Financial markets oversight plan draws 31 expected bidders

NEW YORK Wed Mar 6, 2013 10:42pm IST

A sign for the Securities and Exchange Commission (SEC) is pictured in the foyer of the Fort Worth Regional Office in Fort Worth, Texas June 28, 2012. REUTERS/Mike Stone

A sign for the Securities and Exchange Commission (SEC) is pictured in the foyer of the Fort Worth Regional Office in Fort Worth, Texas June 28, 2012.

Credit: Reuters/Mike Stone

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NEW YORK (Reuters) - Thirty-one companies have indicated they plan to submit bids to build and operate a comprehensive system to track equity and options trading activity, a regulatory response to the "flash crash" of 2010.

The 31 potential bidders to build the Consolidated Audit Trail, or CAT, include exchange operators BATS Global Markets, the NYSE Technologies unit of NYSE Euronext, and Nasdaq OMX, according to a website dedicated to the CAT process.

The Financial Industry Regulatory Authority, the industry's own watchdog that already runs the Order Audit Trail System, or OATS, that tracks order, quote and trade information for Nasdaq and over-the-counter-equities, also was on the list, as was Thomson Reuters Corp.

Other companies included Google Inc and International Business Machines Corp. The full list can be found at: www.catnmsplan.com/CAT_FAQ/

The 31 companies will attend a meeting in New York on Friday hosted by FINRA and the exchanges, which are overseeing the CAT process, where they will discuss the proposed surveillance system.

The Securities and Exchange Commission last July approved creation of CAT, a daunting task that will identify every order, cancellation, modification and trade execution for all exchange-listed equities and stock options across the U.S. marketplace.

A 56-page request-for-proposal was published last week outlining a number of technical requirements, guidelines and obligations related to the CAT. For example, the system will need to track about 8.5 billion orders, quotes and other trading information daily, with peak levels more than double that.

Formation of a CAT advisory committee to help in its development was announced in February to advise the U.S. stock and options exchanges and FINRA in CAT's creation.

It took the SEC and the Commodity Futures Trading Commission almost five months to issue a report on the causes of the May 2010 flash crash because of delays in gathering data, leading to calls for a comprehensive surveillance system.

(Reporting by Herbert Lash; Editing by Leslie Adler)

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