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the proposed rule change will require particularly in the context of aftermarket SECURITIES AND EXCHANGE all Primary Direct Floor Listings to be securities purchases. Purchasers in a COMMISSION registered under the Securities Act, and registered offering may face difficulty [Release No. 34–89679; File No. SR–FINRA– in light of the fact that the existing tracing their shares back to the 2020–024] liability framework under the Securities registration statement whenever a Act for registered offerings will apply to company conducts a registered offering Self-Regulatory Organizations; all such Primary Direct Floor Listings, for less than all of its shares. Thus, even Financial Industry Regulatory the Commission concludes the proposed in the context of traditional firm Authority, Inc.; Notice of Filing of a rule change is consistent with investor commitment offerings, the ability of Proposed Rule Change To Delete the protection. existing shareholders who meet the FINRA Order Audit Trail System The Commission further believes that conditions of Rule 144 to sell shares on (OATS) Rules Primary Direct Floor Listings may an unregistered basis may result in provide benefits to existing and August 26, 2020. potential investors, relative to firm concurrent registered and unregistered Pursuant to Section 19(b)(1) of the commitment underwritten offerings. sales of the same class of security at the Securities Exchange Act of 1934 First, because the securities to be issued time of an exchange listing, leading to (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 by the company in connection with a difficulties tracing purchases back to the notice is hereby given that on August Primary Direct Floor Listing would be registered offering.81 Although judicial 14, 2020, Financial Industry Regulatory allocated based on matching buy and precedent on this topic may continue to Authority, Inc. (‘‘FINRA’’) filed with the sell orders, in accordance with the evolve, the Commission is aware of only Securities and Exchange Commission proposed rules, some investors may be one court that has considered this issue (‘‘SEC’’ or ‘‘Commission’’) the proposed able to purchase securities in a Primary in the direct listing context to date, and rule change as described in Items I, II, Direct Floor Listing who might not that court ruled in favor of allowing the and III below, which Items have been otherwise receive an initial allocation in plaintiffs to pursue Section 11 claims.82 prepared by FINRA. The Commission is a firm commitment underwritten The Commission does not believe that publishing this notice to solicit offering. The proposed rule change the proposed rule change to permit comments on the proposed rule change therefore has the potential to broaden Primary Direct Floor Listings poses a from interested persons. the scope of investors that are able to heightened risk to investors, and finds I. Self-Regulatory Organization’s purchase securities in an initial public that the proposed rule change is Statement of the Terms of Substance of offering, at the initial public offering consistent with investor protection. the Proposed Rule Change price, rather than in aftermarket trading. For the reasons discussed above, the Second, because the price of securities FINRA is proposing to eliminate the issued by the company in a Primary Commission finds that the proposed Order Audit Trail System (‘‘OATS’’) Direct Floor Listing will be determined rule change, as modified by Amendment rules in the FINRA Rule 7400 Series and based on market interest and the No. 2, is consistent with the Exchange FINRA Rule 4554 (Alternative Trading matching of buy and sell orders, some Act. Systems—Recording and Reporting Requirements of Order and Execution believe that Primary Direct Floor IV. Conclusion Listings may be a more accurate way to Information for NMS Stocks) once price securities offerings.80 In a firm It is therefore ordered, pursuant to members are effectively reporting to the commitment underwritten offering, the Section 19(b)(2) of the Exchange Act,83 consolidated audit trail (‘‘CAT’’) and the offering price is decided through that the proposed rule change (SR– CAT’s accuracy and reliability meet negotiations between the issuer and the NYSE–2019–67), as modified by certain standards, as described below. underwriters for the offering. The Amendment No. 2 thereto, be, and it The Rule 7400 Series and Rule 4554 are collectively referred to herein as the opening auction in a Primary Direct hereby is, approved. Floor Listing provides for a different ‘‘OATS Rules.’’ price discovery method for initial public For the Commission, by the Division of The text of the proposed rule change offerings which some believe may result Trading and Markets, pursuant to delegated is available on FINRA’s website at authority.84 in more appropriate pricing for the http://www.finra.org, at the principal offered shares, a potential benefit to Jill M. Peterson, office of FINRA and at the existing and potential investors. The Assistant Secretary. Commission’s Public Reference Room. Commission believes that the proposed [FR Doc. 2020–19203 Filed 8–31–20; 8:45 am] II. Self-Regulatory Organization’s rule change, by providing an opening BILLING CODE 8011–01–P Statement of the Purpose of, and process in which buy and sell orders are Statutory Basis for, the Proposed Rule matched, in accordance with the Change proposed rules, to determine the In its filing with the Commission, offering price, may allow for efficiencies FINRA included statements concerning in the way IPOs are priced and allocated the purpose of and basis for the without sacrificing investor protection. proposed rule change and discussed any Commenters also raised concerns comments it received on the proposed about shareholder claims pursuant to rule change. The text of these statements Section 11 of the Securities Act. The may be examined at the places specified Commission notes that this issue is not 81 In a Primary Direct Floor Listing, all company in Item IV below. FINRA has prepared exclusive to Primary Direct Floor shares will be sold in the opening auction, making summaries, set forth in sections A, B, Listings but rather is a recurring issue, it potentially easier to trace those shares back to the registration statement than in other contexts. and C below, of the most significant 82 See Pirani v. Slack Techs., Inc., 2020 U.S. Dist. aspects of such statements. 80 See Matt Levine, Soon Direct Listings Will LEXIS 70177 (N.D. Cal., April 21, 2020). Raise Money, Bloomberg, available at https:// www.bloomberg.com/opinion/articles/2019-11-27/ 83 15 U.S.C. 78s(b)(2). 1 15 U.S.C. 78s(b)(1). soon-direct-listings-will-raise-money. 84 17 CFR 200.30–3(a)(12). 2 17 CFR 240.19b–4.

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A. Self-Regulatory Organization’s Section C.9. of Appendix C to the Plan, two years after the Effective Date would Statement of the Purpose of, and as modified by the Commission, facilitate a more expeditious retirement Statutory Basis for, the Proposed Rule requires each Participant to ‘‘file with of duplicative systems; and Change the SEC the relevant rule change filing (iii) whether individual Industry to eliminate or modify its duplicative Members can be exempted from 1. Purpose rules within six (6) months of the SEC’s reporting to duplicative systems once (a) Background approval of the CAT NMS Plan.’’ 12 The their CAT reporting meets specified FINRA and the national securities Plan notes that ‘‘the elimination of such accuracy and reliability standards, exchanges (collectively, the rules and the retirement of such [sic] including, but not limited to, ways in ‘‘Participants’’) 3 filed with the systems [will] be effective at such time which establishing cross-system Commission, pursuant to Section 11A of as CAT Data meets minimum standards regulatory functionality or integrating the Exchange Act 4 and Rule 608 of of accuracy and reliability.’’ 13 Finally, data from existing systems and the CAT Regulation NMS thereunder,5 the the Plan requires the rule filing to would facilitate such Individual National Market System Plan Governing discuss the following: Industry Member exemptions.15 the Consolidated Audit Trail (the ‘‘CAT (i) Specific accuracy and reliability In response to these requirements, the NMS Plan’’ or ‘‘Plan’’).6 The standards that will determine when proposed rule change deletes the OATS 16 Participants filed the Plan to comply duplicative systems will be retired, Rules from the FINRA rulebook. The with Rule 613 of Regulation NMS under including, but not limited to, whether proposed rule change will be the Exchange Act.7 The Plan was the attainment of a certain Error Rate implemented once the CAT achieves the published for comment in the Federal should determine when a system specific accuracy and reliability Register on May 17, 2016,8 and duplicative of the CAT can be retired; standards described below and FINRA approved by the Commission, as (ii) whether the availability of certain has determined that its usage of the CAT 14 modified, on November 15, 2016.9 On data from Small Industry Members Data has not revealed material issues March 15, 2017, the Commission that have not been corrected, confirmed 12 approved the FINRA Rule 6800 Series to In compliance with this requirement, in May that the CAT includes all data necessary 2017, FINRA filed a proposed rule change to to allow FINRA to continue to meet its implement provisions of the CAT NMS eliminate the OATS Rules and amend FINRA’s Plan that are applicable to FINRA electronic blue sheet (‘‘EBS’’) rules, Rules 8211 and surveillance obligations and confirmed members.10 8213 (‘‘original proposal’’). See Securities Exchange that the Plan Processor is sufficiently The CAT NMS Plan is intended to Act Release No. 80783 (May 26, 2017), 82 FR 25423 meeting its obligations under the CAT (June 1, 2017) (Notice of Filing of File No. SR– NMS Plan relating to the reporting and create, implement and maintain a FINRA–2017–013). FINRA filed an amendment to consolidated audit trail that will capture the original proposal on August 25, 2017. See linkage of Phase 2a Industry Member in a single consolidated data source Securities Exchange Act Release No. 81499 (August Data, which as discussed further below, 30, 2017), 82 FR 42168 (September 6, 2017). The will replicate what is in OATS today.17 customer and order event information original proposal was subsequently withdrawn but for orders in NMS Securities and OTC provided similar views and mechanisms for Equity Securities, across all markets, eliminating the OATS Rules as this proposed rule As used herein, the term ‘‘Small Industry Member’’ includes Introducing Industry Members from the time of order inception through change does and, as noted above, also proposed to amend the EBS rules. See Securities Exchange Act in accordance with the Introducing Brokers routing, cancellation, modification or Release No. 82524 (January 17, 2018), 83 FR 3239 Exemptive Order. execution.11 Among other things, (January 23, 2018) (Notice of Withdrawal of File No. 15 See CAT NMS Plan, Appendix C, Section C.9. SR–FINRA–2017–013). 16 FINRA is considering whether there are 3 For a complete list of Participants, see Exhibit FINRA notes that the current filing addresses additional FINRA rules that can be deleted or A to the Limited Liability Company Agreement of only the elimination of the OATS Rules. Proposed amended, as necessary, upon the implementation of Consolidated Audit Trail, LLC, available at amendments to the EBS rules would be subject to CAT, e.g., trade reporting rules requiring the www.catnmsplan.com/sites/default/files/2020-07/ a separate FINRA rule filing made in conjunction submission of ‘‘non-tape’’ regulatory reports LLC-Agreement-of-Consolidated-Audit-Trail-LLC- with SEC rulemaking to amend Rule 17a–25 under relating to riskless principal and agency as-of-7.24.20.pdf. the Exchange Act. 17 CFR 240.17a–25. transactions (Rules 6282, 6380A, 6380B and 6622), 4 15 U.S.C. 78k–1. 13 See CAT NMS Plan, Appendix C, Section C.9. Rule 6431 (Recording of Quotation Information) and Rule 4590 (Synchronization of Member Business 5 17 CFR 242.608. 14 As noted in footnote 6, unless otherwise Clocks). Such proposed changes would be subject 6 specified, capitalized terms used in this rule filing See Letter from the Participants to Brent J. to a separate rule filing with the SEC. Fields, Secretary, Commission, dated September 30, are defined as set forth in the CAT Compliance Rule In addition, FINRA notes that there are multiple 2014; and Letter from Participants to Brent J. Fields, Series or in the CAT NMS Plan. ‘‘Small Industry rules throughout the FINRA rulebook that cross- Secretary, Commission, dated February 27, 2015. Member’’ is defined in FINRA Rule 6810(nn) as an reference or otherwise incorporate some or all of the On December 24, 2015, the Participants submitted Industry Member that qualifies as a small broker- OATS Rules. If the Commission approves the an amendment to the CAT NMS Plan. See Letter dealer as defined in SEA Rule 0–10(c). On April 20, proposed rule change, FINRA would file a proposed from Participants to Brent J. Fields, Secretary, 2020, the Commission granted exemptive relief rule change to delete or amend, as applicable, the Commission, dated December 23, 2015. from certain provisions of the CAT NMS Plan references to the OATS Rules before the Unless otherwise specified, capitalized terms related to broker-dealers that do not qualify as Small Industry Members solely because such amendments in the current proposed rule change used in this rule filing are defined as set forth in are implemented. the CAT Compliance Rule Series or in the CAT broker-dealers satisfy Rule 0–10(i)(2) under the 17 FINRA notes that OATS was originally NMS Plan. Exchange Act in that they introduce transactions on a fully disclosed basis to clearing firms that are not proposed to fulfill one of the undertakings 7 17 CFR 242.613. small businesses or small organizations (referred to contained in an order issued by the Commission 8 See Securities Exchange Act Release No. 77724 as ‘‘Introducing Industry Members’’). Specifically, relating to the settlement of an enforcement action (April 27, 2016), 81 FR 30614 (May 17, 2016). the Commission provided exemptive relief from against FINRA (f/k/a National Association of 9 See Securities Exchange Act Release No. 79318 requiring Introducing Industry Members to comply Securities Dealers, Inc. (‘‘NASD’’)) for failure to (November 15, 2016), 81 FR 84696 (November 23, with the requirements of the CAT NMS Plan that adequately enforce its rules. See Securities 2016) (‘‘Approval Order’’). apply to Industry Members other than Small Exchange Act Release No. 39729 (March 6, 1998), 10 See Securities Exchange Act Release No. 80255 Industry Members (‘‘Large Industry Members’’), 63 FR 12559 (March 13, 1998) (Order Approving (March 15, 2017), 82 FR 14563 (March 21, 2017) provided that the Participants require such File No SR–NASD–97–56) (‘‘OATS Approval (Order Approving File No. SR–FINRA–2017–003). Introducing Industry Members to comply with the Order’’); see also Securities Exchange Act Release See also Securities Exchange Act Release No. 89119 requirements of the CAT NMS Plan that apply to No. 37538 (August 8, 1996); Administrative (June 22, 2020), 85 FR 38468 (June 26, 2020) (Notice Small Industry Members. See Securities Exchange Proceeding File No. 3–9056 (‘‘SEC Order’’). In the of Filing and Immediate Effectiveness of File No. Act Release No. 88703 (April 20, 2020), 85 FR OATS Approval Order, the Commission concluded SR–FINRA–2020–018). 23115 (April 24, 2020) (Order Granting Limited that OATS satisfied the conditions of the SEC Order 11 See, e.g., Securities Exchange Act Release No. Exemptive Relief Related to Certain Introducing and was consistent with the Exchange Act. See 63 67457 (July 18, 2012), 77 FR 45722, 45723 (August Brokers From the Requirements of the CAT NMS FR at 12566–67. As noted, the Plan is designed to 1, 2012). Plan) (the ‘‘Introducing Brokers Exemptive Order’’). create, implement and maintain a CAT that would

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(b) Specific Accuracy and Reliability a 5% error rate alone would ensure a non-compliance rates following major Standards sufficient level of data accuracy and releases have been temporary and did The first issue the Plan requires the reliability for purposes of surveillance not result in a degradation of FINRA’s proposed rule change to discuss is and investigations, and as noted above, surveillance capabilities. With ‘‘specific accuracy and reliability the expectation is that error rates after experience over time, the OATS standards that will determine when reprocessing of error corrections also compliance rates have dramatically duplicative systems will be retired, must be de minimis. Accordingly, improved and, as noted above, the post- including, but not limited to, whether FINRA believes that, when assessing the correction error rate is generally at or the attainment of a certain Error Rate accuracy and reliability of the data for below 1% today. FINRA anticipates that should determine when a system the purposes of retiring OATS, the error this will be the case with respect to CAT duplicative of the CAT can be thresholds should be measured in more reporting, which is anticipated to be retired.’’ 18 FINRA believes that relevant granular ways and should also include more complex and new to some firms maximum error rates of post-correction error rates are the primary, but not the and therefore more likely to contain data, which represents the data most sole, metric by which to determine the errors when initially reported. Thus, CAT’s accuracy and reliability and will likely to be used by FINRA to conduct surveillance. Although FINRA is FINRA believes that a 2% post- serve as the baseline requirement correction error rate strikes a reasonable needed before OATS can be retired. proposing to measure the appropriate error rates in the aggregate, rather than balance between the potential costs of As discussed in Section A.3(b) of retaining OATS and requiring Appendix C to the CAT NMS Plan, the firm-by-firm, FINRA believes that the error rates should be measured solely duplicative reporting by firms for a Participants established an initial Error longer period in order to achieve a Rate, as defined in the Plan, of 5% on for equity securities since options orders are not currently reported regularly or lower error rate and any potential initially submitted data (i.e., data as impact on FINRA’s surveillance submitted by a CAT Reporter before any included in OATS. capabilities, which FINRA anticipates required corrections are performed). The To ensure the CAT’s accuracy and would be temporary. Importantly and as Participants noted in the Plan that their reliability, FINRA is proposing that, expectation was that ‘‘error rates after before OATS could be retired, the CAT further discussed below, while error reprocessing of error corrections will be would generally need to achieve a rates are a key standardized measure in de minimis.’’ 19 The Participants based sustained error rate for Industry Member determining whether OATS retirement this Error Rate on their consideration of reporting in each of the categories below is appropriate, FINRA’s use of the data ‘‘current and historical OATS Error for a period of at least 180 days of 5% in the CAT also must confirm that there Rates, the magnitude of new reporting or lower, measured on a pre-correction are no material issues that have not been requirements on the CAT Reporters and or as-submitted basis, and 2% or lower corrected, the CAT includes all data on a post-correction basis (measured at necessary to allow FINRA to continue to the fact that many CAT Reporters may 22 have never been obligated to report data T+5). FINRA is proposing to measure meet its surveillance obligations and the to an audit trail.’’ 20 the 5% pre-correction and 2% post- Plan Processor is sufficiently meeting its FINRA agrees with the Participants’ correction thresholds by averaging the obligations under the CAT NMS Plan conclusion that a 5% pre-correction error rate across the period, not require relating to the reporting and linkage of threshold ‘‘strikes the balance of a 5% pre-correction and 2% post- Phase 2a Industry Member Data. As correction maximum each day for 180 adapting to a new reporting regime, such, even if maximum error rates are consecutive days. FINRA believes that while ensuring that the data provided to met, FINRA must evaluate and confirm regulators will be capable of being used measuring each of the thresholds over to conduct surveillance and market the course of 180 days will ensure that the CAT consistently meets minimum Phase III, which required manual orders to be reconstruction, as well as having a reported to OATS; (2) OATS for OTC Securities sufficient level of accuracy to facilitate accuracy and reliability thresholds for which required OTC equity securities to be reported the retirement of existing regulatory Industry Member reporting while also to OATS; and (3) OATS for NMS which required 21 ensuring that single-day measurements all NMS stocks to be reported to OATS. Each of reports and systems where possible.’’ these releases was accompanied by significant However, FINRA does not believe that do not unduly affect the overall measurements. updates to the required formats which required OATS reporters to update and test their reporting capture customer and order event information for Based on prior experience with systems and infrastructure. The CAT NMS Plan also orders in NMS Securities and OTC Equity OATS, FINRA believes that a 2% post- cites the combined average error rates for the time Securities, across all markets, from the time of order correction error rate is the appropriate periods immediately following release across five inception through routing, cancellation, maximum standard for purposes of significant categories for these three releases: The modification, or execution in a single consolidated average rejection percentage rate, representing order data source. FINRA has already adopted rules to retiring OATS. Currently, OATS non- events that did not pass systemic validations, was enforce compliance by its Industry Members, as compliance rates are lower than 2%— 2.42%. The average late percentage rate, applicable, with the provisions of the Plan. See generally at or slightly below 1%. representing order events not submitted in a timely Rule 6800 Series. However, compliance rates have not manner, was 0.36%. The average order/trade Once the CAT can replace OATS, FINRA believes always been at this level, particularly matching error rate, representing OATS Execution it will be appropriate to delete the OATS Rules that Reports unsuccessfully matched to a FINRA Facility were implemented to comply with the SEC Order. with the implementation of new OATS trade report was 0.86%. The average Exchange/ 23 FINRA will not transition from OATS to CAT until reporting requirements. These higher Route matching error rate, representing OATS its surveillance program is fully prepared for such Route Reports unsuccessfully matched to an transition. Accordingly, FINRA believes that it 22 The Plan requires that the Plan Processor must exchange order was 3.12%. Finally, the average would continue to be in compliance with the ensure that regulators have access to corrected and Interfirm Route matching error rate, representing requirements of the SEC Order once the OATS linked order and Customer data by 8:00 a.m. OATS Route Reports unsuccessfully matched to a Rules are deleted. Eastern Time on T+5. See CAT NMS Plan, report representing the receipt of the route by 18 See CAT NMS Plan, Appendix C, Section C.9. Appendix C, Section A.2(a). another reporting entity was 2.44%. The Plan 19 See CAT NMS Plan, Appendix C, Section 23 As discussed in the CAT NMS Plan, the further notes that the error rates for the 1999 initial A.3(b), at note 102. Participants considered industry experience with OATS implementation were significantly higher 20 See CAT NMS Plan, Appendix C, Section OATS for purposes of determining the applicable (e.g., the initial rejection rates for OATS were 23% A.3(b). Error Rate for the CAT, noting that there have been and the late reporting rate was 2.79%). See CAT 21 See supra note 20. three major industry impacting releases: (1) OATS NMS Plan, Appendix C, Section A.3(b).

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that overall, there are no material issues type of report rejected.29 FINRA is example, linkages for representative and the data is accurate and reliable.24 proposing that, over the 180-day period, order scenarios involving agency FINRA is proposing to use error rates aggregate rejection rates (measured average price trades, net trades and in each of the following categories, solely for equities) must be no more aggregated orders will not be required measured solely for equities, to assess than 5% pre-correction or 2% post- until the third phase of reporting (or whether the threshold pre- and post- correction across all CAT Reporters. ‘‘phase 2c’’) is implemented in April correction error rates are being met: • 2021; such linkages are not required in • Intra-Firm Linkages. The Plan Rejection Rates and Data requires that ‘‘the Plan Processor must OATS today. FINRA is proposing that Validations. FINRA has reviewed the be able to link all related order events there be at least a 95% pre-correction data validations for the CAT, which are from all CAT Reporters involved in the and 98% post-correction rate for order set forth in the Industry Member lifecycle of an order.’’ 30 At a minimum, linkages that are required in phase 2a. Technical Specifications published by FINRA notes that in phase 2a, linkage 25 this requirement includes the creation the Plan Processor, and confirmed that of an order lifecycle between ‘‘[a]ll order is required between the representative they are substantially similar to OATS. events handled within an individual street side order and the order being While not required to be designed the CAT Reporter, including orders routed represented when the representative same as OATS, data validations must be to internal desks or departments with order was originated specifically to functionally equivalent to OATS in different functions (e.g., an internal represent a single order (received either accordance with the CAT NMS Plan ATS).’’ 31 FINRA is proposing that from a customer or another broker- (i.e., the same types of basic data aggregate intra-firm linkage rates across dealer) and there is: (1) An existing validations must be performed by the all Industry Member Reporters must be direct electronic link in the firm’s Plan Processor to comply with the CAT at least 95% pre-correction and 98% system between the order being NMS Plan requirements). Appendix D of post-correction. represented and the representative the Plan, for example, requires that order, and (2) any resulting executions • Inter-Firm Linkages. The order certain file validations 26 and syntax and are immediately and automatically linkage requirements in the Plan also context checks be performed on all applied to the represented order in the require that the Plan Processor be able submitted records.27 If a record does not firm’s system.37 While such linkages are to create the lifecycle between orders pass these basic data validations, it must not required in OATS today, FINRA routed between broker-dealers.32 FINRA be rejected and returned to the CAT believes that it is appropriate to evaluate is proposing that at least a 95% pre- Reporter to be corrected and them for purposes of retiring OATS. 28 correction and 98% post-correction resubmitted. The Plan also requires These linkages represent a significant aggregate match rate be achieved for the Plan Processor to provide daily enhancement to the data currently orders routed between two Industry statistics on rejection rates after the data available in OATS and will enhance the has been processed, including the Member Reporters.33 • quality of the equity audit trail. FINRA number of files rejected and accepted, Order Linkage Rates. In addition to further notes that linkages for more the number of order events accepted creating linkages within and between complex representative order scenarios, and rejected, and the number of each broker-dealers, the Plan also includes such as those involving agency average requirements that the Plan Processor be price trades, net trades and aggregated 24 FINRA notes that while error rates after able to create lifecycles to link various orders, will not be required until phase 34 reprocessing of error corrections are ultimately pieces of related orders. For example, 2c. Accordingly, FINRA does not expected to be de minimis for the CAT (see CAT the Plan requires linkages of order NMS Plan, Appendix C, note 102), FINRA does not anticipate that the error rates for the believe that post-correction errors need to be de information to create an order lifecycle phase 2a representative order linkages minimis before OATS can be retired and is not from origination or receipt to in CAT would be significantly higher suggesting, with this proposal, that 2% would meet cancellation or execution. In addition, the ultimate objective of de minimis error rates for than the order linkages available in CAT. the Plan requires linkages between OATS today. Nonetheless, in evaluating 25 See, e.g., Industry Member Technical customer orders and ‘‘representative’’ whether the standards for OATS Specifications (2a/2b) version 2.2.1 r6, dated June orders created in firm accounts for the retirement have been met, FINRA will 22, 2020, available at www.catnmsplan.com/sites/ purpose of facilitating a customer order, take into consideration if the error rates default/files/2020-06/CAT_Reporting_Technical_ riskless principal orders, and orders Specifications_for_Industry%20Members_v2.2.1r6_ for the phase 2a representative order CLEAN.pdf. worked through average price linkages have a significant negative 35 26 See CAT NMS Plan, Appendix D, Section 7.2. accounts. Pursuant to the phased impact on the overall error rates for The Plan requires the Plan Processor to confirm that approach for Industry Member order linkages. file transmission and receipt are in the correct reporting, certain of these order linkages • formats, including validation of header and trailers Exchange and TRF/ORF Match on the submitted report, confirmation of a valid will not be required in the initial phase Rates. The Plan requires that an order SRO-Assigned Market Participant Identifier, and of reporting (or ‘‘phase 2a’’), which lifecycle be created to link ‘‘[o]rders verification of the number of records in the file. commenced on June 22, 2020.36 For routed from broker-dealers to 27 See supra note 26. The Plan notes that syntax exchanges’’ and ‘‘[e]xecuted orders and and context checks would include format checks 29 See supra note 26. trade reports.’’ 38 FINRA is proposing at (i.e., that data is entered in the specified format); 30 See CAT NMS Plan, Appendix D, Section 3. data type checks (i.e., that the data type of each least a 95% pre-correction and 98% 31 See supra note 30. attribute conforms to the specifications); 32 post-correction aggregate match rate to consistency checks (i.e., that all attributes for a See supra note 30. 33 each equity exchange for orders routed record of a specified type are consistent); range/ This assumes linkage statistics will include logic checks (i.e., that each attribute for every record both unlinked route reports and new orders where has a value within specified limits and the values no related route report could be found. NMS Plan) (‘‘Phased Industry Member Reporting provided are associated with the event type they 34 See CAT NMS Plan, Appendix D, Section 3. Exemptive Order’’) and FINRA Rule 6895. represent); data validity checks (i.e., that each 35 See supra note 34. 37 See Industry Member Technical Specifications attribute for every record has an acceptable value); 36 See CAT Reporting Timelines at (2a/2b) version 2.2.1 r6, dated June 22, 2020, completeness checks (i.e., that each mandatory www.catnmsplan.com/timelines/. See also available at www.catnmsplan.com/sites/default/ attribute for every record is not null); and Securities Exchange Act Release No. 88702 (April files/2020-06/CAT_Reporting_Technical_ timeliness checks (i.e., that the records were 20, 2020), 85 FR 23075 (April 24, 2020) (Order Specifications_for_Industry%20Members_v2.2.1r6_ submitted within the submission timelines). Granting Conditional Exemptive Relief from CLEAN.pdf. 28 See supra note 26. Sections 6.4, 6.7(a)(v) and 6.7(a)(vi) of the CAT 38 See CAT NMS Plan, Appendix D, Section 3.

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from Industry Members to an exchange the data is accurate and reliable.40 Thus, Regulatory Notice announcing the and, for over-the-counter executions, the in addition to the maximum error rates implementation date of SR–FINRA– same match rate for orders linked to and matching thresholds proposed 2020–024. FINRA is proposing that this trade reports. above, FINRA’s use of CAT Data must language be added to Rule 4554 and the FINRA intends to commence its confirm that (i) there are no material Rule 7400 Series upon approval of the review of CAT data and error rates issues that have not been corrected (e.g., proposed rule change by the SEC. delays in the processing of data, issues based on phase 2a data and linkages, (c) Small Industry Member Data with query functions, etc.), (ii) the CAT which would replicate the data in OATS Availability today, and will not wait for includes all data necessary to allow implementation of phase 2c reporting FINRA to continue to meet its The second issue the Plan requires the (and the attendant linkages) to do so. As surveillance obligations and (iii) the proposed rule change to address is discussed in the Phased Industry Plan Processor is sufficiently meeting its ‘‘whether the availability of certain data Member Reporting Exemptive Order,39 obligations under the CAT NMS Plan from Small Industry Members two years Phase 2a Industry Member Data relating to the reporting and linkage of after the Effective Date would facilitate includes all events and scenarios Phase 2a Industry Member Data. FINRA a more expeditious retirement of 42 covered by OATS. FINRA Rule 7440 notes that any errors in the CAT Data duplicative systems.’’ describes the OATS requirements for may manifest themselves only after As discussed in the original proposal, recording information, which includes surveillance patterns and other queries FINRA believes that there is no effective information related to the receipt or have been run. Thus, while the error way to retire OATS until all current origination of orders, order transmittal, rate thresholds may be met over a 180- OATS reporters are reporting to the and order modifications, cancellations day period, additional time may be CAT. Pursuant to the phased reporting and executions. Large Industry Members required to reliably establish that usage approach, Small Industry OATS and Small Industry Members that of the CAT has not revealed material Reporters and Large Industry Members issues that have not been corrected and were required to begin reporting to the currently are reporting to OATS (‘‘Small 43 Industry OATS Reporters’’) are required allow contextual analysis of the data to CAT on the same date, June 22, 2020. to submit data to the CAT for these same take place to uncover errors in reporting Thus, at this time, all current OATS or processing that may not be apparent reporters are required to report to the events and scenarios during phase 2a. 44 Accordingly, Phase 2a Industry Member from more standardized data validation CAT. Small Industry Members that are 41 Data is the most relevant for OATS processes. not currently required to record and retirement purposes. Based on the proposed accuracy and report information to OATS are required to begin reporting to the CAT in FINRA anticipates retiring OATS reliability standards described above, December 2021.45 based solely on phase 2a reporting, FINRA anticipates that the time period for implementation for the deletion of FINRA believes that the requirement assuming the threshold pre- and post- the OATS Rules could be significant. that all current OATS reporters begin correction error rates are achieved and Thus, in order to help alert members of reporting to the CAT on June 22, 2020 FINRA’s use of the data confirms that the status of the OATS Rules, if the will expedite the retirement of OATS, the data is accurate and reliable, as Commission approves the proposed rule providing a significant cost savings for discussed below. This is because, as change, FINRA is proposing to add the industry. noted above, phase 2a data and linkages introductory language to Rule 4554 and will replicate what is in OATS today; (d) Individual Industry Member the Rule 7400 Series clarifying that the the data and linkages that are not Exemptions SEC has approved a proposed rule required to be reported until phase 2c change (SR–FINRA–2020–024) to The final issue the Plan requires the are not in OATS today. OATS will not remove Rule 4554 and the Rule 7400 proposed rule change to address is be retired prior to commencement of Series from the FINRA rulebook; ‘‘whether individual Industry Members phase 2c reporting by Large Industry however, by its terms, SR–FINRA– can be exempted from reporting to Members in April 2021, and there may 2020–024 will not be implemented until duplicative systems once their CAT be an initial increase in error rates FINRA has determined that the CAT has reporting meets specified accuracy and immediately following implementation achieved a level of accuracy and reliability standards, including, but not of the new phase 2c reporting reliability sufficient to replace OATS. limited to, ways in which establishing requirements. FINRA does not believe Once FINRA has determined that such cross-system regulatory functionality or that such increase would impact standards have been met, FINRA will integrating data from existing systems FINRA’s ability to assess the accuracy file for immediate effectiveness a rule and the CAT would facilitate such and reliability of phase 2a data for filing setting forth the basis for its Individual Industry Member purposes of determining OATS determination and will publish a exemptions.’’ 46 retirement. In addition, FINRA believes FINRA believes that a single cut-over that Industry Members would gain 40 For example, FINRA will need to transition all from OATS to CAT is highly preferable experience with the new 2c reporting or substantially all of its automated surveillance to a firm-by-firm approach and is not requirements over time, such that the patterns to CAT Data in order to evaluate the proposing to exempt members from the expected increase in the error rate accuracy and reliability of the data. 41 FINRA notes that the proposed criteria and OATS requirements on a firm-by-firm would dissipate. Such short-lived anticipated timing of OATS retirement outlined in basis. The primary benefit to a firm-by- increase is not expected to have an this filing are premised on and assume there are no firm exemptive approach would be to impact on FINRA’s ability to meet its material changes to the current CAT implementation plan, including availability and surveillance obligations. 42 See CAT NMS Plan, Appendix C, Section C.9. FINRA’s access to CAT Data. Pursuant to 43 Even if these error rate thresholds are amendments to the CAT NMS Plan adopted by the See supra note 36. met, FINRA must evaluate and confirm SEC, OATS must be retired by December 31, 2021 44 The 180-day timeframes discussed above with through incorporation of CAT Data into for the Plan Participants to meet the Period 3 respect to usage of the data and calculation of error rates will apply to data reported to the CAT by its automated surveillance program that Financial Accountability Milestone (Full Availability and Regulatory Utilization of Small Industry OATS Reporters. Transactional Database Functionality). See CAT 45 See supra note 36. 39 See supra note 36. NMS Plan, Sections 1.1 and 11.6. 46 See CAT NMS Plan, Appendix C, Section C.9.

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reduce the amount of time an individual that FINRA is able to continue to fulfill that currently report to OATS begin firm is required to report to a legacy its statutory obligation to protect reporting to the CAT on the same date system (e.g., OATS) if it is also investors and the public interest by as Large Industry Members (June 22, accurately and reliably reporting to the ensuring its surveillance of market 2020); CAT. FINRA believes that the overall activity remains accurate and effective (2) implementing a single cut-over accuracy and reliability thresholds for while also establishing a reasonable from OATS to CAT for all firms the CAT described above would need to timeframe for elimination the OATS provided that average error rate be met under any conditions before Rules, which will be rendered thresholds over a 180-day period are firms could stop reporting to OATS. In duplicative after implementation of the met and FINRA has determined that its addition, a firm-by-firm approach would CAT. usage of the CAT Data has not revealed require that OATS and CAT data be material issues; and B. Self-Regulatory Organization’s combined and integrated in order for (3) imposing a 2% post-correction FINRA to conduct surveillance in Statement on Burden on Competition error rate, in addition to the 5% initial accordance with SEC rules and SRO Economic Impact Assessment Error Rate as defined in the Plan, as a obligations. This process would be FINRA has undertaken an economic condition for retiring of OATS. technologically costly and complex and impact assessment to analyze the Economic Impacts could potentially compromise the regulatory need for the proposed rule quality of the data and FINRA’s change, its potential economic impacts, In creating the proposal to retire surveillance. Moreover, as discussed including anticipated costs and benefits, OATS, FINRA is seeking to carefully above, Small Industry OATS Reporters and the alternatives considered in balance the additional costs incurred by are required to report to the CAT on the assessing how to best meet regulatory member firms associated with same timeframe as all other OATS objectives. FINRA does not believe that continuing to maintain duplicate Reporters (i.e., Large Industry the proposed rule change will result in systems and records created by the CAT Members). Thus, there is no need to any burden on competition that is not NMS Plan and existing rules with the exempt members from OATS necessary or appropriate in furtherance risks to effective and efficient requirements on a firm-by-firm basis. of the purposes of the Act. surveillance that could arise from If the Commission approves the eliminating access to existing data proposed rule change, the rule text will Regulatory Need systems before a high-quality alternative be effective upon approval; however, As mentioned above, once members has been tested and verified. The costs the amendments will not be are effectively reporting to the CAT and of maintaining duplicate systems and implemented until FINRA has the CAT’s accuracy and reliability meet records include, among other things, determined the accuracy and reliability certain standards, OATS reporting will system maintenance, quality control standards set forth in the proposed rule be a duplicate effort. Accordingly, oversight and staff to maintain the change have been met. Once FINRA has FINRA is proposing to add introductory systems and records. Because the CAT determined that such standards have language to Rule 7400 that facilitates the NMS Plan created the need to have been met, FINRA will file for immediate deletion of the Rule 7400 Series, upon duplicate systems and required a plan effectiveness a separate rule filing announcement by FINRA that CAT has for the retirement of duplicate systems setting forth the basis for its achieved the accuracy and reliability and processes, the Economic Impact determination and will publish a targets. Assessment will focus on the proposed Regulatory Notice announcing the Economic Baseline choices made by FINRA in implementation date of the amendments implementing the retirement plan. proposed herein. Currently all FINRA members that do The proposed rule change will impact business in equity securities are all OATS-reporting firms. As of June 30, 2. Statutory Basis required to report equity audit trail 2019, 616 (of 936) large FINRA member FINRA believes that the proposed rule information to OATS. As noted above, broker-dealers and 221 (of 476) small change is consistent with the provisions Small Industry OATS Reporters and FINRA member broker-dealers report to of Section 15A(b)(6) of the Act,47 which Large Industry Members were required OATS. Of the 221 Small Industry requires, among other things, that to begin reporting to CAT on the same Members that report to OATS, all but FINRA rules must be designed to date, June 22, 2020, as part of the nine of them currently report through prevent fraudulent and manipulative broader plan to implement the CAT and other firms or service providers.49 Of the acts and practices, to promote just and retire other systems. The proposed rule nine that self-report, eight of them equitable principles of trade, and, in change lays out a plan by which FINRA report very few orders to OATS.50 The general, to protect investors and the will retire OATS to eventually eliminate approximately 575 FINRA member public interest, and Section 15A(b)(9) of the need for duplicative reporting and the Act,48 which requires that FINRA records maintenance. 49 All of the clearing firms that report to OATS rules not impose any burden on Costs and benefits associated with on behalf of Small Industry Members were required competition that is not necessary or establishing the CAT, including the to begin reporting to CAT on June 22, 2020. In economic impacts associated with addition, the service providers that report to OATS appropriate. on behalf of Small Industry Members have a mix FINRA believes that the proposed rule retiring existing systems, have been of small and large clients for whom they provide change fulfills FINRA’s obligation under established as a part of the Plan this service and, therefore, began CAT reporting on the CAT NMS Plan to submit a approved by the SEC. The proposed behalf of their clients on June 22, 2020. proposed rule change to eliminate or framework in Appendix C, Section C.9. 50 As noted above, FINRA has identified approximately 221 member firms that currently modify duplicative rules. FINRA serves as the baseline to evaluate the report to OATS and meet the definition of ‘‘Small believes that the approach set forth in economic impacts of the proposed rule Industry Member;’’ however, only nine of these the proposed rule change strikes the change. Accordingly, the next section firms submit information to OATS on their own appropriate balance between ensuring addresses the potential impacts behalf, and five of the nine firms report very few orders to OATS. For example, in one recent month, stemming from: five of the nine firms submitted fewer than 25 47 15 U.S.C. 78o–3(b)(6). (1) Revising the reporting timeline to reports during the month, with four firms 48 15 U.S.C. 78o–3(b)(9). require that Small Industry Members submitting fewer than 10.

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broker-dealers that are currently exempt rate may permit individual firms to end changeover to CAT a year earlier. The or excluded from OATS reporting are OATS reporting even while their CAT magnitude of these costs is dependent not impacted by this proposed rule reporting does not meet the specified on several factors, including the volume change because they currently incur no error rate as long as the error rate is low of trades expected to be reported to CAT costs in maintaining directly or enough for the industry. Thus, as well as the technological differences indirectly systems for OATS surveillance of market activity for those between the OATS system compliance. Accordingly, the analysis firms may not be as efficient or effective specifications and CAT system here focuses on the impact of the due to the higher error rates. Taken specifications. proposed plan for retiring OATS on further, it is possible that a single cut- Third, FINRA proposes that the OATS-reporting firms only. over may reduce the incentives for any official retirement of OATS occurs only First, FINRA’s proposal recommends one firm to put significant effort and once CAT has met minimum accuracy a requirement that there be a single cut- costs into meeting or beating the and reliability standards defined as a over from OATS to CAT rather than a threshold error rates because the maximum error rate of 5% on a pre- firm-by-firm cut-over. The primary benefits are shared among all firms correction basis and 2% on a post- beneficiary of this proposal will be the while greater cost is borne by the firms correction basis for all CAT submissions investing public. This approach whose compliance rates satisfy the averaged over a 180-day period in eliminates the need to merge OATS and minimum error rate thresholds. This applicable categories, and FINRA has CAT data in order to execute disincentive is likely to be small for determined that its usage of the CAT surveillance in accordance with SEC firms with significant reporting Data has not revealed material issues rules and SRO obligations. The obligations, who would seek to end that have not been corrected, confirmed integration process would be duplicative reporting as quickly as that the CAT includes all data necessary technologically costly and difficult and possible and who represent the vast to allow FINRA to continue to meet its could introduce errors into the data majority of OATS reports, but may, at surveillance obligations and confirmed being surveilled that did not exist prior the margin, extend the time necessary to that the Plan Processor is sufficiently to integration. Conducting market meet the error reporting threshold. meeting its obligations under the CAT surveillance from a single audit trail However, significant error rates could NMS Plan relating to the reporting and system increases the efficiency and constitute a rule violation and subject linkage of Phase 2a Industry Member effectiveness of the process and firms to possible disciplinary action.51 Data. FINRA believes that a minimum of improves the integrity of the markets. In Thus, firms that delay reducing error 180 days is required to provide addition, there are direct benefits of this rates to threshold levels would over sufficient time to ensure that future approach to firms. Specifically, other time incur higher costs through error rates below the maximum than during the time period during enforcement actions and be incentivized thresholds are able to be maintained and which the accuracy and reliability of to improve their compliance rates. that the CAT data can otherwise be CAT data is validated, a single cut-over With respect to the revised timeline relied upon for conducting effective approach would eliminate the need for requiring that all firms that report to market surveillance. The trade-offs of firms that report on other firms’ behalf OATS begin CAT reporting on June 22, lengthening or shortening the phase-in to create a technological solution for 2020, this requirement means that 221 period and raising or lowering error rate receiving and reporting on data Small Industry Members were required thresholds are increased costs to structured for both OATS and CAT to begin reporting to the CAT on the member firms for maintaining duplicate simultaneously. Such a practice would same timeframe as Large Industry reporting systems and records versus increase costs to ensure compliance Members. The primary benefit of this reliable surveillance and effective with the proper reporting mechanism. approach is that it allows the OATS investigations of market activity, whose These costs would likely be system to be retired up to a year earlier, benefits eventually accrues to investors. incorporated into the fees for the service saving firms the costs of maintaining Note that the current OATS error rates charged to introducing firms and could duplicate reporting systems. Of the are significantly lower than 2%; eventually be borne by customers estimated 221 firms that would be however, OATS reporting errors have through higher fees based on the price impacted by this proposal, 212 report to decreased over time with additional elasticity for brokerage services. OATS through clearing firms or other experience by firms, and CAT reporting The potential costs associated with third party providers, all of whom were is anticipated to be more complex and the single cut-over approach will be required to begin CAT reporting on June new to some firms and therefore more borne by firms that could meet the 22, 2020 either by the requirement in likely to contain errors when initially maximum error thresholds for reporting the Plan or on behalf of clients who are reported. to CAT earlier than the single cut-over required to in the Plan. Thus, there Alternatives Considered approach would allow. These firms should be limited additional technical would bear the technology and requirements or costs to facilitate In considering how to best meet its compliance costs associated with dual reporting for these firms. In fact, regulatory objectives, FINRA considered reporting for a longer period than they requiring Small Industry OATS several alternatives in the design of the might otherwise. Reporters to report to the CAT on the proposed rule changes. Among these Another potential cost of the single same timeframe as Large Industry alternatives, FINRA assessed whether cut-over method is that there will likely Members will likely allow the Small Industry Members should be be firms reporting to CAT that do not introducing and clearing firms to avoid subject to a different effective date for meet the maximum error rate the costs associated with maintaining CAT reporting. It was determined that thresholds, leading to lower quality data two systems for reporting during the Small Industry OATS Reporters should available for surveillance. If firms were additional transition year. The other begin reporting to CAT on the same date individually permitted to end OATS nine small firms will be required to that Large Industry Members begin reporting only when meeting a incur costs associated with the reporting, to enable linkages across maximum error rate, every firm’s order lifecycle events, enhancing reporting would meet the minimum 51 See CAT NMS Plan, Appendix C, Section 3(b) surveillance and potentially permitting criterion. Requiring an aggregate error (discussing firm-specific compliance thresholds). OATS to be retired more quickly.

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FINRA also considered a firm-by-firm comment letters, as well as FINRA’s Commission and any person, other than approach, for exempting members from partial amendment and subsequent those that may be withheld from the the OATS reporting requirements, as an response to comments (which were filed public in accordance with the alternative to single cut-over from OATS with the Commission as comment provisions of 5 U.S.C. 552, will be to CAT. FINRA determined that this letters), are available on the available for website viewing and approach represented a higher threshold Commission’s website. printing in the Commission’s Public for the industry to meet, likely III. Date of Effectiveness of the Reference Room, 100 F Street NE, increasing costs and the period where Proposed Rule Change and Timing for Washington, DC 20549, on official both CAT and OATS would be required Commission Action business days between the hours of 10 simultaneously. Further, such an a.m. and 3 p.m. Copies of such filing Within 45 days of the date of approach would also potentially reduce also will be available for inspection and the efficacy of the audit trail, creating no publication of this notice in the Federal Register or within such longer period (i) copying at the principal office of substantial benefit to investor FINRA. All comments received will be protection. Therefore, FINRA is as the Commission may designate up to 90 days of such date if it finds such posted without change. Persons proposing to implement a single cut- submitting comments are cautioned that over approach for retirement of OATS. longer period to be appropriate and publishes its reasons for so finding or we do not redact or edit personal C. Self-Regulatory Organization’s (ii) as to which the self-regulatory identifying information from comment Statement on Comments on the organization consents, the Commission submissions. You should submit only Proposed Rule Change Received From will: information that you wish to make Members, Participants, or Others (A) by order approve or disapprove available publicly. All submissions As discussed above, FINRA provided such proposed rule change, or should refer to File Number SR–FINRA– similar views and mechanisms for (B) institute proceedings to determine 2020–024 and should be submitted on eliminating the OATS Rules in the whether the proposed rule change or before September 22, 2020. should be disapproved. original proposal.52 Four comment For the Commission, by the Division of letters were submitted in response,53 IV. Solicitation of Comments Trading and Markets, pursuant to delegated 58 and FINRA subsequently filed an Interested persons are invited to authority. amendment to the original proposal, submit written data, views and Jill M. Peterson, which summarized and responded to arguments concerning the foregoing, Assistant Secretary. the comments received.54 Three of the including whether the proposed rule [FR Doc. 2020–19192 Filed 8–31–20; 8:45 am] four commenters filed additional change is consistent with the Act. comment letters in response to the BILLING CODE 8011–01–P 55 Comments may be submitted by any of amendment, and FINRA filed a the following methods: response to comments.56 In addition, prior to the original proposal, FIF and Electronic Comments SECURITIES AND EXCHANGE COMMISSION SIFMA submitted letters to the • Use the Commission’s internet Participants regarding the retirement of comment form (http://www.sec.gov/ systems related to the CAT.57 The rules/sro.shtml); or [Release No. 34–89673; File No. SR– • Send an email to rule-comments@ CboeBZX–2020–066] 52 See supra note 12. sec.gov. Please include File Number SR– 53 See Letters from Marc R. Bryant, Senior Vice FINRA–2020–024 on the subject line. Self-Regulatory Organizations; Cboe President and Deputy General Counsel, Fidelity BZX Exchange, Inc.; Notice of Filing Investments, to Robert W. Errett, Deputy Secretary, Paper Comments and Immediate Effectiveness of a SEC, dated June 22, 2017 (‘‘Fidelity’’); William H. Hebert, Managing Director, Financial Information • Send paper comments in triplicate Proposed Rule Change To Amend the Forum, to Robert W. Errett, Deputy Secretary, SEC, to Secretary, Securities and Exchange Fee Schedule dated June 22, 2017 (‘‘FIF’’); Manisha Kimmel, Commission, 100 F Street NE, Chief Regulatory Officer, Wealth Management, August 26, 2020. Thomson Reuters, to Brent J. Fields, Secretary, SEC, Washington, DC 20549–1090. dated June 22, 2017 (‘‘Thomson Reuters’’); and All submissions should refer to File Pursuant to Section 19(b)(1) of the Ellen Greene, Managing Director & Theodore R. Number SR–FINRA–2020–024. This file Securities Exchange Act of 1934 (the Lazo, Managing Director and Associate General ‘‘Act’’),1 and Rule 19b–4 thereunder,2 Counsel, Securities Industry and Financial Markets number should be included on the Association, to Brent J. Fields, Secretary, SEC, dated subject line if email is used. To help the notice is hereby given that on August June 23, 2017 (‘‘SIFMA’’). Commission process and review your 12, 2020, Cboe BZX Exchange, Inc. (the 54 See Securities Exchange Act Release No. 81499 comments more efficiently, please use ‘‘Exchange’’ or ‘‘BZX’’) filed with the (August 30, 2017), 82 FR 42168 (September 6, only one method. The Commission will Securities and Exchange Commission 2017); see also Letter from Brant K. Brown, Associate General Counsel, FINRA, to Brent J. post all comments on the Commission’s (the ‘‘Commission’’) the proposed rule Fields, Secretary, SEC, dated August 28, 2017. internet website (http://www.sec.gov/ change as described in Items I, II, and 55 See Letters from Manisha Kimmel, Chief rules/sro.shtml). Copies of the III below, which Items have been Regulatory Officer, Wealth Management, Thomson submission, all subsequent prepared by the Exchange.3 The Reuters, to Brent J. Fields, Secretary, SEC, dated September 27, 2017; William H. Hebert, Managing amendments, all written statements Commission is publishing this notice to Director, FIF, to Heather Seidel, Acting Director, with respect to the proposed rule solicit comments on the proposed rule Division of Trading and Markets, SEC, dated change that are filed with the change from interested persons. September 29, 2017; and Ellen Greene, Managing Commission, and all written Director & Theodore R. Lazo, Managing Director and Associate General Counsel, SIFMA, to Brent J. communications relating to the 58 17 CFR 200.30–3(a)(12). Fields, Secretary, SEC, dated September 29, 2017. proposed rule change between the 1 15 U.S.C. 78s(b)(1). 56 See Letter from Brant K. Brown, Associate 2 17 CFR 240.19b–4. General Counsel, FINRA, to Brent J. Fields, Processor, dated April 4, 2017, at 2; Letter from 3 The Exchange initially filed the proposed fee Secretary, SEC, dated October 11, 2017. William H. Hebert, FIF, to Participants re: Milestone changes on August 3, 2020 (SR–CboeBZX–2020– 57 See Letter from Kenneth E. Bentsen, Jr., SIFMA, for Participants’ rule change filings to eliminate/ 064). On August 12, 2020, the Exchange withdrew to Participants re: Selection of Thesys as CAT modify duplicative rules, dated April 12, 2017. that filing and submitted this proposal.

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