Concept Release on Consolidated Audit Trail and Other Audit Trails and Data Sources
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This proposal by the SEC explores improvements to audit trails like the Consolidated Audit Trail (CAT) used to regulate U.S. securities markets. It considers changes to accommodate current market conditions, privacy concerns, technology solutions, and cybersecurity. The proposal seeks public input on these audit systems and their related funding. Parties impacted are regulators, brokers, dealers, and trading venues.
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Key Changes
- Potential updates to the rules governing audit trails to reflect current market conditions
- Consideration of privacy, cost-efficiency, and cybersecurity improvements
- Review and possible modification of funding mechanisms for audit trails
Obligations
What this law requires
Securities and Exchange Commission has requested comments from brokers, dealers, trading venues, and other market participants regarding the effectiveness, regulatory use, and costs of audit trails and data sources by June 22, 2026.
SROs must ensure compliance with the rules and regulations governing the Consolidated Audit Trail (CAT) and related data sources as mandated by the Securities Exchange Act.
Brokers and dealers must report standard data elements for proprietary securities transactions under Rule 17a-25, including transaction details and identification information for the parties involved.
Large traders must identify themselves to the SEC and make certain disclosures on Form 13H under Rule 13h-1, providing necessary account-level information.
FINRA CAT, LLC must maintain the Consolidated Audit Trail and provide regulators with timely access to comprehensive trading data from SROs and Industry Members.