U.S. Securities & Exchange Commission issues concept release seeking input on restructuring or alternatives to the Consolidated Audit Trail

The U.S. Securities & Exchange Commission published a concept release as part of its comprehensive review of the Consolidated Audit Trail (CAT), inviting public comment on whether and how the CAT should be reshaped in light of issues spanning governance, technology infrastructure, data security, funding models, and privacy. The release describes the CAT as a government-mandated repository covering every equity and options order and trade, and highlights cost and execution concerns, including an annual budget that grew from an estimated USD 55 million in 2016 to almost USD 250 million until recently and an implementation timeline that is years behind schedule. It also notes steps taken over the past year to reduce costs, cease mandated collection and storage of personally identifiable information, and reevaluate certain data fields, while posing questions about options such as moving away from a centralized repository, further restricting the ability of regulators to link personally identifiable information to transaction data (including where CCIDs are used), or eliminating the CAT while maintaining effective market surveillance by the Commission and self-regulatory organizations. The Commission intends to use feedback on the concept release to inform its reassessment of the CAT and its broader approach to financial surveillance.