SEC Order Approving CAT NMS Plan Amendment to Reduce Consolidated Audit Trail Operating Costs
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On March 27, 2026, the SEC approved an amendment to the National Market System Plan governing the Consolidated Audit Trail (CAT), with Commission modifications, estimated to save $55–$73 million annually in cloud hosting and operational fees. The CAT, originally projected to cost ~$55.8 million per year when approved in 2016, has far exceeded that figure due to explosive growth in trading volumes and data storage demands. The approved amendment contains seven components: (1) eliminating daily delivery of interim CAT-Order-IDs, replacing it with on-demand delivery upon request by authorized regulatory users; (2) reducing data retention from six years to three years for most CAT data, with shorter periods for Options Market Maker Quotes (6 months) and Options SIP Data (6 months), and deletion of Interim Operational Data after 15 days; (3) relaxing late data reprocessing requirements; (4) modifying the Online Targeted Query Tool (OTQT) requirements; (5) changing rejected message handling; (6) adjusting data availability windows; and (7) updating reference data requirements. The Commission modified the proposed amendment in one key area: it removed a provision that would have limited ad hoc interim CAT-Order-ID requests to only senior officers of specific SEC divisions, instead allowing any authorized regulatory users from both the Participants and the Commission to submit such requests — preserving regulatory flexibility without embedding SEC internal organizational constraints into the NMS Plan. This order builds on prior cost-reduction actions including the 2024 Cost Savings Amendment (~$30M/year actual savings), the 2025 Cost Savings Exemptive Order, and the CAIS Amendment ($7–9M/year). The Commission acknowledged tradeoffs — particularly that deleting CAT data after three years (vs. the prior five-year threshold) will require regulators to seek historical trading data older than three years from other sources, such as Electronic Blue Sheets, in enforcement and examination contexts.
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Key Changes
- Eliminates mandatory daily delivery of interim CAT-Order-IDs by T+1; replaces with on-demand delivery (generally by T+2 at 9 p.m. ET) upon request by authorized regulatory users from Participants or the Commission — estimated savings: $2–$3M/year
- Reduces standard CAT data retention period from 6 years to 3 years; Options Market Maker Quotes retention cut from 1 year to 6 months; Options SIP Data retention cut from 5 years to 6 months; Interim Operational Data deletable after 15 days — estimated savings: $23.5–$32M/year
- Commission modified proposal to remove restriction limiting ad hoc interim CAT-Order-ID requests to 'senior officers of SEC's Division of Trading and Markets, Enforcement, or Examinations' — now any authorized regulatory user from Participants or Commission may request
+ 3 more changes with Pro
Obligations
What this law requires
Eliminate daily delivery of interim CAT-Order-IDs and instead provide on-demand delivery upon request by any authorized regulatory users from both Participants and the SEC
Reduce data retention period from six years to three years for most CAT data, effective upon amendment approval
Reduce data retention for Options Market Maker Quotes to 6 months and delete Interim Operational Data after 15 days
Relax late data reprocessing requirements in accordance with the approved amendment specifications
Modify Online Targeted Query Tool (OTQT) requirements as specified in the approved amendment