Securities group asks SEC to intervene for brokers in audit-trail database fight | Reuters


Brokers must soon begin sending sensitive information derived from their clients’ trades to a new database called the Consolidated Audit Trail (CAT) that the Securities and Exchange Commission tasked exchange operators and the Financial Industry Regulatory Authority (FINRA) with building and operating.

But before they begin sending the information, the brokers must sign an agreement that limits the financial liability of the exchanges and FINRA, collectively called self-regulatory organizations (SROs), to $500 per reporting firm if there is a breach of that data.

That puts the brokers on the hook for any security breaches of the database, which they have no control over, said Kenneth Bentsen, chief executive officer of the Securities Industry and Financial Markets Association (SIFMA), which represents banks, broker-dealers and asset managers.

“SIFMA’s guiding principle is ‘they who hold the data bear the liability,’” Bentsen said in a statement.

Source: Securities group asks SEC to intervene for brokers in audit-trail database fight – Reuters

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