalf of Mosaic ATS to clear and settle all transactions executed on the ATS. Pursuant to this agreement, Instinet submits the ATS's executions to NSCC for clearing and to the Depository Trust Company ("DTC") for settling. All Subscribers are required to maintain clearing arrangements with brokers that are NSCC and DTC participants. MOAT serves as the counterparty to all trades executed on the ATS, and Subscribers are informed only that MOAT was the counterparty to their executions. Y 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. Y N N N