The Financial Information Forum (FIF) announces the launch of a CAT Counterparty Contact Utility (“Utility”), a secure central repository of CAT counterparty contact information. Upon request and approval, brokers will be permitted to access the Utility to obtain the contact information of counterparties on an accelerated basis.
The Utility will facilitate compliance with the CAT requirement that obligates brokers to repair interfirm linkage errors by T+3 (trading day of the event (T) + three trading days). Access to the Utility will be made available to all CAT reporting brokers, regardless of whether the broker is a current FIF member.
The Utility will serve an important industry function once testing of interfirm linkages goes live on July 27, 2020. The three-month testing cycle will allow brokers to identify the counterparties that caused the interfirm linkage mismatches, ensure that proper matching criteria is established, and test the repair and resubmission process in preparation for production go-live on October 26, 2020.
Production go-live of interfirm linkage validation will impose significant challenges upon the industry, as delivery of corrected CAT files within T+3 materially deviates from the T+5 error reconciliation window pursuant to OATS (OATS does not require brokers to correct interfirm linkage errors). Broker submission of repaired errors within T+3 is further complicated because CAT eliminates current OATS reporting exemptions.
Therefore, approximately 1800 brokers will now report to CAT as opposed to OATS, which impacted around 1,000 brokers. Taken in the aggregate, the 1) reduction of OATS’ T+ 5 error correction window to T+3; 2) increase in the number of reporting brokers by 800; and 3) CAT’s expansion of OATS rules (i.e. interfirm linkage validation) will impose significant challenges upon brokers.
Brokers may request access to the Utility here.
Contact: Kevin McCabe, FIF Program Manager, email@example.com; 212-652-4462.