Consolidated Audit Trail (CAT)’s Claws Begin to Sink in

The Securities and Exchange Commission (SEC)’s mandated Consolidated Audit Trail (CAT) requires FINRA and the national exchanges to develop and maintain a database that collects and identifies every order, cancellation, modification, and trade execution for all exchange-listed equities and options in all US markets. Recognizing the complexity of a project of this size and scope, the SEC has implemented the rollout in phases beginning with the exchanges reporting equities and options data last month and broker-dealers due to start reporting by November 2019. According to leading market research firm TABB Group  “broker-dealers are renewing preparations for reporting to CAT… but six years after the SEC ordered the creation of the database, challenges persist” and cites the view from David Campell, VP – Global Technology and Operations at Broadridge that “people are going to be testing, developing and designing three different phases of the same regulation all at the same time. They could be playing catch up,”

Connamara views the challenge to the industry as similar in scope to that imposed by the European Securities & Markets Authority (ESMA) with the MiFID II mandate, which affected all firms trading European securities but also had far reaching consequences to the industry in general.  Connamara engaged with several firms to assist in meeting the MiFID II timeline and as the phased rollout for CAT continues is well positioned to assist the industry in navigating the complexities of this evolving regulatory requirement.

Connamara Systems, the premier provider of matching engine technology for startup and frontier exchanges and co-originator of the industry standard open-source QuickFIX FIX engine, provides software engineering services exclusively to the capital markets industry. Connamara practices Agile software development and project management methods and has over 20 years of experience successfully delivering complex, distributed systems to the most demanding customers in the financial marketplace.

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