Simplifying FINRA CAT Compliance: Making Your WSPs Audit-Ready

EDISON, N.J. - Nov. 4, 2025 - PRLog -- In today's fast-changing regulatory environment, firms face more scrutiny than ever. The FINRA Consolidated Audit Trail (CAT) has added new layers of complexity for broker-dealers who handle large volumes of trades every day.

Having audit-ready Written Supervisory Procedures (WSPs) for CAT isn't just a formality — it's essential to protect your firm from penalties and reputation damage. Yet even strong compliance programs often miss key details that regulators pay close attention to.

Let's look at the most common areas firms tend to overlook and how modern compliance tools like RSMS help close these gaps.

Understanding FINRA CAT and Why It Matters
The FINRA CAT system tracks every trade order from start to finish, giving regulators a complete view of trading activity across the market. This brings greater transparency — but also increases risks for firms.

Even a small data or reporting error can lead to audits, regulatory questions, or enforcement actions. That's why WSPs must go beyond the basics to cover every possible compliance risk.

5 Commonly Overlooked Areas in CAT Compliance
1. Accuracy Issues in Reporting
Getting every trade detail right is the foundation of CAT compliance. Common problems include:

Not matching CAT data with internal trade logs.
Relying too much on automated feeds without manual checks.
Using outdated trade event mappings.
Many firms assume that once data integration is set up, it stays accurate forever. In reality, systems and regulations keep changing — so continuous testing is vital.

How RSMS helps: It automatically validates and cross-checks CAT submissions with source data, alerting teams to any mismatches before reports are filed.

2. Missing or Incomplete Data
Regulators expect complete trade records — not just correct ones. Missing even one order, route, or execution can raise red flags. Common blind spots include:

Manual trades or off-system transactions.
Missing updates for modified or cancelled orders.
Gaps from third-party systems.
How RSMS helps: It combines data from multiple systems (like FIX, CSV, and others) into one unified platform, ensuring no trades are missed. Dashboards make it easy for compliance teams to track data completeness.

3. Late Submissions
Timeliness is critical under FINRA CAT rules. Even small delays can count as violations. Delays often happen due to:

Slow internal data processing.
System bottlenecks during busy periods.
Lack of alerts for failed submissions.
How RSMS helps: It timestamps every step of the reporting process and sends real-time alerts for late or failed submissions — so issues are fixed before deadlines are missed.

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