SIFMA Statement on CAT Plan Proposed by SEC

Release Date: April 27, 2016
Contact: Liz Pierce, 212.313.1173, [email protected]

SIFMA Statement on CAT Plan Proposed by SEC

New York, NY, April 27, 2016 – SIFMA today released the following statement from Randy Snook, executive vice president, business policies and practices, after the Securities and Exchange Commission (SEC) issued for comment a proposed National Market System (NMS) Plan for the Consolidated Audit Trail (CAT):

“SIFMA members support the concept of a consolidated audit trail given its potential to enhance the quality of data provided to regulators and promote fair and equitable markets. The CAT will be a critical industry utility, and it should be designed to operate efficiently and comprehensively. A true collaboration among all market stakeholders will be vital to an effective CAT, especially as we consider the security and technology considerations that have arisen since the SEC proposed the CAT.

“In the almost six years since the SEC first proposed the creation of a CAT, cyber threats have increased in frequency and sophistication. It is essential that the CAT have robust protections for the massive volume of sensitive transaction data it will track and store, which will include personally identifiable information (PII), including social security numbers, for every person with a brokerage account.

“Additionally, the CAT must be developed from the outset to include necessary features to replace redundant and duplicative regulatory reporting systems. There must be a commitment to promptly eliminate systems such as FINRA’s Order Audit Trail System (OATS), the Electronic Blue Sheet (EBS) system, and the Large Trader reporting requirements.

“We also call on the SEC to make sure that the funding model for the CAT is equitable among not only CAT reporters but also CAT users. In this regard, the funding for CAT should take into account existing sources of regulatory revenue and cost savings realized by the SROs from the elimination of redundant and duplicative systems. As we have stated on other NMS Plans, the governance of the CAT should include full industry representation. Further, we ask that the SEC modify the current schedule for CAT implementation, which we believe does not provide a realistic timeframe of deadlines.

“SIFMA will review this proposal in detail with our members and provide substantive comments in due course.”