SEC Prepares Sweeping Revamp of Consolidated Audit Trail

The U.S. Securities and Exchange Commission is preparing a broad restructuring of the Consolidated Audit Trail (CAT), targeting its governance, funding and operating model, SEC Chairman Paul S. Atkins said in a letter to Robert Walley, chair of the CAT Operating Committee. Atkins said the agency has already cut CAT's annual operating costs during his tenure by granting exemptions, approving amendments to the CAT NMS plan, and removing the requirement to report personally identifiable information (PII) into the system. While those steps reduced costs and narrowed the scope of data collection, he said core problems persist in CAT's cost structure, governance framework and funding mechanisms. To address the issues, the SEC on April 16, 2026 issued a concept release launching a comprehensive review of CAT and other audit-trail systems and data sources used in U.S. securities market oversight. The commission said it has received hundreds of comments, with a central theme that investors and market participants want the SEC to take greater responsibility for CAT's management and funding. Atkins said he has instructed SEC staff to develop a comprehensive reform package that would: (1) evaluate alternative funding sources, including congressional appropriations and transaction fees under Section 31 of the Securities Exchange Act; (2) draft a rule proposal that, if adopted, would rescind Rule 613 and require exchanges, FINRA and broker-dealers to keep using existing CAT infrastructure and reporting standards while submitting CAT data directly to the SEC or a designated entity; and (3) assess the SEC's internal resource needs as it prepares to assume CAT governance responsibilities. The SEC expects the overhaul to involve multiple interconnected elements that will require coordinated implementation, with a full transition targeted for completion by the end of 2027.