There’s More Than One Way to Skin a CAT
I've never been a big fan of regulators imposing technology platforms on the industry. Typically, such platforms aren't aligned with the technological realities of the Street. So when the US Securities and Exchange Commission (SEC) released in May its proposed Rule 613 for Regulation NMS, which mandates that the Financial Industry Regulatory Authority (Finra) and the self-regulatory organizations (SROs) build and maintain a consolidated audit trail (CAT) platform, I felt that familiar feeling in the pit of my stomach—the Intermarket Trading System (ITS) is about to be reincarnated.
The SEC says it would take a few years to get the CAT off the ground and would carry a price tag of only about $4 billion in its first year and $2.1 billion in the subsequent years.
Given the scope of the project and the number of organizations involved, the estimated budget and proposed schedule all seem a bit optimistic.
Earlier this week, market access provider FTEN filed a comment with the SEC suggesting that the regulator should look to off-the-shelf technology that is already being used in the industry rather that constructing an expensive bespoke offering.
According to the filing, FTEN claims that if it followed its proposed four-phase implementation plan, it could have 73 percent of the market covered within the first 30 days the remaining 27 percent of the market covered by the end of 12 months without affecting end-users’ trading experience.
Ted Myerson, CEO of FTEN, is a bit coy on how much a vendor-supplied system would cost the industry, saying that this isn't the proper stage to discuss price. Considering FTEN's current offerings and footprint in the industry, it makes an attractive option.
Now that FTEN has raised one possible alternative to a custom CAT platform, it shouldn't be long until other vendors start proposing their own alternatives.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@waterstechnology.com or view our subscription options here: http://subscriptions.waterstechnology.com/subscribe
You are currently unable to print this content. Please contact info@waterstechnology.com to find out more.
You are currently unable to copy this content. Please contact info@waterstechnology.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@waterstechnology.com
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@waterstechnology.com
More on Trading Tech
Waters Wrap: The changing definition and perception of blockchain
Anthony says that questions of definition and perception are killing DLT projects in the capital markets—oh, and a lack of proven implementations.
BlackRock to integrate Aladdin and Preqin to create new private markets platform
CEO Larry Fink calls combining the two platforms “maybe the biggest opportunity in 10 years.”
Ace high or busted flush? Digital Asset’s mixed fortunes mirror DLT adversity
The vendor hoped to remodel post-trade using blockchain technology—and it still might—but its bumpy progress raises questions over the future of DLT in finance.
This Week: BlackRock/Preqin, Trading Technologies, FIA Tech and more
A summary of some of the past week’s financial technology news.
Adaptive’s Aeron goes live on Microsoft Azure Marketplace
The messaging software used for building bespoke trading platforms is now available on Microsoft’s marketplace, making it accessible through major cloud providers.
Bloomberg, industry bodies push back on Cboe’s proposed OEMS rule change
Some industry bodies disagree with the options exchange’s proposal to carve its Silexx OEMS out of the SEC’s definition of an exchange facility and place it into a separate business line.
Waters Wrap: CME, Google and the pursuit of ultra-low-latency trading
CME Group and Google have announced Aurora, Illinois, as the location for the exchange’s new co-location facility. Anthony explains why this is more than just the next phase of the two companies’ originally announced project.
WatersTechnology latest edition
Check out our latest edition, plus more than 12 years of our best content.