August 24, 2020

SEC proposes amendments to the CAT NMS Plan

On August 21, 2020, the US Securities and Exchange Commission proposed amendments to the national market system governing the Consolidated Audit Trail (CAT NMS Plan). The SEC said the amendments were designed to limit the scope of sensitive information to be collected, enhance the security of the CAT, and improve protections afforded to CAT data.  The CAT NMS Plan was formed by the SEC in 2016 to create an audit trail system that provides regulators with timely access to a comprehensive set of trading data and enables them to more efficiently and effectively reconstruct market events, monitor market behavior, and investigate misconduct.  

The SEC proposal includes twelve amendments to the existing rules: 1) define the scope of the current information security program; 2) establish a security-focused working group, 3) require the creation of secure analytical workspaces (SAWs) that participants will be required to use in order to access and analyze personally identifiable information (PII) and other confidential CAT information; 4) limit the amount of CAT data that can extracted from the Central Repository outside of SAWs; 5) impose requirements related to the reporting of certain PII; 6) define the process that governs access to customer and account attributes that will still be reported to the Central Repository; 7) enhance existing policy and procedures regarding data confidentiality; 8) refine the existing requirement that CAT data only be used for regulatory or surveillance purposes; 9) codify existing practices and secure connectivity and data storage; 10) implement a formal cyber incident response plan; 11) amend reporting requirements related to Firm Designated IDs and Allocation Reports, and 12) clarify that Appendix C has not been updated to reflect subsequent amendments to the CAT NMS Plan.

A 45-day public comment period will begin following publication of the amendments in the Federal Register and on

SEC Press Release | SEC Proposed CAT NMS Amendments