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SEC Delays CAT Reporting Due to COVID-19 Concerns

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The US Securities and Exchange Commission (SEC) has confirmed a delayed start for Consolidated Audit Trail (CAT) reporting, upon condition of compliance with certain other obligations, including milestones related to testing and releases of CAT functionality, as well as all other compliance dates for broker-dealer reporting to the CAT.

Although the original reporting deadline for Large Industry Members was due on 20th April, in March the Financial Industry Regulatory Authority (FINRA) issued a no-action letter to the SEC that essentially delayed the deadline until mid-May. The latest announcement from the SEC further extends that leeway until 22nd June, when initial equities reporting for large broker-dealers and small firms who currently report to the FINRA Order Audit Trail System (OATS) will come into force.

“In order to address the impact of COVID-19 while preserving progress toward existing milestones, the first exemptive order also allows for a delayed start to CAT reporting conditioned upon compliance with certain other obligations,” says an SEC spokesperson. “These obligations include milestones related to testing and releases of CAT functionality, as well as all other compliance dates for broker-dealer reporting to the CAT.”

Other CAT deadlines include 20th July 2020 for initial options reporting for large broker-dealers, 13th December 2021 for full equities and options reporting for all firms, and 11th July 2022 for full customer and account reporting.

UK-based data integration specialist Inforalgo, which offers a cloud-based service for CAT compliance, warns that while the news might come as a welcome relief as businesses work to stabilise under new working conditions, firms should not rest on their laurels, but use the time to address key COVID-19 considerations: including whether CAT reporting can be supported with employees working from home, whether current infrastructure can handle the diverse changes to the trading environments, and whether an outsourced or managed service solution might be beneficial in order to meet compliance requirements.

“We strongly advise firms to use this time to get ahead of the game and get their reporting solutions in order,” says the provider.

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