SEC Mulls Tweaking Stock Audit Rules to Share Less Customer Data
Published Date: 6/23/2025
Notice
Summary
Big stock market players want to change how much customer info they share in a big tracking system called the Consolidated Audit Trail (CAT). This change aims to keep less personal data in the system, making it safer and simpler. The SEC is now deciding if this update should go ahead, and it could affect how exchanges handle data soon.
Analyzed Economic Effects
4 provisions identified: 3 benefits, 1 costs, 0 mixed.
Brokerage PII Removed from CAT
The Plan would stop requiring broker-dealers to send customer names, customer addresses, account names, account addresses, years of birth, and authorized trader names (collectively, "Name, Address, and YOB") to the CAT for all Customers (including natural persons and legal entities) and would require CAT LLC to delete existing Name, Address, and YOB data. The Participants say this change would reduce CAIS (Reference Database) costs and the estimated annual cost savings from the amendment changed to about $7 to $9 million.
Phased Removal Timeline for Customer Data
If approved, CAT LLC proposes a phased implementation: stop regulator visibility of Names/Addresses/YOBs ~3 months from the effective date; continue accepting but stop processing such submissions ~3 months; begin rejecting reports containing those fields ~6 months or more; and delete existing Names/Addresses/YOBs about 9–12 months after data migration is completed, with an additional ~2–3 months to permanently remove old data.
Firms Must Update Systems, Face Implementation Costs
Industry Members (broker-dealers and other reporting firms) will need to update their systems to stop reporting Names, Addresses, and YOBs; CAT LLC estimates a one-time Plan Processor implementation fee of about $4.5 to $5.5 million, and Participants say Industry Members will incur unspecified additional costs to update reporting systems.
EIN Field Eliminated to Reduce SSN Risk
The amendment would remove the requirement to report Employer Identification Numbers (EINs) for legal-entity customers from the Reference Database. The Participants state removing the ein field would eliminate the risk that an individual's SSN could be improperly reported in the ein field while still allowing regulators to search by EIN to find a CCID.
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