SEC Proposes Data Security Enhancements, Security Measures to Consolidated Audit Trail

The SEC proposed amendments to the national market system plan governing the Consolidated Audit Trail to bolster the CAT’s data security.  The proposed amendments to the CAT NMS Plan are the latest SEC actions to limit the scope of sensitive information required to be collected by CAT and enhance the security of the CAT and the protections afforded to CAT data, the SEC said. “Data security is an essential pillar of the CAT,” said SEC Chairman Jay Clayton. “The requirements outlined in the proposal, including requiring the removal of sensitive PII, are designed to both (1) significantly reduce the amount of sensitive data collected without affecting the operational effectiveness of the CAT and (2) provide market participants with greater certainty regarding how CAT data will be protected and used. We will continue to evaluate these matters, including to address changes in risks and other matters, as implementation and operation of the CAT continues.”  The SEC is encouraging public comment on the proposal. The Wall Street Journal reported that groups such as the ACLU had raised privacy and security concerns with the amount of investor data to be stored in the CAT.