Washington, D.C., April 22, 2020 – SIFMA today released the following statement from Kenneth E. Bentsen, Jr., SIFMA president and CEO regarding the Consolidated Audit Trail (CAT) and the CAT Reporter Agreement industry members are required to sign by the self-regulatory organizations (SROs) to gain access to the database:

“SIFMA and its members are supportive of the CAT and its regulatory intent but remain concerned regarding the risks of sensitive customer information being compiled in one government-mandated database. Broker-dealers should not bear the liability of a breach in the CAT database, over which they have no control.  SIFMA’s guiding principle is ‘they who hold the data bear the liability.’ The liability for any CAT breach should rest with the SROs as they hold, maintain and control the data. The SROs improperly denied broker-dealers the ability to report data in compliance with the law, including failing to properly propose the CAT Reporter Agreement for notice and comment. Because our members are committed to seeing CAT proceed, we are asking the SEC to set aside the SRO denial of access and stay the application of the reporting agreement. This would allow CAT reporting to proceed according to the proposed schedule, while reviewing and resolving the obvious flaws in the proposed agreement.”

Filings made today further expand on these views:

• Application for Review of SRO Action That Violates Exchange Act Sections 19(d) and 19(f)
• Motion to Stay SRO Action Pending Commission Review of SIFMA’s Application Pursuant to Exchange Act Sections 19(d) and 19(f) and Incorporated Memorandum of Law
• Declaration in Support of SIFMA’s Application Pursuant To Exchange Act Sections 19(d) and 19(f)

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SIFMA is the leading trade association for broker-dealers, investment banks and asset managers operating in the U.S. and global capital markets. On behalf of our industry’s nearly 1 million employees, we advocate for legislation, regulation and business policy, affecting retail and institutional investors, equity and fixed income markets and related products and services. We serve as an industry coordinating body to promote fair and orderly markets, informed regulatory compliance, and efficient market operations and resiliency. We also provide a forum for industry policy and professional development. SIFMA, with offices in New York and Washington, D.C., is the U.S. regional member of the Global Financial Markets Association (GFMA). For more information, visit http://www.sifma.org.

See Also

• Podcast: They Who Hold the Data Should Bear the Liability – SIFMA’s Challenge of the CAT Reporter Agreement Over Data Privacy, Security and Liability Concerns