SIFMA Publishes Recommendations for the Creation of a Consolidated Audit Trail (with Barrentine Comment)

SIFMA published a new white paper titled "Industry Recommendations for the Creation of a Consolidated Audit Trail (CAT)." The paper presents SIFMA's views on how the CAT system should be organized, provides key principles on operations, structure, governance and scope, and outlines the industry vision of how the CAT system should be implemented and expanded. SIFMA identified eight guiding principles for the development of a CAT system:

• Elimination of Duplicative Systems and Reporting;
• Appropriate Flexibility and Scalability;
• Centralized Administration;
• Public Transparency and Industry Engagement;
• Minimal Disruption to Existing Market and Business Practices;
• Reuse of Existing Assets and Standards;
• Data Security, Privacy and Consumer Protection;
• Special Considerations for Options.

Barrentine Comment: SIFMA's carefully considered views should make clear the need for thorough planning to get CAT right before plunging forward in response to a self-imposed and unrealistic deadline. Done right, CAT can improve the financial markets by providing for better and cheaper regulation while also strengthening the public's trust and confidence in the financial markets. Done wrong, CAT will lead to a needlessly duplicative, inflexible and overly expensive regulatory structures that falls far short of the goals set for it. SIFMA's White Paper should serve as a wake-up call regarding the need for a more realistic timeline to allow for implementation of a truly inclusive process and more thoughtful and comprehensive planning around CAT's design and implementation. CAT is simply too important to the future of our markets and the financial industry to do otherwise.

View White Paper in full here (links externally to SIFMA website).See also: SIFMA Criticizes Decision to Move Forward with Request for Proposal for the Creation of Consolidated Audit Trail (with Lofchie Comment).