Fintech Insights

CAT Deadline: Just Another Scratch on the Wall?

October 04, 2018

It was not long ago that large broker-dealers were scrambling to meet the looming November 2018 deadline for submitting their U.S. equities and options data to the Consolidated Audit Trail (CAT) Processer, under Rule 613 of the U.S. Securities Exchange Commission (SEC).

By now, the entire industry should know that the SEC and Self-Regulatory Organizations (SROs) will be using CAT for market analysis, regulatory analyses and market event reconstruction to determine precise causes of disruptive market events and trading violations. Every order, quote and event in the trade life cycle will need to be recorded and reported.

That said, if you were among the early movers to get your house in order, kudos to you. You are now considered officially “ahead of the game.”

For the rest who doubted the deadline would ever stick in the first place, there is no more wall to scratch. The rollout will occur in five phases, as follows:

  • Equities Part I (similar to OATS reporting)
  • Options Part I (simple electronic orders)
  • Equities Part II (linkages and allocations)
  • Options Part II (manual and complex)
  • Customer and account data

The production deadline for large broker-dealers to submit phase one equities data is now set at November 2019, preceded by an industry-wide testing period starting on August 15, 2019.

These dates are not expected to change. The SEC has granted some leniency to date but is now firm in its resolve that CAT reporting must be in place and active by 2020. Their final bit of grace appears to be the conformance period granted between November 2019 and February 2020.

In short, the SEC has drawn the line. The November 2019 reporting deadline and three-month testing period that begins August 2019 will fly by fast. Broker-dealers that delay will soon run out of time if they don’t make progress on their CAT compliance preparation now.

Working backward from the August 2019 testing commencement, and using a six-month implementation and readiness window, broker-dealers should have a system selected (or built) by January 2019. This includes having a credible team and/or vendor in place that understands the regulation, how to manage the big data required to comply, and the cybersecurity necessary to meet the requirements. A qualified partner can also help establish the workflows, processes and best practices needed to meet Rule 613 requirements by next year.

Avoid the penalties. Act now. Please contact FIS and ask about our Protegent CAT compliance solution for broker-dealers or visit us today at