SEC reopens CAT review
The SEC said it is seeking public comment on whether to comprehensively review the Consolidated Audit Trail, reopening debate about the U.S. market‑tracking database. The review will look at how much market state must be captured, normalised and retained across fragmented venues and could prompt changes to reporting burden and retention architecture. A separate warning highlighted cyber‑risk concerns after claims that Anthropic’s Mythos model could pose threats to the SEC’s market‑tracking database, calling attention to AI interactions with sensitive market systems. (economictimes.indiatimes.com / financialpost.com)
The Securities and Exchange Commission has reopened a broad review of the Consolidated Audit Trail, the database regulators use to reconstruct stock and options trading across U.S. markets. (sec.gov) The agency issued a concept release on April 16, 2026 asking for public comment on the CAT’s purpose, scope, governance, funding, cybersecurity and data privacy, along with other market audit trails and data sources. (sec.gov) The CAT works like a market flight recorder: broker-dealers and exchanges report customer and order events so regulators can track activity in National Market System securities from order entry through execution. The SEC adopted Rule 613 in July 2012, and approved the CAT National Market System plan on November 15, 2016. (sec.gov 1) (sec.gov 2) This review follows a cost-cutting push that has already changed the system in 2026. On March 27, the SEC approved an amendment and exemptive relief meant to reduce CAT operating costs while keeping what it called “core regulatory functionality.” (sec.gov) The new comment process asks whether the CAT still collects the right amount of information, whether some data should be normalized or retained differently, and whether other audit trails could replace parts of the job at lower cost. The SEC fact sheet also asks how to balance regulatory need against privacy, confidentiality and civil-liberties protections. (sec.gov) Cost has been a central fault line for years. Commissioner Hester Peirce said on April 16 that the CAT’s estimated annual budget was $55 million in 2016 and had grown to “almost $250 million” before recent reductions. (sec.gov) Supporters inside the agency have argued the database gives regulators a single view of fragmented markets that older systems cannot provide. Commissioner Caroline Crenshaw said in a February 2025 statement that the CAT helps regulators protect “investors, and the economy” by making market data usable for oversight and enforcement. (sec.gov) A separate warning on April 16 added a new line of attack: artificial intelligence and cyber risk. Bloomberg reported that the American Securities Association said Anthropic’s Mythos model could expose traders and the financial system through the SEC’s market-tracking database. (bloomberg.com) For now, the SEC has not proposed a final rewrite of the CAT. It has opened the record instead, signaling that the next fight will be over how much of Wall Street’s trading exhaust regulators should keep, for how long, and at what cost. (sec.gov)
