Consolidated Audit Trail Gets New Push

The US Securities and Exchange Commission's (SEC) plans for a consolidated audit trail are being renewed with a new set of deadlines and steps toward implementation.

Entry of bids to be the central repository operator and processor of consolidated audit trail (CAT) data closed on March 21, and a winner will be chosen by the US markets' self-regulatory organizations (SROs). SROs, in turn, have a September 30 deadline to file a CAT NMS [National Market System] plan, as called for under SEC Rule 613. Two months after that deadline, the SROs are expected to make their choice of CAT plan processor.

The CAT NMS plan, explains Manisha Kimmel, executive director of the Financial Information Forum, a financial industry operations and technology regulatory advocacy organization, will detail CAT operations, including its governance, cost, funding, data recording and reporting functionality, clock synchronization, reliability, accuracy, security, confidentiality, handling of primary market transactions, implementation timing, approaches to incorporating industry input, and ways to eliminate existing systems.

Yet, some uncertainties remain in the implementation timeline following a November or December naming of a CAT processor, because the SEC must approve what the SROs propose. "It is unknown at this point how long the SEC comment period will be [for the CAT NMS plan] and how much time the SEC will take to approve the plan," says Kimmel.