The Securities and Exchange Commission (SEC) approved an amendment to the National Market System Plan governing the Consolidated Audit Trail (CAT).
The amendments allows for the implementation of various cost savings measures designed to reduce the costs of the CAT while maintaining core regulatory functionality.
“After a decade of increasing costs, today’s amendment builds on last year’s progress towards a more efficient and cost-effective CAT. It is a step in the right direction, but there are still many more steps to be taken,” SEC Chairman Paul Atkins said. “The Commission’s ongoing comprehensive review of the CAT will consider the sustainability of the CAT’s budget, and we expect the Plan Participants that operate the CAT and the industry to work together towards further cost savings.”
The amendment expands on cost savings measures approved by the SEC in 2025. Specifically, it will allow the plan participants to:
- Cease creating interim lifecycle linkages absent request by an authorized regulatory user;
- Delete certain CAT data, including all CAT data older than three years;
- Ease requirements related to the re-processing of late records;
- Cease providing certain functionality associated with the online targeted query tool;
- Cease reporting of rejected messages received by Plan Participants;
- Relax certain processing deadlines for CAT data;
- Implement a revised approach for the generation of anonymized customer identifiers; and
- Implement a spending cap provision governing future changes to the CAT.
“The Division supports efforts by the CAT NMS Plan Participants to control the sizeable costs of operating the CAT. We expect these efforts to continue and look forward to additional progress,” Jamie Selway, director of the SEC’s Division of Trading and Markets, said.
The SEC estimates that the amendment will result in approximately $50 million to $70 million in annual cost savings as compared to the 2025 CAT budget. It is also estimated to result in approximately $19.4 to $24.1 million in incremental additional cost savings compared to estimated savings with the exemptive relief granted by the commission in 2025.