Monday, November 28, 2016

SEC Creates National Database of Individual Trades - CARDS Rising from the Dead?

We all remember CARDS - FINRA's ill conceived plan to store and maintain information regarding every trade made by every person in our national markets. The plan was a disaster from the start, for many reasons, but one of the main reasons being the collection of all of that data by a private entity (FINRA), in one place, inclluding information regarding invidual investors. Sorry, but most thinking folks don't trust the government, or a private entity, or FINRA, to securely store that information and keep it protected from hackers. Plus, why would we allow the government to keep such detailed information on every single investment made by every single investor?

Well, we are going to have that happen. 
The SEC has approved an NMS plan to create a single, comprehensive database known as the consolidated audit trail (CAT) that the SEC and regulators believe will enable regulators to more efficiently and thoroughly track all trading activity in the U.S. equity and options markets. 

It will also create a database of trades, by investor, that the government can troll through at will.
The NMS plan details the methods by which SROs and broker-dealers will record and report information. While the goal is to obtain a range of data elements that together provide the complete lifecycle of all orders and transactions in the U.S. equity and options markets, those data elements include a unique identifier for the customer!
While the NMS plan also sets forth how the data in the CAT will be maintained to ensure its accuracy, integrity and security, there is no information as to what a unique customer identifier means, and you can be sure that someone will think it clever to use the customer's last name, or the last four digits of the customer's SSN, which can, ultimately, be reversed into the identity of the customer.
And why should the government have a record of every trade executed by every individual in the entire country?

SEC.gov | SEC Approves Plan to Create Consolidated Audit Trail
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