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Regulatory Initiatives

Overview

In November 2016, the Securities and Exchange Commission approved a national market system (NMS) plan that required national securities exchanges and national securities associations (“SROs”) to create a single, comprehensive database known as the Consolidated Audit Trail (CAT) that it stated will enable regulators to more efficiently and thoroughly track all trading activity in U.S. equity and options markets. FINRA has been selected as the processor for CAT.

To learn more about the requirements visit: https://catnmsplan.com/index.html.

Some important milestones on the SEC’s current schedule for implementing CAT are as follows:


Event Date
CAT Registration by Industry Members March 18, 2019 – June 27, 2019
Annual Clock Synchronization and Certification March 15 of Each Year
Industry Testing and Validation for Equities December 2019
Equity Go-Live April 2020
Industry Testing and Data Validation for Options December 2019
Options Go-Live May 2020

What IBKR Clients Need to Know

An IBKR client falls under the rule and is obligated to report to CAT if they are a member of a U.S. national securities exchange or a U.S. national securities association that handles orders or quotes in NMS equity securities, OTC equity securities or listed options. Unlike the current OATS reporting obligation, the CAT reporting obligations extend the scope of covered instruments to options too.

We recommend that such clients become familiar with the rules that are available on the regulator’s website: https://catnmsplan.com/index.html.

Please note that the CAT Rules do not provide for any firms to be excluded or exempted from the CAT reporting obligation.

IBKR will offer CAT reporting services for its clients that are obligated to CAT report.

  • If your firm would like to contract with IBKR to handle CAT reporting, please complete the CAT Declaration page that is available on the website at:
    https://www.catnmsplan.com/registration/.

  • If you elect to have IBKR handle CAT reporting for you, IBKR will provide you with a CAT Reporting Agreement for signature. We expect to provide these soon, after FINRA publishes its best practices for these agreements. Your firm will also need to update its own policies and procedures in accordance with the CAT Rules.

Although the CAT Industry Member Technical Specifications continue to be amended and revised, IBKR is working to comply with the requirements outlined so far.

We will provide additional information about testing and CAT reporting efforts as it becomes available.

Additional Resources