Demystifying FINRA's CAT: What Compliance Teams Need to Know

EDISON, N.J. - July 28, 2025 - PRLog -- The Consolidated Audit Trail (CAT) is a unified system, mandated by SEC Rule 613 and implemented via FINRA's Rule 6800 series, designed to collect comprehensive data on every order, modification, cancellation, and execution involving U.S. equities and options across all exchanges . CAT enhances market oversight by creating a single, consolidated record that enables regulators to detect fraud, manipulation, and anomalies more efficiently.

Why CAT Matters
Market Transparency & Investor Protection: CAT empowers regulators to link trading activities across firms and exchanges, helping detect insider trading, abuse, and other misconduct .
Transition from OATS: Unlike the legacy OATS system, CAT covers all trading venues and customer types, ensuring every order is properly identified and timestamped.

Key Components: Transaction vs Customer/CAIS Data
Transaction Database: Captures all trade-related activity flows, including orders, executions, modifications, and cancellations.
Customer & Account Information System (CAIS): Houses data like investor names, addresses, and other identifying information submitted by broker-dealers and CAT Reporting Agents (CRAs). Together, these elements provide end-to-end traceability from order event to the investor origin.

Privacy & Data Risk: The Ongoing Debate
The CAT customer database has raised concerns over consolidating sensitive personal data — even for accounts unlikely to be investigated .
In February 2025, the SEC granted an exemptive order allowing industry participants to opt out from reporting names, addresses, and years of birth of U.S. natural persons to CAT .

As of March 19, 2025, FINRA CEO Robert Cook publicly supported further amendments to eliminate reporting of all customer‑identifying information and to remove previously submitted PII from CAT entirely — pending SEC approval.
Compliance Expectations & Enforcement Highlights
Firms must comply with FINRA Rule 6800 Series and maintain strict protocols around clock synchronization, data accuracy, completeness, timeliness, and reporting integrity.

FINRA regularly reviews firms' Written Supervisory Procedures (WSPs) to verify the assignment of responsible personnel, testing schedules, error tracking, and portal monitoring frequency.

https://capmarketsolutions.com/cat/

Enforcement has intensified: FINRA officials have reported "millions if not billions" of inaccurately or late-reported events, with fines and cautionary measures on the rise.
Streamlining CAT Reporting with RSMS & CATalyst™
Capital Market Solutions (CMS) offers robust compliance solutions tailored for FINRA CAT & CAIS challenges:

https://capmarketsolutions.com/the-critical-role-of-data-...

RSMS (Regulatory Surveillance & Management System): Automates CAT/CAIS reporting, aligns submissions, validates error correction, flags exceptions, and supports audit-ready workflows with real-time exception handling .
CATalyst™: Converts raw audit trail data into actionable insights to drive proactive compliance and informed decision-making, enhancing overall CAT data quality and operation efficiency.