The Consolidated Audit Trail

On May 6, 2010 the “Flash Crash” disrupted the equities market, with the Dow Jones Industrial Average (DJIA) dropping in value by approximately 9% in a matter of minutes. In response to the difficulty in determining the cause of the Flash Crash, on July 18, 2012 the SEC adopted Rule 613 to create the Consolidated Audit Trail (CAT), intended to allow regulators to monitor activity throughout the U.S. securities markets. The CAT collects information on a variety of market events, including quotes, orders, routes, and trade executions for all U.S. exchange-listed equities and options, among other things. Additionally, the CAT will track the identity of accounts and customers originating this information. The development and implementation of the CAT on an industry-wide basis represents an evolution in maintaining the integrity of the financial and capital markets.

Kingland was selected by FINRA CAT to be a subcontractor responsible for implementing and operating the component of CAT required to collect, validate and store the customer and account information required in CAT, known as the Customer and Account Information System (CAIS).