The Securities and Exchange Commission on Thursday issued a concept release soliciting public comment in support of a comprehensive review of the Consolidated Audit Trail, or CAT.

The concept release seeks comment on topics including, but not limited to, CAT funding and cost management, the regulatory purpose of the CAT, the structure and governance of the CAT, the design and scope of the CAT, and the cybersecurity and data privacy of the CAT and other audit trails and related data sources, as well as comments regarding the appropriate balance between privacy and confidentiality considerations, civil liberties protections, and regulatory need, the agency said.

"Under my leadership, the Commission has made meaningful progress to reform the CAT and strike a better balance between regulatory use, costs, funding, and security considerations," Paul Atkins, the SEC chair, said in a statement. "Over the last year, the Commission has issued exemptive relief and approved amendments to the national market system plan governing the CAT that have, among other benefits, reduced the CAT's projected annual operating costs by over $100 million and permanently eliminated the reporting of personal identifiable information to the CAT."

"However, we can — and must — do more," Atkins added.

In October, Atkins said that his demand regarding CAT "is to bring the cost way down; we get way back to what's essential."

Atkins instructed agency staff in September to undertake a comprehensive review of the CAT, which tracks orders and trades and was conceived by the SEC after the 2010 "flash crash."

The costs of operating the CAT "have ballooned beyond belief," Atkins said then. "When the CAT was established, in November 2016, its ongoing annual costs were estimated to total, at the upper end, about $55 million. Unfortunately, even that estimate proved woefully unrealistic, and costs have regularly increased."

The concept released also seeks comment on other audit trails and related data sources used in the regulation of U.S. securities markets, the agency said.

NOT FOR REPRINT

© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.