SEC Signals Reevaluation of CAT Reporting Amid Broader Transparency and Regulatory Reform Efforts

Securities and Exchange Commission (SEC) Chairman Paul S. Atkins recently directed SEC staff to conduct a review of the Consolidated Audit Trail (CAT), focusing on the escalating costs, reporting requirements, and cybersecurity risks stemming from sensitive data collection.[1] This directive aligns with Chairman Atkins’ expressed priorities to return to principled regulation, support market innovation and evolution, and reduce unnecessary compliance burdens. Among other things, Chairman Atkins cited CAT’s “appetite for data and computing power,” noting annual costs approaching $250 million, ultimately borne by investors, as the rationale for this reevaluation.[2] He supported Commissioner Mark T. Uyeda’s efforts behind the granting of an exemption from the requirement to report certain personally identifiable information (PII) to CAT for natural persons.[3]

This CAT reevaluation is part of a broader market-friendly agenda at the SEC. For example, Chairman Atkins has identified a goal of his tenure is to develop a rational regulatory framework for crypto asset markets, covering the issuance, custody, and trading of crypto assets all the while discouraging bad actors from violating the law. Chairman Atkins continues to emphasize the importance of regulatory frameworks that are “fit-for-purpose” with “clear rules of the road” for market participants to facilitate capital formation and protect investors. 

While no immediate changes to CAT reporting obligations are effective beyond the PII exemption, market participants should prepare for shifts in how the SEC approaches data collection and cost allocation.

[1] Paul S. Atkins, Chairman, SEC, “Prepared Remarks Before SEC Speaks” (May 19, 2025), https://www.sec.gov/newsroom/speeches-statements/atkins-prepared-remarks-sec-speaks-051925.

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[3] Paul S. Atkins, Chairman, SEC, “Testimony Before the United States House Appropriations Subcommittee on Financial Services and General Government” (May 20, 2025), https://www.sec.gov/newsroom/speeches-statements/atkins-testimony-fsgg-052025. See Katten’s Quick Reads post on the exemptive relief for reporting personally identifiable information here.