The SEC proposed various measures to "facilitate additional progress" in the implementation of the Consolidated Audit Trail ("CAT").
The proposal would require FINRA and the securities exchanges to publish a comprehensive CAT implementation plan and quarterly progress reports that must be approved by a supermajority vote of the Operating Committee of CAT NMS, LLC. In addition, the SEC proposed target deadlines for four CAT implementation milestones, and a reduction in the fees that self-regulatory organizations ("SROs") and securities exchanges may recover from broker-dealers if the target deadlines are missed. Comments on the proposal must be submitted within 45 days of publication in the Federal Register.
Separately, SEC Chair Jay Clayton expressed support for "ongoing efforts" by SROs to address data protection concerns regarding personally identifiable information ("PII") that would be stored in the CAT. Mr. Clayton noted that one approach, involving the removal of social security numbers, account numbers and dates of birth from the CAT, warranted "serious consideration." Mr. Clayton added that even if certain types of PII are removed from CAT, the nature of data to be maintained in the CAT "necessitates robust security protections."
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