SEC Provides for Phased CAT Broker-Dealer Reporting Timelines with Conditional Exemption for Impacts of COVID-19
The SEC issued two exemptive orders to facilitate phased implementation of the Consolidated Audit Trail (CAT) by adjusting reporting timelines for broker-dealers and extending small-firm deadlines to qualifying introducing brokers, with no fraud, charges, or misconduct involved.
The SEC granted two exemptive orders to support the orderly rollout of the Consolidated Audit Trail (CAT), establishing phased reporting deadlines for broker-dealers amid COVID-19 disruptions. Initial equities reporting began June 22, 2020, followed by options reporting on July 20, 2020, with full equities and options reporting required by December 13, 2021, and full customer/account reporting by July 11, 2022. The second order permitted introducing brokers meeting net capital requirements under Rule 0-10(c)(1) to follow the small broker-dealer timeline, even if they did not technically qualify as 'small' under the CAT NMS Plan, with no enforcement, fines, or allegations of wrongdoing.
The Securities and Exchange Commission issued two exemptive orders to advance the implementation of the Consolidated Audit Trail (CAT) by providing regulatory flexibility to broker-dealers during the COVID-19 pandemic. The first order established a phased reporting timeline, beginning with initial equities reporting on June 22, 2020, followed by options reporting on July 20, 2020, and requiring full equities and options reporting by December 13, 2021, with full customer and account reporting due by July 11, 2022. The second order extended the small broker-dealer reporting schedule to introducing brokers that met the net capital requirements under Rule 0-10(c)(1) of the Securities Exchange Act of 1934, even if they did not qualify as 'small' under the CAT NMS Plan. These actions were designed to accommodate operational complexity and pandemic-related delays while preserving key compliance milestones. No enforcement actions, fines, or allegations of fraud were associated with these orders. The SEC emphasized that the exemptions were administrative and aimed at ensuring feasible, orderly market infrastructure modernization. The focus was entirely on regulatory scheduling and compliance support, not on addressing misconduct or penalizing entities.
Exhibits & Attached Documents (2)
Extracted insights
- person first commission order
- person first exemptive order
- person second commission order
- person second order
- agency Securities and Exchange Commission
- SEC voted to issue Two Exemptive Orders
- First Commission Order focuses on Allowing Equity and Options Reporting in Phases
- First Exemptive Order allows Delayed Start to CAT Reporting
- Second Commission Order focuses on Introducing Brokers Meeting Net Capital Requirements
- Second Order provides Exemptive Relief for Certain Firms
- Large Broker-Dealers begin Initial Equities Reporting June 22, 2020
- Large Broker-Dealers begin Initial Options Reporting July 20, 2020
- Large and Small Broker-Dealers begin Full Equities and Options Reporting Dec. 13, 2021
- Large and Small Broker-Dealers begin Full Customer and Account Reporting July 11, 2022
The Securities and Exchange Commission announced it has voted to issue two exemptive orders in order to move Consolidated Audit Trail (CAT) implementation forward: (1) establishing a phased CAT reporting timeline for broker-dealers, and (2) permitting introducing brokers that meet certain requirements to follow the small broker-dealer reporting timeline. The first Commission order focuses on allowing for equity and options reporting in phases, taking into account the complexity of reporting events. In order to address the impact of COVID-19 while preserving progress toward existing milestones, the first exemptive order also allows for a delayed start to CAT reporting conditioned upon compliance with certain other obligations. These obligations include milestones related to testing and releases of CAT functionality, as well as all other compliance dates for broker-dealer reporting to the CAT. The second Commission order focuses on those introducing brokers that meet the net capital requirements for small broker-dealers under Rule 0-10(c)(1) under the Securities Exchange Act of 1934, but fail to qualify as small broker-dealers for the purposes of the CAT NMS Plan. This order provides exemptive relief permitting these firms to follow the CAT reporting timeline applicable to small broker-dealers. Following today's actions, select milestones for broker-dealer reporting to the CAT are: June 22, 2020: Initial equities reporting for large broker-dealers and small broker-dealers that currently report to FINRA's Order Audit Trail System (OATS); July 20, 2020: Initial options reporting for large broker-dealers; and Dec. 13, 2021: Full equities and options reporting for large and small broker-dealers; and July 11, 2022: Full customer and account reporting for large and small broker-dealers.
The Securities and Exchange Commission announced it has voted to issue two exemptive orders in order to move Consolidated Audit Trail (CAT) implementation forward: (1) establishing a phased CAT reporting timeline for broker-dealers, and (2) permitting introducing brokers that meet certain requirements to follow the small broker-dealer reporting timeline. The first Commission order focuses on allowing for equity and options reporting in phases, taking into account the complexity of reporting events. In order to address the impact of COVID-19 while preserving progress toward existing milestones, the first exemptive order also allows for a delayed start to CAT reporting conditioned upon compliance with certain other obligations. These obligations include milestones related to testing and releases of CAT functionality, as well as all other compliance dates for broker-dealer reporting to the CAT. The second Commission order focuses on those introducing brokers that meet the net capital requirements for small broker-dealers under Rule 0-10(c)(1) under the Securities Exchange Act of 1934, but fail to qualify as small broker-dealers for the purposes of the CAT NMS Plan. This order provides exemptive relief permitting these firms to follow the CAT reporting timeline applicable to small broker-dealers. Following today's actions, select milestones for broker-dealer reporting to the CAT are: June 22, 2020: Initial equities reporting for large broker-dealers and small broker-dealers that currently report to FINRA's Order Audit Trail System (OATS); July 20, 2020: Initial options reporting for large broker-dealers; and Dec. 13, 2021: Full equities and options reporting for large and small broker-dealers; and July 11, 2022: Full customer and account reporting for large and small broker-dealers.