MADISONVILLE, La. – Sen. John Kennedy (R-La.), a member of the Senate Banking Committee, today joined Sens. Tom Cotton (R-Ark.) and Tim Scott (R-S.C.) and colleagues in sending a letter to the acting chairman of the U.S. Securities and Exchange Commission (SEC), Mark Uyeda, urging him to conduct a comprehensive review of the Consolidated Audit Trail (CAT). 

The SEC requires brokers to submit investors’ personally identifiable information (PII) to its CAT database. Earlier this month, the Trump administration’s SEC issued an order that exempts certain PII consisting of investors’ names, addresses and years of birth from CAT reporting.

“The Consolidated Audit Trail (CAT) has been a highly controversial endeavor that has raised many concerns from Members of Congress . . . We are pleased that you and fellow Commissioner Peirce have repeatedly acknowledged these longstanding concerns and applaud the Commission for its recent steps to protect the financial privacy of American investors,” the lawmakers wrote.

“However, there is more work to be done. The prohibition on collecting investor PII must be formally codified (rather than via rescindable exemptive relief) and already-collected PII must be expunged. Cybersecurity measures for the remaining data must be enhanced. And the CAT’s bloated out-of-control budget must be addressed,” they continued.

“Given these continuing concerns, the Commission should launch a comprehensive review that covers all aspects of the CAT. In doing so, the Commission should take additional steps to pause the CAT’s most controversial elements—not only the collection of customer PII, but also the problematic funding structure that a majority of the current Commission voted against. Further, it would appear appropriate for the Commission to pause and reconsider its position with respect to ongoing litigation related to the CAT, as it has done for other cases commenced during the Biden administration,” the lawmakers concluded. 

Background:

• Earlier this month, Kennedy introduced the Protecting Investors’ Personally Identifiable Information Act.

• Kennedy’s bill would prohibit the SEC from requiring market participants to submit investors’ personally identifiable information to the CAT. 

• The bill would also require the SEC to delete personally identifiable information once the agency resolves the investigation or issue that required that information. 

Sens. John Boozman (R-Ark.) and Bill Hagerty (R-Tenn.) and Reps. French Hill (R-Ark.), Bill Huizenga (R-Mich.), Ann Wagner (R-Mo.) and Barry Loudermilk (R-Ga.) also joined the letter. 

The full letter is available here.