Consolidated Audit Trail and Regulatory Reporting
The Consolidated Audit Trail is a single US database that records every order, quote, and trade across every exchange so regulators can reconstruct what happened, in what order, across the whole market.
Before the Consolidated Audit Trail (CAT), reconstructing a fast-moving event across US equity markets meant pulling records separately from each exchange, each broker, and each dark pool, then trying to line up timestamps that weren't recorded the same way twice. CAT was built to fix that: every order, every modification, every cancellation, and every execution, on every US exchange and most broker systems, gets reported into one system with a common format and synchronized clocks.
CAT exists so regulators can replay the full lifecycle of any order — from the moment a client clicks "buy" to the moment it fills — across every venue it touched, using one consistent timeline instead of stitching together records from dozens of separate systems.
Each reportable event carries an identifier that lets regulators trace an order as it's routed, split, re-routed, and executed, including which trader or algorithm originated it. This is what makes it possible to investigate something like a flash crash or a suspected spoofing pattern at the level of individual orders across the whole market, rather than one exchange's slice of it.
For a firm, CAT compliance is an operational obligation, not a strategy design choice: broker-dealers must capture and submit the required fields correctly and on time, and errors or gaps in reporting are themselves a regulatory violation, independent of whether the underlying trading was legitimate.
Further reading
- SEC, Consolidated Audit Trail National Market System Plan