In November 2016, the Securities and Exchange Commission approved a national market system (NMS) plan that required national securities exchanges and national securities associations (“SROs”) to create a single, comprehensive database known as the Consolidated Audit Trail (CAT) that it stated will enable regulators to more efficiently and thoroughly track all trading activity in U.S. equity and options markets. FINRA has been selected as the processor for CAT.
To learn more about the requirements visit: https://catnmsplan.com/index.html.
Some important milestones on the SEC’s current schedule for implementing CAT are as follows:
|CAT Registration by Industry Members||March 18, 2019 – June 27, 2019|
|Annual Clock Synchronization and Certification||March 15 of Each Year|
|Industry Testing and Validation for Equities||December 2019|
|Equity Go-Live||April 2020|
|Industry Testing and Data Validation for Options||December 2019|
|Options Go-Live||May 2020|
What IBKR Clients Need to Know
An IBKR client falls under the rule and is obligated to report to CAT if they are a member of a U.S. national securities exchange or a U.S. national securities association that handles orders or quotes in NMS equity securities, OTC equity securities or listed options. Unlike the current OATS reporting obligation, the CAT reporting obligations extend the scope of covered instruments to options too.
We recommend that such clients become familiar with the rules that are available on the regulator’s website: https://catnmsplan.com/index.html.
Please note that the CAT Rules do not provide for any firms to be excluded or exempted from the CAT reporting obligation.
IBKR will offer CAT reporting services for its clients that are obligated to CAT report.
Although the CAT Industry Member Technical Specifications continue to be amended and revised, IBKR is working to comply with the requirements outlined so far.
We will provide additional information about testing and CAT reporting efforts as it becomes available.