From: Pensions & Investments
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Rather than going fully ahead with CAT, Mr. Weisberger thinks consideration should be given to enhancing the current FINRA Order Audit Trail System to include proprietary trading strategies and order routing for options to its current capability to view a trade’s lifecycle. That way, the order audit system will perform the same function as CAT with less risk, he said.
“OATS doesn’t require information about the end customer directly,” Mr. Weisberger said. “With CAT, you’ll know the actual customer and, if it was compromised, hackers could learn about strategic investments or when high-profile investors acquire or sell positions in real time. It’s extremely sensitive market information and there are clearly risks, however well the system is built since the users of the system could provide access unwittingly. There is an argument that a breach of the CAT could be used to discover non-public information that’s market-moving and information that could be used to manipulate the market.”
‘Other side of the argument’
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