SIFMA Urges SEC to Delay CAT Compliance Deadline

SIFMA requested that the SEC delay the November 15, 2018 compliance deadline for large broker-dealer reporting to the Consolidated Audit Trail ("CAT"). SIFMA contended that meeting the current large broker-dealer implementation deadline will be a significant challenge for industry members for three key reasons:

1. the CAT governance structure does not "give the industry a significant voice,"
2. the implementation schedule does not account for the demands of "large scale process changes," and
3. current proposals to remove duplicative regulatory reporting systems are "not sufficiently aggressive."

In addition to these challenges, SIFMA raised concerns regarding CAT data security and called for a "fundamental rethink" of both the data contained within CAT and how that data is managed and protected. SIFMA urged the SEC to reconsider the requirement to collect extremely sensitive personally identifiable information, particularly from retail investors, and restrict the ability of any data to be downloaded from the CAT.

SIFMA recommended that the SEC allow for a Consolidated Audit Trail Industry Steering Committee ("CAT ISC"), as with the T+2 Industry Steering Committee, which could directly interact with the CAT Operating Committee. With a focus on improving implementation, a CAT ISC could be tasked with (i) a revised timeline, (ii) building consensus around a "phased equity and listed-options implementation approach" using pilot trial periods, (iii) technical specifications, and (iv) design of a coordinated user acceptance testing.