CAT Connectivity Deadlines – Establish Connectivity Methods and Be Ready for Testing

FINRA CAT, LLC hosted two industry webinars concerning CAT Connectivity on August 29th and September 26th, 2019 which provided a summary of CAT interfaces and connectivity methods.  Three connection methods for file submittal were outlined for Industry Members (IMs).

Private Line provided by a Managed Network Service Provider (MNSP)

  • After an industry RFP, CenturyLink was selected as a Private Link Reporting provider. The final terms of this contract were executed the week of September 9th, 2019; preliminary pricing was provided in the webinar, based on length of contract (one or two years available) and file transfer bandwidth speeds (10 mbps to 1 gbps). It is important to note that existing OATS CenturyLinks are not available for use in CAT, and that new connections with new hardware must be established.  Therefore, CenturyLink circuit delivery times can and will vary depending on the provider’s network complexity and status at any location.  FINRA provided firms with a broad delivery period of between 30 to 90 business days after establishing a contract with CenturyLink; this contact can take up to two weeks.
  • On September 20th, 2019 FINRA CAT, LLC announced a second Private Line Managed Network Service Provider (MNSP). BT Radianz will serve as the second MNSP option in addition to CenturyLink for connectivity to the CAT system. Final contact terms are expected in the first week of October.  Similar to CenturyLink, FINRA CAT, LLC has negotiated pricing and Industry Members can start contractual conversation with this provider.  Initial broad range delivery expectations are between 30 to 67 business days after contractual agreements have been completed.

AWS PrivateLink

  • Industry specifications are not currently available but expected by October 11th, 2019. Testing will not be available until January 27th, 2020.  AWS PrivateLink pricing information is available at:  https://aws.amazon.com/privatelink/pricing/.

CAT Secure Reporting Gateway

  • File transfers via website are limited to manual uploads of no more than 100,000 records per file.

Why the Urgency?

Industry Members voiced significant concern around the timing of establishing a CenturyLink and AWS PrivateLink.  The worry is that the deadline for establishing the required links will lead to reduced testing time, which is scheduled to open on December 16, 2020.  FINRA has suggested no further delays are to be expected to the CAT implementation.  Some firms, in the worst-case scenarios with CenturyLink or who choose to transmit data through the AWS PrivateLink, may not be able to take full advantage of the testing window.

It is extremely important for Industry Members and CAT Reporters to quickly and thoughtfully make their final decisions of CAT Connectivity and establish the proper contractual agreements. Those who anticipate potential delays with CenturyLink or who will be using AWS PrivateLink may consider interim testing through the web gateway.  Industry Members who outsource CAT reporting need to complete due diligence on their vendor and their readiness to report on the Industry Member’s behalf.

How Oyster Can Help

  • Assess current state readiness to meet CAT timelines
  • Assess event reporting scenarios and determine any data gaps from existing systems
  • Design testing scenarios and review readiness for reporting
  • Design future process to review/repair errors (including providing resources for repair remediation post implementation)

 

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About the authors:

Ralph Magee is a Senior Consultant with over 20 years of experience in the financial services industry.  Through a variety of roles with Wachovia Securities, LLC and The Financial Group of Virginia, Ralph gained his expertise in clearing conversions, trading, compliance, and retail brokerage, including his extensive understanding of trading and regulatory reporting of equity and fixed income securities.  A member of the Oyster Consulting team since 2010, Ralph has led multifaceted teams in large-scale client remediation and clearing platform conversion-related projects.  Ralph has also completed the registration of RIAs, designed and implemented compliance programs, personal trading compliance review systems and national trade suitability review programs. The ability to keep projects on track, within scope and on budget, is one of Ralph’s greatest skills.

Terry Schafer is a financial services executive, with 30 years of experience as a COO and CFO for investment banking capital markets, trading and derivative businesses in New York, London and Tokyo, as well as Fin-Tech start-ups, private funds, RIA’s and hybrid broker-dealer businesses.  Terry’s expertise in business management, operations, compliance and technology allows her to translate business, legal and regulatory requirements into workable business and compliance policies, processes and technology solutions. 

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