A bill requiring securities regulators to safeguard a data system called the Consolidated Audit Trail (CAT), used to track market trading activity, was passed in the House on Monday.
The Consolidated Audit Trail, developed by the Securities and Exchange Commission (SEC), contains data on trade orders and cancellations for equities and options listed on U.S. exchanges.
The Market Data Protection Act of 2017 would require SEC, the Financial Industries Regulatory Authority (FINRA), and the operator of the CAT to develop internal risk controls to protect and regulate the storage of market data, research, and data sharing agreements. This would be done in consultation with the SEC’s chief economist.
“We need to make sure our house is in order at the SEC,” U.S. Rep. Warren Davidson (R-OH), a member of the House Financial Services Committee and the sponsor of the bill, said. “We know there are serious flaws in the way the SEC maintains its data, and in the ways they respond to and communicate errors and omissions. These flaws undermine the trust and confidence of the customers the SEC regulates.”
He added that the recent Equifax breach and a cyber attack against the SEC heighten the need for better cyber controls.