FINRA CAT: A Game Changer in Regulatory Compliance

 

In the ever-evolving world of financial markets, regulatory compliance has grown increasingly complex. At the center of this transformation is FINRA CAT — the Consolidated Audit Trail — an initiative poised to fundamentally reshape how firms monitor, track, and report trading activity. But what exactly is FINRA CAT, and how does it impact broker-dealers today?

At Capital Market Solutions (CMS), we help firms confidently navigate the intricacies of CAT compliance with technology-driven solutions that simplify the process — without compromising accuracy or security.

What is FINRA CAT?

The Financial Industry Regulatory Authority (FINRA) oversees the implementation and enforcement of CAT, a centralized system designed to record and track all order and trade events across U.S. equity and options markets. It aims to enhance market transparency and ensure regulatory bodies can more effectively detect and investigate manipulative behaviors.

Key goals of FINRA CAT include:

  • Creating a comprehensive view of all customer orders
  • Linking customer identities to trading activities
  • Enabling rapid market event reconstruction

With trillions of order events flowing through the system, the CAT is arguably the most ambitious regulatory data initiative in U.S. financial history.

Why FINRA CAT Matters to Broker-Dealers

For broker-dealers, FINRA CAT reporting isn’t optional — it’s mission critical. Firms must submit millions of data points daily, from order origination to execution, across multiple platforms and asset classes. Even a minor reporting error can result in compliance issues, audits, or costly penalties.

Challenges faced by firms include:

  • Keeping up with evolving CAT Phase requirements
  • Ensuring data completeness and accuracy
  • Managing linkage errors and repair windows
  • Responding to regulatory inquiries in a timely manner

That’s where Capital Market Solutions steps in.

Simplifying Compliance with CMS’s CAT Reporting Solutions

At CMS, we offer purpose-built tools that streamline every aspect of CAT compliance — from data ingestion to error resolution. Our Regulatory Surveillance and Management Suite (RSMS) is engineered for seamless integration, real-time error tracking, and proactive resolution management.

Features of our CAT Reporting solutions:

  • Automated ingestion and validation of trade data
  • Real-time alerting for submission and linkage errors
  • Centralized dashboard for compliance monitoring
  • Custom reports for internal and regulatory use

Whether you’re a small firm struggling with reporting consistency or a large firm managing vast volumes of order data, CMS provides the scalability and support you need.

Proactive Compliance: The CMS Advantage

What sets Capital Market Solutions apart is our focus on proactive compliance. We don’t just help you meet CAT requirements — we empower you to exceed them.

Our team offers:

  • Deep expertise in CAT rules and FINRA updates
  • Tailored onboarding and integration support
  • Ongoing error analysis and root-cause tracking
  • Responsive client service and technical support

We stay on top of every regulatory update so you don’t have to.

Looking Ahead: Staying Ahead of the Curve

With Phase 2e and beyond introducing increasingly complex requirements, it’s more important than ever to invest in a flexible, reliable, and intelligent CAT reporting solution.

Capital Market Solutions is ready for what’s next — from future CAT expansions to cross-market surveillance demands.

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