SEC Grants Relief to CAT Participants from Certain Reporting Requirements

The SEC granted conditional relief from certain Consolidated Audit Trail ("CAT") reporting requirements requested by FINRA and the national securities exchanges (the "Participants").

As previously covered, the Participants requested exemptive relief regarding the way in which broker-dealers executing a trade would report the identity of the clearing broker and "a cancelled trade indicator for trades that are cancelled." The Participants proposed an alternative approach that would use FINRA Facility Data rather than requiring additional Participant reporting.

The SEC agreed that "relying on FINRA Facility Data in lieu of requiring Industry Members to report the SRO-Assigned Market Participant Identifier of the clearing broker, if applicable, and a cancelled trade indicator will be more efficient and more cost-effective for Industry Members, because this proposed alternative approach will avoid burdening Industry Members with reporting data regarding clearing brokers and cancelled trades pursuant to two reporting regimes."

In granting the relief, the SEC noted the Participants' assertion that the relief will not result in any loss of data with respect to the collection of relevant data for cancelled trades and clearing brokers. The SEC conditioned the relief on certain steps by the Participants with regard to the FINRA Facility to ensure the collection of relevant and equivalent data regarding cancelled trades and clearing brokers.

In the Order, the SEC also approved the alternative phased implementation schedule for the CAT NMS Plan, with full implementation by December 15, 2022.