FINRA Amends CAT Reporting Rules to Align with Recent Changes to Short Sale Exceptions

FINRA proposed a rule change to amend its Consolidated Audit Trail reporting requirements to align with recent amendments to the CAT NMS Plan on short sale exceptions. 

Current FINRA Rule 6830 ("Industry Member Data Reporting") required Industry Members to specifically report whether a sell order relies on the "bona fide market making" exception under Regulation SHO. According to the proposed amendment, under new Rule 6830(a)(2)(G) — and as to the original receipt or origination of an order to sell an equity security — members must report whether the order is a short sale effected by a market maker claiming the exception found in Regulation SHO Rule 203(b)(2)(iii) ("Borrowing and delivery requirements"). 

FINRA stated that this change is necessary to ensure consistency with the SEC’s 2023 amendment to the CAT NMS Plan, which mandated that participants require their Industry Members to record and report reliance on the BFMM Locate Exception to the Central Repository. FINRA noted that the rule assists in meeting regulatory obligations and applies equally to all Industry Members trading equity securities.

The SEC waived the standard 30-day operative delay, designating the rule change operative immediately upon filing. Comments on the proposal are due by January 21, 2026.