52278 Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Notices 

25 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4See Securities Exchange Act Release No. 77724 

(April 27, 2016), 81 FR 30614 (May 17, 2016). 

5See Securities Exchange Act Release No. 79318 

(November 15, 2016), 81 FR 84696 (November 23, 

2016) (‘‘Order Approving the National Market 

System Plan Governing the Consolidated Audit 

Trail) (‘‘Approval Order’’). 

6See Securities Exchange Act Release No. 89679 

(August 26, 2020), 85 FR 54461 (September 1, 2020) 

(Notice of Filing of File No. SR–FINRA–2020–024). 

7See Letter from Lisa C. Horrigan, Associate 

General Counsel, FINRA, to Vanessa Countryman, 

Secretary, Commission, dated October 29, 2020. 

8See Securities Exchange Act Release No. 90535 

(November 30, 2020), 85 FR 78395 (December 4, 

2020) (Notice of Filing of Amendment No. 1 and 

Order Granting Accelerated Approval of SR– 

FINRA–2020–024). 

Commission shall institute proceedings 

to determine whether the proposed rule 

should be approved or disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

NASDAQ–2021–069 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–NASDAQ–2021–069. This 

file number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

internet website (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549, on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of the 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–NASDAQ–2021–069 and 

should be submitted on or before 

October 12, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.25

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–20214 Filed 9–17–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92981; File No. SR– 

NYSEAMER–2021–38] 

Self-Regulatory Organizations; NYSE 

American LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Delete the Order Audit 

Trail System Rules in the Rule 7400 

Series 

September 14, 2021. 

Pursuant to Section 19(b)(1) 1 of the 

Securities Exchange Act of 1934 

(‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that, on 

September 7, 2021, NYSE American 

LLC (‘‘NYSE American’’ or the 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission (‘‘SEC’’ or 

‘‘Commission’’) the proposed rule 

change as described in Items I and II, 

below, which Items have been prepared 

by the self-regulatory organization. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to delete the 

Order Audit Trail System (‘‘OATS’’) 

rules in the Rule 7400 Series as these 

Rules provide for the collection of 

information that is duplicative of the 

data collection requirements of the CAT. 

Further, the Financial Industry 

Regulatory Authority (‘‘FINRA’’) has 

determined to eliminate its OATS rules. 

The proposed rule change is available 

on the Exchange’s website at 

www.nyse.com, at the principal office of 

the Exchange, and at the Commission’s 

Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

self-regulatory organization included 

statements concerning the purpose of, 

and basis for, the proposed rule change 

and discussed any comments it received 

on the proposed rule change. The text 

of those statements may be examined at 

the places specified in Item IV below. 

The Exchange has prepared summaries, 

set forth in sections A, B, and C below, 

of the most significant parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

Rule 613 of Regulation NMS requires 

national securities exchanges and 

FINRA to create, implement, and 

maintain a consolidated audit trail to 

capture customer and order event 

information for orders in NMS 

Securities and OTC Equity Securities, 

across all markets, from the time of 

order inception through routing, 

cancellation, modification, or execution 

in a single consolidated data source. 

The Participants filed the Plan to 

comply with Rule 613 of Regulation 

NMS under the Act. The Plan was 

published for comment in the Federal 

Register on May 17, 2016,4 and 

approved by the Commission, as 

modified, on November 15, 2016.5

On August 14, 2020, FINRA filed with 

the Commission a proposed rule change 

to delete the OATS rules once Industry 

Members are effectively reporting to the 

CAT (the ‘‘OATS Retirement Filing’’).6

On October 29, 2020, FINRA filed 

Amendment No. 1 to the proposed rule 

change (‘‘Amendment No. 1’’) and a 

response to the comments that were 

submitted on the original filing 

(‘‘Response to Comments’’).7 On 

November 30, 2020, the Commission 

approved the proposed rule change, as 

modified by Amendment No. 1, on an 

accelerated basis.8 On June 17, 2021, 

FINRA filed a proposed rule change 

setting forth the basis for its 

determination that the accuracy and 

reliability of the CAT meet the 

standards approved by the Commission 

Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Notices 52279 

9See Securities Exchange Act Release No. 92239 

(June 23, 2021), 86 FR 34293 (June 29, 2021) (SR– 

FINRA–2021–017) (Notice of Filing and Immediate 

Effectiveness of a Proposed Rule Change Relating to 

the Retirement of FINRA’s Order Audit Trail 

System). 

10 17 CFR 242.600(B)(47). 

11Appendix C of CAT NMS Plan, Approval Order 

at 85010. 

12As clarified in the OATS Retirement Filing, 

although FINRA does not believe that postcorrection errors need to be de minimis before 

OATS can be retired, FINRA was not suggesting, 

with the proposal, that 2% would meet the ultimate 

objective of de minimis error rates for CAT. See 

CAT NMS Plan, Appendix C, note 102 (error rates 

after reprocessing of error corrections are ultimately 

expected to be de minimis for the CAT). See also 

Approval Order. 

13See FINRA’s Response to Comments, supra 

note 8. 

14Appendix D of the CAT NMS Plan, Section 7.2, 

for example, requires that certain file validations 

(e.g., file transmission and receipt are in the correct 

formats, confirmation of a valid SRO-Assigned 

Market Participant Identifier, etc.), and syntax and 

context checks (e.g., format checks, data type 

Continued 

in the OATS Retirement Filing for 

purposes of eliminating the OATS 

rules.9 The FINRA proposal stated that 

FINRA would retire OATS effective 

September 1, 2021. 

After conducting an analysis of its 

rules in accordance with the CAT NMS 

Plan, the Exchange has determined that 

the information collected pursuant to 

the OATS rules is intended to be 

collected by CAT. Further, the Exchange 

believes that the Rule 7400 Series will 

no longer be necessary and proposes to 

delete such rules from the Exchange’s 

rulebook. Discussed below is a 

description of the duplicative rule 

requirements as well as the timeline for 

eliminating the duplicative rules 

followed by a discussion on the OATS 

Retirement Filing that formed the basis 

for retiring OATS. 

Duplicative OATS Requirements 

The Rule 7400 Series consists of Rules 

7410 through 7470 and sets forth the 

recording and reporting requirements of 

the OATS Rules. The OATS Rules 

require all Exchange members and 

associated persons to record in 

electronic form and report to FINRA, on 

a daily basis, certain information with 

respect to orders originated, received, 

transmitted, modified, canceled, or 

executed by members in all NMS stocks, 

as that term is defined in Rule 

600(b)(47) of Regulation NMS,10 traded 

on the Exchange. The Exchange relies 

on the information reported to OATS 

either to conduct surveillance or to 

facilitate surveillance conducted by 

FINRA pursuant to a regulatory services 

agreement (‘‘RSA’’). This information is 

used by Exchange and FINRA staff to 

conduct surveillance and investigations 

of member firms for violations of 

Exchange and FINRA rules and federal 

securities laws. The Exchange believes 

it is appropriate to retire OATS because 

the requirements of the Rule 7400 Series 

are duplicative of information available 

in the CAT and thus will no longer be 

necessary now that the CAT is 

operational. 

Timeline for Elimination of Duplicative 

Rules 

The CAT NMS Plan states that the 

elimination of rules that are duplicative 

of the requirements of the CAT and the 

retirement of the related systems should 

be effective at such time as CAT Data 

meets minimum standards of accuracy 

and reliability.11 As discussed in more 

detail in the OATS Retirement Filing, 

FINRA believes that OATS may be 

retired effective September 1, 2021 

given the error rate thresholds have 

been met, and FINRA has determined 

that its usage of the CAT Data has not 

revealed material issues that have not 

been corrected and further confirmed 

that the CAT includes all data necessary 

to allow FINRA to continue to meet its 

surveillance obligations. 

OATS Retirement Filing 

In the OATS Retirement Filing, 

FINRA proposed to eliminate the OATS 

rules once Industry Members are 

effectively reporting to the CAT and the 

CAT’s accuracy and reliability meet 

certain standards. Specifically, FINRA 

proposed that before OATS could be 

retired, the CAT generally must achieve 

a sustained error rate for Industry 

Member reporting in five categories for 

a period of at least 180 days of 5% or 

lower on a pre-correction basis, and 2% 

or lower on a post-correction basis 

(measured at T+5). In addition to the 

maximum error rates and matching 

thresholds, FINRA’s use of CAT Data 

must confirm that (i) there are no 

material issues that have not been 

corrected, (ii) the CAT includes all data 

necessary to allow FINRA to continue to 

meet its surveillance obligations, and 

(iii) the Plan Processor is sufficiently 

meeting its obligations under the CAT 

NMS Plan relating to the reporting and 

linkage of Phase 2a Industry Member 

Data. 

In the OATS Retirement Filing, 

FINRA explained that its review of CAT 

Data and error rates would be based on 

data and linkages in the initial phase of 

reporting (or ‘‘Phase 2a’’), which 

replicate the data in OATS today and 

thus are most relevant for OATS 

retirement purposes. Phase 2a Data 

includes all events and scenarios 

covered by OATS and applies only to 

equities. FINRA did not consider 

options order events or Phase 2c data 

and validations, which are not in OATS 

today, for purposes of OATS retirement. 

As described below, FINRA has 

determined that the CAT meets the 

accuracy and reliability standards 

approved by the Commission in the 

OATS Retirement Filing. 

(1) Maximum Error Rates 

As discussed in the OATS Retirement 

Filing, FINRA believes that relevant 

error rates are the primary, but not the 

sole, metric by which to determine the 

CAT’s accuracy and reliability and will 

serve as the baseline requirement 

needed before OATS can be retired. 

FINRA proposed that, before OATS 

could be retired, the CAT would 

generally need to achieve a sustained 

error rate for Industry Member reporting 

in five categories for a period of at least 

180 days of 5% or lower, measured on 

a pre-correction or as-submitted basis, 

and 2% or lower on a post-correction 

basis (measured at T+5).12 FINRA 

proposed to average the error rates 

across the period, rather than require a 

5% pre-correction and 2% postcorrection maximum each day for 180 

consecutive days. FINRA also proposed 

to measure the error rates in the 

aggregate, rather than on a firm-by-firm 

basis. Finally, FINRA proposed to 

measure the error rates separately for 

each of the five categories, rather than 

evaluate all categories in the aggregate. 

As noted above, FINRA’s assessment of 

the error rates for Industry Member 

reporting is based solely on Phase 2a 

CAT reporting for equity events since 

options orders are not included in 

OATS today. 

As discussed in the OATS Retirement 

Filing, FINRA measured the error rates 

in each of the five categories discussed 

below during the period from October 

26, 2020 through April 26, 2021 (the 

‘‘applicable period’’). FINRA 

commenced this period on October 26, 

2020, which was the date that Industry 

Members were required to begin 

correcting all errors for inter-firm 

linkages and exchange/TRF/ORF match 

validations. As discussed in the 

Response to Comments, although the 

production environment for inter-firm 

linkage and exchange/TRF/ORF match 

validations was open for testing as of 

September 28, 2020, FINRA did not 

believe it would be appropriate for the 

180-day period to commence prior to 

the October 26, 2020 compliance date.13

Rejection Rates and Data Validations. 

As described in the OATS Retirement 

Filing, the Plan Processor must perform 

certain basic data validations,14 and if a 

52280 Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Notices 

checks, consistency checks, etc.) be performed on 

all submitted records. 

15See FINRA’s Response to Comments, supra 

note 8. 

16FINRA noted that in Phase 2a, linkage is 

required between the representative street side 

order and the order being represented when the 

representative order was originated specifically to 

represent a single order (received either from a 

customer or another broker-dealer) and there is: (1) 

An existing direct electronic link in the firm’s 

system between the order being represented and the 

representative order, and (2) any resulting 

executions are immediately and automatically 

applied to the represented order in the firm’s 

system. As set forth in the OATS Retirement Filing, 

while such linkages are not required in OATS, 

FINRA believes that it is appropriate to evaluate 

them for purposes of retiring OATS because they 

represent a significant enhancement to the data 

currently available in OATS and will enhance the 

quality of the equity audit trail. However, FINRA 

also explained in the Response to Comments that 

if all other proposed criteria have been met, FINRA 

would not anticipate delaying OATS retirement 

based on Phase 2a representative order linkage error 

rates alone. 

In evaluating whether the standards for OATS 

retirement have been met, FINRA determined that 

the error rates for the Phase 2a representative order 

linkages did not have a significant negative impact 

on the overall error rates for order linkages. 

Accordingly, FINRA did not need to separately 

evaluate or exclude Phase 2a representative order 

linkage rates in measuring the error rates over the 

applicable period. For example, if the intra-firm 

linkage error rate had been above 5% over the 

applicable period, FINRA would have evaluated 

whether the error rate was the result of unlinked 

representative orders to create an apples-to-apples 

comparison to OATS. 

17See Amendment No. 1. 

record does not pass these basic data 

validations, it must be rejected and 

returned to the CAT Reporter to be 

corrected and resubmitted. FINRA 

proposed that over the 180-day period, 

aggregate rejection rates must be no 

more than 5% pre-correction or 2% 

post-correction across all Industry 

Member Reporters. FINRA has 

determined that, over the applicable 

period, aggregate rejection rates across 

all Industry Member Reporters were 

0.03% pre-correction and 0.01% postcorrection. 

Intra-Firm Linkages. As described in 

the OATS Retirement Filing, the Plan 

Processor must be able to link all related 

order events from all CAT Reporters 

involved in the lifecycle of an order. At 

a minimum, this requirement includes 

the creation of an order lifecycle 

between all order events handled within 

an individual CAT Reporter, including 

orders routed to internal desks or 

departments with different functions 

(e.g., an internal ATS). FINRA proposed 

that aggregate intra-firm linkage rates 

across all Industry Member Reporters 

must be at least 95% pre-correction and 

98% post-correction. FINRA has 

determined that, over the applicable 

period, aggregate intra-firm linkage rates 

across all Industry Member Reporters 

were 99.97% pre-correction and 99.99% 

post-correction. 

Inter-Firm Linkages. As described in 

the OATS Retirement Filing, the Plan 

Processor must be able to create the 

lifecycle between orders routed between 

broker-dealers. FINRA proposed that at 

least a 95% pre-correction and 98% 

post-correction aggregate match rate be 

achieved for orders routed between two 

Industry Member Reporters. FINRA has 

determined that during the applicable 

period there was a 99.08% precorrection and 99.84% post-correction 

aggregate match rate for orders routed 

between two Industry Member 

Reporters. 

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 orderrelated linkages to capture an overall 

snapshot of order linkages in the CAT.15

FINRA proposed that there be at least a 

95% pre-correction and 98% postcorrection rate for order linkages that 

are required in Phase 2a. FINRA has 

determined that during the applicable 

period there was a 99.66% precorrection and 99.93% post-correction 

rate for order linkages required in Phase 

2a.16

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 proposed at least a 95% 

precorrection and 98% post-correction 

aggregate match rate across all equity 

exchanges 17 for orders routed from 

Industry Members to an exchange and, 

for over-the-counter executions, the 

same match rate for orders linked to 

trade reports. FINRA determined that, 

during the applicable period, there was 

a 99.51% pre-correction and 99.87% 

post-correction aggregate match rate 

across all equity exchanges for orders 

routed from Industry Members to an 

exchange and, for over-the-counter 

executions, there was a 99.34% precorrection and 99.53% post-correction 

rate for orders linked to trade reports 

submitted to the FINRA Trade Reporting 

Facilities and OTC Reporting Facility. 

As set forth above, the error rates for 

Industry Member reporting over the 

applicable period were well below the 

maximum rates established in the OATS 

Retirement Filing. FINRA also noted 

that the overall post-correction error rate 

for Phase 2a Industry Member reporting 

of 1.01% is comparable to the current 

overall OATS post-correction error rate, 

which generally is at or slightly below 

1%. Therefore, FINRA has determined 

that, based on the error rates for 

Industry Member reporting, the CAT 

Data meets the accuracy and reliability 

baseline standards required for OATS 

retirement. 

(2) FINRA’s Use of CAT Data 

In the OATS Retirement Filing, 

FINRA stated that while error rates are 

a key standardized measure in 

determining whether OATS retirement 

is appropriate, FINRA’s use of the data 

in the CAT also 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 includes all 

data necessary to allow FINRA to 

continue to meet its surveillance 

obligations, 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. 

In the OATS Retirement Filing, 

FINRA stated that it has been planning 

for OATS retirement for several years 

and the necessary development work 

has been underway for some time. 

FINRA also has been analyzing and 

testing production CAT Data for 

purposes of transitioning its automated 

equity surveillance patterns since the 

commencement of Phase 2a Industry 

Member reporting in June 2020 and 

through subsequent CAT milestone 

releases. For example, in addition to 

quantitative reviews, such as the error 

rate statistics discussed above, FINRA 

has conducted a series of qualitative 

reviews of Industry Member CAT Data. 

Such reviews include, among other 

things, comparing the count and 

distribution of Industry Member event 

reporting through CAT versus OATS 

(e.g., new order and execution events, 

and data elements such as buy/sell/sell 

short codes), and reviewing results of 

examinations, alert reviews, and 

investigations relating to the timeliness 

and accuracy of Industry Member 

reporting. Based on such qualitative 

data reviews, FINRA has concluded that 

Industry Member CAT Data, in the 

aggregate, is a sufficient replacement for 

OATS for purposes of FINRA’s 

surveillance program. 

As discussed in the OATS Retirement 

Filing, today, FINRA’s surveillance 

patterns rely on the cross-market data 

model (‘‘CMDM’’), which comprises 

linked OATS data, equity exchange data 

feeds from each of the exchanges with 

Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Notices 52281 

18FINRA’s Response to Comments noted this 

dependency, stating that the process of 

transitioning FINRA’s surveillance patterns to CAT 

Data necessarily includes, among other things, 

ingestion of all Industry Member and Plan 

Participant data and linkages in CAT format. See 

Response to Comments, supra note 8, at 4[sic]. The 

Response to Comments further noted that the Plan 

Participants would be reporting to CAT via another 

mechanism until April 2021. 

19For example, according to the CAT Reporting 

Technical Specification for Plan Participants 

(version 4.0.0–r4 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-ReportingTechnicalSpecifications-for-Participants-4.0.0-r4.pdf. 

20FINRA notes that additional POD releases are 

scheduled; however, these releases introduce minor 

enhancements to POD, as opposed to significant 

changes that would impact the way data is ingested 

or processed in POD. 

21FINRA notes that user acceptance testing is the 

final stage of any software development life cycle 

and enables actual users to test the system to 

confirm that it is able to carry out the required tasks 

it was designed to address in real-world situations. 

22See, e.g., CAT Q1 2021 Quarterly Progress 

Report dated April 30, 2021, available at 

www.catnmsplan.com/sites/default/files/2021-05/ 

CAT-Q1-2021-QPR.pdf. 

23FINRA notes that the CAT uses the same code 

in both the test and production environments. 

Thus, FINRA believes that linkages in the test 

environment are reliable indicators of linkages in 

the production environment. 

which FINRA has entered into a RSA, 

and transactions reported to FINRA’s 

equity trade reporting facilities. The 

CMDM will be retired and replaced by 

a newly created surveillance data mart, 

the Pattern Optimized Datamart 

(‘‘POD’’), which incorporates both 

equities and options data. At that point, 

FINRA’s patterns will rely on CAT Data 

in POD, i.e., Plan Participant and 

Industry Member data reported in CAT 

format and linked by CAT.18 FINRA 

notes that the Plan Participants 

transitioned to reporting via the CAT 

technical specification as of April 26, 

2021, and full Plan Participant equities 

reporting and linkage validations in 

accordance with the CAT specification 

commenced on June 1, 2021.19

Successful completion of the transition 

to the CAT specification for Plan 

Participants is a prerequisite for FINRA 

to retire the CMDM and leverage CAT 

Data and linkages in POD for its 

surveillance patterns. As of the date of 

this filing, 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.20 FINRA 

anticipates completing additional 

activities before the proposed OATS 

retirement date, including, e.g., planned 

user acceptance testing.21

As discussed in the OATS Retirement 

Filing, FINRA has performed broad 

analysis of its equity surveillance 

patterns and has determined that all of 

the data required to support the 

transition is available in CAT. By 

mapping OATS data to Industry 

Member CAT Data in POD, FINRA has 

confirmed that CAT Data has equivalent 

analogs to all data elements in OATS. In 

that regard, FINRA notes that, as a Plan 

Participant, FINRA has been involved in 

CAT development efforts to ensure that 

the scope and features of Industry 

Member data and processed output are 

sufficient for FINRA’s surveillance 

program. These efforts include, for 

example, developing and updating the 

Industry Member Technical 

Specifications and Reporting Scenarios, 

conducting OATS–CAT gap analyses 

and validating that all such gaps have 

been properly addressed, and 

performing OATS-to-CAT field-level 

mappings. 

With respect to Plan Participant data, 

FINRA notes in the OATS Retirement 

Filing that the test environment for Plan 

Participant reporting in accordance with 

the CAT specification opened on 

February 15, 2021.22 Plan Participant 

equity reporting in accordance with the 

CAT specification in the test 

environment had a very high 

compliance rate for data ingestion and 

validation, and compliance in the 

production environment is comparable. 

In addition, starting on April 26, 2021, 

CAT began linking copies of Industry 

Member and Plan Participant data 

reported via the CAT specification in a 

test environment, and at that point, 

FINRA began its evaluation of the 

quality of these linkages. Based on this 

review and evaluation, in the OATS 

Retirement Filing, FINRA stated that it 

believes that the linkages between Plan 

Participant data and Industry Member 

data in CAT are comparable to the 

linkages between RSA exchange data 

and OATS data in the CMDM today.23

FINRA CAT and the Plan Participants 

have now met the necessary criteria for 

a full cutover from the RSA 

specification to the CAT specification, 

including, e.g., achieving comparable 

data ingestion validation and intervenue linkage rates (within a variance of 

under one percent) between RSA and 

CAT specification submissions. 

Accordingly, the Operating Committee 

approved the cutover from the RSA 

specification to the CAT specification as 

the official source of Plan Participant 

data as of June 1, 2021, and today, all 

Industry Member and Plan Participant 

equities data reported via the CAT 

specification is linked in the CAT 

production environment. 

As discussed in the OATS Retirement 

Filing, FINRA continues to evaluate 

CAT Data quality, and in particular, 

linkages between Industry Member and 

Plan Participant data, and to test its 

surveillance patterns to run on CAT 

Data in POD. In that regard, FINRA 

notes that it has followed established 

and time-tested processes and protocols 

throughout the development process to 

ensure that its patterns will perform as 

expected and produce the necessary 

output using CAT Data following the 

retirement of OATS. For example, 

FINRA’s Software Development 

Lifecycle (‘‘SDLC’’) procedures govern 

systems design, changes, testing and 

controls. The SDLC procedures are an 

essential component of FINRA’s 

operations and have been developed to 

serve FINRA’s unique regulatory needs 

and structure. Additionally, consistent 

with SEC Regulation SCI, FINRA 

procedures include a plan of 

coordination and communication with 

regulatory staff. By relying on these 

established processes and protocols, 

FINRA has confidence that the CAT 

Data and linkages are reliable and 

sufficient to run FINRA’s surveillance 

patterns. 

Based on these results, as well as the 

results of its quantitative and qualitative 

reviews of CAT Data and successful 

efforts integrating CAT Data into POD, 

in the OATS Retirement Filing, FINRA 

stated that it believes that the complete 

portfolio of equity surveillance patterns 

will be capable of consuming CAT Data 

and achieving comparable (or better) 

output results. 

Thus, FINRA proposes to retire OATS 

in accordance with the schedule set 

forth herein. FINRA will run its 

surveillance patterns for review periods 

through the end of the second quarter of 

2021 using OATS data and begin 

using—and be fully reliant on—CAT 

Data for its surveillance patterns for 

review periods beginning in the third 

quarter of 2021. Following the 

retirement of OATS, FINRA expects to 

maintain the current established 

cadence of its monthly, quarterly and 

semi-annual surveillance patterns. In 

addition, FINRA’s analytics platforms 

will have access to CAT Data as soon as 

such data is made available to 

regulators. Thus, outside of regularly 

scheduled surveillance pattern runs, 

FINRA can perform expedited analytics, 

as required by market events. 

As discussed in the OATS Retirement 

Filing, FINRA is finalizing the 

development and certification of its 

surveillance patterns to run on CAT 

Data on a rolling basis and, in 

52282 Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Notices 

24FINRA notes that FINRA CAT tracks known 

issues relating to Industry Member and Plan 

Participant reporting. See, e.g., catnmsplan.com/ 

CAT-Transaction-Known-Issues-List. FINRA 

regularly reviews and analyzes FINRA CAT’s list of 

current and resolved issues and does not believe 

that any of these issues would impact its ability to 

incorporate and use CAT Data in its surveillance 

program. 

25See CAT NMS Plan, Appendix D, Section 6.2. 

26See CAT NMS Plan, Appendix C, Section 

A.2(a). 

27See CAT NMS Plan, Appendix C, Section 

A.1(b). 

28See CAT NMS Plan, Section 6.10(c). 

29As discussed in the OATS Retirement Filing, 

OATS was originally proposed to fulfill one of the 

undertakings contained in an order issued by the 

Commission relating to the settlement of an 

enforcement action against FINRA (f/k/a National 

Association of Securities Dealers, Inc. (‘‘NASD’’)) 

for failure to adequately enforce its rules. See 

Securities Exchange Act Release No. 39729 (March 

6, 1998), 63 FR 12559 (March 13, 1998) (Order 

Approving File No SR–NASD–97–56) (‘‘OATS 

Approval Order’’); see also Securities Exchange Act 

Release No. 37538 (August 8, 1996); Administrative 

Proceeding File No. 3–9056 (‘‘SEC Order’’). In the 

OATS Approval Order, the Commission concluded 

that OATS satisfied the conditions of the SEC Order 

and was consistent with the Exchange Act. See 63 

FR 12559, 12566–67. FINRA believes that it will 

continue to be in compliance with the requirements 

of the SEC Order once the OATS Rules are deleted. 

30The Implementation Plan and Quarterly 

Progress Reports are available at 

www.catnmsplan.com/implementation-plan. 

accordance with its existing SDLC 

procedures, will run a month’s worth of 

data and compare the output before 

certifying each pattern. For those equity 

patterns that will be subject to 

certification after OATS retirement, 

FINRA anticipates that there would be 

sufficient time to identify and remediate 

any issues prior to running the patterns 

in accordance with the current 

established cadence. FINRA does not 

anticipate significant issues arising from 

additional scheduled POD releases or in 

the final stages of its pattern 

development and certification efforts. 

As discussed in the OATS Retirement 

Filing, on an ongoing basis following 

the retirement of OATS, FINRA will 

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. Among other 

things, FINRA has a robust mechanism 

for detecting data issues, determining 

which issues are material for purposes 

of its surveillance program, and 

requesting resubmission and/or 

reprocessing of data, as necessary. 

FINRA also (1) performs a suite of data 

quality checks against data sourced from 

CAT to POD and against data processed 

by POD for use in surveillance patterns; 

(2) oversees a robust surveillance and 

examination compliance program that 

evaluates Industry Member reporting 

timeliness, data quality, and other 

issues and trends; (3) reviews CAT 

compliance program alerts using a rapid 

remediation process and formal reviews, 

as necessary; and (4) reviews Industry 

Member self-reporting and error 

correction trends. FINRA believes that 

these practices are sufficient for 

identification and timely resolution of 

Industry Member reporting and data 

issues after OATS has been retired. 

Specifically, with regard to the 

additional standards approved in the 

OATS Retirement Filing, through its use 

of CAT Data to date, as described above, 

FINRA believes that these standards 

have been satisfied. With respect to the 

first factor, 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) 24 that would impact 

FINRA’s ability to incorporate and use 

CAT Data in FINRA’s surveillance 

program. 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+5.25 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+5.26

Additionally, after ingestion by the 

Central Repository, the raw unprocessed 

data must be transformed into a format 

appropriate for data querying and 

regulatory output.27 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.28 FINRA’s use of the CAT Data 

has not uncovered any processing 

delays or other material issues 

impacting the availability of, and 

FINRA’s access to, the data. 

With respect to the second factor, 

FINRA stated in the OATS Retirement 

Filing that it 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.29 As noted above, Phase 2a 

Data includes all events and scenarios 

covered by OATS and is the most 

relevant for OATS retirement purposes. 

FINRA Rule 7440 describes the OATS 

requirements for recording information, 

which includes information related to 

the receipt or origination of orders, 

order transmittal, and order 

modifications, cancellations and 

executions. Large Industry Members and 

Small Industry Members that currently 

are reporting to OATS were required to 

submit data to the CAT for these same 

events and scenarios commencing in 

Phase 2a. FINRA’s 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 

FINRA’s surveillance program. 

With respect to the third factor, 

FINRA stated in the OATS Retirement 

Filing that it 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, 2020.30

Based on the foregoing, FINRA has 

determined that the CAT meets the 

accuracy and reliability standards 

approved by the Commission in the 

OATS Retirement Filing for purposes of 

eliminating the OATS Rules. FINRA has 

determined to retire OATS and remove 

the OATS rules from its rulebook 

effective September 1, 2021. 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 7450(b)(3), for which OATS will 

accept order events and perform routine 

Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Notices 52283 

31 15 U.S.C. 78f(b). 

32 15 U.S.C. 78f(b)(5). 

33Appendix C of CAT NMS Plan, Approval Order 

at 85010. 

34 Id. 

35Approval Order at 84697. 

36 15 U.S.C. 78s(b)(3)(A)(iii). 

37 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6) requires a self-regulatory organization to give 

the Commission written notice of its intent to file 

the proposed rule change at least five business days 

prior to the date of filing of the proposed rule 

change, or such shorter time as designated by the 

Commission. The Exchange has satisfied this 

requirement. 

38 17 CFR 240.19b–4(f)(6). 

39 17 CFR 240.19b–4(f)(6)(iii). 

40For purposed only of waiving the 30-day 

operative delay, the Commission has considered the 

proposed rule’s impact on efficiency, competition, 

and capital formation. See 15 U.S.C. 78c(f). 

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. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

Section 6(b) of the Act,31 in general, and 

furthers the objectives of Section 6(b)(5) 

of the Act,32 in particular, because it is 

designed to prevent fraudulent and 

manipulative acts and practices, 

promote just and equitable principles of 

trade, to foster cooperation and 

coordination with persons engaged in 

regulating, clearing, settling, processing 

information with respect to, and remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system, and, in 

general, to protect investors and the 

public interest. 

In particular, the Exchange believes 

that the proposed rule change is 

consistent with Section C.9 of Appendix 

C to the Plan, which requires each 

Participant to ‘‘file with the SEC the 

relevant rule change filing to eliminate 

or modify its duplicative rules within 

six (6) months of the SEC’s approval of 

the CAT NMS Plan.’’ 33 The Plan notes 

that ‘‘the elimination of such rules and 

the retirement of such systems [will] be 

effective at such time as CAT Data meets 

minimum standards of accuracy and 

reliability.’’ 34 Accordingly, the 

Exchange believes the proposed rule 

change implements, supports, interprets 

or clarifies the provisions of the Plan, 

and is designed to assist the Exchange 

and its members in meeting regulatory 

obligations pursuant to, and milestones 

established by, the Plan. In approving 

the Plan, the SEC noted that it ‘‘is 

necessary and appropriate in the public 

interest, for the protection of investors 

and the maintenance of fair and orderly 

markets, to remove impediments to, and 

perfect the mechanism of a national 

market system, or is otherwise in 

furtherance of the purposes of the 

Act.’’ 35 To the extent that this proposal 

implements, interprets or clarifies the 

Plan and applies specific requirements 

to members, the Exchange believes that 

this proposal furthers the objectives of 

the Plan, as identified by the SEC, and 

is therefore consistent with the Act. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. The 

proposed change is not designed to 

address any competitive issue but rather 

implement provisions of the CAT NMS 

Plan, and is designed to assist the 

Exchange in meeting its regulatory 

obligations pursuant to the Plan. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were solicited 

or received with respect to the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing proposed rule 

change does not: (i) Significantly affect 

the protection of investors or the public 

interest; (ii) impose any significant 

burden on competition; and (iii) become 

operative for 30 days from the date on 

which it was filed, or such shorter time 

as the Commission may designate, it has 

become effective pursuant to Section 

19(b)(3)(A)(iii) of the Act 36 and 

subparagraph (f)(6) of Rule 19b–4 

thereunder.37 The proposed rule change 

would not significantly affect the 

protection of investors or the public 

interest because it seeks to delete the 

Exchange’s OATS rules to be consistent 

with FINRA’s retirement of its OATS 

rules. The Exchange further believes 

that the proposed rule change would not 

impose any significant burden on 

competition because the proposed rule 

change is not designed to address any 

competitive issue but rather implements 

provisions of the CAT NMS Plan, and is 

designed to assist the Exchange in 

meeting its regulatory obligations 

pursuant to the Plan. 

A proposed rule change filed under 

Rule 19b–4(f)(6) 38 normally does not 

become operative prior to 30 days after 

the date of the filing. However, pursuant 

to Rule 19b–4(f)(6)(iii),39 the 

Commission may designate a shorter 

time if such action is consistent with the 

protection of investors and the public 

interest. The Exchange has asked the 

Commission to waive the 30-day 

operative delay so that the proposal may 

become operative immediately upon 

filing. As noted above, the Exchange 

believes that the OATS reporting 

requirements of the Rule 7400 Series are 

duplicative of information available in 

the CAT and thus will no longer be 

necessary now that the CAT is 

operational. The Commission believes 

that it is consistent with the protection 

of investors and the public interest for 

the Exchange to delete its OATS 

reporting because FINRA has retired 

OATS. Accordingly, the Commission 

hereby waives the 30-day operative 

delay and designates the proposal 

operative upon filing.40

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

should be approved or disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

NYSEAMER–2021–38 on the subject 

line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

52284 Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Notices 

41 17 CFR 200.30–3(a)(12). 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–NYSEAMER–2021–38. This 

file number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

internet website (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549, on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of the 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–NYSEAMER–2021–38, and 

should be submitted on or before 

October 12, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.41

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–20216 Filed 9–17–21; 8:45 am] 

BILLING CODE 8011–01–P 

SMALL BUSINESS ADMINISTRATION 

[Disaster Declaration #17176 and #17177; 

ARIZONA Disaster Number AZ–00074] 

Presidential Declaration of a Major 

Disaster for Public Assistance Only for 

the State of Arizona 

AGENCY: U.S. Small Business 

Administration. 

ACTION: Notice. 

SUMMARY: This is a Notice of the 

Presidential declaration of a major 

disaster for Public Assistance Only for 

the State of Arizona (FEMA–4620–DR), 

dated 09/13/2021. 

Incident: Severe Storms and Flooding. 

Incident Period: 07/22/2021 through 

07/24/2021. 

DATES: Issued on 09/13/2021. 

Physical Loan Application Deadline 

Date: 11/12/2021. 

Economic Injury (EIDL) Loan 

Application Deadline Date: 06/13/2022. 

ADDRESSES: Submit completed loan 

applications to: U.S. Small Business 

Administration, Processing and 

Disbursement Center, 14925 Kingsport 

Road, Fort Worth, TX 76155. 

FOR FURTHER INFORMATION CONTACT: A. 

Escobar, Office of Disaster Assistance, 

U.S. Small Business Administration, 

409 3rd Street SW, Suite 6050, 

Washington, DC 20416, (202) 205–6734. 

SUPPLEMENTARY INFORMATION: Notice is 

hereby given that as a result of the 

President’s major disaster declaration on 

09/13/2021, Private Non-Profit 

organizations that provide essential 

services of a governmental nature may 

file disaster loan applications at the 

address listed above or other locally 

announced locations. 

The following areas have been 

determined to be adversely affected by 

the disaster: 

Primary Counties: Apache, Coconino, 

Navajo. 

The Interest Rates are: 

Percent 

For Physical Damage: 

Non-Profit Organizations with 

Credit Available Elsewhere ... 2.000 

Non-Profit Organizations without Credit Available Elsewhere ..................................... 2.000 

For Economic Injury: 

Non-Profit Organizations without Credit Available Elsewhere ..................................... 2.000 

The number assigned to this disaster 

for physical damage is 17176 6 and for 

economic injury is 17177 0. 

(Catalog of Federal Domestic Assistance 

Number 59008) 

James Rivera, 

Associate Administrator for Disaster 

Assistance. 

[FR Doc. 2021–20208 Filed 9–17–21; 8:45 am] 

BILLING CODE 8026–03–P 

SURFACE TRANSPORTATION BOARD 

[Docket No. EP 670 (Sub-No. 3)] 

Renewal of Rail Energy Transportation 

Advisory Committee 

AGENCY: Surface Transportation Board. 

ACTION: Notice of intent to renew 

charter. 

SUMMARY: In accordance with the 

Federal Advisory Committee Act, notice 

is hereby given that the Surface 

Transportation Board (Board) intends to 

renew the charter of the Rail Energy 

Transportation Advisory Committee 

(RETAC). 

ADDRESSES: A copy of the charter is 

available on the Board’s website at 

https://prod.stb.gov/resources/ 

stakeholder-committees/retac/. 

FOR FURTHER INFORMATION CONTACT: 

Kristen Nunnally, Designated Federal 

Officer, at (202) 245–0312. Assistance 

for the hearing impaired is available 

through the Federal Relay Service at 

(800) 877–8339. 

SUPPLEMENTARY INFORMATION: RETAC 

was established by the Board on 

September 24, 2007, to provide advice 

and guidance to the Board, on a 

continuing basis, and to provide a forum 

for the discussion of emerging issues 

and concerns regarding the 

transportation by rail of energy 

resources, including, but not necessarily 

limited to, coal and biofuels (such as 

ethanol), and petroleum. RETAC 

functions solely as an advisory body 

and complies with the provisions of the 

Federal Advisory Committee Act 

(FACA), 5 U.S.C. app., and its 

implementing regulations. 

RETAC consists of approximately 25 

voting members, excluding the 

governmental representatives. The 

membership comprises a balanced 

representation of individuals 

experienced in issues affecting the 

transportation of energy resources, 

including no fewer than: Five 

representatives from the Class I 

railroads; three representatives from 

Class II and III railroads; three 

representatives from coal producers; 

five representatives from electric 

utilities (including at least one rural 

electric cooperative and one state- or 

municipally-owned utility); four 

representatives from biofuel feedstock 

growers or providers and biofuel 

refiners, processors, and distributors; 

two representatives from private car 

owners, car lessors, or car 

manufacturers; and one representative 

from the petroleum shipping industry. 

The Committee may also include up to 

two members with relevant experience