After Huge Data Breaches, Republicans Back Watchdog's Move to Limit Investor Personal Data Collection
Members of the House Financial Services Committee have written to the SEC to express support for the regulator's move to limit its collection of retail investors’ personally identifiable information in a pending Consolidated Audit Trail database.
The five legislators – all Republicans – welcomed recent indications that the SEC may no longer require the collection and storing of retail investors’ Social Security numbers in the CAT.
The indications came from SEC Chairman Jay Clayton who said during a Sifma conference last month that the regulator was considering solutions for the PII issue. That was later confirmed by an SEC spokesman who said the regulator supports an approach that would eliminate the need to store Social Security numbers in the CAT.
The CAT is a single comprehensive database expected to store an unprecedented amount of sensitive trade data and PII, which in earlier pronouncements included an investor’s name, address, date of birth and Social Security number or Individual Taxpayer Identification Number.
The CAT is expected to take in 58 billion records daily – including orders, cancellations, modifications, executions and quotes for the equities and options markets – and maintain data for more than 100 million customer accounts and their unique customer information, according to parties involved in the CAT.
“We have serious concerns with the federal government’s cybersecurity posture in this era of digital hacking and cyber theft,” the legislators say in a letter sent to the SEC Tuesday.
The legislators note that “virtually all of the federal financial regulators have experienced a significant data breach” in recent years. They add that “the government’s systems are subject to hundreds of intrusion attempts from foreign governments and other sophisticated parties every day.”
Signatories to the letter include Barry Loudermilk (R-Ga. 11th District), Bill Huizenga (R-Mich. 2nd District), French Hill (R-Ark. 2nd District), Warren Davidson (R-Ohio 8th District) and Ted Budd (R-N.C. 13th District).
The American Securities Association, which has been lobbying to exclude PII from the CAT, welcomes the recent pronouncements and the legislators' follow-up to the SEC.
“The cost of putting American investors at risk is far greater than the benefits of collecting PII, and it’s not necessary for the CAT to do its job,” the ASA, which represents financial services companies, says in a statement.