SEC Grants Conditional Exemptive Relief to Reduce CAT Operating Costs

The SEC granted conditional exemptive relief to Consolidated Audit Trail ("CAT") participants from certain requirements under the Exchange Act and Regulation NMS in order to reduce operating costs. 

In the Order, the SEC provided four areas of relief for CAT participants: 

• Lifecycle Linkage Deadlines are extended from T+1 at noon to T+5 at 8:00 a.m. (ET), with regulators able to request interim IDs sooner;
• Late-Record Re-processing is scaled back, with lifecycle mapping for the prior three years run quarterly instead of weekly, and the "Full Replay" process required only on request;
• Decommissioning of Query Tools will allow the OTQT suite (DIVER, ARLE, OLA Viewer) to be retired after a two-month transition, while Bulk Data Structured Query Language and Direct Read remain available; and
• Reduced Data Storage and Retention permits deletion of CAT data older than five years, archiving of data older than three years, deletion of OMM quote data after one year, and elimination of interim operational data after 15 days.

The SEC said the Order responds to two developments: (i) CAT’s operating costs have materially exceeded original projections, with 2025 expenses projected at nearly $200 million; and (ii) on July 25, 2025, the Eleventh Circuit vacated the SEC’s CAT funding model, creating uncertainty in how costs are allocated. (See related coverage.) The SEC characterized the exemptive relief as interim cost controls while staff continues a broader review of the CAT and considers pending amendments. 

The SEC noted that the Order applies to national securities exchanges and FINRA, while broker-dealers remain subject to their existing CAT reporting obligations.