SEC Issues Order to Reduce Operating Costs of Consolidated Audit Trail
The SEC granted conditional exemptive relief to CAT NMS Plan participants to reduce operating costs following a court decision vacating the 2023 Funding Model Order.
The SEC issued conditional exemptive relief to self-regulatory organizations to reduce Consolidated Audit Trail (CAT) operating costs while maintaining core regulatory functionality. This action follows the Eleventh Circuit's decision to vacate the 2023 Funding Model Order, aiming to rationalize a budget that originally exceeded $248 million. The relief is expected to reduce 2025 expenses by an additional $20 million to $27 million below the $196 million forecast.
The SEC granted conditional exemptive relief to self-regulatory organizations participating in the Consolidated Audit Trail (CAT) NMS Plan to reduce escalating operating costs. This regulatory action responds to the U.S. Court of Appeals for the Eleventh Circuit vacating the 2023 Funding Model Order. To achieve cost efficiencies, participants will cease creating certain interim lifecycle linkages, ease late record re-processing requirements, and optimize older data storage. These measures are expected to reduce the 2025 CAT budget by an additional $20 million to $27 million from a $196 million forecast, down from an initial $248 million. SEC Chairman Paul S. Atkins emphasized that this relief is the beginning of a journey to make the CAT more efficient and cost-effective. While no specific fraud was alleged, the relief streamlines requirements under Regulation NMS Rule 613 and Exchange Act Rule 17a-1.
Exhibits & Attached Documents (2)
Extracted insights
- $248.00M $248 million $100M–$1B
- $196.00M $196 million $100M–$1B
- $27.00M $27 million $10M–$100M
- $20.00M $20 million $10M–$100M
- person cat budget
- person conditional exemptive relief
- person conditional exemptive relief order
- person jamie selway
- person paul s. atkins
- agency Securities and Exchange Commission
- Securities and Exchange Commission issued order granting conditional exemptive relief
- Conditional Exemptive Relief allows participants to expeditiously and meaningfully reduce operating costs of the Consolidated Audit Trail
- Paul S. Atkins said CAT must be more efficient and cost-effective
- Jamie Selway said Division will continue to engage participants and industry members to facilitate needed improvements to reduce costs for investors
- Conditional Exemptive Relief Order expands on previous cost savings measures approved by the Commission
- CAT Budget exceeded $248 million
- CAT’s Expenses forecast to fall an additional $20 million-$27 million below the approximately $196 million forecast expenses for 2025
The Securities and Exchange Commission today issued an order granting conditional exemptive relief related to certain requirements of the National Market System Plan governing the Consolidated Audit Trail (CAT NMS Plan), Rule 613 of Regulation NMS, and Rule 17a-1 under the Securities Exchange Act of 1934. This conditional exemptive relief allows the self-regulatory organizations that are the participants to the CAT NMS Plan to expeditiously and meaningfully reduce the operating costs of the consolidated audit trail (CAT) while maintaining core regulatory functionality. “Both the Commission and the participants that operate the CAT need to take very seriously their roles in reducing these seemingly endless cost increases. CAT must be more efficient and cost-effective, especially after the recent decision by the U.S. Court of Appeals for the Eleventh Circuit that vacated the 2023 Funding Model Order governing the CAT,” said SEC Chairman Paul S. Atkins. “While I am pleased to support today’s exemptive relief, I want to reiterate that this is just the start.” “Today’s Commission action begins an overdue journey to reform and rationalize the CAT. The Division will continue to engage participants and industry members to facilitate needed improvements to reduce costs for investors,” said Jamie Selway, Director of the SEC’s Division of Trading and Markets. The conditional exemptive relief order expands on previous cost savings measures approved by the Commission and will allow the plan participants to, among other things: (1) cease creating interim lifecycle linkages absent regulator request; (2) ease requirements related to the re-processing of late records; (3) cease providing certain functionality associated with the online targeted query tool; and (4) delete certain CAT data and more cost effectively store older CAT data. The CAT budget originally approved by the Operating Committee of the CAT for 2025 exceeded $248 million. As a result of implementation of previous cost amendments and the relief granted today, CAT’s expenses are approximately forecast to fall an additional $20 million-$27 million below the approximately $196 million forecast expenses for 2025.
The Securities and Exchange Commission today issued an order granting conditional exemptive relief related to certain requirements of the National Market System Plan governing the Consolidated Audit Trail (CAT NMS Plan), Rule 613 of Regulation NMS, and Rule 17a-1 under the Securities Exchange Act of 1934. This conditional exemptive relief allows the self-regulatory organizations that are the participants to the CAT NMS Plan to expeditiously and meaningfully reduce the operating costs of the consolidated audit trail (CAT) while maintaining core regulatory functionality. “Both the Commission and the participants that operate the CAT need to take very seriously their roles in reducing these seemingly endless cost increases. CAT must be more efficient and cost-effective, especially after the recent decision by the U.S. Court of Appeals for the Eleventh Circuit that vacated the 2023 Funding Model Order governing the CAT,” said SEC Chairman Paul S. Atkins. “While I am pleased to support today’s exemptive relief, I want to reiterate that this is just the start.” “Today’s Commission action begins an overdue journey to reform and rationalize the CAT. The Division will continue to engage participants and industry members to facilitate needed improvements to reduce costs for investors,” said Jamie Selway, Director of the SEC’s Division of Trading and Markets. The conditional exemptive relief order expands on previous cost savings measures approved by the Commission and will allow the plan participants to, among other things: (1) cease creating interim lifecycle linkages absent regulator request; (2) ease requirements related to the re-processing of late records; (3) cease providing certain functionality associated with the online targeted query tool; and (4) delete certain CAT data and more cost effectively store older CAT data. The CAT budget originally approved by the Operating Committee of the CAT for 2025 exceeded $248 million. As a result of implementation of previous cost amendments and the relief granted today, CAT’s expenses are approximately forecast to fall an additional $20 million-$27 million below the approximately $196 million forecast expenses for 2025.