CAT Clock Synchronization Rule 6820 (12/10/19)

CAT Clock Synchronization Rule 6820

Reminder on which firms CAT rules and regulations apply to:

• Every firm that handles orders in equities or listed options is required to register with, test and ultimately report into the FINRA CAT system.

• If you do not handle orders in these asset classes, CAT does not apply to you firm.

FINRA’s Consolidated Audit Trail (CAT) Rule 6820 (Clock Synchronization) requires that each CAT member firm satisfy clock synchronization, documentation, certification, and violation reporting requirements for all Business Clocks used for the firm’s Reportable Events that must be reported under SEC Rule 613 (e.g., order routing), including any third-party service provider’s clocks used for those events.

CAT member firms relying on third-party service providers’ Business Clock, especially introducing firms relying on their clearing firms’ clocks, would not have access to those clocks to obtain the information necessary to comply with Rule 6820.

Recognizing this issue, the Operating Committee for CAT NMS, LLC has updated the CAT NMS FAQs regarding clock synchronization to clarify the specific information firms should obtain from their third-party service providers (both broker-dealer and non-broker-dealer providers) to demonstrate compliance with Rule 6820.

FINRA CAT HELPDESK PHONE #: 888-696-3348

Call them with your questions, they are very helpful!

I hope this update has been helpful!

All the best,

Paige