SIFMA: Industry recommendations for the creation of a consolidated audit trail

28 March 2013

SIFMA's white paper, 'Industry Recommendations for the Creation of a Consolidated Audit Trail', presents how a CAT system should be organised, provides key principles on operations, structure, governance and scope, and outlines the vision of how the CAT system should be implemented and expanded.

SIFMA supports the creation of an effective, efficient CAT system which can help strengthen regulation of financial markets. This white paper is meant to provide the industry's input on the best path forward to create a CAT that captures the full lifecycle of trades, including customer account information - a massive undertaking that will require significant resources from the industry.

In its paper, SIFMA identified eight guiding principles for the development of a CAT system:

• Elimination of Duplicative Systems and Reporting;
• Appropriate Flexibility and Scalability;
• Centralised Administration;
• Public Transparency and Industry Engagement;
• Minimal Disruption to Existing Market and Business Practices;
• Reuse of Existing Assets and Standards;
• Data Security, Privacy, and Consumer Protection; and
• Special Considerations for Options.

SIFMA utilised these principles to make specific recommendations on 10 key topics that are vital to CAT implementation. These recommendations include:

• Elimination of Other Rules and Systems
• Implementation Timeline
• Infrastructure
• Governance
• Customer ID
• Reporter ID
• Linkages
• Options
• Other Products
• Cost/Benefit

SIFMA hopes that this white paper will contribute to the creation of a CAT system that provides transparency which helps to strengthen financial markets, and thereby builds a measure of trust and confidence in the financial industry.

Press release

© SIFMA - Securities Industry and Financial Markets Association