The SEC on Sept 30 released an order giving conditional exemptive relief that lets the self-regulatory organizations participating in the CAT NMS Plan to quickly and significantly reduce the operating costs of the consolidated audit trail (CAT) while maintaining core regulatory functionality.

This conditional exemptive relief is related to certain requirements of the National Market System Plan governing the Consolidated Audit Trail (CAT NMS Plan), Rule 613 of Regulation NMS, and Rule 17a-1 under the Securities Exchange Act of 1934.

“Both the Commission and the participants that operate the CAT need to take very seriously their roles in reducing these seemingly endless cost increases. CAT must be more efficient and cost-effective, especially after the recent decision by the U.S. Court of Appeals for the Eleventh Circuit that vacated the 2023 Funding Model Order governing the CAT,” stated SEC Chairman Paul S. Atkins. “While I am pleased to support today’s exemptive relief, I want to reiterate that this is just the start.”

The conditional exemptive relief order expands on prior cost savings measures approved by the SEC and will let the plan participants stop creating interim lifecycle linkages without regulator request while easing requirements with regards to the re-processing of late records.

It also stops providing certain functionality associated with the online targeted query tool while deleting specific CAT data and lowering the cost to store older CAT data.

The CAT budget first approved by the CAT's Operating Committee for this year was above $248 million. Due to the implementation of prior cost amendments and the relief given by the order, CAT’s expenses are projected to fall an added $20 to $27 million short of the roughly $196 million projected expenses for this year.

“Today’s Commission action begins an overdue journey to reform and rationalize the CAT. The Division will continue to engage participants and industry members to facilitate needed improvements to reduce costs for investors,” noted Jamie Selway, Director of the SEC’s Division of Trading and Markets.