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Federal Register / Vol. 86, No. 172 / Thursday, September 9, 2021 / Notices
D. Order Linkage Rates As described in the OATS Retirement Filing, in addition to creating linkages within and between broker-dealers, the Plan Processor must be able to create lifecycles to link various pieces of related orders. For example, the Plan requires linkages of order information to create an order lifecycle from origination or receipt to cancellation or execution. This category essentially combines all of the order-related linkages to capture an overall snapshot of order linkages in the CAT.22 FINRA
determined that for the applicable period, the order-related linkage accuracy rates across all Industry Member Reporters were 99.66% precorrection and 99.93% post-correction, which far exceed the threshold requirements of 95% or higher precorrection and 98% or higher postcorrection in other words, the order linkages accuracy far exceeds the threshold requirement that there be less than 5% inaccuracy pre-correction and less than 2% inaccuracy postcorrection.

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E. Exchange and TRF/ORF Match Rates As described in the OATS Retirement Filing, an order lifecycle must be created to link orders routed from broker-dealers to exchanges and executed orders and trade reports.
FINRA determined that for the applicable period, the match rate across all equity exchanges for orders routed from Industry Members to an exchange was 99.51% pre-correction and 99.87%
post-correction. This match rate far exceeds the threshold requirements of 95% or higher pre-correction and 98%
or higher post-correction in other words, the match rate accuracy far exceeds the threshold requirement that there be less than 5% inaccuracy precorrection and less than 2% inaccuracy post-correction.
Based upon the accuracy and reliability of the above five categories of CAT Data, FINRA determined that the CAT Data met the accuracy and reliability standards required for OATS
retirement.23
II. FINRAs Use of CAT Data Additionally, the OATS Retirement Plan Order set forth that before retiring OATS, FINRAs use of CAT data must confirm that i there are no material issues that have not been corrected e.g., delays in the processing of data, issues with query functions, etc.; ii the CAT
22 See Letter from Lisa C. Horrigan, Associate General Counsel, FINRA, to Vanessa Countryman, Secretary, Commission, dated October 29, 2020.
23 See supra note 20.

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includes all data necessary to allow FINRA to continue to meet its surveillance obligations; 24 and iii the Plan Processor is sufficiently meeting its obligations under the CAT NMS Plan relating to the reporting and linkage of Phase 2a Data.
As set forth in FINRAs OATS
Retirement Filing, by September 1, 2021, FINRA will be ready to retire its use of OATS data for cross-market surveillance, and replace it with a newly created surveillance data mart, the Pattern Optimized Datamart POD, which incorporates equities and options data submitted by both Participants such as IEX and Industry Members. IEX, like other Participants, transitioned from reporting to FINRA
via the RSA specification, to reporting via the CAT technical specification as of April 26, 2021, and full Participant equities reporting and linkage validations commenced on June 1, 2021.25 Successful completion of the transition to the CAT specification for Participants was a prerequisite for FINRA to retire the OATS-based cross market surveillance patterns and leverage CAT Data and linkages in POD
for its surveillance patterns. FINRA has completed all planned activities on schedule, including substantially completing the process of integrating CAT Data into POD and successfully running large amounts of production CAT Data for the month of May through POD.26 FINRA anticipates completing additional activities before the proposed OATS retirement date of September 1, 2021, including planned user acceptance testing.27
Additionally, FINRA has confirmed that all of the data required to support the transition from OATS to CAT is available in CAT.28 Specifically, FINRA, supported by the Participants, conducted a mapping of all OATS data 24 FINRA conducts surveillance on behalf of IEX
pursuant to the Regulatory Service Agreement entered into by IEX and FINRA RSA. Therefore, any references in this rule filing to FINRA
surveillance include FINRAs use of either OATS or CAT Data in furtherance of the regulatory services it provides on behalf of IEX.
25 For example, according to the CAT Reporting Technical Specification for Participants version 4.0.0r4 dated April 20, 2021, additional linkage error feedback for off-exchange trade reports was effective as of June 1, 2021. The Technical Specifications can be found on the CAT NMS Plan website at www.catnmsplan.com/sites/default/files/
2021-04/04.20.2021-CAT-Reporting-TechnicalSpecifications-for-Participants-4.0.0-r4.pdf.
26 See supra note 20.
27 As 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.
28 See supra note 20.

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to CAT data, and then completed a gap analysis to address any issues with the field-level mapping of OATS to CAT
data. Furthermore, IEX, 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.29 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.30 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 2021.31 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.32
III. OATS May be Retired in Light of the Accuracy and Reliability of the CAT
Data IEX, 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, IEX, 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 IEX 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 29 For example, for the month of July 2021, IEXs compliance error rate for CAT Data reporting was 0.0435% i.e., 99.9565% of records were successfully reported.
30 See supra note 20.
31 See supra note 20.
32 See supra note 20.

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