In a speech to the Intermarket Surveillance Group annual conference, the U.S. Securities and Exchange Commission’s Director of the Division of Trading and Markets said the Commission is reviewing both immediate and longer-term reforms to the Consolidated Audit Trail while continuing to treat cross-market surveillance as a core investor protection tool. The remarks pointed to the Commission’s April 16 concept release on CAT and other audit trails and said the review is focused on funding, governance, functionality, and security. The speech said the SEC and self-regulatory organizations have reduced CAT’s operating budget by more than USD 100 million since last summer, after projected annual costs had risen to more than USD 248 million as of November 2024 from an original upper-end estimate of about USD 55 million when the CAT plan was approved in 2016. It also highlighted the Commission’s request for input on modernizing broker-maintained blue sheets and on a request-response mechanism to link sensitive client information to CAT transaction data. Beyond CAT, the remarks said surveillance will need to capture products that provide exposure to U.S. equities outside traditional equity and options markets, including tokenized assets, event contracts, and perpetual futures traded on offshore venues. Comments on the concept release are due by June 22 as the Commission considers CAT’s future and possible governance changes to prevent similar cost and operational problems from recurring.
U.S. Securities & Exchange Commission2026-05-27
U.S. Securities and Exchange Commission Trading and Markets Director outlines CAT reform priorities and highlights more than USD 100 million in operating budget cuts
The SEC’s Trading and Markets Director said the Commission is reviewing near- and long-term reforms to the Consolidated Audit Trail, focusing on funding, governance, functionality, and security, while preserving cross-market surveillance. He said CAT’s operating budget has been cut by more than USD 100 million, and the SEC is seeking input on modernizing broker-maintained blue sheets and a request-response mechanism to link sensitive client data to CAT. He also highlighted the need to surveil products providing U.S. equity exposure outside traditional markets, including tokenized assets, event contracts, and perpetual futures on offshore venues.