New Bill Puts Clamp on SEC's CAT

The SEC, Loundermilk said, "has been barreling forward" with CAT, "which tracks every trade an individual investor makes and links it to their identity through a centralized system."

Loundermilk added: "Not only is collecting all this information unnecessary, regulators already have similar systems that don't easily match identities with transactions, but it also creates another security vulnerability and a target for hackers."

Former SEC Chairman Jay Clayton explained in 2019 that the CAT was "intended to enhance regulatory oversight of our securities markets. Our equities and options markets operate through multiple exchanges and other venues and the CAT will facilitate cross-market oversight and analysis, thereby improving investor protection and market integrity."

Loundermilk said his bill "would help prevent an accidental or intentional breach by restricting the SEC's ability to collect this data in the first place."

Under the bill, the SEC "would only be able to request this data if they are investigating or enforcing violations of federal securities law. Furthermore, they would be required to destroy the data after they are finished with it. This is a commonsense solution aimed to protect investors, and it in no way hinders the SEC's mission."

Kennedy added in the statement that CAT "would expose every American investor's Social Security number and personal data to malicious hackers. The CAT is unconstitutional, and it hoards personal information it doesn't need."