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Federal Register / Vol. 86, No. 171 / Wednesday, September 8, 2021 / Notices
CAT Data into POD and successfully running large amounts of production CAT Data for the month of May through POD.28 FINRA anticipates completing additional activities before the proposed OATS retirement date of September 1, 2021, including planned user acceptance testing.29
Additionally, FINRA has confirmed that all of the data required to support the transition from OATS to CAT is available in CAT.30 Specifically, FINRA, supported by the Participants, conducted a mapping of all OATS data to CAT data, and then completed a gap analysis to address any issues with the field-level mapping of OATS to CAT
data. Furthermore, LTSE, along with other Participants, has had a very high compliance rate in reporting CAT Data using the CAT specifications both in the testing and production environments.31 Reviewing the Participant submitted CAT Data and matching it with Industry Member data, FINRA determined that the data linkages in CAT are comparable to the linkages between RSA exchange data and OATS data currently used by FINRA.32 Accordingly, the CAT NMS
Plan Operating Committee approved the cutover from the RSA specification to the CAT specification as the official source of Participant data as of June 1, 2021, and today, all Industry Member and Participant equities data reported via the CAT specification is linked in the CAT production environment.
Thus, FINRA will use OATS data for surveillance patterns run through the end of the second quarter of 2021 and has already begun using CAT Data for its surveillance patterns for review periods beginning in the third quarter of 2021.33 As detailed in the OATS
Retirement Filing, FINRA will continue to conduct regular reviews to ensure confidence in the completeness and accuracy of Industry Member reporting, along with the ability to remediate any issues in a timely manner.34
28 See
supra note 22.
noted in the FINRA OATS Retirement Filing, user acceptance testing is the final stage of any software development lifecycle and enables actual users to test the system to confirm it is able to carry out the required tasks it was designed to address in real-world situations.
30 See supra note 22.
31 For example, for the month of July 2021, LTSEs compliance error rate for CAT Data reporting was 1.7% i.e., 98.3% of records were successfully reported. However, this monthly average error rate was impacted by a single day; for all other days in that month, LTSEs compliance error rate ranged between 0.00% and 0.05%.
32 See supra note 22.
33 See supra note 22.
34 See supra note 22.

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III. OATS May Be Retired in Light of the Accuracy and Reliability of the CAT
Data LTSE, like FINRA, believes that the three additional standards set forth in the OATS Retirement Order for retiring OATS have been satisfied. With respect to the first factor, LTSE, like FINRA, does not believe that there are any material issues that have not been corrected or could not be corrected in the course of operation of CAT, as approved by the Operating Committee that would impact FINRAs ability to incorporate and use CAT Data in FINRAs surveillance program, which it conducts on behalf of LTSE pursuant to the RSA. For example, the Plan requires that raw unprocessed data that has been ingested by the Plan Processor must be available to Participant regulatory staff and the SEC prior to 12:00 p.m. Eastern Time on T+1, and access to all iterations of processed data must be available to Participant regulatory staff and the SEC
between 12:00 p.m. Eastern Time on T+1 and T+5.35 The Plan Processor also must ensure that regulators have access to corrected and linked order data by 8:00 a.m. Eastern Time on T+5.36
Additionally, after ingestion by the Central Repository, the raw unprocessed data must be transformed into a format appropriate for data querying and regulatory output.37 The user-defined direct queries and bulk extracts must provide authorized users with the ability to retrieve CAT Data via a query tool or language that allows users to query all available attributes and data sources.38 FINRAs use of the CAT Data has not uncovered any processing delays or other material issues impacting the availability of, and FINRAs access to, the data.39
With respect to the second factor, LTSE, like FINRA, believes that the CAT
includes all data necessary for FINRA to meet its surveillance obligations after the retirement of OATS. FINRA must ensure that the CAT, as the single source of order and trade data, can enable FINRA to conduct accurate and effective market surveillance in accordance with its regulatory obligations. As noted above, Phase 2a Data includes all events and scenarios covered by OATS and is the most relevant for OATS retirement purposes.
FINRAs testing, analysis and use of the CAT Data including integration into 35 See 36 See
CAT NMS Plan, Appendix D, Section 6.2.
CAT NMS Plan, Appendix C, Section
A.2a.
37 See CAT NMS Plan, Appendix C, Section A.1b.
38 See CAT NMS Plan, Section 6.10c.
39 See supra note 20.

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POD, as described above, has confirmed that the CAT includes all data necessary for FINRA to meet its surveillance obligations and that CAT is a reliable substitute for OATS. In addition, based on its qualitative data reviews, FINRA has concluded that Industry Member CAT Data, in the aggregate, is a sufficient replacement for OATS for purposes of FINRAs surveillance program.
With respect to the third factor, LTSE, like FINRA, believes that the Plan Processor is sufficiently meeting its obligations under the CAT NMS Plan relating to the reporting and linkage of Phase 2a Data. As detailed in the Implementation Plan and Quarterly Progress Reports submitted by the Plan Participants, the Plan Processor has met its targeted completion dates for the milestones for Phase 2a, including, for example, production Go-Live for Equities 2a file submission and data integrity validation Large Industry Members and Small OATS Reporters on June 22, 2020; Production Go-Live for Equities 2a Intrafirm Linkage validations on July 27, 2020; and production go-live for firm-to-firm linkage validations for equities Large Industry Members and Small OATS
Reporters and exchange and TRF/ORF
linkage validations for equities Large Industry Members and Small OATS
Reporters on October 26, 2020.40
Based on the foregoing, LTSE agrees with FINRAs determination that the CAT meets the accuracy and reliability standards approved by the Commission in the OATS Retirement Order for purposes of eliminating OATS. FINRA
has determined to retire OATS effective September 1, 2021.41 Firms must continue to report to OATS all order events that occur on or prior to August 31, 2021. Reports submitted to OATS for order events that occur after August 31, 2021 will be rejected. In other words, August 31, 2021 will be the last OATS
Business Day, as defined under FINRA
Rule 7450b3, for which OATS will accept order events and perform routine processing including incorporation of corrections and repairs of rejections occurring within the normal OATS
timeframe for such activities. OATS will continue to accept reports for order events that occur on or prior to August 31, 2021 including, but not limited to, late and corrected reports for such order events through September 16, 2021.
Firms must ensure that their OATS
40 The Implementation Plan and Quarterly Progress Reports are available at www.catnmsplan.com/implementation-plan.
41 See FINRA Regulatory Notice 2121 June 2021.

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