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SEC Approves Cost-Saving Measures for the Consolidated Audit Trail

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The Securities and Exchange Commission (SEC) has approved an amendment to the National Market System Plan to implement various cost-saving measures for the Consolidated Audit Trail (CAT). This decision includes exemptive relief from specific requirements of the Securities Exchange Act of 1934, aiming to reduce the financial burden of the CAT while maintaining its core regulatory functions. The amendment builds upon previous efforts from 2025 to streamline the system’s budget and operational efficiency.

Key changes under the new amendment include the deletion of CAT data older than three years, the relaxation of certain data processing deadlines, and the implementation of a spending cap for future modifications. Furthermore, the plan participants will cease creating interim lifecycle linkages unless requested and will stop reporting rejected messages. These technical adjustments are designed to simplify the infrastructure and reduce the volume of data managed by the system.

The SEC estimates that these measures will result in annual cost savings of between $50 million and $70 million compared to the 2025 CAT budget. When measured against the savings from the 2025 exemptive relief, the new amendment is expected to provide an additional $19.4 million to $24.1 million in incremental reductions. SEC Chairman Paul S. Atkins noted that while this represents significant progress, a comprehensive review of the CAT’s long-term sustainability remains ongoing.

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