The SEC also provided exemptive relief from certain Rule 17a-1 requirements under the Securities Exchange Act to enable the implementation of eight specific cost savings measures. The amendment builds on similar cost reduction efforts approved by the Commission in 2025, with the new measures expected to deliver an additional $19.4 million to $24.1 million in incremental annual savings beyond those earlier reforms.
The cost reduction initiative comes after what Chairman Paul S. Atkins characterized as "a decade of increasing costs" for the CAT system. The approved measures allow Plan Participants to eliminate various data processing and reporting requirements, including ceasing creation of interim lifecycle linkages unless requested by authorized regulatory users, deleting CAT data older than three years, and discontinuing certain functionality in the online targeted query tool.
Under the amendment, Plan Participants may also ease requirements for re-processing late records, stop reporting rejected messages, relax certain CAT data processing deadlines, and implement a revised approach for generating anonymized customer identifiers. Additionally, the amendment establishes a spending cap provision to govern future changes to the CAT system.
The cost savings effort reflects broader concerns about the CAT's financial sustainability. The comprehensive audit trail system, which tracks securities transactions across U.S. markets, has faced mounting operational expenses since its implementation, prompting calls from industry participants and regulators for more efficient operations.
"After a decade of increasing costs, today's amendment builds on last year's progress towards a more efficient and cost-effective CAT. It is a step in the right direction, but there are still many more steps to be taken," said SEC Chairman Paul S. Atkins. "The Commission's ongoing comprehensive review of the CAT will consider the sustainability of the CAT's budget, and we expect the Plan Participants that operate the CAT and the industry to work together towards further cost savings."
Jamie Selway, Director of the SEC's Division of Trading and Markets, emphasized the need for continued cost control efforts. "The Division supports efforts by the CAT NMS Plan Participants to control the sizeable costs of operating the CAT. We expect these efforts to continue and look forward to additional progress," Selway said.
The Commission indicated that its comprehensive review of the CAT will continue to examine budget sustainability issues, suggesting additional reforms may be forthcoming. The cost reduction measures are expected to take effect as Plan Participants implement the operational changes over the coming months.