Critical CAT WSP Areas Firms Must Address for FINRA Compliance in 2025

 

As regulatory oversight intensifies, Consolidated Audit Trail (CAT) compliance has become one of the most critical priorities for broker-dealers and trading firms. In 2025, FINRA CAT examinations are increasingly focused not just on whether firms submit data — but how well their Written Supervisory Procedures (WSPs) support accurate, complete, and timely reporting.

With evolving guidance, tighter timelines, and heightened expectations around data quality, firms can no longer rely on reactive compliance practices. Understanding which CAT-related WSP areas draw the most regulatory attention is essential to staying inspection-ready.

Below are the top CAT WSP focus areas FINRA is scrutinizing in 2025, and how modern platforms like a Regulatory Surveillance and Management System (RSMS) and CAIS-Connect help firms stay ahead.

1. Accurate CAT Reporting

Accuracy remains the cornerstone of FINRA CAT compliance — and one of the most common failure points.

Common WSP gaps include:

  • Vague or incomplete documentation of reporting workflows
  • Lack of standardized data validation controls
  • Insufficient staff training on CAT field requirements

Even minor inaccuracies — such as incorrect timestamps, customer identifiers, or order lifecycle data — can trigger regulatory reviews and deeper examinations.

How RSMS Supports Accuracy

A robust Regulatory Surveillance and Management System (RSMS) strengthens reporting accuracy by providing:

  • Clear, field-level CAT reporting guidance
  • Automated data validation against source systems
  • Real-time dashboards highlighting potential discrepancies

With RSMS, firms significantly reduce submission errors before data ever reaches FINRA.

2. Complete CAT Reporting

Completeness is not just about submitting files — it’s about ensuring every required record is included.

FINRA frequently flags firms for:

  • Weak reconciliation controls
  • Overreliance on manual checks
  • Failure to detect missing events or records before submission

Regulators expect firms to demonstrate pre-submission reconciliation within their WSPs.

How RSMS Ensures Completeness

RSMS enables:

  • Pre-submission reconciliation across systems
  • Automated detection of missing or mismatched data
  • End-to-end trade lifecycle coverage

This ensures FINRA receives a full and accurate representation of trading activity.

3. On-Time CAT Submissions

Timeliness reflects a firm’s operational discipline. Missed deadlines often signal deeper process weaknesses.

Common challenges include:

  • Inefficient data aggregation workflows
  • Reactive reporting processes
  • Lack of contingency planning

Late submissions increase regulatory risk and can damage credibility.

How RSMS Maintains Timeliness

RSMS is designed to support consistent, on-time CAT delivery through:

  • Streamlined submission workflows
  • Deadline tracking and proactive alerts
  • Built-in safeguards for operational disruptions

Firms using RSMS maintain submission consistency even during high-volume or resource-constrained periods.

4. Error Corrections and Root Cause Analysis

FINRA expects firms to do more than fix errors — it expects them to prevent recurrence.

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WSP weaknesses often include:

  • Inadequate error logs
  • Reactive correction processes
  • No formal root cause analysis

Repeated errors raise serious questions about compliance maturity.

How RSMS Strengthens Error Management

RSMS delivers:

  • Pre-submission error detection
  • Detailed error tracking with audit trails
  • Root cause analysis workflows

Many firms using RSMS achieve industry-leading error rates as low as 0.001%, demonstrating strong internal controls.

5. Regulatory Inquiries & Record Retrieval

FINRA inquiries test how quickly and accurately a firm can retrieve CAT and account-level data.

Common issues include:

  • Decentralized data storage
  • Slow response times
  • Incomplete documentation

Delayed or incomplete responses often lead to deeper regulatory scrutiny.

How RSMS Handles Regulatory Inquiries

RSMS functions as a centralized compliance warehouse by:

  • Consolidating CAT and transactional data
  • Enabling rapid inquiry response workflows
  • Automatically maintaining response documentation

Firms can respond to FINRA inquiries in hours — not weeks.

6. Comparative Reviews & Peer Benchmarking

In 2025, regulators are increasingly emphasizing comparative reviews, measuring firms against industry peers.

Challenges include:

  • Fragmented data across platforms
  • Lack of benchmarking visibility
  • Overwhelming data volumes

Falling behind peers in CAT performance can raise regulatory red flags.

How RSMS Leads in Comparative Reviews

RSMS advanced analytics provide:

  • Unified data views across trading systems
  • Peer benchmarking insights
  • Actionable intelligence to close gaps proactively

These tools help firms stay ahead of regulatory trends rather than react to them.

Integrating CAT and CAIS Compliance

Beyond CAT, firms must also align with FINRA CAIS requirements. A strong Customer Account Information System (CAIS) framework is essential for ensuring accurate account-level data reporting.

Platforms like CAIS-Connect integrate seamlessly with RSMS to:

  • Centralize CAT and CAIS data
  • Improve data consistency across regulatory reports
  • Strengthen end-to-end compliance governance

Together, RSMS and CAIS-Connect provide a unified approach to CAT and CAIS compliance.

RSMS: A Smarter Approach to FINRA CAT Compliance

As FINRA’s expectations continue to rise, firms need more than manual processes and siloed systems. A modern Regulatory Surveillance and Management System (RSMS) enables firms to achieve:

  • Accurate and complete CAT reporting
  • Consistent on-time submissions
  • Proactive error prevention
  • Rapid regulatory inquiry response
  • Strong comparative review readiness

By partnering with Capital Market Solutions, firms can future-proof their Consolidated Audit Trail (CAT) compliance, strengthen FINRA CAIS alignment, and build lasting regulatory confidence.

Compliance doesn’t have to slow growth. With RSMS and CAIS-Connect, it becomes a competitive advantage.

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