You cannot haz cheeseburger.
Transparency, Transparency, Where for Art Thou Transparency
The Federal Register has put up a notice from the SEC, that once again, the Consolidated Audit Trail System (CATS) system is delayed, this time over wanting more comment time on fees associated with its operation. Notably, the majority of the SROs (Self Regulatory Organizations) reside in Chicago. While there is no evidence to suggest any link to Citadel Securities LLC, it is interesting that it is primarily Chicago Exchanges that are once again keeping the CATS system from being put in place, and our dear friend Kenny Griffin and his company Citadel Securities LLC, are located in..dun dun dun..Chicago.
The full document can be read on the Federal Register https://www.federalregister.gov/documents/2021/11/02/2021-23817/self-regulatory-organizations-cboe-byx-exchange-inc-cboe-bzx-exchange-inc-cboe-c2-exchange-inc-cboe
For readers who are not familiar with the Consolidated Audit Trail System, it is the audit trail of all trades that occur in the market. The existing system OATS relies on multiple different sources, all trying to combine data, to form a final audit trail. The new system (CATS) would help prevent bad actors in the market, and we can think of one in particular from being able to take advantage of the time delays between the existing system (OATS).
Consolidated Audit Trail System Information
Detailed information on the CATS system can be read at https://www.catnmsplan.com/ – it should be noted, that the CATS system has been in the works since at least 2016 and continues to be pushed back by the industry for a variety of reasons, not the least being refusal to change something that takes away advantages they currently enjoy.
While it is understandable that the market is complex, they purposely made it that way, for “reasons”, we aren’t dealing with stunningly complex data here, it’s data capture and it’s pretty damn easy. The SROs can implement technology stunningly fast, even when it’s expensive, yet somehow, when it comes to proper record keeping, they drag their feet like sulking children.