The Securities and Exchange Commission plans to publish for public comment a National Market System (NMS) plan to create a consolidated audit trail (CAT) to better enable regulators to track trading in equity and option securities. The CAT plan was submitted jointly by the national securities exchanges and the Financial Industry Regulatory Authority to the SEC.
The CAT NMS plan includes a plan processor who will build a central repository that would receive, consolidate and retain consolidated trade and order data. Among other things, the plan processor would be responsible for operating the central repository, ensuring the security and confidentiality of the data, and publishing technical specifications for data submission by the self-regulatory organizations (SROs) and broker-dealers to the central repository.
The CAT plan would apply to NMS securities and over-the-counter equity securities. At the various stages in the lifecycle of an order, SROs and broker-dealers would be required to submit certain information about the order to the central repository, including the following:
- a unique identifier, provided by the broker-dealer, for the customer submitting the order;
- an identifier, provided by the SRO, for the broker-dealer receiving, originating, routing or executing the order;
- the date and time of the order event; and
- the security symbol, price, size, order type and other material terms of the order.
The CAT plan would generally require this data to be recorded contemporaneously with the order event and reported to the central repository by 8:00 a.m. the following day. The CAT plan also would require the data to be timestamped with a minimum granularity of one millisecond for electronic order events, and with a minimum granularity of one second for manual order events.
Public comments on the CAT plan should be submitted to the SEC within 60 days of the plan’s publication in the Federal Register.
More information is available here.