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ICYMI: FINRA’s Cook Dumps on Consolidated Audit Trail

by Jesse Westbrook & Robert Schmidt | Capitol Account

Finra President Robert Cook weighed in late last week on the consolidated audit trail – and he’s got a few issues with the massive stock trading database as it comes closer to full operation. His frank comments, at the Security Traders Association conference in Washington, could help fuel an already heated opposition campaign by the brokerage industry and numerous Republican lawmakers.

Cook blasted the funding plan that the SEC approved last month as inequitable because it requires Finra, a non-profit, to shoulder a larger share of the costs than the exchanges. He also warned the financial industry to expect an extra bill. “We will be passing along the Finra portion,” Cook said. “I want people to be aware that is coming.”

The Finra chief added that “it may be possible” for brokerages to recover some of their fees for the CAT from investors. But he told them to move quickly. “This is coming like a railroad train, like a freight engine, right at the industry,” Cook said. “I think it is probably coming too fast.”

Cook also waded into the debate over the CAT’s collection of personal identifiable information, implying that the SEC was going too far. He said that even his own mother, an 80-year-old retiree with a small investment account, was in the database. “Granny is not manipulating the market,” Cook underscored. But like millions of other Americans, she wants to know why her details are now in the database. “In fact,” he said, “her words were, `Gee it sounds like Big Brother is getting pretty big.”

While regulators will always say they want more information, Cook stressed that there should be a middle ground. “I think there are other approaches that might better balance the regulatory need with the legitimate concerns about privacy and data security,” he said.

And he pointed out that “moms would also probably say, `it’s never too late to do the right thing.’”

This article originally appeared in Capitol Account.


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American Securities Association, based in Washington, DC, represents the retail and institutional capital markets interests of regional financial services firms who provide Main Street businesses with access to capital and advise hardworking Americans how to create and preserve wealth. ASA’s mission is to promote trust and confidence among investors, facilitate capital formation, and support efficient and competitively balanced capital markets. This mission advances financial independence, stimulates job creation, and increases prosperity. The ASA has a geographically diverse membership of almost one hundred members that spans the Heartland, Southwest, Southeast, Atlantic, and Pacific Northwest regions of the United States.


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