By now the entire industry should know that the deadline for large broker-dealers to submit their U.S. equities and options data to the Consolidated Audit Trail (CAT) Processer, per SEC Rule 613, has been reset for April 2020. According to the legislation, every order, quote and event in the trade life cycle will need to be recorded and reported starting then.
So why aren’t more firms well on their way to installing the appropriate compliance management solutions?
It may be human nature to procrastinate. It may be that the SEC has extended the deadline several times in the past. However, there is no reason to believe that this new deadline will disintegrate. In fact, the SEC has now slated December 15, 2019 as the deadline for CAT compliance testing.
In short, the game is more serious than ever. If you aren’t prepared by now, you may be about to cash in your ninth and final CAT life. Here is the official five-phase rollout plan as announced by the SROs:
- Equities Part I (similar to OATS reporting)
- Options Part I (simple electronic orders)
- Equities Part II (allocations)
- Options Part II (manual and complex)
- Customer and account data
With phase one fixed at April 2020, preceded by an industrywide testing period starting this December, all CAT compliance reporting mechanisms must be set in place and active by April or penalties and fines will ensue.
Working backward from the December 2019 testing commencement, a reasonable six-month implementation and readiness window would suggest that broker-dealers would have a system selected (or built) by now. This would include 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 who can help establish the workflows, processes and best practices needed to meet the requirements by year’s end.
If you have not already made your move to accommodate CAT, talk to FIS today. Our Protegent CAT solution may be able to accelerate your timeline – but the clock is ticking.
Act now and avoid the penalties. Ask about our Protegent CAT compliance solution for broker-dealers or visit us today.