Regulated Monopolies Seek to Tax American Investors After Backroom Deal

WASHINGTON – The American Securities Association (ASA) today sent a letter to the Securities and Exchange Commission (SEC) requesting a stay of self-regulatory organizations (SROs) new Rule 19b-4 filings related to the imposition of fees related to the Consolidated Audit Trail (CAT). The filings would require broker-dealers and their customers to pay for historical costs SROs incurred to develop the CAT and impose new taxes on market participants for what they alone have collectively agreed are the prospective costs of operating the CAT for the year 2024.

“After meeting in secret, regulated monopolies decided to use the CAT to push a massive tax increase on the American investing public in the most undemocratic way possible,” said ASA President and CEO Chris Iacovella. “ASA urges the SEC to immediately suspend this tax before American retail investors and retirement savers are forced to unfairly foot the bill.”   

“The SROs specifically chose this process because they want to circumvent the basic due process and transparency requirements that exist when the SEC conducts a formal review of their filings,” Iacovella wrote in the letter. “This is an unlawful attempt to extract hundreds of millions of dollars in taxes from broker-dealers, such as ASA members, and their customers simply for participating in our public markets. Even more egregious, this is being done while a fully briefed challenge to the funding and legality of the CAT is pending before the U.S. Court of Appeals of the Eleventh Circuit.”

To read ASA’s full letter to the SEC, click here.

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The American Securities Association (ASA) represents the retail and institutional capital markets interests of regional financial services firms who provide Main Street businesses with access to capital and advise hardworking Americans how to create and preserve wealth. ASA’s mission is to promote trust and confidence among investors, facilitate capital formation, and support efficient and competitively balanced capital markets. This mission advances financial independence, stimulates job creation, and increases prosperity. The ASA has a geographically diverse membership of almost one hundred members that spans the Heartland, Southwest, Southeast, Atlantic, and Pacific Northwest regions of the United States.