The Securities and Exchange Commission has formally requested industry feedback on reducing the cost and scope of trading data collected through the Consolidated Audit Trail (CAT) system. The agency is seeking ways to streamline the massive data collection requirements that exchanges and brokers must report to this centralized database.

Launched in 2012, the CAT was designed to track trading activity across all U.S. equity and options markets to help regulators monitor market manipulation and ensure fair trading practices. However, the system has faced criticism from industry participants who argue the data collection requirements are overly burdensome and expensive to implement. The SEC is now exploring whether certain data points could be eliminated or collected less frequently without compromising the system's effectiveness.

This move comes as financial institutions continue to grapple with rising compliance costs in the post-2008 regulatory environment. Industry groups have long advocated for a review of the CAT requirements, arguing that some data elements provide limited regulatory value while imposing significant operational costs. The SEC's request for input signals a potential shift toward more flexible data collection standards that balance regulatory oversight with industry efficiency.