Regulations

Story: SEC Cuts CAT Costs After Industry Pressure

By Jean-Luc Maracon

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What Changed in the Amendment. The new rules simplify administrative requirements that were bogging down the system.

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Industry Players Weigh In. The New York Stock Exchange and Nasdaq have been vocal critics of CAT costs from the start.

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What Happens Next. The SEC still needs feedback from industry members to fine-tune implementation.

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The Securities and Exchange Commission approved an amendment March 27 that slashes operational costs for the Consolidated Audit Trail system.

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The CAT tracks securities trading data across all U.S. markets, but it's been pretty much a money pit since launch.

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The new rules simplify administrative requirements that were bogging down the system. Brokerage firms won't have to jump through as many hoops, and certain compliance mandates…

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FINRA backed the move, especially for smaller brokerage firms that get hit hardest by CAT costs.

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Two days before the SEC decision, the Securities Industry and Financial Markets Association fired off comments pushing for even more cost cuts.

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Market participants are still waiting for implementation details. The SEC hasn't released a timeline, leaving firms guessing about compliance deadlines and resource requirements.

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The New York Stock Exchange and Nasdaq have been vocal critics of CAT costs from the start. Both exchanges argued the financial strain hurt their operations and competitive…

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SEC Chair Gary Gensler held a public roundtable March 20 to hash out the amendment's implications.

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The Investment Company Institute jumped into the discussion March 23 with a statement supporting the SEC's efforts.

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Charles Schwab and TD Ameritrade are watching developments closely. Any cost reductions could significantly impact their operational budgets.

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The Office of Information and Regulatory Affairs started collaborating with the SEC on March 18 to review cost-benefit analysis for the regulatory changes.

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Former SEC Chair Mary Jo White weighed in during a financial conference March 24. She called the CAT instrumental for market transparency but said cost efficiencies are crucial…

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