Consolidated Audit Trail Costs May Hit HFT Hardest

Quote from ChkitOut:

theses stupid assholes at the sec are going to pay 4 billion for a computer and say it costs 2 billion a year to run?

hahaha, it cost less to send a man to the moon.


what kind of scam is this exactly? and what exactly are these morons going to do with a consolidated audit trail?? i mean, what is the point. this is so beyond stupid hopefully romney puts a stop to this idiot money grab. this has nothing to do with an audit trail, its simply a way to increase their budge 3 fold. its sickening.
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Scam? As of now there is no method to detect and investigate suspicious market behavior and events. The manipulation and illegal activities that occur cost market participants well over $4 billion. And considering total stock market value is in the trillions the cost of this is trivial. The CAT's capabilities are endless.

Annual SEC audit reports of funds, brokers etc would have near 100% accuracy. Funds could no longer fudge numbers or create false trade data to hide losses. The numerous rogue traders over the years would have been identified much sooner.

This is not a scam but an absolute necessity. Just look at how many frauds the SEC has missed in the past. They still havent found the missing MF Global funds.

And Romney? Give me a break.
 
It's not the idea that's a "scam" - it's the claimed costs.

Those are completely out of line, and IMO the poster has it right, the SEC is looking at this as a budget-padder.
 
Quote from Random.Capital:

That's ridiculous. Where did the two extra zeros come from? It's not THAT much data to be shuffling around.
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Umm... Its an incomprehensible amount of data to store in real time.
 
Quote from mastertrader456:

Umm... Its an incomprehensible amount of data to store in real time.
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in ten years that is 20 billion dollars. do you know how many public companies you can buy out right with 20 billion...

lets see.... biogen, bed bath and beyond, charles schwab corp, El paso, HJ Heinz, Harley Davidson, Kellogg....

should i keep going? and they just want to buy a computer.. :confused:
 
Quote from ChkitOut:

in ten years that is 20 billion dollars. do you know how many public companies you can buy out right with 20 billion...

lets see.... biogen, bed bath and beyond, charles schwab corp, El paso, HJ Heinz, Harley Davidson, Kellogg....

should i keep going? and they just want to buy a computer.. :confused:
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The projected figures are estimates of the costs that would be incurred in aggregate, industry-wide.

This isn't the SEC saying that the SEC will spend 2 billion annually on a computer system. It does project FINRA paying $101 million in new annual operating costs.

Read more here (page 169 - 170):

http://www.sec.gov/rules/proposed/2010/34-62174.pdf

Section 9. Total Costs

Based on the assumptions and resulting estimated costs discussed above, the Commission preliminarily estimates the initial aggregate cost the exchanges and FINRA would incur to comply with the proposed Rule, other than costs related to creating and operating the central repository, would be approximately $231 million, and ongoing aggregate annual costs would be approximately $77.7 million.

In addition, the exchanges and FINRA would incur an initial aggregate cost of approximately $120 million to set up the central repository, with ongoing annual costs to operate the central repository of approximately $101 million. For SRO members that would make changes to their own order management and trading systems to comply with the proposed Rule, we estimate the initial aggregate one-time cost for implementation of the proposed Rule would be approximately $3.4 billion and aggregate ongoing annual costs would be approximately $1.7 billion.

For SRO members that are likely to rely on a third party to comply with the proposed Rule (such as their clearing broker), we estimate the initial aggregate one-time cost for implementation of the proposed Rule would be approximately $287 million and ongoing annual costs would be approximately $253 million.

Therefore, for all SROs and members, we estimate that the total one-time aggregate cost to implement the proposed Rule would be approximately $4 billion and the total ongoing aggregate annual costs would be approximately $2.1 billion.
 
Your missing the point. The $ amount of fraud and manipulation in the market is trivial in comparison to the cost of the CAT. It is estimated that stock fraud alone amounts to $40billion annually. The CAT will drastically reduce that number.
 
FINRA's projection is slightly lower.

http://www.sec.gov/comments/s7-11-10/s71110-91.pdf

By leveraging its existing technology platforms and processes, as well as those of the exchanges, and building upon a proven OATS infrastructure that the securities industry has devoted significant resources to and developed substantial experience with over a period of more than a decade, FINRA believes significant savings in cost, t ime to market, and ease of implementation can be achieved over building a new system f rom the ground up. Specifically, we estimate that the initial cost for Phases I and 2 will be between $100 - $125 million and the ongoing annual costs for these phases will be between $30 - $40 million.
 
actually, i don't see the difference. why would it cost the industry 2 billion a year in aggregate to maintain some sort of infrustructure to run this stupid thing? i dont get it.

whether the sec just demands 2 billion from the industry OR they are paying it to someone else, it really doesn't make a difference.
 
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