PTG submits amicus brief in latest case over CAT funding model

First, PTG argues that the SEC exceeded its statutory authority by establishing and funding the Consolidated Audit Trail (CAT) without clear congressional authorization. The brief asserts that Congress never intended to empower the SEC to create a massive surveillance system funded by perpetual, industry-wide fees, and that such a significant regulatory initiative requires an explicit legislative mandate, which is absent.

Second, the brief claims that the 2026 Order’s method of allocating CAT costs violates both the Securities Exchange Act and the Administrative Procedure Act. It maintains that the Order allows self-regulatory organizations (SROs) to recover their share of CAT costs from broker-dealers and other industry members, effectively forcing these firms to potentially bear the entire financial burden. This is not an equitable or

reasonable allocation of costs as required by law, but rather a rebranding of a previously rejected approach.

Third, the brief argues that the SEC failed to meet the reasoned decision-making standards required by law. The 2026 Order is said to rest on the same flawed incentive structure that led to past cost overruns, and the SEC did not conduct a meaningful economic analysis of the consequences for market participants.

The brief concludes that the SEC’s approach does not address the fundamental issues previously identified by the court and therefore cannot stand.