SROs Launch Study to Analyze Implementation Cost of CAT

FINRA and national securities exchanges, including the NYSE, NASDAQ, BATS Exchange, Inc., and others (collectively, the "SROs"), began distributing a cost study questionnaire to gather information to assess and manage the anticipated financial impact of the Consolidated Audit Trail ("CAT") reporting requirements on the broker-dealer community.

Rule 613 ("Consolidated Audit Trail") of Regulation NMS, adopted by the SEC in July 2012, requires that the SROs submit to the SEC a national market system ("NMS") plan to create, implement, and maintain an audit trail (the CAT) that will allow regulators to track activity in NMS securities throughout U.S. markets. The purpose of the CAT NMS Plan is to create a central repository for the SROs and the SEC to perform surveillance on order event data, linked to customer and account information, and to permit regulators to perform market reconstructions.

The SROs are currently working together to identify an optimal design for the CAT, and have requested that recipients turn in a completed questionnaire by August 6, 2014.

See: CAT NMS Plan Website. Related news: SIFMA Submits Comments to the SROs and the Exchanges on Selected Consolidated Audit Trail ("CAT") NMS Plan Topics (June 11, 2013); SIFMA Submits Comments on and Recommendations for 2014 Priorities to CAT Development Advisory Group (March 27, 2014); SEC Approves Proposed Joint NMS Plan Regarding the Consolidated Audit Trail (with Lofchie Comment) (February 24, 2014); SIFMA Submits Comments on NMS Plan for the Consolidated Audit Trail (January 7, 2014); SEC Grants Temporary Rule Exemption Regarding Establishment of a Consolidated Audit Trail (with Lofchie Comment) (December 9, 2013); SIFMA Submits Comments to the SROs and the Exchanges on Selected Consolidated Audit Trail ("CAT") NMS Plan Topics (June 11, 2013); SIFMA Publishes Recommendations for the Creation of a Consolidated Audit Trail (with Barrentine Comment)(March 28, 2013).