The Securities and Exchange Commission is weighing direct control and funding of the Consolidated Audit Trail (CAT) after Citadel Securities won a lawsuit challenging its financing. The CAT tracks U.S. equities and options trades, created after the 2010 flash crash. The SEC aims to address ballooning costs, with current annual expenses estimated at $250 million.

SEC Chairman Paul Atkins said the changes, likely taking effect by late 2027, would address "fundamental issues" with costs, governance, and funding. The agency also plans to delete data older than five years and reduce reporting speed for certain trades to cut cloud storage expenses, which have surged with retail options activity.

Industry group Sifma praised the move as a "major step forward." The current funding model requires exchanges and Finra to pay, then seek reimbursement from brokers. Direct SEC funding would spread costs across all market participants via a small fee.