Press Releases

House Approves the Market Data Protection Act


Washington, November 14, 2017 -

The House passed bipartisan legislation on Monday to require securities regulators to safeguard a data system used to track market trading activity.

The bill, the Market Data Protection Act of 2017, would require the Securities and Exchange Commission (SEC), the Financial Industries Regulatory Authority (FINRA), and the operator of the Consolidated Audit Trail (CAT) to consult with the SEC’s chief economist and develop internal risk control mechanisms to safeguard and govern the storage of market data, all market data sharing agreements, and all academic research using market data.  The SEC developed the Consolidated Audit Trail, which contains data on trade orders and cancellations for equities and options listed on U.S. exchanges.

Rep. Warren Davidson (R-OH), a member of the House Financial Services Committee and the sponsor of the bill, said the recent Equifax breach and a cyber-attack against the SEC intensify the need to ensure top cybersecurity controls are in place.

“We need to make sure our house is in order at the SEC,” said Rep. Davidson. “We know there are serious flaws in the way the SEC maintains its data, and in the ways they respond to and communicate errors and omissions. These flaws undermine the trust and confidence of the customers the SEC regulates.”

In September, Chairman Jeb Hensarling (R-TX) wrote to SEC Chairman Jay Clayton and urged the SEC to delay implementation of the CAT system “until the SEC can implement information security safeguards and internal controls to ensure the security of confidential and sensitive data.”

The House approved the bill by voice vote.

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