The consolidated audit trail is now live for broker-dealer reporting, but the Securities and Exchange Commission has already pushed back the planned April 20 deadline because of the COVID-19 pandemic, and U.S. exchanges have requested a further deadline reprieve.
Years in the making, the CAT will be a single database for all equity and options trades executed on U.S. exchanges. It's intended to allow regulators to track illegal or manipulative trades and show a way to quickly determine what caused large, sudden losses in trading value, such as the flash crash of May 6, 2010. When fully operational, the CAT will be the world's largest data repository of information on securities transactions, tracking all orders throughout their life cycle, according to the operating committee for the CAT.
The CAT testing and production environments are now running in parallel, the operating committee said in a news release Tuesday, noting that broker-dealer reporting went live Monday. Firms that need to test can continue to do so while firms that FINRA CAT has certified as production-ready may begin reporting into the production environment. The exchanges selected the Financial Industry Regulatory Authority as the plan processor in February 2019, which then created FINRA CAT to build the audit trail.