In an April 2025 comment letter, they argued that scaling back the CAT’s customer data collection undermines the SEC’s enforcement capabilities and increases the risk of manipulation going undetected. 1 See CAT NMS Plan, FAQ R.2 for the types of information firms should obtain from third-party vendors to satisfy these requirements. SIFMA makes no representation, warranties or guarantees, express or implied, as to the accuracy, completeness, timeliness, or continued availability of this document or any other on our website. SIFMA has no obligation to correct, supplement, update, or maintain this document.
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CAT invoices will be published to the CAT Reporter Portal and made accessible via SFTP on the 25th day of the following month. In the event that the 25th is a weekend or holiday, invoices will be published in the CAT Reporter Portal and made accessible via SFTP on the next business day after the 25th. The invoices are due to be paid by CAT Reporters within 30 calendar days of the date of the invoice (unless a longer payment period is otherwise indicated). The CAT NMS Plan definition of “CAT Executing Broker” may differ from the definition of executing broker used in other SRO rules or other contexts. Beginning in Phase 2d, the settlementDate field must not be populated for allocations in “when-issued” securities with any future date.
CAT Reporting Obligations
- It provides detailed information about data elements, data types, order events and file formats for the in-scope products that are required to be reported.
- Please see FAQ A29 for additional information on what broker-dealers are considered “Small Industry Members” for purposes of reporting to the CAT.
- But data is only valuable to a firm if it is clean, trusted, controlled and accessible under proper processes.
- An Industry Member cannot assume that any third party will perform reporting on its behalf.
- Because the trade was executed on a different day from the reference price, the actual time of execution must be reflected in the eventTimestamp field on the CAT Trade Event and in the Execution Time field on the trade report for both OTC equity securities and NMS stocks.
- Regulatory Notice (FINRA Reminds Firms of Their Supervisory Responsibilities Relating to CAT) describes practices and recommended steps firms should consider when developing and implementing their CAT Rules compliance program.
- In an April 2025 comment letter, they argued that scaling back the CAT’s customer data collection undermines the SEC’s enforcement capabilities and increases the risk of manipulation going undetected.
Because the order was cancelled before the ATS referenced the NBBO (or other applicable reference price), there would be no such information to report. The nbboTimestamp field should be populated with the time that the ATS referenced, or „looked up” the existing reference price. If a trade is reported to both CAT and a TRF/ADF/ORF, and later cancelled in the TRF/ADF/ORF, the cancellation is not required to also be reported to CAT. If the orders are routed into ACES Pass-Thru via an electronic order handling system, the orders would be considered electronic and a Routed Order ID must be passed through via the Branch/Sequence Number field in ACES. If the client qualifies as “institutional” under FINRA Rule 4512(c), then the order should be reported to CAT with an accountHolderType of ‘A’ (Institutional Customer). The accountHolderType must represent the type of beneficial owner of the account for which an order was received or originated.
- A CAT Executing Broker’s CAT fee is calculated by multiplying the number of the CAT Executing Broker’s executed equivalent shares traded in Eligible Securities by the applicable fee rate.
- For compliance officers and advisors at large firms, it’s a reminder that transparency and accountability in regulatory costs aren’t just buzzwords – they’re essential, especially when the numbers run into the hundreds of millions.
- As such, the Industry Member closing the account must populate the value of ‘ENDED’ in the roleEndReason, fdidEndReason, and ltidEndReason fields.
- Additionally, the allocationType field must be populated with the value, ‘DVP’; and the DVPCustodianID field must be populated as described in the CAT Reporting Technical Specifications for Industry Members.
- The accountHolderType field is only available on the New Order Event which reflects receipt of a Customer order or origination of an order by the Industry Member.
Legal
In Phase 2a, the Industry Member soliciting interest must report any equity leg received as the result of the solicitation process that is selected and sent on for execution using handlingInstructions values ‘SR’ (Solicitation Response) and ‘OPT’. The routing of the options legs of the complex order to the exchange would not be reportable until Phase 2d. However, the routing of the equity leg audit trail to the exchange or another Industry Member is reportable in Phase 2a. The senderType field on an Order Accepted event (MEOA) must only be populated with a value of ‘O’ when the receiving party is voluntarily reporting an order in the OTC Equity symbol of a foreign security that was not required to be reported to CAT because it was executed outside the U.S. Any Order Accepted event that was required to be reported to CAT and received from another Industry Member must be populated with a senderType value of ‘F’.
When the piggyback firm is fully disclosed, the correspondentCRD field must be populated with the CRD number of the introducing fixed assets firm that has the relationship with the customer. For example, in a piggyback scenario where the piggyback firm is fully disclosed and Firm A (with customer relationships) piggybacks on Firm B’s clearing relationship with Clearing Firm C, the clearing firm must populate Firm A’s CRD number in the correspondentCRD field. There currently is no exemptive relief that would allow only the submission of an incomplete Customer Record for a Natural Person Authorized Trader. Use of the Authorized Trader Names List rather than the submission of all information required for Natural Person Authorized Traders could be subject to review by Regulators. Accordingly, Industry Members are encouraged to report all data required for Natural Person Authorized Traders as soon as possible before the Full CAIS Compliance Go-Live date. See the section titled “Fractional Share Scenarios” in the CAT Industry Member Reporting Scenarios document for more information regarding the transaction reporting requirements for fractional share scenarios.
CAT Alerts
The CAT NMS Plan requires the Plan Processor to store and retain Raw Data submitted by CAT Reporters. Such Raw Data will be available to the SEC and Participants Statement of Comprehensive Income for regulatory purposes. The CAT NMS Plan requires the CAT to support a minimum of 3,000 regulatory users and at least 600 such users accessing the CAT concurrently without an unacceptable decline in performance. The CAT NMS Plan requires the Consolidated Audit Trail, LLC to appoint a Chief Information Security Officer (CISO) and Chief Compliance Officer (CCO), each of which is an employee of the Plan Processor, reporting directly to the Operating Committee and with fiduciary duties to the Consolidated Audit Trail, LLC. Given these continuing concerns, the Commission should launch a comprehensive review that covers all aspects of the CAT. In doing so, the Commission should take additional steps to pause the CAT’s most controversial elements—not only the collection of customer PII, but also the problematic funding structure that a majority of the current Commission voted against.
FINRA Continuing Membership Applications
The Commission argued that updating its analysis wasn’t necessary since it wasn’t reconsidering the CAT itself. It further claimed to have relied on the „best information available” at the time. The substantial new facts on costs and the revised allocation structure demanded a fresh, careful reassessment. The court found it unreasonable for the SEC to lean so heavily on a flawed and outdated 2016 economic analysis. Regulatory advocates like Better Markets have emphasized that a fully functioning CAT is essential to market surveillance.