Wall Street Resigned to a CAT Delay

“It’s not surprising to see so many folks using the SEC’s mishandling of its own data breach to call for yet another delay,” added Tyler Gellasch, executive director of Healthy Markets Association. “It is probably not lost on the SEC that most of those same voices have been fighting the CAT for years on every front.”

The EDGAR breach is a bit of a red herring regarding the CAT since the platforms use different technology, noted Gellasch.

“I suspect the SEC and market participants will take comfort in the fact that the technology firm working on the CAT has been working on the SEC’s MIDAS for years without any known incidents,” he said.

It is hard to argue against taking a few months to make sure the CAT is up to snuff from a cyber-security perspective, given the amount of time and effort that has already gone into the project, according to Gellasch.

“After seven years of planning and fighting, the SEC might finally get a surveillance tool that is about half as valuable what most Americans would suspect the SEC would have had for decades,” he said. “The data breach is not the biggest threat to the CAT’s successful implementation, the enormous holes in its design, including the failure to include futures market information and legal entity identifiers, are much greater concerns.”

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