The SEC has delayed an audit reform that would protect retail investors from nefarious practices in the market to 2024.
Opponents, including SEC Commissioner Hester Peirce want to scrap the entire project.
Hester Peirce is tied to a lobbyist group of anti-regulators.
Quite a contradiction being an SEC Commissioner if you ask me.
Keep reading below to find out how delaying this audit reform is a direct violation of retail investors’ rights.
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Consolidated Audit Trail of 2016
In 2016, the SEC approved a rule to establish the Consolidated Audit Trail, which would capture data on customers and orders for exchange-listed equities and over-the-counter (OTC) securities across all U.S. markets.
The system would provide the SEC with an enormous database of information to help the agency detect and quickly react to events that disrupt the markets and could potentially harm retail investors.
Brokerages were supposed to begin collecting customer information for the CAT this month but in May, Finra delayed implementation of the CAT customer and account information system until the end of this year.
However, in an order on Friday, the SEC pushed back implementation of some SRO reporting obligations until July 2024.
“The CAT, a project designed to give the Securities and Exchange Commission and other regulators comprehensive market insight, has proved much harder and more expensive to implement than anyone anticipated,” SEC Commissioner Hester Peirce said in a statement.
“I have grave concerns about the whole project. The dollars, distraction, dissension, and drain of endless meetings over the past several years of CAT implementation are reasons enough to reconsider the entire project; the risks to liberty and security posed by the project should compel us to do so.” – Investment News
OTC trading goes unregulated until 2024
Over-the-counter trading has been a real issue in our markets.
It’s allowed financial institutions to trade retail’s orders outside the lit exchange (NYSE), making it susceptible to market manipulation.
These markets are unregulated which leads to less public information and the possibility of fraud.
Delaying this market reform means the SEC is pushing a decade of complacency since the reform’s introduction in 2016.
Something the SEC is very good at.
The question is, how long does the SEC think they can continue to delay market reforms before investors take matters into their own hands, and into the streets again.
I’d love to hear your thoughts on the matter.
Leave a comment down below.
Is the SEC pushing it a little too far now?
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