FOR IMMEDIATE RELEASE
Wednesday, November 14, 2018
Contact: Nick Jacobs, 202-618-6430 or njacobs@bettermarkets.com
THE ACID TEST FOR THE SEC’S MISSION CRITICAL CAT TOOL IS TOMORROW
SEC MUST HOLD CONFLICTED INDUSTRY-LED EFFORT ACCOUNTABLE
FOR UNACCEPTABLE DELAYS AND PROMPTLY TAKE MEANINGFUL ACTION
Washington, D.C. – Better Markets President and CEO, Dennis Kelleher, issued the following statement on the eve of the November 15 deadline for implementing the Consolidated Audit Trail (CAT):
“If the SEC is ever going to be able to properly protect investors, markets and our economy, it needs 21st Century technology like the mission critical Consolidated Audit Trail (CAT), an essential tool for the SEC to supervise and police the securities markets. The SEC’s current technology is decades behind the private sector, which makes its surveillance and enforcement program look like Inspector Clouseau’s outdated and dysfunctional magnifying glass.
“That must change, and that change must begin tomorrow when the CAT NMS LLC, an industry consortium responsible for building and implementing the CAT, are due to bring the system online to accept full reporting by the stock exchanges and FINRA. Unfortunately, this industry-dominated group has failed for a year to meet deadlines and bring the CAT online. That should not be a surprise given that the CAT will enable the SEC to monitor and police those very same industry participants, many of whom enrich themselves in today’s opaque and fragmented markets and some of whom engage in predatory if not illegal conduct.
“The SEC’s unwise and short-sighted decision in 2012 to outsource the building and operating this game-changing tool was like asking bank robbers to provide the police with a get-away maps app. It’s not in their interest to do that, which is why trying to kill it outright or by slow-walking it would be predictable.
“That’s why the SEC must take clear, decisive and meaningful action if the CAT NMS tomorrow again fails to fully meet its obligations under SEC Rule 613 and the CAT NMS Plan or takes only minimal, cosmetic or token action. As Better Markets urged SEC Chairman Jay Clayton two months ago, the SEC must enforce the rule of law and hold the industry accountable for its failures. If that happens again tomorrow, the SEC should immediately initiate enforcement proceedings against CAT NMS and its members for compliance failures, and promptly initiate a process to radically change the governance and control structure of CAT NMS. It is past time for the SEC to ensure that the CAT is built and operational ASAP.”
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Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies – including many in finance – to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.com.
