SEC Relaxes PII Disclosure Requirements for Stock Trades

“Over 12 years ago, the CAT was designed with the goal of creating a modernized audit trail system to enable regulators to analyze and reconstruct market events,” said Mark Uyeda, SEC acting chairman. “Today’s exemptive order eliminates the requirement to report names, addresses, and years of birth for any U.S. natural person who trades in the stock market and recognizes that such information is not necessary to achieve CAT’s objectives."

Uyeda noted that, "Despite today’s action, bad actors and other miscreants who engage in insider trading, market manipulation, and other schemes" should understand the SEC "has more than sufficient investigative tools to hold them accountable.”

The commission cited sophisticated bad actors who could use leaked PII to impersonate a customer or broker-dealer in the event of a breach as the reason for the exemption.

Originally, PII such as names, addresses and years of birth were collected in the CAT to generate unique customer IDs and help regulators with identification, SEC said. An order from the commission in 2020 exempted reporting of sensitive PII, like social security numbers. Monday’s order exempts additional PII, the SEC added.

Kenneth Bentsen, CEO of the Securities Industry and Financial Markets Association (SIFMA), applauded the action in a statement Monday. “For a decade, SIFMA has expressed strong concerns on behalf of the industry and investors that the information in the CAT—the largest database of retail and institutional trading ever created—was a ripe target for cyber criminals and collecting PII put investors’ data at risk.” Bentsen added, “This bold decision by the Commission is entirely appropriate and long overdue.”