Compliance Dates
FINRA Rule 6895 sets out the compliance date framework distinguishing when different categories of Industry Members were required to begin reporting each successive phase of CAT data, and it functions largely as a historical implementation record today, similar in character to the phased testing timeline discussed in the Rule 6880 entry elsewhere in this dictionary.
Understanding this rule requires understanding both the specific dates it documents and the more important underlying principle it establishes: CAT compliance dates differ meaningfully based on firm size and prior OATS reporting status, a distinction candidates and practitioners need to apply correctly when working through scenario-based questions involving different categories of firms.
From a Single Go-Live Date to a Phased Rollout
CAT's compliance date framework did not originate as the granular, multi-phase structure documented in the current rule text. The original CAT NMS Plan contemplated a single compliance date for each firm category: Large Industry Members were originally required to begin reporting by November 15, 2018, and Small Industry Members by November 15, 2019. FINRA subsequently restructured this single-date framework into the current, more granular phased approach, deleting the original single dates and replacing them with the specific Phase 2a through Phase 2e schedule that actually governed CAT's real-world implementation. This restructuring reflected the practical reality, discussed in the Rule 6880 entry, that attempting to bring the industry's full CAT reporting scope online all at once on a single date created unacceptable implementation risk relative to a carefully sequenced, phased rollout.
The Large Industry Member Schedule
Paragraph (c)(1) establishes the compliance schedule for Large Industry Members, meaning any Industry Member that does not qualify as a Small Industry Member. Large Industry Members were required to report Phase 2a Industry Member Data by June 22, 2020, Phase 2b Industry Member Data by July 20, 2020, Phase 2c Industry Member Data by April 26, 2021, Phase 2d Industry Member Data by December 13, 2021, and Phase 2e Industry Member Data, representing the full scope of Industry Member Data contemplated by the CAT NMS Plan, by July 11, 2022. This roughly two-year rollout, from June 2020 through July 2022, reflects the actual pace at which CAT's full reporting scope came online for the industry's largest firms.
The Small Industry Member Schedule and the OATS Reporter Distinction
Paragraph (c)(2) establishes a materially more complex schedule for Small Industry Members, one that itself splits into two further subcategories based on a firm's prior OATS reporting history. Small Industry Members that were previously required to record or report information to OATS under applicable SRO rules, referred to as Small Industry OATS Reporters, were required to report Phase 2a Industry Member Data on the same June 22, 2020 date as Large Industry Members. Small Industry Members that had no such prior OATS obligation, referred to as Small Industry Non-OATS Reporters, received a considerably longer runway, not required to report Phase 2a data until December 13, 2021, roughly seventeen months later than their OATS-experienced counterparts.
This distinction reflects a sensible underlying rationale: a Small Industry OATS Reporter already possessed the technical infrastructure and institutional experience of complying with a comparable audit trail reporting regime, making an earlier CAT transition more feasible than for a firm with no comparable prior reporting experience at all, since that firm's existing OATS-era systems and processes could, at least in part, be adapted rather than built entirely from scratch. All Small Industry Members, regardless of this OATS-history distinction, were required to report Phase 2b, Phase 2c, and Phase 2d Industry Member Data by the same December 13, 2021 date, and Phase 2e Industry Member Data by July 11, 2022, the same final deadline applicable to Large Industry Members, meaning the entire industry converged on the same final compliance date even though the intermediate phases had accommodated meaningfully different starting points for different categories of firms.
The Introducing Industry Member Rule
Paragraph (c)(3) resolves a category candidates should recognize from the Rule 6810 entry elsewhere in this dictionary: Introducing Industry Members, meaning broker-dealers that fail to qualify as Small Industry Members solely because they introduce transactions on a fully disclosed basis to clearing firms that are not themselves small businesses, must comply with the CAT NMS Plan requirements applicable to Small Industry Members. This provision extends the more accommodating Small Industry Member compliance schedule to a category of firm that might otherwise, on a purely technical reading of the small business size standard, fail to qualify for that more favorable timeline simply because of its clearing relationship rather than anything about its own actual size or operational complexity.
Why CAT's Compliance Date Framework Differs Fundamentally From OATS
Candidates and practitioners should understand a critical structural distinction between CAT's compliance date framework and the retired OATS system's exemption structure, discussed in more detail in the Rule 7400 entry elsewhere in this dictionary. OATS permitted certain categories of firms to obtain genuine exemptive relief from its recording and reporting requirements entirely. CAT provides no comparable exemption of any kind for any category of broker-dealer, regardless of firm size. FINRA's own guidance on this point is unambiguous: neither SEC Rule 613 nor the CAT NMS Plan provides exemptive relief to any class of broker-dealer, meaning even a firm that had previously obtained a full OATS exemption is nonetheless required to fully comply with CAT's recording and reporting requirements once its applicable Rule 6895 compliance date arrived.
This is a frequently misunderstood point, particularly for firms and practitioners more familiar with OATS's exemption structure than with CAT's fundamentally different, exemption-free design. Rule 6895's phased compliance dates determine only when a firm's CAT obligation began, never whether that obligation applies at all; every Industry Member, without exception, eventually became subject to full CAT compliance once its applicable phase-in date arrived.
The Enforcement Timing Nuance
FINRA and the exchanges adopted a specific, coordinated enforcement posture tied to these compliance dates worth understanding precisely. The Participants announced they would not commence enforcement of their CAT Compliance Rules with respect to Industry Member CAT reporting until the actual Rule 6895 compliance dates for each phase had arrived, even though certain underlying obligations, most notably Rule 6820's clock synchronization requirement, technically applied to firms before their substantive reporting obligations actually began. This meant firms were required to synchronize their Business Clocks in advance of their actual reporting go-live date, but were not subject to enforcement for clock synchronization violations tied to Reportable Events until the compliance date for the corresponding mandatory reporting phase had actually arrived, a nuanced but practically important distinction between an obligation technically applying and that same obligation actually being subject to enforcement action.
A Worked Comparison Across Firm Categories
Placing all three compliance schedules side by side clarifies exactly how differently CAT's rollout treated different firm categories during the same historical window. On June 22, 2020, two categories of firm began Phase 2a reporting simultaneously: every Large Industry Member, and every Small Industry OATS Reporter. Small Industry Non-OATS Reporters, by contrast, had no Phase 2a obligation at all on that date, continuing to operate without any CAT reporting requirement until December 13, 2021, roughly a year and a half later. During this intervening period, a Small Industry Non-OATS Reporter and a Small Industry OATS Reporter of comparable size and business model faced dramatically different regulatory obligations, purely as a function of whether the firm had previously been subject to OATS.
This divergence narrowed considerably as the phases progressed. By December 13, 2021, every Small Industry Member, regardless of prior OATS status, converged on the same Phase 2b, 2c, and 2d reporting obligations simultaneously, meaning the OATS-history distinction that had created such a significant timing gap for Phase 2a entirely disappeared for the subsequent phases. By July 11, 2022, every Industry Member across every category, Large, Small OATS Reporter, and Small Non-OATS Reporter alike, converged on full Phase 2e compliance, meaning CAT's phased rollout ultimately achieved complete, uniform industry-wide coverage despite the meaningfully different paths different firm categories took to reach that same endpoint.
Why This History Still Matters Today
A reasonable question is why any of this historical phase-in detail matters for a firm operating well after CAT's phased rollout concluded in 2022. The answer lies in how CAT-related enforcement actions and examination findings sometimes reach back to conduct occurring during the original phase-in period itself, meaning a firm's historical compliance posture during a specific phase can remain relevant to a current regulatory inquiry years after that particular phase's compliance date has passed. A firm facing an examination or enforcement inquiry touching on historical CAT reporting conduct should understand precisely which compliance obligations actually applied to it on any given historical date, since a firm's obligations, and therefore its potential exposure, differed meaningfully depending on its classification and the specific phase and date in question.
This historical dimension also matters for firms conducting their own internal CAT compliance audits covering periods spanning the original rollout, since a firm reviewing its historical CAT reporting accuracy needs to apply the correct compliance standard for each relevant historical period rather than assuming its current, full Phase 2e obligations applied retroactively to conduct that occurred before the firm's actual applicable compliance date under Rule 6895. Applying today's full reporting scope to a historical period predating a firm's actual Phase 2e compliance date would produce a materially inaccurate assessment of that firm's historical compliance performance.
Relevance Across FINRA's Exam Programs
The SIE, Series 63, and Series 65 do not test Rule 6895's specific compliance date mechanics, since these exams do not reach into CAT's historical implementation timeline at this level of detail. A Series 7 candidate is unlikely to encounter this rule directly, though understanding that CAT's rollout accommodated different firm sizes with different timelines provides useful context for appreciating how large-scale regulatory infrastructure changes are typically implemented across an industry with widely varying firm capabilities.
A Series 24 candidate supervising a firm working through any historical CAT compliance question, or onboarding a newly registered firm to CAT obligations today, needs to understand that no exemption path exists regardless of firm size, distinguishing CAT sharply from the OATS framework that preceded it. A principal should also understand the Introducing Industry Member accommodation precisely, since correctly classifying a firm's status determines which compliance schedule, and by extension which broader set of CAT NMS Plan requirements, actually applies to that firm. A Series 57 candidate is less directly implicated by this rule's historical dates, though should understand that CAT's universal applicability, with no size-based exemption available, means every firm handling orders in NMS Securities, OTC Equity Securities, or Listed Options bears full CAT reporting responsibility regardless of its size or trading volume.
Practical Guidance for Firms
Firms newly entering the securities industry, or firms undergoing a change in registration status that could affect their Small Industry Member or Introducing Industry Member classification, should not assume the historical phase-in dates documented in Rule 6895 remain directly relevant to their own current compliance obligation. A firm becoming a CAT reporter today faces full, immediate compliance with the complete scope of CAT requirements from the outset, since the phased rollout itself concluded in July 2022 with Phase 2e; there is no remaining phase-in accommodation available to a firm beginning CAT reporting now, regardless of that firm's size, meaning a new entrant should build its CAT compliance infrastructure to full Phase 2e specifications from day one rather than assuming any gradual, accommodating on-ramp remains available.
Firms should specifically confirm, and periodically reconfirm, their correct classification as a Large Industry Member, Small Industry Member, or Introducing Industry Member, since this classification determines more than just historical compliance dates; it continues to affect which specific provisions throughout the broader Rule 6800 Series apply to the firm today. A firm whose clearing relationship or overall size changes over time should specifically revisit this classification rather than assuming a categorization made years ago at CAT's original implementation remains accurate indefinitely without any need for periodic reconfirmation.
Firms should also correct any lingering internal assumption, carried over from institutional memory of the OATS framework, that small size or limited trading activity might support an exemption from CAT reporting. Given FINRA's explicit confirmation that no such exemption exists for any category of broker-dealer, a firm's compliance training materials and onboarding documentation should affirmatively address and dispel this misconception directly, particularly for staff who worked under the OATS regime and may carry forward an inaccurate assumption about how CAT's exemption structure compares to its retired predecessor.
Firms conducting historical compliance reviews, whether in response to a regulatory inquiry or as part of routine internal audit, should maintain accurate internal documentation mapping their own historical Industry Member classification against the specific compliance dates that classification implied at each point in time. A firm that has since changed classification, for example transitioning from Small Industry Member to Large Industry Member status as its business grew, needs to apply the correct historical compliance standard for each period under review rather than uniformly applying its current classification's requirements backward across periods when a different classification, and therefore a different compliance timeline, actually governed.
Compliance and legal teams should treat any CAT-related regulatory inquiry touching on conduct from the 2020 through 2022 phase-in period with particular care regarding compliance date accuracy, confirming precisely which phase and which corresponding data elements were actually required as of the specific date in question before assessing whether the firm's historical conduct met its actual obligations at that time. Given how granular and firm-category-specific the phase-in schedule actually was, a superficial or imprecise reconstruction of a firm's historical compliance timeline risks either understating or overstating the firm's actual historical compliance performance, neither of which serves the firm well in responding accurately and credibly to a regulatory inquiry.
Firms should also recognize that the convergence of all firm categories onto the same final Phase 2e compliance date represents the conclusion of CAT's original implementation timeline rather than a permanently fixed endpoint for the system's overall development. As discussed throughout the other Rule 6800 Series entries in this dictionary, CAT has continued to evolve substantially since 2022 through additional amendments, exemptive relief, and new reporting requirements, meaning firms should treat Rule 6895's phased compliance date framework as historical context explaining how CAT reached its current baseline scope, rather than assuming that baseline itself has remained static since the original rollout concluded.
