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Markets

Stock exchanges fire company building CAT database

U.S. stock exchanges are ousting, for undisclosed reasons, the company tasked with developing a massive database for all equity and options trades executed on their platforms.

Thesys Technologies LLC, a capital markets technology provider, was selected by the Securities and Exchange Commission to administer the consolidated audit trail, which is intended to allow regulators to track illegal or manipulative trades and give them a way to quickly determine what caused large, sudden losses in trading value. Thesys then created Thesys CAT LLC and worked with CAT NMS LLC, which was formed by U.S. exchanges, to establish a plan to implement the audit trail. The first stage of the CAT was launched in November.

CAT NMS confirmed in a statement that it was "transitioning the CAT project to a new plan processor" and said Thesys CAT is providing "necessary services through the transition period."

"In transitioning the project to a new plan processor, the (self-regulatory organizations) are evaluating the impact the transition will have on current industry member implementation dates," the statement went on. "The SROs anticipate that initial testing of data ingestion will begin in late 2019, and that the current industry member technical specifications will continue to provide the basis of such reporting. Further updates will be provided in due course."

A Thesys spokesman also confirmed that Thesys CAT is working with CAT NMS on a transition plan.

The Financial Industry Regulatory Authority is expected to take over the project, according to media reports. When asked for to comment, a FINRA spokesman would only refer Pensions & Investments to CAT NMS spokespeople.

The SEC approved creating CAT in 2012. The submission of exchanges' equity and options trade data for CAT was originally scheduled to begin Nov. 15, 2017, but was delayed for a year after exchanges and the Financial Industry Regulatory Authority said they wouldn't be ready for the initial date.

An SEC spokeswoman declined comment Monday, but last week it appointed Manisha Kimmel to lead the CAT's implementation.