FINRA’s Cook: ‘Mission Accomplished’ With CAT Database

Speaking about the status of the Consolidated Audit Trail’s transaction database on Thursday, Financial Industry Regulatory Authority CEO Robert Cook said, “Mission accomplished.” Cook also signaled that paring back the amount of information collected via CAT may be warranted.

“If you go back and think about what was the purpose of CAT — coming out of the flash crash, the SEC wasn’t in a position to reconstruct what happened; it didn’t have the data available,” Cook said during comments at the Securities Traders Association’s annual Market Structure conference, held in Washington.

“Fast forward to today, we have an integrated consolidated audit trail that allows for surveillance of all listed products in [over the counter] trading; it allows for market reconstruction, it allows for policy informing/policy analysis,” Cook explained.

CAT is the SEC-mandated central repository of trades, quotes and orders for all U.S. exchange-listed and over-the-counter equity securities and U.S. exchange-listed options contracts across all U.S. markets and trading venues. Investors’ personal identifiable information, or PII, became available via the CAT on March 17.

While there are “tons of problems that people raise with CAT,” Cook explained, “overall, the transactional database has been very successful in meeting those goals.”

As for “legitimate” privacy concerns related to CAT, Cook said, it’s “never to late to do the right thing. Just because we’re there now doesn’t mean we can’t say, ‘Maybe we went too far. Let’s go back and collect less data and really shrink the footprint of that.’”

CAT Funding

In terms of  CAT funding, FINRA was “disappointed that the SEC approved the funding model that came out,” Cook explained. “We had commented again it several times; we don’t think it’s the appropriate allocation of the costs of CAT.”