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lotter on DSK11XQN23PROD with NOTICES1

Federal Register / Vol. 86, No. 172 / Thursday, September 9, 2021 / Notices Participant regulatory staff and the SEC
between 12:00 p.m. Eastern Time on T+1 and T+5.33 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+5.34
Additionally, after ingestion by the Central Repository, the raw unprocessed data must be transformed into a format appropriate for data querying and regulatory output.35 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.36 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.37
With respect to the second factor, IEX, 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 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, IEX, 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 33 See 34 See
CAT NMS Plan, Appendix D, Section 6.2.
CAT NMS Plan, Appendix C, Section
A.2a.
35 See CAT NMS Plan, Appendix C, Section A.1b.
36 See CAT NMS Plan, Section 6.10c.
37 See supra note 20.

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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, 2020.38
Based on the foregoing, IEX 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, 2021.39 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
reporting is accurate and complete for all order events that occur on or prior to August 31, 2021. IEX Rule 11.420, like the FINRA OATS Rules, will be deleted from the IEX rulebook effective September 1, 2021.40
In light of the foregoing, IEX, like FINRA, believes that retiring OATS as of September 1, 2021 is appropriate, particularly given the potential risks of continuing to run OATS and CAT in parallel for an additional period of time.
Such potential risks may include, for example, on an industry-wide basis: 1
Processing and storage capacity issues from operating two systems particularly in the event of extraordinary market volume; 2 cybersecurity risks from having data flow through two separate systems for a longer time period; 3
systems issues from reporting 38 The Implementation Plan and Quarterly Progress Reports are available at www.catnmsplan.com/implementation-plan.
39 See FINRA Regulatory Notice 2121 June 2021.
40 In the unlikely event that FINRA determines it is unable to retire OATS effective September 1, 2021, IEX will delay the retirement of IEX Rule 11.420 pending the actual retirement of FINRA
OATS.

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infrastructure that is near end-of-life;
and 4 the expense and burden on CAT
Reporters of dual reporting, particularly in the event of systems issues requiring correction and/or resubmission of data and competing resource priorities between OATS and CAT reporting and repair activities.
IEX has filed the proposed rule change for immediate effectiveness and is seeking a waiver of the 30 day operative delay to allow its OATS rules to be retired concurrent with the September 1, 2021 retirement of FINRAs OATS Rules. IEX will also announce the retirement of OATS via a trader alert to its Members.
2. Statutory Basis IEX believes that the proposed rule change is consistent with the provisions of Section 6b5 of the Act,41 which require, among other things, that IEXs rules must be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, and, in general, to protect investors and the public interest.
IEX believes that the proposed retirement of IEX Rule 11.420 fulfills the obligation in the CAT NMS Plan for IEX
to submit a proposed rule change to eliminate or modify duplicative rules, and that the CAT NMS Plan has achieved the accuracy and reliability standards required by the Commission in the OATS Retirement Order.
Additionally, as discussed in the Purpose section, IEX believes that the use of CAT Data, whether by IEX
directly, or by FINRA pursuant to the RSA, will continue to allow for accurate and effective surveillance of market activity on IEX. Therefore, IEX will continue to be able to fulfill its statutory obligation to protect investors and the public interest after the retirement of OATS.
B. Self-Regulatory Organizations Statement on Burden on Competition IEX does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. IEX notes that the proposed rule change implements provisions of the CAT NMS
Plan, facilitates the retirement of certain existing regulatory systems, and is designed to assist the Exchange in meeting its regulatory obligations pursuant to the Plan. IEX also notes that the proposed rule change will apply equally to all firms that trade NMS
Securities. In addition, all national securities exchanges and FINRA are 41 15

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