CAT Implementation Delayed Due to COVID 19

CAT DelayOn March 16, 2020 the SEC announced no-action relief to allow Participants to delay the implementation of Consolidated Audit Trail (CAT) until May 20, 2020.  This announcement comes as the industry deals with disruptions as a result of COVID-19, and members have to make difficult prioritization decisions around staff required to implement CAT.  Market volatility and the implementation of business continuity plans has also stressed firms’ information technology infrastructure being used to support critical operations.

We encourage our clients to pay close attention to the wording used in this SEC announcement found below.

“Specifically, at this time Staff would not recommend that the Securities and Exchange Commission (“Commission”) take enforcement action against the Participants under Section 19(g)(l) of the Act and Rule 608( c) of Regulation NMS should the Participants not enforce the CAT implementation deadlines against Industry Members. The Staff’s position in this letter applies only until May 20, 2020, but could be extended.”

This only expresses the Staff’s current position, which can be modified or revoked at any time.  Therefore, we are recommending that our clients continue to prepare for the implementation of CAT as internal resources allow.  This is an excellent opportunity for firms to shift their focus to test the validity of the data being reported, looking beyond syntax checks, and to perform more data comparisons to the source data file used to generate CAT reporting events.

Oyster can help you assess how your firm is positioned for CAT readiness, manage your requirements assessment and implementation phases, interface with your own technology providers, and assist you in determining what and how your technology providers will report for you. We can also assist in testing data scenarios and data linkage, as well as creating an error repair process. Firms can also leverage Oyster testing tools to gather and analyze reported data and errors.

Oyster also provides free resources such as podcasts and blogs, as well a team of consultants and software to help you organize and automate your compliance program. Oyster Consulting has the knowledge and experience to support your efforts to achieve compliance. To receive assistance with the design or implementation of your business continuity plan, please give us a call at (804) 965-5400 and a Relationship Manager will be glad to connect you with an Oyster expert.

About the Author:  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.