Consolidated Audit Trail (CAT) Compliance & Consolidated Audit Trail (CAT) Compliance: What Firms Need to Know for 2025

 As regulatory expectations continue to evolve, broker-dealers face increasing pressure to maintain accurate, timely, and complete reporting under the Customer Account Information System (CAIS) and the Consolidated Audit Trail (CAT) Compliance framework.

With FINRA CAT intensifying scrutiny, firms — especially small and mid-sized broker-dealers — must prioritize streamlined reporting, data governance, and error correction processes to avoid penalties and operational disruptions.

This blog breaks down the essentials of CAIS, CAT, and FINRA CAT obligations, and highlights how Capital Market Solutions (CMS) (https://capmarketsolutions.com/) provides end-to-end reporting, remediation, and compliance support.

What Is Customer Account Information System (CAIS)?

The Customer Account Information System (CAIS) is a key component of the CAT reporting structure.
It requires firms to submit customer and account-level information accurately to ensure regulators can properly identify market participants involved in reportable transactions.

CAIS Reporting Includes:

  • Customer details (names, dates of birth, entity types, etc.)
  • Account-level relationships
  • Ownership structures
  • Large trader information
  • LEIs, LTIDs, and other identifiers
  • Full lifecycle updates, including corrections and deletes

Failure to maintain accurate CAIS information can lead to error codes, rejections, and regulatory attention, putting your firm at risk.

Understanding the Consolidated Audit Trail (CAT) and FINRA CAT

The Consolidated Audit Trail (CAT) is the most comprehensive data collection system ever established for U.S. equity and options markets. It captures order and trade events across all broker-dealers to improve market surveillance and transparency.

FINRA CAT serves as the Plan Processor responsible for ensuring firms comply with CAT requirements, which include:

CAT Compliance Responsibilities

  • Accurate order lifecycle reporting
  • Intraday submissions with strict timelines
  • Error correction and resubmission
  • Synchronized timestamps
  • CAIS + Transaction (CAIS/Equities/Options) alignment
  • Regular reviews to avoid aging reconciliation issues

With CAT now fully implemented, FINRA expects firms to demonstrate strong governance, validated reporting channels, and ongoing operational oversight.

Why CAIS and CAT Compliance Are Becoming More Complex

Broker-dealers today face multiple challenges:

1. Frequent CAIS Schema Updates

Regulators continue to adjust data formats, validations, and fields — meaning firms must stay current or risk rejections.

2. High Volumes of Aging Errors

FINRA CAT enforcement has grown more serious, with firms receiving alert letters for unresolved errors that are months old.

3. Manual Processes Are No Longer Sustainable

Spreadsheets and fragmented workflows create reporting gaps, mismatches, and duplicate submissions.

4. Pressure to Demonstrate Governance & Controls

Regulators expect clear documentation, supervisory procedures, and automated oversight systems.


The result?
CAIS and CAT compliance is now a full operational discipline — not just a regulatory task.

How Capital Market Solutions (CMS) Helps Firms Stay CAIS & CAT Compliant

This is where Capital Market Solutions (https://capmarketsolutions.com/) becomes your trusted RegTech partner.

CMS offers specialized CAIS and CAT tools designed for broker-dealers who need accuracy, automation, and affordable compliance support.

✔ CAIS Connect — Your All-In-One CAIS Reporting Solution

CMS’s flagship CAIS platform ensures:

  • Automated CAIS data validation
  • Error detection and remediation
  • Efficient LTID/LEI management
  • Complete reconciliation workflow
  • Reporting dashboards and audit trails

Perfect for small and mid-sized firms that lack internal CAIS infrastructure.

✔ CAT Reporting & Error Management

CMS supports end-to-end FINRA CAT compliance with tools for:

  • Full lifecycle order event reporting
  • Daily submissions and validations
  • Error correction and governance
  • Reconciliation support
  • Transaction-CAIS alignment (TID/LTID matching)

✔ Regulatory Expertise Built In

CMS’s compliance specialists help firms:

  • Interpret new CAIS and CAT updates
  • Reduce aging errors
  • Prepare for FINRA examinations
  • Strengthen Written Supervisory Procedures (WSPs)
  • Improve data governance frameworks

Why Firms Choose CMS for CAIS & CAT Compliance

  • Affordable compared to enterprise platforms
  • Fast onboarding with minimal tech dependency
  • Expert human oversight where needed
  • Designed specifically for small & mid-size broker-dealers
  • Proven track record in reducing CAT/CAIS reporting errors significantly

CMS helps firms not only stay compliant — but stay ahead.

Conclusion

As CAIS and Consolidated Audit Trail (CAT) Compliance expectations continue to tighten, firms must adopt modern reporting systems and expert-backed workflows.
FINRA CAT is actively monitoring error rates, data quality, and supervisory models — making proper compliance a critical priority.

By partnering with Capital Market Solutions, broker-dealers gain reliable, scalable, and cost-effective tools that simplify compliance and reduce risk.

Learn more here: https://capmarketsolutions.com/
Your complete CAT & CAIS compliance partner.

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