May 14, 2021


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SIFMA Usually takes Goal at SEC’s CAT Program

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The Securities Market and Money Markets Affiliation instructed the SEC on Wednesday that it opposes the regulator’s approach to “force all industry members” obligated to report to the Consolidated Audit Trail, or CAT, to assume “all the liability involved with a breach or misuse of data” in the CAT.

“We support the enhancement of the CAT but have had longstanding problems about the stability of the CAT facts,” Ellen Greene, SIFMA handling director, fairness and options marketplace construction, stated in a remark letter Wednesday. “This is the largest selection of consumer and trading data that has at any time been collected and consolidated and a breach would have devastating consequences on market place integrity, buyers and economic corporations.”

Shifting the liability to business customers, Greene explained, “is fundamentally unfair due to the fact the [self-regulatory organizations] SROs have the distinctive responsibility for maintaining the CAT and for utilizing steps to safeguard the CAT versus a facts breach.”

SIFMA, she continued, strongly thinks “those accountable for the knowledge need to bear the legal responsibility for any breaches, and we motivate the highest concentrations of security measures be place in spot to safeguard traders.”

The comment period on the SEC’s plan, Proposed Amendments to the National Market place Process Approach Governing the Consolidated Audit Path to Improve Info Safety, finished Wednesday.

The CAT is a regulatory reporting tool commissioned by the SEC and becoming made by FINRA.

Former SEC Chairman Jay Clayton described in September that the CAT “is meant to greatly enhance regulatory oversight of our securities marketplaces. Our equities and choices markets function by way of multiple exchanges and other venues and the CAT will facilitate cross-industry oversight and analysis, thus bettering trader safety and industry integrity.”

The SEC announced Tuesday that Manisha Kimmel, senior policy advisor, regulatory reporting, who has coordinated the SEC’s oversight of the creation of the CAT, will conclude her tenure at the conclude of January.

FINRA said in early October that it planned to enhance some service fees it charges broker-dealers to cope with the onslaught of new regulatory duties, which includes individuals close to Regulation Best Interest and the Consolidated Audit Trail.

The SEC in May possibly issued two exemptive orders to set up a phased CAT reporting timeline for broker-dealers, and permit introducing brokers that satisfy particular demands to stick to the compact broker-dealer reporting timeline.

The first fee get enables for fairness and solutions reporting in phases, having into account the complexity of reporting gatherings.

In purchase to address the influence of COVID-19 even though preserving development toward current milestones, the 1st exemptive order also permits a delayed commence to CAT reporting conditioned upon compliance with particular other obligations.

These obligations incorporate milestones similar to screening and releases of CAT performance, as effectively as all other compliance dates for broker-vendor reporting to the CAT.

The American Securities Association is suing the SEC and filed to end the collection of investors’ private identifiable information and facts by means of the CAT.

Ron Kruszewski, ASA’s chairman and CEO of Stifel Economical, mentioned in a statement in Could that though the affiliation supports the SEC’s implementation of CAT, it “firmly believes that the selection of investors’ PII into a centralized databases is an unnecessary and considerable possibility to the privateness of American traders.”