SEC's epic title seeks exemption for audit trail cost recovery drama
Published Date: 9/3/2026
Notice
Summary
No summary available.
Analyzed Economic Effects
3 provisions identified: 0 benefits, 3 costs, 0 mixed.
Proposed $260.6M Fee Recovery from Industry
The Participants ask the SEC to allow CAT LLC to recover $260,562,426 from Industry Members for non-CAIS Period 4 costs via a Historical CAT Assessment. They estimate that recovering that amount over one year would produce an estimated fee rate of about $0.000022 per equivalent share.
100% Penalty Would Shift $490M Burden
Because FAM 4's target deadline was December 30, 2022 and the Participants identify Full Implementation as July 15, 2024 (more than 270 days late), the Plan's penalty schedule would reduce recoverable Period 4 fees by 100%. That would prevent recovery of $326,767,429 from Industry Members and leave Participants to bear $490,151,144 in Period 4 costs.
Request to Shorten Recovery Period and Deadline Relief
The Participants seek exemptive relief from Plan Sections 11.3(b)(i)(D)(I) and 11.3(f) to allow a one-year Historical Recovery Period (instead of the Plan's 24-month minimum) and to avoid the March 31, 2028 prohibition on billing. They say this is needed so a Historical CAT Assessment to recover FAM 4 costs can be billed before March 31, 2028.
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