On March 27th, the SEC approved an amendment to the National Market System (NMS) Plan for the Consolidated Audit Trail (CAT), along with exemptive relief from certain Rule 17a‑1 requirements. These modifications are meant to further the SEC’s aim to streamline CAT operations and reduce financial burdens on the industry while maintaining key regulatory functions.
The amendment allows CAT Plan participants to carry out several operational efficiencies, including the following cost-saving measures:
- discontinuing interim lifecycle linkages unless specifically requested by an authorized regulator
- deleting certain CAT data, including all data older than three years
- loosening requirements for re‑processing late records
- discontinuing certain online targeted query tool functions
- discontinuing the reporting of rejected messages received by Plan Participants
- relaxing processing deadlines for CAT data
- employing a revised method for generating anonymized customer identifiers
- introducing a spending cap for future CAT changes
The SEC anticipates that the amendment will effect an estimated cost savings of :
- $50 million to $70 million in annual savings compared to the 2025 CAT budget
- an additional $19.4 million to $24.1 million in incremental savings beyond the cost reductions already achieved through 2025 exemptive relief.
For further information, see the Joint Industry Plan; Order Approving an Amendment to the National Market System Plan Governing the Consolidated Audit Trail, as Modified by the Commission, to Further Reduce the Costs of the Consolidated Audit Trail SEC order on sec.gov.
Sources:
SEC Approves Amendment to NMS Plan to Further Reduce the Costs of the Consolidated Audit Trail (sec.gov)
SEC Order (sec.gov)
