Press Release: ASA Responds to Consolidated Audit Trail Status Update

WASHINGTON – The American Securities Association (ASA) today commended U.S. Securities and Exchange Commission (SEC) Chairman Jay Clayton for acknowledging the many cybersecurity concerns associated with the Consolidated Audit Trail (CAT) database and the need to protect the sensitive information of America’s retail investors.

“We appreciate Chairman Clayton taking an important step forward and acknowledging the CAT can serve its needed regulatory objectives without collecting the most sensitive personal information of America’s retail investors,” said ASA CEO Chris Iacovella. “We are hopeful that the Commission and the SROs can now get the CAT up and running as quickly as possible to better surveil the marketplace without collecting any amount of retail investor personally identifiable information.”

According to a recent nationwide Morning Consult survey, 72% of investors are not willing to put their personal information at risk in order to facilitate more insider trading cases, while 76% favor being allowed to ‘opt-out’ of having their PII collected under a system such as the CAT. There is growing momentum in Congress calling on the SEC to remove retail investor PII from the CAT. In July, a group of Senate Republicans sent a letter to the SEC highlighting the CAT’s national security risks. Leading members of the House Financial Services Committee sent a similar letter in April.

The collection of retail investor PII in no way bolsters the ability of the SEC to oversee equity markets more effectively as the Commission has had no issue bringing insider trading cases since FY2011 totaling 387. ASA believes the CAT can surveil the marketplace and better understand market structure just as effectively by giving IDs to financial institutions, hedge funds, high-frequency and other large traders. Retail investors did not cause the flash crash.

ASA has been at the forefront of advocacy to remove retail investor PII from the CAT. ASA CEO Chris Iacovella recently penned an op-ed in The Hill titled “The National Security Risk No One Is Talking About.” To read our recent letter to the SEC, click here. To read our recent letter to the Senate Banking Committee, click here. To view a Morning Consult poll showing an overwhelming majority of American investors oppose sending their personal information to the CAT, click here.

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ASA’s regional financial services companies work in communities across the country to create jobs, grow the economy, and increase prosperity for all Americans. The ASA exclusively represents the capital market and private client interests of its members and seeks to promote free market principles making it easier to access financial advice and capital. ASA members help Americans save for retirement, provide Main Street businesses with capital to grow, and advise hardworking Americans how to create and preserve wealth. For the latest updates follow @AmerSecurities and learn more at http://americansecurities.org/.