The Wall Street Journal | By: Alexander Osipovich, Dave Michaels And Kate Fazzini | September 22, 2017:
Some market participants say Consolidated Audit Trail would contain sensitive information that could prove lucrative to hackers.
The breach of the Securities and Exchange Commission is stoking doubts about a vast database of trades that the agency has touted as a defense against episodes like the 2010 “Flash Crash” but is coming under fire as a hacking risk.
The Consolidated Audit Trail, or CAT, would keep track of every trade and order in U.S. stock and option markets, and is designed to help the SEC analyze complex market events and detect manipulation. The CAT will begin receiving data from stock exchanges in November following a multiyear push by the SEC, which approved the plan last year.
Critics have argued that if the detailed information reported to the database fell into the wrong hands, it could be used to reconstruct the most lucrative and closely guarded trades of hedge funds and other big investors.
The program is an ambitious, expensive and not universally popular undertaking that is now coming under renewed scrutiny after the agency was caught off guard by the breach of its corporate filings system, known as Edgar.
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