SIFMA questioned a section of the cat journalists agreement, which concerns the liability of self-regulatory organizations (SROs) composed of stock exchanges and securities associations, and CAT LLC, the group formed by the U.S. stock exchanges to develop an implementation plan for the consolidated audit band, and its executives, employees and representatives ”in the event of a cat data protection breach or other behavior, are responsible for CAT LLC or SROs, limited. ”SIFMA said in its submission to the SEC. The solution comes in the wake of a dispute between U.S. stock markets and dealer brokers, which threatened to hold brokers liable for breaches of a new trading database controlled by exchanges and the Financial Industry Regulatory Authority (FINRA). As brokers prepare to send critical and sensitive business information to the CAT, SROs had insisted that brokers sign an agreement limiting the financial liability of SROs to 500$US per reportable company in the event of a data breach. In addition, SROs must limit the language of liability in the CAT-Reporter agreement, without first proposing a rule and go through the public process of notice, comment and approval with the SEC. This comparison will have the greatest impact on companies that have not signed the CAT Reporter Agreement. These companies have just over a month to test and be certified before the Phase 2a go live compliance date on June 22, 2020. Once the revised agreement has been published and accepted by reporting companies or credit rating agencies, CAT is expected to see a significant increase in the notification of events and companies wishing to obtain their production certification. ”Sifma and its members support the CAT and its regulatory intentions, but remain concerned about the risks of compiling sensitive customer information into a government-imposed database. Dealer brokers should not be held liable for an infringement in the CAT database over which they have no control.
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