Is It Time to Scale Back? Daniel Hawke Explains Cost and Complexity of SEC’s CAT System in WatersTechnology

Daniel Hawke, Securities Enforcement & Litigation partner and former chief of the Securities and Exchange Commission (SEC) Division of Enforcement’s Market Abuse Unit, was quoted in the WatersTechnology article, “Exchanges Plead with SEC to Trim CAT Reporting Requirements.” The piece examines efforts by major U.S. exchanges to scale back reporting obligations under the Consolidated Audit Trail (CAT), particularly regarding options data.

Hawke, who led the SEC Division of Enforcement’s investigation into the 2010 Flash Crash that prompted the creation of the CAT, offered historical and technical context on the regulator’s longstanding challenges with integrating options data. He noted he wasn’t surprised by Nasdaq and Cboe’s skepticism over the utility of this data within CAT. While acknowledging the importance of maintaining oversight, Hawke said reducing options data could allow the SEC to meaningfully cut costs without undermining the system’s mission. “I don’t think it would gut the CAT,” he said. “I would bet that there are reasonable workarounds on options data in which the fields of data could be narrowed or conformed to avoid some of the burden and waste.”

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