SEC Scraps Personal Info Disclosures for Trade-Tracking System
The Securities and Exchange Commission is getting rid of personal information disclosure requirements in its market-tracking surveillance program amid concerns over potential data breaches, the agency announced Monday.
The Consolidated Audit Trail, or CAT, is a program which keeps a real-time record of all trading activities across U.S. stock exchanges. The system aims to provide asset managers with time-stamped trades and to limit risks such as front-running or insider trading.
The SEC is now providing an exemption from a requirement that broker-dealers report the names, addresses and dates of birth of U.S. clients to the CAT system. The program will still be able to generate “reliable and consistent anonymized customer IDs” without having to use such personal information to help regulators identify those responsible for a trade, the SEC said in a statement.
The SEC’s decision will mitigate data-breach risks without compromising already available investigative capabilities, said Cynthia Kelly, a senior compliance consultant at STP Investment Services, in an email.
“This action reflects a balanced approach to help ensure investor protection while addressing legitimate concerns about data privacy and reinforces the Commission’s commitment to robust market surveillance, security, and transparency,” she said.
Read what Cynthia and other subject matter experts had to say in FundFire here.
