There’s More Than One Way to Skin a CAT

robdaly-headshot

I've never been a big fan of regulators imposing technology platforms on the industry. Typically, such platforms aren't aligned with the technological realities of the Street. So when the US Securities and Exchange Commission (SEC) released in May its proposed Rule 613 for Regulation NMS, which mandates that the Financial Industry Regulatory Authority (Finra) and the self-regulatory organizations (SROs) build and maintain a consolidated audit trail (CAT) platform, I felt that familiar feeling in the pit of my stomach—the Intermarket Trading System (ITS) is about to be reincarnated.

The SEC says it would take a few years to get the CAT off the ground and would carry a price tag of only about $4 billion in its first year and $2.1 billion in the subsequent years.

Given the scope of the project and the number of organizations involved, the estimated budget and proposed schedule all seem a bit optimistic.

Earlier this week, market access provider FTEN filed a comment with the SEC suggesting that the regulator should look to off-the-shelf technology that is already being used in the industry rather that constructing an expensive bespoke offering.

According to the filing, FTEN claims that if it followed its proposed four-phase implementation plan, it could have 73 percent of the market covered within the first 30 days the remaining 27 percent of the market covered by the end of 12 months without affecting end-users’ trading experience.

Ted Myerson, CEO of FTEN, is a bit coy on how much a vendor-supplied system would cost the industry, saying that this isn't the proper stage to discuss price. Considering FTEN's current offerings and footprint in the industry, it makes an attractive option.

Now that FTEN has raised one possible alternative to a custom CAT platform, it shouldn't be long until other vendors start proposing their own alternatives.

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact info@waterstechnology.com or view our subscription options here: http://subscriptions.waterstechnology.com/subscribe

You are currently unable to copy this content. Please contact info@waterstechnology.com to find out more.

Waters Wrap: The tough climb for startups

Anthony speaks with two seasoned technologists to better understand why startups have such a tough time getting banks and asset managers to sign on the dotted line.

You need to sign in to use this feature. If you don’t have a WatersTechnology account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here