The Commission simultaneously provided exemptive relief from certain requirements of Rule 17a-1 under the Securities Exchange Act of 1934 to allow for the implementation of various cost savings measures.
The approved changes allow CAT plan participants to cease creating interim lifecycle linkages unless requested by authorized regulatory users, delete all CAT data older than three years, and ease requirements related to the re-processing of late records.
Additional measures include eliminating certain functionality in the online targeted query tool, ceasing the reporting of rejected messages received by plan participants, and relaxing processing deadlines for CAT data. The amendment also establishes a revised approach for generating anonymized customer identifiers and implements a spending cap provision governing future changes to the CAT.
The Commission estimates the amendment will deliver approximately $50 million to $70 million in annual cost savings compared to the 2025 CAT budget. This represents approximately $19.4 million to $24.1 million in incremental savings beyond those already achieved through cost-reduction measures approved in 2025.
The cost-cutting effort addresses mounting budget pressures for the comprehensive trading surveillance system, which tracks virtually every equity and options trade in U.S. markets. The CAT was mandated following the 2010 flash crash to provide regulators with detailed transaction data, but its implementation has been marked by technical challenges and criticism from industry participants who fund the system.
SEC Chairman Paul S. Atkins stated that the amendment builds on last year’s progress toward a more efficient and cost-effective CAT. He said, "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." Atkins noted that the Commission's ongoing comprehensive review will consider the sustainability of the CAT’s budget and expects plan participants 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. She said, "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."
The amendments take effect as the Commission continues its broader review of the CAT’s structure and operations. The measures are designed to reduce operational expenses while maintaining the system’s ability to provide regulators with the comprehensive market surveillance data originally envisioned.