U.S. SEC Relaxes CAT Requirements

On September 30, 2025, the U.S. Securities and Exchange Commission (SEC) issued an order (the Order) granting conditional exemptive relief related to certain requirements of the National Market System Plan governing the Consolidated Audit Trail (the CAT NMS Plan), Rule 613 of Regulation NMS, and Rule 17a-1 under the Securities Exchange Act of 1934, as amended (the Exchange Act). The order allows self-regulatory organizations (SROs) that are participants (Participants) in the CAT NMS Plan to reduce CAT operating costs. The Order is effective immediately.

The Order provides four areas of conditional exemptive relief for Participants:

• Relax requirements related to the provision of lifecycle linkages on T+1;
• Ease requirements related to the re-processing of late records;
• Cease providing certain functionality associated with the online targeted query tool (OTQT); and
• Delete certain CAT data and more cost effectively store older CAT data.

These four areas of conditional exemptive relief are discussed below.

Lifecycle Linkage Deadlines

The Order allows the CAT NMS Plan processor (the Plan Processor) to provide only final lifecycle linkages for all order events by T+5 at 8:00 a.m. ET. Previously, interim lifecycles linkages were required by T+1 at 9:00 p.m. ET and final linkages by T+5 at 8:00 a.m. ET (as set forth in the November 2023 order). As a condition to this relief, upon requests made by authorized regulatory users from the Participants or the SEC, the Plan Processor must create interim CAT Order IDs for a specified trade date or dates and thereby provide linked lifecycles to regulators before T+5 at 8:00 a.m. ET. No lifecycle linkages will be required for options market-maker quotes in listed options (OMM Quotes), consistent with the December 2024 amendments to the CAT NMS Plan for OMM Quotes.

Re-processing of Late Records

The Order allows Participants to cease performing the “Full Replay” process. The Full Replay process involves re-processing late-reported CAT data, including assembling all such data into complete order event lifecycles so that regulatory users receive it in a form substantially consistent with how it would have appeared if reported on time.

As a condition to this relief, the Participants must ensure that the Plan Processor maintains the “Enhanced Late to the Lifecycle” process for late records (i.e., post T+5 data) from trade dates within the prior three years. This includes lifecycle mapping that shows all associations made during the Enhanced Late to the Lifecycle process. The Enhanced Late to the Lifecycle process must be conducted quarterly, and no re-processing is required for data older than three years.

Upon requests by authorized regulatory users from the Participants or the SEC, the Plan Processor must run the Full Replay process on specified data, such that late records received through Friday of the prior week are available for regulatory users on the following business day at 8:00 a.m. ET, absent extraordinary circumstances. The Plan Processor must also continue to notify regulatory users how re-processing will be completed for late records.

Online Targeted Query Tool

The Order grants relief to the Plan Processor from providing Participants and the SEC with access to processed CAT data through certain OTQT functionality. Specifically, the Order grants conditional exemptive relief from the requirements for DIVER, ARLE, OLA Viewer, and MIRS volume concentration and market replay tools.

As a condition to this relief, the Plan Processor must maintain currently existing performance requirements, controls, monitoring, logging, and reporting for the remaining query tools (i.e., user-defined direct queries (BDSQL) and bulk extract (Direct Read) tools), as well as for certain MIRS reporting statistics tools that provide regulatory users with access to compliance information. In addition, OTQT functionality may not be eliminated until two months after the publication of the Order in the Federal Register (i.e., December 2, 2025).

This conditional exemptive relief granted in this Order is intended to supersede the conditional exemptive relief set forth in the November 2023 order with respect to OTQT performance requirements.

Data Storage and Retention

The Order allows Participants to:

• Delete all CAT data older than five years, instead of six years;
• Move CAT data older than three years to a more cost-effective storage tier (i.e., a tier requiring some “manual intervention” to retrieve data), which will not be immediately accessible but will be made available to regulatory users when requested;
• Delete all options market quotes in listed options data after one year; and
• Delete all interim operational data older than 15 days.

Looking Ahead

In a statement announcing the Order, SEC Chairman Paul Atkins emphasized that the Order is “just the start,” and signaled that more changes are forthcoming. We will continue to monitor any developments and provide updates as they become available.