WASHINGTON – Sen. John Kennedy (R-La.), a member of the Senate Banking Committee, and fellow senators today introduced the Protecting Investors’ Personally Identifiable Information Act, which would protect information that could reveal the identity of American investors. The legislation would prohibit the Securities and Exchange Commission (SEC) from requiring brokers to submit investors’ personally identifiable information to its Consolidated Audit Trail (CAT).
“Investors trust the U.S. stock market with their savings and their privacy. The SEC’s Consolidated Audit Trail puts their privacy at risk by collecting personal information it doesn’t need. I introduced the Protecting Investors’ Personally Identifiable Information Act to make sure that the SEC only houses information it needs, and only while it needs it. As long as hackers and foreign enemies keep targeting federal agencies and individual Americans, the government shouldn’t make their personal information a prime target by centralizing and storing it needlessly,” said Kennedy.
The SEC’s CAT will be fully operational in 2022, making it the largest government database of its kind. The CAT will collect all customer and order information for equity securities and listed options, including data that might be considered personally identifiable information.
The SEC is implementing the CAT despite concerns from investor protection groups and the securities industry and in the wake of vulnerabilities that recent cyber-attacks have revealed at federal agencies.
This bill would prohibit the SEC from requiring market participants to submit investors’ personally identifiable information to the CAT. Under this legislation, the SEC can obtain personally identifiable information related to investors only by requesting it on a case-by-case basis. Companies and investors trading on the U.S. stock exchanges would need to fulfill the SEC’s request for this information within 24 hours, though smaller brokers may request additional time.
The bill would also require the SEC to delete personally identifiable information once the agency resolves the investigation or issue that required that information.
“The CAT is a sitting duck that makes every American investor and retirement saver’s data privacy an easy target for Chinese hackers. We thank Senator Kennedy for his leadership in protecting America’s mom-and-pop investors by introducing this important legislation to remove their personal and financial information from the CAT,” said American Securities Association CEO Chris Iacovella.
Original co-sponsors include Sens. Cynthia Lummis (R-Wyo.), Mike Rounds (R-S.D.), Jerry Moran (R-Kan.), Steve Daines (R-Mont.), Kevin Cramer (R-N.D.) and John Boozman (R-Ark.).
Rep. Barry Loudermilk (R-Ga.) introduced companion legislation in the House of Representatives.
Text of the Protecting Investors’ Personally Identifiable Information Act is available here.