Itiviti to Expand Regulatory Coverage, Starting with the CAT

Itiviti will soon bring to market an offering that will help broker-dealers and other market participants comply with the consolidated audit trail (CAT).

For the project, Itiviti is partnering with another vendor specialized in regulatory reporting. Linda Middleditch, chief product officer at Itiviti, sees using a partner/acquire strategy as particularly useful for the CAT offering.

“If you think about CAT, it’s, of course, an option for me to build a solution with the technology I have at Itiviti, but I’m not convinced that it’s something that I need to do. With CAT, it’s more about, partnering with somebody whose daily [focus] is to understand the regulation and look at the requirements, rather than me build a team who are CAT specialists,” she says.

She adds that two sides need to be taken care of in order to comply with the CAT. First, they will work to create a tagging system for data flowing through its order management system (OMS).

“We will have the coverage of the regulatory rules within the OMS. That’s stamping the orders and messages with the relevant data based on the scenario. That bit Itiviti does,” she says. The second piece is working with the unnamed third-party specialist for the final pieces.

“And then we partner with somebody who actually does the CAT submission; because their core competency is the CAT, they’re looking at the validation and things that I probably wouldn’t have had time to do. But for me, that would mean we would have a better CAT offering than what I would have if done in-house,” Middleditch adds.

• READ: Microsoft is carrying out pilots on an Azure-based service for the SEC’s CAT that will be ready for use within six weeks. Click here to read more.

On its own, Itiviti would have probably created a baseline offering that includes creating a message in the CAT format and submitting it to the CAT. That would have just been “ticking the box,” as Middleditch says. 

Instead, by partnering with a specialist, Itiviti can offer value-added features such as validating the CAT or looking at corrections related to reporting. 

“They’re going to go further into the subject matter, which is something I wouldn’t do if I were building in-house. So I believe our customers benefit by me going with a specialist,” she says. 

Itiviti’s upcoming CAT offering is part of its “overarching” theme of building out its regulatory coverage. Robert Mackay, CEO of Itiviti, says trade reporting, CAT, and a few other rules-focused pieces are all part of Itiviti’s regulatory-enhancement activities going forward.

“We are finalizing partnership arrangements and particularly how we take it to market. This is at an advanced stage,” says Mackay about the CAT offering, which he expects to launch in the fourth quarter of 2019. 

The first phase of the CAT rollout is scheduled for April 2020, starting with equity reporting for large broker-dealers. It will be followed with full equity reporting, including small broker-dealers, in December 2020. Full production of the CAT is slated for December 2022.