The SEC’s Conditional CAT Reporting Exemption
The Consolidated Audit Trail (CAT) has reached the final implementation of the Customer and Accounting Information System (CAIS) with the passing of the compliance Go-Live date on May 31, 2024. Reporting members are now expected to be fully compliant with record submission and error correction and resolution within a 72-hour window. This marks the end of a nearly five-year rollout of the rule and technology behind the rule that started in 2019 with the first connectivity tests. However, the SEC issued Release No. 34-100181 on May 20, 2024, granting a temporary conditional exemption related to the reporting of certain electronic quote responses under the CAT NMS Plan.
The exemption was requested by multiple exchanges and regulatory organizations collectively referred to as the Participants. The Participants sought relief from the requirement to report bids and offers made in response to a request for quote (RFQ) or other solicitation responses in a standard electronic format that are not immediately actionable. These are termed Non-Immediately Actionable (NIA) Electronic RFQ Responses. The request was made to allow additional time for the development and implementation of necessary reporting frameworks and technological changes.
Key Dates and Deadlines
- July 31, 2025: Participants must submit a written implementation plan detailing the reporting of NIA Electronic RFQ Responses
- July 31, 2026: Recording and Reporting of report NIA Electronic RFQ Responses required
Exemption Details:
- The SEC grants temporary exemptive relief from the requirement to record and report NIA Electronic RFQ Responses until July 31, 2026.
- This exemption allows Participants, Plan Processors, and Industry Members additional time to update and implement reporting frameworks, compliance guidance, and technical specifications.
- The relief is granted to minimize business disruptions and impacts on existing workflows while allowing adequate time for necessary technological and process changes.
Conditions of the Exemption:
- By July 31, 2025, Participants must submit a written implementation plan detailing the reporting of NIA Electronic RFQ Responses.
- This plan should identify workflows and provide technical specifications for reporting these responses.
- The goal is to ensure a structured framework for the reporting of NIA Electronic RFQ Responses is established before the exemption expires.
The temporary exemption is aimed at facilitating a smooth transition and compliance with the reporting requirements for NIA Electronic RFQ Responses by the extended deadline. This order provides necessary flexibility while ensuring that industry members have adequate time to implement the required changes without disrupting current operations.
The CAT Reporting Expertise You Need
Oyster Consulting provides comprehensive consulting for CAT and CAIS reporting, from performing simple due diligence on CAT Reporting Agents to providing a comprehensive assessment of your CAT/CAIS reporting and related policy, procedures and controls. Oyster Consulting’s CAT reporting experts can assist you with creating the implementation plan to meet the exemption requirements. Get the support you need to ensure you are compliant and ready for the exemption deadlines.
Oyster Solutions CAT Reporting Software
Oyster Solutions Consolidated Audit Trail reporting software helps firms meet their FINRA CAT reporting obligations.
The Oyster Solutions CAT Reporting Module consolidates CAT reporting events, error analysis and validation data into a central program. Our CAT Application will identify errors, linkage and gaps between your data and CAT reporting data. Our application allows for individual and bulk repairs prior to the FINRA CAT Portal, a feature that enhances the user experience. The Oyster Solutions CAIS module can be utilized by firms who do not use the CAT Application for monitoring and evidencing their CAT reporting.
