Consolidated Audit Trail (CAT)
The Consolidated Audit Trail (CAT) is a comprehensive, centralized database mandated by the SEC under Rule 613 that captures and retains detailed records of every order event — origination, routing, modification, cancellation, and execution — in U.S. equity and options markets, enabling regulators to reconstruct market activity and investigate potential violations with unprecedented speed and precision.
Before CAT, U.S. securities regulators relied on a patchwork of order audit trail systems maintained separately by individual self-regulatory organizations (SROs) — including FINRA, NYSE, and Nasdaq — each using different data formats, retention periods, and levels of granularity. Reconstructing market events that spanned multiple venues, broker-dealers, and account types required lengthy manual data aggregation that could take weeks or months. The 2010 Flash Crash investigation, which took five months to produce an initial account, highlighted how severely fragmented audit trail data limited regulatory effectiveness.
The SEC adopted Rule 613 in 2012, requiring FINRA and the national securities exchanges to jointly develop, fund, and operate the CAT. After years of development and negotiation among the SROs, CAT began receiving data submissions from broker-dealers and exchanges on a phased basis starting in 2020, with full implementation across all market participants and account types extending through the early 2020s.
CAT captures order lifecycle data at the event level. Each record includes a unique customer and account identifier, timestamps to the microsecond, the specific order type and size, the routing destination, any modifications or cancellations, and the ultimate execution details. Critically, CAT links together the full lifecycle of an order as it passes through multiple broker-dealers and venues, enabling regulators to follow a single order from its origination at a retail brokerage account through routing to a market maker and final execution at an exchange.
The scale of CAT is extraordinary. The system ingests tens of billions of records daily, making it one of the largest financial regulatory databases in the world. CAT LLC, the legal entity formed by the SROs to build and operate the system, engaged a technology vendor to design and maintain the infrastructure.
For regulators, CAT fundamentally transforms the speed and scope of market surveillance. The SEC and FINRA can use CAT data to detect manipulative trading patterns — including layering, spoofing, wash trading, and front-running — by searching across all market participants simultaneously rather than reviewing records from individual firms in sequence. CAT data also enables rapid reconstruction of market disruptions and trading halts.
For broker-dealers and institutional investors, CAT compliance requires substantial ongoing investment in data quality, reporting systems, and error correction processes. Firms that submit inaccurate or incomplete CAT data face regulatory scrutiny and potential enforcement action from FINRA and the SROs.