SEC Chairman Plans Overhaul of CAT Regulatory System

The Chairman of the U.S. Securities and Exchange Commission (SEC), Paul S. Atkins, has written to Robert Walley, Chairman of the CAT Operating Committee, outlining plans for a comprehensive reform of the Consolidated Audit Trail (CAT). This reform aims to adjust the governance structure, funding sources, and operational model. Atkins stated that the SEC has significantly reduced the annual operating costs of CAT through exemptions and the approval of amendments to the CAT NMS plan, and has eliminated the requirement for reporting personally identifiable information (PII). Nevertheless, fundamental issues remain regarding CAT's costs, governance, and funding mechanisms. To address these issues, the SEC published a concept request for comments on April 16, 2026, to conduct a thorough review of CAT and other audit trail systems. The SEC received hundreds of responses, with investors and market participants expressing a desire for the SEC to take on more responsibility in the management and funding arrangements of CAT. Atkins has called for SEC staff to propose deep reforms, including exploring new funding sources for CAT, drafting rule proposals to repeal Rule 613, and assessing the internal resource needs of the SEC to prepare for future governance responsibilities of CAT. This reform is expected to continue until the end of 2027.