Thesys Selected by SROs to Build Massive Audit Trail

"After careful consideration following a thorough request for proposal (RFP) process, a majority of the SROs have selected Thesys to deliver a solution for the CAT, and we're confident in Thesys' management, technology and resources to implement this important regulatory initiative," said the operating committee of CAT LLC, the company comprised of SROs created to manage the CAT, in a statement.

The decision is pending the execution of a Plan Processor Agreement between Thesys and CAT LLC.

Thesys, which also partnered with IBM, law firm Latham & Watkins, and brokerage Rosenblatt Securities on the bid, was selected from a group that initially included 31 bidders all vying for the opportunity to build and implement the massive audit trail that will be responsible for tracking and storing information on every order, cancellation, modification and trade execution for exchange-listed equities and options in the US markets.

The US Securities and Exchange Commission (SEC), which initially approved the National Market System (NMS) plan for the CAT in July 2012, estimates the audit trail could cost the industry an estimated $2.4 billion to implement and $1.7 billion annually.

The SROs whittled down the list of bidder to three in November 2015. Thesys beat out FIS, a global provider of banking and payments technologies that acquired SunGard, the original bidder, in November 2015 and the Financial Industry Regulatory Authority (Finra), which currently operates and maintains the Order Audit Trail System (OATS), which is used to monitor trading practices for all NMS stocks and over-the-counter (OTC) equity securities.

"We're very excited to have this opportunity to bring our technology and expertise to bear on the Consolidated Audit Trail—one of the most important market initiatives of our time," Mike Beller, managing partner at Thesys and CEO of Tradeworx, tells WatersTechnology.

Beller spoke with WatersTechnology in December 2016 about areas the CAT NMS plan could be improved.

To read more about the CAT, click here to see more stories about what will be one of the biggest technology projects in the history of the industry.