The SEC approved a national market system (NMS) plan to create a single, consolidated audit trail (CAT) database, designed to enable regulators to more efficiently and thoroughly track all trading activity in the U.S. equity and options markets. The plan outlines how self-regulatory organizations and broker-dealers will record and report information, resulting in a range of data elements that together provide the complete lifecycle of all orders and transactions in the U.S. equity and options markets. In response to public comments and recommendations, the SEC modified several provisions of the plan from its original form. For example, the SEC:

  • Strengthened several data security requirements, including with respect to personally identifiable information;
  • Tightened the clock synchronization standards for SROs to within 100 microseconds of the time maintained by the National Institute of Standards and Technology to enable regulators to better sequence order events across multiple exchanges and required the SROs to assess industry standards for clock synchronization based on the type of market participant or system, rather than the industry as a whole;
  • Enhanced the CAT plan governance by expanding the membership of the advisory committee to include an additional institutional investor representative and a representative of a service bureau that provides CAT reporting services; and
  • Accelerated the deadline for SROs to submit proposals to retire regulatory data reporting systems that will be rendered obsolete by CAT, to reduce the burden on broker-dealers of reporting to multiple systems.

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