When the stock market fell 600 points in five minutes on May 6, 2010, that prompted the Securities and Exchange Commission that perhaps it needed a better view on stock trading. Seeking to create a massive new computer system to perform detailed tracking on stock trading, the plan is to create the Consolidated Audit Trail, or CAT for short. The CAT promises to be an especially thorough monitor of trading activity even to the point of providing data that in the past was not immediately available for SEC scrutiny. In addition to ferreting out illicit trading activities, the CAT will enable better and timelier postcrash analyses (Matthew Philips and Silla Brush, with Dave Michaels “An SEC Computer to Peer Into Dark Pools” Bloomberg Businessweek, 8/11/14–8/24/14, pp. 28–29):
“[CAT] will be one of the largest databases in the world, designed to funnel 50 billion daily records into an archive. The computer will track every stock quote, order, and trade, including when and where transactions occur, the brokers who handle them, and the customers they represent. The CAT will pull data from the 18 U.S. public stock and options exchanges and the private trading venues run by banks, known as dark pools, that don’t have to immediately report data to the SEC.” (p. 28)
Building the CAT is a big task. Who gets to handle this lucrative project remains to be seen. Among the bidders are the likes of Google, Sungard, HP, IBM, and Tata Group. Rumors are that the initial five-year contract could run as high as a billion dollars. Now there’s a CAT that is never going back in the bag!